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JeffersonClay posted:People that think the business cycle can be affected with monetary policy: Mainstream economists. People that dispute this: Marxists and Paulites. Lolz end the fed am I rite? quote:You know what would really put a dent in income inequality? A massive depression. By avoiding massive depressions, the Fed does allow income inequality to expand. Do you think the poor would benefit more if these depressions were allowed to occur? Rodatose fucked around with this message at 02:22 on May 11, 2015 |
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May 11, 2015 02:20
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JeffersonClay posted:Cost of living adjustments would mitigate some of the harm here, but not nearly all of it. Things like social security, ssi, ssdi, don't actually provide enough for a person to live comfortably right now. So even if they're indexed to inflation, people on these programs will still be worse off. Imagine a person who gets 10,000 a year from ssi, but who needs to purchase 20,000 dollars of stuff to live comfortably for a year, a $10,000 deficit. If inflation is 10%, the next year the person needs to purchase 22,000 worth of goods and their ssi payment will increase to 11,000, a deficit of $11,000. False dichotomy
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May 11, 2015 02:21
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We can kill the rich and improve our economy.
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May 11, 2015 02:22
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euphronius posted:We can kill the rich and improve our economy. I don't approve of killing, partly because it's bad publicity and all of the not-dead-yet rich people will probably get defensive and raise mercenary contractor armies (which would be a big hassle imo). Let's just retire them in luxurious resorts paid for and maintained by 1% of the total wealth confiscated from them and use the other 99% to do things that benefit society
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May 11, 2015 02:25
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Rodatose posted:I don't approve of killing, partly because it's bad publicity and all of the not-dead-yet rich people will probably get defensive and raise mercenary contractor armies. Let's just retire them in luxurious resorts paid for and maintained by 1% of the total wealth confiscated for them and use the other 99% to do things that benefit society No. If left alive they will no doubt orchestrate another capitalist democracy.
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May 11, 2015 02:27
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euphronius posted:No. If left alive they will no doubt orchestrate another capitalist democracy. there is no escape from The Resort.
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May 11, 2015 02:29
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GlyphGryph posted:At the level we are discussing, higher wages statistically result in lower demand for employment down to 40 hours per week. I can't find the study right now, but if people want to call me on this, I'll try to dig it up. Yep I want to see that. Comparing nations does show a backwards curve, but I've never seen one for any particular country. Note that the U.S. curve isn't really backwards overall, the richest demographics work the most. QuarkJets posted:Please put this at the top of all of your posts I never said it. I used the absurd amount of $100 to pick something which this audience would understand to have a large impact. Because this audience has been trying to argue that $15 won't. Using obfuscated math. The dollar amount of additional wages, or better, that quantity represented as a percentage of the overall economy. The thing I've said multiple times.
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May 11, 2015 02:33
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asdf32 posted:I'm sad people think they can use math and science in politics when they don't understand it. I'm not sure how to break this down and make it easier. Let's try this. Minimum wage is $5. I have two workers: I'm paying John $5 and Sally $6. My total labor costs are $5+$6 = $11. If we pass the "double all wages" law, I would pay $10+$12=$22. $22/$11=2. By doubling all wages, I have doubled my total labor costs (obviously). This is a linear relationship. If we pass a "double the minimum wage" law, I would pay them both $10. $10+$10=$20. Is $20/$11 (a) more than 2 (b) exactly 2 (c) less than 2
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May 11, 2015 02:36
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Rodatose posted:There was this whole 'credit crash recession' that happened recently that wasn't prevented by fed policy. Also it was partly caused by underconsumption from a lack of consumer income triggering the whole credit crash. No, Fed policy didn't prevent the recession. Fed policy stopped the recession from becoming a massive, full blown depression. Had it been a full blown depression, income equality would have risen, as everybody would have been hosed but the rich most of all. Do you think that would be good policy? euphronius posted:False dichotomy Counterpoint: You don't understand economics for poo poo.
