patrick.net

debyne says

What I'm saying is that they'll be driven to ONLY buy more of the things that
they need, and less of the crap that society tells them they need. That way
they'll have more money left to invest and build their wealth. That's what I
meant.

Fine. Then you agree that if people do that, it will lead to many more people unemployed? And it's very hard to build wealth without a job.

tatupu70 says

Ah--another shadowstats guru? I should have known.

By that you must mean "truth seeker" :)

tatupu70 says

debyne says

What I'm saying is that they'll be driven to ONLY buy more of the things that

they need, and less of the crap that society tells them they need. That way

they'll have more money left to invest and build their wealth. That's what I

meant.

Fine. Then you agree that if people do that, it will lead to many more people unemployed? And it's very hard to build wealth without a job.

You're probably right in the short term, but capitalistic economies are pretty adaptable and I think it would serve us better in the long run. I do agree that job losses would likely happen in the short term though.

Shadowstats shows inflation probably averaging 7-8% in 2008/09, when:

Housing crashed ~20%
Rents weakened to flat
Oil crashed from $140 to $40
Cash for clunkers
down brand electronics gained market share
food prices decreased

wtf???

control point says

Shadowstats shows inflation probably averaging 7-8% in 2008/09, when:

According to my calculations and research it is around 3%-5%, similar to the EPI. Even 3% is breaking the middle-classes neck, because their wages do not appreciate 3% yearly. What are we going to do now, raise the minimum wage by 3% per year? Inflation caused by QE and ZIRP has benefited the wealthy and (slowly) bankrupted the middle-class.

mell says

Inflation caused by QE and ZIRP has benefited the wealthy and (slowly)
bankrupted the middle-class.

That's just BS. The problem isn't 3% inflation--the problem is the lack of wage increases. Inflation is a distraction. If we get real wage growth, who cares what the inflation rate is--it's just a meaningless number. If wages grow faster, all is well.

mell says

According to my calculations and research it is around 3%-5%, similar to the EPI.

Right, because housing and cars, for example, are expenditures where price changes don't matter.

Of course gas prices matter more than housing prices, since most spend at least 20% on gas compared to housing.

FFS, the CPI is accurate.

tatupu70 says

The problem isn't 3% inflation--the problem is the lack of wage increases.

Aggregate income (for workers, wage) growth IS inflation.

The problem is the allocation of income growth. This is reflected in falling real MEDIAN wages, as capital has been favored to labor, and non-specialized labor has been commoditized.

Labor in an ever more global economy is powerless without leverage. Wage arbitrage sure is an easy game to play as the world shrinks.

tatupu70 says

If we get real wage growth, who cares what the inflation rate is--it's just a meaningless number.

Isn't the definition of "real" wage growth calculated as nominal wage growth against inflation? If yes, inflation is VERY relevant in calculating "real" wage growth.

mell says

What are we going to do now, raise the minimum wage by 3% per year?

It's a good question to ask. If we just raise wages, won't that contribute to more price inflation? The key here is "real" wage growth, which I believe is primarily achieved through innovation that allows us to produce more with less effort thereby (hopefully) reducing prices.

debyne says

It's a good question to ask. If we just raise wages, won't that contribute to more price inflation? The key here is "real" wage growth, which I believe is primarily achieved through innovation that allows us to produce more with less effort thereby (hopefully) reducing prices.

Gov't actions have unintended consequences, in this case fewer workers hired.

debyne says

Isn't the definition of "real" wage growth calculated as nominal wage growth
against inflation? If yes, inflation is VERY relevant in calculating "real" wage
growth.

Of course. My point is that you are focusing on the wrong part of that equation. Instead of trying to reduce inflation (which has some bad side effects), you should be worrying about how to increase median wages.

Control point is correct too--the issues is distribution, not aggregate wage growth. Find a way to redistribute and all the problems go away.

debyne says

It's a good question to ask. If we just raise wages, won't that contribute to
more price inflation? The key here is "real" wage growth, which I believe is
primarily achieved through innovation that allows us to produce more with less
effort thereby (hopefully) reducing prices.

I think you're refering to productivity gains which have been very strong. The problem is that the fruit of those gains only goes to the owners and not to the workers, leading to inequality and stagnant median wages.

