Re: Refuting supply-side economics

From: T.Carr (tcarr13398_at_aol.com)
Date: 09/19/04 

Date: 18 Sep 2004 22:48:19 -0700

Keynes <Keynes@earthlinkspam.net> wrote in message news:<et3mk09dii5l3bbch433fueinbvp9u36a8@4ax.com>...
> On Thu, 16 Sep 2004 18:38:37 GMT, William F Hummel <wfhummel@comcast.net> wrote:
>
> >On 15 Sep 2004 20:03:58 -0700, bc76@midmaine.com (Some Guy) wrote:
> >
> >>William F Hummel <wfhummel@comcast.net> wrote in message news:<0bffk09pp7cegf5s15s17b177jsl8g5hpu@4ax.com>...
>
> >>> Your model of inflation is far too simple. The relation between the
> >>> supply of goods and prices applies only to a true commodities in a
> >>> setting where there is plenty of competition and those in the business
> >>> know what prices the commodities have traded at. That doesn't apply
> >>> to almost everything we buy as consumers, whether goods or services.
> >>>
> >>> For example, if you visit a dentist and pay for a filling, the price
> >>> of fillings doesn't increase. None of the thousands of other dentists
> >>> in town is even aware that you had the service. If you buy a loaf of
> >>> bread at the grocery store, the price of bread doesn't change for the
> >>> same reason.
> >>>
> >>There is definately a time delay there. I agree.
> >
> >What time delay? There is no automatic price increase in a gadget
> >because someone buys it. How much have computer prices increased
> >because of the millions that have been sold?
> >
> >In 1982 I bought an IBM PC with 256K of RAM, Bill Gates's primitive
> >operating system, a BASIC interpreter, and a printer that altogether
> >cost about $3,300. In today's money that would be about $6,600.
> >
> >The PC had 256K of memory, and ran at a snails pace. Compare that to
>
> 4 MHz 8088
>
> (At school I worked on an IBM mainframe. It had 8 meg of wire-strung
> magnetic memory and two monsterous hard drives of one megabyte each.
> It filled an air conditioned room built over a floor of heavy cables.)
>
> Previous to the IBM PC ('70's), an IBM salesman tried to sell us a
> 'desktop' machine with a 5 inch monitor, tape but no floppy disk drives,
> and without an operating system for the bargain price of only $15K.
>
> Instead of the $15K IBM we bought a TRS 80 with extra memory and
> dual disks for under $1K. We also bought a 9-pin printer that crudely
> printed upside down (so you couldn't see output until the paper was removed).
> The printing was wonderfully dotty, as impressive computer output should be.
> The blooming thing cost $1,000.
>
> At that time a 'winchester' hard drive of a whole megabyte cost $5K.
>
> IBM big iron salesmen were dismayed to find apple PCs running
> VisiCalc spreadsheets on executive's desks. So they ran a crash
> program to produce a PC in less than a year, but it was necessary
> then to use 'outsourced parts', contrary to previous IBM policy.
>
> Bill Gates bought an operating system (form of CP/M) for
> 50K and offered to License it to IBM. They bit, but then
> didn't own MSDOS. Gates was free to offer it to competitors.
>
> The IBM PC became open source, and competition jumped in
> to cut IBMs exhorbitant prices. Xerox and Sperry were also
> in it for the money. Fortunately, competition drove them all out.
>
> There were tons of proprietary PCs sold in discount stores for
> a while - Atari, and the toymakers Coleco and Mattel. But the
> stores took a bath on them as they were left with outmoded or
> badly made stock. So they bailed.
>
> Radio Shack and Commodore were technology leaders but
> were sunk by poor marketing. Apple never lisenced it's OS
> so it hung on to all of it's own market, but high pricing has
> left then with only 5% of the whole desktop market.
>
> The intercommunication benefits and larger market by standardization
> have made the IBM clone and Microsoft the only way for folks to go.
> But Microsoft is a tad greedy and dishonest. They know they can't
> make a bulletproof system and still stay in the upgrade business.
> So open source Linux is climbing in usability and popularity,
> particularly for internet servers.
>

Keynes <Keynes@earthlinkspam.net
 
> Computer competition has made hardware and software absurdly
> cheap, and these days, also necessary. A cheap computer can do
> the work of a whole typing pool and filing staff, not to mention mailboys
> and inhouse printing and duplicating. Cheap computers are the labor saving
> device that has saved many millions of unskilled workers from their jobs.

  Whats your alternative "Keynes" The Amish approach to life?
 

                                                                 T.Carr

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