2019 - A Look Back at a Strange Economic Year

[_moksha]

Trump has announced more tariffs on Chinese goods. I thought they were coming to an agreement.

Trump lies about everything. It seems strange to say this, but wait till you have a positive statement from Beijing.

[_EAllusion]

Does the article really account for the fact that it costs a lot more time and money to qualify for a job now than it once did. For the old fogies retiring now, optometry school was a three year program and I don't think it even required an undergraduate degree to get into optometry school. They probably didn't pay more than $10k in tuition for that 3 year program.

The wiki link is just an explanation of the effect.

This is a different, but related issue. To the extent increased educational requirements produce a parallel in added value, it's a wash. To the extent they are met by better service, it's an artificial price increase. Notable for the point in my first post, you can't pay for a 1950's optometrist exam with 1950's technology, medical knowledge, and educational standards. It don't exist. It's been extinguished in the market. You either pay for the modern equivalent or you do without. You can't work for a fraction of the time and buy a 1950's eye exam.

Imagine I give you X dollars in 1955. You use that to buy a house, a car, clothes, refrigerators, etc. It turns out that because of improvements in the manufacture of material goods, your dollar goes a longer way to buy more stuff. It's better stuff too. Cars are better. Homes are better. Refrigerators are better. But you have more money leftover to purchase things that didn't even exist in 1955. Standard of living has drastically improved. However, services that are more limited by human capacity aren't improving at the same rate and in some cases are essentially hard capped. This means either those services go away or, if their is continued demand for them, their relative price goes up because the people performing those services demand a continued competitive salary. So child care costs feel increasingly like a burden at the very same time things seem to have generally gotten better.

Going beyond this, real wages for ordinary workers haven't actually moved much since the 1960's. Almost all wealth generated from productivity improvements have gone to the upper crust. That pulls up the average, but taking into account how Jeff Bezos is doing can lead to some misunderstandings of how a person working 2 jobs for a little more than min wage is doing.

[_canpakes]

This isn't the entire story though. There are direct services that just can't get much more efficient. Think of taking care of a child. But the cost of taking care of a child keeps going up. Why? There's an economic theory that says it is because in order to have people who are willing to work to take care of children, you have to pay them something resembling a competitive salary so they, too, can buy clothes and HDTV's. Otherwise, they'll just get a job making HDTV's.

The average hourly wage for daycare workers is actually pretty low, hovering around $10 an hour. I also don’t think that there are too many places (like, virtually none) left in America that manufacture televisions. : )

Where labor costs factor into this is probably due more to the number of employees required within a daycare facility. But other, more influential factors on the cost of daycare for many commercial providers include insurance, regulation, training, and facility construction/maintenance expenses.

This article is a good, quick read on the topic:

https://www.theatlantic.com/ideas/archi ... ve/602599/

[_huckelberry]

Reason has a hobby horse when it comes to the capitalism v. socialism debate, and almost weekly carries an article citing studies where support for capitalism is slipping among younger Americans when presented as a word. For example, they'll point to studies where a question like, "Do you believe capitalism has led to more harm or good for society?" gets answered as it having been more harmful by people under 40 years of age. And then point out that this flips if one doesn't use the term capitalism but instead asks about choice, opportunities for self-determination, degree of government control of industry, etc. I think that part of the article is more of an undercurrent to their broader point than meant to be a point of focus.


My read on the article is that Democrats and Republicans act in ways that are expanding the deficit, using negative messaging to push agendas that aren't evident in the economy overall, but that we do have serious issues facing us if we don't start paying attention to how government spends money.

I am wondering which is more shallow, reactions to the word capitalism thinking only of its potential downside or reactions to bromides replacing economics with "be all you can be" type advertising. Perhaps recent education has given an unbalanced picture of negatives which have accompanied capitalism. Our education should encourage people to want political considerations to go deeper than test group reactions to sound bites.

Of course we need to consider the money government spends.It is unfortunate that both Democrats and Republicans find ways to increase the deficit

Still I am sorry I am unable to unhear an underlying message in the article: How can we have all these people building Mcmansions to live in if they have to contribute tax money for food assistance and medical assistance ?

[_EAllusion]

The average hourly wage for daycare workers is actually pretty low, hovering around $10 an hour. I also don’t think that there are too many places (like, virtually none) left in America that manufacture televisions. : )

Manufacture of TV's is an abstraction to refer to higher productivity work. Child care involves more than day care workers, but even focusing on that, they are not earning an 1870's living despite not having major leaps forward in their capacity to take care of children. The demand is there, so the relative expense increases.

[_honorentheos]

Reason has a hobby horse when it comes to the capitalism v. socialism debate, and almost weekly carries an article citing studies where support for capitalism is slipping among younger Americans when presented as a word. For example, they'll point to studies where a question like, "Do you believe capitalism has led to more harm or good for society?" gets answered as it having been more harmful by people under 40 years of age. And then point out that this flips if one doesn't use the term capitalism but instead asks about choice, opportunities for self-determination, degree of government control of industry, etc. I think that part of the article is more of an undercurrent to their broader point than meant to be a point of focus.


