At least investment comes to a halt, and along with it job creation, when predicting the future gets expected worth all wrong. So people who are not Capitalists pay directly for the lack of capital. Were it as simple. When you think of the causes of the Great Recession (2008) much of it was caused by evaluation made by financial and banking concerns, and international investors and governments, that has very little to do with the decisions of individual citizens of the world. And it caused a great malfeasance in the assigning of value and risks to investments made by a tiny minority of individuals. The bank bailouts and other decisions made in 2008-2010 did not really redress the mistakes made in that evaluation process and people who were not to blame are still paying the price., and governments around the world did not pursue the people who caused the collapse as fraudsters, at least not enough, and many of those people are still making economic decisions today.
The thing you're looking for is 50 to 1 leverage (for every $1 of physical assets, be able to borrow $50 for investing in real estate) and easy central bank credit. Even federal bonds become very risky at those levels of leverage yet very profitable when things go right. Fraud and criminal negligence is a side issue and merely indicates the remarkable carelessness for risk that is common to such bubbles. Most of the people involved didn't actually commit fraud. That is why they aren't being prosecuted for it.
We can look at the possibility that rising Minimum Wage could accelerate automation and forget that much of the imbalances and injustices of the present world economic order are the direct result of the digital revolution. This is much more than bookkeepers being put out of business by Excel. It is the speeding up of investment and the demand by investors for short-term ROI and the possibility of new forms of speculation made possible by programmed trading. The use of supercomputers to execute trades at milisecond intervals and engage in arbritrage strategies has a far bigger impact on markets than who gets automated, and it is mostly bad for economic systems.
Except that these activities have not actually caused a recession. The previously mentioned 50 to 1 leverage and easy credit did that. That could have happened just as easily in the 19th century as now. The technology and investment targets would be cruder and more limited, but the bubble and subsequent crash would be very familiar.
And we still have yet more evidence that raising the minimum wage does eliminate jobs.
Ok, looks like Social Security is somewhere a bit north of $20 trillion. The higher numbers I quoted include a a much larger amount coming out of unfunded liabilities from Medicare/Medicaid.
$0 trillion is the actual number. There is no reserve. It is a pay as you go system. The money goes to buy imaginary bonds and thereby gets dumped into the general fund and spent - sometimes on things of value.
And the liabilities, last I heard were anywhere from $16 trillion to $120 trillion depending on who's doing the math. I figure around $40 trillion myself though I haven't done a proper GAAP accounting on the numbers myself - unless they cut benefits, which I figure they'll probably do via unreported inflation.
There have been calls to privatize SS and invest its money in the stock market. Such an event, especially if it was done over a short period of time, would pump the stock market so high it would make the housing bubble of 2007 look petty. The finance industry would go nuts and pocket immense amounts of our wealth, then, when the inevitable fall and crash comes, hope to quietly walk away and leave us to pick up the pieces.
No reform no matter how sound it is in theory is immune to poor implementation. Sure, we can pump and dump Social Security via the stock market. If this were to actually happen as you say, I'd be riding this very predictable bubble too.
So maybe we shouldn't do it that way. I think the primary resistance to replacing Social Security with something like that is that, if well implemented to reduce the bubble characteristics of which you speak, is that it would show how bad US Social Security really is in any sense - social policy, retirement "insurance", or investment.
Cronies? More like citizens exercising their right to freely associate, pool resources, and petition government. You know, the same argument we use to defend corporations when people whine about the rich and "1%ers"
Getting stuff merely because you're better connected politically is the essence of cronyism. Hence, my use of the label.
Incorrect. A government that did nothing was pre-1861 US. That US was little more than an extension of its colonial days, with little demand and growth.
Let's take a look at your little history retcon. The US during that period of "little demand and growth" went from around 4 million people in the 1790 census to over 31 million people in the 1860 census. That's doubling the population in a bit over 20 years for more than two thirds of a century. Land area more than tripled from 860,000 square miles in 1790 to 2,970,000 square miles in 1860. In addition, the infrastructure to support that huge growth of people had to be built from scratch.
But let's suppose your assertion was somehow correct and that the economy of the time didn't actually grow very fast. You still have to explain why growing a measure of economic activity (GDP for example) at a certain rate is more important than providing food, shelter, clothing, etc for a country which doubled almost three times over the course of those 70 years with minimal government help.
I kept going and found educated guesses for GDP over that period. It went from 1,100 in 2009 USD per capita to 2,800 in 2009 USD per capita. That's more than 150% growth in per capita GDP after adjusting for inflation. Not bad for 70 years of low government though we currently trounce them with roughly 400% growth from the Great Depression era 1940 to 2010.
