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Job growth has slowed sharply; the question is why

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Re: Job growth has slowed sharply; the question is why

#61

Post by andsoitis »

Volundr wrote: post #53
andsoitis wrote: post #48

Earlier quoted context omitted.

> One would indeed expect removing currency from the economy to be deflationary, but in GPs example the issue is that the GP's premise ("When super-rich people receive money, it goes mostly to tax havens, removing it from circulation.") is invalid.

The question I answered was: > Doesn't the lack of liquidity in an economy cause deflationary behavior? Which seems to accept the given premise. But ok, let's look at yours: > the issue is that the GP's premise ("When super-rich people receive money, it goes mostly to tax havens, removing it from circulation.") is invalid. Is it? I thought it was well understood at this point that the best place to stimulate the econ…

> > the issue is that the GP's premise ("When super-rich people receive money, it goes mostly to tax havens, removing it from circulation.") is invalid.

> Is it?

Yes, it is an inaccurate belief. The super-rich don't take most of the money (did the person mean money or did they mean wealth?) they receive, remove it from the economic system, and stash it unproductively in a tax haven.

Re: Job growth has slowed sharply; the question is why

#62

Post by dannyobrien »

andsoitis wrote: post #61
Volundr wrote: post #53

Earlier quoted context omitted.

The question I answered was: > Doesn't the lack of liquidity in an economy cause deflationary behavior? Which seems to accept the given premise. But ok, let's look at yours: > the issue is that the GP's premise ("When super-rich people receive money, it goes mostly to tax havens, removing it from circulation.") is invalid. Is it? I thought it was well understood at this point that the best place to stimulate the econ…

> > the issue is that the GP's premise ("When super-rich people receive money, it goes mostly to tax havens, removing it from circulation.") is invalid. > Is it? Yes, it is an inaccurate belief. The super-rich don't take most of the money (did the person mean money or did they mean wealth?) they receive, remove it from the economic system, and stash it unproductively in a tax haven.

I mean, apart from the open question of whether the majority of money gets moved into tax havens, if the money is out of the economic system entirely, won't it just inflate away? I presume rich people want to put their money in instruments that return interest, which means that it has to be used /somehow/. I mean, potentially just speculative assets like gold or art, but those are high risk.

Re: Job growth has slowed sharply; the question is why

#63

Post by motorest »

merth wrote: post #49
pasquinelli wrote: post #32

Earlier quoted context omitted.

> How does increasing wealth inequality drive price increases? i'm not the person you asked, and i'm just spit-balling, but here's a way: wealth inequality means there's a group that has substantially more wealth than normal, let's call that group A, and the complimentary group of people who don't have substantially more wealth than normal, let's call them B. A's wealth ultimately comes from B-- you know, you got wor…

i'm not the person you replied but if wages lag furhter, how rents going up? it should go down since there is noone to be able to pay higher rents. they have no choice but either convince homeowner or downgrade. and Group A(rich + upper-middle) won't rent since they have enough wealth to buy a house, they may upgrade and cause inflation in luxury houses/goods.

> i'm not the person you replied but if wages lag furhter, how rents going up?

The greater the number of people who cannot afford buying a home, the greater the number of people whose only option is to rent.

The more people enter the rental market, the higher rental prices get.

It would be very interesting to have statistics on how many people share apartments/rent rooms. I'd bet those numbers would be spiking.

Re: Job growth has slowed sharply; the question is why

#64

Post by Volundr »

andsoitis wrote: post #61
Volundr wrote: post #53

Earlier quoted context omitted.

The question I answered was: > Doesn't the lack of liquidity in an economy cause deflationary behavior? Which seems to accept the given premise. But ok, let's look at yours: > the issue is that the GP's premise ("When super-rich people receive money, it goes mostly to tax havens, removing it from circulation.") is invalid. Is it? I thought it was well understood at this point that the best place to stimulate the econ…

> > the issue is that the GP's premise ("When super-rich people receive money, it goes mostly to tax havens, removing it from circulation.") is invalid. > Is it? Yes, it is an inaccurate belief. The super-rich don't take most of the money (did the person mean money or did they mean wealth?) they receive, remove it from the economic system, and stash it unproductively in a tax haven.

Ok, what do they do with it, and how does effect the economy compared to the way lower wealth people behave when they receive money?

FWIW I do agree that if we give Jeff Bezos or Elon Musk more money, it's not headed straight for an account in the Caymans, but I also don't think the exact destination of said money is core to the point.

