Re: A Libertine Question (fwd)

Forwarded message:

> Date: Fri, 2 Aug 1996 23:36:37 -0700 (PDT)
> From: Sandy Sandfort <sandfort@crl.com>
> Subject: Re: A Libertine Question (fwd)
> On Sat, 3 Aug 1996, Jim Choate's dog wrote:
> 
> > Really? Then would you mind explaining why costs rise over time
> > instead of going down?
> 
> Gladly. Prices rise over time because of inflation of the money 
> supply.  While it is possible for private actors to temporarily
> inflate the money supply (e.g., extension of credit by banks),
> only the government can increase the money supply indefinitely.  
> Inflation is the most insidious form of "taxation."  It steals
> silently and punishes the savings in favor of consumption.

Then why didn't the costs rise at the same rate as the general inflation
rate instead of tens of times faster? If the cost of airline tickets matched
the rise in milk then my gallon of milk would cost over $10 instead of the
$2 (this x5 factor I got from a news show the other nite, I have not
verified it) it costs now (and it has remained pretty constant over the last
10 years or so arguing that something has been balancing that inflation rate).
Since the inflation rate on a dollar is flat across the board in our economy
simple inflation does not account for this rise in prices in a niche market.
I guess it could be in the case of airlines because they have had to increase
the fairs to pay for the increase in aircraft loss due to crashes and fatigue
(airlines are not replacing their aircraft as fast now as they did in the
regulation days, one of the reasons Beoing and other commercial companies
are having such a hard time.) over the last few years as well as the rise in
the price of their insurance premiums since deregulation to compensate for
the increased payouts both due to increased frequency of crashes since
deregulation and the increase in the payouts to the victims and their families.
I would guess that insurance companies don't like paying for a multi-million
dollar plane unless they have to. They are in the business of not paying off
after all.

> > Insurance has become involved in the medical industry, what
> > happened? The cost has gone through the roof. The airplane
> > industry was deregulated in the late 70's, what happened? The
> > price of a ticket went up...yada yada yada.
> 
> Technically, Jim's logical fallacy is called /post hoc, ergo 
> propter hoc/, after this, therefore on account of this.

If it was a single case I would agree, the reason that I put several
unconnected fields which share one thing, the loss of government regulation.
What we are looking at is a inflation rate for unregulated commodities
like milk (for example) and compare them to the difference in operating
costs between a regulated versus a unregulated role. It is clear that with
a increase of x5 in this area and something like < x2 in the commodities
area that something is at play here other than pure inflation.

> > If this is so then by your own argument, business are operated
> > by people therefor they are people...
> 
> Nope, that's not what I said.  This fallacy is called a "straw
> man."  It is a weak or mistated opposing argument set up by a 
> politician or debator, etc., in order that he may attack it and
> gain an easy, showy victory.

A straw man is where I take one situation and compare it to another. I am
taking your supposition and applying it to a economic model that fits both
cases. Both businesses and individuals survive by trading their outgoing
products for incoming products. The issue is whether the rules that apply to
one should apply to another. If you look at the gross cash flow between a
business and a individual they are identical. Since we are talking about
gross cash flow in both cases it does not qualify for straw man status.

> > Is your contention that because I own and
> > operate a computer it should be given rights?
> 
> Nope.  Whatever gave you that idea?

Your contention was that a business should enjoy some of the same rights
that a person does because it was owned and operated by a person or persons.
Since I own and operate my computer and it is an inanimate object like the
system of rules and procedures used by a business they are comparable in
this case, as is comparison to any other inanimate object. The key points
here are that people have rights and your contention that because businesses
are owned and operated by people they should have rights as well. My goal is
to determine your litmus test (if you will) as to how you determine that a
business is eligible for such right but a automobile is not. Simply saying
they are different is not sufficient in this case.

> > > > Businesses are a system of rules and procedures...
> > > 
> > > Made and enforced by PEOPLE.  Jim is begging the question.
> > 
> > Which question would that be? "Should businesses be considered
> > people with the same rights and priviliges?"
> 
> Nope.  You just don't get it, do you?

I get it, it just doesn't make sense when looked at the way you are looking
at because you have still failed to elucidate your litmus test. Obviously it
is more complicated than simple ownership or else anything owned would
qualify. I am simply requesting clarification of the remainder of the test.
It is hard to evaluate a theory if you don't have access to the whole thing.
Sorta similar to analyzing a crypto algorithm via public peer revue.
Generaly considered a bad thing.


                                             Jim Choate

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                          SANDY SANDFORT
 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C'punks,

On Sat, 3 Aug 1996, Jim Choate's dog wrote:

> > ...Prices rise over time because of inflation of the money 
> > supply...

> Then why didn't the costs rise at the same rate as the general
> inflation rate instead of tens of times faster?

Simple.  In a market economy, with or without inflation, relative
prices are constantly changing in response to changes in supply 
and demand, and as capital is moved among investments to maximize
return.  In an inflationary environment the result is that while
all (or at least most) prices are rising, some will rise faster
than others in the short term.  Q.E.D.

> If the cost of airline tickets matched the rise in milk then my
> gallon of milk would cost over $10 instead of the $2...
> [Jim supported his /post hoc/ argument by saying it applied to
> a lot of things, i.e., he did not address the issue, but in
> essence said /post hoc/ does not apply when there's a whole
> bunch of it.]
>
> ...It is clear that with a increase of x5 in this area and
> something like < x2 in the commodities area that something is
> at play here other than pure inflation.

Only to someone who does not understand economics.  A counter
example is the unregulated computer industry.  Prices rise very
little, if at all, and even undergo price deflation at times. 

> A straw man is where I take one situation and compare it to
> another.

Sorry, this is incorrect.  (We call that an analogy.)  The 
definition of "straw man" I used came directly from the 
dictionary.  Now you may have a "personal" definition, but I
doubt it's widely shared.  (Ref., my Lewis Carrol quote in my
exchange with the pomey.)

If there are no other questions, class is dismissed.


 S a n d y

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

> Since the inflation rate on a dollar is flat across the board in our economy
> simple inflation does not account for this rise in prices in a niche market.


   No. The COnsumer Price Index (the Bureau of Labor Statistics also puts
out the Producer Price Index, but that is not as widely reported in the
cartoon-news mass media), _is_ a single number, but only because it is
_defined as_ a measure of central tendency of all the price rises. It is
an artificial number. Each individual price rise, does swing freely.