So there might be a case for economic growth there, but there was a lot of growth even in the absence of an extensive government for a country which grew its population almost a factor of eight over that time. Having looked at these sorts of historical estimates before, I believe it is difficult to grow the economy per capita in a time of high population growth (for example, in Eurasia between 800 BC and 500AD). And I certainly don't buy that there actually was low economic growth during this period of time.
The rapid industrialization and growth known as the Gilded Age happened after the Civil War, after the government began expanding its influence and taking action. From federal government backing the railroads to state government discriminating against the Chinese so their wages are kept low, the US since 1861 has not been the original union the Founding Fathers would have wanted.
Given that a number of the Founding Fathers didn't actually want what they had in the first place (for example, the well known disagreement on the strength and size of the federal government), this shouldn't be a surprise.
As to the actual federal spending (see figure 2 which includes off budget expenditures for programs like Social Security) over that period relative to GDP, it's worth noting that it remained pretty steady aside from during the 1812 war and the Civil war through to 1910. And after the First World War, federal spending went down to 3% of GDP in 1930. That's 140 years of decent economic growth coupled with extremely low government spending except during major wars.
As that graph in the last link shows, after the Second World War is when things got crazy with the budget sneaking over 20% of GDP for a good part of the time even in times where there wasn't much in the way of warfare.
The norm is for people working hard all their life, but most will never reach within a few orders of magnitude of the truly wealthy.
If I wrote a letter to a friend saying I didn't think that person x was doing a good job and my friend took that letter and photocopied it and passed it around, I don't think I'd be liable for any slanderous proceedings (IANAL though).
Sure, you can libel someone in that way. Lies or malicious attacks on my character don't need me directly involved (and often work better in fact, if I'm unaware of them for a time) in order to work.
I think this crossed the line from public to private speech due to the password requirement for reading the comments in question.
The cost of home-schooling for six years is never being a well-adjusted person
You aren't going to get that from a typical school environment either. You get to be a well-adjusted person by associating with people outside your narrow age group in normal social situations.
General Motors should have been left to go bankrupt?
General Motors did go bankrupt. What changed was that Democrat party cronies (here, labor unions - particularly the United Auto Workers) got favorable treatment.
And if useful sectors of the economy falter for lack of demand, too bad, eh?
My point here is that there should be faltering and bankruptcy. Recessions aren't just about demand. They're also about culling unproductive businesses. Useful sectors will survive.
For governments, lowering demand is absolutely the wrong move.
It's worth noting that the primary way that governments can avoid "lowering demand" is by doing nothing.
When demand, employment, and interest rates drop, the government should borrow more, because borrowing is a bargain, and hire people because employing them is a bargain, and fix our infrastructure not to give people something to do but because it really is crumbling and needs fixing.
While simultaneously, the private world now has lost some access to cheap lending and cheap employees. Let's hope that "infrastructure" actually got fixed because otherwise it's a net loss.
We have a lot of other infrastructure that needs fixing or replacing, but it seems we will have to wait for another few bridge collapses before the politicians find the guts to fund it, possibly even by reducing the huge amounts spent on corporate welfare.
There's money and prestige in new infrastructure. That explains why politicians have no trouble finding money for new bridges, but can't be bothered to fund the repair of old ones. This is the machine you hope will fix a recession.
Pay down government debt when the economy is good.
Well, that would be a nice plan, if you could get the governments of the world to stick to it. Good economies just mean for most that you can borrow more.
The War of Choice was by far the biggest budget buster in the past 25 years, far bigger than the TARP, and these self proclaimed Republican penny pinchers uttered not a single squawk over it at the time.
I'd put Social Security way ahead of that. I bet they added ten or twenty trillion in liabilities during that time period.
Why, indeed, should the oil business get a "depletion allowance" that no one else enjoys?
I decided to look that up. Turns out a bunch of people get that depletion allowance.
A tax deduction authorized by federal law for the exhaustion of oil and gas wells, mines, timber, mineral deposits or reserves, and other natural deposits.
and not having to import our cars' vital body fluids from desert tribes which hate us
But whose oil is just as good as anyone else's. That's the nice thing about markets, you don't have to care about the beliefs of the other party that you trade with.
Lower demand is not what is the right move in a recession, it is what CAUSES a recession. It's almost funny to see how people don't learn jack from history. What caused the depression of the 1930s? The stock crash? Yes, but in a different way than most people think. The problem was that most people had their money riding on that stock market. If you look at the development of the stock market closely, you'll notice that originally the market just took a little dip after years (!) of climbing. That dip was enough, though, to send the first high-risk investors into a must-sell spin, which in turn took the market into the nose dive. But even that would not have caused the depression that followed without one single very important fact: EVERYONE, not just classic "investors" but EVERYONE, including the "little man on the street" has put their money on the stock market.
