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Lumpenproletariat

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The Citizens dividend appears to be just a different version of "crybaby economics". Once you utter "deserve a larger share", it is "crybaby economics".

No, the words "share" and "deserve" are not always crybaby ideas. ... "Crybaby Economics" best describes the protectionist trade economics of demagogues like Bernie Sanders and Donald Trump. ...
The whole point of calling certain economic ideas "crybaby economics" is to insult those ideas, insult the theorists who advocate those ideas, and insult the voters the advocates of those ideas attract the votes of. Debating what is or is not "crybaby economics" therefore amounts to debating who should be insulted.

No, that's not what the debate is. It's legitimate in a debate to clarify a term which is being misused, as the term "crybaby" was misused here. This term has a legitimate use. Just because it has an "insult" element to it does not make it illegitimate. It's OK to use a strong term for emphasis.


Who should be insulted is not a scientific question.

That's not the question here. There is a secondary question about what "crybaby" means, which should be clarified. But the main question is why benefits should be given to some which end up making society worse off overall because of the costs imposed onto everyone else.


So if you think Economics belongs in the Science section rather than the Political Discussions section, you should stop using the word "crybaby".

No, it's OK to use an "insult" term, or metaphor, as long as the meaning fits the logic of the one being insulted.

E.g., what is the reasoning of someone who demands lower gas tax?

They ignore the damage done by carbon emissions and demand something which gives instant gratification to people now, at a cost to someone later, whose interest is ignored, who must pay the cost for the instant gratification we want now.

That's what a baby does, who has no idea of the cost for whatever it demands. All it knows is what it demands now, and throws a tantrum to get what it wants, regardless of the cost or sacrifice someone has to make.

So it's a "crybaby" demand when some interest group demands something which all the rest of us have to pay for, or later generations have to pay for, or suffer the consequence for. While the one demanding it doesn't care that the someone else has to pay for it, or suffer the consequences. They ignore that cost others have to pay and just pretend that it's only their narrow interest that matters. Or they pretend there is no cost or damage to others.
 

laughing dog

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No, "crybaby economics" doesn't just mean someone demands more, like "a larger share" of something. Some such demands are legitimate.
From your many walls of text, it is clear you object to proposals that somehow subvert "the market" outcome (for example, minimum or living wage proposals) - you call them "crybaby economics". Well, your proposal subverts the outcome of "the market". So, it is an example of "crybaby economics".


In the meantime, why don't you make yourself useful and explain why certain categories of producers should be given special benefits the rest of us have to pay for, like protection against having to compete, and like being paid more than their supply-and-demand value in the market.
I believe we have a different view of what "being useful" means. Walls of irrelevant text (your MO) is not being useful in my opinion, but since you do, I will try it.

I understand traditional economic theory. I have studied it and used for a number of decades. I understand that it is an analytical tool that can be used to understand some parts of social interaction and social organization and can help construct policies to improve certain outcomes. I understand that economic theory has its limitations. Finally, I know that there are very few opportunities in the real world where a Pareto improvement (i.e. improving the welfare of some people without harming the welfare of anyone) is possible. Hence, almost every policy involves winners and losers. Which means that assessing the worthiness of such policy means making a political or moral judgment about relative importance of the winners and the losers. Most debates over policy revolve about disagreements the identification of the winners and the loses, and their relative importance.

Markets are a social construct. There are situations where markets are beneficial in my opinion. And, in my opinion, there are situations where markets are harmful.
I do not venerate markets. I do not assume market outcomes are necessarily good.
IMO, helping people survive or achieve a decent standard of living by intervening in market outcomes is not conveying a "special benefit" to them - it is acting in a humane and civilized manner. If it means "the rest of us" bear the cost, then we do. I would prefer that cost be minimized, but I realize that how people view the means by which something is achieved differently. So sometimes we use mechanisms (such as minimum wages or price supports) because they do not confer a stigma to the recipients. In my view, such stigmas (such as your "crybaby economics) are regrettable indicators of pointless moral judgments which hinder potential improvements in social organization and social justice.
 

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No, "crybaby economics" doesn't just mean someone demands more, like "a larger share" of something. Some such demands are legitimate.
From your many walls of text, it is clear you object to proposals that somehow subvert "the market" outcome (for example, minimum or living wage proposals) - you call them "crybaby economics". Well, your proposal subverts the outcome of "the market". So, it is an example of "crybaby economics".


In the meantime, why don't you make yourself useful and explain why certain categories of producers should be given special benefits the rest of us have to pay for, like protection against having to compete, and like being paid more than their supply-and-demand value in the market.
I believe we have a different view of what "being useful" means. Walls of irrelevant text (your MO) is not being useful in my opinion, but since you do, I will try it.

I understand traditional economic theory. I have studied it and used for a number of decades. I understand that it is an analytical tool that can be used to understand some parts of social interaction and social organization and can help construct policies to improve certain outcomes. I understand that economic theory has its limitations. Finally, I know that there are very few opportunities in the real world where a Pareto improvement (i.e. improving the welfare of some people without harming the welfare of anyone) is possible. Hence, almost every policy involves winners and losers. Which means that assessing the worthiness of such policy means making a political or moral judgment about relative importance of the winners and the losers. Most debates over policy revolve about disagreements the identification of the winners and the loses, and their relative importance.

Markets are a social construct. There are situations where markets are beneficial in my opinion. And, in my opinion, there are situations where markets are harmful.
I do not venerate markets. I do not assume market outcomes are necessarily good.
IMO, helping people survive or achieve a decent standard of living by intervening in market outcomes is not conveying a "special benefit" to them - it is acting in a humane and civilized manner. If it means "the rest of us" bear the cost, then we do. I would prefer that cost be minimized, but I realize that how people view the means by which something is achieved differently. So sometimes we use mechanisms (such as minimum wages or price supports) because they do not confer a stigma to the recipients. In my view, such stigmas (such as your "crybaby economics) are regrettable indicators of pointless moral judgments which hinder potential improvements in social organization and social justice.

Not to mention that we all bear the cost of maintaining a system that keeps people in poverty or near poverty. Too many work full time hours for too little pay and without decent health care, time away from work when ill or simply to rest and have a break. The cost to society is seen in the health care system and in the educational systems, especially.
 

Swammerdami

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Braess's Paradox

I think it is elegant how free markets often arrive at "correct" prices — prices which lead to resource usage which is most efficient. As a simple example where market mechanisms would be useful: The "external cost" of global warming should be factored into the price of carbon via gasoline and/or carbon taxes. (In the 1990's an alliance of environmentalists and libertarians passed the Clean Air Act which moved in that market-derived direction.) This would reduce the need for the hodge-podge of subsidies and regulations we've ended up with.

HOWEVER, the free market does NOT ALWAYS lead to optimality. In this post I mention a class of exceptions so surprising it is called a mathematical paradox. (These exceptions are very vaguely related to the Prisoner's Dilemma Paradox.)

