Wisdom vs Knowledge

realitykeeper

For many years now, Irish governments have striven to develop a knowledge based economy. To a large extent they have succeeded but perhaps with hindsight their priorities were misplaced. I suggest they should have focused on making Ireland a more self reflecting, philosophical type of society first and then pursued the knowledge based economy.

Back in the early nineties a lot of multinational companies were attracted to Ireland because of the young educated workforce. These jobs were filled by Irish people. Nowadays, the high tech companies are still coming but they are forced to hire from abroad because throughout the naughties, Irish youth took up courses in non economically sensible courses like social studies and courses geared toward the caring profession.

Caring is all nice and dandy but at the end of the day, if we all went about "caring" for each other, who would pay for everything? As it turns out, the troika are paying us in the form of the tens of billions we are borrowing every year to keep the show on the road. Needless to say, this is a very foolish strategy because the policy of "stimulus" will ultimately fail in the EU, the US and anywhere else it is attempted.

One CEO of an American multinational was overheard laughing that no Irish would be hired in their new Dublin facility because they needed people with language skills. The sad fact of the matter is that he was correct. Perhaps if the Irish were less obsessed with clinging to the apron strings of our former occupiers we would be less inclined to waste the time and energy of our youth on studying English. Adding stupidity to stupidity, Irish "educators" think that teaching Shakespeare is a worthwhile pursuit.

Why bother learning a foreign language you already speak fluently? Would it not be more sensible to learn a foreign language you do not speak such as Chinese or Portuguese, after all China and Brazil have growing capitalist based economies with which we could trade whereas English speaking economies (including our own) are sliding slowly into the Bolshevik abyss.

This is what I suggest. A complete privatization of the entire education sector. The forces of supply and demand should be the sole requisite for the existence of a school, college or course.

If people were required to live in the real world, they would be less inclined to indulge in the type of vulgar behavior for which the Irish were rightly admonished for by one former German Ambassador during the celtic tiger. Incidentally, that poor man was criticized something awful for his words of wisdom but of course subsequent events proved him to be correct.

Whether it is the cronyism of politics, the auction politics of the right, left and center, the self regulation during the good times and the over regulation in the bad times, the notion that foreign based retailers are net contributors to the Irish economy or all of the above, - the Irish would appear to be a people of low intellect, standards and morals.

During one of his speeches, the economist David McWilliams recently asked the following question: If a lender gives a loan with no great consideration as to how the borrower is to pay back the money, who is to blame when the borrower defaults? The response from the (Irish) audience was that it was to lender who was to blame. This attitude further illustrates the selfish, stupid attitudes of so many Irish people. The lender is not to blame. Full blame should always be put squarely on the borrower and that is how the Germans think which is why there will be no debt forgiveness - nor should there be! In any event, the Irish banks knew what they were doing when they borrowed all that money.

In order to acquire wisdom, the Irish must experience poverty and hardship on an extreme scale. This will prompt self reflection and the type of honesty needed to get beyond our foolish self serving, rights and entitlements type of mentality. The good news is that the undercurrents of economic reality will eventually take hold and create the conditions necessary to reshape the nation.

When that day comes, will the Irish people celebrate God`s justice like Jonah in the belly of the whale? Perhaps not but to make another biblical reference, I believe people really ought to prioritize the tree of life over the tree of knowledge because without wisdom, knowledge can be a dangerous thing.

djpbarry

realitykeeper wrote: »

Why bother learning a foreign language you already speak fluently?

I actually thought you were going to make an interesting point, but I stopped reading when I got to this.

You've got to be kidding, right? You think the standard of English in Ireland is so high that there's no point teaching it anymore?

First of all, it's not a foreign language - English is the native language of pretty much every Irish person.

Secondly, English is rapidly becoming, if it has not already become, the lingua franca of the planet. If a non-native English speaker can't communicate effectively through English, they're going to find opportunities limited in a lot of industries.

ardmacha

Secondly, English is rapidly becoming, if it has not already become, the lingua franca of the planet. If a non-native English speaker can't communicate effectively through English, they're going to find opportunities limited in a lot of industries.

Exactly. Much of this ranting about languages is nonsense. Of course Irish people should learn languagues, but their economic contributuon will be in the tourist industry or selling Irish products abroad. The notion that Ireland can produce people who will get jobs for Danish speakers in mutinationals, when every Danish graduate is more than qualified for, is fanciful.

