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Helsing posted:That or we're just in the bad part of a kondratieff wave. Ultimately, the question is if the world will go on another reformist course as it did 1929-1980 or that without the immediate threat of Marxism/the Soviets or if the world will gradually and inevitably slide into a series of stagnating basket cases run by hard right populist governments because that threat doesn't exist?
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Jan 21, 2016 20:31
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Helsing posted:That assumes that some kind of left liberal reformism is the only solution to the crisis. I find that plausible from an ethical standpoint but not necessarily an economic one. Could be that some authoritarian political system will stumble onto a workable economic formula for the 21st century. Stranger things have happened. Well more technically it could possible be market socialist reformism as well. As for authoritarian governments figuring it out, I guess anything is possible but in all honesty the current crop of authoritarians seem primarily interested in maintaining power above all else and economic policy seems distant in the background. If anything these regimes often have to rely so much on nationalism and emotional appeals, because they don't really have much else to bring on the table. It isn't to ignore the problem of how this situation was started in the first place, but ultimately I don't really see much if any progress being made. Paradoxish posted:The real reason that China is a bit of a red herring is that the cause of the next recession doesn't really matter. They happen as just a normal part of the economic cycle, so if it's not China or cratering oil prices then it'll be something else that eventually slows growth. The problem isn't that we may or may not be going into another recession, it's that none of the structural issues from the 2008 crisis were dealt with and the global economy is fragile as gently caress as a result. Any sort of slow down in the near term is going to hit a lot of people very hard, and a slow down is inevitable even without anything disastrous happening. There's a reason the ECB responded to panic in the stock market with, effectively, "we will do literally anything." That is the issue isn't it, that another downturn isn't that remarkable but in many ways it doesn't seem to many consumers we already left the last downturn, and as you said there are probably even less policy options now then there were then. Most European governments that were indebted during the crisis are still racking up deficits even when times are suppose to be "good" and the world is looking for a engine for growth that may not really be there. Once the US economy slows down without fiscal stimulus to back it up, there isn't really any where to turn to but hope that India some how can figure out how to carry the world on its back (they can't and the Modi bubble will also eventually pop).
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Jan 23, 2016 00:05
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Paradoxish posted:Japan's central bank has moved to negative interest rates. This is probably what we're going to see if/when growth significantly slows in the US before the Fed feels comfortable that the economy can chug along without training wheels. If anything it is already happening, Q4 growth is projected to be a rather dismal .7%. Some of that result may be seasonal but low consumer demand and a strong dollar is going to eventually have an effect on the overall economy. Ardennes fucked around with this message at 23:00 on Jan 29, 2016 |
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Jan 29, 2016 21:17
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A major problem for the US at this point is that almost every major economy has seen already significant devaluations, it is going to be nearly impossible to push a weak dollar policy. Of course, a real fiscal policy is now impossible. QE may cushion the fall a bit, but there is little evidence that loose monetary policy is actually enough to address looming structural issues with the US economy. If anything it looks like a case of a coming "great stagnation." Growth is slowing but it is going to be even harder for the US if not most major economies to pull themselves out of it because there simply no longer any possibility of fiscal stimulus. Do you see the US House passing a major stimulus bill if there is a recession? Then there is the question of who else is going to pull the world out of increasing stagnation if not for the US? Let's be honest, it isn't going to be Europe and probably not China, Europe still hasn't recovered and China is in it's own crisis. Moreover, Abenomics has been a near complete failure. Otherwise most emerging markets are looking pretty dire at the moment beyond India. Of course, India's growth is probably not going to last and also its economy is still too small to have a major impact on the world (at least right now). Ardennes fucked around with this message at 17:21 on Jan 30, 2016 |
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Jan 30, 2016 16:47
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Agronox posted:Just to be clear, while much of the western world is still at, near, or below zero percent interest rates, QE is mixed (the US Federal Reserve stopped months ago and is letting its QE portfolio roll off), and so far as I know, no major economy with the possible exception of China is doing major infrastructure spending. I assume a return to QE and negative interest rates are possible (if not likely) the question if it will make much of a difference, and to be honest it probably won't. It may help stabilize a downturn to some extent but you need fiscal stimulus. quote:I don't think the wheels will come off, but the central bankers don't have many tools left in their box. And, really, that's okay because the solutions should be coming from the political process (Congress, parliaments, etc.) anyway. The best tool will still be increased government spending, although it is for some reason anathema to large segments of the population. Let's be honest, the core of issue is that so much of the business and political elite in the first world are deeply against increased government spending. If anything we are in a complete ideological deadlock where many who hold power would rather jump off a building than issue stimulus measures. I think we are going to be stuck quite a while once growth finally slowly down, there just isn't enough ideological flexibility in the system left to address the issue. Once one side completely wins an ideological battle, the hardliners only become more hardline. Ardennes fucked around with this message at 18:19 on Jan 31, 2016 |
