Welcome login | signup
Language en es fr

Forum Post: Why Americans Should Work Less – The Way Germans Do by dean baker

Posted 12 years ago on July 10, 2012, 8:32 a.m. EST by flip (7101)
This content is user submitted and not an official statement

Nobel Laureate Paul Krugman and Richard Layard, a distinguished British economist, took the lead last week in drafting a sign-on "Manifesto for Economic Common Sense", condemning the turn toward austerity in many countries. This manifesto seems destined to garner tens or even hundreds of thousands of signatures, including mine.

While the basic logic of the manifesto is solid, there is an important aspect to the argument that is overlooked. We can deal with unemployment every bit as effectively by having people work fewer hours, as we can by increasing demand.

The most important point to realize is that the problem facing wealthy countries at the moment is not that we are poor, as the stern proponents of austerity insist. The problem is that we are wealthy. We have tens of millions of people unemployed precisely because we can meet current demand without needing their labor.

This was the incredible absurdity of the misery that we and other countries endured during the Great Depression, and which Keynes sought to explain in The General Theory. The world did not suddenly turn poor in 1929, following the collapse of the stock market. Our workers had the ability to produce just as many goods and services the day after the collapse as the day before; the problem was that after the crash, there was a lack of demand for these goods and services.

The result of this lack of demand was a decade of double-digit unemployment in the United States. The spending programs of the New Deal helped to alleviate the impact of the downturn, but because of the deficit hawks of that era, Roosevelt never could spend enough to bring the economy back to full employment – at least until the second world war made deficits irrelevant.

This is the same story we face today. The US and European economies were close to full employment in 2007 due to demand created by housing bubbles in the United States and across much of Europe. These bubbles then burst, substantially reducing demand. As Krugman and Layard point out in their statement, one remedy for this loss of demand is for government to fill the gap. If the private sector is not prepared to spend enough to bring the economy to full employment, then the government can engage in deficit spending to make up the shortfall.

But there is another dimension to this issue. It's great for the government to generate demand insofar as it can productively employ people. This means either providing immediate services, like healthcare and education, or in investing in areas that will provide future dividends, such as modernizing the infrastructure or retrofitting buildings to increase their energy efficiency.

However, it can also employ people by encouraging employers to divide work among more workers. There is nothing natural about the length of the average work week or work year and there are, in fact, large variations across countries. The average worker in Germany and the Netherlands puts in 20% fewer hours in a year than the average worker in the United States. This means that if the US adopted Germany's work patterns tomorrow, it would immediately eliminate unemployment.

Of course, it is unrealistic to imagine such large changes occurring overnight, but governments can certainly attempt to encourage employers to shorten workweeks and increase vacation and other paid time-off. In fact, this is the real secret of Germany's post-crisis recovery. Germany's growth has been no better than growth in the United States since the start of the downturn, yet its unemployment rate has fallen by 2.0 percentage points – while unemployment in the United States has risen by almost 4.0 percentage points. The difference is that Germany encourages firms to reduce work hours rather than lay off workers.

Since workers in the United States put in the most hours, the US has the greatest potential gains from shortening work years. But all countries could try to go this path. In the short term, this route keeps people employed and allows them more time to enjoy with their family and friends. Ideally, most of the lost wages will be made up by subsidies from the government. (Remember, the problem is too little demand, not too much. We can afford this.)

In the longer term, workers may find that they prefer more leisure and may be willing to sacrifice some income to have a shorter work week, paid vacation or family leave, or other paid time-off. If that ended up being the case, it would be a lasting benefit from using short-time working as a route for dealing with the downturn.

But even if there are no long-run changes in work patterns, shorter work hours should be on everyone's list as a mechanism to combat unemployment. It is a proven success story with real benefits for workers and the economy.



Read the Rules
[-] 3 points by HempTwister (667) from Little Rock, AR 12 years ago

This would be as hard to pass as Health care. One side likes high unemployment. It keeps wages down. https://www.facebook.com/WarOnWages

[-] 2 points by flip (7101) 12 years ago

agreed - we need an fdr type - like when he said - "We have not come this far without a struggle and I assure you we cannot go further without a struggle.

