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It’s Official: This Is Now the Longest Economic Expansion in US History

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Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#51

Post by Anon1096 »

basilgohar wrote: post #46
jcims wrote: post #13

Earlier quoted context omitted.

I'm sure someone has come up with a better analogy, but dollars are like electrons, they only do work when they move. I was looking at some other HN thread a while back and there was someone talking about how a subscription model works much better for investors because the regularity of returns worked best with expectations from the investors. And it occurred to me at that time that this electric analogy might extend…

Upvoting because, to be honest, the moving electrons/moving dollars analogy works really well for me, and especially I think that's a useful analogy. For a society, in general, dollars sitting idle in a bank account instead of being spent on something constructive or services where someone is getting paid for work or something of utility is being built/created are not, from my perspective, useful to that society. Sur…

If you think money is just sitting in a bank account then you misunderstand how the economy works. Money in a bank gets reinvested by the bank and funds loans, mortgages, and credit. The only money that isn't moving is dollars literally stuffed under a mattress and what the bank keeps on hand to fulfill reserve requirements.

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#52

Post by [deleted] »

whb07 wrote: post #11
sjg007 wrote: post #10

Earlier quoted context omitted.

Right, the fix would be some form of govt regulation to break the bifurcation or maybe more social net support.

it was the government that caused this in the first place. I always wonder why people suggest this, when the "cure" to the ailment is more of the disease.

[deleted]

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#53

Post by ls612 »

rhacker wrote: post #2

Money is strange, right? It literally doesn't exist yet it can run out and cause entire nations to go into chaos. Since it is literally a sociological experiment, are we going to get to the point where we fine tune the allotment such that we disable down-turns? It's almost as if we simply just get angsty all at once, see a global therapist and the economy recovers.

Think of the economy like a forest and downturns like a forest fire. The downturns (fires) are a necessary part of the lifecycle of the economy (forest) since they remove inefficient or incompetent companies and reallocate their resources for better uses (burn away the driest and dead wood and fertilize the ground for new saplings)

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#54

Post by rjtavares »

ls612 wrote: post #53
rhacker wrote: post #2

Money is strange, right? It literally doesn't exist yet it can run out and cause entire nations to go into chaos. Since it is literally a sociological experiment, are we going to get to the point where we fine tune the allotment such that we disable down-turns? It's almost as if we simply just get angsty all at once, see a global therapist and the economy recovers.

Think of the economy like a forest and downturns like a forest fire. The downturns (fires) are a necessary part of the lifecycle of the economy (forest) since they remove inefficient or incompetent companies and reallocate their resources for better uses (burn away the driest and dead wood and fertilize the ground for new saplings)

And like forest fires, sometimes people suffer and even get killed dy downturns. We should try to avoid that instead of the fire itself.

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#55

Post by bryanlarsen »

dalbasal wrote: post #34

I think that GDP (and therefore inflation) don't actually measure what they used to. You can measure the number of cars being produced and houses built. It doesn't really matter how you quantity value the value of a 1999 vw golf relative to the 2019 model. Once iphones, Google, Spotify & such get thrown into the mix... GDP just doesn't tell us much about how economic output has changed over the last 20 years. For the…

This problem is supposed to be solved by the "basket" structure of inflation calculation. The basket is a collection of spending by a typical family, and inflation is the measure of the cost increase of that basket. If iPhone goes down X and rent goes up X then inflation is zero.

But the composition of the basket is not easy, varies and is prone to gaming.

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#56

Post by swebs »

sandworm101 wrote: post #35
swebs wrote: post #12

Earlier quoted context omitted.

Huh? The homeless rate has been going down across the country over the past few years. Maybe you're just in one of the few states where it has been increasing, like New York, California, or Massachusetts. https://www.usich.gov/tools-for-action/map/

Totally depends on definition of "homeless". Some use a definition based on whether someone has a roof over their head most nights, the narrowest definition possible. I prefer a definition based on legal rights: Does the person have property rights (owners/renters/housing benefits etc) in a stable domicile. That means those couch surfing, in shelters and illegal residences are counted as homeless alongside the people…

>The concept of someone having a fulltime job and still not able to afford rent is new

Does that happen anywhere outside of San Francisco?