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Jan 31, 2016 18:02
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Agronox posted:Agree that fiscal policies should do the heavy lifting. I also think--though I have little to back this up with other than intuition--that while skidding around at nearly zero percent is okay, actually going negative is going to be, on the net, ineffective or even counterproductive. It probably won't make that much of a difference, you could say QE already is an effective alternative to negative interest rates but there almost certainly a declining return on expansionary monetary policy of any form. Abe is trying to pump as much money as he can into the system, but ultimately it is a more of a question of where it is going than the amounts he is pumping to the system. If (or when) there is another crisis or another recession in the US, expansionary monetary policy has to be part of the reaction but if that is about it then we are going to be quite stuck for years in a deflationary/near deflationary environment. At best we might get some type of "Bush bucks" hand out but that is about it. Ardennes fucked around with this message at 19:19 on Jan 31, 2016 |
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Jan 31, 2016 19:11
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A Buttery Pastry posted:Look dude, if this is you attitude about the US, what does that means for its retarded brother the EU?? It is hard to see the EU doing better at this point, even without the ideological restrictions that are there at the national level, since there is the reoccurring issue of the Euro. Even if governments change or at least become less hardliner, there isn't going to be much of them to do at this point. For example, Spanish public debt is over 100% at this point (was almost 30% before the crisis), and it doesn't control its own currency and if anything is even more reliant on the ECB and the EU if another crisis happens. Unfortunately, I don't see either institution changing their course, and if anything the situation is even more politically unpredictable with the resurgence of populism and radicalism. Left wing governments are going to be relatively screwed because they won't be able to changing budgets much, but in many ways can't play the blatant xenophobia card like far-right parties can. The far-right parties don't have an economic solution either, but they very well may distract the populace enough so they can generally keep a grip on power. Ardennes fucked around with this message at 21:54 on Jan 31, 2016 |
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Jan 31, 2016 21:51
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Shifty Pony posted:I'm having a hard time envisioning how a just-slightly-deflationary environment would affect the median US family. Jus tot start with personal debt would become an even worse idea, correct? Well unemployment and underemployment would start going back up, while labor participation rates would take another hit. Consumer spending would go down again and likely stay depressed, while personal debt would continue to get worse. I see the future crisis being a long, slow and very stubborn recession, and when growth happens afterward it very well be extremely borderline (and likely continually revised downward). I could see whomever winning the 2016 election being a one-term president (sort of like Bush 1). Ardennes fucked around with this message at 22:05 on Jan 31, 2016 |
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Jan 31, 2016 22:00
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Paradoxish posted:One jobs report really isn't a big deal and that article is more reasonable than you make it sound, even if it's pretty fluffy and not saying much. There's an actual, real downward trend in the labor market (at least as "real" as any trend over a short period of time can be, given that BLS employment data collection is really inexact), but that doesn't mean the economy is collapsing. We're 7ish years into a recovery, so at this point anyone who thinks things aren't going to slow down and eventually reverse is just being unrealistic and ignoring a hundred years of economic history. That still doesn't mean that one bad jobs report points to a recession three months from now or whatever. It doesn't mean there will be absolutely be a recession in 3 months, but as you said, the US economy in particular is heavily cyclical and I wouldn't dismiss the growing possibility of a recession in the next 6-9 months. Beyond labor statistics, the clear bubble happening in coastal real state and as well equity markets which seems to indicate that we are probably "do" for at least some type of contraction in the short term. Maybe it is just different this time? [The S&P in particular has looked rather "saw-toothed" for the past 9 months.] I guess it is a open question if it would actually effect the election, we will have to see I guess but it is far from impossible. Anyway, the hope is at least that the next recession would far more mild than the last one. Ardennes fucked around with this message at 01:48 on Jun 5, 2016 |
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Jun 5, 2016 01:36
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MiddleOne posted:This is some laughable sample bias rear end poo poo. By which I mean have you considered a career in professional finance analysis? A true believer? The issue isn't that there were sudden declines in equity markets but rather they have met heavy resistance which it seems they have yet to be able overcome and as far as China and oil goes...the US economy itself is not completely detached from either one, they really aren't the issue. The issue is that equity markets are very clearly in a holding pattern. Also, a similar thing happened in 2007. However, beyond equity markets, real estate markets have been bubbling for a while, and consumer spending and wages are detaching at the same time job growth is minimal. It isn't necessarily proof of a recession but certainly a sign we very well be maybe heading toward one. We will see how the fed reacts, but the chatter is they may get cold feet. Ardennes fucked around with this message at 05:47 on Jun 5, 2016 |