The paradox is most visible in automobile traffic management. In 1990, traffic sped up the day New York's 42nd street was closed. The concept is applied by real-world traffic engineers, e.g. "A few years ago, traffic planners made the decision to tear down a 6-lane highway in Seoul, South Korea and replace it with a five-mile long park. Many transportation professionals were shocked, but surprised when the traffic congestion actually improved." These road closings might have been impossible if the roads were operated by private entrepreneurs as some libertarians espouse.

... there are very few opportunities in the real world where a Pareto improvement (i.e. improving the welfare of some people without harming the welfare of anyone) is possible. Hence, almost every policy involves winners and losers. Which means that assessing the worthiness of such policy means making a political or moral judgment about relative importance of the winners and the losers. Most debates over policy revolve about disagreements the identification of the winners and the loses, and their relative importance.

Markets are a social construct. There are situations where markets are beneficial in my opinion. And, in my opinion, there are situations where markets are harmful.
I do not venerate markets. I do not assume market outcomes are necessarily good.

I agree with laughing dog's post. But the "case against" markets is even stronger than he implies. There are situations where free markets lead to "solutions" which are worse for everyone!

I bring you ... (drumroll, please) ...  Braess's Paradox. I see that that Wiki page is much larger than the last time I looked; for example someone applied the Paradox to sports and quotes Helenio Herrera about soccer: "With 10 players our team plays better than with 11" Feel free to read the Wiki article and skip the rest of this post, which simply details a particular contrived example of the Paradox.


I'm copying verbatim from my long-ago post on The.Other.Message.Board. I should have embellished the example: pointing out the roads are built into mountain faces and cannot be widened, and that the ferries are expensive because the river is extremely wide at Ableton and Bakersville.

Drivers need to commute from Startburg to Endtown and have two choices.

Option A) They can take the road to Ableton, then the $45 ferry from Ableton to Endtown. A complication is that time is money and the time cost of traveling the road to Ableton varies with traffic: zero if the road is otherwise empty, $40 if all the vehicles traveling from Startburg to Endtown have taken this road, and proportional to the traffic for any amount in between. As we will see, half the traffic will use this road, so its time cost is $20, and the total cost of travel for drivers who use Option A is 20+45 or $65.

Option B) This option is very similar in effect to Option B. Take the $45 ferry from Startburg to Bakersville, then the road from Bakersville to Endtown, which has just the same cost schedule as the road from Startburg to Ableton.

Options A and B are essentially the same so half the traffic will pick (A) at random, for a total cost of $65, the other half will pick (B) for a $65 cost. If the use of (A) rises, its cost will rise while B's cost declines; smart consumers will then cause equilibrium to be restored.

Now an entrepreneur builds a new bridge from Ableton to Bakersville and charges only $2 as toll. The first driver to use this bridge is delighted. He drives to Ableton, losing only $20 in wait time, since half the traffic is still taking the old ferry from Startburg to Bakersville, pays $2 toll on the new bridge, then takes the Bakersville-Endtown road for another $20. Total cost is $42, significantly better than the $65 everyone else pays.

But the other drivers soon figure out the new route and they all take it. Since 100% of the traffic is now using both the Startburg-Ableton road and the Bakersville-Endtown road, each of those roads now costs $40 in wait time. With the $2 toll on the new bridge, the total cost to travel from Startburg to Endtown has gone up to $82, compared with the old $65 cost!

Now, at this point, what decisions do the market participants make? A driver can take the old ferry to Bakersville, but then he still has to travel on the congested Bakersville-Endtown road and ends up spending $85 instead of $82. Similarly, if he takes the old ferry from Ableton he ends up spending $85. Drivers can do no better than $82 or $85, even though they made the trip for $65 before the bridge was built!

And what about the entrepreneur who's operating the bridge? He can increase the toll to $4 and the drivers will still all be better off using his bridge. Drivers would all be better off if none of them took the bridge, but, regardless of other drivers' actions, each driver individually is better off paying $4 to take the bridge.



ETA: Here's a related Wikipedia page:  Downs–Thomson paradox. (I see just now that the dash between Downs and Thomson is a dash, not a hyphen. Is that "standard"? If you type a hyphen instead, Wiki will redirect to the dashed-page.)
 

Bomb#20

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... Finally, I know that there are very few opportunities in the real world where a Pareto improvement (i.e. improving the welfare of some people without harming the welfare of anyone) is possible. Hence, almost every policy involves winners and losers. ... So sometimes we use mechanisms (such as minimum wages or price supports) because they do not confer a stigma to the recipients. ...
Depends on how you measure welfare and what you mean by possible. A Pareto improvement is theoretically possible pretty much whenever there's a deadweight loss. And there are deadweight losses everywhere there's restraint of trade, which is to say, pretty much everywhere. Getting a Pareto improvement is just a matter of eliminating some deadweight loss and then applying whatever mixture of taxes and subsidies it takes to dole out the resulting gain among the affected parties to make it win-win. When the government is using import quotas to promote some domestic industry, it would do better to simply tax the product and use the money to give a domestic producer a subsidy.

But of course if workers feel stigmatized by their employer receiving subsidies, or if buyers accept high prices from manufacturers but get angry over taxes, what's economically possible and beneficial may become politically impossible or harmful. Economics isn't great at pricing emotions.
 

lpetrich

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Controlled by workers? Russian and Chinese communism tried that, both failed. ...
How were the workers there supposed to have done that?

Soviet and Chinese Communism was rule by a centralized, authoritarian party that claimed to be the party of the working people.

BTW, many right-wingers seem a lot like Marxists with their whining about how hard they work and how hard their heroes work. They also believe that there is an exploiting class, though they have a different identification of it than Marxists do. In particular, they claim that governments are exploiters and that taxation is exploitation of the working class.
 

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... Finally, I know that there are very few opportunities in the real world where a Pareto improvement (i.e. improving the welfare of some people without harming the welfare of anyone) is possible. Hence, almost every policy involves winners and losers. ... So sometimes we use mechanisms (such as minimum wages or price supports) because they do not confer a stigma to the recipients. ...
Depends on how you measure welfare and what you mean by possible. A Pareto improvement is theoretically possible pretty much whenever there's a deadweight loss. And there are deadweight losses everywhere there's restraint of trade, which is to say, pretty much everywhere. Getting a Pareto improvement is just a matter of eliminating some deadweight loss and then applying whatever mixture of taxes and subsidies it takes to dole out the resulting gain among the affected parties to make it win-win. When the government is using import quotas to promote some domestic industry, it would do better to simply tax the product and use the money to give a domestic producer a subsidy.
Even in theory it is difficult. Take your example. Taxing a product to support a domestic industry creates a deadweight loss to the consumers of the product. In theory, a policy that creates the potential for a Pareto improvement (the benefits to winners exceed the costs to the losers) requires that the losers get sufficiently compensated, otherwise there is no actual Pareto improvement.