When the market crashed, it not only meant that investors were out of money (they could actually take that loss), but that people actually lost not only their life savings but also took out loans to invest, putting them in a very deep financial hole. And that in turn meant that consumption took a nose dive because now they could not afford anything anymore.
So, what you're saying is that once peoples' wealth up and left, that they had to adjust by cutting back on their demand, purchases, consumption, etc. That's just what I said.
Neither in the 1930s nor today the problem was a lack of goods, and certainly not a lack of workforce that kept the economy from rolling. The problem in both cases is a lack of consumption. Simply "riding it out" is the wrong answer. Looking at Iceland I could see how to overcome the problem: Let the banks crash and burn, instead of bailing out the banks bail out the bank customers. For Iceland, it worked out pretty neatly, 3 years after the big bust they were back on track. We're now what, in the 5th year, and it's getting worse and worse.
No, the problem was then as it was in 2008, a massive public delusion in both cases amplified by heavy leverage and poor public policy. And Iceland had no choice but to ride out the recession - the UK seized a good portion of the Iceland banks' assets.
By "we", I assume you mean the US and/or EU. There, he government responses and the developed world's inability to compete labor-wise with emerging markets explain the lengthy doldrums.
For example, the Obama administration passed the American Recovery and Reinvestment Act of 2009 (the "Stimulus") with the hopes of sparking the US economy. It didn't happen, not because things were "worst than expected", but rather because the program didn't work - often the money wasn't even spent for years much less spent in a way conducive to Keynesian strategy (such as actually doing something useful).
On the European side, we have both the above raid on Iceland banks and similar thuggery with respect to Cyprus banks. Nobody really cares when it happens to Russian mobsters and citizens of some little island nation. But everyone can see for themselves what will happen, if the powers-that-be decide to try the same trick elsewhere.
This is amateur-hour stuff. Sure, it doesn't help spark demand and recovery, but who really should be chowing down in such an environment of uncertainty and incompetence? I don't see consumption as the problem or solution when there is incompetence on a level big enough to unsettle the economy and everyone's economic decisions.
Sure, spies and crooks have been caught via interviewing. It's far from perfect, but it does work frequently.
And even if it just temporarily disrupted the bombing plans, that might have been enough of a delay for the police to catch them for other crimes, paricularly, three murders in 2011 in which the two brothers seem to be the primary suspects.
Could we please stop with the endless pro-drug commentary?
Sure, once it's at least partly legalized in a sensible way for most areas of the world. Else the issue won't go away.
normal people don't care about such matters.
I imagine they would start caring, if say their house or car were seized as part of a US drug raid. You don't have to care in order to get bit by the bizarre and rather nasty laws that have come about in order to fight the War on Drugs.
That depends to some degree on what they plan to do with the bitcoins. If they hold them, then they are exposed to more risk than if they sell them as soon as they compute them.
In addition to both getting the definition of "consumer" and characterizing Rubio's use of the term incorrectly (see TubeStake's discussion of this), we also have the misuse of the term, "sociopathic". What's going on is that economists are merely creating a useful label for a role in certain sorts of trades. This is called "abstraction". It's a far handier label than say, "Bob" because it describes the role and applies even when the consumer isn't named "Bob".
a person with a psychopathic personality whose behavior is antisocial, often criminal, and who lacks a sense of moral responsibility or social conscience.
I don't see any of that applying merely because one uses a word which you don't like.
Both sides have to work out for a market to be created and goods/services to change hands, i.e. to create trade. But we don't have any kind of shortage on the supply side. We have a shortage on the demand side.
I covered that bit (here, a "demand" shortage for labor) when I wrote " Most of the ideas expressed in this thread... get in the way of that." Money dropped from helicopters doesn't employ people. It creates some jobs as a result of the temporary increase in economic activity, but it also loses jobs through the destruction of the value of money.
Actively, discouraging investment in favor of spendthift behavior most certainly doesn't employ people (since when has encouraging short term thinking been helpful?). And of course, the research of this story, which claims that minimum wage laws encourage the elimination of low wage jobs for automation, implies that bit of law doesn't employ people either.
What keeps them all from producing is a lack of demand. The economy is in a downturn not because our production cannot keep up with demand, not because we lack the ability or willingness to invest and we certainly don't have a shortage in the workforce.
