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“A solution in search of a problem” is a low-rates phenomenon

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Re: “A solution in search of a problem” is a low-rates phenomenon

#121

Post by lesuorac »

Eisenstein wrote: post #115
lesuorac wrote: post #92

Earlier quoted context omitted.

They might be unhappy when the profitable business are all ran out of town and the unprofitable ones collapse leaving neither behind.

Why do things that serve the public need to be profitable? Are roads profitable? Is sewage treatment profitable? Do you maintain that they should be?

If it's privately ran it needs to be profitable otherwise it will no longer be ran (at some point). Of course the privately ran business could change course at some time and become profitable (i.e. raise prices or discontinue unprofitable business lines / areas of service). But if that's the only X store left in town and they discontinue service, you're kinda screwed.

The same ends up being true for publicly ran things as well. Flint is a great example of a town that was not profitable and so Michigan stepped in and changed their water supply to decrease the towns cost (a scenario that would've been avoided if Flint wasn't broke, amongst other ways it could've been avoided). It's just that at the government level you can have many services that cost more than they take in (often because you just don't charge people for the service; which is fine) which get balanced out (eventually) by other "services" (often more general taxes) that take in more money than they cost.

If you live in a town and continuously it spends $X a year and takes in $<X a year, that difference is going to eventually cause a problem. Perhaps it means that roads will stop being repaired. Perhaps it means you'll have boil water notices all the time.

Re: “A solution in search of a problem” is a low-rates phenomenon

#122

Post by ElevenLathe »

Eisenstein wrote: post #115
lesuorac wrote: post #92

Earlier quoted context omitted.

They might be unhappy when the profitable business are all ran out of town and the unprofitable ones collapse leaving neither behind.

Why do things that serve the public need to be profitable? Are roads profitable? Is sewage treatment profitable? Do you maintain that they should be?

If they're not minimally profitable in some general sense, such that the benefits of building and maintaining them are not at least paid by the benefit of using them then no, they shouldn't be built. Unfortunately, when you factor in the externalities of carbon emissions, loss of habitat, and other biosphere stressors (the biosphere being the life support system for all life, including humans, and which we do not have the means to replace), then most human activity in living memory cannot pay for itself. This is sad, but we can't fix it until we acknowledge it.

We're using up our life support system when we build a highway or airliner, not investing in anything.

Re: “A solution in search of a problem” is a low-rates phenomenon

#123

Post by drekipus »

Espressosaurus wrote: post #108
drekipus wrote: post #106

Earlier quoted context omitted.

> it might take decades of work to build up enough capital to start a small business, while someone with the right connections and half the talent is handed money for little effort You can't have it both ways; either it takes decades or it's handed over for little effort. You also don't need much capital to start a few small businesses. Obviously it depends on what you want to do. but it won't take decades to start a…

You can have it both ways if it's different people. The amount I save over 10 years is going to be radically different than the amount of money someone pulling a mil per year is going to save is going to be radically different than the amount of money someone working minimum wage will be able to save.

Right, but we're saying "enough to start a small business" which is similarly varied.

Is it upsetting that someone on minimum wage won't be about to become a tycoon overnight? Is it upsetting that people have to talk to others to convince them to give you money?

Re: “A solution in search of a problem” is a low-rates phenomenon

#124

Post by v0idzer0 »

prottog wrote: post #66
obblekk wrote: post #24

I really dislike these takes on low interest rates. As far back as the 70s (when interest rates were 8-15%), there have been random business ideas being started and shutdown (pet rocks, every airline ever, etc.). We don't remember those because they shutdown 40 years ago. Today, we only see the successful ones that survived (walmart, fedex, etc.). There's a legit question: why have long term interests declined over t…

> why have long term interests declined over the past 500 years, accelerating in the past 50-100 years The cost of money (that is, interest) is based on two things: the time value of money, which is the concept that an amount of money is worth more now than the same amount of money later (above and beyond inflation); and the default risk, that you may not get back some or all of the money that you lent out. As the wo…

Why would anyone believe we’re in a new era of geopolitical instability?

Re: “A solution in search of a problem” is a low-rates phenomenon

#125

Post by v0idzer0 »

obblekk wrote: post #24

I really dislike these takes on low interest rates. As far back as the 70s (when interest rates were 8-15%), there have been random business ideas being started and shutdown (pet rocks, every airline ever, etc.). We don't remember those because they shutdown 40 years ago. Today, we only see the successful ones that survived (walmart, fedex, etc.). There's a legit question: why have long term interests declined over t…

I think it’s just the modern fiscal policy adopted by the FED. They’ve learned to tame inflation and are more concerned with deflation. Not to mention the FED is controlled by politicians who are elected by the media who is owned by the wealthy who own stocks and want them going up.

Re: “A solution in search of a problem” is a low-rates phenomenon

#128

Post by feet »

astrange wrote: post #90
wolfram74 wrote: post #79

Earlier quoted context omitted.

What's the point in generating value if it's all being captured by the capital holding class?

The capital holding class is “people with 401ks” and so includes you.

The capital holding class includes people who could quit their job and live purely off capital gains, so it likely does not include you
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