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Alan Greenspan has died

washingtonpost.com

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Re: Alan Greenspan has died

#201

Post by sokoloff »

RA_Fisher wrote: post #139
bhouston wrote: post #5

I'm not a gold bug but Alan was a proponent of the gold standard. He wrote about how the gold standard created responsible spending and more equality in the world: https://ritholtz.com/2008/11/gold-and-economic-freedom-by-al... The world we are in now, especially in the US, is one where there is near unlimited government credit but it is, according to many, papering over deep structural problems. At some point, these…

The gold standard and metalism generally, leads to all kinds of unproductive panics bc the quantity of money can’t wisely be adjusted to the situation. It’s a bad trade off, bc it’s well-known in the literature that inflation-targeting works (and that’s the current world-wide central bank policy since 1991).

It also can’t be unwisely adjusted to the situation (usually in the form “too much for too long”).

I tend to think the benefits of unbacked currency exceed the downsides, but it’s not exclusively upside.

Re: Alan Greenspan has died

#202

Post by npunt »

zackmorris wrote: post #83

Revisionist history will tell it differently, but I remember that from the mid 1990s until about 2000 when the economy was booming yet prices weren't rising, Greenspan publicly indicated that he wasn't sure exactly why that was. Or at least that the information economy had different performance characteristics than the industrial economy, since production wasn't limited by supply but by worker productivity multiplier…

Just want to say I appreciate the effort that you put into this. I know HN sometimes doesn't vote up the big posts but if they're well researched and follow a thought through to a conclusion, I think they're a valuable addition to the discussion. cheers

Re: Alan Greenspan has died

#203

Post by twoodfin »

My favorite bit of Greenspan lore:

Texas Senator Phil Gramm (pretty sure it was him) was a prominent GOP member of the Senate Banking Committee. Of course, Greenspan often testified there.

Gramm would always ask Greenspan, along with his other questions, “Mr. Chairman, what’s the ideal capital gains tax rate?”

Greenspan never missed a beat: “Zero.”

Agree or disagree, you always knew where he stood!

Re: Alan Greenspan has died

#204

Post by paulddraper »

throw0101d wrote: post #15
bhouston wrote: post #5

I'm not a gold bug but Alan was a proponent of the gold standard. He wrote about how the gold standard created responsible spending and more equality in the world: https://ritholtz.com/2008/11/gold-and-economic-freedom-by-al... The world we are in now, especially in the US, is one where there is near unlimited government credit but it is, according to many, papering over deep structural problems. At some point, these…

> He wrote about how the gold standard created responsible spending and more equality in the world: The Gilded Age, which had quite high levels of inequality, occurred when the gold standard was active: * https://en.wikipedia.org/wiki/Gilded_Age It should also be noted that the gold standard did not bring any kind of price stability: * https://archive.is/https://www.theatlantic.com/business/arch... Further, sticking…

> The Gilded Age

Which saw 40% increase in median real wages over 30 years. [1]

> It should also be noted that the gold standard did not bring any kind of price stability:

Prices are *475%* what they were 50 years ago, far exceeding price changes under the gold standard.

> Further, sticking to the gold standard made the Great Depression worse as it reduced flexibility and options of central banks had, and made deflation worse:

It did make deflation worse. Deflation = Bad is an assumed tenant of modern economics.

> The sooner countries left the gold standard the sooner they started recovering from the Great Depression:

By a certain definition. The US did not really leave the gold standard until 1971 (which coincidentally, is when inflation really started to take off).

[1] https://en.wikipedia.org/wiki/Gilded_Age

Re: Alan Greenspan has died

#205

Post by SJC_Hacker »

nighthawk454 wrote: post #173
throw0101d wrote: post #170

Earlier quoted context omitted.

> The 1920's gilded age was fueled by fiat money, the greenback. So-called fiat money didn't become a thing until after FDR became president, which was after 1932.

> Greenbacks … a form of fiat money https://en.wikipedia.org/wiki/Greenback_(1860s_money)

This was a wartime measure. The US went back to a hard money system soon after the civil war ended

Re: Alan Greenspan has died

#206

Post by SJC_Hacker »

expedition32 wrote: post #189
greenavocado wrote: post #55

Earlier quoted context omitted.

The Great Depression was caused by France panic hoarding gold https://www.nber.org/papers/w16350 Semi-ironically France was the reason the US fell off the dollar standard after it panic hoarded gold AGAIN when the French government made one last, massive purchase of gold from the US using US dollars, paying $35/oz. A French warship arrived in New York in early August 1971 to load the gold and bring it back to France.…

The US spending more money than comes in has been the problem. You cannot blame that away. (Don't get me wrong I am grateful that America spent billions on the CIA fighting commies and launching rockets to the moon but in hindsight that party was never going to last)

The argument is that on a hard money standard, the US government would simply not be able to spend as much as it has, because it would not ne able to print money as it has been doing.

Re: Alan Greenspan has died

#207

Post by franktankbank »

twoodfin wrote: post #203

My favorite bit of Greenspan lore: Texas Senator Phil Gramm (pretty sure it was him) was a prominent GOP member of the Senate Banking Committee. Of course, Greenspan often testified there. Gramm would always ask Greenspan, along with his other questions, “Mr. Chairman, what’s the ideal capital gains tax rate?” Greenspan never missed a beat: “Zero.” Agree or disagree, you always knew where he stood!

HILARIOUS!

Re: Alan Greenspan has died

#209

Post by gamblor956 »

spwa4 wrote: post #194
throw0101d wrote: post #99

Earlier quoted context omitted.

> Have you lived through the late 90s big tech boom or the current AI boom? Inequality (at least in the US) started growing in the 1980s, after Reagan got elected. For causes I'd start with these: * https://en.wikipedia.org/wiki/Friedman_doctrine * https://en.wikipedia.org/wiki/Reaganomics

What people often forget is what preceded the Friedman Doctrine. Management would simply directly use company resources for their own personal benefit. This went from employing their entire family (and in the 1970's that did not mean 1 nephew, it meant 50 of them), to Free VIP access to Disneyworld, all-inclusive. https://en.wikipedia.org/wiki/Club_33 Frankly, my grandfather is dead now, but I did have one or two con…

Your Club 33 link doesn't prove your point. Club 33 was launched as a place to wine and dine corporate sponsors (i.e. companies paying to advertise at Disney properties).

The only non-sponsors allowed in were those who paid for the individual memberships. Currently, those memberships get you "free" VIP access to the Disney park where you have a membership, but the membership fee is $25,000 and the annual dues start at $10,000. These prices don't include food or beverage.

Re: Alan Greenspan has died

#210

Post by bko »

margalabargala wrote: post #187
bko wrote: post #119

Earlier quoted context omitted.

Keep reading the comment. Why do people buy iPhones today knowing that they can get a significant discount in 6-12m for that same iPhone

The state of tech goods is such that they become obsolete and have a finite lifespan, due to battery and compute needs, as well as the "fashion" element of having the newest thing. The price is dropping over time because you're getting something literally less valuable. The analogy would be, would you pay the same for a bag of rice expiring in 2 years, as one expiring in 2 months? The argument you're trying to make,…

Finite lifespan and batter don't degrade on a new iPhone that happens to be last years model.

The "fashion" element is BS. Almost no one can tell what iPhone is which.

It's literally the same phone now or 6 months from now. It doesn't "expire". You're really stretching here.

Same thing is true for Android and pretty much most electronics or TVs.

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