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Fed Ends Zero-Rate Era

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Re: Fed Ends Zero-Rate Era

#261

Post by vezzy-fnord »

dragonwriter wrote: post #258
vezzy-fnord wrote: post #235

Earlier quoted context omitted.

The reason many economists are unsure or against the minimum wage is not because they're some agents of bourgeoisie capitalists, but because arguments in favor of it tend to be moral, not economic. For instance, here's a case for the minimum wage presented by an (otherwise very knowledgeable, I'll grant) Post-Keynesian economist: http://socialdemocracy21stcentury.blogspot.com/2013/02/the-e... It's pretty weak. The fi…

> The reason many economists are unsure or against the minimum wage is not because they're some agents of bourgeoisie capitalists, but because arguments in favor of it tend to be moral, not economic. All policy arguments are moral. Economics (to the extent it is a useful, predictive, empirical science) can tell you what outcomes to expect from what actions, but not tell which actions should be preferred, without firs…

All policy arguments are political, but not necessarily emanating from a moral philosophy. To the extent morality can be reduced to cause-effect propositions, it can also be subject to analysis.

Re: Fed Ends Zero-Rate Era

#262

Post by rodgerd »

dsr_ wrote: post #50
roymurdock wrote: post #28

Fed raising interest rates 0.25% and setting a goal of "normal" 2% by 2018 means little to nothing. Market already priced the miniscule rate hike in as the move was widely expected, and move did nothing to assure markets that the Fed is in control, or set credible, measurable goals for future hikes. Fed can continue to push on the supply side of money at the bank/institutional level all it wants. We need the Federal…

If you want to stimulate aggregate demand at the consumer level, you need more people to have good jobs, so they can make money, so they can spend money. This would represent a reversal of the trend since 1970 towards greater income inequality. It is not clear to me that anyone is doing anything about that (except, of course, in the negative sense.)

> It is not clear to me that anyone is doing anything about that (except, of course, in the negative sense.)

Precisely - monetary policy in the English-speaking world has, since the 80s, been focused on avoiding inflationary pressures via avoiding "too much" growth. Anything that would lead to upward income pressure outside the executive suite is "too much".

Re: Fed Ends Zero-Rate Era

#263

Post by rodgerd »

vezzy-fnord wrote: post #248
crdoconnor wrote: post #244

Earlier quoted context omitted.

I'm not at all concerned about economists who are "for" or "against" the minimum wage. They can hold whatever opinions they want if they don't lie. It's the economists who poorly design studies with the intent of demonstrating that it either causes prices to rise uncontrollably (which it doesn't), causes unemployment to rise (which it also doesn't) and who pointedly never, ever, ever look at the effect it has on prof…

Economists are agents of bourgeoisie capitalism, then. Alright, I'll end here.

A well-sourced argument you've got there.

Re: Fed Ends Zero-Rate Era

#264

Post by dragonwriter »

vezzy-fnord wrote: post #261
dragonwriter wrote: post #258

Earlier quoted context omitted.

> The reason many economists are unsure or against the minimum wage is not because they're some agents of bourgeoisie capitalists, but because arguments in favor of it tend to be moral, not economic. All policy arguments are moral. Economics (to the extent it is a useful, predictive, empirical science) can tell you what outcomes to expect from what actions, but not tell which actions should be preferred, without firs…

All policy arguments are political, but not necessarily emanating from a moral philosophy. To the extent morality can be reduced to cause-effect propositions, it can also be subject to analysis.

> All policy arguments are political, but not necessarily emanating from a moral philosophy.

Insofar as they can be called arguments at all, they rest on moral -- or at least, "subjective value", which some would see "moral" as a subset of, with other subsets including "aesthetic" and probably some others; these distinctions are not well-defined and, ultimately, I don't think actually meaningful -- bases.

> To the extent morality can be reduced to cause-effect propositions, it can also be subject to analysis

To the extent something can be reduced to cause-effect proposition, it is a fact question, not a value question. Morality consists of the space of value questions. It may be necessary to answer a fact question to address a value question in a particular value framework, but ultimately a question that can be reduced to cause-effect propositions is not a moral question, but a fact question (which may also have utility in addressing a moral question.)

Re: Fed Ends Zero-Rate Era

#265

Post by Spooky23 »

vezzy-fnord wrote: post #235
crdoconnor wrote: post #224

Earlier quoted context omitted.

