He is the most entertaining of the presidential candidates and I agree with several of his positions, but his defenses of some of them strike me as largely bogus. Having proposed that the Fed should maintain stable prices via a commodity bundle, a reasonable if politically novel idea, he defends the proposal by claiming that current Fed stabilization policy is somehow the reason real incomes have not risen, goes on to claim that if only the Fed were not messing things up we would have enough more economic growth to let us eliminate the deficit without cutting spending, thus saving him from having to specify specific cuts — any of which can be expected to offend some interest group whose support he wants.
I’m not sure why everyone who listens to Vivek immediately thinks he wants to be Trump’s VP when he repeatedly says that he never wants to report to anyone and will never agree to be anyone’s number 2. I think he just wants to get Trump’s base in case Trump drops out or is in jail.
Well, true that VPs often lose the general election, but you cannot say being the parties nominee is a bad place to be if you're looking to win the election.
In modern elections that I can recall we have Ford, Mondale, Bush, Gore, Biden....a lot of VPs become the parties pick and I don't think you can postulate the Mondale and Gore lost BECAUSE they were VPs, right?
Do you think it's relevant to compare today's climate to that of over 50 or 60 or 100 years ago?
In modern times, let's say since 50s, being a VP was the most common way to become the nominee, at least the way I see it. Nixon, Ford, Bush, Mondale, Gore, and Biden....that's a big list you seem to think isn't dominate....why? Because they lost the election is a non-sequitor in the question as to "what's the best path," at least the way I'm adding it up.
Are you saying that being the nominee as a VP is a disadvantage and the parties should no longer support a VP?
I think there are attributes of this instance that one could consider unusual enough to justify the path.
If Ramaswamy became VP, it would be the first time a President changed VPs since Nixon (due to corruption charges), or since FDR (due to the previous VP not working out). In both cases, the VP in question went on to become President, due to the early departure of their predecessor. That's a general trend of a sort, although it may sound a bit "astrological".
Another plausible trend is that if a President was preceded by a President of a different party only four years ago, swing voters might not yet feel it's time for a change of party. If Ramaswamy runs for President in 2028, it will feel like only year 4 of a Republican administration, which increases his chances. (He pays for it in 2032, but the incumbency factor might sustain him for a second term, especially if he performs well in his first.)
Meanwhile, we can expect Trump to face some sort of impeachment movement, probably starting with his first day in office, and in general, a lot of people are clearly motivated to get rid of him as early as possible. Knowing Trump, he will likely even do something that exacerbates the incentive. It's possible Ramaswamy could consequently get in earlier, and then run in 2028 as if an incumbent.
That’s possible, but this guy has been CEO for a long time and he says that like Trump he wouldn’t do well as anyone’s number 2. It should at least be acknowledged that MAYBE he’s not lying. He’s also criticized Trump (“disagreed”) many times recently (not necessarily on Jan. 6, but on other things), which again suggests he wants Trump’s base.
Ramaswamy says that god is real. Anyone who states this has, in my opinion, demonstrated a propensity to believe falsehoods. I expect that the most dangerous of the other falsehoods he believes is that he has the ability and the right to rule other people. He should perhaps fill that ‘hole’ Pascal mentions with something more substantial such as additional sapience and humility.
This all depends on how you define God. The perennial philosophy (attempts to integrate all religions) would say that the word “God” is just a placeholder for “the ultimate nature of reality” and so the claim “God is real” is something more akin to the value statement “reality is fundamentally good” than to a factual statement.
I think Mr. Ramaswamy said “God is real” rather than making reference to a philosophical ‘“the ultimate nature of reality” because he is running for a political office that is chosen (supposedly) by a public that in large measure believes that god is a supernatural, all powerful entity that demands obedience and threatens apostates with perpetual damnation if they don’t submit; kind of like the earthbound version of the position he is seeking and the authority he wishes to exercise over others. His choice of words was a conscious attempt to cater to that portion of the electorate.
If that’s true, why wouldn’t he just say he’s Christian? He went to a Christian high school. Would sure make things a lot easier on him if he said he converted to Christianity as a young adult, right?
