Krugman has been consistently wrong throughout the years. The latest is his prediction that the stock market would crash when Trump was elected and that it would take years (actually never) to recover.
Okay...then I guess you will go with "Economic for Dummies!" I did mention Paul Samuelson also, though...right?
I will go with Econ 101 as confirmed by Paul Samuelson: http://www.econlib.org/library/Enc/MinimumWages.html
Ouch! ****** Paul Samuelson said that? I guess I shunta used him. I apologize. I was wrong, I screwed up. Mea Culpa. Okay...so I wanna go with Nobel Laureate Paul Krugman. Anyway...the Card, Krueger study done here in New Jersey...seems to indicate that a rise in minimum wages does not have the debilitating effect that has been supposed. http://www.nber.org/papers/w4509 And if it ever is shown that increasing the minimum wage hurts employment...we should infer that reducing it (or eliminating it as you suggest) should really increase employment. And with that, I agree as I mentioned earlier. Let's allow companies to pay workers $1.25 per hour...and we should get most of those jobs we've lost to the third world back. We'd have full employment. Everyone would be hiring...and every Tom, Dick, and Harry would be working. Right?
No problem. The book "Minimum Wages" - Neumark & Wascher - MIT Press - 2008 discusses the Card - Krueger paper (1995) whose results are inconsistent with the rest of the literature which shows an increase in unemployment as minimum wage is raised. More low productivity workers would have jobs but high productivity workers would not work for very low rates. We would not have full employment.
It depends on the circumstances including elasticity, how far the minimum is from equilibrium, etc. The key point is that minimum wages, like welfare, rent control, and a hundred other harmful policies, are a band-aid solution for the real problem: the removal of people's rights to liberty by privilege. If people had their rights, they wouldn't need so many government interventions to rescue them from enslavement by the privileged. The chief economic effect of minimum wages is simply to reduce the rents of commercial and industrial locations suitable for minimum-wage employment, and increase the rents of residential locations suitable for minimum-wage workers. So they don't have much effect on employment, but also do not actually help low-skilled workers much. Not that simple. See above.
The full transcript is a good way to look at this as well....... http://www.ted.com/talks/nick_hanau..._pitchforks_are_coming/transcript?language=en 3:11 3:52 He is certainly correct that some changes do have to be made.
BIG BANKING IN AMERICA PROTECTS ITS OWN No, the real fact of the matter was that Main Street bankers were creating mortgages based upon lies - that is, falsified information regarding the personal financial condition of the mortgagor (borrower) by the mortgagee (lender). This loan documentation, because it was unregulated, was a common lie in the practice, and the result was that these mortgages were given Triple-A ratings without ever being investigated by the Big-3 credit rating agencies (S&P, Fitch & Moody's"). (The mortgaging fraud was massive and, had the process been overseen adequately, the business volumes would have been negatively impacted.) Whereupon, with unverified credit-ratings, the mortgages were resold by lending banks to Investment Bankers who packaged them and, in turn, sold them to the world. Thus the initial mortgage-money was returned by the Investment Bankers and then to Main-Street Banksters to be lent once again. That's how mortgaging works everywhere in the world. But, "everywhere else" has much stricter guidelines regarding confirmation of the mortgagor's ability to repay the mortgage. For instance, here in France, if prospective mortgagors cannot justify accurately (payslips) of their income, they might not get a mortgage loan according to the amount they desire - or at all. That's how the "real world" works - and the US does not. In the US, during the "wild years" of the housing frenzy (just after the turn of the century) banks were writing mortgages left and right. Because the mainline thinking was, "Well, if they don't make their payments, we just repossess the property!" Which works well enough in "normal times". But the amount of the "failed-payment" mortgaging was so great that banks ended up owning enormous amounts of property - and no income on those properties. So, they were threatened with failure due to the "bad debt". Which is why Obama's government had to step-in and lend them the money to meet their reserve requirements. (Whilst Obama - as a condition - put oversight management onto the banksters Board of Directors.) I am not the least bit sorry to bust your little bubble of a lie regarding how the Great Recession happened. Because, in fact, BigBanking deserved what happened due to the "mortgaging fraud" - for which inevitably NOBODY WENT TO PRISON. Wanna know why? Read here: How Wall Streets Bankers Stayed Out of Jail (Sept. 2015). Excerpt: BigBusiness and especially BigBanking in America "protects their own" - and its the little guys-'n-gals who pay for the consequences (which are called "recessions" and causes banks to repossess properties of those families that have insufficient income) ...
