swbluto
Veteran
Joined: 26 Feb 2011
Age: 37
Gender: Male
Posts: 2,899
Location: In the Andes, counting the stars and wondering if one of them is home to another civilization
01 Nov 2011, 9:14 am
ToughDiamond wrote:
marshall wrote:
I think most politicians are idiots. I'd love to see a truly objective treatise on the subject of economics, but it seems most economic claims are based on ideology rather than pure science.
Yes, even Marx has an axe to grind, though his work was a welcome counterbalance to the presumptuous crap about economics that was written before that (and still is written). I guess it's rather like religion....it's hard to find anybody who doesn't have strong views. Also the economy is such a complex thing that it's hard to say anything about it that's simple enough to understand and to use, without introducing distortions.
Quote:
My personal theory is that the uneven growth of new technology and technological infrastructure is the underlying mechanism behind the biggest booms and busts. If it was just technology fueling the cycle then you would have booms associated with big advances in technology which leads to increased entrepreneurial activity, followed by stagnation as the biggest companies are able to produce more and more while spending less and less on labor. The most extreme theoretical case would be the development of robotics replacing the need for human workers almost completely. The reason we often have sharp downturns rather than just stagnation after a major boom is due to the unrealistic growth expectations which drive financial speculation and turn booms into a bubbles that burst suddenly.
It's often been suggested that if a government controlled the commanding heights of the economy, there would be no recessions, because they could simply move the workforce on to doing something more useful as soon as whatever they'd been making was enough to satisfy the public need. I believe this is what China does - when export demand is low, they channel the surplus labour into infrastructure projects. What always strikes me about recessions is that they are so irrational, i.e. nobody is any less willing or capable of a productive day's work than they were during the boom years, but entrepeneurs, shareholders and banks get scared and withdraw their faith and support, because they are free to do so.
Also on the topic of the economy, it seems like the socially optimal economic strategy during recessions is to lower wages as opposed to cutting workers, but yet that's what America does. So, suddenly, you have a group of unemployed people desperately trying to find jobs that don't exist and they end up in debt and other sorts of financial calamity. But, hey, it's optimal for the companies to cut the least productive workers and squeeze ever more producivity from existing workers in order to maximize profits, so that's obviously the best way to do business; increase company profits for the upper class shareholders at the unemployed's expense.
(I'm aware that wages can't be decreased where the job's wage is near minimum wage, which is one problem of minimum wage laws.)
01 Nov 2011, 9:35 am
swbluto wrote:
I understood money when I was 5. I understood money management when I was 16, thanks to Robert Kiyosaki's "Rich Dad Poor Dad" book.
I have read that book too
01 Nov 2011, 9:52 am
swbluto wrote:
it seems like the socially optimal economic strategy during recessions is to lower wages as opposed to cutting workers, but yet that's what America does. So, suddenly, you have a group of unemployed people desperately trying to find jobs that don't exist and they end up in debt and other sorts of financial calamity. But, hey, it's optimal for the companies to cut the least productive workers and squeeze ever more producivity from existing workers in order to maximize profits, so that's obviously the best way to do business; increase company profits for the upper class shareholders at the unemployed's expense.
It's good from the narrow viewpoint of the individual business maximising its return on invested capital. But from the broad viewpoint of running the country, it's not good.
Quote:
(I'm aware that wages can't be decreased where the job's wage is near minimum wage, which is one problem of minimum wage laws.)
Assuming that redundancy and pay cuts are the only options, yes. Though I'm still not convinced that there's any need to impose any kind of austerity on the masses. I can't prove there's no need, but I have yet to see the proof that there is. Given the horrific nature of government-imposed austerity, I think we're entitled to a comprehensive explanation and then a referendum.
01 Nov 2011, 9:59 am
01 Nov 2011, 12:06 pm
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