Politics Discussion Thread September 2012

Multiheaded

The last thread didn't fare too badly, I think; let's make it a monthly tradition. (Me, I'm more interested in thinking about real-world policies or philosophies, actual and possible, rather than AI design or physics, and I suspect that many fine, non-mind-killed folks reading LW also are - but might be ashamed to admit it!)

Quoth OrphanWilde:

Top-level comments should introduce arguments; responses should be responses to those arguments.
Upvote and downvote based on whether or not you find an argument convincing in the context in which it was raised. This means if it's a good argument against the argument it is responding to, not whether or not there's a good/obvious counterargument to it; if you have a good counterargument, raise it. If it's a convincing argument, and the counterargument is also convincing, upvote both. If both arguments are unconvincing, downvote both.
A single argument per comment would be ideal; as MixedNuts points out here, it's otherwise hard to distinguish between one good and one bad argument, which makes the upvoting/downvoting difficult to evaluate.
In general try to avoid color politics; try to discuss political issues, rather than political parties, wherever possible.

Let's try to stick to those rules - and maybe make some more if sorely needed.

Oh, and I think that the "Personal is Political" stuff like gender relations, etc also belongs here.

Quoth OrphanWilde:

Top-level comments should introduce arguments; responses should be responses to those arguments.
Upvote and downvote based on whether or not you find an argument convincing in the context in which it was raised. This means if it's a good argument against the argument it is responding to, not whether or not there's a good/obvious counterargument to it; if you have a good counterargument, raise it. If it's a convincing argument, and the counterargument is also convincing, upvote both. If both arguments are unconvincing, downvote both.
A single argument per comment would be ideal; as MixedNuts points out here, it's otherwise hard to distinguish between one good and one bad argument, which makes the upvoting/downvoting difficult to evaluate.
In general try to avoid color politics; try to discuss political issues, rather than political parties, wherever possible.

Let's try to stick to those rules - and maybe make some more if sorely needed.

Oh, and I think that the "Personal is Political" stuff like gender relations, etc also belongs here.

I have changed my mind about "Market Monetarism".

Market Monetarism is the idea that the central bank of the country should target a growing path for nominal gross domestic product or nominal wages. The growth rate is to be set at a point just a little higher than the rate of increase of Total Factor Productivity, to avoid deflation.

A few things convinced me that this way of managing the money supply is not a bad one.

There was empirical evidence presented by Evan Soltas, where maintaining a NGDP target in the past few decades would have actually resulted in tighter money. This convinced me that this was not just an excuse to print more money in this crisis time.

There was empirical evidence that in countries like Sweden, Israel and Australia, maintaining a good NGDP growth rate actually kept the base money less. There was actually less money printing.

Also, the loss of the value of the unit of money is not really a great issue in the long run. What we should care about is standard of living. If standard of living is growing, then the goals of the economic system are being met.

Also, when in a time of recession, the central bank buys the safest assets moving towards the higher risk assets, it rewards those who had kept aside reserves in a time of prosperity. This behaviour, if completely understood and absorbed into behaviour of agents in the market, will lead to a more stable capitalism in the long run. I have slight doubts on the distributional consequences of this, but it seems better than arbitrary allocation.

There are a number of aspects of the present system that I would want changed. But this note is on monetary policy and not other aspects. Please concentrate your critique on monetary policy alone. (eg. I want pollution taxes and a georgist land tax, a great restriction on maturity mismatching, a minimal state that concentrates on delivering justice and invests in the long run. )

I too find Market Monetarism interesting. However, I find the discussion around it bafflingly incomplete.

I live in Britain, where legally the central bank (BoE) is supposed to target inflation at 2%. In actual fact, however, before the economic crisis the central bank had inflation consistently running well above its legal target. What it was doing, however, was keeping NGDP growing at approx 5.5% per year - and it had been doing so for over a decade. It was therefore generally thought that, letter of the law be damned, the BoE was in fact an NGDP level ta... (read more)