The General Economics Thread

5 Things we thought were Millenial truths that are looking to be Recession Trends:

• College Grads are getting white-collar jobs instead of Mc Jobs
• People are moving out of their parent's homes
• Millenials are buying cars
• Retailers are beginning to raise wages again
• The Suburbs are beginning to build up again instead of returning to the cities

(Rolling Stones) With a failing public higher education system and a growing number of imploding for profit colleges, the future looks grave for the average person seeking higher education.

To whom I say, Come abroad, to a world, of pure imagination...

There's a lot that needs to be figured out with higher education. A stronger post-secondary vocational model would probably serve a lot of students better, and other efficiencies should be applied to streamline what is still effectively a 19th-century pedagogical model running on its last legs.

Although this should be applied judiciously, as there is value in the liberal arts, but the current system is still too ponderous and has a lot of stuff students will never need.

But at the same time, we do need to refocus on providing public support for this. What we should aspire to is the "work your way through college" model that was so-talked-about in the past, and aim to lower in-state tuition at schools to the equivalent of 20 hours per week at the state minimum wage for 52 weeks per year (which still wouldn't cover everything, due to hidden costs like room, board, books, etc, but would close the gap tremendously).

The High Price of a Free College Education in Sweden.

Swedish studies are free, but the cost of living is high: students leave college with high debt because they don't depend on their parents at all, but it's very manageable debt. Because they grow independent earlier, they end up marrying and having kids earlier, which explains the higher rate of fertility in Sweden compared to other EU countries.

I'll skip straight to the conclusion:

Beyond capitalism and socialism: could a new economic approach save the planet?

I'm amused by the phrase "beyond capitalism and socialism". It's how Italian Fascists used to describe themselves.

Jan Smuts? Please tell me not this one...

Wow, productive posting day for Mr. The Handle.

Post #12077: If this arrangement is still available in ten years, I'll send my son and daughter.

Post #12079: Once, not long ago, the US government subsidized student loans with low interest rates, long repayment plans, and easy forgiveness in the case of unemployment. When I was a student, I took out some loans, and when I graduated they basically let me pay it off when I could afford to. It doesnt work like that now.

Now- US universities are starting to look like the employment sector- growing disparities between the upper and lower economic classes.

Post #12080: People have been saying that for decades, for generations. Trouble is, no one seems to be able to come up with a viable alternative.

I wonder if some form of localism, of protecting local markets from some of the effects of globalism would help?

edited 2nd Jun '15 7:05:00 PM by DeMarquis

The economic liberalism of the mid-20th century is looking more and more like an aberrant phase rather than a permanent revolution. I mean, if you look back historically, education has mostly always been the domain of the upper class; guaranteeing it as a public right is relatively new. Maintaining that right against the onslaught of influence from the privileged is proving to be quite hard.

As for protecting markets, it is difficult to argue with the advantages offered by economies of scale in terms of productivity. A factory farm can grow more food for less resources than a local farm. Tug on my heartstrings all you want, but I can't build an iPad in my garage and hope to compete with a Chinese factory. The problem is that increasing productivity, particularly due to automation, shifts wealth to capital owners and away from labor, increasing net inequality.

The obvious solution, as has been proposed many times, is a guaranteed minimum standard of living. As an interim solution, we should seek to punish countries that throw up artificial barriers to competition, such as China manipulating its currency to keep its products cheap and the U.S. subsidizing agriculture.

edited 3rd Jun '15 7:43:35 AM by Fighteer

Isn't manipulating your own currency to affect prices an important part of trade, though? China keeps theirs weak to improve their exports, the US keeps ours strong to improve our imports. Is there a moral dilemma there I'm missing?

Agreed that subsidies need an overhaul in general, especially in regards to agriculture. American farming has some huge problems (using underpaid undocumented laborers who can't complain being at the top of the list), and subsidies are one of the big ones. It's been noted that the American addiction to sugar can largely be blamed on corn subsidies making soda cheaper than everything else.

Then again, some manufacturers compete on quality instead of price, and some customers like know where their goods were made, and/or for it to be made to their specifications, or have that "something" a mainstream product might not have. They might not mind paying more for that peace of mind.

Admittedly, that might be nearer the top end of the market, but that demand is still there.

edited 3rd Jun '15 9:39:28 AM by Greenmantle

That always varies by product, of course. There are plenty of products where "good enough" is all anyone really wants, and so competition on price becomes paramount again.

Re-shoring is a thing lately, and some have talked about how the economy of small artisans will return to us once automation kills off most industrial-era jobs and things like 3D printers enable local customized work to be done on things again.

