[Cog]

A bank will finance a loan for any time period you wish. Make it seven if you like. Don't pay it off, you don't get a free house, the bank takes the house as collateral. The system works just fine if you aren't part of the free stuff army.

The lack of knowledge of how business and capital works on this board is amazing but not surprising.

[Pops]

Debt isn't going away and neither is capitalism regardless of whether "growth" ends or not.

Debt is simply paying for the "time value of money" - some things are worth more to us today than tomorrow. Working as a barista for 40 years to save up a couple hundred thousand to go to medical school when you're 60 isn't really practical.

Capitalism is a distribution system, the market decides how much "stuff" you get. The options to capitalism don't work out because they all entail some one deciding how much stuff you get. As they say, that power corrupts absolutely. Of course the devil is in the details and there are all sorts of socialist systems that utilize markets.

But I do wonder what the end of growth means for the dream of the rising tide lifting all boats. More and more productivity gains are accruing to the ownership. Not sure why so many working people are so eager to sell their time at such a low rate and vote for more corporate power, unless it's because they believe they'll get ahead themselves one day. In a stagnant or declining economy, whether due to falling population or limiting resources or both, growth can in theory still come from increased efficiency and productivity but you can only fire so many people before you run out of "improvement."

[Newfie]

You want to deliberately crash the economic system impoverishing millions and I'm supposed to think deeply about that? How about no?

I stand by my position that people who want to bring on doom are nothing but a death cult.

You want to ballon the population to its ultimate limit upons which time untold billions would starve to death, just so you don’t have to inconvience yourself with thought?

[Newfie]

Pops,

Those are some really good thoughts. And it’s much more than an economic/money question. So when you completely eliminate all workers not only does productivity hit a max but the workers also wage goes to zero and they become problematic because you have removed their employment.

One could argue that the surplus workers should get a pension for the rest of their projected career had they not been displaced. Eventually they all age out. But they also have children who never get the chance to replace Dad in the factory line.

This is along the lines of the argument for a guaranteed minimum wage. Because we have become so efficient some of that benefit should be spread around. But it does not address their needs to contribute. How many hairdressers, and TSA folks can we tolerate?

I could go in but won’t. It all gets real complicated real fast.

[Pops]

Newf I'm not a disciple of Marx, fact is I can't decipher his writing so get it second hand. Anyway, I think he thought at the end productivity becomes infinite, so scarcity is zero, and everything worthless.

Not sure that's gonna happen tho, LOL

Actually productivity gains are not the problem. The problem is the workers are no longer sharing in the profit and the reason is not complicated.
Here's the picture:

[evilgenius]

First of all, the Jubilee was every 50 years, not every 7. It was designed to allow ancestrally negotiated, tribal, selling off of land from the tribe to revert back to the tribe, by returning it to the heirs. Everybody knew the Jubilee was coming, so they made negotiations accordingly. If you were a long way from the Jubilee you fought for a different position than if you were close.

But what's more fair, terms that don't bury people or debt forgiveness? We have debt forgiveness through bankruptcy. It doesn't work for everything. It definitely doesn't work for student loans. It doesn't work for municipal 'debt' which people accumulate as a matter of life either, as in the bench warrants people in Ferguson, Missouri may face for not paying some fine or government fee levied against them. That's part of the violence that was mentioned in the interview concerning how debt forgiveness has always been a major political theme throughout history.

I'll throw something out there. I did mention this in another thread. Somebody said it would amount to a free lunch. I didn't bring it up as a sour grapes suggestion, or a free lunch aspiration. Modern Monetary Theory says that sovereign governments with fiat money have the power to create money. They only sell bonds or collect taxes to prevent this creation of money from promoting inflation or allowing the people to move away from the currency held in common. So, why not use the government to capitalize the people? It's a simple concept, really. Instead of high interest rates discouraging involvement by riskier actors, you use them to discourage people from getting involved in activities for which they require capital to become involved in which there are already enough people doing the thing. The government could offer low interest rates in order to capitalize entrepreneurs who wish to go into an under served, but necessary economic endeavor. They could offer higher interest rates, higher than the banks, for people to get involved in those activities which are already active enough. It's basically, let my people go, if you think about it. The people qualify simply by being citizens.

I'm not suggesting something that people who receive the money could just walk away from and not feel any consequences. There would be credit ratings, just like with the banks. The difference would be that the government would have a very different philosophical point of view than the financial system. They would be looking to empower both the economy and the people rather than make a profit. A person's rating would have to do with how much they can borrow toward an end. They may have to start small and work their way toward more credit for expansion, but qualifying would not effect the rate they paid, only the amount they could borrow. This wouldn't be about buying houses, but about going into business. Like I said, about capitalizing the people.

[Outcast_Searcher]

Actually productivity gains are not the problem. The problem is the workers are no longer sharing in the profit and the reason is not complicated.
Here's the picture:

The world is a whole hell of a lot more complicated than tax rates. Let's not pretend that the Reagan tax cuts cause everything. For example: the knowledge economy really took off during the Reagan era because of the personal computer becoming (relatively) affordable and available to the masses at that point. And then EVERYTHING changed because things like spreadsheets became commonplace, and people with analytical ability had a HUGE advantage over people without much of that (or access to use such tools).

And that's just one obvious example. But no wonder wealth began skewing more. It would have without any tax cuts.

And its not like the dems couldn't have raised taxes more if they wanted to during, say, the Clinton era.

Now, the .1% or the 1% or the 10% or whatever could be taxed at higher rates. Getting a Bernie Sanders there might accomplish two things:

1). Tax the rich more heavily.

2). Badly screw up the US economy overall, by destroying much of economic incentive to create wealth.