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Jun 5, 2016 05:30
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MiddleOne posted:Not not really? Personally, I think the indexes have been over-inflated for years due to the low-rate environment and that if anything is likely to trigger a recession it's going to be a return to the norm on central rates which would most definitely trigger speculation crashes on real estate in countries like Canada and Sweden. A correction is bound to happen, it's just a matter of when. It isn't going to cause the disaster but it is one of multiple indicators. They have been over inflated for years, but the question is while they are still in so much of a holding pattern especially since the Fed is still dragging their feet on rates. It is almost certain we will have a recession before rates return to their pre-crisis norm. I mean in 2006-2007 they were at over 5 percent, which would takes years at the rate the Fed is moving. Also, I doubt it is only going to be Canada or Sweden, just look at the Bay Area and how much real estate has exploded. I wouldn't say it is imminent either [in 3 months or less], but I think there is a pretty finite time horizon just looking at the situation historically. Ultimately, none of this is actually perfectly predictable but we do have history as a guide.
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Jun 5, 2016 05:55
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MiddleOne posted:Yeah of course there is a finite horizon, did I claim otherwise? 9 months of S&P500 activity is still a poo poo indicator. Put your money where your mouth is if you believe otherwise instead arguing with me, there's millions in it for you if you're right. I may look at going into a index fund if there is a good entry point but regardless, it isn't 9 months of data...it is 9 months out of a 9 year cycle. Anyway, we will see how the data goes but if a pattern becomes clear it certainly makes more sense to be defensive at this point.
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Jun 5, 2016 07:21
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Paradoxish posted:It's not like there's anything sinister or hard to understand going on here. For most people, the solution to inequality seems really simple: get a better job or make more money at the job they already have. The easiest way for politicians to appeal to those people is to suggest that growing the economy will give everyone a bigger piece of the pie. That's how it's supposed to work. Most people don't want to radically alter the system, they just want to benefit more from it. Nobody wants to hear that that might be impossible. Isn't that a bit paternal? Don't tell the kids that Santa doesn't exist or they may ask for a raise?
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Aug 12, 2016 21:08
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Paradoxish posted:I mean, what else are you going to say? Large scale institutional change really isn't on the table over the short term or, probably, ever. I doubt that there's some horrible conspiracy where evil politicians are keeping The Truth from the masses so much as politicians saying things that will let them keep their jobs while hoping that everything works out. The state of the economy is purely a political topic, so everyone is just going to read what they want to see in the data and longterm trends anyway. Would be a conspiracy to say maybe they just really don't care that much? Few American politicians seem to notice there is a problem and the ones that do aren't in a position (or aren't allowed) to be in a position to do anything about it. Direct spending on infrastructure is only going to do so much, especially since the most people are employed in the service industry. It is something that should be done (every society needs infrastructure) but it is far from an actual solution to wage stagnation. Then you have issues like housing costs (especially on the West coast) where the costs of living is completely lopsided and jobs from infrastructure aren't going to matter very much. Housing costs are so bad on the West Coast there is an argument to be made people would be happy with Soviet style concrete apartment blocs as long as they were semi-affordable. Then you have the entire issue of educational debt and cost which also has no realistic solution. Health care is also still relatively hosed on top of that. Ardennes fucked around with this message at 01:27 on Aug 13, 2016 |
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Aug 13, 2016 01:18
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I wanted to add, neither Mincome or a GMI is that useful of a proposal when you have strict budget restrictions in the first place as well as spiraling costs for necessary public goods. Not only is there not the funding or either program but the costs of education, housing and health care can and almost certainly eat up intended good of the program (or greatly balloon the costs). You can already see this in effect with Obamacare where the government provides generous subsidies to private insurers but ultimately has limited to no ability to control costs.
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Aug 13, 2016 01:37
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ToxicSlurpee posted:Which is really a good argument in favor of the government getting more control in the situation. What we're seeing overall right now is the horrible failure of American capitalism. Then it goes back to the entire other issue is that while social democracy made a pretty nice middle ground, it arguably existed because of historical circumstance (especially WW2 and the Cold War). If anything you could say capitalism is a victim of its own success, sort of like a big name actor driving their Ferrari off a cliff after a drug fueled orgy.
