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Thread: The US Recovery

  1. #721
    Dirty Kiwi Senior Contributor
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    Quote Originally Posted by Monash View Post
    I maybe wrong but most if not all modern macroeconomic theories define 'full employment' as being < 100% or alternatively that all economies have a natural rate of unemployment which is derived from structural inefficiencies in the economy. Full employment policies were dropped in the middle of last century by the West by those Western nations that espoused them because they were inflationary - and at that time they were. Unemployment rates would and did remain low because technology and all the other factors we now struggle with were a long term issue. So you could live with say 2-3 % natural unemployment - when I say "you" I mean any government of the day.
    Thatcherism, Reaganomics and our own Rogernomics were a switch by western governments from a policy of full employment to a policy of inflation control.
    In truth, laissez faire did not demonstrably stop inflation, just altered the way it was calculated.
    Stage one: Those measures that have most impact on the lower 50% of the population such as energy, food, housing, clothing etc were no longer a measure of inflation becuse they were 'volatiles'. So by simple slight of hand economists were able to demonstrate economic mastery of inflation simply by not measuring it.
    Stage two, the introduction of VAT or GST moved the burden of welfare from the richest to the middle and lower income earners.
    Stage three: The massive movement of societies capital toward a small percentage of each societies populations while the poor, literally, got poorer and the middle class got smaller.
    Stage four:policies such as union breaking, TINA (there is no alternative) removing the right to strike for many sectors combined to break workers ability to negotiate from strength.
    This all occured in the late seventies and eighties, not the middle of last century. An incredible rise in standards of living over thirty years, now halted and often declining by the various itterations of laissez faire.

    The baby boomers got to reap the benefits of strong social policies then got to break them so they didn't have to pay for the next generation.
    TINA was so effective, people still believe there is only one economic policy that works, that the market rules social policy rather than the reverse and that society is there to supply the marketplace, rather than the marketplace being there to serve society.
    When you hear of welfare you think of Venezuela, not Norway, Denmark, Australia Finland or Canada, all of which have excellent standards of living without having ever bought into the notion that "the market rules".
    Last edited by Parihaka; 22 Apr 17, at 06:25.
    In the realm of spirit, seek clarity; in the material world, seek utility

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  2. #722
    Senior Contributor DOR's Avatar
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    Doktor,

    Quote Originally Posted by Doktor View Post
    Once we all turn into bankers and programmers, we are all gonna eat those bonds : )

    Hey, I am in services, too, but I still need a computer, paper, something to eat, drink and wear. Not to mention something to drive and a place to live in.
    How many farmers live in Lower Manhattan? Why do you need to have farming and manufacturing in every single community? Would you expect to find fishing in Nevada? No. Why not? Because it would be a really, really stupid place to base a fish company … totally inappropriate climate. Ditto for farming in Lower Manhattan, or manufacturing in Hong Kong. Those activities can and should be done in places where they make the most sense, not in places that happen to be inside an arbitrary border.

    = = = = =

    GVChamp,

    Are you saying that increasing the number of workers is bad for worker bargaining position?
    What's your opinion on immigration again?
    That was a very cool gotcha, a real turn-the-tables.
    Well played.
    Wrong, but well-played.

    Supply and demand: increase supply, and all else being equal, the price falls to the market-clearing rate at which demand takes all that can be supplied.

    Immigration: the cross-border movement of people. Not to be confused with a mass movement of working-age adults.


    Is the American Dream more accessible today, than in the 1950s?
    Of course. Delete obvious and institutionalized bigotry and it automatically expands the universe that may achieve that dream.

    Does it involve a manufacturing job and a stay-at-home spouse?
    Go on, pull the other one.
    (It has bells on it!)

    = = = = =

    Parihaka,

    Feel free to point out where my personal experiences make any of my economic or historical arguments invalid.
    Go ahead, be my guest. (Oh, and I haven’t lived in Berkeley since early 1983. What’s your excuse?)