So there's that.

[Pops]

yeah, everyone was poor in '72

[Outcast_Searcher]

yeah, everyone was poor in '72

Yeah, and everyone is poor now.

Really? So that's the level of a serious discussion?

[Pops]

The world is a whole hell of a lot more complicated than tax rates.

That's true. Financialization results when leverage and information asymmetry replace innovation and productive investment as the source of wealth creation.

https://www.oftwominds.com/blogmar14/we ... y3-14.html

[Outcast_Searcher]

The world is a whole hell of a lot more complicated than tax rates.

That's true. Financialization results when leverage and information asymmetry replace innovation and productive investment as the source of wealth creation.

https://www.oftwominds.com/blogmar14/we ... y3-14.html

OK. I'll go along with that, at least to a large extent. (But it sure appears to me there's plenty of productive investment going on in the world as well as financialization).

But notice that information asymmetry brought on by technological progress isn't some conspiracy by the rich. It's a wave of change that is working against an even wealth distribution in the current era.

Now, to me, the key question is: "What should modern first world societies do about it?"

When I suggest the possibility of a UBI to replace much of the current welfare state mess, lots and lots of people become upset or even unhinged, since it's not a perfect solution.

What concerns me is I see very little of substance (vs. empty lip flapping) from either side of the beltway about seriously addressing the many problems (of which a skewing of wealth is a big one, with MUCH MORE to come re job losses)). So as usual, it looks like the US will wait until the problem is in our face and huge, and then the politicians will cry "who could have seen this coming?", and THEN they'll get re-elected.

Excuse me. I need to go bang my head against a wall for a few minutes.

[marmico]

Here's the picture:

The rise of the 0.1% is the digital economy. The return from intellectual property is more valuable than the return from a micro-chip factory.

I ain't worried about the Joesixpacks and Jane Chardonnays. The 4% share increase of national income (the "income statement") of the 1 in 1000 has been more than offset by the increase in housing prices (the "balance sheet") of the 999 of 1000 since the Reagan vertical line on your chart. Joe and Jane got a little too exuberant in the Bush43 era.

[Outcast_Searcher]

I ain't worried about the Joesixpacks and Jane Chardonnays.

Ok, so what happens when in fairly rapid succession, no particular order:

1). A huge proportion of the driving jobs go away?
2). A huge proportion of the distribution, packing, etc. jobs go away?
3). A huge proportion of service jobs like cashiers (what are left) go away?
4). A huge proportion of food service work goes away?
5). A hell of a lot of lower skilled jobs in general are replaced by automation?

I'm VERY concerned about what the vast majority of the Joes and Janes do THEN, because they're not likely to be able to suddenly do some highly skilled job requiring degrees, prep for degrees, etc. -- when folks with degrees are already pouring out of colleges.

It's not the building wave that is the big concern: it's when the wave breaks over the heads of the Joes and Janes. Nothing is certain, but given how society basically does NOTHING re looking ahead at such issues, the fallout could be very ugly indeed.

[Pops]

So which line are you? (rhetorical question)



I'm pretty sure no one here is in the 1% or even 10%, so it always baffles me why they would defend laws that disadvantage them. If one were foolish enough to listen to rump, he ran on the same platform as Bernie wrt inequality.

Thing about a UBI is that simply borrowing money to give away today that the same people will pay back tomorrow is no solution and is not going to solve the problem, which is increasing (or returning) inequality— we're now borrowing a huge amount to give to the already monied and the corporate persons!

Back to my point earlier, in a growing economy the peasants can be fooled (and help fool themselves) into thinking they will get ahead, in a stagnant or retreating economy they will not be so easily fooled. For the majority, the economy is already stagnant, and the politics show.

[marmico]

I'm pretty sure no one here is in the 1% or even 10%, so it always baffles me why they would defend laws that disadvantage them.

Too funny. What are you blathering about?

US GDP per capita has increased at 2% per year, with waxes and wanes, for 150 years. It's only 1.4% today with the dual headwinds of demography and productivity. Demography is not going to change in the near term, so productivity must to get back on the long term track.

[Pops]

you do understand the idea of "average" right?

[marmico]

Spare me your blather.

Based on your chart, in 1967 (a 22 year old lead edge baby boomer) started and if they were average they ended up 50% higher in real income in 2018. That would be your GM assembly worker with 4 years experience since age 18 with a high school diploma. Maybe if you graduated college with a STEM degree (that takes a lot of worry and effort) you could have achieved 100% increase in real income. Maybe you were real smart in undergraduate studies and got a post-graduate degree (more worry and effort). Then you were golden. Head on down to the 7-11 to get your 6 pack of Bud, Pops.

[Newfie]

I think a case could be made that we are working toward a UBI in a very backhanded way. Look at all the people employed by the various levels of government.

There are the obvious; politicians, bureaucrats, military, public school teachers, prision guards.

But many more that are less obvious; road, highway, airport infrastructure, TSA, military suppliers such as Boeing’s military work, charter schools to a greater or lesser extent, privatized prison guards, privatized food handlers. Also hospitals and all of medical to an extent because of Medicare, Medicaid.

Then a whole group of stealth industries such as privatized prisons but also all prisioners. Each prisoner is to some extent on the dole; 4 hots and a cot and free medical and all the support infrastructure that comes with it.

And then there all the support services like credit unions but also food workers and construction that comes about because of these government paychecks.

When you look at all that, whose paychecks either come directly from thme government, or where government money backs the paycheck, or their support personnel then you have a huge portion of our society.

Think about it in your personal life, how many folks do you know that don’t trace at least some significant part of their income to one of the various governments?