How much of the higher price of gasoline is the Fed's fault?
To a first approximation, zero. Oil is priced in dollars in the international market. The falling dollar has no effect on the price of oil. And inflation is a tiny contributor to the huge increase in gasoline prices. The huge increase is due to the fact that a lot of people want to consume oil, but producers have been slow to supply additional quantities. When demand goes up and supply doesn't, prices rise.
You're just using the inevitable paultard fury to run up comment and link counts and fool your Atlantic overlords, aren't you? Ron Paul fans are a renewable resource
The falling dollar has no effect on the price of oil.
Uh...huh? Europeans are suddenly richer in dollar terms. They can afford to pay more in dollar terms for oil. This drives the price of oil in dollar terms up. No?
"Research shows that a 10 percent reduction in the value of the dollar against the currencies of other oil-consuming countries leads to a 7.5 percent increase in the dollar price of oil.[1]"
http://www.dallasfed.org/research/swe/2004/swe0403c.html
The Dallas Fed disagrees with you...
Of course, even considering the effect of dollar depreciation, there's another 15-20% price increase that would appear to be related to other factors, like increased demand.
In 2006, U.S. oil consumption slightly declined - yet we had a 17% rise in prices. Its not always just domestic demand - but its not just the value of the dollar either.
But to say that "The falling dollar has no effect on the price of oil" is ignoring simple economics.
Why haven't you not answered your own question of why not a competing currency? Have you looked into legal tender laws yet? How come it doesn't bother you that the US govt doesn't allow any individual/ corporation to compete with the US Dollar?
Indeed, oil is still priced in dollars on the international market, but some OPEC members are considering using the euro instead.
So here I am taking time out of my busy schedule to let you and maybe a few other people know that the law of parsimony suggests that Dr. Ron Paul is capable of passing very rapidly from a hidden enjoyment of sick wowserism to a proclaimed attachment to defeatism and back -- and back again. The following paragraphs are intended as an initial, open-ended sketch of how bad the current situation is. He is a bad role model for children. What are the lessons for us in this? First, it's that he preaches tolerance yet actively refuses to tolerate views that differ from his own. And second, he has been deluding people into believing that his programs of Gleichschaltung are our final line of defense against tyrrany. Don't let him delude you, too.
Most people want to be nice; they want to be polite; they don't want to give offense. And because of this inherent politeness, they step aside and let Ron marginalize me based on my gender, race, or religion. Trumpeted so many times, his reports have begun to feed on themselves, to generate their own publicity, to cow their opponents not by argument but by sheer repetition, and to procure explosive devices, gasoline, and detonators for use in an upcoming campaign of terror. I am sorry to have to put this so bluntly, but I am a law-and-order kind of person. I hate to see crimes go unpunished. That's why I decidedly hope that Ron serves a long prison term for his illegal attempts to lead us into an age of shoddiness -- shoddy goods, shoddy services, shoddy morals, and shoddy people.
I should note that Ron is locked into his present course of destruction. He does not have the interest or the will to change his fundamentally uncivilized viewpoints. I may not believe that he is the arbiter of all things but I indisputably do maintain that by allowing him to formulate social policies and action programs based on the most predatory sorts of cynicism in existence, we are allowing him to play puppet master. Ron's argument that there's no difference between normal people like you and me and irritating, viperine sensualists is hopelessly flawed and totally circuitous. The spectrum of views between mercantalism and alcoholism is not a line but a circle at which irascible cowards and subhuman, raving deadheads meet. To properly place Ron somewhere in that spectrum, one needs to realize that Ron obviously believes that without his superior guidance, we will go nowhere. What kind of Humpty-Dumpty world is he living in? As you ponder the answer to that question, consider that he justifies his impetuous precepts with fallacious logical arguments based on argumentum ad baculum. In case you're unfamiliar with the term, it means that if we don't accept Ron's claim that might makes right then he will retain an institution which, twist and turn as you like, is and remains a disgrace to humanity. I would like to go on, but I do have to keep this letter short. So I'll wrap it up by saying that Dr. Ron Paul easily impresses his myrmidons using big words like "fractional reserve banking".
