posted
As many may have noticed I am a big Ron Paul fan. Mostly I am a fan of his social libertarianism and his tirades against the Iraq war, foreign involvements, and depending on foreign debt to keep our economy afloat.
Predictably my focus these days has been watching what is going on with the dollar. It seems to be dying. When we bought our house several months ago we transferred some money from Japan. Currency was trading at 1 dollar for 119 yen. Now it is trading at 1 dollar for 102 yen (doh)!
We should of waited a few months like my old landlord advised. He was adamant that the dollar was dying and even said waiting a few months would make a dramatic difference. He is a very smart man who sold all of his property at the peak prices and has his PhD in economics.
Altho not a Paul fan (he stopped focusing on politics a while ago), my landlord would wax eloquent about the end of our economy and way of life for hours with that special twinkle in his eye.
The euro is higher, the yen is higher, gas prices are higher (in part because of the weakness of the dollar) and the government is throwing money at it's citizens and bad mortgage lenders like that will somehow fix everything. We continue to pump in money and lower rates to save the mortgage crises and we continue to involve ourselves in expansive and expensive wars.
My lens has been so colored by Ron Paul that I want to step back and get a different perspective.
Is this just the regular business cycle or is there something special going on with our economy and dollar that could drive us into 20+ years of transformation into a new type of economy, government, way of life, and possibly (but not likely) even currency?
Are middle eastern countries going to drop the dollar? Are more and more countries going to start trading in Euros further weakening global confidence in the dollar?
How will this affect me?
Posts: 2445 | Registered: Oct 2004
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posted
It's not a normal business cycle. Whether it's the end of our way of life depends on how one defines that. I think we are beginning to see the effects of the Baby Boomers moving out of their most productive years and the baby bust coming into its prime. There was a slew of books about 15 years ago about how most retirees would be living in group homes by now, kind of reverse orphanages, so there are certainly less rosy possibilities that have been coutenanced.
The economy is in a very fragile state. I'm not sure what universal healthcare will do to it. Healthcare has swollen from 1/20th of the GDP to 1/6th - that was a figure the academics were discussing in 2000, and I'd be surprised if it hasn't worsened. The mortgage crisis is the crisis we can see. I'm not sure which way healthcare will go.
I hadn't been aware of the level of federal spending until this campaign, either. When the federal spending doubles, and housing expense doubles, and energy doubles, and food begins to rise, and wages don't, well, I guess the only answer is for everyone under the age of 60 to be working two jobs (for the system to survive in anything resembling its current form).
Posts: 11017 | Registered: Apr 2003
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To answer the question in the title, no. We are still the most productive country in the world (possibly excepting Luxembourg, and it is much easier to be a very productive small country than a very productive large country). A 'weak' dollar strengthens our exports; it is a response to the imbalance of trade we've been seeing so long.
What's funny is, if you don't like the 'depending on foreign debt to keep our economy afloat' (which is a gross misstatement of the situation), you should like the dollar readjustment. Its the sanest way for the imbalance of trade to readjust. You can't have a dollar as strong as we had and not have a trade deficit. Pick one to rail about, and pick one to cheer for, you don't get to do both and have any credibility for your position.
This is a regular old type of business cycle. Probably a bit more severe than the last couple, but better than several of the ones before that. As for driving us into 'a new type of economy', that's always happening.
For instance,
quote: * “the U.S. now has more choreographers (16,340) than metal-casters (14,880)” * “more people make their livings shuffling and dealing cards in casinos (82,960) than running lathes (65,840)” * “there are almost three times as many security guards (1,004,130) as machinists (385,690)”
The economy is constantly changing in ways we do not expect. As for a new form of government, extremely unlikely, at least if I'm interpreting the degree you're talking about correctly. As for a new way of life, that's always changing, too. Twenty years ago, could you have imagined what life would be like today, with the internet?
And as for currency, no.
Posts: 15770 | Registered: Dec 2001
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quote:This is a regular old type of business cycle.
While I agree with most of what fugu said, I don't agree with this part. Rising oil prices are facing us with the rather grim prospect of stagflation. My hope is that this will spur innovation in alternative forms of energy that will ultimately work as an economic stimulus, but having the real prospect of stagflation means this is not just a regular type of business cycle.
Posts: 10177 | Registered: Apr 2001
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fugu: I had the internet 20 years ago. =P Though we didn't have the web back then.
Every business downturn is "the worst since the great depression." So be ready to hear that phrase from whoever wins the Dem nomination.
