There was talk about renaming the Krugman thread for this purpose, but that seems to be going nowhere. Besides which, I feel the Krugman thread should be left to discuss Krugman while this thread can be used for more general economic discussion.
Discuss:
- The merits of competing theories.
- The role of the government in managing the economy.
- The causes of and solutions to our current economic woes.
- Comparisons between the economic systems of different countries.
- Theoretical and existing alternatives to our current market system.
edited 17th Dec '12 10:58:52 AM by Topazan
I keep hearing about how money is leaving the suburbs and going to the cities. If this is true this would make cities a better place for me to live since it would be easier to get around and there would be better work. But how am I suppsed to move to the city when my generation has been screwed over? I have no clue how id be able to afford a city apartment , and they just keep getting more and more expensive. But I guess there's no in between ?
V
How likely is it that the derivatives market
might crash, as mentioned in this article?
Lost in Space
It is not unlikely given how much money is currently piled up in investment markets, going nowhere except inflating asset prices.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
I have a couple of questions about international air travel.
- How did air travel become such a huge industry? My instinctual answer is that new construction techniques developed during World War II & the early Cold War for cargo planes & strategic bombers were later applied to passenger aircraft, which meant that airliners could carry more people and therefore charge less for tickets whilst maintaining profits.
- Could international air travel be on the way out, with rising tensions in certain parts of the world, rising costs, and environmental concerns?
As an addendum to number 1, is it possible that something similar could happen for space travel?
Direct all enquiries to Jamie B Good
Visiting from the Hoag Galaxy
![[up]](https://static.tvtropes.org/pmwiki/pub/smiles/arrow_up.png "[up]"){kind=icon}
I don't think international air travel is going anywhere. At the very least, business travel is extremely lucrative for airlines. People have families scattered all over the world, tourism is still really high and so on.
Although, if they figure out the high-altitude spaceplanes without making everyone really nauseous, the long-range flights would just go way above anywhere dangerous.
Not Three Laws compliant.
Fuck you, Fascist sympathizers
Having no engineering skill, i'd say the answer to that has something to do with gyroscopes.
Hell, put us all in the equivalent of an ICBM. As long as some sort of setup was used to transfer the inertia and G-forces to keep your body from getting liquefied, you could get from LA to HK in 40 minutes or something.
Lost in Space
Air travel makes the global economy possible, period. Without it, we'd have no way to rapidly move goods and people across oceans. Even intracontinental travel is much faster in the air than over rail.
As for suborbital flight, it really depends on materials technology and safety issues.
edited 30th Mar '15 8:43:17 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
This is a weird question , and the answer may just be that writers aren't economists, but in the Hudsucker Proxy, I dont understand what's so villainous about a company's executives wanting to attain control of its assets , admittedly thru shady means, especially when their company is in dire straits . And if their company does start to become more successful and encourage investment, how have they lost? The company has come back from the brink of collapse and they arent in a situation anymore where they need to own all its assets
Lost in Space
It's been ages since I saw that movie (I did see it, I think?) but in these types of "board buyout" deals it's usually because they want to take over executive control of the company from the protagonist or his friend. That's not inherently evil or even necessarily wrong; it is what is known as a "hostile takeover", which is often seen as antagonistic in the business world. What matters is their purported motives for doing so.
edited 31st Mar '15 10:54:57 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
What was wrong and illegal in the Hudsucker Proxy was that the Board of Directors (not the executives) was intentionally attempting to tank the company's profitability and stock price. The Board of Directors has a duty of trust (also called a fiduciary duty) to their stockholders - they are expected to represent the stockholders' interests and avoid conflicts of interest. Deliberately attempting to trigger a run on your own stock price is a breach of fiduciary duty.
