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NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious. Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action.
It’s a slow morning on the economic news front, as we wait for various euro shoes to drop, so I thought I’d share a meditation I’ve been having on the diagnosis and misdiagnosis of the Lesser Depression. It’s not really different from what I’ve been saying all along, but maybe coming at it from a different angle is somewhat enlightening.
So, start with our big problem, which is mass unemployment. Basic supply and demand analysis says that things like that aren’t supposed to happen: prices are supposed to rise or fall to clear markets. So what’s with this apparent massive and persistent excess supply of labor?
In general, market disequilibrium is a sign of prices out of whack; and most people commenting on our mess accept the notion that one or more prices are for some reason not adjusting. The big divide comes over the question of which price is wrong.
As I see it, the whole structural/classical/Austrian/supply-side/whatever side of this debate basically believes that the problem lies in the labor market. (I know, the Austrians will deny it — but it doesn’t matter what you say about their position, any comprehensible statement leads to angry claims that you don’t understand their depths). For some reason, they would argue, wages are too high given the demand for labor. Some of them accept the notion that it’s because of downward nominal wage rigidity; more, I think, believe that workers are being encouraged to hold out for unsustainable wages by moocher-friendly programs like food stamps, unemployment benefits, disability insurance, and whatever.
As regular readers know, I find this prima facie absurd — it’s essentially the claim that soup kitchens caused the Great Depression. But let’s stick with the economic logic for now.
So what’s the alternative view? It’s basically the notion that the interest rate is wrong — that given the overhang of debt and other factors depressing private demand, real interest rates would have to be deeply negative to match desired saving with desired investment at full employment. And real rates can’t go that negative because expected inflation is low and nominal rates can’t go below zero: we’re in a liquidity trap.
There are strong policy implications of these two views. If you think the problem is that wages are too high, your solution is that we need to meaner to workers — cut off their unemployment insurance, make them hungry by cutting off food stamps, so they have no alternative to do whatever it takes to get jobs, and wages fall. If you think the problem is the zero lower bound on interest rates, you think that this kind of solution wouldn’t just be cruel, it would make the economy worse, both because cutting workers’ incomes would reduce demand and because deflation would increase the burden of debt.
What my side of the debate would call for, instead, is a reduction in the real interest rate, if possible, by raising expected inflation; and failing that, more government spending to increase demand and put idle resources to work.
So how can you tell which side is right? Well, these differing views make differing predictions. If you believe that the problem is excessive wages, you believe that the economy is fundamentally suffering from a supply-side constraint. In that case government borrowing is competing with the private sector for a limited quantity of resources, so big budget deficits should lead to soaring interest rates; meanwhile, because the supply of goods is limited, large increases in the money supply should lead to soaring inflation. Oh, and cuts in government spending should, if anything, be expansionary, because they both release resources to the private sector and make life tougher for workers who try to live on public benefits.
If, on the other hand, you believe that the problem lies in a shortfall of demand due to the zero lower bound, you believe that government borrowing needn’t drive up rates, because it puts unemployed resources to work; that monetary expansion won’t be inflationary, because the money will just sit there; and that fiscal austerity will be strongly contractionary.
I leave the adjudication of these competing claims as an exercise for readers.
Oh, and one more thing: no, you can’t say “Well, there may be truth to both views”. Either the economy is supply-constrained or it’s demand-constrained. Of course even the most ardent demand-siders will admit that there are supply constraints in there somewhere, that if we had an economic boom we would, after some period of time, enter a regime where printing money is inflationary and government borrowing drive up interest rates. But not here, not now.
So yes, the price is wrong — but it’s a terrible, disastrous mistake to focus on the wrong wrong price.
Source Slanted piece, but I feel it sums up the economic fundamentals at play right now.
"So, start with our big problem, which is mass unemployment. Basic supply and demand analysis says that things like that aren’t supposed to happen: prices are supposed to rise or fall to clear markets. So what’s with this apparent massive and persistent excess supply of labor?"