Permabear

This post has been deleted.

realitykeeper

Permabear wrote: »

This post had been deleted.

I agree that levels of illiteracy are far too high but why waste time becoming literate in a declining language like English when they can become literate in a language with a future? The "soft power" (to quote a recent report in an influential Chinese newspaper) of cultural influence which the English language enjoyed in the past is rapidly coming to an end. This is because the US, UK, Canada, Australia and Ireland are all quickly becoming economic basket cases. The aforementioned countries with the possible exception of Canada, are so addicted to debt that they are collectively partaking in economic suicide through various means of quantitative easing.

People like Max Kaiser and Peter Schiff confirm this fact but sadly they are being ignored by all but a very small minority of Right wing heroes of congress in the US. Capitalism once made America great but the US is no longer capitalist in a fundamental sense. China however is capitalist and therefore China (and its main language) is destined for greatness.

Farmer Pudsey

realitykeeper wrote: »

China however is capitalist and therefore China (and its main language) is destined for greatness.

China has one main disadvantage in it bid to become a major power. For all our criticism of the US and western Europe the Chinese have an inability to invent new products. If you look at gunpowder it had it for at least 300 years before Western civilisation. However in about 200 years European Military technology had passed it out and by the 19 Century was way more advanced in Gunpowder technology than any Far or Middle eastern country.

You might think that this is a isolated case but very few serious advances in Technology can be attributed to them. The far east's strength lies in it workforce and it attention to detail(Japan) in production of goods.

Yes we have a debt issue in The west however it is rather disengenous to state all the blame is with the borrower. This is a pre 1800's idea with debtors prisions etc. In Ireland the biggest issue we have is we still have not go a proper Bankrupty process therefore our economy is static as people find it impossible to continue with there economic progression.

I wonder for how long can China continue with a cheap labour policy as it workforce becomes more educated and demand personel and political freedom. It was this education that broke up the British Empire.

I agree with you in that a lot of 3rd level courses are ill taught out and class contact time on some of these courses is inadequate. Some courses have developed a self educate ethos. This is grand in theory those that pass may well develop enterprnarial skills however we seem to leave a vast body of students behind. A lot of lower level courses are a complete waste of time and industry should be left to train these in house or employ people and put in place a on the job and college base training.

We only have to look at the Child case industry where an idea was floated that workers in the industry( a virtual minimum wage industry) would be require to de a one or two year fetac course. In the last 5 years our young have adbandoned the trade's sector which will come back to bite us.

SupaNova2

realitykeeper wrote: »

I agree that levels of illiteracy are far too high but why waste time becoming literate in a declining language like English when they can become literate in a language with a future?

You are way off here, English is not in decline, it is the chosen language for international business and tourism, the network effect has already given English a monopoly in this role. Everyone is getting along fine trading with China using English and China themselves push English in schools for this reason. The idea of abandoning English for Chinese for the purpose of trade is ludicrous.

And when a non English speaking tourist enters another non English speaking country he uses English, and the locals in whatever destination are usually capable of speaking a little themselves, again the network effect has given English this role.

sarumite

realitykeeper wrote: »

China however is capitalist and therefore China (and its main language) is destined for greatness.

China is also autocratic. Some would argue that it was the open market that made the US great. Chine has many hurdles against it. It's currency is too highly regulated, its market is tightly controlled by the politburo, its endemically corrupt, its government run industries are more inefficient than their private sector counterparts yet they dominate the industries they occupy. The one child policy has lead to destabilisation in terms of gender numbers which will lead to social unrest and as mentioned they have not figured out how to move from a "made in China" to a "designed in China" economic model.....and that is just the short list. They may be destined for greatness, however they have along row to hoe.

djpbarry

realitykeeper wrote: »

...a declining language like English...

I'd love to see your basis for that statement?

realitykeeper

djpbarry wrote: »

I'd love to see your basis for that statement?

The soft power (language/music/culture etc) the US had for many years were influential throughout the world. However, this power is a bi product of capitalism. Quantitative easing will undermine capitalism in the US in particular but also other english speaking countries and therefore the English language will rapidly lose status.

djpbarry

realitykeeper wrote: »

The soft power (language/music/culture etc) the US had for many years were influential throughout the world. However, this power is a bi product of capitalism. Quantitative easing will undermine capitalism in the US in particular but also other english speaking countries and therefore the English language will rapidly lose status.

