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Can the West’s perplexing employment miracle continue?

economist.com

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Re: Can the West’s perplexing employment miracle continue?

#121

Post by midhhhthrow »

mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

Yes. For the longest time everyone was saying there’s no way the fed can raise rates above 2% without completely crashing the economy because the entire world was “addicted to low rates”. Whatever happened to the crash?

Re: Can the West’s perplexing employment miracle continue?

#122

Post by ETH_start »

Wild armchair economist guess:

Efficient market theory predicts that in a free market, all labor will be utilized, irrespective of demand dips due to interest rate hikes.

With the gig economy providing a route around regulatory regimentation of the labor market and inflation having driven down the real minimum wage to below the market value of the vast majority of labor, the labor market has been able to adjust to every economic turn and produce effectively full employment.

Going even further out in a limb: I think in a sense, political gridlock has prevented the government from instituting disastrous measures that in the 1930s produced so much unnecessary unemployment, like the FDR Administration trying to fight deflation by imposing very high industry-specific minimum wages that caused the unemployment rate to exceed 20 percent.

Re: Can the West’s perplexing employment miracle continue?

#123

Post by seizethecheese »

midhhhthrow wrote: post #121
mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

Yes. For the longest time everyone was saying there’s no way the fed can raise rates above 2% without completely crashing the economy because the entire world was “addicted to low rates”. Whatever happened to the crash?

A phrase in known in macroeconomics that interest rate changed have unpredictable lags.

Re: Can the West’s perplexing employment miracle continue?

#124

Post by ajross »

marcosdumay wrote: post #89
ajross wrote: post #80

Earlier quoted context omitted.

And I say a third time: if you want to have a discussion about unfair distribution of monetary effects on specific populations, you need to have that discussion and not just shout "inflation!". Because while your point is true, it's specious. Changes are always happening (c.f. eggs, mentioned upthread). The question isn't whether things are changing, it's about what is changing and what to do about it.

Still "elevated inflation disrupts the purchase power of most of the population" is a perfectly real phenomenon. It's not an "specific population", unless you think "almost everyone" is "specific". And yes, the disruption tends to pass after the inflation goes away. But none of that makes the argument specious.

"Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though. Without numbers your argument is specious. There are winners and losers. Whose losing and by how much? I'll give you a few losers: retirees on fixed incomes, and investment employees working on commission. And a few winners: homeowners, and young professionals with significant credit debt. There are lots of others. Feel free to advocate for the policies you think are appropriate. Just please stop with the "Inflation!" nonsense as a shorthand argument.

Re: Can the West’s perplexing employment miracle continue?

#125

Post by selcuka »

metadat wrote: post #105
bluGill wrote: post #20

Earlier quoted context omitted.

This isn't a high interest rate ecconomy, this is normal interest rates. Rates have been absurdily low for a while so you may not remember it, but history provides a record.

Is the norm really that home loans are unaffordable even to first-time-buyer DINKs with good-to-decent six figure jobs who just want a place to live? (not an investment property) Currently the mortgage rates are the highest ever since 1989. Have you personally already purchased your first home? Without family assistance, it would be absolutely brutal and untenable for my children to enter into in this domain at prese…

> Is the norm really that home loans are unaffordable even to first-time-buyer DINKs with good-to-decent six figure jobs who just want a place to live?

The home loans are unaffordable because the house prices are too high. The median house price in 1989 was around $95K ($230K adjusted for inflation). Today it's about $400K.

Re: Can the West’s perplexing employment miracle continue?

#126

Post by [deleted] »

derstander wrote: post #11
mjhay wrote: post #6

Earlier quoted context omitted.

If you are talking about monetary stimulus/low interest rates, you have a point, but if you are talking about expanded unemployment or Berniebucks, that's been gone from the economy for quite some time.

What are “Berniebucks”? A cursory google search suggests that they are either Safari Ltd’s reward program or Bernie Sanders fundraising for his 2016 run for President, but neither of those seem germane to this conversation. Is the notion that Bernie Sanders is somehow responsible for all of the economic stimulus given to US citizens during the pandemic?

[deleted]

Re: Can the West’s perplexing employment miracle continue?

#127

Post by selcuka »

refurb wrote: post #111
metadat wrote: post #105

Earlier quoted context omitted.

Is the norm really that home loans are unaffordable even to first-time-buyer DINKs with good-to-decent six figure jobs who just want a place to live? (not an investment property) Currently the mortgage rates are the highest ever since 1989. Have you personally already purchased your first home? Without family assistance, it would be absolutely brutal and untenable for my children to enter into in this domain at prese…

Yes, it's normal when housing prices have massively inflated due to ultra-low interest rates, then rates returned to normal. If DINKs can't afford it, what does that tell you about the direction housing prices will go?

> If DINKs can't afford it, what does that tell you about the direction housing prices will go?

The ones with capital will buy them, and you will be renting.

Re: Can the West’s perplexing employment miracle continue?

#128

Post by whitemary »

derstander wrote: post #11
mjhay wrote: post #6

Earlier quoted context omitted.

If you are talking about monetary stimulus/low interest rates, you have a point, but if you are talking about expanded unemployment or Berniebucks, that's been gone from the economy for quite some time.

What are “Berniebucks”? A cursory google search suggests that they are either Safari Ltd’s reward program or Bernie Sanders fundraising for his 2016 run for President, but neither of those seem germane to this conversation. Is the notion that Bernie Sanders is somehow responsible for all of the economic stimulus given to US citizens during the pandemic?

Berniebucks refers to the greatly expanded unemployment insurance distributed during the pandemic, which resulted from an amendment by Bernie Sanders. Bernie heavily criticized the unamended bill, especially the bipartisan giveaways to Wall Street, and refused to support it without his amendment.

Re: Can the West’s perplexing employment miracle continue?

#129

Post by Aeolun »

geuis wrote: post #106

It's difficult to take serious any article that tries to apply Japanese customs to other western (Euro/US/Aus/NZ) cultures. We are deeply entangled, but JP is a different beast. Aside from the aging population and low birth rate, it's still a distinctly different culture than say, New York or London. What the author describes are long term artifacts of Japanese culture. It's a service culture (dunno if that's a term)…

The difference is that people in Japan feel like it is normal to work hard (and long) for a pittance.

People in Europe feel like their boss is being unreasonable if they ask them to come in 35 hours a week. And think 4 days, or even better, 3 days is optimal.

Then since they’re not being paid a lot, they feel it’s fair to just not give a rats ass about anything they’re doing.

I think there might be some balance in between that I’d like best.

Re: Can the West’s perplexing employment miracle continue?

#130

Post by beebmam »

mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

It's quite incredible seeing these two statements right next to each other:

> Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass.

> We know inflation should start decreasing within a year or so,

We don't know that. In fact, it's actually a pretty commonly discussed possibility that inflation could stay high (>5%) for the next decade due to retiring baby boomers and other reasons

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