The Great Resignation? More Like the Great Renegotiation • Hacker News Board

Re: The Great Resignation? More Like the Great Renegotiation

#501

Post by zcw100 » Wed, Jan 26, 2022, 2:35 PM UTC

015a wrote: post #411

buscoquadnary wrote: post #395

Earlier quoted context omitted.

I keep hearing that people in debt win when inflation goes up but the problem is you only win if you have assets that already appreciate in value or access to large amounts of capital to purchase assets that are inflation resistant. Simple example Tim is a manager at Lowe's Tim makes $66,000, each year. Tim spends most of that money on the necessities of life, a car payment a house payment if he is lucky, a rent if h…

Its mostly just "economics 101" stuff; how it plays out in reality is different, and your analysis isn't wrong. Inflation is good for debtors if wage keeps pace with inflation. That's it. Taken to the extreme: Imagine I make $100k in 2030. I take out a 1 year loan for $10k @ 5% (10% my income). Inflation is at 50%, but my wages keep up. 2031: I make $150k. I pay back the loan: $10.5k (7% my income). The loan is worth…

No economics is "economics 101" stuff. Economics 101 is a gross over simplification to get students accustomed to basic concepts. There's a reason economics is called the dismal science.

You've got a system where everything is connected to everything else. There is no way you're going know if it's good for you or not. I have a house with a mortgage so inflation is good. If I can keep my job and demand higher wages. But if inflation is high it will put pressure on the fed to bring it down raising interest rates. Higher interest rates mean buyers won't quality for as high of a mortgage and the price of my house goes down. Unless they can also get higher wages to offset inflation. But then the county notices that their coming up short on tax revenue because of inflation and reassess my taxes. But I need a new roof and that just got more expensive. But my 401k is doing great etc, etc.

All of these things are in balance and you have no idea which ones are elastic and which ones aren't. It's like trying to balance a 10,000 leg stool. You can maybe make some gross generalities and even then you're often going to be wrong depending on where you own your home, what businesses are location close to there. What you have your 401k invested in.

Re: The Great Resignation? More Like the Great Renegotiation

#502

Post by sleepingadmin » Wed, Jan 26, 2022, 2:49 PM UTC

cwkoss wrote: post #471

sleepingadmin wrote: post #262

Why is the central bank inflation target typically 2%? Well if you target 0% and any actual result below 0% happens, that's deflation which is a disaster for economies. If inflation is say 10%. Maximum employment is near certainly impossible. Debt will be expensive and the economy crawls to a halt. Who wants to pay 10% interest on their student debt? So where in between do you have a good price stability? It tends to…

Is -0.1% deflation really that disastrous for economies? Is it really worse than 10% inflation? I've never experienced it, so can't speak too authoritatively, but it kind of feels like accepted wisdom in the economic academia: so it isn't questioned - but a lot of economics is propaganda for the powerful, IMO - would minor deflation really hurt the common man significantly? Or would it mostly just punish the rich and…

>Is -0.1% deflation really that disastrous for economies? Is it really worse than 10% inflation?

Yes, it has to do with how people react. Japan has been fighting it for awhile now.

http://honesteconomics.com/history/japan-and-deflation/

Japan has many problems. Their immense debt basically requires them to have a total tax burden of ~95%. That is to say, you work for the government for the entire year and you dont even get anything for it. They are just paying the interest payments on their debt and dont get services from their government.

Then you have the real factor that as boomers leave the workforce. There isnt enough people to replace them.

The only thing that seems to be keeping Japan afloat is their government owned slaves. Their judicial system still has forced labour and also a 99% conviction rate. Get accused of a crime and you're going to be producing goods for japanese companies. There's also the "technical intern training" which basically enslaves non-citizens and traps them in these jobs for life. The numbers are extremely suspect as well. The number of goods produced and recorded by big entities like their automotive industry or electronics like Sony couldn't possibly have been produced by the these government slaves. Makes you wonder where the forced labour camps are that aren't making it into the numbers.