"The falling dollar has no effect on the price of oil." M. McArdle
Zimbabwe's plight is well known..the value of their currency, here v. Euro http://coinmill.com/chart/XEU_ZWN.html , has fallen through the floor..
Your saying that the Zimbabwe 'Dollar' buys as much oil today, as last year? No?
The U$D has depreciated over the last year, at the minimum, it takes more U$D today, to buy the same amount of oil, then it took last year (ceteris paribus).
the S&D dynamic is only a part of the pricing picture..
Jack Said:
"You're just using the inevitable paultard fury to run up comment and link counts and fool your Atlantic overlords, aren't you? Ron Paul fans are a renewable resource"
Jack, why are you Wonkett junkies so snotty and elitist, anyhow? You need a little schooling on professionalism.
Eliza, that is some of the most eloquent nonsense I have ever read. It's mostly bizarre unsupported assertions, but it does have a few clear but still unsupported points, such as "Ron's claim that might makes right". Ron Paul's philosophy is the exact opposite of "might makes right". It forms the basis for his position that not only should we leave Iraq ASAP, but we should close all of our foreign military bases as well. Our might does NOT give us the right to be there is his point.
And if you really think that Ron Paul "obviously believes that without his superior guidance, we will go nowhere", you're totally missing the point. He says repeatedly, and means genuinely, that his campaign is about the ideas and principles of liberty, not him. Further, the philosophy of liberty is about self-leadership, and most assuredly not about _anyone_ providing "superior guidance" to anyone else, much less Ron Paul providing that guidance.
You're either a troll, or you just don't get it.
Most oil is drilled for over seas in other countries. These companies must pay operating costs in Euros, Dinars, and other foriegn currencies which are gaining strength on the dollar.
They then sell the oil to the U.S. for Dollars
so they spend X amount in one currency to drill for the oil then have to sell it and charge more in dollars to counter the weaker dollar to cover there operating expenses.
Do yourself a favor go read Von Mises!
Brooksfoe has a good point, although it's maybe a second order effect given the somewhat inelastic nature of oil demand; it's not like you can just switch your electric plants from coal to oil or deliberately lengthen your commute 10 miles. The main risk of currency fluctuations still falls on the producers.
The falling dollar has no effect on the price of oil.
The stupid, it burns!
More seriously, though: China, the EU and so on each have a certain elasticity of demand for oil (as do we here in the US). If the dollar falls 30% against the Euro (and let's say the yuan falls too, the Chinese have been stubborn about the dollar/yuan exchange rate), then oil denominated in Euros is suddenly that much cheaper. The new equilibrium will have the Europeans consuming somewhat more (at a lower price, at least from the Euro perspective), while China and the US consume less (at a higher price). So, yes, a weaker dollar makes the price of oil or any other internationally traded commodity go up. This is fairly elementary economics.
San Diego Thinker,
If you had been following the various "Ron Paul" threads here, you would have recognized that eliza is using one of the computerized "complain makers" found online. All she does is type in "Ron Paul", tell the program how many paragraphs she wants, and presto! The computer generated meaningless complaint issues forth.
I know a fellow who actually writes like that in real life.
Eliza... wow. That was a highly overly flowery way of making your point. I don't say that as an attack, just a suggestion that your assertions might carry more credibility were they not so intentionally dramatic and excessively/pretentiously wordy.
Past that, I don't really see how one can equate Ron Paul's insistence on philosophy and reason (I mean, look at his adherence to von Mises and justification based on the first principles of the Constitution rather than rhetoric or "gray area") as a foundation for decisions with irrationality.
'Splain, please.
In the future, I suggest consulting with an economist before you post an assertion like this.
You might be trying to say, and which much more likely to be true, is that the price of oil to those paying in Euros, Pounds and Yen is unchanged.
In this case we have barrels per dollars (b/$) and dollars per euros ($/Euro) so the dollars cancel out to reach barrels per Euro (b/Euro).