I don't think his statement was intended to define his belief but only to solicit the support of that significant portion of the public who hold a belief in an omnipotent supernatural being.
Two things. One: belief that God is real is not equivalent to just any falsehood (e.g. belief in the Easter Bunny, or that 2 + 2 = 5). Two: that "hole" has been filled the same way by every other President, and they've collectively either led the US to becoming the world's foremost superpower, or successfully kept out of the way of it happening.
No more tangibly than he can his. But when I see an unequivocal statement making an assertion about the truth of a subject that I believe to be just as ‘demonstratively’ false as true it leads me to believe that this isn’t a unique occurrence.
I am not sure what it means to say that something is as demonstratively false as true. My best guess is that it sounds like you’re saying one can’t either prove or disprove the existence of God.
And if that’s the case, then maybe the correct thing to do is to withhold belief and say something like “I don’t know whether or not the claim that God exists is true or false.”
But you implicitly claimed it was false, so it sounded to me like you were in fact saying it is *more* demonstratively false than true. Not *as* demonstratively false as true.
This, plus it's not really abnormal for someone to believe in a deity. Billions of people do and have throughout human history. It's not like he stood up and proudly claimed the flatness of earth. It doesn't really say anything about his ability to reason about other issues at all. Believing otherwise is just the genetic fallacy.
Only tangential to the topic, but have you thought about / seen any discussion of how to make a stable-price basket in an economy where spending is dominated by services & rents? It's hard to imagine an system where I can exchange $1mm for four credit-hours of college (from where? is it prestigious?) and two months in a 3br apartment (in what metro area, of what quality...). When the things I buy are not fungible, is there any reasonable way to use these basket arbitrages to produce stable prices?
The whole idea is a compromise with reality, since only consumer evaluations determine the relative value of goods, and those can change arbitrarily. If people's preferences are relatively stable, the idea of stable prices sort of makes sense. If not, not.
"It is more likely that we will, again, be faced with a choice..."
As a regular reader, I'd like to lodge an objection to the use of the "royal we." I don't vote (as a matter of principle, not apathy) so I'm never forced with this choice.
"Perhaps if the war is over by the election …"
I left the US a little over 6 years ago and besides becoming an athiest and leaving the church, leaving the USA was the best choice I've ever made.
You don't have to wait for Europe to become stable, David, just move down here to Mexico. I live freely, pretty much as an anarchist, actually, and the city I live in has the best weather I've ever experienced (and I've lived in So Cal and in Hawaii). It's insanely cheaper than the states in general and ridiculously cheaper than living in the Police State of California.
Why Americans who say they like freedom tolerate living in America I can only imagine; it's likely the same reason I stayed in the church for so long. "Freedom Is Slavery. Ignorance Is Strength."
Some languages distinguish an exclusive "we" from an inclusive "we". E.g. in the English-based creole Tok Pisin, "yumi" (from you + me) includes the listener, whereas "mipela" (from me + fella) excludes the listener. In this case, the ambiguity of the English pronoun is useful, as some readers should feel included while others shouldn't.
I also like Vivek, he seems to be bringing a lot of new ideas into the conversation! Maybe Scott Alexander can run as his vice president, or get appointed to Minister Of Internet Affairs, or Press Secretary, to build up his political resume.
I: The economy grows, tax receipts increase. If expenditures don't increase, or increase less, the deficit goes down. If the deficit goes negative, becomes a surplus, the national debt decreases.
There are two reasons why expenditures might not increase as fast as receipts. One is that some expenditures don't depend on the size of the economy, the obvious example being interest on the debt, another arguable one being the cost of maintaining an adequate military. The other is that some expenditures, such as food stamps, depend on people being poor, and if the economy is growing faster than the population the number of poor is probably going down.