So what? Ever consider that lower demand is the right move to make in a recession?
Half the things complained about in the comments to this story are consequences of trying to stir demand at a time when it shouldn't be so stirred - eg, bank bailouts (and the highly leveraged adventures that lead to those bailouts), businesses not willing to act due to economic uncertainty, prioritizing economic activity and "stimulus" over generation of value (which is my complaint in my previous post), quantitative easing, and of course, minimum wage laws.
It's all pain management (with a large dollop of corruption and just plain incompetence, I wager) and it has a higher priority than the health of nation-level economies. In the medical world, that only happens when either the illness is inconsequential (like a cold) or the patient is about to die with nothing possible except a somewhat less painful send-off. Do you think either possibility is relevant here?
Recessions don't happen because there was a magic drop in demand. They happen because enough of us were wrong about the world and what things are worth. That massive shift in our collective worldview is what creates the uncertainty and the drop in economic activity characteristic of a recession.
Most demand management, whether in a recession or not, is an attempt to provide incentives to pretend that the problems of the recession didn't happen. That is remarkably foolhardy and wasteful. I hope we grow out of that some day.
Although I think the helicopter drop would get money into the hands of people who would spend it instead of "investing" it in rent-seeking behaviour
"Rent-seeking behavior" like what? This has to be one of the worst pseudo-Keynesian ideas out there, that somehow we need to squander a bunch of wealth in order to have a healthy economy.
If it were simply finances that ran our Government, why in all blue blazes did we privatize the banking industry?
Why would that be any better? I notice that ass-wiping is also privatized. Some things just work better that way.
The "creators of currency"... I said "currency", not "wealth"... are empowered not only to draw from thin air that which they do not have, but are also empowered to exact usury for the use of that which never existed in the first place.
It's not "thin air", it's leverage to the tune of somewhere around 1 part real money in 10.
Its a really nasty little paradigm which encourages extremely unproductive "investments".
Like home and capital purchases.
As we move forward with manufacturing and production technology, the economies of scale lead to an environment of material goods abundance. I feel any shortages at our present stages of this game are purposely created by those who are gaming the system
With a substantial floor on how cheap those material goods can get. And someone still has to design and make that stuff.
I can't see where employees should cost the employer anything... the employer should simply write them off against taxes - as the employee they hired now has the burden of paying tax on his income.
And if they were paying all of their income as taxes, you'd be right. But since they aren't, the write off only reduces taxes by a fraction of the wages paid.
Every time I hear someone claim they're "creating a job" when they hire someone I cringe. You're not creating the job. I create that job when I buy the good or service you offer.
And you don't "create" that job when the good or service isn't offered.
So if you want someone to create a job, make sure people have money to consume. Because that's how you create jobs!
And where does that money come from? Economies work not because there is money for consumption, but because there is trade - people exchanging things for mutual benefit, be it labor, goods, services, and so on. Most of the ideas expressed in this thread (particularly, the money-copters and the idea that investment is rent-seeking) get in the way of that. Here, merely having money doesn't mean that you can afford what you want. The desired goods or services can be even more expensive or even unavailable at any price.
I have yet to meet anyone who thinks that a great deal of thought and preparation should go into a Slashdot post.
There's a place for planning and such, but it goes with things which benefit from such planning. Here, the original AC poster made an off-the-cuff remark that using non-renewable energy was bad.
No matter how short-sighted or ignorant humanity is in this regard (and delaying the transition to renewable is not necessarily the short-sighted, ignorant choice, I might add), they will be using renewable sources sooner or later. It's merely a matter of timing.
There's an easy fix for that. Use up those non renewable sources now (at least to a level that isn't very economically viable) and you won't have to worry about people using it up later.
Given how much people want to think about the future, it makes me wonder how they manage to get up in the morning. Weeks of planning go into that, amirite?
At an absolute minimum, he should have attempted to raise his concerns up the chain through approved channels. Did he try this? If not, I'd suggest that he's screwed.
Others did try this. And it's possible that he'd be facing more jail time going through approved channels than he is now.
I'd use the phrase "more likely" based on a thermodynamics argument. My take is that states where the brain functions better are far fewer than states where it works worse. So any modification of brain function is more likely to slide into a poorer state rather than a better one.
Slashdot Mirror
At least investment comes to a halt, and along with it job creation, when predicting the future gets expected worth all wrong. So people who are not Capitalists pay directly for the lack of capital. Were it as simple. When you think of the causes of the Great Recession (2008) much of it was caused by evaluation made by financial and banking concerns, and international investors and governments, that has very little to do with the decisions of individual citizens of the world. And it caused a great malfeasance in the assigning of value and risks to investments made by a tiny minority of individuals. The bank bailouts and other decisions made in 2008-2010 did not really redress the mistakes made in that evaluation process and people who were not to blame are still paying the price., and governments around the world did not pursue the people who caused the collapse as fraudsters, at least not enough, and many of those people are still making economic decisions today.
