The Shipping News Suggests Economic Weakness • Hacker News Board

Re: The Shipping News Suggests Economic Weakness

#111

Post by brc » Sat, Jan 30, 2016, 10:44 PM UTC

michaelt wrote: post #37

calibraxis wrote: post #31

Earlier quoted context omitted.

Many do. Not the sectarian economists hired to develop capitalist theology, but the ones you take seriously when you need to run a real capitalist economy. Here's a lucid explanation: "If you take an economics course, they’ll teach you, correctly, that if the government spends n dollars to stimulate the economy, it doesn’t really matter what it’s spent on: they can build jet planes, they can bury it in the sand and g…

they’ll teach you, correctly, that if the government spends n dollars to stimulate the economy, it doesn’t really matter what it’s spent on Forgive my ignorance on these matters - I know that if the government pays a work crew the work crew ends up with money in their pockets regardless of what specifically they build; but surely if you pay a work crew to build a useful freeway or a bridge (or a rail system if you pr…

The issue is that, by having politicians decide where and when to build the bridge, you don't necessarily end up with the right bridges.

What you wrote is correct, the flaw is you put in the word 'useful'.

If it were just about bridges and railways, it wouldn't be so bad. But lately economic stimulus is used as the fig leaf for all types of whole scale wealth destruction like cash for clunkers, amongst countless other examples.

Re: The Shipping News Suggests Economic Weakness

#112

Post by bvi » Sat, Jan 30, 2016, 10:57 PM UTC

floppydisk wrote: post #83

paulpauper wrote: post #74

The dry index is a poor predictor of future economic health or stock market returns http://greyenlightenment.com/economics-myths-part-7-the-balt... The index was flat in the 80' and 90's yet the global economy boomed. Not sure why stories that are sensationalist hyperbole get voted to the front page anyway

The best indicator for anything transportation is utilization and how much stuff is actually being moved. Not just the price of moving something from A --> B. Yes, the presence of more movers, as the article points out, suppresses the price because people are competing to offer the lowest possible price to get the business. And, shippers did start investing in new builds extensively when it looked like the economy wa…

> Unfortunately, the amount of stuff being moved is not public record

Not true - you can get a sense of this through ATA's Truck Tonnage Index.

1. http://www.trucking.org/article.aspx?uid=5897732a-ea35-4369-... 2. http://www.trucknews.com/transportation/ata-truck-tonnage-in... 3.

Re: The Shipping News Suggests Economic Weakness

#113

Post by brc » Sat, Jan 30, 2016, 11:35 PM UTC

ericd wrote: post #89

vezzy-fnord wrote: post #54

Earlier quoted context omitted.

What you're describing might explain fluctuations, but it's inadequate and incomplete for the business cycle. Virtually no one, not even Keynesian or other left-economists support make-work. It's mostly an idea favorable to laymen, or often done for more nationalistic rather than economic reasons. FDR was inspired by William Trufant Foster's and Waddill Catchings' policy advice for instance, who had Keynesian-esque u…

My understanding is that FDR's "make-work" policies weren't only that - they were involved in massive infrastructure improvements which paid economic dividends, and building out parks, which provide cheap entertainment for the public. Perhaps there were others that were less useful, though?

FDRs policies included the Hoover dam, a massive productivity boost.

The latest round of stimulus spending included cash for clunkers, lots of money for financial institutions and paybacks to teachers unions and other supporters. That's not a partisan criticism, an administration of the opposite party would have given to their supporters in equal measure.

The rules of startups are about : make something that people want, and don't take money for the sake of it, your better of solving problems out of necessity.

The truth is that, as a theory, the idea works. In practice, it doesn't because it relies on the idea that central planning can work at all, and that lots of productive projects are available but can't get started due to lack of capital and resources. If a dam or bridge makes sense, then build it the moment it makes sense.

Re: The Shipping News Suggests Economic Weakness

#114

Post by brc » Sat, Jan 30, 2016, 11:38 PM UTC

tootie wrote: post #21

brc wrote: post #4

The world economy is dominated by people in governments who believe that printing money, burying it and paying people to dig it up again will increase the amount of trucks built and goods shipped. No amount of failure of this theory will be enough for it to be abandoned, because it has a certain amount of truthiness to it, and it excuses profligate and wasteful behaviour. Both these things are fun and buy votes. The…

No economists believe that ridiculous straw man nor is it relevant to this article.

If only that were true!

Besides, it's not economists that matter here. It's talking heads who provide cover for politicians to create massive amounts of malinvestmemt of scarce resources, diverting from possible productive investments and leaving behind the interest payments as a drag on future investment.

Re: The Shipping News Suggests Economic Weakness

#115

Post by brc » Sat, Jan 30, 2016, 11:45 PM UTC

SixSigma wrote: post #39

calibraxis wrote: post #31

Earlier quoted context omitted.

Many do. Not the sectarian economists hired to develop capitalist theology, but the ones you take seriously when you need to run a real capitalist economy. Here's a lucid explanation: "If you take an economics course, they’ll teach you, correctly, that if the government spends n dollars to stimulate the economy, it doesn’t really matter what it’s spent on: they can build jet planes, they can bury it in the sand and g…

But building / updating bridges, roads, rail networks, dams, lead water pipes etc. would have the side effect of being useful to the economy once built / updated.

This is a critical point. No they are not.

Where I live billions and billions was spent on water infrastructure. No actual improvements in supply were made- no additional catchments were built, because dams == bad. The money was spent in pipelines and a desalination plant that has never - and I mean never - been switched on. It's 5 years old and has never output water, because the cost is too high compared to dam water.