Well, if the West crashes, China's kind of screwed, isn't it? Who else is going to buy all their stuff?

sarumite

realitykeeper wrote: »

The soft power (language/music/culture etc) the US had for many years were influential throughout the world. However, this power is a bi product of capitalism. Quantitative easing will undermine capitalism in the US in particular but also other english speaking countries and therefore the English language will rapidly lose status.

You are completely ignoring the network effect of the English language. For example science is now an English language discipline. It doesn't matter in which country you do your work, you will write your articles in English. This is now independent of America's influence and will remain the case for the foreseeable future.

Permabear

This post has been deleted.

realitykeeper

Obviously the decline of English will not be an overnight event but its advantages will no longer exist if capitalism collapses in the US and UK. Naturally China would also suffer a setback in this scenario but the US would fall from a far greater height. Besides all that would happen is that Asian trade would swing from the first world to the third world.

The world is interested in doing business so without capitalism in the US/UK the relevance of English would quickly diminish. Small English speaking enclaves of capitalism would have to learn Chinese, Portuguese etc as no one is interested in learning a minority language (populations in the US/UK will be irrelevant to world without capitalism.) Already the Chinese are learning Portuguese, Spanish, Russian etc and vice-versa. Without capitalism, the US/UK could no longer fund R & D, the last bastion of relevance to the English language.

In this country, low literacy rates are used as a reason to focus on English. However it is precisely this focus on the English language which is causing the low literacy rates in the first place. Perhaps if the kids were challenged they wouldn`t be so bored. Time to drop English from the curriculum in a hurry. The Chinese/Brazilians etc will quickly tire of learning an irrelevant language so the only way to talk to them will be by learning their languages.

loveBBhate

Both.

loveBBhate

realitykeeper wrote: »

?

Wisdom and Knowledge, why both both?

Instead of 'Wisdom vs Knowledge' as the thread asks.

realitykeeper

loveBBhate wrote: »

Wisdom and Knowledge, why both both?

Instead of 'Wisdom vs Knowledge' as the thread asks.

Knowledge is great but without wisdom it can be dangerous. Therefore, acquiring wisdom ought to precede the acquisition of knowledge. I used the example of the knowledge economy. It became a form of collateral to borrow billions we cannot pay back. Had we been wise, that would not have happened.

Low Energy Eng

djpbarry wrote: »

Well, if the West crashes, China's kind of screwed, isn't it? Who else is going to buy all their stuff?

The other 5 billion people maybe?

loveBBhate

realitykeeper wrote: »

Knowledge is great but without wisdom it can be dangerous. Therefore, acquiring wisdom ought to precede the acquisition of knowledge. I used the example of the knowledge economy. It became a form of collateral to borrow billions we cannot pay back. Had we been wise, that would not have happened.

Keeping it real, realitykeeper.

Frank Lee Midere

Permabear wrote: »

This post had been deleted.

I dunno, 30%? The top 30%.

And yes, it seems Ireland should adopt the Finnish model.

djpbarry

realitykeeper wrote: »

Obviously the decline of English will not be an overnight event but its advantages will no longer exist if capitalism collapses in the US and UK.

That’s quite a big “if”, isn’t it?

realitykeeper wrote: »

Naturally China would also suffer a setback in this scenario but the US would fall from a far greater height. Besides all that would happen is that Asian trade would swing from the first world to the third world.

But the third world is not going to be able to afford the prices the first world has been paying?

djpbarry

Low Energy Eng wrote: »

The other 5 billion people maybe?

China exports about $350 billion worth of goods to the US every year. You’re telling me that if the US disappears, the rest of the world is going to pick up the slack, just like that?

Brussels Sprout

The arguments for the decline of the english language in tandem with a rise in Mandarin just don't add up. Even if, as expected, the western countries do decline in comparison to the likes of China, English as the de-facto language of international business is so ingrained that it will persist long after the influence of english speaking countries wanes.

As an aside: Surely if any language should be dropped from the curriculum in this country it should be irish.

djpbarry

Brussels Sprout wrote: »

The arguments for the decline of the english language in tandem with a rise in Mandarin just don't add up. Even if, as expected, the western countries do decline in comparison to the likes of China, English as the de-facto language of international business is so ingrained that it will persist long after the influence of english speaking countries wanes.