DARWINIAN SURVIVAL OF THE FITTEST There is nowhere in the world today that would be convinced by the above thesis. Thought regarding "financial reform" in any country or group of country's is far too fractioned. Frankly, the world is in the middle of a Recessionary Crisis and "reform" is not the least bit suitable a discussion in such times. (Though, evidently, that is exactly what is needed.) Europe is very much afraid of Trump based mainly on the fact that he is warming up to Putin. And for whatever negotiation that might be held between the two, the Ukraine will be the main "sticking point". Obama defended the EU, which was solidly behind the Ukraine's desire to withdraw from Russian hegemony. Which is why Putin invaded its nearby provinces. Just this past week, Putin has reinvigorated the fighting and people (both combatants and non-combatants) are dying. Trump has cockamamie solutions to problems that are not problems - like keeping out the Mexicans who are the only ones who will tend to America's garbage-mountain and other such menial jobs that "Amurikuns" shy from. Trump has a number of "Rasputins" - foremost of which are Bannon and Sessions. They have his ear, for about as long as his attention-span gets. A minute or so. He's smart enough to capture thinking that pleases him, as long as it coincides with his warped view of the world. Which is really quite simple: "The rich dominate the poor who are weaklings." Ie., life is a Darwinian survival of the fittest. The guy is empty-of-self-reflexion. He is driven by greedy self-admiration and expects false-admiration of all who surround him. And if you are a woman, you can kiss his you-know-what. (And I leave that word to your imagination.) Nobody loves Trump more than Trump himself. And this guy is "leading the nation"? Wow - am I ever glad I'm simply spectating from thousands of miles away ... ... - - - Updated - - - And as for the Muslims: Given the ability of ISIS to foment killing and assassination in at least three or four instances in Europe, keeping out its protagonists has no small face-value. The total number of ISIS killings in Europe is now around 130 persons. See here: Which is food for thought - though getting into Europe is far easier for ISIS than getting into the US. Though, the one news paper has estimated at 850 the number of English-speaking combatants who have come from England.
Why not read and reference books instead of magazine articles from the Atlantic which have nothing to do with the financial crisis ?? The housing bubble and financial crisis are actually two different things although the collapse of the housing bubble resulted in the financial crisis. The housing bubble was caused by the lowering of lending standards due to the HUD requirement that Fannie and Freddie make a set percentage of loans to low income borrowers. This policy was initiated by Bill Clinton and was based on an interpretation of the Community Reinvestment Act. At the end of Clinton's term that percentage was 50%. This was increased to 55% by the Bush administration. The lowering of the lending standards was used by unscrupulous mortgage lending firms like Countrywide and New Century to make many other high risk loans. Adding to the housing bubble was the easy money policy of the Fed which made loans easier to afford due to low interest rates. The housing bubble suddenly burst in 2008. This was similar to the dot.com bubble which burst in 2001 and recovered from by 2003 but why was the financial industry so terribly affected this time. The financial crisis triggered by the housing bubble collapse was the result of a combination of financial and banking regulations going back to 1936 (See the list below). Mortgage backed securities have been around for years before the 00's. They are securities formed by conglomerating home mortgages and are a way for investors to earn a return through the housing market. They have historically been very safe investments. The HUD housing policies however resulted in a portion of the MBS's created in the 90's and 00's to consist of the subprime and other low standard loans. The Basel rules were based on the assumption that securities consisting of home mortgages were of very low risk. Therefore the reserve requirements for MBS's were set at a very low rate of 5%. This meant that for every $50K of MBS's that a commercial or investment bank had it could make loans totaling $1M. Since banks make money from loans they would use the investment vehicles with the lowest reserve requirement. And very many of them did. They bought AAA rated MBS's (the ratings were determined by the National Ratings Agencies - Fitch, Moodys, and Standard and Poors). This was required by gov regulation. But the ratings agencies were not doing due diligence on the make up of the MBS' which was unknown to the banks involved who trusted the ratings and Basel guidelines. Collapse of the housing bubble caused foreclosures in the subprime mortgages especially. This created fear and uncertainty in the value of the MBS's even though they were still paying ~ 90% of their returns. The market price dropped (in some cases a price could not be determined because no one was interested in buying). This is where the mark to market rule came in resulting large paper and consequently the banks reserves falling below the already low 5%. The bailout from the gov started out as TARP which was passed to buy up all these MBS's which had now large paper losses due to mark to market. It was quickly changed however to give money directly to the banks so that they could bring their reserves up to the 5% level. Bear Stearns was bailed out but Lehman was allowed to fail. This resulted in uncertainty and the credit markets froze (none of the banks wanted to lend to other banks who might not be bailed out). Some commercial banks like WaMu also had MBS's in reserve and ended up being taken over. The analysis of what happened is contained in the book by Friedman and