The General Economics Thread

I'm Canadian, but when I lived out in the middle of nowhere, the lines on our street, and only our street, were underground. It meant that they could handle dial-up internet but nothing faster since no one wanted to replace the lines. Everyone eventually moved to satellite internet, especially since one of our neighbors had an incredibly enormous radio tower in their backyard, and the satellite dishes were mounted on that.

edited 29th Jan '15 7:26:33 AM by Zendervai

In my city lines are underground in the suburbs and downtown, but in the residential city areas, it's all telephone poles.

There used to be telephone poles in my place, but since it all got redevloped, I think they went underground. There's plenty of them outside of the estate, though.

I was thinking about something recently. There's been talk about how families used to get by just fine with only one breadwinner. While my older brother and sister-in-law both have jobs that pay highly enough that one of them could easily quit and have the other pay for the entire household, many people have a hard time making ends meet even single without kids.

What happened? What could fix it? I like the "living wage" idea and want to see it or something similar catch on.

In part it was because the prices of things went up while wages stagnated.

What other parts were involved?

In the big picture, it's all about wages versus cost of living. For most Americans, the ratio has gone down since the 1970s — we have less median purchasing power than we used to. There are microeconomic factors: cost of living has risen a lot more in some places than in others, mainly due to wealth stratification. Healthcare is a big source of that inflation.

Cost of education as well.

Yeah, you have to look at the specific cost items that have increased disproportionately to overall inflation.

Healthcare caused inflation?

To summarize: Costs have gone up, but your paycheck hasn't.

edited 29th Jan '15 11:30:09 AM by PotatoesRock

Yes, modern medicines and treatments are expensive, much more so than older methods. It's even an issue in single-payer systems, where it also becomes a political issue.

And those only became available after a few years — not too good when you've got patients' groups demanding immediate use of the latest medicines available.

edited 29th Jan '15 2:09:07 PM by Greenmantle

It doesn't help that it's much harder to get the "generic" variants of medicines in the States.

Hey, you guys want a laugh?

Bolivian President Evo Morales said in CELAC (Presidential summit of all American countries except Canada and the U.S) that "If Latina America and The Caribbean wanted to advance in the reduction of poverty and hunger, they must orient their politics towards fighting capitalism"

Then he noted that his people have no energy problems, no hunger, and two thirteenth salaries.

Syriza causes economic meltdown in Europe...or not.

Where's the kaboom? There was supposed to be an economy-shattering kaboom!

Here's Tom The Dancing Bug on misleading conversations involving economic terms http://www.gocomics.com/tomthedancingbug/2015/01/30 .

Just finished reading The Jungle and it's frightening how relevant some of it is to current economic trends.

Jaume Ventura: Capital in the 21st Century: “On 19th December CEPR and the Bank of England hosted a joint workshop to discuss Thomas Piketty’s seminal work ‘Capital in the 21st Century’. Chaired by the Bank’s Chief Economist Andy Haldane, the panel comprised Orazio Attanasio, Tim Besley, Peter Lindert, Thomas Piketty and Jaume Ventura…

Justin Wolfers @JustinWolfers on Twitter: What This Morning’s U.S. Wage Numbers Mean: “Employment cost index only up 0.6% in the past quarter putting it up 2.2 percent over the year. Consistent with inflation well below 2%. If you think the US labor market is anywhere near capacity, you expect wages to be growing at 3.5-4%. They’re growing at 2.2%. There’s nothing in these wage data to give the Fed any confidence that inflation is going to drift back up towards its target anytime soon. The good news in these wage data is that this is the economy telling us that it can generate plenty more jobs without hitting bottlenecks. A thought on the Phillips Curve: Perhaps wage data are telling us that both the long-term unemployed & those out of the labor force matter.

Oil is at 44.8 Dollars a barrel. (The article goes into the impact of oil prices dropping as far as they are.)

edited 30th Jan '15 7:16:25 AM by PotatoesRock

Interesting fact: all of the Scottish National Party's economic arithmetic for the independence White Paper was based on an oil price of $110/barrel.

China's economy is not as scary as Paul Krugman thinks. Posted without endorsement to annoy Fighteer.

Frankly, I thought that China's instability was because it's sitting on the mother of all private debt bubbles.

This seemed interesting at least in premise:

Mile Kimball: John Stuart Mill on the Rich and the Elite

Seems like a bit of No True Scotsman, but sort of... reversed? "Only True Scotsman"? We shouldn't hero-worship "the rich", we should hero-worship "the honest rich", a term which seems ripe for at-will redefinition to mean whatever you need it to mean at the moment. Besides, I think he's already gotten his wish. Most people don't hate the rich just for being rich. No one really begrudges athletes or entertainers for being multi-millionaires, or even entrepreneurial types like Steve Jobs or Bill Gates. When people talk about "the one percent", they're usually talking about the people who get obscenely wealthy doing nothing but making other obscenely wealthy people even more obscenely wealthy. Wall Street types whose massive net worth is utterly divorced from the utility they offer society as a whole, but whose fuckups can drag the rest of us down with them (see: Great Depression, Great Recession). Career CEOs who get multimillion dollar bonuses for laying off employees and slashing pensions even while the company still hemorrhages cash and they're fired for failing to generate a profit. Executives in industries like cable companies, who spend millions on lobbying to ensure that they maintain their monopolies, while simultaneously praising the virtues of the competitive free market.

So yeah, it's not the "honest" rich — the ones that make their money by selling us stuff that we want — that everyone hates.

edited 1st Feb '15 9:43:35 AM by NativeJovian

You have to remember he belonged to something of a different era, as well. When industry was young, you wanted to encourage these people because they were going off and doing the work of modernization, and the values of encouraging Bourgeois-capitalist entrepreneurs compared to the old, landed aristocratic rich was an important distinction. It's why the old clash was "classical liberalism" vs old-school Tory conservatism of land and queen and country. It wasn't until the former had won and absorbed the trappings of the latter to become the conservative establishment that the socialist-liberal wave came on. Mill was operating at the end of the early-industrial era, while we were still focused on takeoff rather than figuring out how to properly distribute the new wealth of industrial society.

Yes, it is important to remember that John Stuart Mill lived in Britain from 1806-1873, with most of his important work occurring in the second half on the 19th Century, and the context that implies. Doesn't mean there aren't lessons to be learnt, but remember the context in which they were originally written.

We do have a class of people whose primary source of wealth are not the profits of the company they own, it's the value of the stock they own, which is funded in part by diverting corporate money away from capital investments or payroll.

Due to aging demographics, 2% GDP growth is likely the new 4% GDP growth.

(FT) Gavyn Davles: How low can negative interest rates go? "By pushing policy interest rates more deeply into negative territory than ever seen before, the Swiss and Danish central banks are testing where the effective lower bound on interest rates really lies."

edited 2nd Feb '15 5:53:53 AM by PotatoesRock