(12-26-2016, 12:11 PM)Warren Dew Wrote: If you want to get rid of all the mooching byy getting rid of government assistance and letting private charity help those who are really in need, I'm all for it.

(12-22-2016, 11:13 PM)Warren Dew Wrote: What we saw in the 1970s was that without the spur of international competition, US industries became inefficient and their products dropped in quality while increasing in price.  That's how the Japanese got a foothold in our auto market, of which they own a substantial fraction now.  In the medium to long run, you need competition to maintain your edge.

(12-22-2016, 11:58 PM)Warren Dew Wrote:

(12-19-2016, 12:33 PM)David Horn Wrote:

(12-18-2016, 04:54 PM)Warren Dew Wrote: Certainly the situation now is different; in particular, as Bartlett points out, the situation Reagan was facing was inflationary, and the current situation is not.  Thus he is correct to critique Rubio's strategy of merely duplicating the deflationary supply side stimulus of the 1980s.

My proposal goes well beyond that, however.  For example, to address the wage disparities that have resulted from a supply side easy immigration policy for the past three decades, we need to clamp down on immigration and illegal immigrants.  That will be quite inflationary since it will increase wages, especially at the lower end of the scale.

It will also dampen growth, since it will restrict the labor supply.  To counteract the negative effects on growth, we will need some combination of monetary stimulus and fiscal stimulus.  Since both  the basic wage leveling policies and the monetary stimulus will be inflationary, we will need the fiscal stimulus to be supply side stimulus:  the deflationary effect of supply side stimulus will help counteract the inflationary effect of the immigration policies and monetary stimulus.

I wear a heavy coat and boots in the winter, but that doesn't mean I quit wearing my shirt and pants underneath.

This seems to be an excessively complicated way to achieve your goals.  Three actions can provide the intended results without the need for outside actors to take actions they may elect not to take.  First, raise the minimum wage.  $15 nationally, with a nod to more in high-wage areas, will move low wage earners to actual living wages.  Second, raise taxes on high incomes, and, for heavens sake, eliminate the special benefits that accrue to unearned income and large inheritances.  Third, Start an infrastructure building program that includes old (roads, bridges and the like) and new (smart grid, broadband everywhere, 5G wireless) projects that are truly investments in the economy. 

The rest will take care of itself.  As inflation kicks in, interest rates can be raised.  I'm no fan of the public purse being deprecated to private profits when "crowding out" occurs.  Right now, the public sphere needs far more attention.

My proposal is no more complicated than your proposal:  each has three parts.  I just explained how mine would work in more detail.

That, of course, is because your proposal would not actually work.  Your massive increase in minimum wage, for example, far from helping low wage earners, would simply throw many of them out of work entirely.  Seattle is already seeing negative effects on the job market from the first phase in step of their minimum wage increase to $15, and they've only gone to $10 so far.  By the time they reach $15, half of those jobs will be gone entirely.

(12-24-2016, 09:42 PM)Warren Dew Wrote:

(12-23-2016, 08:42 PM)Eric the Green Wrote: Studies that I have heard of say that higher minimum wages increase jobs, because when people are paid better, they buy more and thus create jobs for the businesses.

Higher minimum wages don't cause people to be paid better, though; they just cause people at the low end of the wage spectrum to be put out of work.

(12-24-2016, 11:51 PM)Warren Dew Wrote:

(12-24-2016, 10:30 PM)Ragnarök_62 Wrote:

(12-24-2016, 09:42 PM)Warren Dew Wrote: Higher minimum wages don't cause people to be paid better, though; they just cause people at the low end of the wage spectrum to be put out of work.

But, but, who in their right mind wants to work for a penny/hour?  We're in a Neo Gilded age and since there are no large labor unions, that's what sort of stuff will happen.  The real problem is there is no such thing as equal economic power between an individual and Corporate America.  .... Well, I suppose we can supplement our meager wages with massive five finger discounts.

If Trump and Ryan do what they promised and institute mandatory e-verify, wages will rise at the low end of the wage spectrum well above the mandatory minimum.  People will still be put out of work, but it will only be the illegal aliens, and they will likely return to their home countries.

(12-26-2016, 09:35 AM)Odin Wrote: But if the wages are too low the person will need government assistance to survive, anyway, which means that the government is essentially subsidizing the business. If you have to pay your workers so little that they can't survive without welfare then YOU are the one mooching off the taxpayer's dime and should not be in business.

Funny how all you right wingers have no problem when so-called "job-creators" are the "moochers".

(12-26-2016, 12:11 PM)Warren Dew Wrote:

(12-26-2016, 09:35 AM)Odin Wrote:

(12-24-2016, 09:42 PM)Warren Dew Wrote:

(12-23-2016, 08:42 PM)Eric the Green Wrote: Studies that I have heard of say that higher minimum wages increase jobs, because when people are paid better, they buy more and thus create jobs for the businesses.