The thing you're looking for is 50 to 1 leverage (for every $1 of physical assets, be able to borrow $50 for investing in real estate) and easy central bank credit. Even federal bonds become very risky at those levels of leverage yet very profitable when things go right. Fraud and criminal negligence is a side issue and merely indicates the remarkable carelessness for risk that is common to such bubbles. Most of the people involved didn't actually commit fraud. That is why they aren't being prosecuted for it.
We can look at the possibility that rising Minimum Wage could accelerate automation and forget that much of the imbalances and injustices of the present world economic order are the direct result of the digital revolution. This is much more than bookkeepers being put out of business by Excel. It is the speeding up of investment and the demand by investors for short-term ROI and the possibility of new forms of speculation made possible by programmed trading. The use of supercomputers to execute trades at milisecond intervals and engage in arbritrage strategies has a far bigger impact on markets than who gets automated, and it is mostly bad for economic systems.
Except that these activities have not actually caused a recession. The previously mentioned 50 to 1 leverage and easy credit did that. That could have happened just as easily in the 19th century as now. The technology and investment targets would be cruder and more limited, but the bubble and subsequent crash would be very familiar.
And we still have yet more evidence that raising the minimum wage does eliminate jobs.
Ok, looks like Social Security is somewhere a bit north of $20 trillion. The higher numbers I quoted include a a much larger amount coming out of unfunded liabilities from Medicare/Medicaid.
Currently, SS has about $2.7 trillion in reserve.
$0 trillion is the actual number. There is no reserve. It is a pay as you go system. The money goes to buy imaginary bonds and thereby gets dumped into the general fund and spent - sometimes on things of value.
And the liabilities, last I heard were anywhere from $16 trillion to $120 trillion depending on who's doing the math. I figure around $40 trillion myself though I haven't done a proper GAAP accounting on the numbers myself - unless they cut benefits, which I figure they'll probably do via unreported inflation.
There have been calls to privatize SS and invest its money in the stock market. Such an event, especially if it was done over a short period of time, would pump the stock market so high it would make the housing bubble of 2007 look petty. The finance industry would go nuts and pocket immense amounts of our wealth, then, when the inevitable fall and crash comes, hope to quietly walk away and leave us to pick up the pieces.
No reform no matter how sound it is in theory is immune to poor implementation. Sure, we can pump and dump Social Security via the stock market. If this were to actually happen as you say, I'd be riding this very predictable bubble too.
So maybe we shouldn't do it that way. I think the primary resistance to replacing Social Security with something like that is that, if well implemented to reduce the bubble characteristics of which you speak, is that it would show how bad US Social Security really is in any sense - social policy, retirement "insurance", or investment.
Of course, a kind of person who puts $5 million into Bitcoin mining equipment might consider risk to be a good thing.
Well, the risk premium will be better because the big money won't be competing.
Cronies? More like citizens exercising their right to freely associate, pool resources, and petition government. You know, the same argument we use to defend corporations when people whine about the rich and "1%ers"
Getting stuff merely because you're better connected politically is the essence of cronyism. Hence, my use of the label.
Incorrect. A government that did nothing was pre-1861 US. That US was little more than an extension of its colonial days, with little demand and growth.
Let's take a look at your little history retcon. The US during that period of "little demand and growth" went from around 4 million people in the 1790 census to over 31 million people in the 1860 census. That's doubling the population in a bit over 20 years for more than two thirds of a century. Land area more than tripled from 860,000 square miles in 1790 to 2,970,000 square miles in 1860. In addition, the infrastructure to support that huge growth of people had to be built from scratch.
But let's suppose your assertion was somehow correct and that the economy of the time didn't actually grow very fast. You still have to explain why growing a measure of economic activity (GDP for example) at a certain rate is more important than providing food, shelter, clothing, etc for a country which doubled almost three times over the course of those 70 years with minimal government help.
I kept going and found educated guesses for GDP over that period. It went from 1,100 in 2009 USD per capita to 2,800 in 2009 USD per capita. That's more than 150% growth in per capita GDP after adjusting for inflation. Not bad for 70 years of low government though we currently trounce them with roughly 400% growth from the Great Depression era 1940 to 2010.