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May 11, 2015 02:41
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I reject the economy of capitalists yes. Why do we have an economy.
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May 11, 2015 02:44
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People with substantial wealth are hurt much more by economic downturns than those with little or no wealth. That's just logic.
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May 11, 2015 02:48
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JeffersonClay posted:No, you need to consider an interest rate target over the lifetime of the policy. When inflation is under the target, the Fed will promote inflation. When inflation is above the target, the Fed will promote deflation. Fed policy just smooths inflation over time. The inflation caused by current policy will be eliminated when the Fed is fighting against the other part of the business cycle. Net inflation is zero. I don't think net inflation is zero long-term. I haven't seen any 5-cent hamburgers around. JeffersonClay posted:Indexing a wage to inflation means that its value to the person receiving the wage stays constant. It doesn't mean that the value to everyone else is constant. If you're unemployed, inflation erodes your purchasing power. If the minimum wage is increased because of that inflation, labor becomes even more expensive and your purchasing power is eroded again. Indexing payments to inflation causes inflation? So if inflation happens for other reasons, we need to let it erode the real value of wages and social security or there will be more inflation? What?
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May 11, 2015 02:49
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euphronius posted:Why do we have an economy. The economy is just a tool we use to accomplish the more important goal of keeping all prices exactly the same forever
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May 11, 2015 02:50
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VitalSigns posted:I'm not sure how to break this down and make it easier. Let's try this. Minimum wage is $5. I have two workers: I'm paying John $5 and Sally $6. My total labor costs are $5+$6 = $11. Can.... can I buy a vowel? 
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May 11, 2015 02:51
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JeffersonClay posted:No, Fed policy didn't prevent the recession. Fed policy stopped the recession from becoming a massive, full blown depression. Had it been a full blown depression, income equality would have risen, as everybody would have been hosed but the rich most of all. Do you think that would be good policy? Policies could have been implemented in exchange for terms preventing the recession from becoming a depression by punishing the banks for their malfeasance by making more demands or in an extreme case (as Iceland did with its crisis) nationalizing them. New-deal like policies could have been sought which redistributed wealth more equally by directing recovery funds toward more locally-targeted programs. Instead, the policies sought were a full capitulation, buying into the narrative that "this is all too complicated for you plebs, now give us more money."
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May 11, 2015 02:54
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Effectronica posted:People with substantial wealth are hurt much more by economic downturns than those with little or no wealth. That's just logic. Regulatory capture is something that market logic is blind to.
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May 11, 2015 02:58
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VitalSigns posted:I'm not sure how to break this down and make it easier. Let's try this. Minimum wage is $5. I have two workers: I'm paying John $5 and Sally $6. My total labor costs are $5+$6 = $11. You can't. Stop trying.
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May 11, 2015 03:00
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asdf32 posted:You can't. Stop trying. But the answer is right there in front of you. Now I know an inkling of how burned-out algebra teachers must feel.
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May 11, 2015 03:07
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Since asdf either refuses or is too stupid to explain their argument: You employ one worker at $7, one at $8, etc., all the way up to $15. Minimum wage is $7. If minimum wage increases to $8, your labor costs increase $1. If minimum wage increases to $15, your labor costs increase $36. Extra credit: integrate 15 - wage with bounds of $7.25 and $15 using the real wage curve.