Of course, it all still requires government largesse, because a world of automation is a world where capital owners are going to get most of the pie if left to their own devices.

How US dependence on Chinese goods invites Beijing adventurism

Wikileaks exposes TISA, apparently the successor to TTIP and TPP.

It looks like the trick is if at first you don't succeed, try something even worse. Or maybe this was their Plan C from the start.

edited 3rd Jun '15 12:50:10 PM by BonsaiForest

Why are the ones responsible for these agreements so fearful of the BRICS?

Because Brazil, China, Russia, India, and South Africa typically buck the Western rules of the "way things are done". Basically old system trying to retain hegemony over punk kids that refuse to play by their rules, essentially.

edited 3rd Jun '15 1:08:58 PM by PotatoesRock

Basically lots of protectionism or other practices that go against the neoliberal regime, and IP theft in a lot of cases. The game of the TPP is to try and force China to play by our rules, so i could see the geopolitical urgency of it, but the fact that it is counterproductive to so many leftist values...

I kinda knew that the BRICS were already an opposing block. Now, why should the neo-liberal groups feel concerned (as far as I know, capitalism worked ok during most of the Cold War, so an economical opposite can only stimulate actually productive policies to fix demand).

Ah, the old protectionism vs. free trade war, I knew some of the attitues were related to that. Am I the only one who thinks there could be a balance between protectionism and free trade, without applying them across the whole of the economy?

There almost always is. I don't think there's a country out there that isn't subsidizing SOMETHING they do. As much as the west bitches about it, look to their overpaid farmers. In Austria they had a phenomenon called "butter mountains" because their farmers were making butter that no-one but the government would pay them for. Japanese rice has the same thing happen, much of it simply rots because it's too expensive to sell, but the government keeps paying them to grow it.

The opposite coin, autarky, has been attempted a few times, but even then you have to have some trade for stuff your country simply cannot produce.

Indeed. And let's not even mention France, who keeps getting quite a lot of EU funds for their agriculture and their protected wines, champagne and cheeses^note Not that there's something wrong with protecting those areas, naturally.

Autarky, like full privatization, is an extreme. I know I'm not fond of economic extremes.

edited 3rd Jun '15 3:18:59 PM by Quag15

Switzerland subsidizes too...but not very well. The subsidies aren't actually that big, and the resulting food is usually not that good.

(Honestly, I find most Swiss food to be really boring, and the meat is usually pretty dire, if only because Swiss cows are bred more for their milk than for their meat.)

It wouldn't be a problem but the Brazilian diplomats always bring up those subsides as one of the reason why Brazilian agricultural products have a difficulty to ender the French and UK food market.

On the other hand the ridiculous Brazilian tariffs over imports and bureaucracy is also brought up over why it is so annoying to make business with the Brazilian market.

Yeah EU food subsidies are proof that we're full of shit on the "free trade" front. We flood particularly African markets with products made by western companies but put in place all sorts of barriers to stop them selling their cheep food over here and undermining our local food industry.

I think Switzerland's subsidies are more present in products other than food (can't recall an article that talked about them, though).

Oh yeah, I've heard about the tariffs. The problem seems to be the tariffs in areas where Brazil can't fully compete yet (e.g. electronics, IIRC), since it stifles the potential growth of the economy.

Yeah, the French and British food markets are quite difficult to penetrate, unless you're an EU member. At least you guys get to have an assured place here (though I don't have the exact numbers of our imports from Brazil when it comes to food).

I suppose that one of the excuses (YMMV on the amount of bullshit) for that is due to some African food "not complying with EU standards and regulations" or something.

In what areas do the US practice protectionist policies, btw?

edited 3rd Jun '15 4:11:34 PM by Quag15

Local jobs are not preserved just by protectionist policies. A sounder strategy is not to run persistent trade deficits over a long period of time (as the US has done at least since 1990, and really longer). A balanced account would mean that localities in the US were exporting on average as much as we import, which translates into an equal number of jobs gained as lost.

Mostly for Soy Beans, fruits and other assorted foods that can't be grown in Europe under reasonable quantities and price.

The problem with our tariffs is that they have been in place for decades but without the local industries actually doing anything to improve their products. It is not like we're going to make our own processors either instead of using Intel, ARM or AMD either.

Our protectionists policies are more related to our local business not wanting to lose a market that accepts sub par products with overly inflated prices with a ridiculous large profit margin.

In fact our protectionism harms us more than it helps, since newer information and service industries would massively benefit from being able to purchase high end equipment with an affordable price instead of relying on local producers who are unable and sometimes unwilling to fill the demand.

Bloody hell, a Toyota Hilux built and assembled in Brazil and exported is cheaper in Argentina than it is in Brazil.