But of course if workers feel stigmatized by their employer receiving subsidies, or if buyers accept high prices from manufacturers but get angry over taxes, what's economically possible and beneficial may become politically impossible or harmful.
That is an example where it is not a Pareto improvement because some people are made worse off.

That is why I think it is rare in the real world where a policy is a Pareto improvement: 1) the losers are not compensated in the real world, and 2) emotional judgments make people worse off.
 

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Even in theory it is difficult. Take your example. Taxing a product to support a domestic industry creates a deadweight loss to the consumers of the product. In theory, a policy that creates the potential for a Pareto improvement (the benefits to winners exceed the costs to the losers) requires that the losers get sufficiently compensated, otherwise there is no actual Pareto improvement.
Sure; but the point is that taxing the product creates a smaller deadweight loss than had been created by the original import quota. So when you get rid of the quota and impose the tax, the foreign producer reduces prices in order to increase sales. The foreign producer's profits go up due to the increased sales; the former buyers get richer because the price went down more than the tax went up; the domestic producer's profits go up even though the price went down because it's getting the subsidy; all these benefits are ultimately being paid for by the new buyers, but they're better off now too because they're getting a product they used to have to do without because the import quota had been holding down production.

That is why I think it is rare in the real world where a policy is a Pareto improvement: 1) the losers are not compensated in the real world,
But they could be. When you say there are very few opportunities in the real world where a Pareto improvement is possible, that's generally because the Pareto improvements are politically impossible, not because they're economically impossible. This suggests we might do better to focus on reforming our political system to make these improvements politically possible instead of throwing up our hands and saying "Fine, let's just resign ourselves to playing beggar-thy-neighbor".

and 2) emotional judgments make people worse off.
True -- man is not the rational animal. When we raise the minimum wage instead of having the working poor rely on social services because using social services makes recipients feel they're sponging off their neighbors, that isn't a rational reaction. Sponging a penny off of each of a thousand neighbors isn't any spongier than sponging ten dollars off of the one neighbor who got priced out of the job market by the minimum wage hike.
 

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Sure; but the point is that taxing the product creates a smaller deadweight loss than had been created by the original import quota. So when you get rid of the quota and impose the tax, the foreign producer reduces prices in order to increase sales. The foreign producer's profits go up due to the increased sales; the former buyers get richer because the price went down more than the tax went up; the domestic producer's profits go up even though the price went down because it's getting the subsidy; all these benefits are ultimately being paid for by the new buyers, but they're better off now too because they're getting a product they used to have to do without because the import quota had been holding down production.
There is no theoretical reason to expect a lower dead weight loss in your example. You have to make specific assumptions about behavior to generate a lower dead-weight loss.

But they could be...
f the losers are not compensated, then there cannot be a Pareto improvement because a Pareto improvement requires that no one is made worse off, not that they could be sufficiently compensate. Moreover, it doesn't matter what the reason(s) are. And they may not be only "political". In your example of substituting a tax for a quote, it may be impossible to identify every possible loser, let alone the amount necessary to compensate them.

If you are arguing that society should use the metric of a potential Pareto Improvement in its consideration of policy, you will get no argument from me. But even with that framework, there are issues. The economics profession debated these issues from the 1920s through the 1970s under the umbrella of "Welfare Economics". Chapter 5 in classis J. Van De Graf's "Theoretical Welfare Economics" gives a good discussion of those issues up to the mid 1960s. Chapter 2 in Per-Olov Johansons "An Introduction to Modern Welfare Economics" (published in 1991) also gives a succinct summary.

and 2) emotional judgments make people worse off.
True -- man is not the rational animal. When we raise the minimum wage instead of having the working poor rely on social services because using social services makes recipients feel they're sponging off their neighbors, that isn't a rational reaction. Sponging a penny off of each of a thousand neighbors isn't any spongier than sponging ten dollars off of the one neighbor who got priced out of the job market by the minimum wage hike.
Human psychology is human psychology. It is pointless to ignore it when dealing with social issues. Like it or not, people make interpersonal judgments. If someone thinks help should be meted out based on their moral metrics on what "deserving" means, then any observed or perceived help to the "undeserving" makes them worse off.
 

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Here's part of the blurb The Economist mailed me today. I detest the partisan characterizations ("Your farts stink, but my farts are so very fragrant"), but still thought it might merit mention in this thread.
Our cover this week warns that classical liberalism is under threat. One danger comes from the Trumpian right. The attack from the left is more surprising and harder to grasp. On the face of it illiberal progressives and classical liberals like The Economist want many of the same things. Both believe that people should be able to flourish whatever their sexuality or race. They share a suspicion of authority and entrenched interests. They believe in the desirability of change. And yet the two camps could hardly disagree more over how to make progress. Classical liberals believe that the best way to navigate disruptive change in a divided world is through a universal commitment to individual dignity, open markets and limited government. The illiberal left prefers to enforce ideological purity, by no-platforming their enemies and cancelling allies who have transgressed. The stakes could hardly be higher.

~ ~ ~ ~ ~ ~

I think the discussion of Pareto perfection is a digression. Deals can be applauded even if a small group suffers slightly. And economic value is VERY hard to measure, especially in the long term. Was the Industrial Revolution "Pareto efficient" in the long run? Maybe. But the absolute number of humans going to bed hungry has never been higher than in recent decades. And climate-change doomsayers believe we're headed for apocalyptic disaster.
 

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Here's part of the blurb The Economist mailed me today. I detest the partisan characterizations ("Your farts stink, but my farts are so very fragrant"), but still thought it might merit mention in this thread.
Our cover this week warns that classical liberalism is under threat. One danger comes from the Trumpian right. The attack from the left is more surprising and harder to grasp. On the face of it illiberal progressives and classical liberals like The Economist want many of the same things. Both believe that people should be able to flourish whatever their sexuality or race. They share a suspicion of authority and entrenched interests. They believe in the desirability of change. And yet the two camps could hardly disagree more over how to make progress. Classical liberals believe that the best way to navigate disruptive change in a divided world is through a universal commitment to individual dignity, open markets and limited government. The illiberal left prefers to enforce ideological purity, by no-platforming their enemies and cancelling allies who have transgressed. The stakes could hardly be higher.

~ ~ ~ ~ ~ ~

I think the discussion of Pareto perfection is a digression. Deals can be applauded even if a small group suffers slightly. And economic value is VERY hard to measure, especially in the long term. Was the Industrial Revolution "Pareto efficient" in the long run? Maybe. But the absolute number of humans going to bed hungry has never been higher than in recent decades. And climate-change doomsayers believe we're headed for apocalyptic disaster.

The notion of Pareto Improvement is crucial to the application of benefit - cost analysis. When the benefits exceed the cost then an action is warranted even when there is no compensation.

The fact that there are winners and losers in almost any action helps to explain both the promotion of change (expected winners) and the resistance to change (expected losers). Recognizing that reality should help steer any discussion on a course of action to include how to get some buy in from the losers. Especially when the resistance is entrenched and powerful.
 

