Travis, I agree with you exactly. Huckabee’s a bit interesting, but Ron Paul has come (from my point of view) out of no where to capture my imagination. Something like: Imagine (you may say-ay-ay-ay I’m a dreamer…) a President that is REALLY opposed to spending, programs, wars, and is in favor of slashing programs, the IRS, the income tax… Suddenly, I find myself quite interested in politics, while before I was just bracing to take a screwin’ by the suits, no matter which side of the isle.
Actually, in the strict sense of the word, only the central bank can cause inflation. This is yet another reason why Ron Paul is such an amazing candidate. He gets the fact that the Federal Reserve is the government’s money-printing shop, which allows them to pay for wars and run up a massive debt in the short-term, while devaluing our currency and discouraging savings. It’s the greatest counterfeiting job in the history of the world–the dollar has decreased in value almost 100% since 1913. It may be the greatest theft in the history of the world.
Efwakeman may pipe up after this, but for my part, I get nervous when Christians get swooney about any particular party or candidate. And Paul seems to be something of a May pole even for fellow W2Kerâ€™s, which seems odd if W2K theorizing has it in mind that â€œThe public square loses some of its importance but retains its dignity. It is neither ultimately good nor inherently evil; politics becomes merely a divinely appointed means for restraining evil while the church as an institution goes about its holy calling.â€
I know I may well be accused of seeing things that arenâ€™t there, but I seem to get this sense from some W2Kerâ€™s. Thus, swooning over anyone/thing seems more in keeping with those who would yet over-realize the function of the public square rather than those who want to see properly sane stakes assigned to temporal purposes. In other words, W2Kerâ€™s who swoon over Paul seem like W2K versions of the Religious Left and Right. To me, they seem to imply that a religious view implies a political one (i.e. W2K implies Libertarianism), instead of realizing that this has been the problem all along â€œever since Winthrop landedâ€ and coded this error into our religio-cultural DNA; which is why most American religionists seem to think a pre-requisite to faith is one set of sweaty politics or another.
So, have your politics one way or another, I say, since the public square should indeed â€œretain its dignity.â€ Even have them passionately (by the same token, feel free not to be particularly interested). Just donâ€™t commit the same principle error that most American religionists do by thinking a religious view necessarily implies a secular one.
Josh, I’m not sure you’re 100% accurate. Congress recently passed a minimum wage increase, which boosted the pay level of pretty much all hourly workers. That means that those workers have more disposable income, which moves the demand curve to the right. The supply curve moves slightly left because firms must raise the prices of their goods. The combined moves push the prices of goods upwards, even if the quantity stays the same, which is inflation.
But to say that inflation is primarily caused by the broad monetary policy of the government (through legislation) and the central bank would be accurate.
Inasmuch as you have proclaimed devotions to so-called â€œC2K,â€ no, properly speaking, your post was not in my purview. It just got me thinking about what I think I might witness amongst those with ostensibly W2K devotions. Hence, my cue that efwakeman might be inclined to pipe up and call me on my hallucinations.
That said, I have to admit, Paul is indeed an interesting phenomenon, no doubt.
Actually, I’ve been using W2K to refer to the Westminster Seminary (California) Two Kingdoms view which totally rejects any obligation on the part of society to pay homage to Christ. This permutation of 2K theology was developed by Meredith Kline in his biblical theological works and is currently being promoted by Michael Horton and our own Darryl Hart here at De Regno.
Their view differs substantially from the 2K held by the majority of Westminster divines. Kline taught that the original cultural mandate (Gen. 1:28) was fractured into two separate programs after the Fall, one cultic and the other cultural. In a recent article, Horton argues that any cooperation between the Church and larger socety in kingdom work is Pelagian works-righteousness. This is assuredly not taught by the WCF and is contrary to how the Westminster Assembly understood its own work, which was to compose a confession for the Church of England restructured as a Presbyterian organization. The purpose of the Assembly was to complete the task of reformation in the English national church according to Puritan socio-religious ideology.
