Re: Rolling bubbles

From: Johnny Marcos (johnny5_at_yahoo.com)
Date: 06/29/04 

Date: Tue, 29 Jun 2004 17:07:37 GMT

> In a free market economy a shortage is not possible. If America stops
> production of wheat, there will still be bread available at a higher
> price.
> There will be no shortage. Just pay $10 for a loaf of bread. No
> shortages.

What if the world has no more easy cheap energy to grow, process, and
distribute that wheat? Price has no meaning in that scenario. There
just isn't enough energy at ANY PRICE. What if there is a ton of ENERGY
to GROW the wheat - but all the metal in the world has been consumed for
the vehicles to distribute it - here we have not a production problem
but a distribution one - there is enough food in the world to feed every
person - but many starve everyday and die - the food is there - its not
getting to them.

> And this brings us to the concept I'd really like to discuss.
> Standard of living, which may be defined as affordability of goods and
> services, without price controls.
> A big part of the population has a low standard of living.
> How can we increase it? What is the easiest way?

Bring the numbers of population into alignment with energy to produce
for them and distribution to deliver to them - you would not buy a 1
acre farm and then put 10 million cows on it. It seems in mans history
WARFARE has been the chosen solution to bring population numbers into
agreement with resources and distribution - I hope in the NUCLEAR AGE
our world leaders understand that the death of some humans from
starvation is preferrable to the death of the whole planet from
radiation. We got to work on these unplanned births.

> Since we both live in Southern California, we both know price of
> housing here.
> You are right, there is no shortage of housing here... at equilibrium
> price.

If it takes 1000 square feet to be happy and california only has enough
to support 50 million people at 1000 square feet - you don't need to let
more people into that closed system - what does the average person in
china have for livable space - 300 square feet - a closet? Here is
where things breakdown though - I know people that live in cardboard
boxes that are happier than people in 10 million dollar mansions - it is
all PERCEIVED happiness. Keep me fed, give me some entertainment, keep
me from getting sick - most people are gonna love thier fellow man. Let
me start starving or let me get sick a lot and I probably gonna be mad
or miserable. In maslows hierarchy we all need food and shelter at the
base level - fix things at that base level on a global scale and then we
can move into some very productive territory. Make it where I can walk
into red lobster and get a free dinner anytime I want and so can every
other man on this planet and you are gonna see world productivity like
you have never known.

> In my opinion, the best way to increase affordability of housing is to
> increase supply of housing.

You keep seeing the tree and not the forest - we only got so many trees
in the forest - only so much oil in the world - I CANNOT PRODUCE MORE
HOUSING if I have cut down all my trees and burned up all my oil.

There are hundreds of thousands of young
> bums in Los Angeles. Why not put them to work in construction?

Maybe they are happy on the street laying about thinking about economic
theory all day and dont WANT to go to WORK in HOT weather slaving away
cutting down trees and pumping oil. Hitler said why not put those lazy
polish bums to work in the factories - well he put them to work.

> First, abolish welfare, so that the bums apply for work... at a market
> price.

I don't want to work, I like sitting on the dock of the bay wasting time
- as the song goes. Or sitting here theorizing macro economics. Why
don't you go pick up a saw and start chopping up trees if you think it
is so important?

> Would you agree that a shift in supply of real estate would reduce
> real estate prices?

Sure it would, you assume I can build into infinity and mother nature is
going to slap you down hard on your face and show you that you cannot.

> I agree. A small increase over time, to 2 or 3 percent would not hurt.

I want many fine young women to give me sex - me and other men beat each
other up to get this sex - if there were more fine women giving the men
sex we would all be happy. Lets all have more babies so that I can have
a bigger pool of fine women giving me sex - make sure they are female
babies though.

> I've offered an equation P = M / G,

I cannot increase the houses if I have run out of trees. Look at the
forest.

> Suppose now, with velocity not changing, we decided that all Americans
> need just two times higher wages and salaries to buy twice more
> goodies.
> So, we increased minimum wages by 100%. Over time, all wages increased
> 100% percent. Labor costs will increase 100%, and prices will increase
> 100%.
> In this case the quantity theory of money is correct.

There are only 2 trees left in the forest and I need 1000 more houses -
somebody is gonna get rained on - but hey - that is OK, if my choice is
getting rained on and being a happy bum or having a house and being a
miserable worker - I choose happy bum.

> durable, because wages are increased forever. Demand here is stable,
> and prices will increase 100% and stay there.

In a closed system you can only grow SO MUCH, and our world right now is
pretty much a closed system - we get so much energy from oil, so much
from the sun, so much from wind, and if you let your consumers grow
faster than what the producers can feed them - you gonna have human
suffering.

> down. Because wages are low, production costs are relatively low, and
> higher prices mean high profits which encourage more production.

I cannot make more houses than there are trees to make them with - no
matter the price.

> Now let's assume that M is amount of money chasing real estate in the
> Southern California market, and G is real estate Goods.

Right, I need to be close to where my job is that pays me a lot of money
- therefore assuming most americans travel 20 miles to work there is a
small radius of land in so cal that is within 20 miles of my high paying
job - a very small limited supply of land.

> At any given moment there is equilibrium price P, which is directly
> affected by supply G and demand M.

Right, the limited amount of land whose importance is determined by its
proximity to paying jobs and luxury services being chased by more and
more money.

> In this case a shift in supply of real estate Goods will cause an

I cannot make more land in southern california - there is only so much -
what I can do to make people happy is try to create the jobs and luxury
that california has in other parts of the country and world or reduce
the number of people wanting california land.

> The change will depend on psychology of the market participents.

People are always going to want to live where there is nice weather,
lots of good food, lots of high paying jobs - etc etc I live in Florida
- without air conditioning I could not live here in the summer - it
takes energy to run the air conditioning - so I have cloned california
weather for an increasing population that desire it - but at the cost of
using up some of my world energy - at some point things cannot GROW
anymore - there is only so much energy and so much land and the
population numbers have to come into alignment with that or there is
going to be suffering.

> Psychological factors like optimism and beliefs about future direction
> of the economy are difficult to quantify, but they ultimately
> determine demand.

Southern california land is always going to be in more demand than
northern alaskan land - its too cold up there and old people have
arthritis - when california falls off into the ocean because of an
earthquake maybe they wont.

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