Can we have a civil, thoughtful discussion on this?

Discussion in 'Economics & Trade' started by Kode, Jan 11, 2017.

  1. Ndividual

    Ndividual Well-Known Member

    Joined:
    Aug 21, 2013
    Messages:
    3,960
    Likes Received:
    638
    Trophy Points:
    113
    When making claims as above, please show the $ figures for comparison.
    And it would help to know what you're referring to as being a 'typical man'.
     
  2. AFM

    AFM Well-Known Member Past Donor

    Joined:
    Dec 15, 2014
    Messages:
    35,789
    Likes Received:
    8,618
    Trophy Points:
    113
    In a recession the economy shrinks. Recessions are usually caused by gov policy blunders. The recent housing bubble / financial crisis was a doozy of an example of that. Supply side policies were responsible for quick recoveries from these recessions. Reagan actually had to create a recession to curb inflation in the early 80's before economic growth sky rocketed. Bush 43 also implemented supply side policies in the recovery from the dot.com and 9/11 recessions. Clinton implemented supply side by triangulating with the R's to generate budget surpluses (~ 25% of the total surplus was due to increased cap gain revenues after the rates were lowered). The Obama recovery was the slowest since the GD - many still felt that there was a recession at the end of his term in 2016 although the recession had ended in 2009.
     
  3. AFM

    AFM Well-Known Member Past Donor

    Joined:
    Dec 15, 2014
    Messages:
    35,789
    Likes Received:
    8,618
    Trophy Points:
    113
    And who would run this supra government ?? Hitler, Stalin, Mussolini, Mao ?? The problem with command control is that a very strong command person is needed. What could go wrong ??
     
  4. Ndividual

    Ndividual Well-Known Member

    Joined:
    Aug 21, 2013
    Messages:
    3,960
    Likes Received:
    638
    Trophy Points:
    113
    At least we seem to agree that the abilities of individuals and nations vary greatly.
    There is no single system which achieves equal results for all. Ideally, each individual should focus on their self-interest in the application of their abilities, putting them to use lawfully in pursuit of success, accepting failure, and learning from their mistakes. Competition is natural, and the primary source of our progress. A free market, regulated in ways that ensure consumer safety, eliminate monopolies, and induce competition will always experience some ups and downs. The demand for some production, food for example remains somewhat constant, while much of todays other production does not and while a great years sales may result in employment growth, it may result in greatly diminishing sales and job losses for several years afterwards. When demand is high, inflation can occur temporarily as it becomes a sellers market. When demand is low, offsetting deflation should be allowed to occur making it a buyers market. For the last century government has attempted to force economic growth and prevent deflation from occurring creating a huge debt bubble, and a constantly rising cost of living which has had great negative effect on the poorest, stagnated growth of the middle classes, and created a great disparity between the wealthiest and all others. Government in an attempt to alleviate this has created a great many aid programs to mask the problem of inflation, which only compounds the problem perpetually for all but the wealthiest and the government.
    Up until the 20th century our American system was based more or less on individual self interest, competition and free markets, and then was fundamentally changed in 1913 to what has become much more a collectivist system, greatly indebted, and becoming less capable of competing in a world market as a result of inflation at home.
     
  5. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,311
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    And exactly what does "paid a wage relative to the value of the function they perform" mean? Are they paid what they are worth or not? They are not.
     
    Last edited: Apr 26, 2017
  6. Econ4Every1

    Econ4Every1 Well-Known Member

    Joined:
    Jan 3, 2017
    Messages:
    1,402
    Likes Received:
    302
    Trophy Points:
    83
    I think of a privilege as something that is granted. I wouldn't call it "privilege", I would call it "advantage".
     
  7. a better world

    a better world Well-Known Member

    Joined:
    May 8, 2016
    Messages:
    5,000
    Likes Received:
    718
    Trophy Points:
    113
    Firstly, a supra-national financial institution, eg, Keynes' postulated 'Clearing Union', is not a 'global government',
    but is machinery established by agreement solely to manage imbalances in global trade, to avoid trade disputes and currency wars., and to foster economic development generally, as opposed to, eg, IMF-mandated. growth destroying 'austerity'.