So there might be a case for economic growth there, but there was a lot of growth even in the absence of an extensive government for a country which grew its population almost a factor of eight over that time. Having looked at these sorts of historical estimates before, I believe it is difficult to grow the economy per capita in a time of high population growth (for example, in Eurasia between 800 BC and 500AD). And I certainly don't buy that there actually was low economic growth during this period of time.
The rapid industrialization and growth known as the Gilded Age happened after the Civil War, after the government began expanding its influence and taking action. From federal government backing the railroads to state government discriminating against the Chinese so their wages are kept low, the US since 1861 has not been the original union the Founding Fathers would have wanted.
Given that a number of the Founding Fathers didn't actually want what they had in the first place (for example, the well known disagreement on the strength and size of the federal government), this shouldn't be a surprise.
As to the actual federal spending (see figure 2 which includes off budget expenditures for programs like Social Security) over that period relative to GDP, it's worth noting that it remained pretty steady aside from during the 1812 war and the Civil war through to 1910. And after the First World War, federal spending went down to 3% of GDP in 1930. That's 140 years of decent economic growth coupled with extremely low government spending except during major wars.
As that graph in the last link shows, after the Second World War is when things got crazy with the budget sneaking over 20% of GDP for a good part of the time even in times where there wasn't much in the way of warfare.
The norm is for people working hard all their life, but most will never reach within a few orders of magnitude of the truly wealthy.
So why should I
If I wrote a letter to a friend saying I didn't think that person x was doing a good job and my friend took that letter and photocopied it and passed it around, I don't think I'd be liable for any slanderous proceedings (IANAL though).
Sure, you can libel someone in that way. Lies or malicious attacks on my character don't need me directly involved (and often work better in fact, if I'm unaware of them for a time) in order to work.
I think this crossed the line from public to private speech due to the password requirement for reading the comments in question.
The cost of home-schooling for six years is never being a well-adjusted person
You aren't going to get that from a typical school environment either. You get to be a well-adjusted person by associating with people outside your narrow age group in normal social situations.
Decent sp agencies try to avoid detection.
Unless they want the target to know. Being obvious is an intimidation tactic.
I think more it's an aspect of that peculiar ecosystem. Parasites that prey on parasites.
General Motors should have been left to go bankrupt?
General Motors did go bankrupt. What changed was that Democrat party cronies (here, labor unions - particularly the United Auto Workers) got favorable treatment.
And if useful sectors of the economy falter for lack of demand, too bad, eh?
My point here is that there should be faltering and bankruptcy. Recessions aren't just about demand. They're also about culling unproductive businesses. Useful sectors will survive.
For governments, lowering demand is absolutely the wrong move.
It's worth noting that the primary way that governments can avoid "lowering demand" is by doing nothing.
When demand, employment, and interest rates drop, the government should borrow more, because borrowing is a bargain, and hire people because employing them is a bargain, and fix our infrastructure not to give people something to do but because it really is crumbling and needs fixing.
While simultaneously, the private world now has lost some access to cheap lending and cheap employees. Let's hope that "infrastructure" actually got fixed because otherwise it's a net loss.
We have a lot of other infrastructure that needs fixing or replacing, but it seems we will have to wait for another few bridge collapses before the politicians find the guts to fund it, possibly even by reducing the huge amounts spent on corporate welfare.
There's money and prestige in new infrastructure. That explains why politicians have no trouble finding money for new bridges, but can't be bothered to fund the repair of old ones. This is the machine you hope will fix a recession.
Pay down government debt when the economy is good.
Well, that would be a nice plan, if you could get the governments of the world to stick to it. Good economies just mean for most that you can borrow more.
The War of Choice was by far the biggest budget buster in the past 25 years, far bigger than the TARP, and these self proclaimed Republican penny pinchers uttered not a single squawk over it at the time.
I'd put Social Security way ahead of that. I bet they added ten or twenty trillion in liabilities during that time period.
Why, indeed, should the oil business get a "depletion allowance" that no one else enjoys?
I decided to look that up. Turns out a bunch of people get that depletion allowance.
A tax deduction authorized by federal law for the exhaustion of oil and gas wells, mines, timber, mineral deposits or reserves, and other natural deposits.
and not having to import our cars' vital body fluids from desert tribes which hate us
But whose oil is just as good as anyone else's. That's the nice thing about markets, you don't have to care about the beliefs of the other party that you trade with.