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Was the Industrial Revolution "Pareto efficient" in the long run? Maybe.
Not really. A whole bunch of rural aristocrats found themselves no longer able to dominate government policy against the interests of city folk.

But the absolute number of humans going to bed hungry has never been higher than in recent decades.
Source?

distribution-of-population-poverty-thresholds-768x542.png


And climate-change doomsayers believe we're headed for apocalyptic disaster.
We were always headed for apocalyptic disaster. The sun is getting hotter; the oceans may boil away within a billion years. The best hope for long-term survival of life is either transplanting it to other star systems or moving the Earth to a higher orbit. Can't do either without an industrial revolution... :)
 

Swammerdami

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Nobody Really Knows How the Economy Works

A N.Y. Times article named "Nobody Really Knows How the Economy Works" quotes a senior economist at the Fed Res.

It has long been a central tenet of mainstream economic theory that public fears of inflation tend to be self-fulfilling.

Now though, a cheeky and even gleeful takedown of this idea has emerged from an unlikely source, a senior adviser at the Federal Reserve named Jeremy B. Rudd. His 27-page paper, published as part of the Fed's Finance and Economics Discussion Series, has become what passes for a viral sensation among economists.

The paper disputes the idea that people's expectations for future inflation matter much for the level of inflation experienced today. That is especially important right now, in trying to figure out whether the current inflation surge is temporary or not.

But the Rudd paper is part of something bigger still. It reflects a broader rethinking of core ideas about how the economy works and how policymakers, especially at central banks, try to manage things. This shift has also included debates about the relationship between unemployment and inflation, how deficit spending affects the economy, and much more.

In effect, many of the key ideas underlying economic policy during the Great Moderation — the period of relatively steady growth and low inflation from the mid-1980s to 2007 that also seems to be a high-water mark for economists' overconfidence — increasingly look to be at best incomplete, and at worst wrong.

It is vivid evidence that macroeconomics, despite the thousands of highly intelligent people over centuries who have tried to figure it out, remains, to an uncomfortable degree, a black box. The ways that millions of people bounce off one another — buying and selling, lending and borrowing, intersecting with governments and central banks and businesses and everything else around us — amount to a system so complex that no human fully comprehends it.

"Macroeconomics behaves like we're doing physics after the quantum revolution, that we really understand at a fundamental level the forces around us," said Adam Posen, president of the Peterson Institute for International Economics, in an interview. "We're really at the level of Galileo and Copernicus," just figuring out the basics of how the universe works.
...
"It has been a noble lie that has become a critical part of the catechism of global monetary policy, that long-term inflation expectations are not just interesting but are a decisive determinant of real-time inflation," said Paul McCulley, a former Pimco chief economist, commenting on Mr. Rudd's paper.

... [Also] for years central bankers believed there was a tight relationship between the unemployment rate and inflation, known as the Phillips Curve. Over the course of the 2000s, though, that relationship appeared to weaken and become a less reliable guideline for how to set policy.

Similarly, interest rates and inflation fell worldwide, for reasons that scholars are still trying to understand fully.
...
 

Lumpenproletariat

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The need for a graduated property tax

Skip to about 13:15 for this news item about a "disturbing" home-buying trend:

[YOUTUBE]https://www.youtube.com/watch?v=FTMadRVRr44[/YOUTUBE]

0:00 ________________________________________ 13:15 ___

It's becoming more common now for home purchases to be that of companies rather than individuals. The news story makes it sound like this is something to be alarmed about.

E.g., in one Atlanta neighborhood about 35% of the homes are owned by a Wall St. investment firm.

Whether there is anything alarming about it or not, there is here a new revenue source opportunity for states. It may be OK for the practice to continue, as these companies become a kind of middleman between the ultimate home-owners/renters and the sellers, similar to ticket-scalpers, who serve a legitimate role in the economy. Or, then again, maybe a disincentive is needed here to reduce this practice.

But regardless whether it's a bad trend, the states can use this as a way to increase revenue, and maybe it would be a very significant source of new revenue.

One way or another, these companies could be taxed extra on these property transactions, by having a tax on properties which is higher on owners with higher total property ownership. Probably the tax would be limited to ownerships above a certain minimum total value, like $5 million, or $10 million total value, so small owners would be unaffected.

Even a graduated SALES tax.

And the tax could be more than just an annual tax on the property, but also a sales tax on transactions, so that there is also a revenue source based on the sales and not just the ongoing ownership.

These home-buying companies would become very efficient at paying such a tax, as it becomes routine for them in comparison to individual home-buyers who would have difficulty with it when they do a one-time purchase.

Perhaps home-buying is done better by a business rather than individuals each transacting their purchase/sale according to just their one-time need, so it's more efficient for the individual to just turn it all over to the company buying and selling/renting many properties.

But these companies then are very profitable from the economies-of-scale gains from this, and they could easily pay a much higher tax rate.

So tax these ownerships and sales based on a graduated scale, making the tax rate higher for higher total values of real estate accumulated by a buyer/owner. So, e.g., a company with $20 or $30 million total property value would pay a higher rate than an owner with only $1 million total value, and an owner with $200-$300 million total value would pay a higher rate than one with $20-$30 million total value. Etc.

(The tax has to be structured similar to that of graduated income tax so that there's no disincentive to crossing the line up to a higher "bracket" level.)
 

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Lender: you don't have enough income to qualify for that mortgage so go keep paying rent and get back to us when you get more experience.
 

Swammerdami

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Lender: you don't have enough income to qualify for that mortgage so go keep paying rent and get back to us when you get more experience.

It sounds silly but it's true: "Being poor is expensive."
 

WAB

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Lender: you don't have enough income to qualify for that mortgage so go keep paying rent and get back to us when you get more experience.

It sounds silly but it's true: "Being poor is expensive."

It sure is! And where I live, you aren't even allowed to be homeless. Cops will routinely check the areas where the homeless are known to settle for as long as they can, usually by the lake, close to a beach where there are bathrooms and showers available. I myself was told by the cops, when I was found sitting on a public bench at three o'clock in the morning, that I could not stay there, and when I told them I had nowhere else to go, they told me there was no "overnight camping" allowed in the city, or loitering. I explained that in three hours the store I was sitting in front of would open, so I could buy something and move on. No go. I could not just sit and wait. So, they nicely asked me if they could bring me somewhere, somewhere I would be safe? I told them I had had an altercation at home and could not return. Finally they asked if I had money, which I did. They offered to drive me into town to take me to a motel room. I agreed, but reluctantly, as motel rooms are expensive, and it's hell getting a smoking room.

And so it goes, and most people on the down low have it FAR worse than I could ever have. I am working steadily now, saving money, and will soon be on my own, free from my crazy family. I have to work for only another five years - though I will try and work until I am 67. I WILL NOT continue working if and when I reach my seventies. I have worked enough. I have put in enough time, and paid more than my share in taxes. I would rather be dead than have to work as an old man - it is shameful that anyone should have to.
 