    National governments remain free to legislate as they see fit, for their own citizens.

    [However, Ndividual believes citizens in any one nation should be free to live or die by their own wits, surely a limited view of life, given that each one of us loves life, whatever our particular gifts or aspirations.
    Competition and self interest are indeed natural, but poverty should never be an outcome of the competition.
    (In a sporting competition, the losers have the chance to regroup and try again next week)].
     
    Last edited: Apr 26, 2017
  8. Ndividual

    Ndividual Well-Known Member

    Joined:
    Aug 21, 2013
    Messages:
    3,960
    Likes Received:
    638
    Trophy Points:
    113
    What is a person worth?
    Two unemployed persons apply and gain employment as burger flippers, one is a recent high school dropout while the other until recently was a research scientist with a Doctorate degree. Both are being paid the same wage, $7.25 an hour. Their wage is relative to value of the function they being employed to perform. It has nothing to do with what the person might be worth, only the job they are being paid to perform.
     
  9. Ndividual

    Ndividual Well-Known Member

    Joined:
    Aug 21, 2013
    Messages:
    3,960
    Likes Received:
    638
    Trophy Points:
    113
    priv·i·lege
    noun
    1. a special right, advantage, or immunity granted or available only to a particular person or group of people.
    verb
    1. grant a privilege or privileges to.

    ad·van·tage
    noun
    1. a condition or circumstance that puts one in a favorable or superior position.
    verb
    1. put in a favorable or more favorable position.

    Yes, a privilege could very well produce an advantage.
     
  10. Ndividual

    Ndividual Well-Known Member

    Joined:
    Aug 21, 2013
    Messages:
    3,960
    Likes Received:
    638
    Trophy Points:
    113
    Poverty need not be a permanent situation, and just like the losers in sporting competition, diligent effort produces greater positive results than does blaming the winners.
     
  11. AFM

    AFM Well-Known Member Past Donor

    Joined:
    Dec 15, 2014
    Messages:
    35,789
    Likes Received:
    8,618
    Trophy Points:
    113
    Kinda like the corrupt IMF ?? What could go wrong ?? Capitalism and specifically supply side policies have brought more people out of poverty than any other system.
     
  12. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,311
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    Not true. The wage you're referring to is called the "starting wage". After some time and observation of performance, a person's wage is usually adjusted to reflect what he is worth to the capitalist. But even that is not what he is actually worth regarding his production.
     
  13. Econ4Every1

    Econ4Every1 Well-Known Member

    Joined:
    Jan 3, 2017
    Messages:
    1,402
    Likes Received:
    302
    Trophy Points:
    83
    Sure, but you can have an advantage without privilege.
     
  14. Ndividual

    Ndividual Well-Known Member

    Joined:
    Aug 21, 2013
    Messages:
    3,960
    Likes Received:
    638
    Trophy Points:
    113
    The wage presented was the 'minimum' wage, mandated by government for most jobs. It may indeed be the starting wage for some jobs, and could be the only wage for some if they are not intended to be lifetime career jobs. Career jobs, where experience and efficiency can grow and make the employee more valuable to the employer are usually the basis in which wage increases result.
    The question remains unanswered, "What is a person worth?"
    Two auto manufacturers, Ford and Ferrari, each have employees performing the same function, but one is working on autos priced at $20,000 while the other is working on autos priced at $200,000 should their pay be based on the price of the car?
     
  15. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,311
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    In economics and employment, as opposed to parenting and marriage ;), a person's worth is based on how much value he can create for the employer.
     
  16. AFM

    AFM Well-Known Member Past Donor

    Joined:
    Dec 15, 2014
    Messages:
    35,789
    Likes Received:
    8,618
    Trophy Points:
    113
    That's ridiculous.
     