    Thatcherism, Reaganomics and our own Rogernomics were a switch by western governments from a policy of full employment to a policy of inflation control.
    Incorrect.
    Reagan’s supply side nonsense was at least in part aimed at expanding employment through corporate investment. Thatcherism started off as a battle with labor unions. I’m not familiar with Roger, but your record of identifying the underlying themes of major economic policy shifts doesn’t encourage me to think he deliberately set out to reduce employment.

    Laissez faire, if we ever encounter it in The Real World, will have nothing to do with how inflation is calculated. Different subject altogether.

    But, If you really like having a rotary dial landline in your consumer price basket, go for it.

  3. #723
    Dirty Kiwi Senior Contributor
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    Quote Originally Posted by DOR View Post
    Parihaka,

    Feel free to point out where my personal experiences make any of my economic or historical arguments invalid.
    Go ahead, be my guest. (Oh, and I haven’t lived in Berkeley since early 1983. What’s your excuse?)
    I have no idea what you're talking about. What I am talking about is your slavish dedication to an ideology that is failing spectacularly.

    Quote Originally Posted by DOR View Post
    Incorrect.
    Of course, they didn't break the unions, give tax cuts to the rich, increase unemployment, place the burden of welfare on those who could least afford it by introducing goods and services taxes, sell of state assets, concentrate wealth to an elite of a particular generation etc etc etc.

    Pull the other one.

    It was fascinating watching the same process being used on Russia post Soviet, until Putin put a stop to it. You must despise him.

    Edit to add: since you like charts n' statistics n' stuff, here's a few regarding your ideology.





    And of course a wee TED talk for the progressives amongst us.

    https://www.ted.com/talks/richard_wilkinson
    Last edited by Parihaka; 22 Apr 17, at 12:35.
    In the realm of spirit, seek clarity; in the material world, seek utility

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  4. #724
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by Parihaka View Post
    I have no idea what you're talking about. What I am talking about is your slavish dedication to an ideology that is failing spectacularly.
    Perhaps a brief reminder might be in order ...

    Blah blah blah, wot I learned in laissez faire 101 in 1976, blah blah. Doest occur to your fervid dreams that the world is a larger place than Berkley, that your experience of growing up was not and is not the centre of the world? That your minorities are not our minorities and that your personal experiences are not the experiences of us all. It is fascinating to watch you deny thirty years of full employment though.]

  5. #725
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by Parihaka View Post
    Edit to add: since you like charts n' statistics n' stuff, here's a few regarding your ideology.





    And of course a wee TED talk for the progressives amongst us.

    https://www.ted.com/talks/richard_wilkinson

    Since when did you become a redistribute-the-wealth socialist?
    That's a real surprise.

    Here's a notion that might have escaped you:
    Capitalism works because of inequality.

    Or, to flip it on its head, Communism doesn't work because of its dependence equality.

  6. #726
    Dirty Kiwi Senior Contributor
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    Quote Originally Posted by DOR View Post
    Since when did you become a redistribute-the-wealth socialist?
    That's a real surprise.

    Here's a notion that might have escaped you:
    Capitalism works because of inequality.

    Or, to flip it on its head, Communism doesn't work because of its dependence equality.
    yay, finally we're getting somewhere. So wealth redistribution from the poor to the rich as the above videos show is capitalism? Or welfare for the rich?

    I'm not a redistribute the wealth socialist. Neither am I an ideologist. Ideologies are bad, because people think one size fits all, that 'this worked here, so it'll work everywhere'. ideologies are simply tools gone wrong. Socialism works in some places, capitalism in others. You don't use a hammer to plaster the wall.