People are very reluctant to buy houses if they don't need them. Lowering the price doesn't cut it (if the oversupply is large enough).
Cheers.
So even if the price of a house reduces to $1, people still won't buy it because there's too many houses? I would think that if the price fell to $1 the opposite would occur: demand > supply.
Krugman is right that basic supply and demand says that at some price, probably between current prices and $1, we should hit a equilibrium where supply equals demand. He argues that basic supply and demand says the same thing about labor.
His point is that this obviously isn't happening, so the question is then: what rigidity is preventing the price of labor or houses or whatever, adjusting to a level where supply equals demand? In short, what is causing basic supply and demand to be wrong?
A house for $1 costs more than $1 (taxes, insurance, maintenance, vandalism, etc.). So you really want a reason for owning the house beyond the novelty. If you look at a market with a serious supply / demand issue the prices are silly low (ex. Detroit).
More importantly, if prices fall too low then builders won't build any more (building provides the jobs - selling existing homes not so much). You could argue that the entire supply chain should / could enact price reductions to firm up demand but the massive price reductions that would be necessary just aren't feasible.
So we've kinda just been waiting for the excess to clear. It looks like it finished clearing a few months ago and so there's finally a lot of excitement and hope that the sector will return to normal.
It’s a slow morning on the economic news front, as we wait for various euro shoes to drop, so I thought I’d share a meditation I’ve been having on the diagnosis and misdiagnosis of the Lesser Depression. It’s not really different from what I’ve been saying all along, but maybe coming at it from a different angle is somewhat enlightening.
So, start with our big problem, which is mass unemployment. Basic supply and demand analysis says that things like that aren’t supposed to happen: prices are supposed to rise or fall to clear markets. So what’s with this apparent massive and persistent excess supply of labor?
In general, market disequilibrium is a sign of prices out of whack; and most people commenting on our mess accept the notion that one or more prices are for some reason not adjusting. The big divide comes over the question of which price is wrong.
As I see it, the whole structural/classical/Austrian/supply-side/whatever side of this debate basically believes that the problem lies in the labor market. (I know, the Austrians will deny it — but it doesn’t matter what you say about their position, any comprehensible statement leads to angry claims that you don’t understand their depths). For some reason, they would argue, wages are too high given the demand for labor. Some of them accept the notion that it’s because of downward nominal wage rigidity; more, I think, believe that workers are being encouraged to hold out for unsustainable wages by moocher-friendly programs like food stamps, unemployment benefits, disability insurance, and whatever.
As regular readers know, I find this prima facie absurd — it’s essentially the claim that soup kitchens caused the Great Depression. But let’s stick with the economic logic for now.
So what’s the alternative view? It’s basically the notion that the interest rate is wrong — that given the overhang of debt and other factors depressing private demand, real interest rates would have to be deeply negative to match desired saving with desired investment at full employment. And real rates can’t go that negative because expected inflation is low and nominal rates can’t go below zero: we’re in a liquidity trap.
There are strong policy implications of these two views. If you think the problem is that wages are too high, your solution is that we need to meaner to workers — cut off their unemployment insurance, make them hungry by cutting off food stamps, so they have no alternative to do whatever it takes to get jobs, and wages fall. If you think the problem is the zero lower bound on interest rates, you think that this kind of solution wouldn’t just be cruel, it would make the economy worse, both because cutting workers’ incomes would reduce demand and because deflation would increase the burden of debt.
What my side of the debate would call for, instead, is a reduction in the real interest rate, if possible, by raising expected inflation; and failing that, more government spending to increase demand and put idle resources to work.
So how can you tell which side is right? Well, these differing views make differing predictions. If you believe that the problem is excessive wages, you believe that the economy is fundamentally suffering from a supply-side constraint. In that case government borrowing is competing with the private sector for a limited quantity of resources, so big budget deficits should lead to soaring interest rates; meanwhile, because the supply of goods is limited, large increases in the money supply should lead to soaring inflation. Oh, and cuts in government spending should, if anything, be expansionary, because they both release resources to the private sector and make life tougher for workers who try to live on public benefits.