Loren Pechtel

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Lender: you don't have enough income to qualify for that mortgage so go keep paying rent and get back to us when you get more experience.

Rent has to include property tax and maintenance, as well as it's unlikely the property is always 100% occupied. Beyond that property management services tend to run about a month's rent per year.
 

none

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Lender: you don't have enough income to qualify for that mortgage so go keep paying rent and get back to us when you get more experience.

Rent has to include property tax and maintenance, as well as it's unlikely the property is always 100% occupied. Beyond that property management services tend to run about a month's rent per year.

Oh the burden Wall Street investors have to go through.
 
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Swammerdami

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It sounds silly but it's true: "Being poor is expensive."

On the other hand ...
Oh the burden Wall Street investors have to go through.
Yes. To listen to some American right-wingers, one would think billionaires are the worst-treated among us, taxed out of all their hard-earned wealth and often forced to emigrate to ghettoes in the Caribbean or the South of France.
 

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Skip to about 13:15 for this news item about a "disturbing" home-buying trend:

[YOUTUBE]https://www.youtube.com/watch?v=FTMadRVRr44[/YOUTUBE]

0:00 ________________________________________ 13:15 ___

It's becoming more common now for home purchases to be that of companies rather than individuals. The news story makes it sound like this is something to be alarmed about.

E.g., in one Atlanta neighborhood about 35% of the homes are owned by a Wall St. investment firm.

Whether there is anything alarming about it or not, there is here a new revenue source opportunity for states. It may be OK for the practice to continue, as these companies become a kind of middleman between the ultimate home-owners/renters and the sellers, similar to ticket-scalpers, who serve a legitimate role in the economy. Or, then again, maybe a disincentive is needed here to reduce this practice.

But regardless whether it's a bad trend, the states can use this as a way to increase revenue, and maybe it would be a very significant source of new revenue.

One way or another, these companies could be taxed extra on these property transactions, by having a tax on properties which is higher on owners with higher total property ownership. Probably the tax would be limited to ownerships above a certain minimum total value, like $5 million, or $10 million total value, so small owners would be unaffected.

Even a graduated SALES tax.

And the tax could be more than just an annual tax on the property, but also a sales tax on transactions, so that there is also a revenue source based on the sales and not just the ongoing ownership.

These home-buying companies would become very efficient at paying such a tax, as it becomes routine for them in comparison to individual home-buyers who would have difficulty with it when they do a one-time purchase.

Perhaps home-buying is done better by a business rather than individuals each transacting their purchase/sale according to just their one-time need, so it's more efficient for the individual to just turn it all over to the company buying and selling/renting many properties.

But these companies then are very profitable from the economies-of-scale gains from this, and they could easily pay a much higher tax rate.

So tax these ownerships and sales based on a graduated scale, making the tax rate higher for higher total values of real estate accumulated by a buyer/owner. So, e.g., a company with $20 or $30 million total property value would pay a higher rate than an owner with only $1 million total value, and an owner with $200-$300 million total value would pay a higher rate than one with $20-$30 million total value. Etc.

(The tax has to be structured similar to that of graduated income tax so that there's no disincentive to crossing the line up to a higher "bracket" level.)

I saw that story on the news and I was shocked that so many investors are buying up so many properties in metro ATL. For those who didn't watch the video, the problem is, that investors pay cash and close on the sales very quickly, which has made it very difficult for the average buyer to have their offer accepted. After watching that on the news, I began to wonder if that is why so many people are moving to my small city, which is 40 miles south of ATL. With or without the investors, property in ATL has become unaffordable for the average middle class buyer.

It's still affordable where I live, but who knows how long that will last? Plus the commute to ATL or the nearby suburbs is a nightmare. I don't know how people can stand it. I had a job in ATL in the mid 90s, and we lived 25 miles north of ATL. It was horrible. Sometimes I was in traffic for well over an hour and a half. ATL was affordable back then. The average rent in ATL is over 1500 per month now. How are low income workers supposed to afford that? We have a huge problem in this country when it comes to affordable housing. I don't see a plan to change that. That's heartbreaking.
 

Loren Pechtel

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Lender: you don't have enough income to qualify for that mortgage so go keep paying rent and get back to us when you get more experience.

Rent has to include property tax and maintenance, as well as it's unlikely the property is always 100% occupied. Beyond that property management services tend to run about a month's rent per year.

Oh the burden Wall Street investors have to go through.

The point is there are legitimate reasons for rent to be higher than a mortgage on the same property.
 

none

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Oh the burden Wall Street investors have to go through.

The point is there are legitimate reasons for rent to be higher than a mortgage on the same property.

Yeah 400 dollars in the example provided keeps young folks from having the burden of equity.... investment equity in a community they can benefit. No shit. Man have you ever just got out of bed without slippers?
 

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Oh the burden Wall Street investors have to go through.

The point is there are legitimate reasons for rent to be higher than a mortgage on the same property.
Yes there is. Someone buys a home to live in will have the mortgage of 900 to pay. Someone buying the home to use as a rental property will also have a mortgage of 900 to pay. Whoever holds the mortgage will also have property tax to pay, insurance to pay, maintenance and upkeep to pay for. So whoever holds the mortgage has a monthly expense much higher than the 900 mortgage expense. If it is a rental property then the rent will have to be set at, at least, enough to cover the cost to the owner.
 

bilby

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Oh the burden Wall Street investors have to go through.

The point is there are legitimate reasons for rent to be higher than a mortgage on the same property.
Yes there is. Someone buys a home to live in will have the mortgage of 900 to pay. Someone buying the home to use as a rental property will also have a mortgage of 900 to pay. Whoever holds the mortgage will also have property tax to pay, insurance to pay, maintenance and upkeep to pay for. So whoever holds the mortgage has a monthly expense much higher than the 900 mortgage expense. If it is a rental property then the rent will have to be set at, at least, enough to cover the cost to the owner.

Exactly. So either:

a) Nobody would ever be so dumb as to buy a property to rent out, because any potential tenant who could avoid defaulting on his rent would already have bought a home, and so the only possible tenants would be deadbeats; or

b) There's an anticipation of an offsetting benefit to the landlord, over and above the rental income, and the market is rigged in favour of those with access to capital to allow them access to that benefit, at the expense of denying that investment opportunity to those who do not have that access.
 

skepticalbip

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Yes there is. Someone buys a home to live in will have the mortgage of 900 to pay. Someone buying the home to use as a rental property will also have a mortgage of 900 to pay. Whoever holds the mortgage will also have property tax to pay, insurance to pay, maintenance and upkeep to pay for. So whoever holds the mortgage has a monthly expense much higher than the 900 mortgage expense. If it is a rental property then the rent will have to be set at, at least, enough to cover the cost to the owner.

Exactly. So either:

a) Nobody would ever be so dumb as to buy a property to rent out, because any potential tenant who could avoid defaulting on his rent would already have bought a home, and so the only possible tenants would be deadbeats; or

b) There's an anticipation of an offsetting benefit to the landlord, over and above the rental income, and the market is rigged in favour of those with access to capital to allow them access to that benefit, at the expense of denying that investment opportunity to those who do not have that access.