For twelve years this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The Nation looked to Government but the Government looked away . . . Powerful influences strive today to restore that kind of government with its doctrine that that Government is best which is most indifferent . . .

We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.

[-] 2 points by HempTwister (667) from Little Rock, AR 12 years ago

A traitor to his class. BTW, he had big majorities in both houses for some time. Love the quote.

[-] 1 points by flip (7101) 12 years ago

and a population that was pushing him - the commies - the real ones were organizing unions like crazy

[-] 1 points by Phanya2011 (908) from Tucson, AZ 12 years ago

Damn. It only took us 80 some years to do it again. Apparently all we learn from history is how to manipulate things, not how to stop them or fix them. So, no more history; just teach people basic arithmetic, basic communication skills and how to think -- instead of teaching everyone what to think.

[-] 1 points by flip (7101) 12 years ago

well history is an ideological field but not sure they should stop teaching it - have you read howard zinn's people's history?

[-] 1 points by Phanya2011 (908) from Tucson, AZ 12 years ago

No, I've never heard of it. I am not saying we should not have historians and history -- I am simply saying that since so much of what is taught in schools is ideologically driven, then teach people how to think and let them know how to evaluate what they read as objectively as possible. I will look into Howard Zinn's book. (I graduated college in 1965, so I was thoroughly indoctrinated :))

[-] 1 points by flip (7101) 12 years ago

"a people history of the united states" - great book - you will love it i think. i graduated in 72 so you got me beat by a bit. the kids i teach are telling me that every memorial day some soldiers come into school and tell the kids how the peace movement spit on the soldiers returning from vietnam. here is a bit (chopped up - sorry) from chomsky on the trilateral commission and indoctrination. - "The Trilateral Commission has issued one major book-length report, namely, The Crisis of Democracy (Michel Crozier, Samuel Huntington, and Joji Watanuki, 1975). Given the intimate connections between the Commission and the Carter Administration, the study is worth careful attention, as an indication of the thinking that may well lie behind its domestic policies, as well as the policies undertaken in other industrial democracies in the coming years. - The point is that their work of "unmasking and delegitimatization" is a threat to democracy when popular participation in politics is causing "a breakdown of traditional means of social control." They "challenge the existing structures of authority" and even the effectiveness of "those institutions which have played the major role in the indoctrination of the young." Along with "privatistic youth" who challenge the work ethic in its traditional form, they endanger democracy, whether or not their critique is well-founded. No student of modern history will fail to recognize this voice.

[-] 1 points by Phanya2011 (908) from Tucson, AZ 12 years ago

Thanks for the information. The internet is such a great source to discover all the information we were not given over the years. So, for people who can think objectively, it is a gold mine. Unfortunately, it is also a mother lode for spreading ideological b.s. The curse is upon us: we are indeed living in interesting times :)

[-] 1 points by flip (7101) 12 years ago

it ain't the 50's

[-] 2 points by bensdad (8977) 12 years ago

Of course Americans should work for less.
I would put a ceiling on everyone's annual earnings - maybe $200,000

But I'd rather work on something 80% of Americans ALREADY approve of
--> --> --> --> --> --> --> http://corporationsarenotpeople.webuda.com

[-] 1 points by JackPulliam3rd (205) 12 years ago

Would the ceiling apply to everyone? Actors? Musicians? Athletes? Doctors and researchers? Steve Jobs? Jack Dorsey?

[-] 2 points by bensdad (8977) 12 years ago


[-] 1 points by flip (7101) 12 years ago

didn't mean to stop you from your cause - i am all for it - and by the way it is not work for less but work less

[-] 2 points by francismjenkins (3713) 12 years ago

Germany did employ this strategy very effectively, and there's no reason to think it wouldn't work in a similar fashion in the US. However, it's important to understand how Germany did this. The German government subsidized its businesses to both reduce hours, and continue paying workers at the same rate. In other words, work less hours, earn the same money, great, but this is not a long term strategy (this is just a hybrid form of Keynesian stimulus, although very effective on a short term basis). So Germany was able to control unemployment, and at the same time, keep demand strong.

