For those who complain about "the economy"....

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Myths are still myths, no matter how many times you care to repeat them. There's a threshold where debt supercedes our ability to service it. That's the line in the sand really and where Keynesian solutions come up against a hard stop.

That may be true. However, when World War II came, the government went all out with massive spending, which led to full employment.

Anyway, our automobile manufacturers are implementing a two-tier wage structure, where the newly hired are only getting paid about one-half of what the older employees are being paid.

http://www.nytimes.com/2011/09/13/busin ... s&emc=tha2

Relatively high unemployment makes it fairly easy to accomplish this.

Still, I think it would be better to let the older workers retire earlier, and thus reduce the pool of people in the labor force.

This is also how we're bankrupting social security in the US. It was set up at a time where most people died before 65 or 66, right now to keep an equivalent age we'd likely be looking toward the mid to late 70's. Then again the problem we have is that yes, we're living longer but those protracted years are only so far off from the level of overall health that a person would have had back then - meaning that just raising the retirement age to 78 across the board won't work either.

I won't pretend there isn't an inherent problem with employment, its clear and obvious that technology is reducing the number of people needed for work, but on the other hand - especially on the international level - we currently have no way of handling this dynamic without the first world and immerging third world markets borrowing from eachother until they're all essentially bankrupt. I think we'll be forced to confront this one in my lifetime and, sorry to Adam, I'm in doubt that it will exactly be an RBE solution. We could perhaps start experimenting on paper with non-inflationary models to see if we can patch the holes in that but then again much smarter people than myself I believe have been looking at this issue for much longer than I have so I doubt we'll find many answers in re-examining things like the gold standard, or at least not a lot that we're particularly wild about.

We obviously need more creative ways of funding retirement. Making people stay in the labor force longer does reduce the number of people living long enough to retire. However, it also increases unemployment, and makes it more difficult for people in the labor force to find work.

A reduction in the labor force, through earlier retirement, would put upward pressure on wages, thus resulting in more wages to tax. Thus funding retirement appropriately.

They laughed at the Laffer Curve, didn't they?

As the US issues its own currency it cannot be like Greece. Greece is being attacked, being subject to a "run on it" as the bondholders know that it can run out of currency and want to take as much as possible before it goes bankrupt. Debt to GDP ratio of US is not very high. This debt crisis is an artificial crisis designed to transfer more resources to the already powerful. It's not unlike a bank robbery.

As all the benefits from technology are being siphoned to the rich who have unprecedented wealth and as society has unprecedented wealth this idea that retirement cannot be funded is absurd but that means getting the money where it is and we know where it is.

Here's the biggest problem with that; we have a massive population bubble that will be flushing through the line between 2015 and 2040 (based on the current retirement age of 66), plans are already in place to increase this to 67 for anyone who was born after 1959 and if things get too ugly I could possibly myself see 68 or 69 - if there is still anything in place to call social security when I'm ready to retire (which under my current 67 rate I'll be in class of 2046). America may luck out in that we have enough people still immigrating where if there is a job gap it may fill quickly, the challenge being though - most of the baby boom professionals had the temperature turned up on them slowly, started an easy job that evolved in ever more complex ways, and I found out the hard way - they have no idea how to train, it relates back a lot of people my age getting hired and fired with training mostly consisting of "Your an adult, you'll figure it out". I don't know what will exactly happen to the economy as all those people pour out of the work force, maybe it will be foreign workers filling the gaps? We might have a huge influx of Indian, Japanese, and Latin American professionals? Whatever will happen I don't think we'll find it wise to lower the retirement age simply because we have significant negative employment.

The other issue, it seems like any time you artificially press down and it increases or decreases numbers on paper it systemically works out. Forced retirement at 64 instead of 66 would run the circle of possibly raising wages, then raising cost of goods sold and retail cost which would still end up in an increased tax percentage on all involved - which would all be wonderfully zero sum if one simply wished to redistribute *except* that the employer would still need to account for the extra taxes, the extra FICA, 401k contribution, and the system we have for catching companies as they fall is chapters 7 through 15 bankrupcy. I'm not saying that it would be the apocalypse, but investment in new business would quite likely be down with perhaps the exception of debt services/consolidation companies and factoring brokerages.

But, our technology is increasing such that fewer and fewer people need to be employed to produce a given (or increasing) level of output. Probably we'll soon have robots doing most of what human employees used to do. Robots don't cry, complain, gossip, or as for bigger wages. What is the use of improving technology, if no-one is going to enjoy it or benefit from it?


Not necessarily. Remember: employees are constantly being called upon to do more with less. With increasing technology, and increasing free trade, fewer workers really are needed. Costs and prices actually go down.


There are always some businesses going bankrupt, no matter what. If workers are being replaced by machines, then it only makes sense to tax the owners of the machines to support the former workers.

We have a really big problem that we need to come up with an answer to: a society where 30-40% or more of the people aren't employed? How will that work? How will things be rationed? How will we keep these people enfranchised enough to be good citizens? If we can't answer these questions this will quite likely destroy us rather than usher in a whole new era.