Personally, I think buying rental property is a piss poor idea... there are better investments that don't involve dealing with problems of managing rental property. But I do understand the reasoning of some who have convinced themselves that it is a great investment (I know a couple of them). They expect a little positive cash flow for maybe ten or so years by which time they think the value of the property will have increased dramatically. At that point they expect to sell out and reap a great profit.

ETA:
In this area, most renters are people that will only be here for a few years so don't want the hassle of buying and then trying to sell a house. They are primarily students or military personnel.
 

Loren Pechtel

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Yes there is. Someone buys a home to live in will have the mortgage of 900 to pay. Someone buying the home to use as a rental property will also have a mortgage of 900 to pay. Whoever holds the mortgage will also have property tax to pay, insurance to pay, maintenance and upkeep to pay for. So whoever holds the mortgage has a monthly expense much higher than the 900 mortgage expense. If it is a rental property then the rent will have to be set at, at least, enough to cover the cost to the owner.

Exactly. So either:

a) Nobody would ever be so dumb as to buy a property to rent out, because any potential tenant who could avoid defaulting on his rent would already have bought a home, and so the only possible tenants would be deadbeats; or

b) There's an anticipation of an offsetting benefit to the landlord, over and above the rental income, and the market is rigged in favour of those with access to capital to allow them access to that benefit, at the expense of denying that investment opportunity to those who do not have that access.

Renters may not plan to be there long. If you have frequent job relocations, rent.

Rent greatly reduces your surprise bill factor.
 

none

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Yes there is. Someone buys a home to live in will have the mortgage of 900 to pay. Someone buying the home to use as a rental property will also have a mortgage of 900 to pay. Whoever holds the mortgage will also have property tax to pay, insurance to pay, maintenance and upkeep to pay for. So whoever holds the mortgage has a monthly expense much higher than the 900 mortgage expense. If it is a rental property then the rent will have to be set at, at least, enough to cover the cost to the owner.

Exactly. So either:

a) Nobody would ever be so dumb as to buy a property to rent out, because any potential tenant who could avoid defaulting on his rent would already have bought a home, and so the only possible tenants would be deadbeats; or

b) There's an anticipation of an offsetting benefit to the landlord, over and above the rental income, and the market is rigged in favour of those with access to capital to allow them access to that benefit, at the expense of denying that investment opportunity to those who do not have that access.

Renters may not plan to be there long. If you have frequent job relocations, rent.

Rent greatly reduces your surprise bill factor.
Yawn, like the sale of an investment.
I could curse here. Out loud and you'd hear it.
 

Lumpenproletariat

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Crybaby-panderers hijack topic


A different topic was hijacked by some Crybaby Economics crusaders, who feel an impulse to tell "working class" crybabies what they want to hear, but don't have the integrity to put this forth as a topic for its own sake, which it deserves. The fact that they cannot present this topic per se for discussion, but are driven to sneak it into a different topic is an indication that their Crybaby Economics theories are false, and cannot be defended in a straightforward honest debate, but have to be slipped in under cover of darkness.

These phonies of course will not ever put this topic forth as an honest discussion, with critical questioning of the protectionist pseudopatriotic immigrant-bashing and foreign-bashing and employer-bashing rhetoric which they always have to fall back on.


(The particular posters are not identified here, so I hopefully won't be accosted with warnings from the powers-that-be accusing me of being "abusive" or "overly aggressive" or "threatening" to them. I have explained what "Crybaby Economics" is and am entitled to use this language to describe those who fit this category, as the following do.)

The topic hijacking begins from a Trumpster labor union fanatic who is pleased that his job was protected from foreign competition by demagogue Trump, who seems to be winning the popularity contest with Bernie Sanders in their rivalry to win over the populist crybaby voting bloc:


Who do you think shrank the economic pie for everyone for 30 years in the lower middle class? Hint: It began with Clinton and NAFTA.

There are 2 lies contained in this Crybaby Economics outburst:

1) The expanded trade under NAFTA increased the economic pie for ALL classes, from lowest to highest. The fact that some uncompetitive wage-earners might have had probems with it does not change the fact that the vast majority are now better off as a result, even including those who had to change to a different livelihood. That someone has to change does not mean their "economic pie" shrank overall.

2) The change referred to really began with the Reagan Administration, not Clinton. The lie that it began with Clinton is a phony attempt to try to deflect blame (CREDIT) for this away from the Republicans and to the Democrats, because this crybaby rant is a clumsy bumbling attempt to promote the Red/Trump/Republican China-bashing crusade which began mostly with Trump and which has attached itself like a parasite to the new Republican Party which has turned into a mob of pseudopatriotic xenophobic populist crybabies and crybaby-panderers in search of a new Evil Empire or Conspiracy upon which to unleash their hate.


It certainly wasn't the deplorables who shipped high value manufacturing jobs to China away from themselves.

Those jobs were NOT high-value. They could easily be done by millions of low-skilled workers in virtually any country, and those U.S. workers were easily replaceable, meaning they were LESS valuable, because that which is easily replaceable is by definition worth less because the supply of it is high rather than low. It's not your personal feelings or impulses which determines the value, but the law of supply-and-demand, and by that "law" anything in much greater supply is much lower in value. And only an idiot could lack the brain capacity to figure out why something in greater supply is lower in value (and price).


one crybaby-panderer rebuffing another:

I don't know what rock you've been living under for the last 3 decades.

But NAFTA was a Republican plan. One Republican talking point in the 1992 campaign was that Clinton wouldn't sign it. But Clinton did throw blue collar workers under the bus when . . .

No, what he did by signing NAFTA and expanding trade was to expand the U.S. economy for all consumers, giving us all more choice and increasing the living standard for all. That some blue collar workers were uncompetitive and had to change was part of that economic expansion, which benefited all Americans. Whining for a few uncompetitive ones who had to change is an example of crybaby-pandering. It's always the uncompetitive crybabies (and panderers) who complain about the evils of expanded trade = expanded competition.

No one has ever shown how expanded competition throws anyone "under the bus" except in the sense that a few uncompetitive ones have to change, for the good of the whole economy = all consumers.

. . . he didn't need their votes any more. (He did the same thing to gay people, signing DOMA and DADT) The Democrats were moving steadily to the right.

And guess what? The Big Exodus of USA manufacturing jobs and the bulk of the influx of undocumented workers happened during the Bush Administration.

Which was good for all Americans. More competition is always better for the economy, i.e., for the vast majority, i.e., for all consumers. No one can show how increased competition ever made the economy worse off. The only problem with "undocumented workers" is that they were not allowed to become documented so this good increase of workers could happen legally. The truth is that without the large number of "undocumented workers" in our economy, we'd all be worse off, because there'd be much less production and higher prices. That's the truth which the crybabies cannot face up to.



