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The Scandal of Financial Nihilism

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131–140 of 165 posts

Re: The Scandal of Financial Nihilism

#131

Earlier quoted context omitted.

> Infamously, a lethal war adds to economic activity as people are busy building and selling weapons of destruction, thereby adding to GDP. I don't think it's a given that a lethal war adds real value when you incorporate the opportunity cost of not having the war. It's been argued that WWII is what ended the Great Depression, but I think that's partly due to the somewhat unique economic circumstances at the time, an…

Agree that when digging into the detail war is a mixed economic bag. There is the destructive aspect of war which obviously destroys economic value, then there is the "organized theft" aspect which is more like a zero-sum game of redistribution and there is the "producing the means of war" aspect which (also quite obviously) adds economic value. The issue with economic nihilism is that it would indeed count these +/-…

> zero-sum

In the Econ 101 model of the world, there are no beans to be gained in war. Changing what you produce does not increase what you produce. There are only beans to be lost, by producing weapons of war instead of producing what markets actually need and want.

This is called the "broken window fallacy". See e.g. https://mises.org/library/broken-window-fallacy.

I have many disagreements with the author of that article, e.g. I think his model of the economy is not realistic enough to be useful. But I think perhaps his model is exactly the kind of model that people have in mind when they think of economic nihilism: an infinite number of perfectly-fungible cyborgs all trading perfectly-fungible goods and services in an idealized frictionless free market. But it is in exactly this model that the broken window fallacy is the most obviously fallacious!

Re: The Scandal of Financial Nihilism

#132
post #39

Earlier quoted context omitted.

I think this is a good challenge. But also nobody here really proves or argued that millennials are uniquely nihilistic either.

It can’t be proven, but common sense would say GenZ are the most nihilistic because they have to work the hardest to even get to the middle, let alone the end. I’d say the people in the beginning and end have a tangible resentment, and not necessarily an existential crisis. In other words, GenZ would be resentful of having to start fresh against the barbarian Millenial/Boomer horde, and Boomers would be resentful of…

I'm always astounded when lengthy generational analyses invalidate themselves by neglecting even the briefest mention of Gen X.

Re: The Scandal of Financial Nihilism

#133
post #76

Earlier quoted context omitted.

Most millennial parents are not even in old age yet and are statistically more affluent than they are. I don’t think your analysis is correct. Plus my own experience as someone born in 1989 doesn’t really mesh with yours. Most of my friends are both what I would call more frugal and more down to earth than their parents were because they had to live through multiple economic crashes. There is little nihilism but peop…

Back in the 70's and 80's people were pretty frugal. The average person was experienced with Lay-away, balancing checkbooks and not a lot of people had credit (high interest rates). What you're witnessing now are just older people that have a lifetime of work accrued and are just trying to enjoy what they have while they can. You'll probably do the same... But in no way shape or form are millennial's in a worse place…

> What you're witnessing now are just older people that have a lifetime of work accrued and are just trying to enjoy what they have while they can. You'll probably do the same...

That’s simply extremely untrue. You can delude yourself if it helps you sleep but this is factually false.

People born in the 60s were the beneficiaries of policies which just don’t exist anymore. They grew in a context of full employment at any qualification level and with career paths towards higher pay which simply don’t exist anymore. Education costs and especially habitation costs both outpaced inflation widely. Tech jobs are such a niche it’s barely worth mentioning.

The situation is even worse where I’m from in Europe with social systems having been utterly mismanaged for decades and a total refusal to equitably address the situation nowadays.

And let’s not talk about the brain dead decisions taken by this generation when it comes to sustainability which millennials and gen z will now have to solve.

Re: The Scandal of Financial Nihilism

#134
post #29

Earlier quoted context omitted.

> On the other hand, if billionaire's stopped wanting to earn more and more money, the economy would likely crash... No, this is incorrect. It doesn't matter who owns the stock as long as someone does. It's irrelevant if one person owns the stock or it's distributed equally among workers (or something in between.) The incentives are the same. In fact, distributing stock more widely could lead to better decision makin…

Well I do agree and hope that this will happen some day. And it will be nice that once the stock is distributed more equally, we get other goals than economic growth, like preserving the planet, eradicating poverty, stop producing useless things and creating bullshit jobs to lower the unemployment rate. But for now the stocks are mostly owned by rich people who want to get richer not matter what and it seems to me th…

I'm not sure that I can reconcile "rich people who own stock just want to get rich" and "creating bullshit jobs to lower the unemployment rate". Those seem contradictory to me.