My read on the article is that Democrats and Republicans act in ways that are expanding the deficit, using negative messaging to push agendas that aren't evident in the economy overall, but that we do have serious issues facing us if we don't start paying attention to how government spends money.

I am wondering which is more shallow, reactions to the word capitalism thinking only of its potential downside or reactions to bromides replacing economics with "be all you can be" type advertising. Perhaps recent education has given an unbalanced picture of negatives which have accompanied capitalism. Our education should encourage people to want political considerations to go deeper than test group reactions to sound bites.

Of course we need to consider the money government spends.It is unfortunate that both Democrats and Republicans find ways to increase the deficit

Still I am sorry I am unable to unhear an underlying message in the article: How can we have all these people building Mcmansions to live in if they have to contribute tax money for food assistance and medical assistance ?

Hey huckelberry,

Your comment is certainly accurate that the article's author reflects a common Libertarian theme. Rather than put it as a means of protecting aspirational consumption for McMansions from social safety net programs like food assistance and Medicare, it usually is expressed as the acquisition of wealth is the best incentive for progress. So to redistribute wealth is to disincentivize people from doing the things that lead to progress. My personal view is this is based on an unrealistic and survivor's biased take on western history. I'm inclined to favor the argument that a force (i.e. government) is needed to ensure people play by certain rules that ultimately result in the democratization of opportunity. Otherwise, we have losers like Trump being given every advantage despite their own inherent inadequacies while countless bright and potentially world-changing but economically disadvantaged people end up excluded from opportunities to maximize their potential to society's detriment. We as a society are worse off when the advantages that accrue to the wealthy are accessible to fewer and fewer people. I've had a few arguments with people who argue the strength of the US has been our capitalistic system which i counter is moronic given capitalism is an economic system not a political one. Only cold warriors think capitalism is an inherent characteristic of the US that allowed us to beat the Communist Soviets. Instead, I argue that it was the break down of traditional European autocratic hierarchies and the expansion of opportunity made available to people of a range of economic classes (combined with natural resource wealth and land, of course, but which play in to access of opportunity) that they are envisioning when they defend capitalism. That's small "d" democracy, and I think both the left and right in the US are threats to that at the moment. I don't believe we can afford to be everything to everybody and frankly, we need to find a balance between what is realistic for providing safety nets and what is over-reaching expectations for giving everyone a participation trophy just for being alive.

Anyway, here's another take for this thread on both looking back at 2019 and what it means going forward from Reason.com:

https://reason.com/2020/01/03/the-liber ... arsely-api

You might find Tyler Cowan's views interesting, even if the article's author isn't sold on them. Nick Gillespie, the article's author, is not too far from the author of the article in the OP, and perhaps on reflection I'm thinking there is value in exposing alternative views outside of the conservative and progressive positions just for the sake of exposure. Even when I don't agree with them. I'm far closer to Cowan than Gillespie (I recommend the podcast that is linked to in it if one has the time and interest for such things) if for slightly different reasons. But at the least, I think there is value in getting past zooming in on the points of disagreement or most offensive positions to ask, "Assuming this person is being reasonable, what is it about their view that I'm missing that would help me understand why they think the way they do?" Our instinct is to ask, "Must I believe this?" and upon finding a reason to answer with, "No", then dismiss the position as irrational. Most people are about as rational as the next person, and most positions do not demand we accept them given there is inherent nuance in them. So the most dare I say progressive approach is to resist the urge to meet contrary positions from our own with narrowly focusing on the points with which we find best cause for dismissal. If we instead assume there are good reasons for someone to hold those views even if we don't agree with them, we may find out there is value there that furthers our understanding of our own positions.

[_huckelberry]

Honorentheos, there are enough things in your previous post that fit my understanding that I am a bit uncertain what response would be interesting. I think it is good for those defending capitalism to understand why others may be looking hopefully at the idea of socialism.

I do not hear socialism itself, government ownership of the major means of economic production, being extolled by people. I do hear some people who wish government have a larger role and others view that as socialism.

I find myself thinking of a rather simple observation with a touch of word play. There is one thing that all economic systems, capitalism, socialism, communism, feudalism, ancient empires like Rome etc, all have in common. They need capital to function. They are all under the temptation to use abusive measure to gather capital. Russia in the 1930s employed lots of slave labor and expropriated crops from peasants causing starvation. The United states collected capitol by slave labor and expropriation of Indian land and homes.

On the positive side capitalism has strengths. I do not think any of them like value of greed and competition, are stand alone virtues. Perhaps more basic is the importance of individual property rights to maintanance of respect for individuals in society. Still in any society that right exists with obligations like paying taxes.