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Aug 13, 2016 01:56
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Ytlaya posted:I'm actually going to agree with this some. While the banks absolutely partake in a bunch of morally questionable, if not outright corrupt, behavior, they aren't really the fundamental cause of stagnant wages and income equality. They may exacerbate the situation, but proper regulation of the financial sector alone won't come close to fixing our problems. Yeah, basically it isn't just banks that are a problem, but they still are an issue even when they are exploding. One issue is simply they are part of a massive concentration of capital that brings a similar size of political power with it. Another issue is that basically the support of the the financial industry with zero interest rates are likely to create another financial bubble if not furthering another tech/housing bubble. In both cases the system is working more or less as intended but are likely going to have catastrophic long-term effects on society.
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Aug 13, 2016 02:56
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ToxicSlurpee posted:If you think fast food has bad margins I have bad news for you. If memory serves a lot of it is "franchise fees" which basically means every McDonald's is required to pay a large bag of money to the company every year just to exist. Minimum wage increases may indeed cause price increases, but then there is the question of what else do you at this point? A minimum wage is on of the few ways to adjust income levels that local governments in the US has and in all honesty, prices have increased since 2009. If you don't raise the minimum wage, you are effectively allow it to decline in real terms. Education isn't necessarily going to be an answer and neither is labor mobility (both are supply side fixes anyway). An a GMI/Mincome in the US is completely pie in the sky, hell it is near impossible to raise food stamp funding at this point either. Moreover a country like the US which has a trade deficit of around 2.5-3% of GDP per year needs to address inequality more than a country with balanced trade.
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Aug 19, 2016 19:17
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ToxicSlurpee posted:The problem is that people frequently argue that any minimum wage increase at all will like triple the cost of a big mac when really even $15/hour will make them a few cents more expensive at most. Definitely not the economy-ending doom and gloom that people scream about. Well, to be frank, the Soviets may have kept us honest. That the propaganda war that played out during the Cold War most likely forced to steer the US on a more reformist course and that the high-living standards of the post-war era were ultimately both a combination of the war itself (which knocked out pretty much everyone except the US) and the fact most business leaders realized they couldn't push the US public too far. The US was also wealthy enough it could afford to have significant trade deficits with Japan and Western Europe (both on or near the "frontline" of the Cold War) without significantly effecting its own economy. For the most part, this compromise worked and allied countries rebuilt while the standard of living in the US was high enough there was little chance for turmoil. The Civil Rights Movement and Vietnam tested the system but didn't crack it. However by the 1980s it was clear the Soviets had weakened ,and by the 1990s they were gone and there wasn't any sort of ideological challenger to the US. Since that point it has very clear the direction has been toward declining real wages and evaporating worker rights. While wages have been stagnating before the 1990s, it was during the early 1990s when wages between the top quintile and the rest of society clearly diverged.  To be perfectly honest, I don't think anything is going to really change unless there is a internal or external threat to the way business is done. Putin's alliance with the populist right seems the closest thing to a challenge but even then it is still very much embedded in very much the same economic system as the rest of the world and doesn't offer any realistic long term alternative.
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Aug 20, 2016 00:12
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ToxicSlurpee posted:The internal challenge is already brewing; as wages stagnate and more and more people end up being poor (at this point a majority of Americans are considered "poor") the middle class is going to contract. With white people increasingly becoming not a majority (and, well, more white people being poor) they can't just vote themselves above everybody else anymore, which means the rich can't use racism to divide the nation. They'll have to find something else (which is why I think they've thrown so much money into the GOP, really). The problem is turning that rising internal discontent (which I think is real) into anything that can threaten the way things are done. As for formal political change, I am rather doubtful it is going to be possible especially after each party re-doubles their efforts to stamp out inter-party dissent. Also, the identity/race issue is going be an factor that will likely continue to be used to divide "have-nots" against each other even with changing demographics. If anything I could see the next decade consisting of both parties doubling down on wedge-issues/identity politics because neither one wants to address the elephant in the room. You may have more people in the streets but there is still going to be a segment of the population that is loyal to the "old system" in both parties. Neither party actually wants to reform in the system in any meaningful way and almost certainly won't until they have absolutely no other choice. There doesn't be any solution on the horizon probably until eventually a "bloody Sunday" type event happens.
