More bad news that inflation is here

What do you call the people who decided for example to give $1500 to buyers of electric car? As he bard said: A rose by any other name is still a rose. I have already noted that these decision influencers / central planners of societal change / work indirectly to achieve their desired social - economic objecives.

 

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I'd call that normal business. It happens every day in advanced economies around the globe. That doesn't make it a centrally planned economy. The fact is there are only three centrally planned economies in the world today, Laos, Cuba, and North Korea. You are taking something, as you are want to do, and trying to morph it into something it isn't.

 

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Nonsense. The central US government decided to encourage home owner ship and electric cars etc., not business.

 

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That doesn't make it a centrally planned economy - pure and simple.

 

When the central government decides how the social economic system should change that is central planning by any reasonable definition. These central decisions can be implemented in many various ways so yes, central planning does come in many different flavors: command economy, permits (licensing), tax reductions for encouraged items, and legal prohibitions (or high rates of taxation) for discouraged items (like of alcohol, etc.) being four of the more common ways the central government can shape the evolution of the economy in directions it desires.

 

No Billy T it isn't. You live in your own little world of conspiracies.

 

The fact is they have not. I see it rather than reading about it. I am certainly not talking about 1 or 2 prices. This is 1 of the reasons, in another thread, I said the lower class has not recovered & probably never will.

 

I gave a reasonable definition of central planning in post 25, which you chose to ignore and made a personal attack instead. You do this very often (or attack the creditability of referenced sources) when you cannot support your nonsensical POVs.

As you decline to tell what is wrong with my definition, what is your definition of central planning?

 

Well actually you didn't' give a reasonable definition. You are taking a page out of Michael's playbook - making up your own definitions.

Using your definition, government spending makes it a centrally planned economy. And that simply isn't the case. That is a perverse definition. Using your definition every advanced economy is a centrally planned economy. According to you congress is our central planning body...it's absurd.
Congress is not the Politburo.

Congress doesn't dictate how many tractors will be produced or how much oil will be refined. It doesn't dictate how much wheat will be grown or what will be invented. Those are the things planned economies do. Those are the hallmarks of a planned economy. We don't have those things.

Government doing things to foment trade like building roads or making loans or giving a tax subsidy does not make it a planned economy.

 

No government spending, which all do, does not make a centrally planned economy. That lacks the very essence of central planning, which is a central effort to get the people to chose X instead of chose Y because the government thinks X is better / more desirable than Y. For example with X = home ownership and Y = renting the IRS's tax code's provision of mortgage interest tax deduction exists because of central planner's idea that home owners are more responsible, better citizens, etc. Like wise $1500 federal bonus for buying an electric car is due to the belief of central planners that electric cars are less polluting, reduce buying of imported oil, etc. etc.

When the government spends money for roads and flood control dams, the military, NIH research, etc. that is not trying to bias the consumers choices but just to become a more productive, safer, healthier, stronger, wealthier, etc. society, not to modulate the choices people make or make some choices illegal. For example, probation (of alcohol consumption) was central planning, but created criminals and lost of tax revenue, so was reversed, and is only discouraged by high taxes now.

In most cases of central planning, even the old USSR, there is no single central planning agency. Instead, many governmental agencies bias the decisions in their area of responsibility. For example in the US, the FDA decides what drugs can be sold over the counter (unbiased free choice) and which require prescriptions. In command economies, there usually is a "politburo," which is mainly concerned with political questions, not more detailed choices that the responsible agencies, like a department of agriculture, department of energy, department of transportation, department of health, etc. make.

So you assert, but you still refuse to give any definition of Central Planning. I want you to define what is central planning, as I did, not tell what it is not. Then it would be possible to check if your POV is at least internally consistent and different from mine.

 

Who makes the cost of living , the government. The government goes into stores to find prices BUT they call those stores ahead of time so as they can reduce their prices on those items the government workers are going to check. The stores either reduce the cost or put it on sale so that it "looks" like the prices have fallen. This skews the cost of living quite a bit and it happens allot. The government is in charge of the cost of living adjustments so they can make the numbers go anyway they want.

As for the price of beef where is the rise coming from? The cattles food hasn't risen that I've seen by 10% so why is the prices going up by 10%?

 

Laissez-faire market-based economies are where goods are sold to whoever is willing to pay for them at a price freely set by whoever is selling them with no other considerations. There are no examples of this.

What we have is a market-based economy with taxes, subsidies, loan programs, regulations, adjucations and prohibitions. Individuals are still responsible for making decisions but the government attempts to provide policy guidance: sin taxes on alcohol and tobacco, fuel subsidies, loan programs to foreigners who are going to buy American products, auto safety regulations, various state laws that mean large purchases have government "insurance" against being ripped off, and laws against selling radium to children in a paper sack. Government policy guidance also extends to efforts to ensure that markets are competitive because without regulation conspiracies and monopolies can shift the price-making power to the hands of a few.

Central planning is replacing market forces with an attempt to guess every human need and orchestrate their delivery, eliminating the need for entrepreneurship (individual risk-taking by business owners). The main draw-back is that central planners make mistakes which can't be fixed in a timely fashion inflicting worse and arbitrary losses of human effort than failings of individual entrepreneurs.

