What do you think are the major pros/cons of each current generation?

[Eric the Green]

(02-20-2022, 03:45 PM)JasonBlack Wrote:

Quote:You might want to give Thomas Pikkety's book Capital in the 21st Century a read (not a trivial undertaking, to be totally honest about it).  He makes the point with one simple mathematical expression: r > G.  What he means by that is, rate of return on investments exceeds the Growth rate of the economy.  This has been going on for a long time and is in full crescendo today.  When that occurs, the holders of capital, mostly the already very wealthy, increase their wealth faster than the economy grows, so the excess becomes even more capital and buys what they don't already own.  Given enough time, and that time frame isn't all that long, the few hyper wealthy will own everything.  OK, you might have a home, at least for a while, but that imbalance is terminal.  It's a formula for modern Feudalism.  The purpose of the book is to show that in terms that can't be ignored -- which it does in spades.

Personally I blame this as much on fiat currency as anything else. We went off the gold standard in 1971 and this happened. Wages have a long history of rising far slower than inflation under such a model. The primary people it hurts are wage earners, responsible savers and retirees no longer earning income. 

I can tell you as an investor, it's not us it hurts haha. 

Quote:The idea is wonderful in theory and unworkable in practice.  A capitalist economy operates on a positive feedback loop: get rich, use that wealth to get richer, rinse and repeat.  Lobbyists, disgusting as they are, are a symptom of the problem, not the problem itself.

It's not unworkable in practice. New Zealand saw HUGE drops in corruption when they severely restricted campaign spending. Currently they fluctuate between 1st and 2nd place in terms of low government corruption.

The gold standard is as arbitrary as any other standard. It has value because we say it does. I suspect blaming fiat currency is pointing at the wrong problem. I suspect the problem is Reaganomics (libertarian economics).

The oil crisis in 1973 caused a mini-depression in the mid 1970s. Conservative policies of neoliberalism were already appearing under Nixon-Ford and Carter. These policies really got rolling under Reagan, and we can see the decisive shift in 1980-81. Once the economy recovered from another oil recession in 1979-82, productivity went up. But as Rachel Maddow showed in the video above, this recovery benefited only the rich. Trickle-down economics policies meant that most people saw their wages decline or stay the same while the rich piled up more and more riches. 

Conservative policies, especially under Reagan and Bush, were 

1) to keep wages flat by refusing to pass minimum wage laws
2) to break up or make it harder to pass or form workers' unions, which had kept wages up before 1980.
3) to lower taxes, especially on rich people, in the belief that they are "job creaters" (GW Bush accent), from whom the benefits will trickle down. But it doesn't; it piles up for the rich. They use their money to buy luxuries, do buyouts, make risky speculations, replace workers with machines, etc., not pay more to their workers. So, CEO salaries rose to 300 times their employees.
4) to reduce regulations on business, which means it can get away with polluting, climate change, making shoddy and unsafe products, charging unfair higher prices, creating poor working conditions, allowing more risky speculation, increasing racial profiling and discrimination, and more, all making it less likely that companies will do a good job for the money we pay, and allowing them instead to rob the people in many ways. Increasing climate change also means more disaster relief, paid for by the people and the taxpayers.
5) to reduce social welfare and other programs that help the needy, increasing poverty and thus reducing consumer spending and depressing the economy for everyone.
6) libertarian policies allowing more risky speculation also have the effect that when they fail, the banks and financial companies get bailed out instead of regulated or broken up, which is just more transfer of wealth by the state from the taxpayers to the wealthy. Since fiscal Keynesian government spending policies have been taken off the table by Reaganomics neoliberalism, the only cure for a slow economy is quantitative easing by the Federal Reserve, which is yet another wealth transfer to banks and businesses.
7) Another result of such bailouts and Fed loans made to distribute money as well as the enormous tax cuts is more debt, which has become even more astronomical than housing prices, especially the national debt. Eventually this could cause interest rates to go up sky high, or defaults, or just more and more money we are asking future generations and young people to pay instead of the economic libertarians of today. By raising the debt sky high, the Republican neoliberals create another excuse not to do social welfare spending since then they claim we can't afford it.
8) free trade and robot automation have often been downward pressures on wages and cause less demand for labor, especially since under free-market neoliberalism the bosses don't have to pay taxes to support those laid off or underpaid.

The investment cycle mentioned by Picketty that David cites applies mostly to real estate, since housing costs have been allowed to rise to astronomical levels so that rich people and companies, sometimes foreign, are buying up property and turning the USA into a feudal ownership aristocracy. Homelessness is a result of this for many people. Some other investments like bonds and money market funds, which more regular people own, are not doing well enough to contribute to this effect of ownership of the economy by a few. But stocks have seen huge rises, the Dow Jones average having risen by over 35 times since the early 1980s.

Thus we have the enormous gap between "productivity" and wages, especially since 1980 when Reagan was elected, as seen in the graph.