  17. Ndividual

    Ndividual Well-Known Member

    Joined:
    Aug 21, 2013
    Messages:
    3,960
    Likes Received:
    638
    Trophy Points:
    113
    So a persons income worth is what a prospective employer is willing to pay him/her?
     
  18. a better world

    a better world Well-Known Member

    Joined:
    May 8, 2016
    Messages:
    5,000
    Likes Received:
    718
    Trophy Points:
    113
    Nothing like the IMF, which is merely another bank that fleeces funds out of borrowers who cannot reasonably pay; your straw-man is noted.

    Supply side did not prevent the 5 decade long destruction of Detroit (but the results are the same as if Japan and Germany had bombed the city for a couple of hours).
     
  19. AFM

    AFM Well-Known Member Past Donor

    Joined:
    Dec 15, 2014
    Messages:
    35,789
    Likes Received:
    8,618
    Trophy Points:
    113
    No straw man. The intent of the IMF is the same as what you propose but that never works in the real world.

    The destruction of Detroit was the accomplishment of Democrats implementing the Blue Model which is shown again to not work. The US was doing great under supply side but not Detroit under governance by Democrats. Where does the bombing of Detroit by Japan and Germany come from ?? WWII ?? If so that's bizarre.
     
  20. a better world

    a better world Well-Known Member

    Joined:
    May 8, 2016
    Messages:
    5,000
    Likes Received:
    718
    Trophy Points:
    113
    Not necessarily, but in any case, since there is no shortage of necessary resources (given modern global productive capacity), the 'value' of work ought to be adjusted by government in cases where market forces would otherwise dictate poverty level existence for certain workers. Life is more than consumption.

    So to expand the topic a bit:

    Another task for the public sector is the creation of work where private sector activity is insufficient to engage the available workforce, eg workers could be quickly trained to staff police stations around the clock, that would otherwise would have to be un-manned. (The public sector could print such funds, with infinitesimally small effects on inflation).

    Another interesting example of productive local work creation that could be enabled by money printing through a supra-national public sector agency: let's assume there is a sufficient fibre-optic cable in the world to connect every dwelling via broadband to the Web. This could probably be achieved in a decade, given much of the required work is
    low-skilled, so training times would be relatively short. As it is, most of the world will remain unconnected in a decade, just as the people of Haiti are still living in tents a decade after the earth-quake.
     
  21. a better world

    a better world Well-Known Member

    Joined:
    May 8, 2016
    Messages:
    5,000
    Likes Received:
    718
    Trophy Points:
    113
    You should study Keynes' Bretton Woods proposals for a global post-war economy. The actual IMF as instituted by the US was an abortion designed (by Harry White) to hasten the demise of the British Empire

    The analogy related to the effects on Detroit of post war competition from the Japanese and German motor industries. (sorry it flew over your head.) 5 decades ago you could see Chevs and Fords all around Asia. Now you see Toyotas and Mercs everywhere.
     
    Last edited: Apr 27, 2017
  22. Ndividual

    Ndividual Well-Known Member

    Joined:
    Aug 21, 2013
    Messages:
    3,960
    Likes Received:
    638
    Trophy Points:
    113
    Many resources production depends on are becoming scarcer and more costly as a result. Fresh potable water, phosphorus needed for agriculture, and rare earth elements, just to name a few. Government, frequently attempts to adjust the value of work by mandating a minimum wage which can result in raising the income of some while as a consequence creating more unemployed, inflation, a higher cost of providing assistance to those who are un/under-employed, and a reduction of the middle classes.


    Printing money or taxing people to pay for things which are neither needed nor wanted is not a solution to the problem. Government could hire and pay people to dig holes and other people to fill them back up as the means of providing them work to earn a living. We appear to recognize as fact that population exceeds our needs, but refuse to address it as the problem needing a solution.
     