Incidentally, a hostile takeover is exactly the opposite of a board buyout. A "hostile takeover" is a takeover by someone who does not have the approval of the current Board of Directors, management or both. These buyouts themselves are neutral, though problematic and easily-abused. They are a consequence of a system where a publically-traded company is seen primarily as a short-term investment by its shareholders (such as mutual funds). If the majority of a company's stock is available for purchase at some price, then anyone who can come up with the money can buy up enough available stock to oust the existing board of directors, and often management. It's why Mark Zuckerberg made damn sure to keep 51% of Facebook stock in his own hands.
edited 31st Mar '15 6:26:46 PM by Ramidel
Lost in Space
Ah, right. I had it backwards. So yeah, they are violating all kinds of rules by tanking their company's stock so they can buy it back for cheap.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
But how do they lose if the hula hoop becomes a success ? Isn't that good for the company?
Lost in Space
If the company launches a successful product, the stock price goes up, foiling their buyback plan.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
But they still make miney don't they?
No. The ones who make money from the company's success are the ones who own the stock, i.e their patsy CEO. The Board doesn't get bonuses for performance unless that's in their contract.
In other words, the Board don't make nearly as much from the hula hoop's success as they would have if the company had tanked, they'd bought it, and then the company had recovered.
edited 31st Mar '15 11:28:19 PM by Ramidel
V
The BBC's Robert Peston: Who to trust - business leaders or economists?
On the day that more than 100 past and current business leaders have written to the Telegraph that the "Conservative-led government has been good for business and has pursued policies which have supported investment and job creation", a survey of academic macro-economists has come up with a different conclusion.
The Centre for Macroeconomics, which groups leading economists from Cambridge University, LSE, University College London (UCL), the Bank of England and the National Institute of Economic and Social Research (NIESR), polled what it calls its 50 experts on whether the "austerity policies of the coalition government have had a positive effect on aggregate economic activity (employment and GDP) in the UK".
Its result was a decisive no. Two-thirds of the 33 economists who responded disagreed or strongly disagreed with the proposition that austerity had been good for the UK.
Now to be clear, this is not a scientifically robust poll of those who know best. But nor is the Telegraph's letter - and those those who took part in the economists' survey are no less distinguished in their field than the business signatories. Among those who disagreed strongly that austerity had been a good thing, Oxford University's Simon Wren-Lewis (never shy to express an opinion) asked if the question was "a joke", adding that "the only interesting question is how much GDP has been lost as a result of austerity" (which he thinks could be as much as 10% of national income).
John Van Reenen of the LSE, who also disagreed with austerity, said "UK GDP is about 15% below where we would have expected on pre-crisis trends... Premature austerity has damaged UK welfare and, as I and others argued at the time, delaying consolidation would have left the UK in a much stronger position than it is today."
But Sir Charlie Bean, former deputy governor of the Bank of England, neither agreed or disagreed. And he said: "The UK consolidation was never undertaken in the belief that it would boost demand directly, but rather that it would reduce the likelihood of a loss of market confidence in the UK government's economic policies, which - had it occurred - would have necessitated a much sharper consolidation."
By contrast, Patrick Minford, of Cardiff Business School, agreed with the austerity policy, He argued: "The coalition government has managed to set a definite direction towards deficit reduction without moving so rapidly as to destabilise the economy. Essentially it has halved the deficit/GDP ratio in this Parliament. In spite of this correction and the reduction in public sector jobs, employment has grown strongly and recovery has been established."
The economists were also asked whether the outcome of the coming general election would have "non-trivial consequences for aggregate economic activity (employment and GDP)". An overwhelming majority, 77%, either agreed or strongly agreed that the economic impact of the election result would not be trivial. Their arguments for why the outcome would matter were not uniform.
Costas Milas from the University of Liverpool said: "This is conditional on whether a Brexit referendum (a referendum on the UK leaving the EU, as promised by the Tories) takes place. A Brexit referendum will add to investor uncertainty, pushing up borrowing costs that companies face and therefore delay their investment decisions. As a result, economic growth will take a hit."
Michael Wickens of Cardiff Business School and York University said: "Given the closeness of the likely outcome of the election, the Labour Party's denial of their role in ruining the public finances prior to 2010, their continued focus on increasing public expenditure and the likelihood of needing a working arrangement with the even more spendthrift SNP, the prospects for the UK are very precarious - almost on a knife-edge."