Even on a purely practical level, English wins hands down - it's quite a flexible language, so it's relatively easy to make oneself understood, even if the grammar used is far from perfect.

maninasia

Actually English is quite notorious among language learners for having difficult spelling, phrasing and grammar, it's pronunciation rules have tonnes of exceptions too, it's not the easiest language to pick up at all for non-native speakers.

On the other hand Chinese grammar couldn't be more simple to pick up, it's tonal which adds a bit more difficulty but the main impediment to non native learners of Chinese is the massive amount of time and effort it takes to learn the characters AND the fact that Chinese does not share a European ancestral root for Westerners. Picking it when young just needs the correct input, like any language.

Anyway....Chinese usage will not surpass English anytime now or in the future IMO but it is an important language in Asia and it is also very useful in tourism and retail. Go to anywhere in Asia now and the locals speak some Chinese to get the RMB, quickly replacing the USD.


As for the original topic, a promising title that was let down by the OPs post. It's a good question , Knowledge vs Wisdom.

There's an over emphasis on knowledge in Ireland and yet many Irish people are not particularly knowledgeable about life beyond Ireland, including the fact that Ireland is really not important or even well known over most of the world.

SupaNova2

djpbarry wrote: »

China exports about $350 billion worth of goods to the US every year. You’re telling me that if the US disappears, the rest of the world is going to pick up the slack, just like that?

The US is not going to disappear so I wouldn't worry about that. The rest of the world can and will pick up any slack from a relative decline of the US, the rest of the world has just as much appetite for phones, tablets, clothes and what ever else China produces, as well as the Chinese themselves.

realitykeeper

djpbarry wrote: »

That’s quite a big “if”, isn’t it?
But the third world is not going to be able to afford the prices the first world has been paying?

It is not a big "if". In fact it is an inevitability because QE will fail. It is true the third world will not be able to pay a lot for Asian goods so what will happen is manufacturing will move from the second to the third world as the second world becomes more consumerist. If you think about what is happening in the world at the moment it is very obvious what the outcome is going to be.

Over the next few years, millions of people will move into China`s ghost cities and become services sector employees who will adopt a consumerist lifestyle. This will increase demand for Chinese goods in China and push up the cost of those goods in the US. Since the US runs a trade deficit with China, inflation will increase in the US. This will be a big problem for the US because they cannot reduce interest rates further and the only solution they will have will be more quantitative easing - which itself will lead to higher inflation. Meanwhile the inherent systemic risks of QE will cause a loss of confidence in the US dollar. Capitalism in the west could end soon, unfortunately.

Farotz

maninasia wrote: »

Actually English is quite notorious among language learners for having difficult spelling, phrasing and grammar, it's pronunciation rules have tonnes of exceptions too, it's not the easiest language to pick up at all for non-native speakers.

The most difficult bits for learners of English are normally spelling and pronunciation, mainly because of the significant number of exceptions, but I wouldn't include grammar in this list. Among European languages, English has perhaps the simplest grammar system.

maninasia

Asian grammar systems are FAR simpler. For instance if you want to express past , present or future in Chinese there are no conjugations of verbs. You generally just place the time something happened in front of the verb or a past participle at the end of a sentence, and often the time something happened is just assumed from the context.

There is also no conjugation for male, female or numbers of people. There are no male and female nouns. There is no need to do that, Chinese is an eminently more logical and efficient language to use (if only they didn't write with those characters..the Koreans figured that out a long time ago).

djpbarry

maninasia wrote: »

...if only they didn't write with those characters...

And that is Chinese's major handicap. A language is of limited value if it cannot be written/read with relative ease.

maninasia

It can written and read with much more ease, on a computer. It's also being learned by enormous numbers of foreign students now, particularly Asians. With technology such as google glass, you would have instant links to pinyin systems or translation systems which will make using it much easier.

But English is already the dominant lingua franca, that won't change anytime soon. I don't see many people challenging that, but some of you should visit Asia to see how many people are learning Chinese now. Chinese characters have also always been a part of Korean and Japanese written scripts.

djpbarry

maninasia wrote: »

But English is already the dominant lingua franca, that won't change anytime soon. I don't see many people challenging that, but some of you should visit Asia to see how many people are learning Chinese now. Chinese characters have also always been a part of Korean and Japanese written scripts.