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Aug 20, 2016 00:38
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Yeah, then there is the issue of drug prices which will probably completely meltdown the thread. That said, I think the ultimate issue is simply a combination of a lot of inefficiencies and profit-making coupled together. Doctors, medical groups, hospitals, insurance companies, and drug companies (among others) all take their cut and most work to make sure the revenue they are making is significantly above inflation. Profit taking is completely logical from their perspective but in reality it effectively acts like a involuntary tax for most of the population. Admittedly you made the system more efficient, doctors would have to be paid less, many hospitals maybe would have to be nationalized, federal drug research funding would have to be increased but you would effectively shifting much of the cost burden from the general population. It is also why it may make sense for many younger Americans to think of a "plan B" in a country with a UHS if they actual go through with fully privatizing Medicare.
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Jan 5, 2017 09:40
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If anything I would say both systems were ultimately unsustainable even though they did led to increases in standards of living for their two systems. As far as at least the purges went, the literate were more likely to be purged while peasants were most likely to die during collectivization. Ultimately, the increase in literacy was absolutely due to an improvement in schooling from the near lack of public education in the Russian Empire. At this point, it looks like we are entering the "hangover" from globalization, comparable to the Brezhnev/Gorbachev period. Most major middle income (Russia, Brazil, Turkey, Egypt, Mexico etc) countries seem to be struggling in some serious capacity while the first world seems to be heading towards authoritarian populism. Significant growth in still happening in parts of the developing world but it is nowhere near the high flying days of the 2000s.
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Jan 12, 2017 16:31
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Helsing posted:I'm not denying that many millions of people have risen out of absolute poverty. The statistics there are unambiguous. We know that in absolute terms people are getting more calories of food, more dollars of payment, consuming a larger basket of goods, etc. I would point out that the sustainability of this situation is questionable given the incredible strain we're putting on the planet's environment, and given that the current global economy has no effective mechanisms for regulating carbon emissions. But to be clear I am in no way denying that there have been improvements across many metrics. Yeah, China remains today deeply state capitalist, and SOE industries still dominate its economy. Hell China still has five year plans even if they also have an active market sector. It is true they benefited from liberalized trade, but much of that was a legacy of the Cold War where the US worked to widen the Sino-Soviet split as far as possible and trade was part of that deal. There really no magic to giving a favorable trade advantage to a country, especially when it doesn't return the favor. Of course, all of this trade also setup China to becoming an aggressive world power, and deep structural problems in the US. It isn't the first time the Cold War and its legacy hosed us in the long-run.
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Jan 30, 2017 23:44
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Helsing posted:Arguably it's even more telling if you look at "second world", i.e. ex-communist, countries. This is a bit simplistic but if we're talking big picture then compare Russia and China. Both former Marxist-Leninist states (technically China still is one I guess), both had some impressive early growth thanks to their command economies, followed by stagnation and over reach due to bad leadership, both started experimenting with serious reforms in the 1980s. I wanted to just mention a misconception, your right about the damage Russia took, but even today significant parts of the economy remained state owned and if anything remaining SOEs have actually kept the country partly together in the 1990s even though workers weren't paid for months at a time. Furthermore, the president who shall not be named nationalized significant portions of the energy sector since that time. If anything I would still call Russia state capitalist and still quite centralized even if there are still oligarchs allied with the Kremlin. Of course, the Soviet Union/Russia's issue is mostly related to Dutch disease and the fact the Russian economy is still overly reliant its exports are focused around energy. quote:And now with the United States looking shabbier and shabbier to the rest of the world neoliberal apologists have gotten so desperate they've started trying to defend their broken ideology by claiming they are somehow responsible for lifting the Chinese out of poverty while downplaying the damage they did to their own countries, and completely ignoring the fact that they fanned the flames of political extremism in America and deserve the lions share of the blame for getting a wave of demagogues elected who now threaten to undo the rest of their precious political project. Yeah, free trade did benefit China because the US was willing to make it one way at the cost to itself. However, China has never been liberal either economically or politically and reforms that happened were also measured in order to promote growth. Trade helped China, this is without a doubt but it also doesn't really make such a great case for a modern liberal model. Yeah, if an industrialized economy is willing to absorb the export from a relatively underdeveloped economy with a protectionist policy, the gap between them is going to close. Right now, it looks like the chickens are starting to coming home to roost because the US model looks like it is experiencing a growing crisis at the moment. It isn't a surprise that people have become completely desperate and uninterested in living month to month because some Chinese or Vietnamese SOE needs to meet its projections. Ardennes fucked around with this message at 00:14 on Jan 31, 2017 |