All that, plus banking deregulation, resulted in the Republican Recession of 2007.

The Dems-Repubs Recession of 2007 was due to many causes. But only the crybabies and crybaby-panderers attribute it to the increased competition due to foreign and immigrant labor. This increase in competition always benefits the economy, just as it did from the late 19th century up to the 1920s. Then the crackdown on foreign and immigrant labor triggered a negative trend which contributed to the Great Depression of the 1930s, turning what should have been another normal recession into the worst depression in history.



The Dems have abandoned the working class in favor of cultural issues and immigrants.

It's true that some of them are tired of the labor union demagoguery and their Crybaby Economics to protect the least competitive workers who need to change instead of just whining and whining forever and demanding pity. And also they recognize the contribution of immigrant workers. But this is not any abandonment of Americans, as we are all made better off by the increased competition in the economy. Even most wage-earners and poor are made better off by the improved production = increased supply. It's a lie to say that this abandons "the working class" -- it only puts some of the less competitive under greater pressure to change and improve themselves.

Pressure to change and improve does not abandon anyone. Real abandonment is to insist on keeping uncompetitive workers in low-value factory jobs, or even to artificially create more factory jobs to put them in because this is thought to be the best way to keep them off the streets. That's the real abandonment of them, not putting more pressure on them to become more competitive so consumers (= all of us) are served better.



The working class doesn’t care about pronouns, gender neutral bathrooms, or cultural appropriation. They care about keeping their jobs and limiting mass migration.

translation: they're crybabies. But no, that's a lie. It's not true that they are such uneducated thoughtless imbeciles that they cannot understand the value of improving themselves, becoming more competitive, and growing up to become better performers in the economy. Trump and Bernie Sanders are liars to imply that the workers are too stupid to change and become something more valuable than common factory workers, and that immigrants must be excluded in order to protect our uncompetitive crybaby workers who are incapable of changing.


Not too long ago even Bernie Sanders argued that mass immigration was a Koch brothers plot for cheap labor. Trump took up the mantle of protecting jobs and limiting immigration - which was Dem policy a generation ago.

translation: our workers are worthless crybabies who must be kept in their low-value factory jobs, protected against competition which would turn them into an unemployed mob of pillagers on a rampage.

In this scenario, the Koch brothers are the producers, improving the economy by seeking less costly labor = higher supply and lower prices for the benefit of all consumers. While Trump and Bernie Sanders are demagogue crybaby-panderers, i.e., self-styled heroes doing what they think is necessary to appease the crybabies so they don't turn into the rampaging mob of pillagers.

In this dichotomy of demagogues vs. competitive producers, it's the Koch brothers we need, with their instinct to improve production (and profit), not the Trump-Sanders demagogues pandering to the paranoid uncompetitive to keep them on the plantation in their uncompetitive factory jobs or protect them against foreign invaders trying to steal their jobs. What we need are not the crybabies and their demagogues, but the producers rich and poor who change as needed, according to market demand.


The Democrats moved hard to the right, starting with Slick Willy, and then the Republicans had to go even further to maintain market share.

I agree with Sanders, the Bush Administration encouraged undocumented workers to keep the cost of labor down while increasing consumption. That's perfect for corporate profits.

Correction -- it's perfect for ALL Americans = ALL consumers = the economy. Not just corporate profits. It's only Crybaby Economics which wants to demonize profit, even that which is productive for the country. When profiteers produce net benefit to all consumers, it's good that they reap those profits. It's good not only for them, but also for us all, for all consumers who benefit from the better production.

Keeping down the cost of labor is good for ALL consumers, who have to pay the cost. It is fundamental to Crybaby Economics to hate all profit, even that which is good because it rewards the producers for their improved performance. What the crybabies cannot understand is that the profit, and also the higher wage, is the reward for improved performance, not their Entitlement.

What we need is MERIT, not Entitlement -- for rich or poor.


Trump lied about protecting blue collar workers, and they bought it.

That's debatable. But what is certain is that the more these demagogues pander to any one class, such as "blue collar workers," the more they inflict damage onto the whole economy = all consumers who have to pay the cost for it. You cannot pander to a limited class of crybabies unless it's done at the expense of all the other classes rich and poor. And everyone is a fool who buys the false promises of these demagogues, even when they do keep their promises and give the crybabies what they demand. Because then all the rest of us have to pay the cost = lower standard of living for everyone outside the narrow class of crybabies being pandered to.

So even if the demagogue is not lying but actually makes good on those promises to the crybabies, he still is inflicting damage onto all others, including the poor, who have to pay the cost.


Same as when they voted for Clinton in 1992.

Clinton made us all better off by continuing the policy of expanded trade. 100% of Americans today are better off as a result of this (or at least 99%). Just because changes happened does not mean we're worse off. And also, the new trade laws contained defects, because these were not truly 100% free trade changes, and so whatever negative results may have followed were due to the protectionist measures which the crybabies demanded and got included in the deals that were struck.


I'm talking about the "deplorable" folks you mentioned that voted for Trump because they consider cultural and immigration issues less important than their jobs. Which I understand is many of those jobs were borderline obsolete anyway.

One grown-up statement among the above jumble of crybaby and crybaby-pandering lies which are popular among today's mindless masses who don't understand the law of supply-and-demand and the role of profit motive and competition in making the economy perform better.

These dishonest Crybaby Economics topic-hijackers are refuted in Economics 1A, and also were refuted 200+ years ago by Adam Smith, where the benefits of competition are made clear.
 
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Swammerdami

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I'm sure your overall point is correct. But I'm not sure that the number of workers adversely affected by moving manufacturing jobs overseas is tiny. Many American workers had blue-collar jobs that paid quite well, but are now too old to retrain or find a new job easily. Are there any statistics on this? How many workers sustained a steep and long-term wage reduction due to the decline of American manufacturing?

On another matter, I think economics discussions here would be more fruitful and more pleasant if less pejorative were directed at one's debating opponents.
 

Loren Pechtel

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I'm sure your overall point is correct. But I'm not sure that the number of workers adversely affected by moving manufacturing jobs overseas is tiny. Many American workers had blue-collar jobs that paid quite well, but are now too old to retrain or find a new job easily. Are there any statistics on this? How many workers sustained a steep and long-term wage reduction due to the decline of American manufacturing?

On another matter, I think economics discussions here would be more fruitful and more pleasant if less pejorative were directed at one's debating opponents.

Far more jobs were lost to machinery than to outsourcing. I'm thinking of my former employer--while I do not believe the employee count was ever reduced the employees per unit of production dropped 80% in the years I was with them. The only "outsourcing" (to other local providers, nothing was foreign) were specialty options that had not previously been offered and I believe most all of that was eventually brought in-house as the production increased. (If the widget fobber can fob 1000 widgets a day and you only need 100 you're probably better off buying fobbed widgets. If you need 800 you're probably better off fobbing your own widgets.)