Posts: 7085 | Registered: Apr 2001
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First of all, the economy is always in a state of transformation. If you look at the past 20 years or so, and look at the 20+ years to come, there are indications that we're in the middle of a significant shift, as the developed countries transform into service-based economies, and a significant number of developing countries become proper industrialized economies.
This is a generally a good thing: don't believe anyone who complains that the U.S. doesn't produce anything anymore (referring to our manufacturing decline), and therefore the end of the world is nigh. Service is just as important a thing to produce as goods are, and it's generally a more intellectually rewarding and comfortable job. Also don't believe anyone who complains about the poor developing economies where people no longer live in peaceful farming villages, but instead must live in polluted cities and work in factories. Subsistence farming is a difficult, difficult life, with little chance of having leisure time, medical care, general security for the future, or generally much of a future (low life expectancy rates).
(This development isn't true for everyone in the world, however - there are significant parts of Asia, and most of Africa where things haven't improved much, if at all, in the past century. This is should be a major concern of everyone interested in the utility of others.)
When you want to know how the economy is going to be performing in the long term, you should ask yourself what are the changing variables that affect economic growth. In a lot of ways the US economy is as strong as it ever was. We have a a well-educated populace, high levels of R&D, excellent levels of corruption and law & order, a developed industrial base, and generally good government policies. This alone should suggest to you that it's extremely unlikely that the economy will be "dying" anytime soon. People have been doing better - for most any measure of "better" (wealth, leisure hours, consumption, health, etc) - in this country year after year pretty much since its start, except for a few blips here and there during times of major economic downturn. That's a powerful trend, and it shouldn't be discounted.
And, what fugu said.
The dollar is dropping, which is exactly what economists have been expecting since before the dot-com boom, since our international trade/finance position hasn't been at a level that could be sustained in the long term. The gentle decline that we're seeing now is a lot better than what I've seen some models predicting, so yay for that.
Business cycle-wise, we're in a tougher downturn than you saw in 2001, but nothing yet like the problems in the '80's.
Posts: 2409 | Registered: Sep 2003
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Pixiest: but even with the internet, could you imagine what life would be like today with it?
MrSquicky: Let me know when we actually hit stagflation. Furthermore, we had stagflation three or four business cycles ago, exactly in the time frame I'm talking about business cycles of comparable size. I anticipate that if we do hit stagflation, it will be less severe than then. And this time we don't have anywhere near the productivity hit we had then.
Posts: 15770 | Registered: Dec 2001
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quote:Furthermore, we had stagflation three or four business cycles ago, exactly in the time frame I'm talking about business cycles of comparable size.
Yes, and that wasn't a normal business cycle either.
A business cycle generally balances unemployment and inflation. That's a normal one. When you get increases in both, you've got stagflation and a lot of the normal bets on the business cycle are off.
I do agree that it seems likely that if we hit stagflation, the effects will be less severe than in the 70s (especially because, as I said, I expect it to spur needed growth in alternative fuels which I think might lead to a small tech boom).
Posts: 10177 | Registered: Apr 2001
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posted
Ah, by normal you mean stereotypical. By normal I mean nothing particularly surprising in character or scope. Stagflation, having been seen (recently and locally), is not surprising, and the scope will almost certainly be smaller.
Posts: 15770 | Registered: Dec 2001
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posted
The dollar is definitely serious ill but I still have hope it will recover.
In 2001, there were 1.78 swiss francs to the dollar and 122 Japanese Yen to the dollar. Yesterday, there were 1.03 swiss francs to the dollar and 103 Japanese Yen to the dollar.
That looks really really bad (and it is) but its important to realize that in June 1995 there were only 84 Japanese yen to the dollar and 1.16 swiss francs to the dollar. So the dollar has recovered from being nearly this weak before. If the US can effectively deal with is budget deficit and trade deficit, there is every reason to believer the dollar can recover again.
Of course those changes aren't in the foreseeable future so for now I expect the dollar to continue its downward spiral.
Posts: 12591 | Registered: Jan 2000
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quote:You can't have a dollar as strong as we had and not have a trade deficit. Pick one to rail about, and pick one to cheer for, you don't get to do both and have any credibility for your position.
Germany manages to do it. In fact their trade surplus has grown over the past 6 years despite an increasingly strong euro.
I guess that make Germany "incredible".
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posted
The dollar 'recovering' to similar levels would be equivalent to re-increasing the trade deficit, absent certain other drastic (and far more painful) events, such as a massive drop in productivity.