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May 11, 2015 03:11
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euphronius posted:I reject the economy of capitalists yes. Maybe start a thread about Marxism and draw off some of the morons here then? Smash KKKapitalism isn't a particularly useful contribution to a debate about policy choices in TYOOL 2015. VitalSigns posted:I don't think net inflation is zero long-term. I haven't seen any 5-cent hamburgers around. Net inflation from a counter-cyclical monetary policy is. The Fed promotes inflation when it gets low, and restrains inflation when it gets high. VitalSigns posted:Indexing payments to inflation causes inflation? Each nominal increase to the minimum wage will promote inflation in the same way that raising the minimum wage from 8 to 9 will promote inflation, yes. This wouldn't be applicable to social security payments because those don't increase the price of labor. Rodatose posted:Fed and treasury policy kicked the can down the road without the core problems that caused the recession to be fixed, and if/when such a thing happens in the future, we might have even worse leadership so that what comes out of the dust is a fascist-corporatist government. The Fed and the Treasury have zero power to nationalize banks or to pass the kind of new-deal like policies which would do a better job of boosting demand. The Fed can lower interest rates and boost bank reserves. I am glad they did so, as the alternative would have been a massive depression. If we're not constraining ourselves to the actual choices foisted upon us by political reality, I wouldn't be defending the Fed and you wouldn't be defending the minimum wage-- better policy alternatives exist for both.
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May 11, 2015 03:13
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Several things are answered. Other questions remain. Among them: why leftism wen so many other bright possibilities were available to you such as climate denier, libertarian, or Alex Jone article commenter.
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May 11, 2015 03:13
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QuarkJets posted:Which quantity do you believe is growing exponentially? Please be explicit because your posts are such a garbled mess of misused mathematical terms that it's hard to keep track of what you're trying to say vs the hosed up and wrong things that you're actually saying. He seems to think it's "total number of dollars" and doesn't realize this only matters in proportion to my existing labor costs. If my labor costs go up by $100,000 that's a whole lot! Look at all those zeros! But if I was already paying $10,000,000 in salaries, then oh actually it's just a 1% change and won't affect my business that much.
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May 11, 2015 03:13
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Series DD Funding posted:
Which is 36% of your current labor costs (7+8+...+15 = 99). If your product costs $5 and labor is 20% of the cost, then $5*0.2*0.36 = $0.36 increase.
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May 11, 2015 03:16
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Series DD Funding posted:Since asdf either refuses or is too stupid to explain their argument: A 40% increase isn't exponential either.
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May 11, 2015 03:18
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JeffersonClay posted:Each nominal increase to the minimum wage will promote inflation in the same way that raising the minimum wage from 8 to 9 will promote inflation, yes. This wouldn't be applicable to social security payments because those don't increase the price of labor. Why would it, if the minimum wage is going up only because of inflation. If the price of hamburgers and all non-labor inputs go up by 10%, then the employer has enough money to increase wages by 10% as well without increasing the price again. If he didn't increase wages by the same amount he would be collecting extra profit because one of his costs has effectively decreased. Do you think that no one has gotten a raise since the 1930s? JeffersonClay posted:Net inflation from a counter-cyclical monetary policy is. The Fed promotes inflation when it gets low, and restrains inflation when it gets high. Is this an accurate description of what has happened with the US money supply over the lifetime of the Fed? asdf32 posted:Several things are answered. Other questions remain. Among them: why leftism wen so many other bright possibilities were available to you such as climate denier, libertarian, or Alex Jone article commenter. You're throwing a tantrum over middle school algebra.
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May 11, 2015 03:20
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JeffersonClay posted:Maybe start a thread about Marxism and draw off some of the morons here then? Smash KKKapitalism isn't a particularly useful contribution to a debate about policy choices in TYOOL You didn't answer the question.
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May 11, 2015 03:22
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Series DD Funding posted:Since asdf either refuses or is too stupid to explain their argument: And your original costs were $99 Your total labor costs have increased by $135/$99=1.36 despite increasing the minimum wage by $15/$7=2.14 A 36% increase in labor costs for a 114% increase in the minimum wage.