Lower demand is not what is the right move in a recession, it is what CAUSES a recession. It's almost funny to see how people don't learn jack from history. What caused the depression of the 1930s? The stock crash? Yes, but in a different way than most people think. The problem was that most people had their money riding on that stock market. If you look at the development of the stock market closely, you'll notice that originally the market just took a little dip after years (!) of climbing. That dip was enough, though, to send the first high-risk investors into a must-sell spin, which in turn took the market into the nose dive. But even that would not have caused the depression that followed without one single very important fact: EVERYONE, not just classic "investors" but EVERYONE, including the "little man on the street" has put their money on the stock market.
When the market crashed, it not only meant that investors were out of money (they could actually take that loss), but that people actually lost not only their life savings but also took out loans to invest, putting them in a very deep financial hole. And that in turn meant that consumption took a nose dive because now they could not afford anything anymore.
So, what you're saying is that once peoples' wealth up and left, that they had to adjust by cutting back on their demand, purchases, consumption, etc. That's just what I said.
Neither in the 1930s nor today the problem was a lack of goods, and certainly not a lack of workforce that kept the economy from rolling. The problem in both cases is a lack of consumption. Simply "riding it out" is the wrong answer. Looking at Iceland I could see how to overcome the problem: Let the banks crash and burn, instead of bailing out the banks bail out the bank customers. For Iceland, it worked out pretty neatly, 3 years after the big bust they were back on track. We're now what, in the 5th year, and it's getting worse and worse.
No, the problem was then as it was in 2008, a massive public delusion in both cases amplified by heavy leverage and poor public policy. And Iceland had no choice but to ride out the recession - the UK seized a good portion of the Iceland banks' assets.
By "we", I assume you mean the US and/or EU. There, he government responses and the developed world's inability to compete labor-wise with emerging markets explain the lengthy doldrums.
For example, the Obama administration passed the American Recovery and Reinvestment Act of 2009 (the "Stimulus") with the hopes of sparking the US economy. It didn't happen, not because things were "worst than expected", but rather because the program didn't work - often the money wasn't even spent for years much less spent in a way conducive to Keynesian strategy (such as actually doing something useful).
On the European side, we have both the above raid on Iceland banks and similar thuggery with respect to Cyprus banks. Nobody really cares when it happens to Russian mobsters and citizens of some little island nation. But everyone can see for themselves what will happen, if the powers-that-be decide to try the same trick elsewhere.
This is amateur-hour stuff. Sure, it doesn't help spark demand and recovery, but who really should be chowing down in such an environment of uncertainty and incompetence? I don't see consumption as the problem or solution when there is incompetence on a level big enough to unsettle the economy and everyone's economic decisions.
but is there really any substance to this?
Sure, spies and crooks have been caught via interviewing. It's far from perfect, but it does work frequently.
And even if it just temporarily disrupted the bombing plans, that might have been enough of a delay for the police to catch them for other crimes, paricularly, three murders in 2011 in which the two brothers seem to be the primary suspects.
Could we please stop with the endless pro-drug commentary?
Sure, once it's at least partly legalized in a sensible way for most areas of the world. Else the issue won't go away.
normal people don't care about such matters.
I imagine they would start caring, if say their house or car were seized as part of a US drug raid. You don't have to care in order to get bit by the bizarre and rather nasty laws that have come about in order to fight the War on Drugs.
That depends to some degree on what they plan to do with the bitcoins. If they hold them, then they are exposed to more risk than if they sell them as soon as they compute them.
when they're feeling especially sociopathic
In addition to both getting the definition of "consumer" and characterizing Rubio's use of the term incorrectly (see TubeStake's discussion of this), we also have the misuse of the term, "sociopathic". What's going on is that economists are merely creating a useful label for a role in certain sorts of trades. This is called "abstraction". It's a far handier label than say, "Bob" because it describes the role and applies even when the consumer isn't named "Bob".
Let's look at the actual definition of sociopath:
a person with a psychopathic personality whose behavior is antisocial, often criminal, and who lacks a sense of moral responsibility or social conscience.
I don't see any of that applying merely because one uses a word which you don't like.
Both sides have to work out for a market to be created and goods/services to change hands, i.e. to create trade. But we don't have any kind of shortage on the supply side. We have a shortage on the demand side.
I covered that bit (here, a "demand" shortage for labor) when I wrote " Most of the ideas expressed in this thread ... get in the way of that." Money dropped from helicopters doesn't employ people. It creates some jobs as a result of the temporary increase in economic activity, but it also loses jobs through the destruction of the value of money.
Actively, discouraging investment in favor of spendthift behavior most certainly doesn't employ people (since when has encouraging short term thinking been helpful?). And of course, the research of this story, which claims that minimum wage laws encourage the elimination of low wage jobs for automation, implies that bit of law doesn't employ people either.
