From Greg Williams (920601)
Regarding Bill Powers' comments about a glitch in the economy, I think it
goes back to 1974 and is called oil prices. Currently, the cost of oil
is about four times what it was in 1973, and a rough average for
cost of goods (excepting electronics) is about times two -- which would
require TWO breadwinners instead of 1973's one per family to keep
maintaining about the same standard of living. The REALLY interesting point,
for me, is that the pre-73 standard is VERY STRONGLY being maintained.
Looks like an importnt reference level: don't let your living standard
drop, even if you have to work twice as hard. Quite a high loop gain, I
suppose!
A couple of years back, Lester Thurow (sp?) -- MIT economist -- claimed in
THE ATLANTIC that he was "puzzled" by the decline in rate of growth in
American productivity starting in 1974. If you were buying new machine tools
for your business and they suddenly went up in price by a considerable
%, I guess you would curtail such productivity-enhancing purchases a b. Why
don't economists EVER seem to think in terms of reference levels???
Best,
Greg
[From Rick Marken (920601 15:15)]
Greg Williams (920601)
Great post Greg!!!
By the way, in my loop gain post yesterday I said the units wrong.
If K = k.o * k.e
Then k.o is in units of output/input; k.f is in units of input/output.
I said it backwards before.
You say:
The REALLY interesting point,
for me, is that the pre-73 standard is VERY STRONGLY being maintained.
Yes!
Looks like an importnt reference level: don't let your living standard
drop, even if you have to work twice as hard. Quite a high loop gain, I
suppose!
Yes indeed. I think I've been willing to perceive a slightly lower
standard of living than that controlled by my parents -- but not much
lower. If it wasn't for the microwave oven (to increase our k.f) I
don't think we could have generated enough k.o to maintain our perception
at what I consider our relatively humble (by LA standards) standard of
living. That new light bulb could really help things.
Best regards
Rick
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