You don't have to convince me - I was in Malaysia a few weeks ago, where Chinese and Western scripts live side-by-side.

Godge

realitykeeper wrote: »

It is not a big "if". In fact it is an inevitability because QE will fail. It is true the third world will not be able to pay a lot for Asian goods so what will happen is manufacturing will move from the second to the third world as the second world becomes more consumerist. If you think about what is happening in the world at the moment it is very obvious what the outcome is going to be.

Over the next few years, millions of people will move into China`s ghost cities and become services sector employees who will adopt a consumerist lifestyle. This will increase demand for Chinese goods in China and push up the cost of those goods in the US. Since the US runs a trade deficit with China, inflation will increase in the US. This will be a big problem for the US because they cannot reduce interest rates further and the only solution they will have will be more quantitative easing - which itself will lead to higher inflation. Meanwhile the inherent systemic risks of QE will cause a loss of confidence in the US dollar. Capitalism in the west could end soon, unfortunately.

How does reducing interest rates reduce inflation?

realitykeeper

Godge wrote: »

How does reducing interest rates reduce inflation?

The most obvious and direct example is people pay less interest on their mortgages when interest rates are low. Businesses also find it easier financing any loans they may have taken out and these lower costs are sometimes passed on to their customers. So lower interest rates tend to result in lower inflation.

Godge

realitykeeper wrote: »

The most obvious and direct example is people pay less interest on their mortgages when interest rates are low. Businesses also find it easier financing any loans they may have taken out and these lower costs are sometimes passed on to their customers. So lower interest rates tend to result in lower inflation.

Conventional economic theory would have it that increasing interest rates cuts inflation.

http://en.wikipedia.org/wiki/Inflation#Controlling_inflation

"High interest rates and slow growth of the money supply are the traditional ways through which central banks fight or prevent inflation, though they have different approaches"

So again, why cut interest rates to cut inflation?

Geuze

RealityKeeper is saying that as China develops, and labour costs naturally rise there, then the deflationary effects of much production moving to China will be less.

Yes, that is the case.

Chinese production of everything from TVs, toys, textiles, etc., drove down the relative price of many goods over the last 10-20 years, helping to keep down goods price inflation in the west.

This can't continue forever, obviously. We can't depend on continued deflation in many goods prices.

However, it's a bit of a jump from that issue having a large definite effect on US monetary policy.

Geuze

realitykeeper wrote: »

Over the next few years, millions of people will move into China`s ghost cities and become services sector employees who will adopt a consumerist lifestyle. This will increase demand for Chinese goods in China

Yes, more middle-class Chinese buying household goods, etc.

and push up the cost of those goods in the US.

Maybe, although more domestic Chinese demand is not the only factor affecting US consumer prices.


Since the US runs a trade deficit with China, inflation will increase in the US.

This is not certain.

This will be a big problem for the US because they cannot reduce interest rates further and the only solution they will have will be more quantitative easing - which itself will lead to higher inflation.

If inflation does generally rise, that would be a good sign of a recovering economy, and would lead to a normal increase in interest rates.


Meanwhile the inherent systemic risks of QE will cause a loss of confidence in the US dollar. Capitalism in the west could end soon, unfortunately.

You seem to suggest that the response to higher inflation is to further cut interest rates.

This is incorrect.

Low Energy Eng

realitykeeper wrote: »

The most obvious and direct example is people pay less interest on their mortgages when interest rates are low. Businesses also find it easier financing any loans they may have taken out and these lower costs are sometimes passed on to their customers. So lower interest rates tend to result in lower inflation.

I was with you until this statement mate.

High interest rates draws currency out of an economy, and vice versa

Inflation is rampant, look at the stock market hitting all time highs

maninasia

There is inflation in asset prices especially in the stock market in the US, but it hasn't trickled down to create massive demand for goods or employees. One of the reasons is becauase the US government has also been cutting back on spending at the same time, which is deflationary. Energy price rises have also tailed off due to fracking.

So inflation can be be increased or reduced by many factors. It is pretty remarkable actually that there hasn't been large scale inflation with such low long term interest rates.

jmayo

realitykeeper wrote: »

For many years now, Irish governments have striven to develop a knowledge based economy. To a large extent they have succeeded but perhaps with hindsight their priorities were misplaced. I suggest they should have focused on making Ireland a more self reflecting, philosophical type of society first and then pursued the knowledge based economy.