What keeps them all from producing is a lack of demand. The economy is in a downturn not because our production cannot keep up with demand, not because we lack the ability or willingness to invest and we certainly don't have a shortage in the workforce.
So what? Ever consider that lower demand is the right move to make in a recession?
Half the things complained about in the comments to this story are consequences of trying to stir demand at a time when it shouldn't be so stirred - eg, bank bailouts (and the highly leveraged adventures that lead to those bailouts), businesses not willing to act due to economic uncertainty, prioritizing economic activity and "stimulus" over generation of value (which is my complaint in my previous post), quantitative easing, and of course, minimum wage laws.
It's all pain management (with a large dollop of corruption and just plain incompetence, I wager) and it has a higher priority than the health of nation-level economies. In the medical world, that only happens when either the illness is inconsequential (like a cold) or the patient is about to die with nothing possible except a somewhat less painful send-off. Do you think either possibility is relevant here?
Recessions don't happen because there was a magic drop in demand. They happen because enough of us were wrong about the world and what things are worth. That massive shift in our collective worldview is what creates the uncertainty and the drop in economic activity characteristic of a recession.
Most demand management, whether in a recession or not, is an attempt to provide incentives to pretend that the problems of the recession didn't happen. That is remarkably foolhardy and wasteful. I hope we grow out of that some day.
Although I think the helicopter drop would get money into the hands of people who would spend it instead of "investing" it in rent-seeking behaviour
"Rent-seeking behavior" like what? This has to be one of the worst pseudo-Keynesian ideas out there, that somehow we need to squander a bunch of wealth in order to have a healthy economy.
If it were simply finances that ran our Government, why in all blue blazes did we privatize the banking industry?
Why would that be any better? I notice that ass-wiping is also privatized. Some things just work better that way.
The "creators of currency" ... I said "currency", not "wealth"... are empowered not only to draw from thin air that which they do not have, but are also empowered to exact usury for the use of that which never existed in the first place.
It's not "thin air", it's leverage to the tune of somewhere around 1 part real money in 10.
Its a really nasty little paradigm which encourages extremely unproductive "investments".
Like home and capital purchases.
As we move forward with manufacturing and production technology, the economies of scale lead to an environment of material goods abundance. I feel any shortages at our present stages of this game are purposely created by those who are gaming the system
With a substantial floor on how cheap those material goods can get. And someone still has to design and make that stuff.
I can't see where employees should cost the employer anything... the employer should simply write them off against taxes - as the employee they hired now has the burden of paying tax on his income.
And if they were paying all of their income as taxes, you'd be right. But since they aren't, the write off only reduces taxes by a fraction of the wages paid.
Every time I hear someone claim they're "creating a job" when they hire someone I cringe. You're not creating the job. I create that job when I buy the good or service you offer.
And you don't "create" that job when the good or service isn't offered.
So if you want someone to create a job, make sure people have money to consume. Because that's how you create jobs!
And where does that money come from? Economies work not because there is money for consumption, but because there is trade - people exchanging things for mutual benefit, be it labor, goods, services, and so on. Most of the ideas expressed in this thread (particularly, the money-copters and the idea that investment is rent-seeking) get in the way of that. Here, merely having money doesn't mean that you can afford what you want. The desired goods or services can be even more expensive or even unavailable at any price.
... which cannot be said of your slashdot posts.
I have yet to meet anyone who thinks that a great deal of thought and preparation should go into a Slashdot post.
There's a place for planning and such, but it goes with things which benefit from such planning. Here, the original AC poster made an off-the-cuff remark that using non-renewable energy was bad.
No matter how short-sighted or ignorant humanity is in this regard (and delaying the transition to renewable is not necessarily the short-sighted, ignorant choice, I might add), they will be using renewable sources sooner or later. It's merely a matter of timing.
There's an easy fix for that. Use up those non renewable sources now (at least to a level that isn't very economically viable) and you won't have to worry about people using it up later.
Given how much people want to think about the future, it makes me wonder how they manage to get up in the morning. Weeks of planning go into that, amirite?
At an absolute minimum, he should have attempted to raise his concerns up the chain through approved channels. Did he try this? If not, I'd suggest that he's screwed.
Others did try this. And it's possible that he'd be facing more jail time going through approved channels than he is now.
I can only envision all the ways the tech could be misused
Don't worry. There'll be a fix for that.
I'd use the phrase "more likely" based on a thermodynamics argument. My take is that states where the brain functions better are far fewer than states where it works worse. So any modification of brain function is more likely to slide into a poorer state rather than a better one.
Does the IAU even have jurisdiction over other star systems definitions of planets?
Yes.