    We've had thirty years of 'the market rules', distributing wealth into the hands of a few by deliberate govt. policy.
    It's time for some corrective surgery. Socialism works to correct the excesses of purist capitalism, because purist capitalism is harming society. (I mean welfare for the rich, really?)
    Last edited by Parihaka; 22 Apr 17, at 21:36.
    In the realm of spirit, seek clarity; in the material world, seek utility

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  7. #727
    Dirty Kiwi Senior Contributor
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    An interesting comparison between privatev sector and public sector pay rates across education levels.

    https://www.cbo.gov/system/files/115...privatepay.pdf

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    In the realm of spirit, seek clarity; in the material world, seek utility

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  8. #728
    Senior Contributor DOR's Avatar
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    Wow.
    Just, wow.

    People would rather work for the private sector than the public sector, so the public sector has to pay more.

    Wow.

    And, the point is ... ?

  9. #729
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    Quote Originally Posted by DOR View Post
    And, the point is ... ?
    The difference between a purely socialist approach to wage gaps and a purely capitalist one. Quite obviously the socialist one supplies a more equitable distribution whilst still rewarding intelligence and drive, whereas the capitalist ones heavily favours a small subset of leaders. Kind of medieval really.
    Last edited by Parihaka; 03 May 17, at 15:02.
    In the realm of spirit, seek clarity; in the material world, seek utility

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  10. #730
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    Quote Originally Posted by Parihaka View Post
    The difference between a purely socialist approach to wage gaps and a purely capitalist one. Quite obviously the socialist one supplies a more equitable distribution whilst still rewarding intelligence and drive, whereas the capitalist ones heavily favours a small subset of leaders. Kind of medieval really.
    How did you draw that conclusion? Might it not be that the public sector is doing what you suggest the private sector is doing? Different needs?

  11. #731
    Dirty Kiwi Senior Contributor
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    Quote Originally Posted by DOR View Post
    How did you draw that conclusion? Might it not be that the public sector is doing what you suggest the private sector is doing? Different needs?
    Which conclusion, that the current private sector income distribution is medieval? Income distribution heavily favouring the wealthy produces a stratified society.
    In the realm of spirit, seek clarity; in the material world, seek utility

    Gottfried Leibniz

  12. #732
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    DOR,

    i thought you might get a kick out of this. one guess as to whom they were interviewing.

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    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  13. #733
    Senior Contributor GVChamp's Avatar
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    I saw that on the train this morning and burst out laughing.
    "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

  14. #734
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    Ahh, you beat me to it by thaaat much.

  15. #735
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    Disability Spending Is Not Responsible for Low Employment

    by Sarah Rawlins: 02 May 2017

    Earlier this month the Washington Post’s editorial board published a criticism of the Social Security Disability program. Noting the decline in labor force participation amongst prime-age men, the board suggests that the disability program discourages its recipients from working. The article argues that the sudden loss of cash benefits (and affordable health insurance) when recipients rejoin the workforce might persuade many to remain on disability when they are able to work.

    It seems unfair to lump these two factors together, since the program’s modest monthly benefits are far less than the wages of any near full-time job, while the loss of health insurance, especially for disabled workers who may require additional services, would be devastating. The Post is probably right to say that health insurance costs play a strong role in workers’ choices about their employment level, but that suggests a different type of reform.

    Is Social Security’s Disability program contributing to low levels of employment? Analysis of 33 OECD countries’ disability spending and prime-age employment found that there’s actually a positive association between disability program spending and employment rates. According to the model, a 1.0 percentage point increase in the share of a country’s GDP spent on disability is associated with a 3.2 percentage point increase in its employment rate.

    This doesn’t necessarily support a causal relationship between disability programs and increased employment, there are many programs that might lead to higher employment which are also likely to go along with generous disability benefits (free college, for example), but it does strongly counter The Post’s claim. Disability insurance might not cause higher employment but it certainly does not seem to be discouraging it. The Post seems especially out of line in claiming that the U.S. disability program, which is one of the least generous of any wealthy country, is somehow a major factor in reducing labor force participation. Far more likely is that labor force participation rates for prime-age workers are low because the job market has still not recovered fully from the recession.

    http://cepr.net/blogs/cepr-blog/disa...low-employment

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