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Jan 31, 2017 00:12
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That article never seems to satisfy the question of why there is there is such an "excessive drop" in employment in the US versus Germany. Manufacturing employment in Germany dropped by half since the 1970s, in the US is it much closer to a fourth and then he just throws in two articles (one affiliated with the University of Chicago FML) to hand-wave it can't come from trade due to China-WTO. Yeah, I have been reading over that thing (it is not well written) and he silently seems to drop the issue of "excessive shedding" without addressing where did these jobs go? Were Americans just that much better at automation (pretty doubtful to be honest)? The US now has almost a third the population of Germany engaged in manufacturing, why are they so different? quote:
https://journalistsresource.org/studies/economics/trade-impacts-american-jobs-research-roundup Ardennes fucked around with this message at 22:29 on Jan 31, 2017 |
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Jan 31, 2017 22:13
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Germany and the US are apples and oranges as far as trade with China, Germany trade with China is a much smaller part of their total trade (European trade is obviously far larger) and their deficit with China is significantly smaller as a result of both the size that trade and its comparably smaller deficit. Just because both are part of the WTO doesn't mean they have the same trade situation, especially when you account for something like the EU. Also, yeah Germany has traditionally had historically positive balance of trade. As far as education and redistributing the profits of trade, that would make sense if you were talking about income distribution in the country itself not really the size of manufacturing employment. Moreover, the German Mark/Euro were never really that weak to begin with especially we are all talking post-Bretton woods. Hell, if anything the German Mark was steadily gaining on the dollar since the 1970s and the Euro was quite strong as well. It is much more fair to stay that the robust nature of the Mark/Euro was holding back exports more than the dollar. Bretton woods if anything kept the Mark artificially low by pegging it to the dollar, which allowed German exports after the war to be cheaper and once it floated the Mark then steadily strengthened. Germany essentially had its own protected sphere of trade called the EEC/European Union which allowed it keep a (relatively) robust manufacturing base and largely limited its exposure to China and much of Asia compared to the US. Ardennes fucked around with this message at 23:32 on Jan 31, 2017 |
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Jan 31, 2017 23:23
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JeffersonClay posted:This is circular. You're claiming that the massive volume of cheap goods from China destroyed US manufacturing, and then claiming we can't compare Germany and the US because China trades a lot more with the US than Germany. China's entry into the WTO meant free trade with both nations. What was unique about US manufacturing here? You can compare them but you have to recognize they are two different types of beasts. The unique thing versus Germany is that Germany was part of a trade bloc that ultimately offset much of Chinese trade while the US was fully exposed. quote:Germany has more robust manufacturing employment because 1) Their educational system produces more productive manufacturing workers due to its fantastic vocational focus 2) They spend a lot more on infrastructure and direct investment 3) They have much better government regulation around unions which make people more productive. Note Germany's unions were able to survive free trade with China. Education and infrastructure spending is fine, but it doesn't explain such dramatic differences (especially when you talk about the type of infrastructure that is involved here). Likewise, the persistence of unions keeps wages higher even if the work is still quite skilled. Bretton woods ended in the early 1970s, but the Mark generally gained versus the dollar except for a brief period during the mid 1980s. The Euro gained strength quite quickly after it was introduced and generally stayed above its 1.20 target (which to be honest was perhaps too high) and may have actually negatively impacted European trade and been a factor in the Eurozone crisis to some degree. Countries with no formal borders, under a common regulator system and in many cases the same currency are going to have less barriers to trade that another country under the WTO outside the EU. The WTO restricts the type of actions governments can conduct to control trade (tariffs) but it doesn't suddenly create a blank slate since there are a multitude of factors that can effect trade.
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Feb 1, 2017 01:29
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Helsing posted:Nah, I've never suggested that "China is worse off because they have adopted capitalist/market practice." Quite the opposite, as I said upthread, I think China's development obviously wouldn't have proceeded at the same pace without access to foreign capital and markets. My point is that China's development hardly vindicates neoliberal economic theories given how much China diverges from their commendations. Russia followed a lot of those suggestions much more closely and suffered for it. It is both about the speed of the reforms and the sort of "end state." In the case of China, it is very clear the pace of reforms have slowed and more or less the country has reached an equilibrium state. I am actually doubtful they are going to get rid of most of the SOEs at this point, at best they cut their employment a little through buy-outs. At the same time there is a push for more environmental and labor regulations and better public health care. There is something to say about some economic liberalism is necessary, and that a complete command economy is simply not the most efficient way of doing things. But the preferred economic end state for a developing country may be a heavily regulated form of state capitalism where the "commanding heights" are still entirely dominated by the state.