However, since the Atlantic is a publication directed at US readers, I doubt there is as much concern about the plight of our friends in Germany on the autobahn.
the price of oil to those paying in Euros, Pounds and Yen is unchanged.
Actually, the price will probably fall for those whose currency has appreciated relative to the dollar (all other things being equal). They are, after all, in the opposite situation.
Simple solution to rising cost of oil: Have Congress repeal the Law of Supply and Demand!
Hey, it makes as much sense as most of the arguments you are getting.
I'm with brooksfoe on this. The fall in the dollar, ceteris paribus, raises the dollar price of oil. The more important question, though, is whether this is really so bad. Dollar depreciation stimulates net exports and, hence, growth.
It is well known that when speculators (like George Soros) attacked the pound and forced Britain off the ERM, the pound fell sharply and Britain's economy, which had been in the doldrums, took off. And there are a thousand similar examples.
Now, it's true that consumers end up paying higher prices for imported goods, but producers (exporters) get high dollar prices for their exports. Ask Coca-Cola's CEO whether the falling dollar is a bad thing...
So a depreciation of the dollar in nothing to fear. Indeed, with large current account deficits, it is to be welcomed.
Dr. Ron Paul's argument is invalid, but that's not the point of this letter. The point is that I was pleased to learn that countless muckrakers have already exposed the evils of Ron's voluble revenge fantasies. By way of introduction, let me just say that wherever you look, you'll see Ron enforcing intolerance in the name of tolerance. You'll see him suppressing freedom in the name of freedom. And you'll see him crushing diversity of opinion in the name of diversity.
Why does Ron want to move increasingly towards the establishment of a totalitarian Earth? Psychologists might suggest that his flighty shock troops are congenitally unable to grasp the fact that his acolytes seem to be caught up in their need for enemies. Counselors might assert that Ron's homilies are immoralism redux. Sociologists might point out that we must turn random, senseless violence into meaningful action if we are to punish him for his shambolic epigrams. I agree with the above assessments, but every time Ron tries, he gets increasingly successful in his attempts to organize a whispering campaign against me. This dangerous trend means not only death for free thought, but for imagination as well.
Why is it that we have a right, an indisputable, inalienable, indefeasible, divine right to build bridges where in the past all that existed were moats and drawbridges? It's because Ron unfairly lambastes people who are trying to do the best they can in a bad situation. But let's not lose sight of the larger, more important issue here: Ron's stentorian ideologies. Does he really know anything about the inclinations he claims to support? No, he doesn't.
If you read between the lines of Ron's zingers, you'll obviously find that Ron has been deluding people into believing that he should transform our little community into a global crucible of terror and gore because "it's the right thing to do". Don't let him delude you, too. With his equivocations hanging over us like the Sword of Damocles, it makes sense that he had promised us liberty, equality, and fraternity. Instead, Ron gave us scapegoatism, antipluralism, and solecism. I suppose we should have seen that coming, especially since Ron has allowed himself to become a spokesman for the same point of view shared by vicious yokels, frightful brutes, and domineering tax cheats while masquerading as an outspoken radical bucking the system. Was he just trying to be cute when he said that all any child needs is a big dose of television every day? I sure hope so because I do not have the time, in one sitting, to go into the long answer as to why lexiphanicism represents a blathering form of divide-and-conquer. But the short answer is that as malignant as it might sound, a consideration that we should do well to bear in mind is that his newsgroup postings amount to what a proverbial metaphor in Sanskrit describes as trying to extinguish a fire by feeding it enough wood to glut its appetite. Whatever weight we accord to that fact, we may be confident that he has a vested interest in maintaining the myths that keep his camp loyal to him. Ron's principal myth is that the world can be happy only when his junta is given full rein. The truth is that Ron truly believes that a richly evocative description of a problem automatically implies the correct solution to that problem. It is just such jealous megalomania, immoral egoism, and intellectual aberrancy that stirs Ron to marginalize dissident voices.