Over that time many of the jobs went from actually doing the job to managing the machine that did the job--lower skill, probably lower wage but I didn't see that kind of data. (By the end most regular production tasks were being done by machines, but almost all product flow was being done by humans.)
 

Lumpenproletariat

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Nutcase Economics

Snake-Oil Economics


I think economics discussions here would be more fruitful and more pleasant if less pejorative were directed at one's debating opponents.


There is nothing wrong with using strong language to identify flaws in the arguments from the other side. (My term "Snake-Oil Economics" might be the same as George Bush's "Voodoo Economics" in his run against Reagan in 1988.) The terminology is legitimate, as long as the meaning is explained and fits the case where it's used. The proper response, if one disagrees, is to defend the one being called by the name (such as defending Reagan's tax-cutting economic theory in that 1988 primary campaign). Strong language is legitimate for adding emphasis.



Crybaby Economics: A benefit is demanded for someone which must be paid for by the whole society, or the whole nation or population. Corporate welfare and trade protectionism are good examples. A good classic example is that of the Luddites in the early 1800s, who demanded that their jobs be saved from the threat of new technology. Obviously it would have imposed much higher costs onto the whole economy, to effectively subsidize their livelihood. Of course there are hundreds of other examples. It's perfectly reasonable to call such crybabies what they are. For some reason they have trouble understanding the damage they inflict onto the whole nation, and calling them a name to emphasize this might be what is necessary to shock them out of their delusionalism (at least in the long term if not the short term). Today's labor unions are guilty of similar economic fallacies, not recognizing the benefits to the economy of competition among all producers and the damage done by cartelism.



Nutcase Economics: These are cases where one is driven to deny obvious facts or truth, which are clearly plain to see. I used the term "nutcase" to describe someone who said that there are "no shortages" during the 2020-21 pandemic situation, where the nightly news regularly reported empty shelves throughout the nation, due to problems with transportation, the truck driver shortage, the cargo ships not being unloaded, etc. These "shortage" problems still persist, whether or not they have been partly relieved. For someone to say there are "no shortages" has to go into the "nutcase" category in face of the constant reporting of this every day in the news. Almost any outburst might come from an immigrant-bashing nativist who can't stand the idea of perhaps allowing more immigrant workers, which would help fix this problem. It would actually be more truthful to just admit that one is a xenophobe rather than deny the plain facts being reported every day on every network and every station.

Other examples of Nutcase Economics would be to deny obvious truths of economics, like the law of supply-and-demand, e.g., claiming that higher production cost has no impact on prices. Some demented employer-bashers, e.g., want to insist that higher labor cost makes no difference in output, and that all the same production and lower prices will continue, despite higher wages being imposed by law onto employers. They imagine that the greedy employers will then just be forced to pay the higher labor cost without any resulting change in their production, because they'll simply become less greedy and accept lower profit. Such flat denial of supply-and-demand is a further example of Nutcase Economics.



Snake-Oil Economics: Some "trickle-down economics" might be in this category, if it means that tax cuts will automatically spur economic growth and generate such new production and profits that the total government revenue will increase rather than decrease. The key is the promise of magic-like outcomes resulting from the measures taken. The "economic stimulus" promises are mostly in this category, claiming that if the government just spends more money, pouring funds into this or that program, to provide incomes to someone, then this generates new spending -- the multiplier effect -- where money is pumped into someone at point A, and this recipient goes out and spends it so someone else at point B gets increased income, who then spends it at point C, and the chain goes on and on generating new incomes everywhere and driving up the GDP, and everyone gets richer. By this reasoning, counterfeiters benefit the economy with the money they print -- as "economic stimulus" -- as long as that money continues to circulate.

FDR was a Snake-Oil salesman with his theory that destroying product, causing shortage, drives up the prices, so producers then make more money and everyone gets richer from this extra income generated to those producers who destroyed their product. This was done among the farmers, who were ordered to destroy their product in order to drive up prices -- dairy farmers were one example, and there were others who plowed their crops under in order to cause shortages.

Another version of this is the falsehood that you generate prosperity by curtailing spending outside your own community or nation, and instead keep all your spending within your group, such as the local community, or within the nation rather than spending it abroad. Because when the money goes "outside" our community or nation, it goes to waste, by stimulating the foreign economies rather than our own. Keeping your spending limited to your own group, even your own race or ethnicity, somehow then magically creates some new prosperity that otherwise would not exist if you just spent your money wherever it's convenient or where you can get the best deal. A radio talk-show host in San Diego is an example of this, claiming that everything bought in China is "junk" or "crap" because the money goes to China rather than being spent in America. So where you spend the money somehow changes what you're buying, turning it from something of value into "junk" because of where the money you're spending ends up.

There are many versions of Snake-Oil Economics, usually promoted by charlatans engaging in some kind of sophistry. Bush's "Voodoo Economics" might be another term for it.



Crybaby Panderers: These are believers in Crybaby Economics, in some sense, but they are not the crybabies per se, but apparently are sympathetic to them, for some unexplained reason. E.g., autoworkers and steelworkers are 2 examples who get much sympathy. Also some small farmers, including dairy farmers, gain extra pity, and it's not clear why these particular victims are selected for this special treatment at everyone else's expense. Somehow these particular groups are in need of special pity because they are high-profile producers of some kind. Also factory workers generally, or laid-off workers generally who are often factory workers. Maybe also fast-food workers, because they are so highly visible and recognized as minimum-wage victims.

And yet at the same time literally millions of poor people, consumers, are damaged by the higher costs imposed onto us all as a result of subsidizing these particular categories of producers we feel sorry for. Most of these high-profile producers are not the poorest but are in the middle-income category, far better off than millions of the consumers who must then pay the higher prices as a result of the special higher costs imposed onto us all in order to give special treatment to these select victim groups we think are entitled to higher incomes regardless of their lower value in the economy. Their lower value is perhaps due to their oversupply, or whatever the supply-and-demand factors may be. Even the low-paid fast-food workers are better off than a large percent of their customers who are even poorer than those workers.

So the crybaby-panderers cannot explain why they choose these particular victims to feel sorry for, and pander for, to increase their incomes, while at the same time ignoring the resulting higher cost burden imposed onto millions, in fact onto the entire population, tens or hundreds of millions of consumers, many of whom are poorer than the crybabies being pandered to and subsidized as victims.

There is nothing wrong with using strong language to describe this damage done to the economy, as long as the terms are defined and applied appropriately to cases which fit the definition.
 

Swammerdami

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The World Economic Forum's 2022 Report on Global Risks is available for free download.
Its 117 pages are chock-full of graphs and summaries; I'll just excerpt a list of the most pressing problems facing the world as ranked by 1000 global experts and leaders.

1st Climate action failure​
2nd Extreme weather​
3rd Biodiversity loss​
4th Social cohesion erosion​
5th Livelihood crises​
6th Infectious diseases​
7th Human environmental damage​
8th Natural resource crises​
9th Debt crises​
10th Geoeconomic confrontation​
 
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