Newsgroups: misc.headlines,talk.politics.misc,alt.activism,sci.econ
Subject: Re: Boom Boom Boom Boom :)
From: demon@desire.wright.edu (Stupendous Man)
Date: 27 Aug 92 11:12:03 EST
Distribution: world
Organization: Demonic Possesions, Inc.
Summary: NOT!, while being easy to say, is not sufficient.

In article <183238@pyramid.pyramid.com>, pcollac@pyrnova.mis.pyramid.com (Paul Collacchi) writes:
> In article <1992Aug26.040745.3040@pony.Ingres.COM>, garrett@Ingres.COM
> (QUOTE OF THE YEAR) writes:
> |> 
> |> This isn't meant as a flame, but I seem to remember that after everyone
> |> one these "boom" periods there was a severe recession. 
> |> 
> |> 1920's	followed by the 30's.
> |> 64-69   followed by stagflation in the 70's (I remember a bad recession
> |> 					in 73-74, but I think there was 
> |> 					also one before then)
> |> 83-89	followed by the present recession.
> |> I'm not sure of the exact date, but there was a depression in the
> |> 1890's as well.
> |> 
> |> Does anyone have a theory on this?
> |> 
> |> -Garrett
> 
> Yes.  It's called the "business cycle," a corollary to a more general
> understanding of the action-reaction of forces known as "karma." The
> higher the highs, the lower the lows.  Stupendous man is simply addicted
> to the highs and denies the lows.  Something akin to ol' Ron himself.

	Ahhh, the cherised Usenet "proof by assertion".  Or "disproof" in this
case.  Numbers?  Facts?  Who needs those!

> Classic behaviours associated with growing up in alcoholic families.

	Still "proof by assertion" or are we now "arguing from authority"?

> Classic.  Reagan sold the notion of living outside of karma (consequences
> of action) to a whole nation of individuals only too eager to hear it.

	Actually the nation appears intent on buying the "guilt" and "greed"
theories.

> Given a relatively fixed population P, GDP(P) will expand indefinitely
> only if P is indefinately consuming more.  In other words, economic
> growth is the increased production which arises to meet increased
> consumption.  If there is no continuing increase in demand then the
> increase in production will become inventory, and production will begin
> to drop off until inventory is depleted.  Production dropping off is
> the end of the growth cycle.

	And?  Are we to ignore: aging of the popultion, world wide economies,
shifts in demand, new markets, etc.?

> The underlying micro-economic model is simply that human beings are
> greedy little consumers whose happiness increases linearly with 
> consumption.  The truth is there is a limited relationship between
> human satisfaction and material consumption and many forms of consumption
> cause economic 'indigestion' which result in a decrease in demand. 

	But what is your point?  How does the above disprove anything in the
"derailing" series?

> Secondly, since the consumer is the worker-bee, he eventually figures 
> out that the has to pay for his indulgences, and therefore makes a
> sane act which is to decrease spending.  I think that its classic 
> system theory to predict overeaction (stop spending) when faced with the
> consequences of having greatly overspent, rather than to simply reduce
> spending by a little bit.  In other words, the same consciousness that
> wanted instant gratification now wants instant relief from the
> consequences.  Consumers just slammed on the breaks when it became clear
> to them what
> had happened.

	Or the government simply taxed away their disposable income.

> There are artificial stimulants to demand, such as "tax cuts" and 
> commercial advertising.  These are efforts to 'entice' consumers to
> consume more, and can in the short term produce some immediate effects.
> But in the long term, sustained growth (consumption) of a relatively
> fixed population of people can only occur if the population permanently
> practices something equivalent to economic bolemia.

	Since we have yet (Earth, that is) to experience a static population,
and since that will probably never happen, your theories seem ripe for a text
on fantasy economics.

	But the facts are: we have a dynamic population, are not limited to
just the USA, having shifting demand vectors, create new markets all the time,
...all things that lead one away from static models (and theories).

> (There are secondary factors as well.  There are demographic "waves" in
>  the population.  The baby-boomers just moved through.  Now there's 
> something of a trough.  Also, the economy has become more service-based.
> There is no inventory of services.  Service supply drops off immediately
> without demand.  You can't produce a massage and store it in inventory.)

	It would be nice if you had numbers, instead of rhetoric, especially if
you intend to "disprove" someone else's numbers.

	Supply-side adapts to "waves" just as it adapts to other economic
influences.  It survives because it doesn't attempt to impose a single,
monolithic economic structure on the population.

Brett                                                      
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