The French tried this some years ago (on a permanent basis, where there were no subsidies, rather they simply shortened their work week through legislation), and it was ineffective at reducing unemployment (mostly because along with a shortened work week, since there were no subsidies, came reduced pay, and thus reduced demand). So yes, as a short term strategy, brilliant idea (although, considering all the political corruption in the US, do we want to create another monster who will require constant feeding)?

The thing about Germany is, they're a very different culture. Their manufacturers are often small, family owned companies, with a high degree of loyalty to Germany. They're much less focused on quarterly profits, and much more focused on the long term. Obviously, we could structure incentives that work around this issue, but it still leaves our current structure unmolested (and indeed, only serves to feed it). In short, I wouldn't mind a program like this IF (and only if) it was restricted to small & medium sized companies (and we created more incentives for the formation of worker cooperatives, employee owned companies, we modified our labor laws so they were more favorable to unions, etc.). We given too many gifts to big business as it is.

[-] 2 points by know1 (210) 12 years ago
[-] -1 points by ABO2012 (-3) 12 years ago

Guess again

[-] 1 points by know1 (210) 12 years ago

how many Guesses do I get

[-] 0 points by ABO2012 (-3) 12 years ago

You obviously need at least one more :-)

[-] 1 points by know1 (210) 12 years ago

Question for you, OH AB02012. Would slave owners want their slaves to go free ? A yes or no answer, please.

[-] 1 points by indoorplumbing (1) 12 years ago

I'm with ya fully, if we could only make it more profitable to hire more workers who work 36-38 hr weeks. It actually may be more profitable in many industries, but it is hard to see the costs that make that true and even harder to get a 1% to pull his head out of is arse to see that far down the road. Here in WV, coal miners have been pissing and moaning for years about the declining jobs and instability of those that are available. But ask a room of coal miners how long they work each week and you will get a range from 50-80 hrs per week, the norm being 50 one week and 60 the next. It seems that after overtime pay, accidents from fatigue, increased work related health problems (NPR is currently doing a report on increasing instances of black lung) that the long term costs are much higher under these conditions. Also if there are less accidents, injuries, and health problems then eventually insurance costs would decrease (at least theoretically). This mirrors, on a smaller scale, the emerging ideas about subtracting environmental impacts from economic indicators like GDP. Anyway, I agree, Germans are smart for sharing and it has given them a lot of resilience.

[-] 1 points by flip (7101) 12 years ago

i read a book many years ago called "why work" - the premise was that in 1820 it took 90% of the population to feed all of us and now it takes 2% - what the hell are the rest of us doing! miners should work like the norwegian oil workers - "The Norway issue has to do with a labor dispute between Statoil (STO: NYSE) and its offshore workers union. The workers get paid about $160,000 per year for about 15 weeks annually of actual work on the rigs. Plus, they can retire at age 62. It's nice work, if you can get it.


[-] 0 points by john23 (-272) 12 years ago

While Krugman supported the policies that created the housing bust...the austrians were screaming that this would create a housing bubble.

Krugman in 2002:

"The basic point is that the recession of 2001 wasn’t a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

1929 was the reckoning of a decades worth of the creation of credit which created a massive bubble that ended in the great depression. Much like the housing bubble. This is what happens every time....and the keynsians are left scratching their heads wondering what went wrong.

[-] 2 points by HempTwister (667) from Little Rock, AR 12 years ago

A right wing talking point I have not seen before.

[-] 1 points by john23 (-272) 12 years ago

I'm not a republican....it's just basic fact.

[-] 2 points by HempTwister (667) from Little Rock, AR 12 years ago

Fact it may be. But the use if the word "bubble" was a joke. They are just calling for lower interest rates. Which makes housing easier to buy. A bubble is when people start paying more for something than it is worth in hopes of making money. It is not credit that creates bubbles. But giving credit to people who can not pay will burst them for sure.