Kraus – “Engineering the Financial Crisis” – 2011. As can be seen these rules were issued over the years with no analysis on how they might conspire together to set up a catastrophic house of cards situation due to the homogenization of asset mix held by many of these investment houses. Collapse of the housing bubble which affected these assets including MBS’s (whose contained loans were still paying at ~ 80%) then lost value due to the market price dropping way below value triggering large paper losses due to mark to market accounting rules. This reduced the capital and lending capacity of the banks due to Basel I and the Recourse Rule (an adoption in the U.S. of part of what later became Basel II), which specify those capital requirements. The conflation of all of this resulted in the financial (really the banking) crisis. The authors also show that the repeal of Glass Steagal had nothing to do with the financial crisis. Glass Steagal prevented the mixing of private deposits with investments and that was not a factor. Here are the set of regulations: 1. SEC Regulations from 1936 requiring mandated minimum ratings for a growing number of institutional investments. 2. SEC decision in 1975 to confer NRSRO on the big three ratings agencies. 3. Basel 1 from 1978 which established favorable risk weighting for mortgages and GSE issued MBS’s. 4. Mark to market accounting established by FAS 115 in 1993 and refined by FAS 157 in 2006. 5. HUD targets for mortgages to low-income families in the late 1990’s resulting in reduction of down payment requirements for the GSE’s. ++ 6. Recourse Rule issued by the FED, FDIC, and Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Here are some excerpts from an editorial from the WSJ: http://online.wsj.com/article/SB10001424052970204468004577166723093578272.html Google – The Meltdown Remains a Whodunit Here is a Reading list for you - The top 8 are in my unofficial order of importance: Engineering the Financial Crisis - Friedman & Kraus - 2011 Fannie Mae & Freddie Mac - McDonald - 2012 Senseless Panic - William Isaac - 2010 Bad History, Worse Policy - Peter Wallison - 2013 “Government Housing Policies in the Lead-up to the Financial Crisis: A Forensic Study” - Pinto http://www.aei.org/wp-content/uploa...-to-the-Financial-Crisis-Word-2003-2.5.11.pdf What Caused the Financial Crisis - Edited by Friedman - 2011 Reckless Endangerment - Morgenson - 2011 Bull by the Horns - Sheila Bair - 2012 All the Devils are Here - McLean - 2010 The Housing Boom and Bust - Dr. Thomas Sowell - 2009 Getting Off Track - Taylor - 2009 Bail Out Nation - Ritholtz - 2009 The Great American Bank Robbery - Sperry - 2011 Shakedown - Malanga - 2010 A Capitalism for the People - Zingales - 2012 Debacle - Norquist - 2012 America's Ticking Bankruptcy Bomb - Ferrara - 2011
I understand your point...but the cost of "labor" is almost always the factor of production that is first cut...and most severely cut. In any case, cut the minimum wage enough...and everyone will employ people...to cut the lawn, clean the babies diapers, serve dinner...all that crap. Once again...I understand what you are saying...but take the bottom out of labor costs...and the "privileged" as you call them, will eat 'em up alive. We will go back to a baron/serf state...which we may nearing.
Thx for presenting actual facts That said, a 500b trade deficit is a 500b deficit regardless of the amount of profit It appears that china may be accumulating dollar denominated foreign reserves from trade deficits from man countries other than the USA. Sadly we have trade deficits with many countries. These deficits are ultimately a potential claim on real American assets
Because it's either a variable cost, or a fixed cost that is no longer considered necessary or profitable when a firm is in difficulty. There is certainly plenty of work to be done. The problem is that our system makes it too expensive to live, or to employ people, because each productive worker has to support too many parasites, especially rich ones. Think about the alternative: taking the bottom out of labor costs is not a problem if we also take the bottom out of living costs by restoring people's rights to liberty. Perhaps 1/3 of production costs consist of gratuitous support for rich parasites. Cutting them off will make us far more competitive than increasing labor costs.
Good ideas...but good luck getting that going. Mostly what is going to happen is that the rich and privileged few are going to buy the labor of the numerous poor for AS LITTLE AS POSSIBLE...and say, "Screw them. They are idiots for being poor." The answer probably will be found in a guaranteed income...with as little work requirement as possible. Let's enslave the machines...and get them to do as much of the work as we can throw their way.
Macmillan Dictionary: Competition: ▸ noun: the act of competing as for profit or a prize ▸ noun: a business relation in which two parties compete to gain customers ("Business competition can be fiendish at times") ▸ noun: an occasion on which a winner is selected from among two or more contestants ▸ noun: the contestant you hope to defeat ("He wanted to know what the competition was doing") My turn: Please look up the definition of "eschew."
There you go: a business relation in which two parties (employers) compete to gain customers (employees) ("Business (hiring) competition can be fiendish at times") Workers will eschew low paying jobs if better wages are available elsewhere. And the Trump 4% growth economy will provide many employment opportunities elsewhere.
Lemme just make a slight adjustment to what you had to say...and I hope it conveys my sense of the problem: Workers will eschew low paying jobs if better wages are available elsewhere. And the Trump 4% growth economy will provide many employment opportunities elsewhere.
But the Trump 4% growth economy will provide many more employment opportunities than the Obama 2% economy. There is no "if" about that.