I don't know what Reason said, but one problem with Ramaswamy's position is that, as of 2022, federal expenditures were about 128% of revenue, so to get the deficit to zero through economic growth you would have to increase revenue by 28% — more if expenditure increases some as well. Ramaswamy is talking about raising the growth rate to 4%. That isn't going to do it in the four years of his term, even if he could actually increase economic growth that much. So the claim that by increasing growth he can eliminate the deficit without cutting expenditure or raising taxes is false. He might be able to reduce the deficit, but the debt would still be going up.
II. One could, by increasing GNP, grow out of the national debt in the sense of making it a smaller fraction of GNP, but again the numbers don't work. The current deficit is about 6% of GNP so if it continues at that level, even with 4 % growth the debt is increasing, not decreasing, relative to GNP.
As I tried to imply in my post, this is Ramaswamy claiming that two plus two equals at least five, maybe ten, in order to claim that if he were president nothing bad would happen, taxes wouldn't go up, spending wouldn't be cut, the deficit would vanish hence the debt would stop increasing.
I like some of Ramaswamy's policies and I think he would be a better president than Trump, probably than Biden, but he is not an honest man. But then, I don't expect high level politicians to be honest, save possibly in the proverbial sense of an honest politician, one who stays bought.
[I have just added this to the post as a P.S. Do people commenting like the idea of my updating posts with material from my responses to comments? I assume most people who read a post do it the day it goes up, but some apparently read or reread posts later.]
"Do people commenting like the idea of my updating posts with material from my responses to comments? I assume most people who read a post do it the day it goes up, but some apparently read or reread posts later."
I personally keep a tab up for your articles until I think they've stopped accruing interesting comments. Yours count, so as long as you're replying at least once about every two days, I'll likely see them. I don't usually re-read the article itself, and the way Substack works, it's actually *more* trouble for me to check for edits to the OP, than to just check the comment count.
How would such a commodity standard link to the US or other national economy, instead of just reflecting the global demand for dollars? Does this assume that the world is an optimal currency area?
I quibble with the argument that US biofuels policy results in less food for poor people, other than in the short term, a few years at most, as shown in the links below:
US corn production is very elastic, depending on the US price support level for supporting baseline production, of which biofuels mandates are just one example. Prices did spike for a few years after the biofuels mandates, supporting your argument, but have since declined again as farmers in the US and worldwide responded to the new incentive. Long-term, price of corn is going to stay at just above the support level, as only farmers who are able to consistently make a profit at that price are able to stay in business.
I dislike corn price supports for several reasons, mainly the forcing out of business of most smaller farmers, the homogenization of US agriculture, with concentration in few hands. But not much its effects on the poor. Price supports cause a consistently high production and reduce price swings (outside those caused by policy changes) leading to stable prices at a low price.
Were a severe drought to reduce production, a relaxing of biofuels mandates would release corn to the market for food. Or, it would were our political leaders wise, or cared about the poor.
I believe so. The price of corn is controlled by the government support. It balances with competing crops so in general, prices are overall higher than they would be in a free market. More corn = less wheat or whatever. But the biofuels program specifically doesn't add much to corn. A few years for farmers to adjust to the new demand, and prices fell to the level required to force the marginal farmers out of business.
So US price manipulations were already screwing the poor, and when the biofuel boondoggle came online, farmers adjusted the supply to (nearly) perfectly offset the new demand so nothing really changed? Or the poor weren’t getting screwed previously, and nothing changed?
Your statistical links show the history of prices, but not the counterfactual of what would have happened without the various manipulations. If “The price of corn is controlled by the government support [and] balances with competing crops,” and corn production expanded to maintain output for food supply, wouldn’t that require a reduction of production of “competing crops”? What factor would allow food production in general to expand in response to this policy, rather than just rearranging the existing output?
Extra corn production comes from several sources. One, simple switching of crops, as I mentioned. Another is diversion of fallowed land, pasture, less productive land that is only tilled when market conditions look favorable. Quite a lot of land CAN be farmed, but often isn't unless something intervenes, like government. The government also pays farmers to pull land from production. Farmers calculate whether they can get more from planting, or from Uncle Sugar to not plant.
Since we are already at the point where we could grow a lot more food but don't because it costs more to grow than is profitable, the government can rather easily increase food production with small increases in price supports.