The rhetoric of 'weak' and 'strong' currencies has always been misleading, anyways. There's nothing bad about exchange rates adjusting in either direction, only about exchange rates being artificially manipulated (directly or indirectly) to perpetuate imbalances. A 'weaker' dollar is no worse for us than a 'stronger' dollar, provided the cause of the 'weakness' (or the 'strength') is not a distortion of incentives.
Posts: 15770 | Registered: Dec 2001
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posted
Germany doesn't have a currency of its own. I guess making an imaginary currency strong could be termed "incredible", but I'd rather have our economists focus on dealing with a real currency. Not that "strong" or "weak" really means much, as fugu points out.
If you want to talk about the European Union's currency, then you need to talk about what all of the EU is doing, economically, since that's what actually affects the currency via the markets & the EU Central Bank's policies.
Posts: 2409 | Registered: Sep 2003
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posted
edit: I refer below to the mark; there's technically a fixed exchange rate of the mark with the euro, even now, so its basically the euro.
You can't directly compare currency strengths across economies. You have to talk about the strength of a currency in the context of a particular economy and in how the international community deals in the currencies. While the mark (imaginary as it is) is strong, until this recent decline, the mark wasn't even on the same playing field as the dollar in terms of perceived strength internationally. It is now, but it isn't particularly stronger than it was before, the dollar is just weaker.
It is, of course, possible to break out of the trade off if one gives up some other things I hope remain invariant. For instance, Germany's 9and Europe's) lackluster productivity growth means the mark can stay relatively strong and they can maintain a surplus. I'd rather have productivity than be able to boast about how 'strong' my currency is. As for particularly unique characteristics, the decreasing need for foreign investment to improve situations in East Germany helps keep the balance of trade in surplus.
Posts: 15770 | Registered: Dec 2001
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quote:Originally posted by lem: ... How will this affect me?
Combined with the stock market crash, sure helps me buy USD and USD investments for that part of my asset allocation Posts: 7593 | Registered: Sep 2006
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quote:The dollar 'recovering' to similar levels would be equivalent to re-increasing the trade deficit, absent certain other drastic (and far more painful) events, such as a massive drop in productivity.
It's not nearly that simple. In 1984, the dollar was at record highs (2.5 CHF/USD) and we had a trade deficit of 109 billion, in 1988 the dollar had dropped by nearly 50% (1. CHF/dollar) e and our trade deficit was at 114 billion. In 1991, the exchange rate for the US dollar was about the same as in 1988 but the Trade deficit dropped to 31 billion. In 1995 the US dollar dropped to 1.15 Swiss Francs but the trade deficit rose to 96 billion. By 2001 the dollar had gained significant strength (1.78 CHF/USD) and the trade deficit had indeed grown substantially (365 billion). At the end of 2007 the dollar had dropped to 1.14 CHF/USD but the trade deficit had burgeoned to nearly 711 billion (nearly double the 2001 values).
Clearly its not nearly as simple as you imply. We have gone through periods where our trade deficit has shrunk despite having a strong dollar and periods where its grown despite a weak dollar.
If we could go to having the dollar at the levels it was at in 2001 (50% more than its worth now) and have the trade deficit we had in 2001 (50% of what it is now) -- I'd bite.
Posts: 12591 | Registered: Jan 2000
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quote:The rhetoric of 'weak' and 'strong' currencies has always been misleading, anyways. There's nothing bad about exchange rates adjusting in either direction
Unless you transfer the equivalent of 30K from yen and realize you could have done it with a LOT less yen! This is fascinating. I always heard that America doesn't produce much. Can you talk more about our high production?
Is it high both in goods like farm products and services, or are we mostly producing services? What are our strengths with exports?
Posts: 2445 | Registered: Oct 2004
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posted
As a public service, I am setting up a Retirement Home & Hospice for all sickly, elderly, or dying dollars. Send them to me, and I will take care of them, free of charge.
Posts: 32919 | Registered: Mar 2003
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America produces the most of any country in the world. GDP literally (if not in an exact fashion) measures the amount of "stuff" country produces. Here's a link to a couple of lists showing ranking of countries' GDP. Typically you'll want to look at the purchasing power parity numbers, since that removes the issue of exchange rate fluctuations. (There's been a recent huff about a major miscalculation of China & India's economies, though, so the PPP numbers there might be off).