Why Ron would even pretend that people are pawns to be used and manipulated is beyond me. If someone were to foster emotionalism at every opportunity, I'd rather it be an army of merciless mob bosses than he because the latter is slatternly, while the former are only sick. While he and other contentious dole-sucking parasites sometimes differ on the details and scale of their upcoming campaigns of terror they never fail to agree on the basic principle and substance. Hence, it is imperative that you understand that I fully intend to focus on concrete facts, on hard news, on analyzing and interpreting what's happening in the world. That's the path that I have chosen. It's sincerely not an easy path but then again, I no longer believe that trends like family breakdown, promiscuity, and violence are random events. Not only are they explicitly glorified and promoted by Ron's tactless, brown-nosing pleas, but he has vowed that by next weekend he'll give voice, in a totally emotional and non-rational way, to his deep-rooted love of authoritarianism. This is hardly news; Ron has been vowing that for months with the regularity of a metronome. What is news is that I recently heard him tell a bunch of people that divine ichor flows through his veins. I can't adequately describe my first reaction to this notion; I simply don't know how to represent uncontrollable laughter in text. In a nutshell, my contempt for Dr. Ron Paul is boundless.
Since September 18, 2005, the price of oil per barrel has increased 35 percent -- if you pay in dollars.
In that same period, the price of oil has increased 14.8 percent -- if you pay in euros.
So from a european's perspective, the price of oil has not increased nearly as much as it has for an American.
Now, I'm not going to try to tie that difference to the gold standard, or the fed, or anything, because I don't know if changing any of those factors would have affected the dollar one way or another.
But clearly the value of the dollar vs, the euro has something to do with the rising price of oil, because people who use dollars have seen the price of oil go up faster than people who use euros.
This is just wrong. As a person who works on a commodities trading desk. The price of oil absolutely is realted to US inflation which is related to Fed activities.
As a poster pointed out above Oil has not appreciated as much in other currencies. The differece is the US exchange rate not the scarcity of Oil. In fact if Oil prices and the dollar are relatively highly correlated.
The reason is that all of the cost and values are viewed in the home country currency. So when they sell us oil they care about how much they get in their currency not ours.
Jesus, woman, do you know anything about this stuff?
Here you go:
1. Fed's monetary inflation causes dollar to decline in value.
2. Foreign oil producers respond to dollars being worth less by demanding more of them.
3. Americans pay more for oil relative to foreigners because dollars are now cheaper for foreigners.
"(The) Fed's monetary inflation causes dollar to decline in value.-ultrapad"
This assumed one-to-one correspondence between inflation and real depreciation is one of the problems with the Ron Paul supporters' arguments.
The interest parity relationship says that the interest rate on dollar assets equals the interest rate on euro assets plus the rate of depreciation of the dollar relative to the euro. Thus, if interest rates are lower in the U. S. than in Europe, some investors will sell their dollar assets, convert their dollars to euros, and purchase higher-yielding euro assets.
This means that dollar depreciation results from differences in interest rates. But, supposing the US had lower (real) interest rates, that would not necessarily mean the US is pursuing an inflationary monetary policy. It could just reflect a slow down in US growth.
So, while it's true that the Fed has a lot of influence over the value of the dollar, it's just simplistic to say that currency depreciation always reflects domestic inflation.
Ah, some will say. "But maybe the causality runs the other way. After all, a weaker dollar means higher import prices, which means higher overall prices, which means inflation. QED." But that argument too is simplistic. One well known economist explained why:
Oh, Atlantic Online, out of all the libertarian economists in the world, you have to hire this one?
Ma'am, your blog is not going well. I enjoy your stories about being the tallest woman in the room, but your economics posts are too short, too snarky, lack citations, and do not anticipate any of obvious rejoinders. This would all be great if you were writing exclusively for an audience of like-minded economists, but the blogosphere generally likes a little reasoning to along with its pronouncements.
Megan said in a previous Ron Paul post,
"Much of his persona, sincere or not, seems to boil down to 'Foreigners are scary, and people who like foreigners are plotting to take away all your stuff.'"
