First off, I'm not sure why you chose to respond to that post with this one, since not only does it not refute what I said, but it actually seems to be an argument for the very policy which I'm saying that Obama supports and which many insist he isn't. Is it fair to go with the assumption that you're not debating that aspect of the issue, but just want to discuss the value of the proposal itself? In any case:
Timelordwho wrote:
No, as someone who doesn't want market interference, you have very little idea about basic market mechanics. As long as the cost of things remains a continuous function, economics generally takes care of itself, when something has a non-continuous break point, there is a high correlation with significant shenanigans. It's not the speed of change in market valuation that causes problems, it's the sudden stop in continuity that causes disorder.
Yes and no. If the only economic effects we're worried about are sudden shifts and wild fluxuations, then obviously you're right. But I think you're focusing on short term stability versus long term prosperity. If the cost of a good isn't consistent in terms of the costs of other goods, it will cause negative economic effects over time. You're correct that when it occurs gradually, it wont cause a panic and massive adjustments and chaos. But that's just because people don't notice it as much, not that it isn't affecting them negatively anyway.
Quote:
Ex. Gas going up 5 cents a week, every week is not a problem, even though it goes up $2.60 in a year.
Problems arise when gas gains $1 in a week. Well, technically problems arise or the results of problems have already taken effect.
Again, I think you're limiting the scope of "problems" to just immediate short term market effects. That extra cost for gas absolutely will have negative effects. People will simply adjust to them over time. I'll point out that that's exactly the reason one might support a policy to gradually increase the cost of gas. They know that it will have an effect (it'll push people to drive less and/or switch to alternatives), but without a sudden large shift, the people wont make a ruckus about it.
It's also true that if you drop a frog in boiling water, he'll freak out and attempt to jump out, but if you put him in water and gradually raise the temperature, he'll sit there and boil to death without complaint. Clearly, the latter approach is a better way to boil the frog, but I doubt that the frog would agree that you have resolved a "problem" by doing that.