Higher minimum wages don't cause people to be paid better, though; they just cause people at the low end of the wage spectrum to be put out of work.

But if the wages are too low the person will need government assistance to survive, anyway, which means that the government is essentially subsidizing the business. If you have to pay your workers so little that they can't survive without welfare then YOU are the one mooching off the taxpayer's dime and should not be in business.

Funny how all you right wingers have no problem when so-called "job-creators" are the "moochers".

If you want to get rid of all the mooching by getting rid of government assistance and letting private charity help those who are really in need, I'm all for it.

(12-26-2016, 05:36 PM)SomeGuy Wrote: I am all for infrastructure investment.  I said that quite clearly on this thread.  There is indeed ample room for public works, and that investment on this scale would do much to address the competitiveness of the US economy and the (under)employment problem in this country.  

All of that is fine.  What I was objecting to was an open-ended policy of the government providing jobs to people as an end in itself.  There is just too much opportunity for mismanagement, for waste, for an expanding and bloated bureaucracy.  I feel that targeted spending on public works, hiring people to build the necessary infrastructure as efficiently as possible, in conjunction with a broader policy of wage subsidies to alleviate conditions on the lower end of the socioeconomic scale, would be more effective.

(12-26-2016, 12:11 PM)Warren Dew Wrote: If you want to get rid of all the mooching by getting rid of government assistance and letting private charity help those who are really in need, I'm all for it.

Quote:Think ahead.  At most, we are 30 years away from a world where almost all human-supplied work will be unnecessary.  Automaton and AI will cross the line where the automatons are able to create more automatons with limited human interaction.  At that point, the cost of human effort will be almost infinitely higher than that provided by machines.  We need an economic model that still operates in that environment, or chaos will ensue. 

Killing off the non-owners is a non-starter for obvious reasons.

(12-28-2016, 02:01 PM)SomeGuy Wrote: I understand it is fashionable to say such things, but this claim has been made many times over the past 200 years and has yet to come to fruition.  Did you actually take a look at the info I had posted earlier, showing that the top 3 countries by number of workers per 10,000 manufacturing workers (the US is 7) had twice the number of manufacturing workers as a percentage of the labor force than does the US today?  The Luddites (the orginal ones, mind you) feared that textile machinery would put them out of work, and yet as the Industrial Revolution ground on the number of textile workers soared.  I am presently employed writing automation scripts for data processing (ETL) and reporting, and yet every time I automate one task, the number of tasks soars.  Take one report for one client that was previously generated once a month by hand, write a script for it, and pretty soon they want it once a week, and then daily, then other clients start clamoring for it, and the net amount of work I do remains much the same, even as the output grows.

(12-28-2016, 02:01 PM)SomeGuy Wrote:

Quote:Think ahead.  At most, we are 30 years away from a world where almost all human-supplied work will be unnecessary.  Automaton and AI will cross the line where the automatons are able to create more automatons with limited human interaction.  At that point, the cost of human effort will be almost infinitely higher than that provided by machines.  We need an economic model that still operates in that environment, or chaos will ensue. 

Killing off the non-owners is a non-starter for obvious reasons.

I understand it is fashionable to say such things, but this claim has been made many times over the past 200 years and has yet to come to fruition.  Did you actually take a look at the info I had posted earlier, showing that the top 3 countries by number of workers per 10,000 manufacturing workers (the US is 7) had twice the number of manufacturing workers as a percentage of the labor force than does the US today?  The Luddites (the orginal ones, mind you) feared that textile machinery would put them out of work, and yet as the Industrial Revolution ground on the number of textile workers soared.  I am presently employed writing automation scripts for data processing (ETL) and reporting, and yet every time I automate one task, the number of tasks soars.  Take one report for one client that was previously generated once a month by hand, write a script for it, and pretty soon they want it once a week, and then daily, then other clients start clamoring for it, and the net amount of work I do remains much the same, even as the output grows.

Why the loud and emphatic insistence that this time is really different?

(12-28-2016, 03:11 PM)Mikebert Wrote:

(12-28-2016, 02:01 PM)SomeGuy Wrote: I understand it is fashionable to say such things, but this claim has been made many times over the past 200 years and has yet to come to fruition.  Did you actually take a look at the info I had posted earlier, showing that the top 3 countries by number of workers per 10,000 manufacturing workers (the US is 7) had twice the number of manufacturing workers as a percentage of the labor force than does the US today?  The Luddites (the orginal ones, mind you) feared that textile machinery would put them out of work, and yet as the Industrial Revolution ground on the number of textile workers soared.  I am presently employed writing automation scripts for data processing (ETL) and reporting, and yet every time I automate one task, the number of tasks soars.  Take one report for one client that was previously generated once a month by hand, write a script for it, and pretty soon they want it once a week, and then daily, then other clients start clamoring for it, and the net amount of work I do remains much the same, even as the output grows.