Megan, while this is part of his campaign, it is a minute part of what attracts most people to him, and it surprises me that someone as smart as you seem to be would miss that point. He has been one of the first candidates in a while to truly speak for those of the libertarian ilk in the voting landscape in a major party. You might even say by that token that he is a true conservative, certainly by Reagan's definition as conservatism was an extension of libertarianism. We can fixate all we like on aspects of anyone's campaign we find unsavory (believe me, I can write a novel on these that would obscure any main campaign platforms and dizzy the mind). But sound politics is the art of compromise, and just as I'm sure many who find the breadth of his policies appealing, they'd overlook the dearth in the interest of what he brings to the floor, as it were. Just as, in the hell frozen over scenario of his presidency, he would most likely find it necessary to compromise with our Democratic House, thus canceling out those unsavory elements.
I suppose this is all a moot point, but I feel the mood surrounding Ron Paul on this blog has suddenly become so fiercely antagonistic, I wonder who an avowed "libertarian" here would find a good candidate, had she her druthers.
He has been one of the first candidates in a while to truly speak for those of the libertarian ilk in the voting landscape in a major party.
He's against free trade and open borders. It is hard to credit the idea that he's a libertarian. He has some libertarian ideas, sure, but so do most of the Republican candidates.
Dan: Wrong! Ron Paul is not against free trade. In fact, he is in favor of unilateral free trade. You can't get much more pro-free trade than that! See http://en.wikipedia.org/wiki/Political_positions_of_Ron_Paul#Free_trade.2C_not_managed_trade
Wow, you are saying that the fall of the dollar (inflation) has nothing to do with the price fo an international commodity? How naiive! The dollar drops, prices increase..simple! Since we have almost no manufacturing base in the US anymore, when our Federal Reserve dollar drops in value against the other currencies of the world through inflation they caused (a private group of bankers not watched by the gov't or the public), do we really wonder why we are working so many hours to just get by? Ron Paul makes sense to me. As he should to all middle and lower class Americans. He is telling the truth to the powers that be!
I've found this discussion very revealing, and I'm glad Megan is provoking it, because of comments like the above:
do we really wonder why we are working so many hours to just get by? Ron Paul makes sense to me. As he should to all middle and lower class Americans. He is telling the truth to the powers that be!
Steve Grycel is right that average Americans are working harder and harder just to get by. What's wrong is the diagnosis. People looking for a sensible explanation of why all the economic growth of the last 6 years has been taken by the top 10%, and most by the top 1%, should be looking to Paul Krugman, Nouriel Roubini and John Edwards' explanations, not Ron Paul's. Ron Paul and the gold-standard fever are a kind of an inverted return of William Jennings Bryan and Free Silver: a simplistic and confused answer to real economic hardship. Though at least Bryan had the direction of the needed reform right -- more flexible monetary policy was needed in the 1890s. Paul's gold standard is non-responsive to any real contemporary economic issue; it's pure magical thinking.
I thought you were smart. This post indicates emphatically that you're not. To say that the falling dollar doesn't impact the price of oil is asinine.
If the price of oil doesn't rise in response to the falling dollar, the oil exporters would be,in effect, taking less money for a wasting asset.
Why should they do that? They wouldn't and they won't. Isn't economics your field?
Another way to look at this is to calculate the price of oil in gold. This removes the impact of the change in the dollar's value. At the end of 2003, an ounce of gold was about $400 while a barrel of oil was about $30. Today, that ounce of gold is about $800 (2x) while the barrel of oil is about $90 (3x). This suggests that while part of the increase in the price of oil is due to the devaluation of the dollar, part is also due to a real increase in demand for oil. (Maybe something related to all of those surging emerging market economies?)
It also shows that if the US were on the gold standard, we would still have seen inflation in the price of oil. In 2003 your dollars backed by an ounce of gold would have bought you 13.3 barrels of oil while today you could only buy 8.9 barrels of oil with that same stack of gold-backed dollars.
The fact is the price of oil responds primarily to (expectations for) global supply and demand-- as does everything else in a free market economy. Going back to the gold standard will not change this.
However, going back to the gold standard will reduce government's flexibility in responding to demand for money. Why would anyone want to do this? Because they don't trust (any) government.
