Can the West’s perplexing employment miracle continue?

Post by red-iron-pine » Mon, Mar 06, 2023, 2:13 PM UTC

pclmulqdq wrote: post #68

marcosdumay wrote: post #67

Earlier quoted context omitted.

Well, maybe in 500 years people will have an explanation for why people don't create fundamental things in low-interest times. Lasting investment seems to be very strongly and positively correlated with rates.

Here's a theory for you: the increased cost of capital doesn't cause people to stop seeking or loaning out capital, it just directs that capital toward shorter-term projects. A bridge or a skyscraper pays off a lot faster than a startup.

Post by red-iron-pine » Mon, Mar 06, 2023, 2:27 PM UTC

gadders wrote: post #210

snowwrestler wrote: post #95

Earlier quoted context omitted.

I agree with most of this, but birth rates are not relevant. Note that Japan has had a very low fertility rate for years but still has folks for all those make-work jobs. In the U.S. what changed over the past 5 years is legal immigration: it was drastically cut and has not been restored. So as citizens and existing long-term residents pursue better jobs or time at home, there are far fewer new residents eager for lo…

Immigration is a method of wage suppression. The issue is that the businesses don't want to cut into their profits to raise wages to attract native/local workers.

Post by pjc50 » Mon, Mar 06, 2023, 2:34 PM UTC

patrickk wrote: post #234

csomar wrote: post #198

Earlier quoted context omitted.

They already are (and are in trouble for that). The problem is not their refusal to accept foreigners but rather they are not fixing the real problem (low birth rates). You can fix the problem by increasing supply, creating new cities or satellite cities, etc… and they are not having superb growth either. The solution can be easily fixed. Most of Western cities are in a “failed state”. The US is a prime example of th…

> The problem is not their refusal to accept foreigners but rather they are not fixing the real problem (low birth rates). How can you fix low birth rates once the process is in decline? Are there any successful examples of a country that has gotten rich, or is getting rich, that has done it succesfully? Every example I've read says no, regardless of geography or culture. It seems an impossible problem to fix. In Sou…

Post by coredog64 » Mon, Mar 06, 2023, 2:46 PM UTC

mym1990 wrote: post #189

teekert wrote: post #175

Earlier quoted context omitted.

For reference, my mortgage from 13 years ago was 4.85%, the one I got 6 months ago was 4.25%, about 1.5 years ago we got 2%. When I was born in the early 80's, my parents were doing 12%. Of course, housing prices adapt so that banks always extract a nice, steady amount from the people. Even more nowadays, when there's more to extract because more women started working. More to the daycare, more to the banks, the Amer…

Maybe a hot take but I feel like high(er) interest rates for homes should be the standard. This allows for demand to be modulated, and puts up a barrier to rent seekers from flooding the market. The problem is that over the past 5-10 years a lot of property has already been snapped up by investors at minimal interest rates, so as long as rents stay somewhat stable, they investors will be raking in the returns. I gues…

Post by rcme » Mon, Mar 06, 2023, 2:48 PM UTC

bluGill wrote: post #20

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.

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.