  23. Econ4Every1

    Econ4Every1 Well-Known Member

    Joined:
    Jan 3, 2017
    Messages:
    1,402
    Likes Received:
    302
    Trophy Points:
    83
    So let's be clear, labor, like anything else, is an expense on the input side of goods and services, but it's also a factor in the potential output side as well. The problem with the question of a person's "value" in terms of their salary is that it changes based on the supply/ demand of labor in a given field. If there are 100 applicants for a job, all who are of equal skill, the salary paid by the employer for that job, all things being equal, is likely to be less, than if there were just 5 applicants for the same job. The best measurement of a "person's value" is when the need for employment and the number of people looking for employment are close to equal. If there are 1000 potential employees for every job available, the "value" of that job will decline, conversaly, if there is 1 emplyee for every 1000 jobs, you'll have the opposite.

    That sounds like market forces at work, but this creates a problem if there are too many unemployed people. Employers, individually, are incentivized to hire as few people as possible to achieve any given amount of productivity, however, paradoxically, as employers reduce the number of people required to do a job via efficiency increases, thus reducing their costs and potential reducing their prices, also potentially, reduce the number of people capable of consuming the products they create. Thus lowering the input costs for goods impacts the consumption rate of those same goods. You may also counter by saying that you think the markets should simply adjust to the new market reality of high unemployment and that higher unemployment will lead to lower wages which employers will benefit from and this, in turn, will allow them to lower prices. However, in the global economy, there is little evidence to substantiate this position because increased unemployment, while it may lower the cost of labor, it also decreases the number of people consuming goods and services within the economy.

    In the past, efficiency increases have allowed people to move to emerging markets, but increasing efficiency and importation of foreign goods, especially in manufacturing is reducing the number "lateral moves" a person can make within the employment market. The problem with a decreasing wage is that is exploits desperation and, in a society where we are empathetic for the hungry, the homeless and the sick and injured it just transfers the burden of paying for their basic needs to the state. Why should we expect the state to pay for working people to have the bare necessities? Aren't we just subsidizing the private sector at that point? I would think you'd be against the kind of bureaucracy that creates when people are dependent on the government to receive the necessities. Making sure people earn enough in their own paycheck empowers them to spend their money in the markets and thus the market is shaped by market forces not the state...right?

    Now having said all of that, I'm not a particular fan of the minimum wage because it does not adjust well for regional differences in the cost of living. It costs more to live in NY and SF than it does in El Paso. I'd instead support eliminating the minimum wage and institute a Job Guarantee that pays a certain wage that's indexed to the costs of a particular area. The JG would set a "soft" wage floor and it would encourage prospective employers to innovate at the low end potentially hiring people below the floor in trade for valuable skills or perhaps even benefits like health insurance or child care work from home or something that the prospective employee might find of benefit. The JG would not be an alternative to a private sector job, rather a fallback as it would pay less than prevailing private sector wages, but in the event that there are job losses in the private sector, the JG prevents deflationary spirals. This ensures that people have the money needed to purchase the output of the private sector. Thus in good times the private sector would pay more and people would be lured away from jobs in the JG and when times are bad, people will fall back on the JG.

    The kinds of work that would be done by those in the JG are jobs that there is either a public need, childcare, and tutoring or mentoring, community beautification, music, conducting research (like polling). The list of potential jobs that will have litte of any conflit wih the private sector area virtually limitless.
     
    DennisTate likes this.
  24. AFM

    AFM Well-Known Member Past Donor

    Joined:
    Dec 15, 2014
    Messages:
    35,789
    Likes Received:
    8,618
    Trophy Points:
    113
    Keynesianism has been debunked.

    The reason you see those cars in Asia is globalization and protectionism in Asia.
     
  25. Kode

    Kode Well-Known Member

    Joined:
    Feb 5, 2016
    Messages:
    26,311
    Likes Received:
    7,461
    Trophy Points:
    113
    Gender:
    Male
    So then, you've never gotten a raise and still work for minimum wage. Nice.
     

Share This Page