Here we go again (Low low down payment)

[FlyerInHi]

Another thing CAr, in your wish to micromanage everything, you’re drawing too many distinctions on what is productive or not.

People trading commodities is productive. There’s a speculative aspect, but higher prices eventually result in more production and more technology. Plus there’s employment in the trading activities.

If I give you a hair cut this week, and you give me a hair cut next week, that’s productive work. We are doing work and exchanging money and that’s a good thing. If there were a lack of liquidity, we’d be sitting around doing nothing. Bad for the economy.

[FlyerInHi]

[quote=spdrun]Sure, but it will happen :)[/quote]

Sure it will happen. But CAr keeps on insisting on a “destroyed” economy and all the gains that we’ve made will be wiped out because they were “artificial”.

Money is artificial. It’s just a man made concept to facilitate trade. There is no reason we should not manage and refine our use of money to keep people working and productive. That’s what economists do.

Some people think there a certain law of nature to money. There is not. Money can be whatever we want.

[spdrun]

To a certain point. If the “best and brightest” are lured to commodity trading by the promise of a lot of money, they are being lured away from possibly more useful activities like scientific research and infrastructure design. Both of which are sorely lacking in the US outside of the I.T. sector.

[FlyerInHi]

I’m very interested in service industries. What we produce is not necessarily lasting but we give pleasure to each other. Like massages, leisure and entertainment. More of those services are good for the economy. Basically we need to keep working doing things, anything. Working and exchanging money.

[spdrun]

Why? Less money velocity would mean cheaper goods. And maybe less need for services if there’s more free time. Why pay for a massage if your wife or gf has time to give you one?

The “working norm” of 40+ hours per week is purely arbitrary.

And you still didn’t speak to misallocation. If the potential inventor of a controlled fusion reactor chooses to push money around in a Wall Street whorehouse instead, it’s a net loss for society and the Earth.

[FlyerInHi]

That’s the paradox of thrift. On an individual level thrift is good. But it’s bad for the economy.

More sevices means more income for everyone. They can spend on things which results in more production and prices to drop. Take chocolate. 100 years ago it was a luxury product. I’ve read of people prostituting themselves for chocolate. But they are now commodities.

The more trade the better. When liquidity problems causes trade to stop, we fix it.
What if you bake delicious cupcakes and someone else gives great massages? You’re both better off for having done business.

On allocation of human capital, we still attract the best and brightest. Just look at the PhD rolls of major universities. Maybe as a share of GDP funding for basic research is down, but that can be rectified by policy.

[spdrun]

So your ideal society would have people working like ants all of their waking time just to satisfy the ideal of maximizing economic output? That’s moronic. When does it STOP?

There are non-monetary virtues in life. Like having time to spend a lazy Saturday morning in bed, screwing the brains out of your significant other. Or spending a week hiking with family. Or just spending a day relaxing in the park, reading for pleasure, not doing much of anything.

And when do people have time to use all of those services that you think of as being so damned important. Work for the sake of work itself isn’t a virtue.

Typical American, buying into the Puritan work ethic (at least for others) hook, line, and sinker. How does that KoolAid taste?

Incidentally, the same person (Keynes) who coined the phrase “Paradox of Thrift” also supported and predicted much shorter working days going forward. Something like 3-4 hours average due to automation.

[FlyerInHi]

Each person can decide when enough is enough. But the person who want to bake cupcakes 24 hours a day should not be stopped. The more bakers do that, the cheaper the cup cakes become for everyone. More people get to enjoy cupcakes and we’re all better off.

You know in Europe a lot of shopkeepers would like to open late or 24 hours. But they cannot because of stupid non-economic laws.

[spdrun]

Bullshit. If the average employer demands 50 hours a week of availability, it’s very hard for the average person who doesn’t want (or can’t) to be freelance to decide otherwise.

The laws in Europe exist to prevent a race to the bottom as far as working hours or time off. Same as worker protection laws exist to prevent a race to the bottom as far as working conditions (e.g. working with asbestos without protection).

[FlyerInHi]

The 50 hours demand is because employers are using salary vs hourly loophole to avoid overtime. It’s up to people to demand a change or simply use their professional discretion to walk away when they see fit.