>I've never experienced it, so can't speak too authoritatively, but it kind of feels like accepted wisdom in the economic academia: so it isn't questioned - but a lot of economics is propaganda for the powerful, IMO - would minor deflation really hurt the common man significantly? Or would it mostly just punish the rich and powerful who are extremely leveraged?

This derives from the fractional banking system. Basically a bank will lend out $20 for every $1 it has. That is to say if they have a 20:1 ratio. The central bank manages this ratio.

The idea is that in a deflationary environment, you kind of break the fractional reality. Interest rates would be bottom or negative. So you are giving money away AND deflating which means the people you give money to can just hold the free money and make money? Who wouldn't jump at such a wonderful thing?

You can see this happening. Germany's 10 year bond right now is -0.065%. So you buy that bond and the person lending you money has to give you 0.065% per year? for 10 years? LOL? Japan is positive at 0.14% but has been awfully negative lately. Obviously Japan/Germany are worse off because they were the losers of WW2. The boomers retiring harms them the most.

To avoid deflation, they are giving away free debt. Why? Debt is money. For every $ that exists, it's just debt. That's the fractional banking system.

Oh and here's the real kicker. https://medium.com/navigating-life/we-just-went-from-fractio...

The USA on March 26, 2020 eliminated the fractional banking ratio. They can lend out $1000 per $1 if they so please. What a disaster.

Re: The Great Resignation? More Like the Great Renegotiation

#503

Post by zcw100 » Wed, Jan 26, 2022, 2:53 PM UTC

cwkoss wrote: post #471

sleepingadmin wrote: post #262

Why is the central bank inflation target typically 2%? Well if you target 0% and any actual result below 0% happens, that's deflation which is a disaster for economies. If inflation is say 10%. Maximum employment is near certainly impossible. Debt will be expensive and the economy crawls to a halt. Who wants to pay 10% interest on their student debt? So where in between do you have a good price stability? It tends to…

Is -0.1% deflation really that disastrous for economies? Is it really worse than 10% inflation? I've never experienced it, so can't speak too authoritatively, but it kind of feels like accepted wisdom in the economic academia: so it isn't questioned - but a lot of economics is propaganda for the powerful, IMO - would minor deflation really hurt the common man significantly? Or would it mostly just punish the rich and…

Yes, it is. I'm no economist but the problem is deflation isn't stable, it tends to run away. It's like standing on a big pile of TNT and saying, "This match isn't really that big of a deal is it?"

In a super simplified example, you have a dollar that's going to be worth more than a dollar tomorrow (the definition of deflation). So maybe you'll wait to buy that shovel till tomorrow. But now less gets done today so tomorrow the money supply is the same but there are fewer things to buy, making your money even more valuable. Then you think, "Shit, things are really looking good for this dollar. If I just hold on to it, it's more valuable then what I was going to do with that shovel" so now you're never going to buy that shovel and pay that person to dig that ditch. So they're just sitting around without a shovel and you're not going to pay someone to just sit around. They'd be perfectly happy to dig that ditch if only they had a shovel, so you lay the person off. Now we have even less productivity and your dollar is looking really good. Next thing you know you realize that every time you shut things down your dollar is looking even better and better. You used to have to work hard for your money but now you're getting rich for not doing something. If you really want to get rich you realize having money is where it's at so you sell off all the shovels you already have for scrap metal, fire all the workers, and sit on the cash.

It's completely perverse. You aren't just paying people to not do anything, you're paying them to destroy productive things. Things that would be good for everyone but while it might be good for everyone in aggregate it's even better for you do do nothing while on a whole most people suffer. So you're sitting in your mansion, doing nothing, amassing a fortune while workers watch as ditches that need to get dug, don't, you're melting down all the shovels, they're unemployed and starving. What do you think the next step is? It's not pretty.

Re: The Great Resignation? More Like the Great Renegotiation

#504

Post by DSMan195276 » Wed, Jan 26, 2022, 3:19 PM UTC

ahthat wrote: post #369

DSMan195276 wrote: post #285

Earlier quoted context omitted.