If, on the other hand, you believe that the problem lies in a shortfall of demand due to the zero lower bound, you believe that government borrowing needn’t drive up rates, because it puts unemployed resources to work; that monetary expansion won’t be inflationary, because the money will just sit there; and that fiscal austerity will be strongly contractionary.
I leave the adjudication of these competing claims as an exercise for readers.
Oh, and one more thing: no, you can’t say “Well, there may be truth to both views”. Either the economy is supply-constrained or it’s demand-constrained. Of course even the most ardent demand-siders will admit that there are supply constraints in there somewhere, that if we had an economic boom we would, after some period of time, enter a regime where printing money is inflationary and government borrowing drive up interest rates. But not here, not now.
So yes, the price is wrong — but it’s a terrible, disastrous mistake to focus on the wrong wrong price.
Source Slanted piece, but I feel it sums up the economic fundamentals at play right now.
"So, start with our big problem, which is mass unemployment. Basic supply and demand analysis says that things like that aren’t supposed to happen: prices are supposed to rise or fall to clear markets. So what’s with this apparent massive and persistent excess supply of labor?"
People are very reluctant to buy houses if they don't need them. Lowering the price doesn't cut it (if the oversupply is large enough).
Cheers.
So even if the price of a house reduces to $1, people still won't buy it because there's too many houses? I would think that if the price fell to $1 the opposite would occur: demand > supply.
Krugman is right that basic supply and demand says that at some price, probably between current prices and $1, we should hit a equilibrium where supply equals demand. He argues that basic supply and demand says the same thing about labor.
His point is that this obviously isn't happening, so the question is then: what rigidity is preventing the price of labor or houses or whatever, adjusting to a level where supply equals demand? In short, what is causing basic supply and demand to be wrong?
A house for $1 costs more than $1 (taxes, insurance, maintenance, vandalism, etc.). So you really want a reason for owning the house beyond the novelty. If you look at a market with a serious supply / demand issue the prices are silly low (ex. Detroit).
More importantly, if prices fall too low then builders won't build any more (building provides the jobs - selling existing homes not so much). You could argue that the entire supply chain should / could enact price reductions to firm up demand but the massive price reductions that would be necessary just aren't feasible.
So we've kinda just been waiting for the excess to clear. It looks like it finished clearing a few months ago and so there's finally a lot of excitement and hope that the sector will return to normal.
Wait, are we talking about houses or employment?
Both - someone has to build them after all :p
Housing construction and related employment are the biggest laggards in the current recovery. Traditionally housing leads the recovery since lower interest rates have such a huge impact.
On April 01 2013 13:21 JonnyBNoHo wrote: So we've kinda just been waiting for the excess to clear. It looks like it finished clearing a few months ago and so there's finally a lot of excitement and hope that the sector will return to normal.
i've never been able to explain to the five-year-old me why having too much of anything could ever possibly be a problem.
edit: now me - it's very bad, the economy is sad, it's because they made too many houses five-year-old me - oh, well, jeez, that sucks at least everyone can have a house tho now me - no, that means people lose their houses five-year-old me - ...?
the grown up world is too complicated tt
Hey sam, long time no see!
To your 5-year old self: if you have two houses and one family, one house will be left sad and lonely
PROVIDENCE, R.I. (WPRI) -- A bill to decriminalize the possession of small amounts of marijuana will take effect on Monday.
In January of 2011, state Representative John Edwards reintroduced said bill, which would call for fines of $150 for marijuana possession of one ounce or less instead of the original penalty of $500 plus up to a year in prison.
The bill was approved by the Senate and the House in 2012 and signed into law by Governor Chafee last June, and, on Monday, it will officially take effect throughout the state of Rhode Island.
The Ocean State will join 13 other states across the country that have adopted marijuana decriminalization laws. In February, local lawmakers introduced additional bills to regulate and tax legal sale of marijuana in Rhode Island, a motion that was passed in Colorado and Washington this past election year.