Re: Job growth has slowed sharply; the question is why

#65

Post by sedawkgrep »

area51org wrote: post #27
andsoitis wrote: post #16

Earlier quoted context omitted.

I think you've got your cause/effect chain a little muddled. I would also assert that the system dynamics are neither linear nor singular in the way you frame it. > Increasing wealth inequality, drives prices inflation How does increasing wealth inequality drive price increases?

Presumably because there's a perception that if there are lots of rich people, they can afford to be gouged. This begs the question of how many rich people there actually are, though.

> Presumably because there's a perception that if there are lots of rich people, they can afford to be gouged.

1) Is this a wrong way to think ?

2) Isn't this what progressive taxation is supposed to do (or *should* do if folks like Musk, et al, actually earned 'income') ?

Re: Job growth has slowed sharply; the question is why

#66

Post by sedawkgrep »

andsoitis wrote: post #47
altairprime wrote: post #23

Earlier quoted context omitted.

The missing dynamic is that businesses are encouraged to increase growth in profit YoY. Each year, a business needs to grow faster than it did the previous year. If business owners get wealthy more rapidly than workers, then eventually the business will not be able to maintain increasing rates of growth, as its profit velocity exceeds the wage velocity of households. Think of a car fuel pump: you can accelerate all y…

> The missing dynamic is that businesses are encouraged to increase growth in profit YoY. > Each year, a business needs to grow faster than it did the previous year. It is very reasonable for an investor or a worker wanting the business they have hitched their financial wellbeing to to do very well, which means growing profit. It gives the business more strength and stability.

I don't think anyone is disagreeing that this is what investors want. I think the point is that it ultimately becomes detrimental.

Re: Job growth has slowed sharply; the question is why

#67

Post by lovich »

andsoitis wrote: post #21
ActorNightly wrote: post #14

Earlier quoted context omitted.

[flagged]

> Please don't conflate what the left has done (actual economic plans and policies that resulted in economic growth) with what the right has done (pointlessly destroyed relations with multiple countries because they didn't get their way in 2020). Have I? The idea of deglobalization has been a rallying cry of both the left and the right. If you don't believe me, review someone like Bernie Sanders' beliefs (e.g. https:…

You had to pick a senator who isn’t even part of any party but an Independent to contrast against a two term president and one of his vice presidents.

This is like trying to use a scale to balance weights but the fulcrum is all the way on one side

Re: Job growth has slowed sharply; the question is why

#68

Post by specialist »

davidw wrote: post #10

I have been enjoying Paul Krugman's writing, now that he's free from the shackles of the New York "both sides!" Times https://paulkrugman.substack.com/p/its-beginning-to-smell-a-... He's obviously got a political angle, but doesn't let that completely color his economic analysis.

Krugman's not partisan.

Politics, people, policy, platforms, party, positions, and partisanship are adjacent, but remain distinct.

Re: Job growth has slowed sharply; the question is why

#69

Post by bitshiftfaced »

dileeparanawake wrote: post #2

Increasing wealth inequality, drives prices inflation, wage stagnation and less disposable income, driving less consumption, driving less revenue for businesses, meaning cuts happen and hiring freezes, drives slowing growth in new job market.

> Increasing wealth inequality, drives prices inflation

Why?

Re: Job growth has slowed sharply; the question is why

#70

Post by altairprime »

andsoitis wrote: post #47
altairprime wrote: post #23

Earlier quoted context omitted.

The missing dynamic is that businesses are encouraged to increase growth in profit YoY. Each year, a business needs to grow faster than it did the previous year. If business owners get wealthy more rapidly than workers, then eventually the business will not be able to maintain increasing rates of growth, as its profit velocity exceeds the wage velocity of households. Think of a car fuel pump: you can accelerate all y…

> The missing dynamic is that businesses are encouraged to increase growth in profit YoY. > Each year, a business needs to grow faster than it did the previous year. It is very reasonable for an investor or a worker wanting the business they have hitched their financial wellbeing to to do very well, which means growing profit. It gives the business more strength and stability.

The difference between “I earned a tidy profit for me and my investors, as well as for my non-investor workers” and “I earned the maximum profit possible for me and my investors, moreso by denying workers as much of those profits as possible” compounds detriment at the difference in profit and wage growth rates, which steadily decreases the maximum profit possible to all firms due to household purchasing powerlessness. Eventually they’ll reach a lower maximum profit than could have be reached if they’d shared more profits as worker wages rather than as investor payouts. Oops.
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