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May 11, 2015 03:24
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computer parts posted:Which is 36% of your current labor costs (7+8+...+15 = 99). If your product costs $5 and labor is 20% of the cost, then $5*0.2*0.36 = $0.36 increase. A 36% cost increase over a 114% minwage increase, compared to a 1% cost increase over a 14% increase ($7 to $8). Effectronica posted:A 40% increase isn't exponential either. asdf couldn't spell calculus correctly, soo... There's also going to be knock-on effects, where workers being paid above the new minimum wage will demand raises in line with their skills. That happens in either a small or large increase. The best way to resolve this would be to look at wage curve effects from previous increases and try to extrapolate 
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May 11, 2015 03:26
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tell us more how the federal reserve prevented the 2009 depression with genius financial policy, such as creating a massive asset bubble by setting interest rates using a dartboard
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May 11, 2015 03:27
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Series DD Funding posted:A 36% cost increase over a 114% minwage increase, compared to a 1% cost increase over a 14% increase ($7 to $8). But you're also only effecting 1 person versus 8.
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May 11, 2015 03:30
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Geriatric Pirate posted:Still not sure what point you're making there because I already said, let's say your figures are correct, I understood the limitations of the ones from the paper, they're from the 90s. Though at the same time, they're actually done by someone who knows what they're doing instead of being guessed by you. It's pretty simple, maybe even you'll understand: If I hand out cash randomly on the street, my chances of giving it to someone in the bottom 20% of household income are 20%. If I instead implement a minimum wage, my chances of helping someone with an income in the bottom 20% is 25%. What a massive improvement. Similarily, in the range of 60-80%, randomly handing out cash on the street: 20%. Minimum wage: 19%. Do you understand what the point of anti-poverty policies is? It's to help poor people. They can actually be identified and helped. Even with your stretched definition of poverty to include 40% of Americans, you still have roughly a 50% efficiency rate by using minimum wage compared to 40% just randomly handing out cash. Haha you are literally the densest motherfucker. At the very least I'd think you could understand my point that you were trying to claim a number was exactly the same as a number twice as big.  I'm trying to explain things slowly to you without too many big words that your understanding of how poverty works is not at all accurate, useful, or reasonable. Poverty is not a binary state. There are degrees of poverty and, guess what, if you're not secure in your food, housing, and person you are poor regardless of whether or not you live in the suburbs. Other people are certainly poorer. I live in Appalachia for fucks sake I know what absolutely crushing poverty looks like. It is worse than the position of the individual who is going to lose his job and house if he breaks his arm or gets into a car accident but that person also is not by any means outside of the realm of poverty. Yes a staggering number of Americans are poor now. That's what happens when you attempt to make up for lack of demand that's been caused by literal decades of stagnating wages by creating a massive credit economy. I am hoping one day at least a picture of differences and really obvious trends will get through to you so I'm going to keep trying. This graph shows real wages for non-managers (read, most people) over time:  You notice how it's not even keeping up with inflation for about 25 of the last 40 years? You notice how it's still barely higher than it was in 1970 as of 2011? Meanwhile, and now I know this might be confusing for you, there's another thing that's happening but this one is going up! The thing that is going up is the debt that American households have. Here are a couple of graphs showing it: This one shows credit card debt over roughly the same period as the one for the wages.  This one shows the growth of household debt as a percentage of income, this time over a slightly longer period even:  Now I hope you can see that both of those are going up. I hope I'm not making this too hard for you!The average american family today has $7281 in credit card debt. If you only count the ones with any debt that rises to $15,609. They have $156,705 on average in mortgage debt and an average of $32,956 in student loans. Now when you take these facts and you put them together and you know what you get? Americans are poor! Many of them can have all of their possessions taken from them should they fail to continue paying back their loans and the interest on their loans. You see the bit where they go down in 2008? That's something you might've heard of called the subprime mortgage crisis. Too many people were getting all of their things taken away and so their things started to be worth less and so the people who actually have been making more and more money this whole time stopped lending out nearly as much money. Because they also sure as heck weren't paying people more this led to people not buying or "buying" on credit as many things which led to less things being produced which led to people being paid less money and so-on and so forth and there was a global