"We applaud the legislature and Governor Chafee for answering Rhode Islanders' calls for a more sensible marijuana policy," said Robert Capecchi, Deputy Director of State Policies for the Marijuana Policy Project. "Nobody should be subject to life-altering criminal penalties simply for using a substance that is objectively less harmful than alcohol."
With the new laws in place, criminal penalties for simple marijuana possession will be similar to those of traffic violations.
On April 01 2013 13:21 JonnyBNoHo wrote: So we've kinda just been waiting for the excess to clear. It looks like it finished clearing a few months ago and so there's finally a lot of excitement and hope that the sector will return to normal.
i've never been able to explain to the five-year-old me why having too much of anything could ever possibly be a problem.
edit: now me - it's very bad, the economy is sad, it's because they made too many houses five-year-old me - oh, well, jeez, that sucks at least everyone can have a house tho now me - no, that means people lose their houses five-year-old me - ...?
the grown up world is too complicated tt
Hey sam, long time no see!
To your 5-year old self: if you have two houses and one family, one house will be left sad and lonely
the five-year-old sam doesn't understand why anybody would be stupid enough to build two houses for their one family
PROVIDENCE, R.I. (WPRI) -- A bill to decriminalize the possession of small amounts of marijuana will take effect on Monday.
In January of 2011, state Representative John Edwards reintroduced said bill, which would call for fines of $150 for marijuana possession of one ounce or less instead of the original penalty of $500 plus up to a year in prison.
The bill was approved by the Senate and the House in 2012 and signed into law by Governor Chafee last June, and, on Monday, it will officially take effect throughout the state of Rhode Island.
The Ocean State will join 13 other states across the country that have adopted marijuana decriminalization laws. In February, local lawmakers introduced additional bills to regulate and tax legal sale of marijuana in Rhode Island, a motion that was passed in Colorado and Washington this past election year.
"We applaud the legislature and Governor Chafee for answering Rhode Islanders' calls for a more sensible marijuana policy," said Robert Capecchi, Deputy Director of State Policies for the Marijuana Policy Project. "Nobody should be subject to life-altering criminal penalties simply for using a substance that is objectively less harmful than alcohol."
With the new laws in place, criminal penalties for simple marijuana possession will be similar to those of traffic violations.
This was only a matter of time, RI has one of the worst state budget situations in the country and they've been desperately seeking solutions for years now. The dominoes will only continue to keep on falling.
PROVIDENCE, R.I. (WPRI) -- A bill to decriminalize the possession of small amounts of marijuana will take effect on Monday.
In January of 2011, state Representative John Edwards reintroduced said bill, which would call for fines of $150 for marijuana possession of one ounce or less instead of the original penalty of $500 plus up to a year in prison.
The bill was approved by the Senate and the House in 2012 and signed into law by Governor Chafee last June, and, on Monday, it will officially take effect throughout the state of Rhode Island.
The Ocean State will join 13 other states across the country that have adopted marijuana decriminalization laws. In February, local lawmakers introduced additional bills to regulate and tax legal sale of marijuana in Rhode Island, a motion that was passed in Colorado and Washington this past election year.
"We applaud the legislature and Governor Chafee for answering Rhode Islanders' calls for a more sensible marijuana policy," said Robert Capecchi, Deputy Director of State Policies for the Marijuana Policy Project. "Nobody should be subject to life-altering criminal penalties simply for using a substance that is objectively less harmful than alcohol."
With the new laws in place, criminal penalties for simple marijuana possession will be similar to those of traffic violations.
This was only a matter of time, RI has one of the worst state budget situations in the country and they've been desperately seeking solutions for years now. The dominoes will only continue to keep on falling.