I think the spidery thing overshadowing both of our arguments, and mine as well about friction based on higher health care wages, is that so many 'widget' manufacturers are all over Asia now and at worst it might have an impact on the price per head of its corporate office and sales staff. Globalism and international BS'ing technology seems to be leading the replacement of humans with at least humans that are willing to work for either less than or pretty close to what it would cost them in start up cost and maintenance for robotics. What sucks, for anyone who's a layman, is we can probably guess all day at what supercedes what in terms of cose benefit analysis but really all we're likely doing is throwing intuitions around and we can likely look at just as many world-renouned economics where, much like the issue of the housing bust we'll have as many different explanations or 'beliefs' as we have economists.

Lol, I can think of a few really wonderful places that I'm much prefer more robotic automation to human labor - congress and the federal reserve.


I think in a lot of our analysis the sticky question is 'when'? Right now we have the nation-chasing game where the lowest bidder gets the industry (at least providing a company can build a plant and not face strong-arm extortion from warlords or that country's government). US jobs will be, in certainty, in a downward spiral until that reaches equilibrium. One GOP nominee was aparently talking about no taxation (for a period perhaps?) for companies who would bring production facilities back to the US; I might argue replacing that with tax incentives per headcount of new employees and see if the GAO can project where diffusion of corporate tax from the corporation itself to the worker actually balances out to either breakeven or slightly better revenue for the fed.

The challenge still remains though; we would need to take several false starts and practice-charges at the problem of what to do with a society with such high unemployment. When utopian or top-down ideas are pushed they get utterly ignored and never stick, rather it would take something organic to fix the problem and, the problem there, that takes a long time; hopefully this ramping down of job quantity will happen at a pace where, again, we are able to catch our breath and come up with a feasible alternate social model for the permanently non-working that isn't chavs, meth labs, and ice babies as far as the eye can see.

If we look at recent events in London, the important thing is to provide jobs for younger people. If they have employment, they may be less likely to riot and cause mayhem. Citizens over 50 are less likely to participate in violent riots, because we're too fat, out of shape, and low in testosterone. We would be absolutely no match for policemen half our age who are armed with riot geer. We would probably just pull a muscle if we tried to throw a brick, and be laid up for a couple of weeks at least. So, keeping us employed is of little relevance.

Lol, I think that has to be the wittiest thing I've seen you say to date.

So long ad it keep dem' yung guns from ramping wit' us fer our skyrockets blood!

I think at a minimum the government would need to keep an eye on who are the usual suspects for rap sheets, perhaps expand the military for the sake of civilian bootcamp for guys who are a bit too raw and real in their own minds for that weak-azz work and school stuff.

Last edited by techstepgenr8tion on 14 Sep 2011, 4:55 pm, edited 1 time in total.

Yes make sure everyone is part of the machine so no one does anything society disaproves of....I am not justifying the London riots specifically I mean from what I hear it was some incident that pissed people off and it mostly did damage to the small buisnesses there which does not really help anyone. But the idea of using employment to keep the population in line is very intresting idea indeed...not one I can say I really agree with though.

Some people around PPR seem to think that capitalism and economic inequality are the chief causes of crime and violence, I myself would argue that its nihilism - which can come with poverty but isn't by any necessary means chained to poverty only.

Rent Belly (1998) and pay close attention to what DMX says to Nas while driving through Omaha, or just watch and listen from 0:13 to 2:54 here:
http://www.youtube.com/watch?v=eWigmCaWg2s&feature=fvsr
Yeah, its just a movie but - it sums up most of the people who I know who are like this *perfectly*.

Well I do not think most of the population are Nhilists, so I don't see how that could be the main cause of crime......not saying poverty automatically=crime, but at the same time when someone really has nothing to lose and would like to survive crime might be what they turn to. But it's ok when the 1% who own the most powerful corporations and are the ones paying the government commit crimes because well they have so much wealth and power it would be a bad move to call them on it.

No, I think we all love to watch the big guys fall even more than the little guys. At worst though people get blackmailed into backing certain people right or wrong because, if they're politically tied, we have a two-party system where the best of your aspirations cast through a vote rise and fall on the decency or stupidity of your elected officials, so in general most 'oh, let it slide' tends to be psychosis revolving around that.

As for nihilism, if you didn't check the youtube link I sent - people have no cause to live, find they have strength, know what feels good and what hurts in the immediate term, and if nothing matters they take the initiative to take whatever they can from those who they feel are weaker or softer than themselves. 'Thugging it' or being a chav are really De Sade'isms.

Well not all crimes are violent or geared towards causing harm towards people you see as weaker or softer...some people just sell drugs to put food on the table, which does not always have to trace back to any horrid violence in south american even though a lot of cannabis is grown right here in the U.S by people who have not done much to hurt anyone. My point was more when people cannot have their basic needs met and some quality of life through the legal socially acceptable means they will deviate from that and find another way.

Cold comfort to the people who are unemployed.

My place is worth thousands of dollars less than what I bought it for just before the recession hit. That makes things like selling and moving a challenge.