I honestly don't know what would happen to prices if the government stopped trying to manage production. I doubt that general, across the board food prices would change much, since the cost of raw corn and wheat etc. is already so cheap. Corn currently is selling for <$5/bushel, or about 9 cents/pound. Wheat is <$7/bushel, about 10 cents/pound. That pound loaf of bread that costs $2 at the supermarket is hardly affected by the base price of wheat.
Regarding the gold standard, isn't the solution to the possible swings in gold prices affecting the interest rate on loans to write into the loan contract that the loan can be paid back in a mix of gold and dollars such that the value is equal to what it would be at a stable price? I seem to recall reading somewhere that back in the 19th and early 20th centuries contracts were often written that way, or using a different commodity than gold like bushels of wheat, to protect against swings in currency valuations. Possibly it was just a fever dream... anyway, with commodity markets so liquid it would seem like an easy practice to bring back.
You can do that, although for long term contracts you are depending on the government not deciding to abolish such contracts, as the US government did with contracts specifying payment in gold. But it's easier, especially for individuals rather than large corporations, to just use the current money.
Doing it with gold and dollars only works if they are moving in opposite directions. And you can't specify the mix in advance, so you are really talking about a contract specified in terms of a price index.
That's a good point, simply specifying "In inflation adjusted 1996 dollars" or something does pretty much solve the problem, if you can agree on an inflation measure. Specifying by a price index of some set of agreed upon goods sounds like a good plan too. Yet, of course all such things are no good if the government is going to arbitrarily decide we can't have nice things.
Ahh well, it is at least heartening that I didn't make the whole memory up in my head :)
I’m not sure why everyone who listens to Vivek immediately thinks he wants to be Trump’s VP when he repeatedly says that he never wants to report to anyone and will never agree to be anyone’s number 2. I think he just wants to get Trump’s base in case Trump drops out or is in jail.
Becoming the VP is often the best path to becoming President in 8 years.
And he may figure that if Trump is busy strutting and enjoying his status his VP can run the country for him.
I would think that too if he didn’t keep saying he will never do that
I don't think what a politician says is a very reliable guide to what he believes or will do.
If you look at history, it's not.
Well, true that VPs often lose the general election, but you cannot say being the parties nominee is a bad place to be if you're looking to win the election.
In modern elections that I can recall we have Ford, Mondale, Bush, Gore, Biden....a lot of VPs become the parties pick and I don't think you can postulate the Mondale and Gore lost BECAUSE they were VPs, right?
Only three VPs would go on to become presidents without inheriting the position, and two of those was back when the runner up became VP.
Do you think it's relevant to compare today's climate to that of over 50 or 60 or 100 years ago?
In modern times, let's say since 50s, being a VP was the most common way to become the nominee, at least the way I see it. Nixon, Ford, Bush, Mondale, Gore, and Biden....that's a big list you seem to think isn't dominate....why? Because they lost the election is a non-sequitor in the question as to "what's the best path," at least the way I'm adding it up.
Are you saying that being the nominee as a VP is a disadvantage and the parties should no longer support a VP?
I think there are attributes of this instance that one could consider unusual enough to justify the path.
If Ramaswamy became VP, it would be the first time a President changed VPs since Nixon (due to corruption charges), or since FDR (due to the previous VP not working out). In both cases, the VP in question went on to become President, due to the early departure of their predecessor. That's a general trend of a sort, although it may sound a bit "astrological".
Another plausible trend is that if a President was preceded by a President of a different party only four years ago, swing voters might not yet feel it's time for a change of party. If Ramaswamy runs for President in 2028, it will feel like only year 4 of a Republican administration, which increases his chances. (He pays for it in 2032, but the incumbency factor might sustain him for a second term, especially if he performs well in his first.)
Meanwhile, we can expect Trump to face some sort of impeachment movement, probably starting with his first day in office, and in general, a lot of people are clearly motivated to get rid of him as early as possible. Knowing Trump, he will likely even do something that exacerbates the incentive. It's possible Ramaswamy could consequently get in earlier, and then run in 2028 as if an incumbent.