economic crisis. This is vastly simplified of course but in any case credit crises are a direct result of making it so that living a reasonable modern lifestyle is impossible without building up massive amounts of debt for the majority of people. As you said, the cost of living in many of these places is higher than the medium income. It isn't like handing out money to random people on the street of course, btw. It's handing out money to EVERYONE who isn't so rich that they'll never be walking on the sidewalk. The thing is that the way economies work this then stimulates the rest of the economy and makes more money for people who didn't make it to the first handout before it ended. Economic activity creates value that is literally econ 101 class 1. The money being handed out helps the poorer people most. They have the greatest marginal utility value on their dollar. It helps the other people too! Just not as much because they're already marginally wealthy compared to the others and so they have fewer immediate needs the money can solve. This can be reversed after the economic growth because they own the means of production and thus profit most off of it but that's a capitalism problem that won't be solved without dismantling the system and we're not talking about that right now. To bring it back to talking about minimum wage explicitly again, you don't have a 50% or a 25% success rate increasing the minimum wage you have a 100% success rate (well not really because tip wages exist). Some of the people who receive higher wages are not in the poorest group of Americans. This is not a problem. You are pretending it's a problem and that it will hurt the poorest Americans but it simply won't. When people who don't have so much money that they are going to save literally all of it (since the data shows that it's only 4.2% of households with a near minimum wage worker who even make over $150k this won't be very many people. Now the downside of this generated activity as you've pointed out is that it can create inflation!  Except your big scary study shows the GREATEST increase in prices being a 2% on food purchased outside the home which if you read the next sentence actually doesn't even include groceries!quote:My analysis, using the Bureau of Labor Statistics’ Consumer Expenditure Survey, showed that the 1996 minimum-wage hike raised prices on a broad variety of goods and services. Food purchased outside of the home bore the largest share of the increased consumption costs, accounting for 21% with an average price increase of slightly less than of 2%; the next highest shares were around 10% for such commodities as retail services, groceries and household personal services. Since I'm looking back at the article anyways I just want to point out how amusing it is that he's talking about it as the most horrifying thing in the world to have a sales tax on food when 19 states in the US currently still charge sales tax on food. That is over a third and a large number of local governments charge a sales tax on food as well expanding it even further. North Carolina for example, does not have a sales tax on food at the state level but does at the local level, funnily enough at 2%. I am sorry for not addressing all this stuff: quote:b) you haven't posted any demographics relating to minimum wage workers that would suggest that they're over-represented in groups which are classified as poor despite having higher incomes. Is there any evidence that there are relatively more minimum wage workers in New York or California who are escaping being in the bottom 20% of wage earners but who are still living in poverty, or did you just decide to make that up? Do you have any evidence that minimum wage workers are important wage earners in large families that are still in poverty but above the 20% cutoff in income? but as far as I can tell the first half is literally nonsense. I can address the last question but that's all. We are looking exclusively at families that include minimum wage workers in the statistics I've been working with at least so we know that they are present in the families. To make it out of the bottom quintile as a family of four you have to be making over 20k a year as a household. Working 40 hour weeks at minimum wage earns you $15k a year. I'd call 75% of the wages necessary to be an important wage earner. Many minimum wage workers are part time though, that's an important factor. What constitutes a major wage earner is subjective of course. If you said that it didn't count if it's under 40% of the household income (honestly I'd say 20% is still pretty major but whatever) that minimum wage worker for this borderline family can be knocked down to 21.5 hours in your week before you're no longer a major earner. To work in the other direction from there a huge majority of workers who work for minimum wage are full time(55,387 vs 20,453 as of 2013). If you apply that same 40% threshold of importance assuming a two worker household the household income can rise all the way to 37500 while ignoring the possibility of working over 40 hours before they become minor. With people working 43 hours a week you could make it to 40k of income for your household and still be a major contributor. If the average turned out to be at 43 hours per week then we would know that 39.9% of people above the lowest 5th are major contributors to their household income including basically all of the 2nd quintile. If it's less than that it's slightly less than that but still significant. quote:edit: and when you factor in that the median age of a minimum wage worker is 24, so a lower income is expected, it starts to look like a really poor way of targeting poor people. I mean unless you want to hurt them, which I guess you do And this is conflating household and personal wages in the most absolutely ridiculous way I think at least. If the median age is 24 and they expect a lower income more money would hurt them? Also is median age of 24 supposed to sound ultra spooky or something? It really is not that low for a median age considering how young some people start working