Back in the early nineties a lot of multinational companies were attracted to Ireland because of the young educated workforce. These jobs were filled by Irish people. Nowadays, the high tech companies are still coming but they are forced to hire from abroad because throughout the naughties, Irish youth took up courses in non economically sensible courses like social studies and courses geared toward the caring profession.
Caring is all nice and dandy but at the end of the day, if we all went about "caring" for each other, who would pay for everything?

I would take issue with some of that.
No.1 a lot of the multi nationals sites here are covering Europe, Africa, Middle East, etc and they need language graduates.
We don't have them so they have to usually hire native speakers from other countries.
No.2 there is a question mark about the quality of Irish graduates.
Yes the number of graduates may have increased in Ireland since now everyone appears to nearly get some sort of third level course, but dropping entry standards, qualification standards or creating courses that allow less able candidates into third level does not make for better graduates.
No.3 during our building bubble lots of people started diverting towards construction related studies rather than technology courses.
I don't know where on earth you got this sh**e about courses geared towards the caring profession ???

The first real big world leading techie multinationals arrived here in late 80s early 90s.
Microsoft and Intel were two world leaders.
And yes I know that before that we had Digital, Wang, Ericson, Analog Devices, Motorola, Apple, etc.
But was there more to companies siting here than access to reasonably well educated workforce.
How much of it was down to nice lax taxes, massive IDA incentives, and access to single European market ?

realitykeeper wrote: »

Whether it is the cronyism of politics, the auction politics of the right, left and center, the self regulation during the good times and the over regulation in the bad times, the notion that foreign based retailers are net contributors to the Irish economy or all of the above, - the Irish would appear to be a people of low intellect, standards and morals.

And private education will change that ?
You do know that some of the ones that lead Ireland to the brink of disaster were privately educated ??

realitykeeper wrote: »

In order to acquire wisdom, the Irish must experience poverty and hardship on an extreme scale. This will prompt self reflection and the type of honesty needed to get beyond our foolish self serving, rights and entitlements type of mentality. The good news is that the undercurrents of economic reality will eventually take hold and create the conditions necessary to reshape the nation.

I actually do agree with that.
We need a total meltdown in this country so that we don't have people getting to walk away from their fookups in future.
We need to learn from our mistakes.
Having ff with a respectable poll rating appear to show we haven't.

We shouldn't have cases where property developers, or the wifes of property developers, are allowed continue their former priviledged lives at the expense of the taxpayers even though technically they are bankrupts.
In fact I would say, in reference to how we treat people who screw the system and dump their crud on the rest of us, we need to be more like Vietnam.

realitykeeper

Godge wrote: »

Conventional economic theory would have it that increasing interest rates cuts inflation.

http://en.wikipedia.org/wiki/Inflation#Controlling_inflation

"High interest rates and slow growth of the money supply are the traditional ways through which central banks fight or prevent inflation, though they have different approaches"

So again, why cut interest rates to cut inflation?

These are unconventional times. Growth is being "stimulated" with QE and borrowed money. Its madness I know but there you go.

realitykeeper

jmayo wrote: »

And private education will change that ?
You do know that some of the ones that lead Ireland to the brink of disaster were privately educated ??

Indeed, but they did not necessarily go to kindergarten where they might have learned basic morality. Besides, many of those who voted for them were publicly educated.

Godge

realitykeeper wrote: »

These are unconventional times. Growth is being "stimulated" with QE and borrowed money. Its madness I know but there you go.

That doesn't explain how cutting interest rates cuts inflation.

You gave the example of reducing the amount that people pay on debt but the method of calculating inflation used by the ECB to determine interest rate policy excludes debt repayments. So I am still confused as to how cutting interest rates reduces inflation.

It is not possible to address your other arguments until you explain this process clearly.

maninasia

Godge wrote: »

That doesn't explain how cutting interest rates cuts inflation.

You gave the example of reducing the amount that people pay on debt but the method of calculating inflation used by the ECB to determine interest rate policy excludes debt repayments. So I am still confused as to how cutting interest rates reduces inflation.

It is not possible to address your other arguments until you explain this process clearly.