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#57

Post by jganetsk »

rhacker wrote: post #2

Money is strange, right? It literally doesn't exist yet it can run out and cause entire nations to go into chaos. Since it is literally a sociological experiment, are we going to get to the point where we fine tune the allotment such that we disable down-turns? It's almost as if we simply just get angsty all at once, see a global therapist and the economy recovers.

> yet it can run out and cause entire nations to go into chaos. Since it is literally a sociological experiment, are we going to get to the point where we fine tune the allotment such that we disable down-turns?

Yes. Money comes into existence ex nihilo. There are trillions of USD in existence today, but the dollar has only existed since 1792. They came into existence by the power of the government printing press. We can "run out" in the sense that we don't have sufficient dollars in circulation, which is a very severe problem, but the solution can be summarized in a simple way: have the government create more money.

And how does the government create more money? By spending it into existence.

https://www.vox.com/future-perfect/2019/4/16/18251646/modern...

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#58

Post by blts »

Nasrudith wrote: post #29
Excel_Wizard wrote: post #22

Earlier quoted context omitted.

The Labor Theory of Value is a fun toy model, but it isn't very accurate.

Yeah even putting aside demand (just because someone spent 50 years making one really good vase doesn't mean 50 years of pottery wouldn't be better even if the potter had to dredge all of the clay themselves instead of using apprentices or hired servants) it has been obviously broken since the Industrial revolution at least but had predecessor cases that pointed out it wasn't true. Aquaducts or irrigation canals alon…

You mistakenly equate effort with value.

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#59

Post by logfromblammo »

blts wrote: post #20
rhacker wrote: post #2

Money is strange, right? It literally doesn't exist yet it can run out and cause entire nations to go into chaos. Since it is literally a sociological experiment, are we going to get to the point where we fine tune the allotment such that we disable down-turns? It's almost as if we simply just get angsty all at once, see a global therapist and the economy recovers.

Money is quite simple - it is the accumulation of value of individual work. The same way batteries store electricity - money store value of work. The same way batteries exchange stored electricity to perform work, money is exchanging stored value to work of others that we desire.

That's not entirely it. Money is a generic and nigh-universally honored claim on future production.

It is the "pay it forward" method of splitting full barter trades into two time-separated half-trades. Instead of giving you a chicken for a bag of milled chicken feed, I can buy the feed for money now, and you can spend that money on a chicken later. Or on something else. It presumes that there will be a chicken to buy later, and that other people won't end up wanting the chicken more than you.

In order to accumulate value from individual work, that value has to be rolled into something durable, or it decays and is lost.

When labor produces a consumable good or service, the value exists only until the good or service is consumed. Why would anyone work on consumables? Because we live on consumables. We eat; we drink; we drive; we set thermostats; we end-user-license IP.

When labor produces a capital improvement, future labor output is multiplied. That's a permanent increase in value, provided that there is some useful purpose for that multiplied labor to work toward. The fisherman can trade fish for a net, or trolling motor, or ice-chest, and thus have more future fish to trade per unit of labor.

The stream of consumables is created by labor, multiplied by capital, and then annihilated by consumption shortly thereafter. That value can be stored for some amount of time in stockpiles and warehouses, but then entropy eats some of it, rather than making it to the consumers.

Money allows the holder to bid for some fraction of the stream of consumables. Divert a tiny stream toward your personal cup for a fraction of a second, and then drink it.

When you hold money, its value is the flow rate of the consumption stream, divided across the quantity of all money.

It's not a battery. It's a voucher for a quantity of grid power. As long as the grid operates reliably, it works the same in practice. But if you really want to store the value of your work, you need to buy goods that multiply the consumable output of your work, or stockpile consumables whose values decay more slowly over time than most.

So it's not quite that simple, especially when some people start issuing themselves claims on future production when they are not actually producing anything now, or planning on producing anything in the future.

Re: It’s Official: This Is Now the Longest Economic Expansion in US History

#60

Post by logfromblammo »

pessimizer wrote: post #36

Of course a less deceptive way to refer to it is as the slowest recovery from a recession in US history.

Username checks out.

Though to be even more pessimistic, the finance wizards have finally rediscovered how to create a permanent recession at the bottom of the economy, and a permanent expansion at the top, so as to multiplex the business cycle over the class gradient, rather than over time.

Reagan economics yields to Antoinette economics.

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