Consider that the number of people who saw the crash coming was about five in the whole world. Or at least did enough to get rich off the crash.

[-] 0 points by john23 (-272) 12 years ago

There were a ton of austrians who predicted it was going to happen (a lot more than 5). They were screaming about it in 2001. Here's a partial list:


Yeah, a bubble does create higher prices But what does easy credit do? Exactly that...causes over investment in certain areas (in this case housing) which increases the price of houses artificially. Excess credit causes bubbles.

[-] 2 points by flip (7101) 12 years ago

and what ended the depression - you have a lot to learn about economics- if you think hayek is the man you are not thinking clearly

[-] 1 points by john23 (-272) 12 years ago

There are many theories...what do you think ended it?

[-] 2 points by VQkag2 (16478) 12 years ago

It was clearly both. In fact WWII was a huge stimulus pgm in that the govt put millions to work in the military industrial complex.

But like Pres Ike said we have to be wary of that economic stimulus. Control it limit it or we will require war to stay economicly successful.


[-] 1 points by flip (7101) 12 years ago

there are not many theories - i know what did it and so do you so cut the shit.

[-] 1 points by john23 (-272) 12 years ago

I was actually being serious (not trying to be an a$$)...WW2...or the stimulus programs? Most people here go with one or the other.

[-] 1 points by flip (7101) 12 years ago

sorry - i am cranky form dealing with too many people who just want to antagonize! it most certainly was government war spending - deficit spending on tanks and planes even before we got into the war. conservative free market types don't like to admit that now but it has been common knowledge for 60 years or more. whats more, is that it was the government giving money to the banks which they then lent back to the government that funded the build up. we could do the same thing today if we wanted (but cut out the banks!). instead of building tanks we could build renewable energy and fix our water system and grid. build the infrastructure for our future but they (the ruling elite or power elite or whatever you call them) are not concerned with our future - just want to line their pockets. lots more examples of deficit spending (sweden exitied the great depression in 1934 - before anyone else using keynesian methods) but no need to go into that i think.

[-] 0 points by john23 (-272) 12 years ago

Check out the great depression of 1921....you won't be able to find it. It could have been if the policies that were undertaken to bring us out of the great depression had been used (which prolonged it). The depression in 1920 lasted 1 year...because markets were allowed to adjust and stimulus wasn't provided. It was a bad year...but it lasted one year and everyone went back to work.

THere are a lot of economists who challenge the new deal and stimulus packages that supposedly got us out of the great depression. Here is a detailed study from the Federal Reserve on this topic:


[-] 1 points by flip (7101) 12 years ago

nonsense. sorry but i do not buy it - believe what you like but it is obvious to anyone who is objective that markets only work in limited arenas. tell me how your beloved markets worked in the panics of 1819, 32,36,37 (and the depression of 37 - 43), 57, 73,93,- should i go on? history show the capitalism is inherently unstable. maybe it will work if you follow carnegie's idea- He advised President Herbert Hoover to "liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people." - not for me, your love of the market is misplaced. keynes stabilized the system and the carnegie capitalists want to dismantle that system. they have been trying since the new deal was put inplace and you are helping them! it is obvious to anyone who can think that hayek, and the free market, hard money and the gold standard are ideological constructs to keep the power eilte (replace with the name you like here) in power (and wealthy!). read about the populist movement and learn what the dirt poor farmers learned about hard money and fiat currency. you are barking up the wrong tree!

[-] 1 points by john23 (-272) 12 years ago

Panics of 1819, 1832, 36 etc. etc....have to do with fractional reserve banking...which i believe is fraudulent and sets the stage for boom/bust cycles...it had nothing to do with the gold standard. I can see why farmers would get angry and believe that hard currencies were what caused the problem. These are not easy topics to understand....especially pre-internet days. This is a quote from Peter Bernholz in his book which studies inflations and hyperinflations of the past (prof of economics):