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Feb 1, 2017 10:35
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shrike82 posted:Singapore is an example of a heavily interventionist government fused with a very open market but progressives heavily criticize it from not just a human rights standpoint but an economic equity standpoint as well given its lack of a welfare structure. SOEs are a significant part of the economy of Singapore but I still think the degree is significantly less than China. The welfare structure of Singapore is debatable, it has public housing as well as a public health care system. But yeah Singapore only liberalized so far and that it clearly reached a equilibrium state. Singapore also makes for a weird case since its economy is so dependent on trade due to its history and location (also its a city-state). It was forced to open itself to probably a higher degree because it simply couldn't survive without trade.
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Feb 1, 2017 11:30
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White Rock posted:Money in stocks and bonds (including fun stuff such as pensions) will disappear if the companies go belly up. Actual "paper" money in the bank won't go bust without hyperinflation, ala Germany in the middle war period. Deflation was the norm during the great depression in USA. IF hyperinflation becomes a thing your best bet is to have a resource which stays in value, typically land which is not speculative, the upper class who owned land fared the best during hyperinflation (as opposed to the middle class who lost all their savings, and the poor who lost their jobs and did not have savings). I think the biggest danger is the fact that when the next recession happens there is going to likely be little to no additional fiscal stimulus if not more extreme cuts which will only exacerbate the crisis. Building the wall is going to produce so many jobs especially since non-defense spending is going to be cut to the bone. The most likely result is deflation and a very very slow recovery even compare to the last recession. Basically, start saving everything you can right now because it is going to be a long hard fight. That said, I also have to wonder about the future because if situation is already tense right now, what is going to happen when you add a recession on top of everything else? Edit: Silver is so volatile and unpredictable you might as well be playing the slots. Ardennes fucked around with this message at 14:45 on Feb 1, 2017 |
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Feb 1, 2017 14:34
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Helsing posted:Well, at the risk of being dangerously simplistic: I think there's a case to be made that for late-developing countries -- especially in regions that have acted as economic colonies on the periphery of the world trading system -- a coercive planned economy may be the fastest route at a certain stage of industrialization, but that at at a later stage of development opening up more space for private investment and initiative is necessary to avoid stagnation. The transition between industrial investment and consumerism is probably the key factor. Industrial development is relatively easy to forecast and plan for compared to a complicated consumer economy. However, at the same time it may not make sense to actually liberalize all your SOEs especially if they are the commanding heights of the economy. Ultimately, the Soviets would have done a lot better if they had switched to some very moderate reforms during the 1960s as growth from industrial development slowed (lift price controls on some consumer goods and allow some NEP style flexibility). Admittedly, China is stuck a bit at the moment since growth from manufacturing is starting to drop as they are undercut by sources of even cheaper labor. That said, I am not really sure how further liberalism would help this compared to developing a stronger domestic economy through income redistribution.
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Feb 1, 2017 19:25
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I kind of hate to say it, but I am really glad I don't have kids. I don't even dislike kids and I definitely see the value of raising a new generation but holy gently caress the world is uncertain and desperate at this point. I mean you have to be doing pretty drat well not to be worried about the future. Moreover, the state of education (K to PhD) and child care in the US is already hosed on top of that then you got health care. It makes be queasy even thinking about it. I don't know how you even save when you have kids at this point? Anyway, if you want to "predict" a recession the best thing to do is start looking at BLS data and to see if there is any rise of consistent rise. Our current data is starting to look like the economy is where it was in around late 06-early 07 (which means we have around 14-18 months if you expect a predictable sequence of events). Ardennes fucked around with this message at 13:03 on Feb 2, 2017 |
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Feb 2, 2017 12:53
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Mozi posted:It does make clear that (in my opinion) the fundamental problem is not free trade/globalization in and of itself, but the concentration of growth in the top 1% as a result of what more or less boils down to massive, often legalized, tax evasion. Free movement of capital is part of globalization though, and it is pretty tough to liberalize trade without finance. If that growth from the 1%/corporations were more favorably spread to the 75-99% it might have stalled the direction the world was going but you were still going to have issues with a rust belt and significant portions of your population without a future. Globalization was unavoidable in some capacity, but it certainly could have been done slower and with higher demands on the governments that were being traded to. In particular, there really was no reason to allow so much trade to flow to China itself with few demands, there is certainly other part of the developing world that manufacturing growth could have flowed to. High tariff walls weren't a solution, but globalization could have been conducted far far better.