Meanwhile, Christopher Martin of Bath University said: "The difference between current Conservative and Labour spending plans is about £40bn per year by the end of the next Parliament. Even the most hard-core, anti-Keynesian would argue that £40bn a year has non-trivial consequences."
Looks like good news for Fighteer — and as for me, I think the world's too dangerous to continue Austerity. It's time for a serious build-up, both in infrastructure (rail and road) and for the military.
Keep Rolling On
Lost in Space
Er, I don't really agree with the 'military' angle there. There is zero likelihood of fighting a major land war in the next ten years. Considering how much military procurement spending is captured by the military-industrial complex, you can't even call for "weaponized Keynesianism" anymore.
edited 1st Apr '15 5:37:25 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
A procrastination in of itself
For the US you can't but it could certainly still be done elsewhere.
“And the Bunny nails it!” ~ Gabrael “If the UN can get through a day without everyone strangling everyone else so can we.” ~ Cyran
V
I'm British. Defence is often one of the first to be cut, and we're hovering just about NATO's 2% target — which is a lot better than most of Europe, particularly Germany.
Keep Rolling On
Lost in Space
Yes, but what is that military going to fight?
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
V
Right now, who knows? 
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Or the Argentines getting up to something, or the Korean War re-starting...
edited 1st Apr '15 6:29:11 AM by Greenmantle
Keep Rolling On
A procrastination in of itself
There are enough parts of the world that are a mess that we could help stabilise that such missions aren't short on supply. The French are able to keep their military pretty busy helping stabilise former colonies.
Then there's maintaining a certain level of preparedness for potential conflict outbreaks, like North Korea or any sudden 'uprisings' in the Baltic.
Finally you've got peacekeeping in a more conventional sense, there's lots of peace that could use keeping out there.
edited 1st Apr '15 6:00:35 AM by Silasw
“And the Bunny nails it!” ~ Gabrael “If the UN can get through a day without everyone strangling everyone else so can we.” ~ Cyran
Fed up of crises, Iceland mulls a monetary revolution:
Iceland's government said Tuesday it would consider a revolutionary monetary proposal removing the power of commercial banks to create money and handing it to the central bank.
The proposal, which would be a turnaround in the history of modern finance, was part of a report written by a lawmaker from the ruling centrist Progress Party, Frosti Sigurjonsson, entitled "A better monetary system for Iceland".
"The findings will be an important contribution to the upcoming discussion, here and elsewhere, on money creation and monetary policy," Prime Minister Sigmundur David Gunnlaugsson said.
The report, commissioned by the premier, is aimed at putting an end to a monetary system in place through a slew of financial crises, including the latest one in 2008.
According to a study by four central bankers published on Monday, the country has had "over 20 instances of financial crises of different types" since 1875, with "six serious multiple financial crisis episodes occurring every 15 years on average."
Sigurjonsson said the problem each time arose from ballooning credit during a strong economic cycle.
He argued the central bank was unable to contain the credit boom, allowing inflation to rise and sparking exaggerated risk-taking and speculation, the threat of bank collapse and costly state interventions.
In Iceland as in other modern market economies, the central bank controls the creation of banknotes and coins but not the creation of all money, which occurs as soon as a commercial bank offers a line of credit.
The central bank can only try to influence the money supply with its monetary policy tools.
Under the so-called Sovereign Money proposal, the country's central bank would become the only creator of money.
@Bonsai: And yet the markets clearly do not take care of those things, since there's no way to make them both profitable for the companies and affordable for the consumers in those widely distributed service areas. Someone has to subsidize it; this is basic math — whether the companies charge urban customers higher fees and use those to subsidize rural customers, or the government does it via taxation.
However, companies won't do that because then a competitor who has no interest in offering rural service will undercut them in the cities. Simple market principles: the company with the lowest prices wins. Quality and social responsibility are secondary.
edited 26th Mar '15 9:31:28 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"