Of course, then they could stop wearing those uncomfortable tinfoil hats.
Since we have almost no manufacturing base in the US anymore,
Bzzzzt. The US has more manufacturing base than at any previous time in history. It's not all the same types of industry in the same places, and the number of manufacturing jobs per capita have probably declined due to population growth far outpacing the manufacturing sector, but that's no cause to throw around canards.
"...should be looking to Paul Krugman, Nouriel Roubini and John Edwards' explanations, not Ron Paul's."-brooksfoe
If ever there was bad advice... Actually, the Ron Paul people have the right general idea, they just get carried away. We need more freedom--lower marginal tax rates, less government waste, less regulation, freer trade and, yes, sound money. We need to unleash the natural dynamic forces of a free market economy. What we don't need is to imbibe John Edwards's poisonous mix of socialism and protectionism.
"...should be looking to Paul Krugman, Nouriel Roubini and John Edwards' explanations, not Ron Paul's."-brooksfoe
If ever there was bad advice... Actually, the Ron Paul people have the right general idea, they just get carried away. We need more freedom--lower marginal tax rates, less government waste, less regulation, freer trade and, yes, sound money. We need to unleash the natural dynamic forces of a free market economy. What we don't need is to imbibe John Edwards's poisonous mix of socialism and protectionism.
rwe,
don't be too discouraged if brooksfoe doesn't get it..free-markets and free people don't seem to be his bag..
this: http://www.24hgold.com/viewarticle.aspx?langue=en&articleid=207787_Fiat_Currency_:_Destroyer_of_Labor_Antal_E__Fekete
is an interesting essay, would be curious as to your take on it..
"...don't be too discouraged if brooksfoe doesn't get it..free-markets and free people don't seem to be his bag.."
Maybe you're right Mark. It could be that brooksfoe would rather see us equal in slavery than free and unequal in wealth.
As for the article, I don't understand the author's argument. He seems to be claiming that US monetary policy has been depleting our capital stock, but actually the rate of investment in the US has been relatively stable over time. Now it is about 16% of GDP, which is not historically low.
What has declined is the saving rate. One reason for that is that asset prices and household wealth have been increasing rapidly since the early 1980's. People, feeling wealthier, have been willing to consume more (and save less). Ironically, it was in large part the success of Reagan's free market policies that made people so much wealthier and less inclined to save...
I think it's true that the Fed has been too quick to manipulate the money supply to try to manage business cycles. This has caused some distortions, and probably contributed to the housing bubble. It would be better if they'd move to an inflation targeting regime, as Chairman Bernanke wants.
We should also try to raise our saving rate. A move away from income taxes to consumption taxes would help. So would entitlement reform.
A country can have sound money and a high saving rate without a gold standard. Look at the East Asian tigers, for example. We should strive for the same.
rwe, you have no plausible explanation for why all of the economic growth of the last 6 years has gone to the top 10%, and most to the top 1%. Or, if you have an explanation, it is one that proposes not to treat this as a problem. Apparently you think it's okay for 90% of Americans to continue earning the same amount they earned in 2000 forever (and in fact, the wages of the bottom quintile have declined), while a tiny minority of Americans become spectacularly wealthy. But because a majority of the bottom 90% of Americans, and many of the top 10% of Americans, do not think their wage stagnation is okay, you and your fellow travelers have started losing elections, and will continue to lose elections until someone comes up with measures that reorient the economy so that benefits are spread more widely.
"rather see us equal in slavery than free and unequal in wealth."
First, how obnoxious. Second, this is what I mean by an impoverished intellectual vocabulary. You have to get some settings on your dial besides "plutocracy" and "Communism".
Apparently you think it's okay for 90% of Americans to continue earning the same amount they earned in 2000 forever
Why would you assume that it's the same people earning the same amount of money? I moved from somewhere in the lower middle to the very bottom to the top quintile in that time period. I'd expect that most people pass through stages in their life, earning very little when young, and quite a bit more when nearing the end of their careers.
