22 years of job creation wiped out in a day
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Re: 22 years of job creation wiped out in a day
#2This post is way off base.
The VC industry is at the heart of creative destruction. And the job creation that results goes well beyond the jobs created in the VC companies themselves. There is a trickle down effect.
Re: 22 years of job creation wiped out in a day
#3Um, according to standard economic theory in the long-run equilibrium the unemployment rate is the rate of frictional unemployment and that is more-or-less of a constant. What we have is cyclical unemployment, which is temporary. http://en.wikipedia.org/wiki/Unemployment_types
Look, someone who doesn't have a job will lower his/her price until he/she gets a job. If you are really on the verge of starvation you will become willing to work for $1, and someone will probably become willing to hire you for that little. Just like any other market, price will fluctuate and equilibrate supply and demand, clearing the market. It's just that in the short run there is price inflexibility, so the market temporarily goes out of whack. In the long-run wage is only determined by worker productivity (which is function of amount of capital and technology level), and anyone who wants a job can have one, though it may not be as high paying as she wants.
Re: 22 years of job creation wiped out in a day
#4The crux of the article is this: "So the bottom line for me is that the venture capital business is not going to solve this problem we are in. We are going to play a role, possibly an important role, but we'll need more forms of job creation to get everyone back to work."
That, I wholeheartedly agree with. Unfortunately, it seems that it will take a while for housing prices to deflate enough and for people's wage expectation to decrease enough that utilizing American workers becomes cost effective again. Will there be enough capital around to finance the shift of production back home? Will other countries continue to underbid domestic goods? Are we in fact heading to a more "normal" level of unemployment (we have usually had a comparatively low rate, globally speaking) ?
Re: 22 years of job creation wiped out in a day
#5This post is way off base. The VC industry is at the heart of creative destruction. And the job creation that results goes well beyond the jobs created in the VC companies themselves. There is a trickle down effect.
Care to explain in more detail?
Re: 22 years of job creation wiped out in a day
#6Um, according to standard economic theory in the long-run equilibrium the unemployment rate is the rate of frictional unemployment and that is more-or-less of a constant. What we have is cyclical unemployment, which is temporary. http://en.wikipedia.org/wiki/Unemployment_types Look, someone who doesn't have a job will lower his/her price until he/she gets a job. If you are really on the verge of starvation you will b…
The price inflexibility is deeply ingrained in housing prices, and the regulation by the state. No matter how desperate you are, you cannot legally work for as little as someone in many foreign lands.
Re: 22 years of job creation wiped out in a day
#7Um, according to standard economic theory in the long-run equilibrium the unemployment rate is the rate of frictional unemployment and that is more-or-less of a constant. What we have is cyclical unemployment, which is temporary. http://en.wikipedia.org/wiki/Unemployment_types Look, someone who doesn't have a job will lower his/her price until he/she gets a job. If you are really on the verge of starvation you will b…
The price inflexibility is deeply ingrained in housing prices, and the regulation by the state. No matter how desperate you are, you cannot legally work for as little as someone in many foreign lands.
We are not even close to there yet. If that does become a problem, if min-wage causes 30%+ of the workforce to be unemployed, the government will lower it. They are stupid, but not that stupid. Besides, housing prices are also shaped by supply and demand. If unemployment becomes very high, housing prices will drop. Essentially what you are talking about is short-run price inflexibility.
Re: 22 years of job creation wiped out in a day
#8Earlier quoted context omitted.
The price inflexibility is deeply ingrained in housing prices, and the regulation by the state. No matter how desperate you are, you cannot legally work for as little as someone in many foreign lands.
We are not even close to there yet. If that does become a problem, if min-wage causes 30%+ of the workforce to be unemployed, the government will lower it. They are stupid, but not that stupid. Besides, housing prices are also shaped by supply and demand. If unemployment becomes very high, housing prices will drop. Essentially what you are talking about is short-run price inflexibility.
I so not disagree with you on any point other than perhaps the use of "short", which is a comparative term anyway.
Re: 22 years of job creation wiped out in a day
#9Earlier quoted context omitted.
The price inflexibility is deeply ingrained in housing prices, and the regulation by the state. No matter how desperate you are, you cannot legally work for as little as someone in many foreign lands.
We are not even close to there yet. If that does become a problem, if min-wage causes 30%+ of the workforce to be unemployed, the government will lower it. They are stupid, but not that stupid. Besides, housing prices are also shaped by supply and demand. If unemployment becomes very high, housing prices will drop. Essentially what you are talking about is short-run price inflexibility.
"They are stupid [ the government] , but not that stupid."
Don't count on it. There is something about government that attracts and concentrates stupidity. They discount reality, blank out unintended consequences, operate with stolen wealth, and shift blame AND cost for its failure onto its victims. In that environment its almost impossible not to be terminally stupid.
Re: 22 years of job creation wiped out in a day
#10Earlier quoted context omitted.
We are not even close to there yet. If that does become a problem, if min-wage causes 30%+ of the workforce to be unemployed, the government will lower it. They are stupid, but not that stupid. Besides, housing prices are also shaped by supply and demand. If unemployment becomes very high, housing prices will drop. Essentially what you are talking about is short-run price inflexibility.
"They are stupid [ the government] , but not that stupid." Don't count on it. There is something about government that attracts and concentrates stupidity. They discount reality, blank out unintended consequences, operate with stolen wealth, and shift blame AND cost for its failure onto its victims. In that environment its almost impossible not to be terminally stupid.
Stupid or negligent?