Finally, there is the black market -- which purports to be laissez-faire but only exists because the transactions are illegal or frowned upon by society.

 

Good, (accurate) post. Yes most, if not all, modern economies are to some extent "centrally planned." China is an interesting hybrid case: essentially a command economy for major capital investments (with more than five decades time horizon*) and more closely resembles Laissez-faire economy than the US by far, as far as the consumer goods markets are concerned.

I.e. there are no bureaucrats making proscriptive performance rules at several levels of government. For example one county requiring use of copper for hot water pipes while the adjoin one permits heat resistant plastic pipe. If you want to open a restaurant selling your grand mother's secrete recipe noodle soup, you just do it and the invisible hand of Adam Smith, will determine if it closes or makes money; however, if the secrete is "just a touch of arsenic," and frequent customers start getting sick, then when the clinic learns they often ate your noodles, your shop will be closed and also you will be at least heavily fined if not do some jail time.

I.e. China post-regulates, not prescriptively regulates. It is a much more free and economically efficient market place with no army of government bureaucrats to pay. They do have their version of the FDA to investigate abuses of the public and courts to appropriately punish wrong doers. If you kill a few people, especially babies as the sellers of milk, watered down with a known protein toxin added to make it test as if with normal protein content, then you will be speedily executed - not after 20+ years of court appeals as in the US. (The six top managers of that milk company were dead in less than a year after what they had knowingly done was learned.)
*

 

No. Their monetary policies _affect_ the economy, and thus the cost of living, but they don't set it, any more than they set unemployment numbers or GDP numbers.

Pure BS.

A shortage of cattle, and a consequent run on cattle futures.

 

Laissez-faire, indeed. http://www.nytimes.com/2011/05/08/world/asia/08food.html

At the mom-and-pop level, it's selling expired/moldy/contaminated product. At the CEO level it's selling poison as food. Thus China is seeing that regulation (of say dairies) beforehand helps boost confidence in the entire dairy market and creates incentives to pay the extra price of being a good actor. But problems continue ... http://www.scmp.com/news/china/article/1264335/chinas-next-food-scandal-honey-laundering

So compliance with public safety is an (economic) game just like any black market, while in the US it is an entry cost of business.

// Added 30 minutes later:

No free market solution exists to the Tragedy of the Commons, which is becoming increasingly relevant on a global scale.

 

Yes that's true, but due mainly to the very high, compared to normal, cost of cattle feed a few years ago causing ranchers to thin their herds* - even their breeder cows. I think the silly corn to alcohol program was partly to blame - it was using more than 1/3 of the corn.

* While this was going on, the price of beef actually declined a little. That makes the current price of beef have larger percentage increases (lower base being compared to).

 

Your definition of central planning simply describes a modern industrial economy - any economy with utilities, roads, watershed management, garbage and pollution handling, etc.

Most people take "central planning" to involve what you are labeling a "command" economy - that is, one in which people's choices are curbed and coerced rather than influenced and persuaded. There is certainly a lot of that in the US, as in all other industrial States, but such US planners cannot reliably set the rate of inflation of the currency , and have only indirect influence on many major economic factors (such as the price of oil, or business hiring).

 

With this I did not say or even mean to imply that Chinese food is as safe to eat a US food. Corruptions facilitates greed, there and in Brazil too, but in both countries more "evil" people are being caught and punished. Both are in period of rapid transitions and both need more public servants inspecting for contaminated food*, etc. The corruption is not new - just now being more exposed and commented on in social media blogs, etc. My point was that although no where, as rpenner notes does a fully Laissez-faire market exist, China comes much closer to that than the US does in a hybrid economy with very strong command economy for larger capital investments. Likewise as rpenner notes ALL modern economies are to some extent centrally planned. I gave four main ways this is done, rpenner gives many more.

* In Brazil's smaller rural towns, it is still quite common for the local butcher shop to sell beef from a carcass that was killed on the farm and delivered to the back of his store in a pick-up truck - all illegal of course but hard to stop.

 

It is more than just market based where goods are sold for prices freely set by the market place. It is free of government regulation, tariffs and subsidies as well.

True enough, and that is why we do not have a centrally planned economy. With few exceptions (e.g. number of physicians), government doesn't fix supply or demand.

True enough, and another reason why we do not have a centrally planned economy as Billy T and Michael have asserted.

Again true. Black markets are not laissez-fare, they are illegal.

 

Another iteration of the CPI conspiracy, repeating it doesn’t make it true. Each month the BLS data collectors visit or call thousands of retail establishments, hospitals, medical offices, etc. and collect pricing data. If your conspiracy were true, it would have to be a conspiracy of monumental proportions involving thousands of people across the land. Why would retailers, physician offices, and hospitals lie to the BLS CPI data collectors? And how could such a broad conspiracy involving thousands of people across the land in disparate locations be kept secret? Our government has enough trouble keeping real secrets secret. And you would think consumers would catch on and take advantage of the monthly CPI price reductions if this were true.

The bottom line is you have no evidence of such a conspiracy, because there is no evidence, because there is no conspiracy.

As I have written several times before, the article you cited stated the cause of increased beef prices was a drought. I suggest you read the article you cited.