Edit: The wikipedia articles on "service(economics)" and "service economy" have a good list of the type of economic transactions that are services. According to Wikipedia, "Services accounted for 78.5% of the U.S. Economy in 2007[1], compared to 20% in 1947." I have no idea on how much of that is exported, although I'd wager a large portion of the financial services, business consulting, and information services ends up getting counted on the "export" side of the ledger.
Posts: 2409 | Registered: Sep 2003
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Rabbit: you're right, it isn't that simple. In long term averages, it is remarkably simple, though. 2001 is not a very good data point because we were in a recession. Our trade deficit was lower partly because our production was down. This is not a good thing, it is a bad thing. Our dollar was stronger due to stickiness after a long period of growth and presence in many central banks' holdings. It was not a sustainable position. In fact, the unnatural strength of the dollar then led to increased purchasing of foreign products . . . which increased the trade deficit.
lem: we are the largest manufacturer in the world, and among the most productive per capita (I think SK has us beat, largely due to the chip production that takes place there); we have Europe beat handily: http://www.bls.gov/fls/prodsupptabletoc.htm
As for services, we have the most productive services per capita of any country in the world, I believe, though I haven't been able to find where I saw those statistics.
There's only one country with more GDP per capita, Luxembourg, and most are nowhere near.
Our economy is the most competitive large economy in the world, even in the current probable recession.
Posts: 15770 | Registered: Dec 2001
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quote:The dollar 'recovering' to similar levels would be equivalent to re-increasing the trade deficit, absent certain other drastic (and far more painful) events, such as a massive drop in productivity.
It's not nearly that simple. In 1984, the dollar was at record highs (2.5 CHF/USD) and we had a trade deficit of 109 billion, in 1988 the dollar had dropped by nearly 50% (1. CHF/dollar) e and our trade deficit was at 114 billion. In 1991, the exchange rate for the US dollar was about the same as in 1988 but the Trade deficit dropped to 31 billion. In 1995 the US dollar dropped to 1.15 Swiss Francs but the trade deficit rose to 96 billion. By 2001 the dollar had gained significant strength (1.78 CHF/USD) and the trade deficit had indeed grown substantially (365 billion). At the end of 2007 the dollar had dropped to 1.14 CHF/USD but the trade deficit had burgeoned to nearly 711 billion (nearly double the 2001 values).
Clearly its not nearly as simple as you imply. We have gone through periods where our trade deficit has shrunk despite having a strong dollar and periods where its grown despite a weak dollar.
If we could go to having the dollar at the levels it was at in 2001 (50% more than its worth now) and have the trade deficit we had in 2001 (50% of what it is now) -- I'd bite.
I'm confused: why are you using the Swiss Franc as a measure of the dollar's general strength?
Anyways, fugu's giving the long-term answer. Short term there's going to be a number of other things affecting trade balances and exchange rates. If you're interested in learning more about international finance, there's a good resource here: http://internationalecon.com/Finance/F-toc.phpPosts: 2409 | Registered: Sep 2003
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I didn't just look at the short term, I gave you a 24 year history.
I understand the economic theory involved, I just think its wrong on several counts as evidenced by the fact that it does not match the historic data well.
The reason for comparing to the swiss franc are relatively simple. The swiss franc is generally considered to be a hard currency which has been relatively stable in value over time due to the strength of the swiss international banking industry. The Swiss franc has also tracked fairly close to other European currencies over the past several decades and so it is a reasonable surrogate for the strength of the dollar compared to European currencies in general. The other European currencies haven't been free currencies over that period of time because of the transition to the Euro.
During the period of time I covered, Japan went through a major recession and the value of its currency dropped dramatically and has sense recovered to a degree. So comparing to the Yen has a strong confounding factor.
Posts: 12591 | Registered: Jan 2000
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posted
24 years isn't particularly long for a macro economic data set, particularly when all you're doing is comparing two numbers, without considering anything else that's happening in the economy at the time. There's a reason why economists take 2+ years of econometric theory in order to run good multiple regressions.
It's like if I were to pick the water flow of the Colorado River for a quarter of a century (make it a time while dams are being built, too), and expect it to confirm to what global warming would predict, because water levels are related to snow levels are related to local weather patterns are related to global weather patterns. While there is a relationship there, there's a lot of confounding variables that you need to account for before the relationship will become clear.
If you want to test the theory, you're going to have to consider a lot more variables than two. There are plenty of papers that do this, and if you want I can point you towards them.
Posts: 2409 | Registered: Sep 2003
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quote:Originally posted by The Rabbit: The dollar is definitely serious ill but I still have hope it will recover.