SomeGuy has hit on the key that has kept people employed--inefficiency and make work. He works to automate tasks, but it has no net improvement in productivity.  Instead of producing an end output (monthly report) more efficiently, the output is redefined (weekly, then daily, then hourly, then real time?) reports so that the same resources spent on report generation years ago continue to be expended today. Does the greater frequency of report generation create value?  No because everybody else is doing it. It  becomes something you have to do to stay in business (i.e. be competitive) and so really functions like a tax.  Advertising and marketing is the same sort of thing.  About 2% of GDP is spent on advertising and has been for 70 years. New technology requiring massive investments is constantly be applied to task all paid for by this 2% "tax". 

I've seen this at my own work.  As result of guys like me, our production operators are phenomenally more productive in terms of the value of the output they physically produce that they were when I started my career.  As a result there are far fewer of them. Yet employment hasn't fallen. What has happened is they have been replaced by college-educated workers involved in QA, IT, "right first time", safety & environmental, "business excellence", and other functions that either did not exist or were much smaller 30 years ago.  So as when I came here, around 60% of the employees were (smart) guys out of high school who put product in the drum, today maybe 30% are.  Thee kids of the guys 30 years ago got college degrees and work in cubicles and probably have about the same standard of living as their parents.

(12-28-2016, 02:48 PM)Mikebert Wrote: I am losing posts or something.  I clearly recall an exchange with Warren about his concept of deflationary stimulus that still makes no sense to me.  I made a post and never got a response. I can't find it now, so I wonder if it got lost and never appeared.  The idea was if you cut a plumbers tax rate he would be incented to cut his rates which would drum up more business expanding his output.

The example was say the tax is 35% and he currently charges $100 an hour--after tax $65.  He gets a tax cut to 20%. So he cuts his rate to $90 an hour, which increases his business by 5%.  He takes home $72, more than the $65 before.  So his weekly income increases from $2600 (40*65) to $3024 (42*72) demand stimulus of $424. His old customers who were paying $4000 for a week of his labor are now paying $3600 for the same, freeing up $400 that can be spent elsewhere for a total demand stimulus of $824.  This comes at a cost of a $600 loss in government revenue for a net stimulatory impact of $224.  Looks great right?

The problem is the incentive calculation is not correct.  After the tax cut, if the plumber would not cut his rates, he will take home $80/hr.  If he then continues to work the same 40 hours a week he will take home $3200, MORE than the $3024 in the example above and do this by working LESS hours.  Why would be cut his rates and take a pay cut? In this case the gain to the plumber is $600, exactly equal to the loss in revenue and there is no stimulus, simply a transfer of money from the state to a private individual.  And unless the private individual spends all of it is will be contractionary.

I don't see how this "deflationary stimulus" is supposed to work.

Quote:We are far more capable now than we ever have been.

Quote:During my working life, I watched good paying jobs disappear due to the digital revolution, and the answer was always the same: retraining.  Except the window was always smaller.

Quote:Retraining requires some level of base knowledge, and the base knowledge changes every 10 years.  So how does this work for a 40 year career? 

Quote:Companies are deciding it doesn't, so they are plowing ahead with technology.  Except this time, the basic skills that make us human are being replicated by machines.  Vehicle operators (the #1 low tech job in the country) will be unneeded in 20 years.  Factories are already automated, as are warehouses and most other repetitious activities.  With AI, non-repetitious activities are next.  Why educate lawyers when expert systems can do the same jobs.  MDs are on the same short list, and surgeons are next.

Quote:I worked in technology for almost 50 years.  The pace of change at the end of my sojourn was staggering.  Automating away all the jobs that don't require highly advance knowledge and decision making skills (even many that do) means planning for the future of today's children is literally impossible.  We're proud of this, but why?  People are not that flexible that they can tear their lives apart 4 or 5 times, and survive -- to say nothing of thrive.  It will only accelerate in the future.

So yes, the fully automated future will have to arrive, because humans will not be able to survive the pace of change.

(12-28-2016, 05:30 PM)Eric the Green Wrote: If automation has collapsed jobs in the USA, it will collapse then in Europe and China too in time. If manufacturing is done by machines, fewer people are needed.

(12-28-2016, 02:48 PM)Mikebert Wrote: I am losing posts or something.  I clearly recall an exchange with Warren about his concept of deflationary stimulus that still makes no sense to me.  I made a post and never got a response. I can't find it now, so I wonder if it got lost and never appeared.  The idea was if you cut a plumbers tax rate he would be incented to cut his rates which would drum up more business expanding his output.