“In a democracy parties compete to gain and maintain government power. As a consequency the party or parties in power have to try to gain as many votes as possible in the next election to secure at least a majority in parliament. However, voters are rationally uninformed about matters which are not very important to them, since the negligible chance that their individual vote would make a difference to the outcome of the election does not warrant more than very little effort and quences. It follows that they are only reasonably well informed about what is important to them, usually their and their relatives’ job security, their wages and incomes, and the availability of not too expensive housing. They are thus usually ignorant about monetary policies and their future consequences. Moreover, these matters are complex and not easily understood without specific education. On top of this, the positive though usually short-lived consequences of an expansionary monetary policy (aka increasing the money supply), namely an upturn of the economy and a decrease in unemployment, follow more quickly than its negative consequences in the form of higher prices. As a consequence, because of the complexity of the problems and of their rational ignorance voters will judge the performance of the government mostly by the results of former policies and even events which have not been caused by measures of the government.” Peter Bernholz - Monetary Regimes and Inflation

I'm far from a power elite...nowhere near being wealthy.

Keynes....lets take a look at the track record of this mindset:

"And so much for stability, as the National Bureau of Economic Research shows the recessions since the Fed was enacted: 1918-1919, 1920-1921,1923-1924, 1926-1927, 1929-1933, 1937,1938,1945 ,1948-1949, 1953-1954, 1957-1958, 1960-1961, 1969-1970, 1973,1975,1980,1981-1982, 1990-1991, 2001, and 2007 of which we are still dealing with. So not only have they not provided a stable economy, they have stolen 95 cents of every dollar from you through inflating the money supply."

[-] 1 points by flip (7101) 12 years ago

so tell me, if they have stolen 95 cents of every dollar then how in the world is the country so much (so very much) richer than it was in 1900! your rant has everything to do with the gold standard - get your facts straight. keynes has nothing to do with the fed. the bretton woods system was dismantled mostly by nixon. it was in part a system designed to prevent speculation in currencies and worked very well. the banking system should be overhauled and nationalized but your rand paul fractional reserve nonsense is just that. hard money has everything to do with the gold standard. get your facts straight. as to the passage you quoted i don't understand why you included it - blah, blah, blah. i assume we should end this - believe what you want but keep me out of it. it is all free market gold standard drivel and only an ideologue would buy it. i am convinced that you do not want to understand how the world works - preferring to hold on to your religious free market theories. you may not be rich but you certainly are carrying water for them!

[-] 1 points by john23 (-272) 12 years ago

Don't trust me on the 95% deal...check it urself from the government website:


"how in the world is the country so much (so very much) richer than it was in 1900"

Have u noticed that we are 16 trillion in debt?


"i am convinced that you do not want to understand how the world works - preferring to hold on to your religious free market theories. you may not be rich but you certainly are carrying water for them!"

I'm convinced of the same to you..unfortunately the very things you rant against would help you..but you won't take the time to sit down and understand them. You've grabbed onto the first thing you've read and taken it as the bible.

"religious free market theories"......where did that come from? Why do i gotta be religious?

Just trying to discuss this...not turn it into a shouting match.

[-] 1 points by flip (7101) 12 years ago

yes, 16 trillion at 95 cents on the dollar makes the debt what??? first of all the debt has nothing to do with the wealth of the nation - if that is your response then it tells me all i need to know. i was being very quiet - i have read plenty on the subject - have you read the critics of your theory. i have read both sides have you?? tell me who you have read that points out the flaws in what you are saying. i have read hayek and paul and too many of the others to do any more. and yes - the gold standard and fractional reserve lending are all part of the same package - hard money and free markets both obvious frauds.

[-] 0 points by john23 (-272) 12 years ago

Marx...Krugman....chomsky...Kevin Philips "American Theocracy" was one of my favorites (left leaning and did a good job of predicting the crisis.)....i actually think most OWS supporters would love it...read a bunch of al frankins books although i wouldn't say they had much insight into the economy...still enjoyed them though.

"the gold standard and fractional reserve lending are part of the same package"

No they are not......that couldn't be further from the truth. Fractional reserves are fraudulent. They precipitate credit expansion under a gold standard....that's not a real gold standard (hence more money in circulation than there is gold in the vaults...which is the cause of all the panics you're talking about).