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Feb 4, 2017 16:08
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Ytlaya posted:Regarding the graph, how much does it account for cost of living (if at all)? Because part of what's happened in the US is that, while median wages have increased somewhat, they've been greatly outpaced by cost of things like health insurance and rent. Someone making less money in many other countries can actually end up better off because they aren't paying as much towards those necessities. Also that graft is missing the entirety of the recession and a general slowdown in growth including China. Basically, it is just showing the "Golden Age" of globalization. (oh yeah, the bottom 20% did actually pretty poorly considering it is a 20 span of high global growth. Basically, the middle 49% did pretty well from manufacturing, and 1% did very well for themselves.) Ardennes fucked around with this message at 20:02 on Feb 6, 2017 |
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Feb 6, 2017 19:59
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Mozi posted:Every system has benefitted the rich and powerful the most, but this is the first one that has the side effect of benefiting the poor as well. The poorest of the poor (the bottom 25%) were largely left behind, but it really helped middle income nations that finally industrialized. Of course, that industrialization probably could have been done with a very different form of trade. Trade still needs to exist, but in many ways I think how globalization worked out was completely unsustainable and disastrous and the ultimate result is we now have a far more dangerous world. Also, in terms of geopolitics, we also created an authoritarian expansionist near-superpower. Ardennes fucked around with this message at 19:21 on Feb 7, 2017 |
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Feb 7, 2017 19:18
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MiddleOne posted:I'm going to make the counterargument that the decrease in poverty we're seeing is the direct result of the investments and funds made available by the World Bank and IMF rather than the often predatory demands that follow those investments. If you replace dirt roads with asphalt, tills with tractors and people with conveyor belts you're going to have economic growth almost irregardless of what policies follow. If you look at the results it's clear as a day that the third world economies that worked around the Washington consensus rather than with it are doing better. China (and many of the other middle income states) were never especially reliant on IMF/WB funds in the first place. If anything the states the most reliant on the IMF usually deindustrialize if anything (Argentina/Ukraine) since that funding usually goes to backing back debt/temporarily supporting its local currency then the country gets hit with an austerity crisis. China actually got a pretty sweetheart deal if anything. One part if anything was how cheap their labor was, and the second part was keeping the Sino-Soviet/Russian split alive (this completely and utterly failed).
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Feb 7, 2017 19:26
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Proud Christian Mom posted:Like does anyone believe all these magically uplifted people aren't going to be shoved right back into the poo poo at the first opportunity? That is partly why China is really trying to resist privatizing/shutting down its state owned companies. It isn't any type of compassion but they know if they shut them down there are going to be hundreds of thousands/millions of pissed off people on the streets and it will completely decimate entire regions. We will see how long it lasts. readingatwork posted:Why is protectionism destined to fail? It may not be perfect but it was the normal way of doing business for centuries. Admittedly there are trade off with protectionism as well, and it does led to a lack of competition. You could probably find some type of middle ground, and made up the different with infrastructure and domestic spending. Ardennes fucked around with this message at 19:58 on Feb 7, 2017 |
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Feb 7, 2017 19:51
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I think the penitent issue here is if consumer debt levels have return to dangerous levels or not, especially since we live in an environment where "good regulation" no longer exists. That said, the data so far is mixed and we are still in a fairly "sunny" period of growth with relatively low levels of unemployment and even some very modest wage growth. The question is how long this period is going to last, and historical trends seems to indicate another 12-18 months. I think this thread jumped the gun, although I guess it doesn't hurt to be too cautious. Btw, some type of consumer credit thus debt is a necessary thing (and some type of interest), but much of everything else is up to debate. Ardennes fucked around with this message at 20:08 on Feb 14, 2017 |
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Feb 14, 2017 20:04
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call to action posted:If this is "sunny" growth, we're hosed considering wages haven't grown in any significant way and everyone that found jobs post 2008 did so in lovely temp work. This is a treading water economy at best. Yeah, that is where I am leading, that this is about the best your going to get and not only will it get worse, it may be a much longer recession. There is a high probability isn't going to be any real stimulus and if anything spending will likely be cut even further. Also, there are some worrying signs of overheating in coastal housing markets. That said, signs of another recession are going to be relatively minute in the beginning, very modest increases in unemployment for example. Ardennes fucked around with this message at 20:31 on Feb 14, 2017 |
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Feb 14, 2017 20:14
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Proud Christian Mom posted:We didn't actually fix any of the issues that led to 2008 and we're now actively making them worse so yeah this is going to get ugly. Dodd-Frank might have make any financial crash for manageable (although there were still plenty of issues with the law) but yeah we are prepping to jump without a parachute right now.
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Feb 14, 2017 20:32
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