But as far as operating hours, I think shops open 24 hours are very convenient and a better use of real estate. Work hours and overtime conditions can still apply.

Sometimes legal restrictions are to prevent abuse and a race to the bottom. But oftentimes the laws only serve to protect underserving entrenched interests.

[spdrun]

And that loophole isn’t within the spirit of working week laws. Therefore should be closed.

Problem is that most people in this country don’t demand change, because they have neither time nor savings to do so. Because of work and societal expectations. Vicious cycle.

The few outlyers will just lose their jobs. Maybe (if they’re lucky), they’ll win a lawsuit against their employer a few years later.

[FlyerInHi]

I agree that employers have to much power. And people think that working a lot is a badge of honor. Plus employers dangle the stock options carrot. They use psychology like “valued associate”, stupid incentives games that have people competing for shit prizes, etc…

Honestly, I’m with you on many things. If employers you like shit you give the shit right back. Don’t think that kissing ass is good. A lot of people are too dumb to see reality.

Amazon won the Supreme Court case saying they don’t have to pay for employees to wait in long security lines before going home. Total bullshit.

[CA renter]

[quote=FlyerInHi]Another thing CAr, in your wish to micromanage everything, you’re drawing too many distinctions on what is productive or not.

People trading commodities is productive. There’s a speculative aspect, but higher prices eventually result in more production and more technology. Plus there’s employment in the trading activities.

If I give you a hair cut this week, and you give me a hair cut next week, that’s productive work. We are doing work and exchanging money and that’s a good thing. If there were a lack of liquidity, we’d be sitting around doing nothing. Bad for the economy.[/quote]

Glad you posted this…you knew how I was going to respond to your previous post. 😉

Yes, I draw a distinction between productive and non-productive activities, and I always will until somebody shows me a *genuine* reason for not doing so.

Spdrun already addressed a few of the problems with your post. As for that misallocation of labor resources, he’s spot on. I have a couple of friends who graduated from Harvard. Both have said that the advisers there will guide the brightest and most driven students toward a career on Wall Street (one of these friends followed their advice). Mathematicians, scientifically-minded students, etc. are often re-routed to the financial sector.

Additionally, speculation is zero-sum. And all of that extra production (misallocation of resources) that might result from speculation? I’ve addressed that in another post, above.

[quote=CA renter]

Asset prices can affect GDP numbers, too. The prices of raw commodities is priced into things that we buy.

Additionally, when asset/commodity prices are artificially inflated, it causes a misallocation of resources. You’ve noted energy, so let’s use that as an example. If prices are being driven up by speculation, it will cause people in the energy industry to commit more resources to drilling for oil, or building massive solar or wind farms, etc. That’s good IF the prices are based on real supply and demand (not speculators of any sort). If the prices increases were caused by speculation or other market manipulations, then the boom will eventually go bust, and all of those direct and indirect jobs will be lost, the equipment will be sidelined (possibly only working a fraction of its intended lifespan), the environment will be damaged (and the companies responsible for the damage might go BK, leaving the mess for taxpayers to clean up) and the economy will be decimated, especially in the regions where all of this work was happening.

This is just one example. Market manipulations have a ripple effect on the economy, and if booms are allowed to grow to bubble proportions, they can take down whole sectors of the economy for a prolonged period of time.

And I doubt that a “lack of liquidity” will exist for very long. If the economy is that dicey, it will usually collapse, then the money from elsewhere comes rushing in during the vulture stage. Of course, I favor a public bank, so in my theoretically ideal world, there would almost always be liquidity in the system, especially if the boom-bust cycle was damped as speculators are prevented from controlling or greatly affecting the market.[/quote]

[Anonymous]

[quote=CA renter] I have a couple of friends who graduated from Harvard. Both have said that the advisers there will guide the brightest and most driven students toward a career on Wall Street (one of these friends followed their advice). Mathematicians, scientifically-minded students, etc. are often re-routed to the financial sector.
[/quote]

Of course the “brightest and best” Harvard grads only end up on “Wall Street” after they seek employment guidance from their “advisers!”

LOL!

[FlyerInHi]

CAr, there is value added in selling things back and forth. Not zero sum.
Think of the eBay business model where we just mail junk back and forth to one another.

[Author]

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