Re: The Scandal of Financial Nihilism

#135

Earlier quoted context omitted.

It can’t be proven, but common sense would say GenZ are the most nihilistic because they have to work the hardest to even get to the middle, let alone the end. I’d say the people in the beginning and end have a tangible resentment, and not necessarily an existential crisis. In other words, GenZ would be resentful of having to start fresh against the barbarian Millenial/Boomer horde, and Boomers would be resentful of…

I'm always astounded when lengthy generational analyses invalidate themselves by neglecting even the briefest mention of Gen X.

Haven't Gen X, so used to being the overlooked generation, who dropped out and laid flat decades ago as the slacker generation, already invalidated themselves?

Re: The Scandal of Financial Nihilism

#136
post #129
post #65

Earlier quoted context omitted.

In the 60s you could buy a median home with 2.1x the median income. In 2019, the ratio is 3.5x. https://themreport.com/news/data/02-02-2021/pressing-housing...

Median house in the 60s is not the same as median house in 2022. You could probably buy a median house from the 60s (i.e. 1000 sqft, no air condition, in a polluted area (this was pre-EPA time, so almost everywhere was polluted) etc.) right now for way below current median.

I hear this every time. It doesn't effing matter if i don't have the option to buy a 1960s size house, let alone the newer larger home, die to price increases and high interest rates.

Your analysis does not explain away decades of mediocre wage growth in the face of inflation in healthcare, education and housing costs.

Re: The Scandal of Financial Nihilism

#137

Earlier quoted context omitted.

> Younger generations are offsetting this with their own retirement savings. Sounds like a Ponzi scheme, just like Social Security and pensions.

Does it? Is a lake with an inflow river and an outflow river a Ponzi lake?

"Social pension system is a Ponzi scheme" is argument I've heard from people with certain political leaning often enough I wondered if Reagan or Thatcher said it or something.

It never made sense to me. As long as the number of people is relatively stable, there's nothing Ponzi on it. Even with the number of people changing, there are other important inputs into the equation - automation, efficiency, etc.

Re: The Scandal of Financial Nihilism

#138
post #71

Earlier quoted context omitted.

I succeeded - I have a condo, summer house and drive a damned Jaguar. I just have empathy with people who don't, because they weren't lucky, like me. I'm not going to go tell people "do it! go buy more lottery tickets! don't give up! you will get there eventually" because I won the lottery.

Would you tell people "acquire valuable skills, seek to sell them to quality employers or start your own business delivering tangible value"?

What quality employers? Tech, which we now see has been built on ZIRP for the past decade plus, overhired for the past three years and is on the verge of mass layoffs and hiring freezes. If an industry, which was seen as not only stable but lucrative for decades, is actually just one big bubble profiting off of past monetary policy, doesn't that just make one feel a little economically nihilistic?

Re: The Scandal of Financial Nihilism

#139

Earlier quoted context omitted.

> Younger generations are offsetting this with their own retirement savings. Sounds like a Ponzi scheme, just like Social Security and pensions.

Does it? Is a lake with an inflow river and an outflow river a Ponzi lake?

Ask all the lakes that have shrunk or dried up because their outflows exceed their inflows.

Re: The Scandal of Financial Nihilism

#140
post #137

Earlier quoted context omitted.

Does it? Is a lake with an inflow river and an outflow river a Ponzi lake?

"Social pension system is a Ponzi scheme" is argument I've heard from people with certain political leaning often enough I wondered if Reagan or Thatcher said it or something. It never made sense to me. As long as the number of people is relatively stable, there's nothing Ponzi on it. Even with the number of people changing, there are other important inputs into the equation - automation, efficiency, etc.

All of these systems rely on working people to pay the tab for retired people because of demographic shifts and inflation causing outputs to exceed inputs. At least Social Security is definitely a Ponzi that per the SSA will only be able to guarantee me 65% of what I am owed when I hit the (continually increasing) payout age.

I align with neither Reagan or Thatcher, but I did pass my math classes.

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