"first of all the debt has nothing to do with the wealth of the nation"....that is absolutely ridiculous. So without that 16 trillion dollars we'd have everything we do now? That 16 trillion paid for things in this economy. That's like saying if we let nigeria spend 16 trillion dollars over the next few years they'd be no better off than they are now. It's akin to your next door neighbor with the lexus and million dollar home that's running up 20 different credit cards worth of debt.

that 16 trillion wasn't created in 1913....16 trillion in todays dollar. Its over 100% of GDP.

[-] 2 points by flip (7101) 12 years ago

and the panic of 2008? if the national gov't could print money there would be no bank run, so there! the truck would arrive and and drop off the fiat currency and the people would walk away. as to the romans, you have read the wrong history - the imploded - it had nothing to do with money and everything to do with resources - like food! just like our society those at the top of the food chain were sucking so much of the resources that those at the bottom could not feed themselves. since the empire was not expanding there were no more slaves being brought in to do the work. check out "peoples history of the world" on that subject - seems that all empires fail in the same way - and we are about to! money is debt - read graeber - do you know who he is - one of the founders of ows in some way. i am sending you an interview - check it out. the reserve currency is a coming problem no doubt but that is a different problem from a fiat currency. any country can print all the money it wants - you are confusing money with wealth - if we have copper and oil (our modern society is build on oil and fossil fuels) and iron ore etc then you are rich and you can print money only limited by those resources - food of course. if you need to get those resources from another country then the shit begins! i do not know what you mean by using a commodity freely - copper as currency or just as copper - a society must husband it's resources - check out rickover's testimony before congress in the 1980's. i am for fiat curency under deomocratic control - just like the populists - fractional reserve lending is not a problem in any way seems to me. neither is inflation - inflation redistributes wealth! read "secrets of the temple" - who is against inflation - the banks and the bondholders - who are the bondholders - the wealthy. if you have a pile of money in the bank and there is inflation you are losing. if you hold someones mortgage and there is inflation you are losing (assuming a fixed interest rate like i have). if you own a house you are getting richer while your mortgage is getting smaller. i lived throught the inflation of the 70's and life was never better - my house was worth more - i raised my fees every year. of course, this all depends on other factors but given our present system inflation is what we need now!!! not sure what your agenda is and who you support but your theories are carrying water for the rich. here is a snippet from keynes - the author here is the dumb one - he does not understand that keynes is making the argument against the gold standard - "John Maynard Keynes once suggested that the government could create jobs by burying bottles full of money in coal mines, covering them with trash, and encouraging people to dig them up. I know, pretty dumb idea. If Korea builds cars, China builds computers, India builds accountants, and we take money out of the private economy to subsidize a government bottle burying program, which economy will generate more wealth in ten years?


[-] 2 points by flip (7101) 12 years ago

you are wrong about the panics - you better read graeber - "debt the first 5000 years" - then check out michael hudson on modern monetary theory. all money is debt- if you pay off the debt money will disappear - tell me you are not arguing for hard money and less debt - debt is not a problem for those with a printing press and a large army. how does china force us to pay - there is something about "if you owe the bank $100 they own you - if you owe them 100 million you own them! and who holds the debt - the rich. if you are saying we should not let banks take the vig i am with you but no problem with lending (fractional reserve doesn't mean much if there is no gold standard - the national bank prints dollar - no?) and printing money - maybe you can enlighten me - are you for hard money? are you for nationalizing the banks - are you for fiat currency and debt - even big debt?? who makes the decisions about money in your ideal world?? that is the only question - read about populism!

[-] 0 points by john23 (-272) 12 years ago

Brand new video talking about oil prices...shows why hard money protects the consumer. Fact checked by the Washington Times.....4 minutes


[-] 0 points by john23 (-272) 12 years ago

I am absolutely right about panics....the only way panics take place is when there isn't enough money at the bank to satisfy withdrawals....there is no other way...why would people panic if they knew all their money was at the bank? They don't...that's ridiculous. So panics occur because people are freaked out that by the time they get there their money will be gone. How can this occur under a pure gold standard without fractional reserves??? It doesn't....that's impossible. For as soon as the bank loans out your gold without your knowledge it has just entered into a fractional reserve transactions. You think you have all of that money in the bank...but someone else recieves the loan from the bank in the form of gold....the money supply has been increased without a subsequent increase in gold...there isn't enough reserves to satisfy a withdrawal from everyone in the economy now. This is what produces panics...not the gold standard.

