Are savers doomed?

[CA renter]

[quote=spdrun]As a deflationista, shouldn’t you be against higher wages and for lower prices? i.e. more of an “end the Fed” sort of gal?[/quote]

I’m both a deflationista AND a labor advocate (and pro-family, and pro-middle-class). Ideally, I’d like to see the shrinking of the labor force (more parents having the option to stay home if prices are falling/wages are stickier; more people living in multi-generational housing…in a good way), rising/sticky wages, and lower prices. Overall, a better quality of life for the average person. Not saying that would be the immediate effect, as deflation is indeed damaging; but at some point, deflation stops, and I think that a greater number of people have a better chance of achieving success (happiness, higher quality of life) in a deflationary environment than an inflationary one. Depends on the details of the events, but that’s a general belief.

It’s purchasing power that I care about most, and deflation is necessary to bring some kind of balance back between labor and capital. Inflation (of asset prices) greatly benefits capital at the expense of workers.

Just to be clear: the effects of inflation (increased money supply) can take many forms. Inflation can affect one sector or group more than others. You can have massive inflation, but also have falling wages (yes, even nominally). That’s what we’ve been experiencing since the “Great Recession.”

[Leorocky]

Inflation is not defined as an increase in the money supply and we have not been experiencing “massive inflation” since the Great Recession.

Both of your statements are patently false.

[an]

[quote=CA renter][quote=AN][quote=spdrun]Frankly, the world might need a collapse to set things back a few decades. Right now, the trend is to more control, more automation, more surveillance. It would be good if innovation was stopped in its tracks (or at least slowed down) for a few decades so we had time to think where society is going, and whether we want it to go there. Delay the Singularity, so to speak.

If it results in some level of mayhem, so be it.[/quote]
What make you think it’ll be only a few decades? What if it turns out to be a few centuries and the only ones left standing are the 1% and we all are sold into indenture servitude? The 1% can afford to buy their private armies to protect themselves.[/quote]

During deflationary times, the wealth and income gaps narrow, sometimes drastically.

Inflation is what gives the 1% their power. Deflation gives workers (and others living on a fixed income) more power. Asset prices fall much faster than wages, on average.[/quote]
I’m responding to this:
[quote=spdrun]Frankly, the world might need a collapse to set things back a few decades.[/quote]I’m not talking about minor deflation but an all out collapse of the banking system.

BTW, deflation might give those workers who still have jobs more power, but as we saw in 2008, there are many who lose their jobs, so no power.

[FlyerInHi]

Some people just refuse to look at the evidence staring us in the face.

Deflation is Japan. Their competitiveness and standard of living are slipping year by year.

Austerity is Europe.

America is looking pretty good in comparison.

[FlyerInHi]

[quote=spdrun]
If that slows down the pace of innovation, so be it. We have a few billion more years left before the sun implodes :)[/quote]

In the time continuum, 2% growth, or 5% growth makes no difference. But don’t you want to experience innovation and rising standard of living before you die?

[spdrun]

No: low birth rate combined with asinine immigration policy is Japan. Japan will be fine if it fixes its immigration laws.

Northern Europe is looking pretty good as compared to “work till you fucking croak” America. If anything, they’re less austere than the US. Better spending on public transport, social welfare, health care, scientific research, things that actually matter. Not as authoritarian in practice as the US.

As far as experiencing innovation and rising standard of living in my lifetime, I’m fine with things as they are. Things like getting off oil as an energy source are more engineering and legal problems than technological ones.

Most of the changes in this country since the 90s have been neutral or negative(*), so I have no faith about future change being positive. And I don’t embrace the singularity.

(*)- there’s a slight trend towards liberalization now, in the sense of same-sex marriage, drug law reform, etc, but it remains to be seen whether this will continue or peter out.

[FlyerInHi]

[quote=spdrun]No: low birth rate combined with asinine immigration policy is Japan.
[/quote]

I agree. And deflation is the result. Japan is pretty much done because I doubt they can adjust fast enough to demography.

[quote=spdrun]
Northern Europe is looking pretty good as compared to “work till you fucking croak” America. If anything, they’re less austere than the US. Better spending on public transport, social welfare, health care, scientific research, things that actually matter. Not as authoritarian in practice as the US.
[/quote]

You’re partly right in your “less austere” argument. However incremental spending matters. That last thing to do is cut spending in the aftermath of a great recession. Big mistake on the part of Europe. There’s a correct time for everything.

[quote=spdrun]
As far as experiencing innovation and rising standard of living in my lifetime, I’m fine with things as they are. Things like getting off oil as an energy source are more engineering and legal problems than technological ones.

Most of the changes in this country since the 90s have been neutral or negative(*), so I have no faith about future change being positive. And I don’t embrace the singularity.