Rob, RWE, and Brooksfoe:
I think it's all matter of perception:
To quote Brooksfoe: "If you put a dumb, lazy ex-frat boy on the payroll who does nothing but chat on the phone and play golf all day"
I think when Brooksfoe thinks of the top 1% he thinks of "dumb, lazy ex-frat boys." In my world, I see smart nerds finally getting what they deserve.
"To a first approximation, zero. Oil is priced in dollars in the international market."
Sigh. This is what happens when someone who does not have a background in economics pretends to be an expert in said field.
Gold is very important in Hindu culture. The same Indian economic boom that is driving up the price of oil is also driving up the price of gold.
For those who advocate a return to the gold standard - what would be the economic result of a dramatic rise in the price of gold?
"rwe, you have no plausible explanation for why all of the economic growth of the last 6 years has gone to the top 10%..."
Brooksfoe, concerning inequality, I suggest you read the most recent "Economics Focus" column in the Economist. It does a good job of debunking the idea that living standards have been getting more unequal. Rob Lyman makes an excellent point above as well, one that Tom Sowell frequently makes, about the degree of mobility between groups. Also, I note that you refer to "wage stagnation," when you must know that it's dishonest to ignore benefits. Total compensation has been rising.
I have to say, though, that inequality of wealth (or income) in itself was never of much interest to me. Chiefly, the rising inequality of income you are talking about has resulted from technological changes that are certainly beneficial on the whole. Perhaps you will be tempted to join the Luddites, seeing that technology has increased our Gini coefficient, but I am no Luddite.
What does bother me, though, is that some people are not developing to their full potential because of the poor quality of public schools in poor areas. That clearly isn't because of a lack of funding--many countries that spend less per pupil are getting much better results. No, the only reasonable conlusion is that the incompetence of the bureaucracy and the intransigence of the teachers' unions are holding poor kids down. If you can think of a solution, then propose it. My solution is school vouchers to force the public schools to compete--to force them to be responsive to the needs of their customers. Unfortunately, the Democratic Party has been very successful in preventing any progress here.
"...this is what I mean by an impoverished intellectual vocabulary."-
Well, I was making the point that those who would surrender liberty for the sake of equlaizing income by force are taking us some ways down the "the road to serfdom." It was not original. Hayek beat me to it. I suppose he too had an "impoverished intellectual vocabulary" in your eyes. Maybe he did, or maybe you're just plain wrong. It wouldn't be the first time.
rwe, I wasn't accusing you of having had an original thought; I was perfectly aware you were simply parroting Hayek. The point is that if you say anyone who points to rising income inequality as a problem must favor slavery, you are working with an explanatory framework that is too reductive to be useful in comprehending the world. And you are also prone to being obnoxious. I might as easily accuse you of being pro-slavery, since in the actual historical record, slavery and serfdom in the form of debt-peonage have always been upheld in the US not by advocates of greater equality, but by wealthy property-law maximalists and laissez-faire social Darwinists. But I don't generally think it useful in political discussions to accuse other discussants of favoring evils which they obviously oppose.
I am curious to hear what "benefits" you think have been rising over the past 6 years for the bottom 20% of wage-earners.
"I am curious to hear what "benefits" you think have been rising over the past 6 years for the bottom 20% of wage-earners."
brooksfoe,
maybe it would be better to understand if the 'bottom 20%' of wage-earners, you refer to, were the same cohort over the years 2001-2007.
Further, why are you focused on the 'bottom 20%'?
And, given this: "What does bother me, though, is that some people are not developing to their full potential because of the poor quality of public schools in poor areas. That clearly isn't because of a lack of funding--many countries that spend less per pupil are getting much better results. No, the only reasonable conlusion is that the incompetence of the bureaucracy and the intransigence of the teachers' unions are holding poor kids down. If you can think of a solution, then propose it. My solution is school vouchers to force the public schools to compete--to force them to be responsive to the needs of their customers. Unfortunately, the Democratic Party has been very successful in preventing any progress here."-rwe
I'd think that if you're in for honest discourse, you'd posit a semblance of an answer to the interrogtive
http://www.thefreedictionary.com/interrogative