One could argue that a federal reserve note is debt...yes...i agree.

"debt is not a problem for those with a printing press and a large army". Tell that to the ancient romans....or any other major superpower of the past that has gone down the exact same tract we are on. A fiat currency has never...in the history of the world...stood the test of time....not once. Our power only exists while the dollar is considered the reserve currency of the world...which allows us to print endlessly (which we are embarking on now) and export inflation. But even that is starting to change:


Many other countries are following suit....Iran happens to be a country trying to do the same thing...libya was as well..along with iraq before the regime was toppled.

What type of financial system am i for......one that allows me to use a commodity freely (it wouldn't be illegal to use gold)...and one which fractional reserves were illegal. The country can use whatever fiat currency they wish to pursue (as long as fractional reserves aren't allowed)...but give me my option to not partake and use a commodity. I am very much against the forcing of a currency on the population and the subsequent printing that ensues to pay for things...this is theft through inflation without the approval of the people....this can be used to fund wars or anything else government needs without direct approval of the people through taxation.

What type of system are you for?

[-] 1 points by flip (7101) 12 years ago

don't care who you know at chevron - sure there is plenty of oil - off the coast of brazil - 7 miles down - now go get it with your new technology - remember bp? look at a chart of north sea oil production or mexican oil production. then do some research on saudi oil and you might not be so confident. i have studied this much more than you so please do not continue on the subject unless you do some reading. as to inflation please stop. if you want to give me a fixed mortgage at 3.5% for 30 years you are not thinking clearly. banks and the rich hate inflation (don't mind deflation). the economy is complex so there are always winners and losers - if you are an importer you win with a strong currency and exporters lose - vice versa with a weak one. you must keep that in mind in any discussion of the economy - can you??? most people's wealth (the middle class anyway - we used to have one) is in their house. when there is inflation (like the 70's) house prices go up while the mortgage payment goes down - that is why the bankers and bondholders hate it. in the past wages were tied to inflation (before too much outsourcing) so the majority of the population benefited from inflation. bondholders - those big money people holding their wealth in treasuries with fixed rates did not like it either. i could go on but i am afraid it is pointless so please stop unless you can comprehend what i am saying. do some reading about populism instaed of ron paul shit and you will learn about money!

[-] 1 points by john23 (-272) 12 years ago

You're not discussing the graphs...at all....its because this is tied directly to monetary expansion...and you can't refute it.

middle class to poor are more easily affected by rising prices than the rich. Middle to lower class wages haven't kept up with the expansion in the money supply...this is where a major squeeze for them is coming from. It used to be a father working could provide for a family of 5...my grandfather worked in retail and was able to do this (5 kids and a wife). Today there is no way....this is from fiat paper expansion.

I have read your stuff....from many different people...maybe you should do the same thing you suggest for me....read the other side of the story.

One individual i know in the industry has worked in it for over 30 years...dealing specifically with exploration....you are flat wrong on peak oil. Saudi, mexico and the north sea does not account for the whole world. Peak oil is coming, no doubt..and i support moving away from fossil fuels...but i'm not deluded by my beliefs. I went to school for engineering and had a focus in structures for green design...i'm not biased in the oil direction at all. BP's problem had nothing to do with technology....but with human error and negligence.

[-] 1 points by flip (7101) 12 years ago

you mean the rev moon washington times - no doubt oil prices hurt people - are we talking supply problems in the oil patch - lots of different factors go into oil prices and currency devaluation is one of them but just one - peak oil is upon us. if you want to respond to my points about inflation great but this will not do it!

[-] 1 points by john23 (-272) 12 years ago

Washington Times....your comment doesn't negate the fact that these are facts...if you want to refute them please provide the data for it.