Sorry, Josh, I didn’t see your comment. We must disagree on what inflation is. I consider inflation to be any broad rise in the price of goods. In that sense, government monetary policy is not the sole contributor to inflation. I see a number of contributions:
1) Technological efficiency – I don’t need to hire servants to wash my dishes because I have a dishwasher. Those “servants” are freed to find more useful and productive jobs. The cost of labor, therefore, goes up because the “easy”=”cheap” jobs are done with machine now. This is one reason why employees should get raises, because it is expected that each year they are more efficient and effective at the jobs they do.
2) Scarcity of natural resources – We can debate oil and energy, but right now, oil is more and more expensive to produce. Venezuelan oil, which was not cost-effective to drill in the 1970’s is now being drilled extensively, despite an expensive conversion process. It is harder to find oil reserves, requiring many man-hours in geotechnical analysis and speculative drilling, and thus the price of the finished product must be higher. The cost of energy, therefore, goes up and that has a ripple effect through the economy as people re-balance their mental equations to determine their new quality of life requirements.
3) Government monetary policy – modern macroeconomic principles say that the central bank should directly “correct” the economic situation through manipulations of the money supply. Inflationary mechanisms tend to lower unemployment and increase capital spending, which deflationary mechanisms tend to raise unemployment and decrease capital spending. The Fed does this through manipulating the prime rate to “balance” employment and inflation rates. However, these corrections also happen through Keynesian deficit spending (e.g. expanding the national debt to arbitrarily improve the economy) which is occuring today.
So, I think that we’re starting to see external corrections to our financial manipulations. As the U.S. borrows to maintain a false economy, other countries are keeping up with real economic forces. This means that the U.S. must borrow and spend more to keep the economy comparable to others. As the capital spending market heats up worldwide, the U.S. must pay a premium for its debt and that translates to higher taxes to pay the interest, but with exports declining and no real economy to pay those taxes, the system will eventually collapse.
Although your definition of “inflation” is fairly standard in common discourse, one must ask how prices rise so quickly. How, for instance, have they doubled over the last twenty years? Why is the dollar worth 4 cents in terms of the dollar of 1913?
It is difficult to attribute this to your #1 and 2. In fact, I think #1 is false because increased productivity should lead to cheaper products, and therefore lower prices. Yes, labor costs might go up (not necessarily though), but the overall costs to produce products with increased productivity is naturally going to fall. It is not a necessarily inflationary scenario. #2 is possible in today’s commodity bull market, but we’ve seen bear markets as well during times of price increases.
As for #3, exactly what are these “inflationary mechanisms”? We all know that the central bank gets to create money out of nothing, which is what you mean by “manipulate the prime rate” (if that rate is to be lowered). Isn’t that theft? In theory, it lowers the value of money because the total supply of money has increased. I am, of course, arguing Ron Paul’s Austrian viewpoint.
If it were cheaper to hire someone than to buy a dishwasher, I’d have a servant. Thus, the market has placed a higher value on human labor outside of dishwashing. Technology makes people more productive, and thus there are a broader range of things that can be made. 50 years ago, you could get most jobs without a college education. Now, there are few that don’t require a degree. That also means that the expertise required to do modern jobs is significantly higher. I think they’re in reverse of criticality – government monetary policy is the leading contributer, followed by natural resources, then technology, but they all have effects.
One other inflationary factor these days seem to me to be the ethanol craze. The farmers in Kansas at my old Church had a great year – all the prices are up. Wheat is up, probably because Corn is up. And corn is way up because of Ethanol, is what I hear. There were also many other contributing factors, draught in many areas, poor harvests here and there. But, because prices were so high, even a decent harvest, like they had in Minneola, was a boon to the farmers this year. But, Ethanol is having its consequences, sadly, it does not appear that one of them is a better and more healthy ecological situation, which is what its supposed to have helped solve in the first place. Though, the energy crisis may warrant the use of bio fuels in the medium/long term until the oil situation is resolved by an American Hegemony in the middle east :-). Go SURGE, go.