On April 01 2013 13:21 JonnyBNoHo wrote: So we've kinda just been waiting for the excess to clear. It looks like it finished clearing a few months ago and so there's finally a lot of excitement and hope that the sector will return to normal.
i've never been able to explain to the five-year-old me why having too much of anything could ever possibly be a problem.
edit: now me - it's very bad, the economy is sad, it's because they made too many houses five-year-old me - oh, well, jeez, that sucks at least everyone can have a house tho now me - no, that means people lose their houses five-year-old me - ...?
the grown up world is too complicated tt
Hey sam, long time no see!
To your 5-year old self: if you have two houses and one family, one house will be left sad and lonely
the five-year-old sam doesn't understand why anybody would be stupid enough to build two houses for their one family
some kids are already trading yugioh cards at that age. damn capitalists start young
On April 01 2013 13:21 JonnyBNoHo wrote: So we've kinda just been waiting for the excess to clear. It looks like it finished clearing a few months ago and so there's finally a lot of excitement and hope that the sector will return to normal.
i've never been able to explain to the five-year-old me why having too much of anything could ever possibly be a problem.
edit: now me - it's very bad, the economy is sad, it's because they made too many houses five-year-old me - oh, well, jeez, that sucks at least everyone can have a house tho now me - no, that means people lose their houses five-year-old me - ...?
the grown up world is too complicated tt
Hey sam, long time no see!
To your 5-year old self: if you have two houses and one family, one house will be left sad and lonely
the five-year-old sam doesn't understand why anybody would be stupid enough to build two houses for their one family
some kids are already trading yugioh cards at that age. damn capitalists start young
isn't it funny? baby's first bubble economy (future book title: From Tulips to Trading Cards. there's a joke about black lotus somewhere there but I can't find it)
the really tragic thing is that the economics of tcg encourage bad design. magic would be a much better game if it weren't for the pressures of the secondary market on card design economies mostly work fine until they start to become aware of themselves, I guess. kinda like people
PROVIDENCE, R.I. (WPRI) -- A bill to decriminalize the possession of small amounts of marijuana will take effect on Monday.
In January of 2011, state Representative John Edwards reintroduced said bill, which would call for fines of $150 for marijuana possession of one ounce or less instead of the original penalty of $500 plus up to a year in prison.
The bill was approved by the Senate and the House in 2012 and signed into law by Governor Chafee last June, and, on Monday, it will officially take effect throughout the state of Rhode Island.
The Ocean State will join 13 other states across the country that have adopted marijuana decriminalization laws. In February, local lawmakers introduced additional bills to regulate and tax legal sale of marijuana in Rhode Island, a motion that was passed in Colorado and Washington this past election year.
"We applaud the legislature and Governor Chafee for answering Rhode Islanders' calls for a more sensible marijuana policy," said Robert Capecchi, Deputy Director of State Policies for the Marijuana Policy Project. "Nobody should be subject to life-altering criminal penalties simply for using a substance that is objectively less harmful than alcohol."
With the new laws in place, criminal penalties for simple marijuana possession will be similar to those of traffic violations.
This was only a matter of time, RI has one of the worst state budget situations in the country and they've been desperately seeking solutions for years now. The dominoes will only continue to keep on falling.
Then why not keep the fine at $500? >_>
IMO, this is merely RI's preparation for the coming wave of legalization mania. A baby step if you will.
On April 02 2013 06:05 {CC}StealthBlue wrote: Mark your calendars this was the day Hillary Clinton started her campaign. In stealth mode of course.
Unlikely.
Her health deteriorated substantially during her tenure as Secretary of State, and it is improbable that she would take on the stress of a presidential campaign as well as the burden of a four-year presidential term.
If this was a Muslim group or even one single muslim the entire Media outlet would be howling and politicians pressing to get on camera. But for some reason this isn't considered domestic terrorism.
KAUFMAN, Texas (AP) — Two days after a Texas district attorney and his wife were found shot to death in their home, authorities have said little about their investigation or any potential suspects.
But suspicion in the slayings shifted to a white supremacist gang with a long history of violence and retribution that was also the focus of a December law enforcement bulletin warning that its members might try to attack police or prosecutors.