(*)- there’s a slight trend towards liberalization now, in the sense of same-sex marriage, drug law reform, etc, but it remains to be seen whether this will continue or peter out.
[/quote]

You and CAr like things a certain way. But policy is made for the benefit of the economy and national interests.

Policy is incremental. You pull some levers, one at time, at the appropriate time. It’s not an all or nothing game.

[spdrun]

Policy should be made for the benefit of the average citizen, not some insane abstract notion of the economy or national interests (aka ugly American d*ck-waving. “WE’RE THE BIGGEST! WE’RE THE BEST! RAH! RAH! RAH”). Really, who gives a flying flip?

The economy is there to benefit the average person. We’re not there to benefit the economy. National interests are only important as far as they benefit people living in a given country. Not as some sort of abstract chest-thumping patriotic idea.

And real standard of living has gone down since the 1990s. OK, people have more tablets and smartphones, but so what? If anything, those devices are more of a leash than a liberator. As long as you have the things in hand, you can’t really disconnect from work or other personal worries.

Longer working hours, but lower rate of employment. Damage to groundwater from fracking. More surveillance since 9/11. Worse food (more HFCS/more obesity). Higher college costs for four-year schools, and less ability to graduate debt-free. Overly rapid industrialization of third-world pestholes, impacting the global environment.

[Doofrat]

The four most dangerous words in investing: “It’s different this time” Be sure to add a “because” at the end of the statement to qualify why this particular cycle is different from all the others throughout history.

[FlyerInHi]

Well, leaders always have visions of grandeur. They want to lead something that is big and influential. If not us, it will be China, or Russia, Brazil, Argentina, Iran, or another country of significant size.

So no, we cannot afford to become irrelevant/non-influential like Sweden or Finland.

You live in NYC and love it. But it wouldn’t be the same without the skyscrapers that speak to the influence of NY. A lot of money went into prestige building to impress others. And that led to more wealth.

The world is asinine and somewhat self-destructive; but such is the human condition.

[The-Shoveler]

Would you invest in a company that was stagnant or declining?

how about a country that was stagnant or declining?

[spdrun]

FlyerInHI: What’s wrong with just living and letting the other countries take over the world? Fuck our responsibility. Maybe the world would be better off split between the Russians, Chinese, or Iranians. We have enough nuclear weapons to deter invasion, so it might alter our economy, but it won’t alter our rights materially.

But note that the world didn’t implode in the 80s when our working hours were shorter and we still took lunch. The Soviets were supposed to have a chance of beating us — see how that worked out 🙂

In fact, if we become a “nobody” country, we might be more free, since we won’t have as much money for law enforcement and won’t be as worried about terrorism. When was the last time a 9/11-scale attack happened in Prague, Budapest, or Amsterdam?

The only reason that I live in NYC is that it’s the part of this country that’s least infested with Americans and their idiotic notions. I much prefer the company of Russians, Hondurans, or French people than spending time with people actually born in this country. Not for the tall buildings, glamor, or anything else.

Only because it’s the closest thing to not being in America while still being within driving distance of my family. Nothing more.

[FlyerInHi]

[quote=spdrun]FlyerInHI: What’s wrong with just living and letting the other countries take over the world? Fuck our responsibility. Maybe the world would be better off split between the Russians, Chinese, or Iranians. We have enough nuclear weapons to deter invasion, so it might alter our economy, but it won’t alter our rights materially.[/quote]

Because well-being is relative.

There is such as thing as keeping up with the Jones (or even surpassing the Jones) that make people happy and motivates them.

Europe, for a time, went its own way to maximize well-being the way they saw it.

In America, our academics perfected capitalism and developed new ways to make capitalism provide us more material goods and to maximize GDP growth.

Europe (and the rest of the world) then looked at us with envy and changed directions to our way of doing things.

So we won. Our way is the way.

[spdrun]

Except that most people in developed countries see America as all nice and fuzzy until they get down to the gory details.

People outside the US *like* their month of time off every year. They *like* having their working hours be limited to a sane amount. The US is nice for them to visit. Few want to stay once the details become known.

BTW – in the 20th century, working hours were historically longer abroad than in the US. It’s only recently (past 2-3 decades) that the situation flipped. This didn’t actually make the US any less competitive.

[an]

[quote=spdrun]Except that most people in developed countries see America as all nice and fuzzy until they get down to the gory details.

People outside the US *like* their month of time off every year. They *like* having their working hours be limited to a sane amount. The US is nice for them to visit. Few want to stay once the details become known.

BTW – in the 20th century, working hours were historically longer abroad than in the US. It’s only recently (past 2-3 decades) that the situation flipped. This didn’t actually make the US any less competitive.[/quote]Unless you’re in Asia. Try working for a Japanese or a Korean company and let me know what you find out.

[Author]

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