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May 11, 2015 03:42
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euphronius posted:You didn't answer the question.  The economy doesn't have a purpose. It's an emergent phenomenon based on the actions of billions of people pursuing their own ends. If your question is really "what is the purpose of government policy W/R/T the economy" I'd answer "making people happier". Rejecting the economy of the capitalists, whatever you imagine that would look like, is unlikely to meet that standard.VitalSigns posted:Why would it, if the minimum wage is going up only because of inflation. If the price of hamburgers and all non-labor inputs go up by 10%, then the employer has enough money to increase wages by 10% as well without increasing the price again. If he didn't increase wages by the same amount he would be collecting extra profit because one of his costs has effectively decreased. If inflation increased the price of all the non-labor inputs of hamburgers, the employer would be pressed to increase the price of hamburgers by a commensurate amount. If the minimum wage is subsequently increased to match that inflation, the employer is pressed to raise the price again because now labor costs have increased, too. quote:Is this an accurate description of what has happened with the US money supply over the lifetime of the Fed? Counter-cyclical monetary policy has, unfortunately, not been the policy goal of the Fed over its lifetime. Inflation targeting started in the 90's.
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May 11, 2015 03:47
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computer parts posted:But you're also only effecting 1 person versus 8. Exactly. If we assume a linear wage curve, the total benefit to the workers increases at a quadratic (not exponential) rate compared to the percentage minwage increase, and so does the cost to employers.
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May 11, 2015 03:48
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Current economy not doing a good job of making people happier. Even if that is what an economy is for which I don't agree.
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May 11, 2015 03:49
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Series DD Funding posted:A 36% cost increase over a 114% minwage increase, compared to a 1% cost increase over a 14% increase ($7 to $8). Yeah it's not a 14% increase. You've increased wages from 99 to 100 not 7 to 8.
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May 11, 2015 03:49
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euphronius posted:Current economy not doing a good job of making people happier. Even if that is what an economy is for which I don't agree. Making them happier than what is the question. Did fed policy avoiding a depression have the effect of making people happier than an alternative world where they allow the depression to happen? Yes. I don't care what you think the economy is for, because you obviously don't understand how it works. RBC posted:tell us more how the federal reserve prevented the 2009 depression with genius financial policy, such as creating a massive asset bubble by setting interest rates using a dartboard JeffersonClay fucked around with this message at 03:58 on May 11, 2015 |
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May 11, 2015 03:52
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Oh word?
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May 11, 2015 03:53
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JeffersonClay posted:Making them happier than what is the question. Did fed policy avoiding a depression have the effect of making people happier than an alternative world where they allow the depression to happen? Yes. I don't care what you think the economy is for, because you obviously don't understand how it works. oh my god im dying
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May 11, 2015 03:53
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Series DD Funding posted:Exactly. If we assume a linear wage curve, the total benefit to the workers increases at a quadratic (not exponential) rate compared to the percentage minwage increase, and so does the cost to employers. No. I plotted your distribution.  A quadratic dependence would mean doubling the minimum wage quadruples labor costs. (100% increase to the wage, 300% increase to labor costs) A linear relationship would mean doubling the minimum wage doubles labor costs. (100% increase to the wage, 100% increase to labor costs) As you can see, the results of your distribution lag significantly behind what a linear relationship would be. And it's not even close to quadratic, lol, why would you think doubling the minimum wage would quadruple the amount a business has to pay everyone? VitalSigns fucked around with this message at 04:08 on May 11, 2015 |
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May 11, 2015 04:03
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can we add a happiness line there as a quadratic function of the fed's monetary policy
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May 11, 2015 04:10
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