>Be careful what you wish for: http://marginalrevolution.com/marginalrevolution/2015/03/how... . tl;dr if you raise the minimum wage imperceptibly, poverty reduction is affected imperceptibly and prices are affected imperceptibly. In general if something will have a negative effect on corporate profits (minimum wage hikes have an outsized effect on corporate profits) you will be able to find a legion of economists wh…

The reason many economists are unsure or against the minimum wage is not because they're some agents of bourgeoisie capitalists, but because arguments in favor of it tend to be moral, not economic. For instance, here's a case for the minimum wage presented by an (otherwise very knowledgeable, I'll grant) Post-Keynesian economist: http://socialdemocracy21stcentury.blogspot.com/2013/02/the-e... It's pretty weak. The fi…

Minimum wage has been around for a long time, and there are plenty of counter examples like restaurant workers and soldiers who could be studied who often get paid less than the minimum wage that has been around for decades.

You also cannot ignore that when the social safety net exceeds the value of working wages, particularly for women, there's a strong incentive to not work. Given the unavailability or high cost of health insurance, Medicaid makes that a no brainier for any woman with one or more children.

Re: Fed Ends Zero-Rate Era

#266

Post by gnaritas »

dragonwriter wrote: post #223
gohrt wrote: post #220

Earlier quoted context omitted.

Form the linked article: > allocates benefits as higher earnings nearly evenly across the income distribution OK by me. Note that it doesn't allocate benefit to idle owners f investment income. > Even after taxes, 27.6 percent of increased earnings go to families in the top 40 percent of the income distribution. "top 40%" is rather silly bucket. That includes basically the median family, all the way to billionaires.…

> "top 40%" is rather silly bucket. That includes basically the median family No, top 40% does not include "basically the median", by any remotely reasonable standard.

That's why he said basically, it's pretty much the upper half which yes, includes middle class families and billionaires and is a silly bucket to put in one group.

Re: Fed Ends Zero-Rate Era

#267

Post by rodgerd »

cft wrote: post #120
roymurdock wrote: post #28

Fed raising interest rates 0.25% and setting a goal of "normal" 2% by 2018 means little to nothing. Market already priced the miniscule rate hike in as the move was widely expected, and move did nothing to assure markets that the Fed is in control, or set credible, measurable goals for future hikes. Fed can continue to push on the supply side of money at the bank/institutional level all it wants. We need the Federal…

> Fed raising interest rates 0.25% and setting a goal of "normal" 2% by 2018 means little to nothing. This means the end of 70% of the unicorns.

Good. A hard dose of reality might make HN slightly less full of aggressively, arrogantly clueless twenty-somethings.

Re: Fed Ends Zero-Rate Era

#268

Post by gnaritas »

gohrt wrote: post #221
vezzy-fnord wrote: post #214

Earlier quoted context omitted.

Competition drives prices down, but chances are people with limited options to shop around and who disproportionately head towards mass retailers already , by example, live in areas with im perfect competition and in the worst case, food deserts. As such, a minimum wage would seem to negate itself again.

Be aware: Right wing thinkers don't believe food deserts exist.

Right wing thinkers don't believe reality exists for the most part. We've come into an age where we can't agree on basic facts; in that environment, there is no real thinking.

Re: Fed Ends Zero-Rate Era

#269

Post by vezzy-fnord »

rodgerd wrote: post #263
vezzy-fnord wrote: post #248

Earlier quoted context omitted.

Economists are agents of bourgeoisie capitalism, then. Alright, I'll end here.

A well-sourced argument you've got there.

What else is there to say about the GP's blanket assertions of opinion being bought out by corporate think tanks and a link to an article about labor-related strife? It's a predetermined conclusion.

Re: Fed Ends Zero-Rate Era

#270

Post by rodgerd »

jfoutz wrote: post #246
pjungwir wrote: post #65

Earlier quoted context omitted.

One way this might affect ordinary people is the choice between investing or paying down a mortgage. The day you get the mortgage, it probably feels like a good risk-adjusted return to pay it down. "Risk-free 5% return!"[0] But if you have a low 30-year rate and interest rates rise enough, there might be low-risk investments that pay better than extra mortgage payments. This is one doubt I've always had about Dave Ra…

I think if you don't make a whole lot of money (like retirement is going to be kinda scary) and you're living in the house you're planning on dying in, paying it down makes sense. it's a very easy way to hold on to some wealth and get to the point that you don't have house payments anymore. maxing out 401k is better, you'll end up with more money, but there's some real security in outright ownership. Paying down the…

> Paying down the mortgage with the rates we have now, aside from personal security, don't make much sense to me.

You must be quite young. The 25-30 year window most people are now taking mortgages out can cover dramatic economic swings. Thirty years ago mortgages in my neck of the woods were up around 20%.

Assuming that rates will be this low forever is like believing we were in a "long boom" in 1999.

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