In 2001, there were 1.78 swiss francs to the dollar and 122 Japanese Yen to the dollar. Yesterday, there were 1.03 swiss francs to the dollar and 103 Japanese Yen to the dollar.
That looks really really bad (and it is) but its important to realize that in June 1995 there were only 84 Japanese yen to the dollar and 1.16 swiss francs to the dollar. So the dollar has recovered from being nearly this weak before. If the US can effectively deal with is budget deficit and trade deficit, there is every reason to believer the dollar can recover again.
Of course those changes aren't in the foreseeable future so for now I expect the dollar to continue its downward spiral.
Not to mention the Canadian dollar being worth more than the American for the first time I can ever remember...
Downturns this rapid are not part of any sort of normal cycle. And it isn't just an immense amount of foreign debt, or trade deficits, or the price of oil; it's also that the Euro has become a highly competitive currency, one which many countries would prefer to deal in.
The U.S. dollar may well recover, but I think overconfidence that said recovery is a certainty is naiive.
Posts: 3826 | Registered: May 2005
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posted
I guess I'm naive in thinking there are a lot of factors at play in the last 24 years that weren't in the prior 24 years and so forth.
Though I do think the transition from industrial to information economy could stand to learn from the transition from subsistence to industrial economy.
I read an incredibly interesting blog post a couple weeks back about how the 4 horsemen of the "apocalypse" represented stages of economic development for humankind over projected history.
Posts: 11017 | Registered: Apr 2003
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quote:t's like if I were to pick the water flow of the Colorado River for a quarter of a century (make it a time while dams are being built, too), and expect it to confirm to what global warming would predict, because water levels are related to snow levels are related to local weather patterns are related to global weather patterns. While there is a relationship there, there's a lot of confounding variables that you need to account for before the relationship will become clear.
Which was indeed my point. If all other things in the economy remained the same and the value of the dollar increased -- then yes we would expect that to make US imports less competitive on the global market. But all other things never remain the same. In fact, the exchange rate isn't an independent variable in the system. It changes in response to other factors in the economy (like interest rates). Which is precisely why if you look at historic data you don't see any correlation between exchange rates and the trade balance in the US and why its ridiculous to claim that we can't expect the value of the dollar to improve without an adverse impact on the balance of trade.
Posts: 12591 | Registered: Jan 2000
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quote:Originally posted by The Rabbit: The dollar is definitely serious ill but I still have hope it will recover.
In 2001, there were 1.78 swiss francs to the dollar and 122 Japanese Yen to the dollar. Yesterday, there were 1.03 swiss francs to the dollar and 103 Japanese Yen to the dollar.
That looks really really bad (and it is) but its important to realize that in June 1995 there were only 84 Japanese yen to the dollar and 1.16 swiss francs to the dollar. So the dollar has recovered from being nearly this weak before. If the US can effectively deal with is budget deficit and trade deficit, there is every reason to believer the dollar can recover again.
Of course those changes aren't in the foreseeable future so for now I expect the dollar to continue its downward spiral.
Not to mention the Canadian dollar being worth more than the American for the first time I can ever remember...
Downturns this rapid are not part of any sort of normal cycle. And it isn't just an immense amount of foreign debt, or trade deficits, or the price of oil; it's also that the Euro has become a highly competitive currency, one which many countries would prefer to deal in.
The U.S. dollar may well recover, but I think overconfidence that said recovery is a certainty is naiive.
Isn't it only by a penny?
Either way, I was reading a couple articles the other day about how Windsor, Ontario (which combined with Detroit is the largest international metropolitan area in the world) is being decimated by the imbalance. Detroiters usually go over to Canada in droves to spend money on night clubs, the casino, shopping, restaurants, etc. But with a combination of the Detroit casinos opening up, and the weak dollar, people aren't going anymore. Add to that the fact that it'll soon be more difficult to casually cross the border and you've got some problems for border Canadians. They're feeling the hit in some cases harder than we are.
Posts: 21898 | Registered: Nov 2004
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posted
We know many of the strongest confounding factors in the correlation. Most of them are directly and obviously bad for us. One of the biggest ones is, weaker manufacturing (in terms of per-person productivity, in particular) will 'help' us have a strong dollar and a lesser trade deficit.
Of course, there is also that trade deficits and 'weaker' dollars are neither inherently bad things. In fact, both are definitely good things (or indicative of good things) in certain situations. Why do you want to pick a certain level to target?
