Chavez doesn't understand inflation

[chequita guevara]

The problem is that there is so much money that the value of money is falling. It's simple supply and demand. Any time that more money winds up in the hands of the lower classes, inflation will rise. Whether you hand it to them as a subsidy or they earn it at work, more money means money has less value.

Since they're going to be having the inflation no matter what, spending it on educating the illiterate, feeding the hungry, giving health care to the sick, homes to the homeless, land to the peasants, etc. is making life for the average Venezuela much better.

Under the policies that you advocate, Oerdin, life spans fall, infant mortality rises, crime rises, pretty much ever measure of life suckitude goes up. Every country that has developed since WWII has done so successfully by doing the opposite of what you call for, by tight controls on foreign trade, land reform, investing in health care and education, subsidizing national industries, etc. Your continued spouting of the neo-liberal agenda is like a religion with you.

[Dinner]

The key part of free trade is even if there is more money sloshing around in Venezuela there is still excess capacity for goods in other countries. Thus free trade can help control inflation.

I advocate subsidizing education, health care, and infastructure using those petro dollars so that the average Venezuelan is better educated, healthier, enjoys better infastructure, and greater job opportunities. As an added benefit prices remain more stable so that average Venezuelans don't see their increase in earnings eaten up by inflation. That means real economic growth rather then high growth but higher inflation.

[chequita guevara]

Free trade has always been the death of colonial and neo-colonial economies, until they are sufficiently developed that they can compete against developed economies. The Asian tigers didn't even begin to consider opening their markets to free trade until their products were on a par with those of developed countries. Even the U.S. developed that way. In fact, part of the reason we fought a civil war was over the issue of tariffs and subsidies. Free trade only works between equally developed countries.

So, despite the fact that Venezuela is training doctors, educating the poor, making land available for peasants, giving grant money to cities and communities to build and repair their infrastructure, investing in industries, i.e., all things that you agree they should be doing, they are apparently doing everything wrong. Franky, if it wasn't Chavez and they weren't using the word socialism, I don't think you'd be *****ing so much. I don't hear a peep outta your mouth about Norway.

[DinoDoc]

Shouldn't people be happy if Chavez effs up the economy of his country?

[Dinner]

Norway went the free trade route I advocate instead of the stupid protectionist high inflation route.

[Vesayen]

Originally posted by Zkribbler


Zimbawe has inflation because it is producing nothing, and the government is printing money to pay its debts.

Venezuela has inflation because money is being directed to the lower classes, who are rushing out to buy stuff.



Yet he runs a country, and you don't.

NOT invoking Godwins law, but I am simply pointing out that Hitler ran a country and made some pretty stupid decisions. Having the height of political power does not always guarantee intelligence.

Chavez overall though, seems to be a very intelligent person, even if some his decisions are bone headed.

[Dinner]

Zimbabwe used to be one of the world's largest producers of gold.

[Vesayen]

Now it is the worlds largest producer of inflation!

The only thing they have resembling a stable currency are bank issued notes which can be turned in to banks for AMERICANS DOLLARS... and they expire after a month or two if you don't turn them in!

[Dinner]

Indeed.

[Whoha]

Originally posted by Oerdin
The key part of free trade is even if there is more money sloshing around in Venezuela there is still excess capacity for goods in other countries. Thus free trade can help control inflation.

Inflation is a monetary phenomena. They have to get control of the money supply to deal with it.

The problem is that there is so much money that the value of money is falling. It's simple supply and demand. Any time that more money winds up in the hands of the lower classes, inflation will rise. Whether you hand it to them as a subsidy or they earn it at work, more money means money has less value.

Since they're going to be having the inflation no matter what, spending it on educating the illiterate, feeding the hungry, giving health care to the sick, homes to the homeless, land to the peasants, etc. is making life for the average Venezuela much better.

Inflation hurts the poor the most. It is a genuine regressive tax, since surely the rich will have the most assets that are not denominated in whatever currency one is sending to zero, while the poor will pretty much have all paper.

[Imran Siddiqui]

Indeed Whoha, Venezuela has to get control over its money supply and also, as Oerdin states, try to diversify its economy. An interesting article in the Economist like six months ago indicated that as prices rise due to oil, other industries don't do as well and the workers that work in other industries have problems because prices are rising due to the oil industry, but their industry can pay them raises to keep up with inflation. It's nice that Chavez is sending some of the oil revenues to social programs, but need a monetary policy plan and fast.

[Imran Siddiqui]

Originally posted by Oerdin
The Wall Street Journal simply isn't an academic source. The following one was an academic peer reviewed published piece though it was later turned into a book:

It's called an academic survey, you numbnut! They went to 132 academic scholars from both sides and asked them. And how in the ****ing Hell do you have a "peer reviewed" history paper on who they think is the best President? Peer review over subjective rankings? Really?

[Dinner]

Price raises have to do with supply and demand. Oil money means demand rises as there is more money floating around. Free trade constrains inflation because it means there is also more supply and individual companies have less room to raise prices since there is more competition. That's why it would lower inflation.

[snoopy369]

Originally posted by Oerdin
The Wall Street Journal simply isn't an academic source. The following one was an academic peer reviewed published piece though it was later turned into a book:

William J. Ridings and Stuart B. McIver offer a solution. Authors of "RATING THE PRESIDENTS: A Ranking of U.S. Leaders, From the Great and Honorable to the Dishonest and Corrupt," they polled hundreds of academics and historians throughout the U.S. and Europe and rated presidents in terms of leadership, political skill, appointments, accomplishments and crisis management and character and integrity.

Here's their list based on international voting of professional academics and scholars:



http://www.buzzflash.com/contributor...residents.html

The liberal bias of that is beyond absurd. Anyone who thinks FDR didn't manipulate WWII for political gain is a moron or an ignoramous, for one... if FDR were running the country today he'd make W look like a good alternative. He practically set up the country as his own dictatorship, pulling all sorts of stuff even Bush won't do to make sure the dissidents (the courts, the congress, etc.) wouldn't or couldn't counter his political agenda.

And Andrew Jackson???? That's not liberal bias, that's just stupidity... the quote by him is particularly endearing:

"It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes." - Andrew Jackson

Yeah, regretted by anyone not named Andrew Jackson... he quite happily bent the acts of government to his own purposes for eight years.

[Whoha]

Originally posted by Oerdin
Price raises have to do with supply and demand. Oil money means demand rises as there is more money floating around. Free trade constrains inflation because it means there is also more supply and individual companies have less room to raise prices since there is more competition. That's why it would lower inflation.

The "anti-inflation" effects that you are ascribing to free trade have more to do with the willingness of foreigners to hoard US dollars(and the asians sitting on massive stockpiles of US government paper) due to its historical stability. As they realize that the US is becoming a banana republic they will dump their dollars.

All currency eventually has to return home so to speak, so trade wouldn't necessarily eliminate inflation, but it could delay or hide it.