Probably because lots of people say they don't want to be VP during the primaries, before switching once they lose the primaries.
That’s possible, but this guy has been CEO for a long time and he says that like Trump he wouldn’t do well as anyone’s number 2. It should at least be acknowledged that MAYBE he’s not lying. He’s also criticized Trump (“disagreed”) many times recently (not necessarily on Jan. 6, but on other things), which again suggests he wants Trump’s base.
Ramaswamy says that god is real. Anyone who states this has, in my opinion, demonstrated a propensity to believe falsehoods. I expect that the most dangerous of the other falsehoods he believes is that he has the ability and the right to rule other people. He should perhaps fill that ‘hole’ Pascal mentions with something more substantial such as additional sapience and humility.
This all depends on how you define God. The perennial philosophy (attempts to integrate all religions) would say that the word “God” is just a placeholder for “the ultimate nature of reality” and so the claim “God is real” is something more akin to the value statement “reality is fundamentally good” than to a factual statement.
I think Mr. Ramaswamy said “God is real” rather than making reference to a philosophical ‘“the ultimate nature of reality” because he is running for a political office that is chosen (supposedly) by a public that in large measure believes that god is a supernatural, all powerful entity that demands obedience and threatens apostates with perpetual damnation if they don’t submit; kind of like the earthbound version of the position he is seeking and the authority he wishes to exercise over others. His choice of words was a conscious attempt to cater to that portion of the electorate.
If that’s true, why wouldn’t he just say he’s Christian? He went to a Christian high school. Would sure make things a lot easier on him if he said he converted to Christianity as a young adult, right?
I don't think his statement was intended to define his belief but only to solicit the support of that significant portion of the public who hold a belief in an omnipotent supernatural being.
Two things. One: belief that God is real is not equivalent to just any falsehood (e.g. belief in the Easter Bunny, or that 2 + 2 = 5). Two: that "hole" has been filled the same way by every other President, and they've collectively either led the US to becoming the world's foremost superpower, or successfully kept out of the way of it happening.
>>Anyone who states this has, in my opinion, demonstrated a propensity to believe falsehoods.
You are certainly entitled to your opinion, but I can’t help but wonder, can you demonstrate this?
No more tangibly than he can his. But when I see an unequivocal statement making an assertion about the truth of a subject that I believe to be just as ‘demonstratively’ false as true it leads me to believe that this isn’t a unique occurrence.
I am not sure what it means to say that something is as demonstratively false as true. My best guess is that it sounds like you’re saying one can’t either prove or disprove the existence of God.
And if that’s the case, then maybe the correct thing to do is to withhold belief and say something like “I don’t know whether or not the claim that God exists is true or false.”
But you implicitly claimed it was false, so it sounded to me like you were in fact saying it is *more* demonstratively false than true. Not *as* demonstratively false as true.
This, plus it's not really abnormal for someone to believe in a deity. Billions of people do and have throughout human history. It's not like he stood up and proudly claimed the flatness of earth. It doesn't really say anything about his ability to reason about other issues at all. Believing otherwise is just the genetic fallacy.
Only tangential to the topic, but have you thought about / seen any discussion of how to make a stable-price basket in an economy where spending is dominated by services & rents? It's hard to imagine an system where I can exchange $1mm for four credit-hours of college (from where? is it prestigious?) and two months in a 3br apartment (in what metro area, of what quality...). When the things I buy are not fungible, is there any reasonable way to use these basket arbitrages to produce stable prices?
The whole idea is a compromise with reality, since only consumer evaluations determine the relative value of goods, and those can change arbitrarily. If people's preferences are relatively stable, the idea of stable prices sort of makes sense. If not, not.
"It is more likely that we will, again, be faced with a choice..."
As a regular reader, I'd like to lodge an objection to the use of the "royal we." I don't vote (as a matter of principle, not apathy) so I'm never forced with this choice.
"Perhaps if the war is over by the election …"
I left the US a little over 6 years ago and besides becoming an athiest and leaving the church, leaving the USA was the best choice I've ever made.