Four top leaders of the Aryan Brotherhood of Texas were indicted in October for crimes ranging from murder to drug trafficking. Two months later, authorities issued the bulletin warning that the gang might try to retaliate against law enforcement for the investigation that led to the arrests of 34 of its members on federal charges.
Kaufman County District Attorney Mike McLelland and his wife were found dead Saturday in their East Texas home. The killings were especially jarring because they happened just a couple of months after one of the county’s assistant district attorneys, Mark Hasse, was killed in a parking lot near his courthouse office.
McLelland was part of a multi-agency task force that took part in the investigation of the Aryan Brotherhood. The task force also included the FBI, the Drug Enforcement Administration as well as police departments in Houston and Fort Worth.
Investigators have declined to say if the group is the focus of their efforts, but the state Department of Public Safety bulletin warned that the Aryan Brotherhood of Texas is “involved in issuing orders to inflict ‘mass casualties or death’ to law enforcement officials involved in the recent case.”
On April 01 2013 13:21 JonnyBNoHo wrote: So we've kinda just been waiting for the excess to clear. It looks like it finished clearing a few months ago and so there's finally a lot of excitement and hope that the sector will return to normal.
i've never been able to explain to the five-year-old me why having too much of anything could ever possibly be a problem.
edit: now me - it's very bad, the economy is sad, it's because they made too many houses five-year-old me - oh, well, jeez, that sucks at least everyone can have a house tho now me - no, that means people lose their houses five-year-old me - ...?
the grown up world is too complicated tt
Hey sam, long time no see!
To your 5-year old self: if you have two houses and one family, one house will be left sad and lonely
the five-year-old sam doesn't understand why anybody would be stupid enough to build two houses for their one family
some kids are already trading yugioh cards at that age. damn capitalists start young
isn't it funny? baby's first bubble economy (future book title: From Tulips to Trading Cards. there's a joke about black lotus somewhere there but I can't find it)
the really tragic thing is that the economics of tcg encourage bad design. magic would be a much better game if it weren't for the pressures of the secondary market on card design economies mostly work fine until they start to become aware of themselves, I guess. kinda like people
people played yugioh for fun, i dueled for cards and sold said cards for money. unfortunately, supply exceeded demand a bit (even though i'm pretty sure i made some profit), and i've got a collection worth quite a few thousand dollars left. anyone interested in a complete first edition legend of blue eyes booster set in mint condition?
anyways, isnt the problem with labor, if you boiled it down to simple supply and demand, that most people have set essentially a price floor on their labor because "I have a BA in history, i'm not going to wash dishes at min wage"? my basic econ is a tad rusty. :<
On April 02 2013 15:05 ticklishmusic wrote: anyways, isnt the problem with labor, if you boiled it down to simple supply and demand, that most people have set essentially a price floor on their labor because "I have a BA in history, i'm not going to wash dishes at min wage"? my basic econ is a tad rusty. :<
the problem is that we think labor is something that can be "boiled down to simple supply and demand."
labor is people. it's not a commodity. it's immoral to treat it like a commodity.
On April 02 2013 15:05 ticklishmusic wrote: anyways, isnt the problem with labor, if you boiled it down to simple supply and demand, that most people have set essentially a price floor on their labor because "I have a BA in history, i'm not going to wash dishes at min wage"? my basic econ is a tad rusty. :<
the problem is that we think labor is something that can be "boiled down to simple supply and demand."
labor is people. it's not a commodity. it's immoral to treat it like a commodity.
And somebody's voice isn't just a tube connected to a vibrating drum, but we model it like that in science to create technology to enhance the voice and the things that make it much more.
To help the people behind the labor, we have to dehumanize the concept in a way that we can understand it.
On April 02 2013 15:05 ticklishmusic wrote: anyways, isnt the problem with labor, if you boiled it down to simple supply and demand, that most people have set essentially a price floor on their labor because "I have a BA in history, i'm not going to wash dishes at min wage"? my basic econ is a tad rusty. :<
the problem is that we think labor is something that can be "boiled down to simple supply and demand."
labor is people. it's not a commodity. it's immoral to treat it like a commodity.