Peak oil is not upon us. I have a couple members of the family in the oil industry, some at the top ranks of Chevron. Technological advances have pushed peak oil off by 50-100 years. We are able to access areas they never thought possible only a few years ago.

Watch the video...there are no supply problems currently..this is verified by the people i know as well. Supply problems and the other factors you mention affect oil prices minimally in the long run....to prove this point is very easy....look at the history of oil prices in this first graph and notice the stability (through some incredibly rough patches of history i might add..world wars etc.)...then look at them after 1971:


Its the insidious fiat currency that does this.....verify it with the other graphs showing goods pre and post 1971. This isn't localized to oil, this is all goods...this is why devaluing a currency hurts the middle and lower class.

[-] 0 points by flip (7101) 12 years ago

humans have to run the technology - no? bp shows how difficult this whole process is - i assume you know about fracking and the problems related to that. you show your ignorance about the oil patch because if the saudis do not have the excess capacity they claim then the world is in a very bad place. i have read both sides of the inflation story - i disagree with you - if you want the last word go ahead but you will not change my mind. i understand how inflation hurts some people but you never - never - NEVER - respond to what i point out to you so STOP - please

[-] 0 points by john23 (-272) 12 years ago

Stop? Really???? You're the one writing to all of my comments I post...in multiple different areas on the site. It's like a tag team between you and geo. I didn't initiate this conversation. Maybe you prefer people who rollover and don't actually read all the articles you post to read. I have read everything you've given to me and responded in great detail. You on the other hand won't even respond to a couple graphs.

If you think that the world oil supply has reached peak oil because of a low ball from Saudi, that shows your ignorance...not mine. I'm well aware of the problems with fracking.

[-] 1 points by VQkag2 (16478) 12 years ago

So what is the solution.?

[-] -2 points by SteveKJR (-497) 12 years ago

Here we go with more "government subsidies" - just what we need.

[-] 1 points by flip (7101) 12 years ago

exactly - social security a government subsidy - you have shown your ignorance or is it ideology

[-] 0 points by SteveKJR (-497) 12 years ago

Oh, it's ok for the government to be selective about what companies receive "green energy money" to prop up their voting. BTW people pay into social security so it is not a Subsidy.

It has been paid for and the government pissed the money away like it does with everything else it gets involved in.

[-] 2 points by flip (7101) 12 years ago

aren't you the one who called it a subsidy - as in right here - "Here we go with more "government subsidies" - just what we need." you mean pissing it away on wars and aircraft carriers (to protect us from saudis with box cutters) and the like. subsidies to corporations to take jobs overseas and corporate farms being paid not to grow food etc - is that what you mean or do you mean to pay my wife's unemployment for two years?

[-] -1 points by SteveKJR (-497) 12 years ago

Pissing money away on wars and aircraft carriers is not a "subsidy"

Pissing money away on "green energy" companies that go belly up with money provided for by the government needs to stop.

If the government wants to put money towards businesses then what needs to happen is they need to work to bring jobs back to this country.

Subsidise them to build plants in this country and subsidise the employees pay to offset the cheap labor abroad.

I will guarentee you if this happens the economy will grow and eventually subsidisies can be eliminated.

But hey, the people in this country don't care - all they are concerned about is buying cheap Chinese made products to prop up the Chinese government who is now of the US Dollar Standard and is proping up the Euro for their own benefit.

Euro going up US Dollar going down - it's only a matter of time before there is a crashi in this country. And when that happens, any US paper money won't be worth the ink that is printed on it.

[-] 2 points by flip (7101) 12 years ago

we disagree on the aircraft carriers and to pick on the solyndra affair is a sign of a partisan. they crashed since they could no longer compete with the price of solar panels falling so fast. the idea they had was a good one. did you call it a subsidy or not - this is a bit nonsensical. you have your ideas - great - keep them. to say that the people of this country don't care is silly. "those that put out the people's eyes - reproach them for their blindness!" - as to your vision of the future i don't think so but time will tell.