Posts: 15770 | Registered: Dec 2001
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Seems like a small difference, but then you have to take into account that for most of my life 1 CDN ~= 65 - 75 USD or so. (62 in 2002?)
A rise that dramatic and fast causes all sorts of interesting changes. I know that the newspapers were dominated with stories of big increases in Canadians going over to buy consumer goods in the States, Canadian retailers being criticized for not adjusting their prices fast enough (most books still assume a 60 cent exchange rate), and big increases in online orders from the states.
Of course the down-side is that much of the manufacturing and exporting industries in Ontario are hard hit since (a majority?) a great deal of exports go straight to the States. Also, Niagara Falls is apparently almost deserted.
For my part, I've been definitely buying the occasional book or electronic equipment from the states and saving some money (even with stupid brokerage fees). I've also been monitoring Canadian financial investing forums where people are either delirious at the thought of being able essentially buy US stocks at hugely discounted rates (50%?) due to the combined impact of the exchange rate and the recession or real annoyed at the crash in the value of their existing investments.
So yeah, turbulent and interesting.
Posts: 7593 | Registered: Sep 2006
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Oh I know. When I was younger I remember it being like 50 cents on the dollar. Now we can't make jokes about Canadian money being used for toilet paper anymore
And I imagine one side of the Falls is pretty busy.
It's another reason, beyond the fact that we have better casinos here now and the fact that I'm not 19 or 20 anymore, to not need to go to Canada anymore. But I'll remember you fondly from good times I had there in my youth.
Posts: 21898 | Registered: Nov 2004
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posted
Wouldn't our economy be stronger if we weren't spending so much in debt service for non-capital improvements (i.e., spending money on the war in Iraq, for example).
It's not just the trade deficit that causes problems, it's how much money we've borrowed, and how much interest payments suck out of our economy.
It often makes sense to borrow against the future if you're building something that lasts longer than the loan repayment schedule.
It makes a lot less sense to spend money you don't have on things that just evaporate the money or suck it out of the country -- or simply redistribute it while running up huge debts.
Posts: 22497 | Registered: Sep 2000
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Bob: our ratio of debt to GDP is pretty healthy, and far smaller than that of many first world countries. Who knows what an ideal level would be, but we're not doing too badly by any standard we can determine from real world data.
Posts: 15770 | Registered: Dec 2001
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The dollar's recent all-time lows make pretty good shopping for us, too. Every time it drops my husband cackles and makes more plans for what to buy in the US.
Posts: 2762 | Registered: Sep 1999
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quote:t's like if I were to pick the water flow of the Colorado River for a quarter of a century (make it a time while dams are being built, too), and expect it to confirm to what global warming would predict, because water levels are related to snow levels are related to local weather patterns are related to global weather patterns. While there is a relationship there, there's a lot of confounding variables that you need to account for before the relationship will become clear.
Which was indeed my point. If all other things in the economy remained the same and the value of the dollar increased -- then yes we would expect that to make US imports less competitive on the global market. But all other things never remain the same. In fact, the exchange rate isn't an independent variable in the system. It changes in response to other factors in the economy (like interest rates). Which is precisely why if you look at historic data you don't see any correlation between exchange rates and the trade balance in the US and why its ridiculous to claim that we can't expect the value of the dollar to improve without an adverse impact on the balance of trade.
Rabbit, maybe this simpler analogy will make things clearer, 'cause I don't think you get it. Suppose you make the claim that there's a direct relationship to how much water level of a River X and the amount of snowfall the previous winter in nearby mountains. This is a completely reasonable belief, supported by the data of the world as well as what scientific theory would predict, and the long-term trend is going to match your claim.
Now suppose that you decide to pick four data points to test this claim of yours, over a 25 year span. You pick one before a dam was built on the river, two after a dam was constructed, and one after the dam was destroyed (the salmon population was suffering). Should you be surprised if the data didn't match your prediction? And would that mean that the theory was wrong, particularly in a long-term outlook? After all, even if the dam throws off some predictions, it can't keep up high water levels with a bad enough drought, or keep water levels low when there's a massive snow pack one year.
Posts: 2409 | Registered: Sep 2003
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quote:Wouldn't our economy be stronger if we weren't spending so much in debt service for non-capital improvements (i.e., spending money on the war in Iraq, for example).
It should be noted that, at least under the Bush viewpoint, the war in Iraq could probably be considered a capital improvement in a sense - it is building a country that in the long term will offer not only stability but a market for our goods and services.
Posts: 2432 | Registered: Feb 2001
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