The era of reduced expectations

[[email protected]]

[email protected] wrote:
On Fri, 21 Dec 2012 14:10:39 -0700, Jim Thompson

On Fri, 21 Dec 2012 12:58:28 -0600, Les Cargill

[snip]

"The inference that is grim" is that birth rates
fall dramatically. That reduces economic growth.

[snip]

Birth rates are dramatically down in the US... at least in the "truly
working classes".

Is that the _cause_ of the decline in economic growth, or the
_effect_?

I think the latter.

Agree. Les has the horse and cart reversed in much of his philosophy.


Population decline will also reduce economic growth, but it's
also caused by economic decline. It's a spiral.

Not sure I can parse that the way you intended, but population decline
is not caused by economic decline, rather the opposite.

In general, as a population skews older, consumption falls faster
than production. So yeah. But there *can* be ( I could have worded that
better ) a demographic effect that can negatively impact production as
well. As you note, it's way much less likely than factors that reduce
consumption.

What I meant (I wasn't any clearer than were you) was that population
decline follows *prosperity*, not economic decline.

I was mainly thinking of France in the interwar period:
http://www.sparknotes.com/history/european/interwaryears/section8.rhtml
A lot of their monetary problems ( France had at least one
hyperinflation ) was due to production simply being inadequate.
WWI caused a massive loss of mostly young men. This is in no way the
whole story, but it's always stuck out to me. Exports of stuff like
steel went in half then. The value of the franc also divided by two.
That might be a coincidence, but I doubt it.

Wars have odd effects that I don't think relate vary well to what
we're seeing now. The US grew out of the Depression, not because
FDR's policies finally worked but because the war demanded production;
slave labor, as it were. Perhaps there is a parallel to Obama's
economics here...

There's some argument as to whether or not this is the case in Japan,
but it's not clear.

Japan today, or Japan at war?

 

[Les Cargill]

On Fri, 21 Dec 2012 18:28:07 -0600, Les Cargill

[email protected] wrote:
On Fri, 21 Dec 2012 14:10:39 -0700, Jim Thompson

On Fri, 21 Dec 2012 12:58:28 -0600, Les Cargill

[snip]

"The inference that is grim" is that birth rates
fall dramatically. That reduces economic growth.

[snip]

Birth rates are dramatically down in the US... at least in the "truly
working classes".

Is that the _cause_ of the decline in economic growth, or the
_effect_?

I think the latter.

Agree. Les has the horse and cart reversed in much of his philosophy.


Population decline will also reduce economic growth, but it's
also caused by economic decline. It's a spiral.

Not sure I can parse that the way you intended, but population decline
is not caused by economic decline, rather the opposite.

In general, as a population skews older, consumption falls faster
than production. So yeah. But there *can* be ( I could have worded that
better ) a demographic effect that can negatively impact production as
well. As you note, it's way much less likely than factors that reduce
consumption.

What I meant (I wasn't any clearer than were you) was that population
decline follows *prosperity*, not economic decline.

Absolutely - we see that in Mexico, for example. But post-Boomer
demographics in the US show that a recession might also depress
birth rates. Taken far enough, it *might* reduce productive capacity,
but only when things get more extreme. I don't think the effect of a
scant-er workforce on say, outsourcing or automation is clearly
understood. That's a real mess to unravel, though. Of the GenX
people I've known who did the best, they were generally in very
nearly trades, or trades-plus-automation.

These topics sort of expand - it's hard to constrain them, and
it's easy for people to get confused. I'm probably confused anyway.

Wars have odd effects that I don't think relate vary well to what
we're seeing now.

That could be. I think there's a lot of error about the interwar period,
and that a lot of those errors cause us grief. I suppose what I
was mainly thinking about the interwar period in France is that
a lot of people think of the hyperinflation without factoring in all
the political instability that went with it.

Dunno; I've got "Nation of Deadbeats" in the book queue, and I think
it's going to be an important book. It mainly says that people think
they can make more and more complex financial instruments and
beat the boom/bust cycle, and they're shown to be wrong. When
they are wrong, sometimes regimes fail, and there is a lot of
war.

So then people confuse that with "free markets" and... there's
nothing "free market" about tranches of CDOs. If it was
your money, you simply would not do that. If you did, then
you'd eventually stand as a warning to others. In *every case*
where we get these boom/bust cycles, it's somebody behaving
like John Law in the Mississippi Bubble.

Used to be you could depend on people at least having heard of
"A Monetary History" by Milton Friedman but lately, he gets lumped in
with Greenspan's "oops".

At any rate, I think it starts with Irving Fisher. And I think we're in
an unnecessarily constrained period. Maybe you guys are right,
and we're not.

The US grew out of the Depression, not because

FDR's policies finally worked but because the war demanded production;
Yep!

slave labor, as it were. Perhaps there is a parallel to Obama's
economics here...

The real problem is that a lot of the legdermain about FDR is still held
in high regard, when a lot of it is just flat false.

Japan today, or Japan at war?

Japan today.

 

[Bill Sloman]

Perfect parallel.  Yeast is only limited by its food.  Government must
be starved the same way.