I think his point is that while a 5% raise and 5% inflation should be a wash, since you now pay slightly more taxes than before your pay after taxes is slightly less value than before. It's still very misleading to say "wage gains aren't good" though - the problem is not that you got a 5% raise, it's that inflation is 5% so you need a slightly-higher-than-inflation raise to keep up. If you didn't get a 5% raise you'd…

It’s too far to say that “”wage gains aren’t good”, but he makes a good point about wage increase, inflation, and tax brackets I hadn’t thought of before

I think it's a bit overblown personally, the percentage of tax you pay is not going to increase a notable amount even with 5% inflation and a 5% raise. The brackets also get adjusted every year, to account for his point.

Re: The Great Resignation? More Like the Great Renegotiation

#505

Post by BoorishBears » Wed, Jan 26, 2022, 3:51 PM UTC

triceratops wrote: post #456

BoorishBears wrote: post #265

Earlier quoted context omitted.

Their example is bad because they used a different country, if you want US wages live in the US. But within the US it's pretty ridiculous. Not all of how you spend your pay is scaled by your cost of living for example... My employer can't predict where I want to retire, yet by scaling my entire pay by cost of living where I currently am they'd be limiting how much I can save. You can live in a high cost of living are…

> if you want US wages live in the US. But within the US it's pretty ridiculous What are "US wages"? A police officer in SF or NYC makes substantially more than a police officer in Oklahoma City or Topeka. Even the US has large regional variations in wages, standards of living, and economic productivity.

> Even the US has large regional variations in wages, standards of living, and economic productivity

... and you think Canada doesn't?

They have HCOL cities too, yet on average people in Canadian HCOL cities make less than their US counterparts.

US wages. Plural. Wages in the US in across multiple locales vs wages in Canada across comparable locales.

Re: The Great Resignation? More Like the Great Renegotiation

#506

Post by lanfeust6 » Wed, Jan 26, 2022, 4:02 PM UTC

andrei_says_ wrote: post #288

Gareth321 wrote: post #155

Earlier quoted context omitted.

If someone doesn’t want to defund the police then I don’t see how they can “agree with the general spirit” unless they want to defund the police. It’s in the name. You can equivocate about anything else but not that. Same for anti-work. I suppose you identified the potential problem here: people inferring that “defund the police” doesn’t actually mean “defund the police” and ascribing softer, feel-good intentions whi…

I prefer “stop pouring insane amounts of money into police funding and tasking the police force with fixing issues completely unfixable by a police force and instead redirect some of the ridiculously inflated police funds to appropriate solutions.” But it’s a bit long.

"reform the police" is rather short. Not sufficient?

Re: The Great Resignation? More Like the Great Renegotiation

#507

Post by smashem » Wed, Jan 26, 2022, 5:07 PM UTC

throw_nbvc1234 wrote: post #415

autokad wrote: post #404

Earlier quoted context omitted.

> They by mandate should have drastically increased interest rates. I disagree, we are having inflation because of supply bottlenecks, not because of demand. Raising interest rates would only make it harder for companies to get finances to ensure supply chains meet demand. That's if you even believe raising interest rates stops inflation. The correlation between interest rates and inflation over the last 40 years is…

> I disagree, we are having inflation because of supply bottlenecks, not because of demand. I've seen this multiple times but what's the underlying evidence for either side. If demand goes up and the supply can't increase to follow, it'll look like a supply issue but ultimately caused by demand. What's ultimately the difference? Is the idea that if the supply chain is scaled for X then moving from X-2 -> X is easier…

It's systems + networks analysis.

Factories, ports, and transportation were limited or shuttered completely. Warehousing and storefronts saw the same.

Impairing these network nodes, all at relatively the same time and in great numbers, had gigantic consequences.

And if the supply network is severely damaged, it ultimately means supply will go down.

Re: The Great Resignation? More Like the Great Renegotiation

#508

Post by Consultant32452 » Wed, Jan 26, 2022, 6:41 PM UTC

BarryMilo wrote: post #490

Consultant32452 wrote: post #216

Earlier quoted context omitted.