You don't have to wait for Europe to become stable, David, just move down here to Mexico. I live freely, pretty much as an anarchist, actually, and the city I live in has the best weather I've ever experienced (and I've lived in So Cal and in Hawaii). It's insanely cheaper than the states in general and ridiculously cheaper than living in the Police State of California.
Why Americans who say they like freedom tolerate living in America I can only imagine; it's likely the same reason I stayed in the church for so long. "Freedom Is Slavery. Ignorance Is Strength."
Some languages distinguish an exclusive "we" from an inclusive "we". E.g. in the English-based creole Tok Pisin, "yumi" (from you + me) includes the listener, whereas "mipela" (from me + fella) excludes the listener. In this case, the ambiguity of the English pronoun is useful, as some readers should feel included while others shouldn't.
I also like Vivek, he seems to be bringing a lot of new ideas into the conversation! Maybe Scott Alexander can run as his vice president, or get appointed to Minister Of Internet Affairs, or Press Secretary, to build up his political resume.
If economic growth is 1% and his claim is that he will make it 4%, his claim is that there will be enough more economic growth to ... .
Is it really possible to "grow" out of the national debt? That sounds too good to be true. I saw a reason YouTube video criticizing Vivek's claim.
It could happen in two ways.
I: The economy grows, tax receipts increase. If expenditures don't increase, or increase less, the deficit goes down. If the deficit goes negative, becomes a surplus, the national debt decreases.
There are two reasons why expenditures might not increase as fast as receipts. One is that some expenditures don't depend on the size of the economy, the obvious example being interest on the debt, another arguable one being the cost of maintaining an adequate military. The other is that some expenditures, such as food stamps, depend on people being poor, and if the economy is growing faster than the population the number of poor is probably going down.
I don't know what Reason said, but one problem with Ramaswamy's position is that, as of 2022, federal expenditures were about 128% of revenue, so to get the deficit to zero through economic growth you would have to increase revenue by 28% — more if expenditure increases some as well. Ramaswamy is talking about raising the growth rate to 4%. That isn't going to do it in the four years of his term, even if he could actually increase economic growth that much. So the claim that by increasing growth he can eliminate the deficit without cutting expenditure or raising taxes is false. He might be able to reduce the deficit, but the debt would still be going up.
II. One could, by increasing GNP, grow out of the national debt in the sense of making it a smaller fraction of GNP, but again the numbers don't work. The current deficit is about 6% of GNP so if it continues at that level, even with 4 % growth the debt is increasing, not decreasing, relative to GNP.
As I tried to imply in my post, this is Ramaswamy claiming that two plus two equals at least five, maybe ten, in order to claim that if he were president nothing bad would happen, taxes wouldn't go up, spending wouldn't be cut, the deficit would vanish hence the debt would stop increasing.
I like some of Ramaswamy's policies and I think he would be a better president than Trump, probably than Biden, but he is not an honest man. But then, I don't expect high level politicians to be honest, save possibly in the proverbial sense of an honest politician, one who stays bought.
[I have just added this to the post as a P.S. Do people commenting like the idea of my updating posts with material from my responses to comments? I assume most people who read a post do it the day it goes up, but some apparently read or reread posts later.]
"Do people commenting like the idea of my updating posts with material from my responses to comments? I assume most people who read a post do it the day it goes up, but some apparently read or reread posts later."
I personally keep a tab up for your articles until I think they've stopped accruing interesting comments. Yours count, so as long as you're replying at least once about every two days, I'll likely see them. I don't usually re-read the article itself, and the way Substack works, it's actually *more* trouble for me to check for edits to the OP, than to just check the comment count.
But again, that's just me.
Thank you for the detailed explanation! I really appreciate your current approach to handle the comment section!
Thank you for explaining; I edited it out of my comment
How would such a commodity standard link to the US or other national economy, instead of just reflecting the global demand for dollars? Does this assume that the world is an optimal currency area?