Cutting interests rates is the number one weapon to counter deflation along with money printing. I don't see how it could ever have a deflationary effect. The idea is to encourage borrowing and spending and money flows.

realitykeeper

Godge wrote: »

... the method of calculating inflation used by the ECB to determine interest rate policy excludes debt repayments. So I am still confused as to how cutting interest rates reduces inflation.

How very convenient for them. Inflation is what it is regardless of whether or not the ECB exclude debt repayments from their calculations.

Godge

realitykeeper wrote: »

How very convenient for them. Inflation is what it is regardless of whether or not the ECB exclude debt repayments from their calculations.

I am beginning to think that you don't know the answer to the question as to how cutting interest rates leads to lower inflation.

All of the conventional economic wisdom suggests the opposite. I cannot find a reliable explanation anywhere and I am interested in how you reached that conclusion.

ardmacha

Part of the confusion about inflation derives from the inclusion of things like mortgage interest in some consumer price indices. Measures like GDP deflator are perhaps a better measure.

Geuze

Interest rates are a tool used by the CB.

Many CB have an inflation target, i.e. they wan to keep inflation low and stable.

They would tend to be happy with 2% inflation.

If the economy is growing fast, and inflation is rising, then the CB will use their tools of monetary policy, incl. increaseing interest rates to cool down the economy.

Think of inflation as the symptom and interest rates as the treatment.

jmayo

realitykeeper wrote: »

Indeed, but they did not necessarily go to kindergarten where they might have learned basic morality. Besides, many of those who voted for them were publicly educated.

I would suggest children first and foremost learn morality from their parents and not in some school.

I think the big thing you can blame our education system for is not teaching enough basic economics as some people made absolutely horrendous financial decisions that a bit of basic knowledge and cop on might have eliminated.
And that curriculum is basically the same for private and public schools as it is set by the Dept of Education.

Oh and it wasn't just the poorly educated or less professionally qualified who made absolutely mad financial decisions.

I believe Greed doesn't respect class nor for that matter educational or professional achievements.
And a lot of people in all strands of Irish society got damm greedy and wanted their slice of action.

I do agree with your point about reaching the bottom to learn from our mistakes.

Maybe we the Irish, a bit like an alcoholic (which btw is another one of our long running societal and racial problems), need to reach rock bottom before we wise up and face our problems.

djpbarry

realitykeeper wrote: »

These are unconventional times. Growth is being "stimulated" with QE and borrowed money.

This is unconventional?

Godge wrote: »

All of the conventional economic wisdom suggests the opposite.

Ah, but these are unconventional times. Apparently.

maninasia

jmayo wrote: »

I would suggest children first and foremost learn morality from their parents and not in some school.

I think the big thing you can blame our education system for is not teaching enough basic economics as some people made absolutely horrendous financial decisions that a bit of basic knowledge and cop on might have eliminated.
And that curriculum is basically the same for private and public schools as it is set by the Dept of Education.

Oh and it wasn't just the poorly educated or less professionally qualified who made absolutely mad financial decisions.

I believe Greed doesn't respect class nor for that matter educational or professional achievements.
And a lot of people in all strands of Irish society got damm greedy and wanted their slice of action.

I do agree with your point about reaching the bottom to learn from our mistakes.

Maybe we the Irish, a bit like an alcoholic (which btw is another one of our long running societal and racial problems), need to reach rock bottom before we wise up and face our problems.

I realise I learned everything about economics and finance AFTER I had two third level qualifications and starting in my late 20s. All of it from reading newspapers, internet discussions, and the recent financial crises.

Before that I knew jack ****. Which is apalling really, graduating from school without even the basics of this (just did the standard accounting classes, commerce classes for the inter cert).

People come out of school and college without almost no knowledge of finance. The same goes for different political and social systems, it's not something that we have access to in schools.

So not having any tools to analyse the situation leaves a lot of people relying on hearsay and their friends and families advice.


NOW, all this being said, experts can also fall into the trip of thinking they know too much, read the Black Swan for a good summary on that. And many of the 'experts' are co-opted by organisations such as in government of hedge funds or banks and they push the 'party' line.

Again you just have to go back to your critical skills toolbox, and maintain health skepticism of 'sure things'.

BTW, this is not only an Irish phenomenon, but very much a human phenomenon.