Now I have a 400% increase in water bills but no actual improvement in what I get. That money goes to paying the interest and running costs for that investment. That money goes out of my local economy. That, in aggregate, prevents and extra shop from opening, or causes an existing one to close. Most businesses run in thin margins and diverting cash away on pointless make work lingers long after the supposed boost happens.

Re: The Shipping News Suggests Economic Weakness

#116

Post by brc » Sat, Jan 30, 2016, 11:49 PM UTC

jjoonathan wrote: post #48

brc wrote: post #4

The world economy is dominated by people in governments who believe that printing money, burying it and paying people to dig it up again will increase the amount of trucks built and goods shipped. No amount of failure of this theory will be enough for it to be abandoned, because it has a certain amount of truthiness to it, and it excuses profligate and wasteful behaviour. Both these things are fun and buy votes. The…

I don't buy it. Boom & bust cycles are driven by the fundamental difficulty of quantifying value. Since there is no true value, people base their opinions on those of others (+delay), leading to "inertia," leading to oscillation. The government might exacerbate the oscillations, but the lion's share of responsibility lies with the market. Complaining that the oscillations happen because the market "just isn't free en…

Boom and bust markets are caused by human infallibility and time lags.

Instead of providing government cover for the cycle, the lesson for businesses should be that they need to prepare for boo and bust. Knowing a truckload of government money will splash down the chute only increases moral hazard for reckless investment.

Your last paragraph sounds like a central planning nightmare. We don't need people in government buildings drawing lines around core needs. People faced with scarce resource allocation will make the choices that are right for themselves. Anything else ends up with tractor and leather shoe 5 year plans which don't match what people want.

Re: The Shipping News Suggests Economic Weakness

#117

Post by brc » Sat, Jan 30, 2016, 11:58 PM UTC

slv77 wrote: post #100

bcg1 wrote: post #34

Earlier quoted context omitted.

"If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months," he said. "And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better--" http://www.huffingtonpost.com/2011/08/15/paul-krugman-fake-a...

Except that you are left with a fleet of militarized space craft that provide no economic value and a pile of debt that was used to finance the fleet. At that point somebody has to pay for that malinvestment through reduced future consumption. Make work projects are not a free lunch. They work by pulling demand from the future into the present via issuance of new debt. How those costs are allocated in the future are…

Each round of centrally planned malinvestmemt in make work lowers the flexibility to deal with the next one, at the same time increasing the moral hazard for firms to expect the government to make good their losses. It also tends to create people dependent on governments as a source of livelihood, which robs them of economic agency.

All because a guy who actually didn't study economics waved away the long term structural issues by stating 'in the long run, we are all dead'

Re: The Shipping News Suggests Economic Weakness

#118

Post by brc » Sat, Jan 30, 2016, 11:59 PM UTC

pbhjpbhj wrote: post #85

calibraxis wrote: post #43

Earlier quoted context omitted.

Very true! Yet another reason why so many economies are absurd; they do not have properties we'd want an economy to fulfill.

Most "economies" are financial systems rather than actual economies.

It's a popular idea but not borne out by the truth. In any decent sized (ie, not tax haven) economy, even the most financially distorted economy still produces a lot more real good and services than finance services.

Re: The Shipping News Suggests Economic Weakness

#119

Post by brc » Sun, Jan 31, 2016, 12:01 AM UTC

Gravityloss wrote: post #14

brc wrote: post #4

The world economy is dominated by people in governments who believe that printing money, burying it and paying people to dig it up again will increase the amount of trucks built and goods shipped. No amount of failure of this theory will be enough for it to be abandoned, because it has a certain amount of truthiness to it, and it excuses profligate and wasteful behaviour. Both these things are fun and buy votes. The…

There's is some government spending that has to be done anyway, but can be shifted in time so it's done when there's a recession. Things like bridge rebuilding or warships. Of course, if you're in recession for 8 years, you start running out of such things.

But if something is worth doing, it's worth doing now.

If you had an idea for a great startup, you wouldn't wait for a few years. You'd do it as soon as it was ready.

Re: The Shipping News Suggests Economic Weakness

#120

Post by floppydisk » Sun, Jan 31, 2016, 5:06 AM UTC

bvi wrote: post #112

floppydisk wrote: post #83

Earlier quoted context omitted.

The best indicator for anything transportation is utilization and how much stuff is actually being moved. Not just the price of moving something from A --> B. Yes, the presence of more movers, as the article points out, suppresses the price because people are competing to offer the lowest possible price to get the business. And, shippers did start investing in new builds extensively when it looked like the economy wa…

> Unfortunately, the amount of stuff being moved is not public record Not true - you can get a sense of this through ATA's Truck Tonnage Index. 1. http://www.trucking.org/article.aspx?uid=5897732a-ea35-4369-... 2. http://www.trucknews.com/transportation/ata-truck-tonnage-in... 3.

Yes, you can get very general macro insights from metrics like that--if they're publicly available--but they are kind of worthless from a understanding point of view because they don't tell you what/where/when/who. The federal government does something similar with imports/exports for energy. But it's voluntary surveys and not guaranteed to be reliable. Especially since how much someone moves is competitive info.

It's more interesting to know that JP Hunt increased their lettuce hauling business from California to Missouri than it is to know that trucking tonnage creeped up ir down. That doesn't give you insight into the why or what's happening behind the scenes.