The MULTIPLIER
MULTIPLIER is not a funnny word, but a routine American English form meaning the effect of multiple factors in an economy. It is part of fundamental modern economics. It is not "trickle-down" - an archaic politically charged Reagan era word of the Democratic Party opposition - when economic policies favoring the supply side were ridiculed as laissez-faire economic incentives for the rich. (The rich would get cake champagne & fresh spring water, and the poor would get the crumbs and the trickles downward from their consumption.)
The MULTIPLIER is the backward and forward effects of supply & demand, effecting prices, employment and the whole economy. Oil as a pricing factor is a classic majestic example (actually the greater set of energy as a price component).
Credit crunches will lag the economy's daily and forward function until the effect ripples backwards to layoffs and production supply line drop offs and cutbacks.
Food prices will be affected by petroleum prices (a cost factor multiplied into the food pricing) but not imemediately, and where seasonally dependent, not until next year .. and they may rise before then. Only supply, and its honest pricing ingredient as a constancy in transportation & production will do that.
Equally, the ripple backwards of a multiplier will show the variable -- the multiplier of demand for goods and services. Anticipating those demands and the continuity of that demand (against a trough) is modern fiscally sound economics -- affecting business & governemnt. Congress is now addressing bi-partisanly a stimulus package which joins the issue of suffcient unemployment compensation, property tax revenue delinquencies (the greatest source of US state treasuries & local governments); fall-offs in demand for new hard goods due to employment cut-backs lay offs and credit declines or delinquiencies. Were we badgered into excessive interest rates to build bank balances and capital --the credit crunch would be worse, and the effect of credit costs (high passed through interest rates) would be instantaneous -- with a disastrous multiplier effect.
That factor - the multiplir in forward expansion and reverse detraction in consolidation and contraction are the government's : the Congress, the OMB and the Fed -- concerns now. The last thing they'll need is idle or insufficient capital -especially in assisted partnered (not nationalized) banks.
The MULTIPLIER is the backward and forward effects of supply & demand, effecting prices, employment and the whole economy. Oil as a pricing factor is a classic majestic example (actually the greater set of energy as a price component).
Credit crunches will lag the economy's daily and forward function until the effect ripples backwards to layoffs and production supply line drop offs and cutbacks.
Food prices will be affected by petroleum prices (a cost factor multiplied into the food pricing) but not imemediately, and where seasonally dependent, not until next year .. and they may rise before then. Only supply, and its honest pricing ingredient as a constancy in transportation & production will do that.
Equally, the ripple backwards of a multiplier will show the variable -- the multiplier of demand for goods and services. Anticipating those demands and the continuity of that demand (against a trough) is modern fiscally sound economics -- affecting business & governemnt. Congress is now addressing bi-partisanly a stimulus package which joins the issue of suffcient unemployment compensation, property tax revenue delinquencies (the greatest source of US state treasuries & local governments); fall-offs in demand for new hard goods due to employment cut-backs lay offs and credit declines or delinquiencies. Were we badgered into excessive interest rates to build bank balances and capital --the credit crunch would be worse, and the effect of credit costs (high passed through interest rates) would be instantaneous -- with a disastrous multiplier effect.
That factor - the multiplir in forward expansion and reverse detraction in consolidation and contraction are the government's : the Congress, the OMB and the Fed -- concerns now. The last thing they'll need is idle or insufficient capital -especially in assisted partnered (not nationalized) banks.
posted by scotty of course at 10:43 AM
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