Everyone should be operating in their own best interest. If it's in the company's best interest to raise your pay to keep you on, they will. If it's in your best interest to leave, you should. Some of my favorite career advice is to seek out a minimum of one interview per year. This lets you see what skills are in demand, what salaries are being offered, and practice your interviewing skills. It's a great way to educ…

"Should" being the key word here. Companies are no more rational than its individual humans, which is why they are often irrationally stingy to the point of massive costs.

Stingy, self-destructive employer sounds like the employer's problem, not the employee's problem.

Re: The Great Resignation? More Like the Great Renegotiation

#509

Post by rovolo » Wed, Jan 26, 2022, 8:10 PM UTC

cwkoss wrote: post #366

codekansas wrote: post #301

Earlier quoted context omitted.

Presumably if the meat packers also raise wages to keep up with inflation, they will have to charge McDonald’s higher prices for patties. Similarly for lettuce growers, beverage bottlers, etc. All these would put small amounts of pressure on the price of a burger. If the ultimate price ends up going from 2$ to 3$, suddenly the 10$ to 15$ wage hike doesn’t mean anything (except for people who didn’t get the wage hike…

Have you been to fast food recently? It feels like prices have tripled over the past decade, outpacing reported inflation numbers significantly. In Seattle: A mcdonalds medium fry is $4.12. A taco bell bean burrito is $3.11 A burger king whopper meal is $12.39

Tripled sounds like a lot, so I trawled through some old pictures of the BK menu. I think the NJ price from 2011 is probably the closest to Seattle (price varies by location), so the whopper meal price is ~1.66x. Inflation is ~1.27x

Inflation: https://fred.stlouisfed.org/series/CPIAUCSL

----

Seattle (2022) Burger: $6.59; meal S: $9.79; M: $10.78; L: $11.28; https://www.bk.com/menu/picker-picker_5520

Utah (2018) Burger: $4.29; meal S: $6.19; M: $6.78; L: $7.18; https://www.slcmenu.com/2018/03/26/burger-king-menu-prices-i...

California (2018) Burger: $5.??; meal S: $7.??; https://foursquare.com/v/burger-king/4c48d1376594be9ae8533e2...

Seattle (2017) Burger: $5.29; meal S: $7.29; M: ???; L: $7.98; https://www.yelp.com/biz_photos/burger-king-seattle-7?select...

Maryland (2017) Burger: $4.??; meal S: $6.??; M: ???; L: $7.???; https://www.tripadvisor.com/LocationPhotoDirectLink-g41094-d...

Chicago (2012) Burger: ???; meal S: $5.??; M: ???; L: $6.??; https://foursquare.com/v/burger-king/4acfd01af964a52034d620e...

NYC (2012) Burger: $4.??; meal S: $6.??; M: ????; L: $7.??; https://foursquare.com/v/burger-king/4d4df8edea2760fc7833642...

Newark NJ (2011) Burger: ???; meal S: $5.89; M: $6.39; L: $6.79; https://foursquare.com/v/burger-king/4b86b7a8f964a5205d9831e...

Georgia (2010) Burger: ???; meal S: $4.49; M: $4.89; L: $5.29; http://milledgevillegeorgia.blogspot.com/2010/05/burger-king...

Virginia (2009) Burger: ???; meal S: $4.49; M: $4.89; L: $5.29; https://www.flickr.com/photos/ryanrules/3430593700

Re: The Great Resignation? More Like the Great Renegotiation

#510

Post by beeboop » Wed, Jan 26, 2022, 8:58 PM UTC

wonderwonder wrote: post #386

beeboop wrote: post #333

Earlier quoted context omitted.

Official inflation numbers are super dishonest in my opinion.

I 100% agree with this. I go to the grocery store on average twice a week. My bill was generally $100. Now my bill is ~$180. I know this is anecdotal and I buy a lot of meat which is definitely up but it seems like everything has come close to doubling.

Fuel prices are high. Housing is high. Food is high. Car prices are high. Education expenses are high. Healthcare expenses are high. Literally everything we spend most of our money on is outrageously expensive.