And somebody's voice isn't just a tube connected to a vibrating drum, but we model it like that in science to create technology to enhance the voice and the things that make it much more.
To help the people behind the labor, we have to dehumanize the concept in a way that we can understand it.
no, it's to dehumanize the concept in a way that the machine can understand it. we understand "labor" just fine. "labor" is people doing things. when you treat it as a commodity, you are just making it machine-readable. but people shouldn't be treated like parts of machines, people should be treated like people.
A federal judge ruled Monday that Stockton is eligible for bankruptcy protection, over the objection of creditors who argued the city could come up with more money.
U.S. Bankruptcy Judge Christopher Klein said Stockton can move forward with a plan to reorganize debt. He twice stated that the creditors had acted in bad faith and had refused to pay their share of the costs for negotiations.
"The creditors got a big black eye today," said Karol Denniston, an attorney who helped draft the legislation that guided Stockton's mandated mediation before filing for bankruptcy protection. "Now the stage is set for the real dogfight."
In late June, Stockton became the nation's largest city to fail financially. At that time, all eyes were on the port city of 300,000 as experts warned the action could set off a string of similar filings among cash-strapped municipalities. Since then, a half-dozen cities have filed for Chapter 9 protection under the U.S. Bankruptcy Code, including the city of San Bernardino.
During the 90-day mediation period, Stockton's creditors refused to negotiate unless the city cut payments to the state pension plan, CalPERS.
California's pension system for government employees is bankrupting cities and the state. There's a big argument with creditors (some who helped fund the unfunded liabilities) as to who gets paid first or even at all. Might go to the Supreme Court, and can set precedent for modern times as other cities are close to bankruptcy.
On April 02 2013 15:05 ticklishmusic wrote: anyways, isnt the problem with labor, if you boiled it down to simple supply and demand, that most people have set essentially a price floor on their labor because "I have a BA in history, i'm not going to wash dishes at min wage"? my basic econ is a tad rusty. :<
the problem is that we think labor is something that can be "boiled down to simple supply and demand."
labor is people. it's not a commodity. it's immoral to treat it like a commodity.
And somebody's voice isn't just a tube connected to a vibrating drum, but we model it like that in science to create technology to enhance the voice and the things that make it much more.
To help the people behind the labor, we have to dehumanize the concept in a way that we can understand it.
no, it's to dehumanize the concept in a way that the machine can understand it. we understand "labor" just fine. "labor" is people doing things. when you treat it as a commodity, you are just making it machine-readable. but people shouldn't be treated like parts of machines, people should be treated like people.
The problem with economists is that if you can't put it in a graph or a spreadsheet, people don't want to hear it.
There's certainly an important moral question to ask before trying to apply statistics to people. On a more light-hearted note:
Should Michael feed the bird or invest in bridges ? Should he listen to his father or Julie Andrews ? If the bank of England falls, does England falls ? Is Mary Poppins a crypto-communist movie we shouldn't let our children see ? So many question I'd never thought I'd ask...
On April 02 2013 15:05 ticklishmusic wrote: anyways, isnt the problem with labor, if you boiled it down to simple supply and demand, that most people have set essentially a price floor on their labor because "I have a BA in history, i'm not going to wash dishes at min wage"? my basic econ is a tad rusty. :<
the problem is that we think labor is something that can be "boiled down to simple supply and demand."
labor is people. it's not a commodity. it's immoral to treat it like a commodity.
And somebody's voice isn't just a tube connected to a vibrating drum, but we model it like that in science to create technology to enhance the voice and the things that make it much more.
To help the people behind the labor, we have to dehumanize the concept in a way that we can understand it.
economics is still quite new, people just run with simplistic assumptions all the time to pursue the appearance of being scientific. (talking in basic, general terms)
EPT
at least everyone can have a house tho![[image loading]](http://sphotos-a.xx.fbcdn.net/hphotos-ash4/483505_366103306828077_154521762_n.jpg)