I quibble with the argument that US biofuels policy results in less food for poor people, other than in the short term, a few years at most, as shown in the links below:
https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=76964
or
https://inflationdata.com/articles/what-is-the-inflation-adjusted-price-of-corn/
US corn production is very elastic, depending on the US price support level for supporting baseline production, of which biofuels mandates are just one example. Prices did spike for a few years after the biofuels mandates, supporting your argument, but have since declined again as farmers in the US and worldwide responded to the new incentive. Long-term, price of corn is going to stay at just above the support level, as only farmers who are able to consistently make a profit at that price are able to stay in business.
I dislike corn price supports for several reasons, mainly the forcing out of business of most smaller farmers, the homogenization of US agriculture, with concentration in few hands. But not much its effects on the poor. Price supports cause a consistently high production and reduce price swings (outside those caused by policy changes) leading to stable prices at a low price.
Were a severe drought to reduce production, a relaxing of biofuels mandates would release corn to the market for food. Or, it would were our political leaders wise, or cared about the poor.
Am I correct in parsing that as, corn would have approximately the same price without the biofuel subsidy/mandates?
I believe so. The price of corn is controlled by the government support. It balances with competing crops so in general, prices are overall higher than they would be in a free market. More corn = less wheat or whatever. But the biofuels program specifically doesn't add much to corn. A few years for farmers to adjust to the new demand, and prices fell to the level required to force the marginal farmers out of business.
So US price manipulations were already screwing the poor, and when the biofuel boondoggle came online, farmers adjusted the supply to (nearly) perfectly offset the new demand so nothing really changed? Or the poor weren’t getting screwed previously, and nothing changed?
Your statistical links show the history of prices, but not the counterfactual of what would have happened without the various manipulations. If “The price of corn is controlled by the government support [and] balances with competing crops,” and corn production expanded to maintain output for food supply, wouldn’t that require a reduction of production of “competing crops”? What factor would allow food production in general to expand in response to this policy, rather than just rearranging the existing output?
Extra corn production comes from several sources. One, simple switching of crops, as I mentioned. Another is diversion of fallowed land, pasture, less productive land that is only tilled when market conditions look favorable. Quite a lot of land CAN be farmed, but often isn't unless something intervenes, like government. The government also pays farmers to pull land from production. Farmers calculate whether they can get more from planting, or from Uncle Sugar to not plant.
Since we are already at the point where we could grow a lot more food but don't because it costs more to grow than is profitable, the government can rather easily increase food production with small increases in price supports.
I honestly don't know what would happen to prices if the government stopped trying to manage production. I doubt that general, across the board food prices would change much, since the cost of raw corn and wheat etc. is already so cheap. Corn currently is selling for <$5/bushel, or about 9 cents/pound. Wheat is <$7/bushel, about 10 cents/pound. That pound loaf of bread that costs $2 at the supermarket is hardly affected by the base price of wheat.
Vivek RamaSMARMY
Regarding the gold standard, isn't the solution to the possible swings in gold prices affecting the interest rate on loans to write into the loan contract that the loan can be paid back in a mix of gold and dollars such that the value is equal to what it would be at a stable price? I seem to recall reading somewhere that back in the 19th and early 20th centuries contracts were often written that way, or using a different commodity than gold like bushels of wheat, to protect against swings in currency valuations. Possibly it was just a fever dream... anyway, with commodity markets so liquid it would seem like an easy practice to bring back.
You can do that, although for long term contracts you are depending on the government not deciding to abolish such contracts, as the US government did with contracts specifying payment in gold. But it's easier, especially for individuals rather than large corporations, to just use the current money.
Doing it with gold and dollars only works if they are moving in opposite directions. And you can't specify the mix in advance, so you are really talking about a contract specified in terms of a price index.
That's a good point, simply specifying "In inflation adjusted 1996 dollars" or something does pretty much solve the problem, if you can agree on an inflation measure. Specifying by a price index of some set of agreed upon goods sounds like a good plan too. Yet, of course all such things are no good if the government is going to arbitrarily decide we can't have nice things.
Ahh well, it is at least heartening that I didn't make the whole memory up in my head :)