The General Economics Thread

And if there were a mass revolt, then what? Egypt's revolution turned out to be a disaster. You could have people saying "fuck the government!" and then either there's nothing, or a bunch of assholes end up in charge. Imagine if the Christian Right, to use one example, saw a power vacuum and took to fill it because they believed it was their sacred duty.

Well, we've mentioned before plenty of time that protesting and reform costs money and time. Most of the people directly affected by this aren't able to do much about it.

I've written my congressmen. I vote. But that's all I really have in my power to do.

We need better candidates. And we need candidates who keep their promises...

The dangers of a revolution are exactly why I don't want one.

The revolution in Egypt, while it had its economic factors, it was more political in nature, due to Mubarak's long reign.

In Western countries, there's democracy, but it's a paid democracy, that is, a democracy paid by things such as lobbying, corruption, media control and agenda-setting (which is determined by those who own the groups which hold the newspaper and magazines), and so on and so forth. And if it's not paid, it's connection-based. Our problems started somewhere in the 80's, while Egypt's problems existed for longer than that (even before Mubarak) and within a country which had its fair share of active/obvious repression/oppression.

edited 19th Dec '14 1:47:37 PM by Quag15

Slight correction: our problems were firmly entrenched way back in the early 1900s, but the folks in power made the mistake of letting conditions get so atrocious that they genuinely faced the threat of being put up against a wall and shot if they didn't do something. The prosperity of the mid-20th century was an aberration in the nation's history (and the history of most nations); these days we are backsliding as the reactionary forces that were forced to remain quiet from the 40s to the 70s have returned to their power of old.

We can hope that it's the last gasp of said reactionaries rather than a new age of oppression — there's a great deal of promise in the nation's demographics. That's one reason why the GOP and its media pals are so desperate to roll back the clock now.

edited 19th Dec '14 1:49:50 PM by Fighteer

Point taken (then again, I haven't read Piketty's book nor any other relevant books and sources on the matter yet, so I'll have to get a bit more informed).

edited 19th Dec '14 1:50:11 PM by Quag15

We also had a nearly-unique coalition built to advance progressive causes; namely, there was a strong and activist Christian Left in the late 1800s and early 1900s, people who considered it a moral failing of our society that poverty existed at all, and (in worrying parallel with our Tea Party ideologues) simply did not give a flying crap what anyone else thought about the subject. So we got the national progressive income tax, labor laws, women's suffrage, and of course, Prohibition.

If the Progressive Era hadn't laid the foundations for FDR (and wasn't, in its original form, sputtering out when he took power), we would probably have faced some kind of revolution; all the proper conditions were in place for a textbook Marxist takeover. Bismarck's comment on a special providence comes to mind...

edited 19th Dec '14 2:25:32 PM by Ramidel

I have read it, and it strengthened by opinion that the US is one severe recession away from another reform era. I give it ten years.

We managed to avoid a reform era precisely *because* the people in power were empowered to avert the worst of the recession. Make no mistake that while the bailouts and TARP, et al, were much more beneficial to the 1% than the 99, they did keep the system functioning long enough for our current anemic recovery to begin. If we had let the market sort itself out: GM bankrupt, major banks destroyed, the credit freeze and the unemployment rates we would have seen, that would have gotten people really angry.

It's why revolutionaries arrived at the conclusion that radical action was necessary. The idea (not that i really espouse it), is that working within the system to reform it just allows old injustices to endure, because the people have been soothed enough to not demand radical change.

tldr: If Ben Bernanke had been an Austrian economist, we'd probably have President Jill Stein right now.

, @ Fighteer:

It's been said that if World War I didn't happen, Britain would have had a Communist Revolution — indeed, we're still wrestling with some of the same problems — political devolution is one of them.

And yes, you'll find that the Christian Left was quite powerful within the Labour Party as well, and incidentally there's even a strand of "One Nation" conservatism pioneered by Benjamin Disraeli which was (and is?) socially progressive.

edited 19th Dec '14 2:40:10 PM by Greenmantle

They can only jury rig the current system for so long. Eventually (within the next generation) they will either have to dispense with the pretence of a social net or implement fundamental reforms to save it.

And you can't dispense with the pretense. That's one realm where old people's tendency to vote will probably save us all.

My parents talk about saving their pensions, money they'd saved up for retirement, and so on. We don't want to have to sell our vacation house (which I love a lot), or for that matter, anything we really like, in order to survive. Both my parents gradually worked their way up and up the ladder at their respective jobs, making more and more money each year, and right now are retired comfortably (we even have cleaning ladies clean our house for us). But they're worried about the money in their retirement and where it will go, if it will still exist.

They're already liberals, so this won't change their vote.

Now, about the reform era showing up, what do you mean about that?

In this context, a "reform era" is a time when there occurs a populist uprising (with luck it remains peaceful) demanding changes to redress inequality.

Your parents' savings are fine, unless we have another bubble-induced market crash. Unfortunately, that's all too likely should the liquidity trap continue and the finance industry keep sucking money out of the general economy.

Imagine that Occupy had a coherent set of goals, and the popular support to achieve them. Essentially a "Tea Party" of the left.

Tell your folks to diversify: put equal amounts of their wealth into stocks, bonds, and real estate. Get them some expert professional investment advice.

• An economic crisis
• Environmental disaster
• A political administration so blunderingly incompetent their names get associated with shanty towns.

So basically you need really incompetent Republicans or super incompetent Democrats in charge.

How New Zealand's innocent unanimous vote near Christmas 25 years ago for 2% inflation brainwashed the rest of the entire world into 2% inflation.

The Sauds' collapse of the oil market may kill the "Texas Miracle".

edited 20th Dec '14 12:46:48 AM by PotatoesRock

I'm not sure all of them were active during the Russian Revolution — there certainly weren't bad harvests, just bad supply and high inflation. To quote The Other Wiki:

Hrm still seems like a three way combination:

• Government mismanagement
• Bad supply (whether by economics or harvest)
• Economic crisis (Inflation or a Stock Market collapse)

That feeds these things.

You can't help today's middle class with 1930's policies:

(Google Translate) The German ZEIT is forecasting energy might be the next big 'bubble' after housing and dotcom.

That WaPo article attempts to tell us what's wrong without offering any kind of prescription for the future. Should we not attempt things that worked in the past in preference to taking no action at all?

Also, energy as the new bubble... so where are are the inflating prices?

edited 20th Dec '14 7:45:30 AM by Fighteer

Aren't deflating prices the "problem" at the moment, driven partially for political reasons?

But that bubble isn't due to economic reasons, is it? I suspect it's more down to political factors, especially concerning Russia, Iran and Saudi Arabia.

edited 20th Dec '14 8:17:00 AM by Greenmantle

Apparently, it's a bubble in oil production with the prices already falling and the producer behaviour and oil prices diverging from each other. A bubble, but without actual price increase as much as producers still behaving like in a price increase.

Perhaps under the presumption that the Saudis won't keep their foot on the gas pedal for too much longer, and things will return to the post-2009 "normal" of bouncing between $3.30-$4.00 at the pump in the US. Which is not an invalid assumption, though these companies really need to start thinking of the long game as alternative fuel sources begin to rise.

Portuguese proverb: if shit ever gained any value,the poor would have no assholes.

I don't recall hearing that one. Must be an old one. And true as well.

edited 20th Dec '14 9:41:03 AM by Quag15

Confucius say: "Man who walk through airport turnstile sideways going to Bangkok."