If you want wine, or a bread loaf that rises, you have to give the
yeast enough sugar.

If you want roads, police, education and defense you have to give the
government enough money. History is full of countries that imploded
when the right-wing nitwits didn't.

The people must starve it but why bother if it's only OPM.  *THE*
reason that *everyone* must pay taxes.

The government is just the biggest protection racket in town.With
care, you can make it serve useful functions. Starving it concentrates
it's attention on it's own survival.

But it'll be different this time...

It was different then, but neither James Arthur nor krw noticed.

 

[[email protected]]

'Fraid not. I have two twenty-something kids, both of who
have degrees ( and no student debt) and are not exactly
living in the lap of luxury. They're both pretty frugal,
too. Lotta garbanzos...

No grandkids.


No, that's why I picked that figure. At $3k a month, you're not exactly
going to be thriving anywhere. $1k rent, $1k food, bills, savings and
the like. Not bad (again) if you're single, but raising kids
would be much more interesting.

I spend about $1k on food a year. Maybe $1k5 these days--food's
cheaper in Califarmya. My biggest cost by far is gov't at roughly $2k
for the local stuff, including prop. tax, fees, and services.

I use about $20 worth of electricity and less than the minimum
billable amounts of water and natural gas per month.

Unless there happen to be $50,000 properties available, I don't
see anyone in that income band buying a house.

Here you can easily buy a fine, decent house for $300/month (or a
castle for more, if you'd rather). I just cruised the real estate
website and found several for <$200/mon. That's not unique to here--
there are such places all over the US. So, top-end, that's $3,600 a
year in payments, just 25% of $14k.

Minimum wage is seven bucks an hour. That's $14k. Unless you own
property outright and have very low property taxes....

There are two answers to that. First, that's only $14k if you only
work 40 hours a week, which I never have in my life. If you get

40hrs in one job, you get time-and-a-half, too. There's no reason a

person in that position shouldn't work 60 hours a week, even if that
means two jobs. 60hrs ups that to $21k/yr.

I moved from Europe on my own when I was 17, and started work at two
full time jobs--one for min. wage, one $.25 more. I easily lived off
part of one job's pay, and saved the rest.

The other answer is that even if you slack and make $14k a year,
that's still more than enough for mortgage, food, taxes, and
everything else. It is. I've done it. Forever. And I still manage
to ski, buy stuff, and have all kinds of fun. And save the rest.

Paul's right. People buy altogether too much <stuff> they've got
absolutely no need of. Which is fine, as long as they're spending
their own money--that's freedom--but it's a choice, and not my choice.

Never could make bread work economically - besides, it's $5.00
a week tops. Not a lot of margin to squeeze out of it.

I like real sourdough bread. It costs about $0.30 a loaf, homemade,
whole-grain, and it's better. I could naturally spend that time
earning more money so I could pay more in "fair share", but, like
Barack said, at some point you've made enough.

Today, it's curried lentils and cranberries. Life is good.

 

[[email protected]]

Wars have odd effects that I don't think relate vary well to what
we're seeing now.  The US grew out of the Depression, not because
FDR's policies finally worked but because the war demanded production;
slave labor, as it were.  Perhaps there is a parallel to Obama's
economics here...

Another factor is that Congress got d@mn tired of FDR's stimulus
fantasies and started fighting back, even before the war. Then when
the war came, Frank dumped his old economic team and hired on a bunch
of industrialists for the war effort, guys who knew how to get real
stuff made and done.

It's a counter-point to stimulus-ists though, who denounce military
spending as economic cost, yet point to it lovingly economically when
deployed by Frank. (They're right in the first case, wrong in the
second.)

 

[Bill Sloman]

FDR's policies are what ended the Great Depression,. The US GDP curves
and unemployment curves turn around in 1933, and rise steadily to
1937.

There are some right-wing myth makers who like to argue otherwise, but
it's rubbish, as evidenced by the fact that James Arthur treats it as
gospel.

Another factor is that Congress got d@mn tired of FDR's stimulus
fantasies and started fighting back, even before the war.

Whence the kink in the recovery in 1937, which allowed FDR to
reinstate hos fantasies.

 Then when
the war came, Frank dumped his old economic team and hired on a bunch
of industrialists for the war effort, guys who knew how to get real
stuff made and done.

It's a different kind of job from building a self-sustaining economy.

It's a counter-point to stimulus-ists though, who denounce military
spending as economic cost, yet point to it lovingly economically when
deployed by Frank.  (They're right in the first case, wrong in the
second.)

It's one more way of encouraging economic activity for the sake of
encouraging economic activity. You don't see the point, but there's a
lot you don't see.

 

[josephkk]

Shallowness of personal thought is responsible for dependence on
frivolous things. For people who are interested in how the world works,
the times are amazing. There is the "maker" movement, the small
(Arduino) boards and box store computers with scads of power.

Life is tenacious.

Paul, I hold that Loss of Self causes these things. Not technology.
When one comes to the point to where they no longer have a reflection
in the mirror, then they act as an animal. Not before.

Painfully on point.