The problem isn't lack of productivity. It's a distribution problem.

tatupu70 says

The problem isn't lack of productivity. It's a distribution problem.

shows per-worker GDP has gone up 8X since 1970 while wages have risen 6X.

now, GDP has become increasingly cooked perhaps, adding in imputed rents and stuff that probably don't belong

jazz music says

No no no, those hopes have never been realized

Of course they have, manufacturing items in unsupported sectors (such as tech) have gotten cheaper and cheaper, that's why they try to maximize profit with contracts attached to devices. They haven't been realized in the subsidized (and often essential) sectors, which is no surprise. If you subsidize section 8 housing to the tune of $2K+/month in the bay area, what incentives are there for landlords to charge $2000 or less, even though they may still come out with a profit?

jazz music says

No no no, those hopes have never been realized and that is why I judged you as brainwashed by the radical right-wing which stands for everything goes to the owners and then we get to HOPE. This is the nuvo-liberal ideology, the cancerous lie that has already crucified our country, and HOPE FOR the TRICKLE.

There is definitely the issue of eventually running out of enough "lower-level" jobs to produce what we need for this country as a result of automation and technological advancement. That means we'll have more strategic jobs to drive all this, but what do we do with all the people left? Do we force people to have less kids so that we don't have this excess labor demand?

tatupu70 says

Of course. My point is that you are focusing on the wrong part of that equation. Instead of trying to reduce inflation (which has some bad side effects), you should be worrying about how to increase median wages.

Control point is correct too--the issues is distribution, not aggregate wage growth. Find a way to redistribute and all the problems go away.

I hear you, which is why I do support a minimum wage...I didn't used to, but I've come around on that issue and it makes sense to me. I also believe in having affordable healthcare so that people performing "lower level" jobs can at least live and have the basics.

Regarding distribution, I just have a hard time taking from one class and giving to another so blatantly. I think it creates a bad culture of class warfare, and it violates equal rights among individual citizens. Plus, I hate the income tax structure today because of all the deductions, loopholes, etc that make it so complicated and require a massive gov't division (IRS) to manage and audit it.

debyne says

There is definitely the issue of eventually running out of enough "lower-level" jobs to produce what we need for this country as a result of automation and technological advancement. That means we'll have more strategic jobs to drive all this, but what do we do with all the people left? Do we force people to have less kids so that we don't have this excess labor demand?

Bullshit, 100 years ago 95% of Americans were farmers today it is less than 5%. Where is the unemployment from that?

indigenous says

Bullshit, 100 years ago 95% of Americans were farmers today it is less than 5%. Where is the unemployment from that?

That's true...the problem I stated may be something that starts to occur after our lifetimes, but I have to imagine that automation and AI will eventually get us to that point.

Bellingham Bill says

shows per-worker GDP has gone up 8X since 1970 while wages have risen 6X.

now, GDP has become increasingly cooked perhaps, adding in imputed rents and stuff that probably don't belong

Besides, total productivity increases partly becasue of technology that is from capital investment. It's understandable that the plutocrats can argue that workers aren't doing more.

The thing is, under this new reality (automation and robots) we are going to have to learn that compensation isn't always going to be for productivity that leads directly to $$ profits. People do need to be productively engaged, sometimes in ways that don't increase GDP ($$), and they need a decent share of the $$ that does come from productive profitable enterprise so that they can contribute to the demand side of the economy.

In other words we are outgrowing much of our current economic thinking.

indigenous says

Bullshit, 100 years ago 95% of Americans were farmers today it is less than 5%. Where is the unemployment from that?

Farming share of GDP was about 20% in 1914. It fell to about 10% by 1929 and remained flat until the end of WW2.

Gradually fell from there to about 1% today.

Seriously, where do you get your facts?

http://faculty.apec.umn.edu/ppardey/documents/9781441906571-c1.pdf

Figure 2-1.

This decline, by the way, is not due to falling real farm income or productivity, but rather the growth of the US economy is other areas at a much greater rate.

Figure 2-4 shows farm share of population around 30% in 1914, falling to under 1% today. Aggregate farm population peaked prior to WW2, after which automation increased productivity greatly and eliminated farm jobs.

Luckily, plenty of other industrial demand for jobs afterwards (the war effort and all) picked up the slack.

control point says

Seriously, where do you get your facts?

Seriously how does that negate my point? 1% instead of 5%, who gives a fuck, the point is that new jobs were created that employed the farmers.

marcus says

In other words we are outgrowing much of our current economic thinking.

somebody disliked you, LOL, but this video was pretty good:

https://www.youtube.com/watch?v=7Pq-S557XQU