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WTF Happened in 1971? (2019)

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191–200 of 477 posts

Re: WTF Happened in 1971? (2019)

#191

Earlier quoted context omitted.

People always underestimate the cost of regulations. Even when good, the cost is big. Health care is a good example. Keeping patient data private is a good thing. However it’s also absolutely crushing in its impact in the industry. Tiny projects can take months or years. HIPPA terrifies so many IT people. Driving away top developers.

Something that surprises me is that nobody ever talks about efficiency, as a trait of a particular piece of regulation. The goal of a regulation, like a project constraint, is to enforce some outcome. This is often a good thing. However, not all implementations of the "code" of that regulation are going to be equal. There's a huge gap between the desired outcome and the way it's articulated as law; there's a ton of w…

This is also my intuition but political and market systems are extremely complex, outcomes are very hard to predict and there is rarely a one size fits all solution.

Regulation and public service work best in scenarios where the processes and data are well established and accessible.

For example transport via train / cars etc. is rather well understood and most efficient when regulated well and collaboratively/publicly owned and ran because of that. Individual competing actors only create chaos and inefficiencies in comparison. Most clear headed observers would agree to this, just by looking at current and historical examples.

But the logistics and production of relatively new goods and services still need to figure out their place. This is where a deregulated, free market makes sense as long as certain baseline requirements are met (protection of workers, consumers, the environment etc.)

A field that would be very controversial to socialize would be food production. On one hand privatized food production is wasteful and even literally toxic and a lot of countries see food production as a matter of national security, so they subsidize it. Also the logistics and needs of the consumers are well understood. But on the other hand almost nobody seems to think that it would be a good idea to put it into public hands.

Re: WTF Happened in 1971? (2019)

#192

The author obviously wants you to believe that it was the abandonment of the gold standard, but there are several other theories that have more credence with mainstream economists. The early 70's was the start of a horrible period of stagflation: stagnation coupled with inflation. Some do blame the loss of the gold standard, but the leading theory is the OPEC oil crisis. Others blame market regulations, the EPA was p…

> "... more credence with mainstream economists" Do you follow main stream economists today? Ray Dalio (Bridgewater), Jeffrey Gundlach (Double Line), Raoul Pal (Real Vision), and Warren Buffet (Berkshire) have made very big bets for Gold and Gold stocks because our currency is being debased at a rate we have never seen.

Gold is nothing more than a bet against global currencies.

Gold producers, on the other hand, one of their biggest expenses is fuel. Fuel is cheap and Gold is fairly high. Combining those two seems like a good investment for a time.

Re: WTF Happened in 1971? (2019)

#193
post #113

Earlier quoted context omitted.

Pretty sure that the cost of energy underpins almost everything we do or produce. I can't think of a single example that doesn't have a large energy component. For example, health insurance is made up of the cost of paying people and creating medicines - and ultimately, it comes back to food, extracting raw materials and paying down debt, all of which are affected by the price of energy. So dropping energy costs will…

ya but i am not sure anyone of the things i named will drop by 5% or more... and mean while they keep going up faster than inflation... Cheap energy is good, but i worry more about our ability to afford those things.

If gas was $.10 / gallon, everything we consume would be cheaper because every single thing we buy is transported in trucks. A huge portion of what you pay for at the supermarket is the raw cost of getting a good to the shelf from the farm/factory.

If gas was $.10/gallon, cars would be cheaper. We wouldn't need ridiculously complex gas engines tuned to yield another 1 mpg, or electric cars with $30,000 of Lithium-ion. They could be low-mpg and cheap and it wouldn't matter.

If gas was $.10/gallon, everyone's wages would, effectively, increase since every person who owns a car would spend less on gas, which for many people is a lot of money.

If jet fuel was $.10/gallon, flying would be cheaper. Importing and exporting goods from faraway places would be cheaper.

Re: WTF Happened in 1971? (2019)

#194
People are asking why decoupling from the gold standard would cause a loss in earning power for labour:

https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

"when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."

The specific intent of inflation is to devalue the real returns to labor to make unemployment numbers look better. The graphs clearly indicate that this policy is working.

Sure, there could be other explanations, but this is quite literally the simplest.

Re: WTF Happened in 1971? (2019)

#196

I'm a proponent of the Gold Standard because inflation is a hidden tax. Worse, it is a regressive tax on the poor. There is a cost to having 6 fleets of aircraft carriers, 20 years of endless war and a huge unfunded pension liability. If we decided to pay for our promises in an honest way - it would equal 10% of our GDP for 75 years. Gold is honest money. Fiat currency is not.

Pure inflation is actually progressive: wages and prices go up in tandem (workers are fine), but savings (right peoople's) are debased.

Re: WTF Happened in 1971? (2019)

#197
post #184

The author obviously wants you to believe that it was the abandonment of the gold standard, but there are several other theories that have more credence with mainstream economists. The early 70's was the start of a horrible period of stagflation: stagnation coupled with inflation. Some do blame the loss of the gold standard, but the leading theory is the OPEC oil crisis. Others blame market regulations, the EPA was p…

> And energy is a massive component in the price of almost everything we consume. Is it really? What would be different if energy was much cheaper? Would we have more advanced rockets or robots or phones? Better CPUs? More and cheaper housing built in dense cities? Cheaper education or medicine? More job security? Even more food? I realize that energy is an important input into some industrial processes, but I don't…

Who said anything about better? Cheaper energy = cheaper everything, but that doesn't mean that quality is necessarily constrained by current energy prices (although that also doesn't mean there aren't ways in which it could be).

Re: WTF Happened in 1971? (2019)

#198
post #107

Plenty of events to choose from here: https://en.wikipedia.org/wiki/1971 Highlights: - "A new stock market index called the Nasdaq Composite debuts." - "Starbucks, a major coffeehouse and outlet in worldwide, is founded in the U.S. State of Washington." - "The U.S. ends its trade embargo of China." - "President Richard Nixon declares the U.S. War on Drugs." - "Southwest Airlines, a low-cost carrier, begins its first…

I'd add that in 1970, the intermodal shipping container became an ISO standard. Containerization has been developing since 1956, and along with minicomputers, would have an impact on world trade and manufacturing for decades to come.

Re: WTF Happened in 1971? (2019)

#199

I don't mean this to say that the women's liberation movement was a bad thing because it was not, but that started in the early 70s and had the effect of rapidly inflating the supply of educated potential white collar employees.

Right; the labor pool increased dramatically, which decreased the cost of wages, but demand and consumption remained basically the same (there'd be an increased demand for gas/cars/clothing/etc with more people going into work, but that would be small).
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