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The Economy

blog.samaltman.com

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Re: The Economy

#51

Post by api »

kaonashi wrote: post #44
api wrote: post #20

I have gradually become convinced by mountains of evidence from many quarters that the Keynesians are right-- we are in a demand constrained economy. One of the problems I think is that economists and politicos tend to always be fighting the last war. In the late 1970s to early 1980s -- the last time the economy seemed this systemically bleak -- the problem was insufficient capital available for investment combined w…

A large component of 70's stagflation was just supply shocks for oil. Why this never gets brought up, or is just brushed aside casually is beyond me. > do modern industrial economies actually tend to oscillate between demand constrained and supply constrained failure modes This is probably a pretty good way to look at it. The solution is something like http://en.wikipedia.org/wiki/Functional_finance The meat: 1. The…

True, and I'm sure the fact that we've likely passed peak conventional oil is a contributing factor to the current malaise.

In both cases there was probably a physical underpinning, but economic policies could indeed have helped. In the case of the 70s oil shocks, having more investment capital available allowed more investment in new capacity. Today having more consumer capital available would spur adoption of electric cars, rooftop solar, LED lights, and other consumer next-generation energy technologies that are required to help us shift consumption away from being so dependent on oil.

In other words I think today's energy problems are -- paradoxically -- also a demand problem. We need more demand, not less, to drive the adoption of alternatives.

Re: The Economy

#52

Post by jerf »

moblahbl4hblah wrote: post #9
doyoulikeworms wrote: post #8

Earlier quoted context omitted.

I thought that they were called entitlements precisely because we pay for them.

They are called entitlements to make people think that some undeserving class is getting over...they think they are "entitled"...is the way that is put. It was done on purpose by conservatives. Its a dog whistle.

I don't think you get what a "dog whistle" is. Everyone calls them entitlements.

Re: The Economy

#53

Post by richcollins »

zenogais wrote: post #26
fokinsean wrote: post #13

Does anyone think we are heading towards an economic collapse?

Seeing as how "natural economic growth" is not infinitely sustainable (I'm operating under the assumptions that there are finite quantities of natural resources and human ingenuity is not infinite and infallible). It's probabilistically inevitable.

It seems unlikely to me that we're anywhere close to diminishing returns from technology. More likely we're seeing what happens when a system is full of perverse incentives that reward unproductive / destructive behavior.

Re: The Economy

#54

Post by pyfish »

I agree technology will save us from the mad max scenario that we repeatedly have read about over the last 5 years. However, it will be interesting to see how the "Technocracy" plays out.

Re: The Economy

#55

Post by josephlord »

The private debt levels are just as critical as the public debt levels and much higher (although down from their 2008 peak still I think). What is particularly is the total rate of change for public and private debt which heavily dictates the growth levels. When the economy suddenly switches from growing debt at accelerating rates to reducing debts is when the major crash happens.

Re: The Economy

#56

Post by abledon »

kaonashi wrote: post #44
api wrote: post #20

I have gradually become convinced by mountains of evidence from many quarters that the Keynesians are right-- we are in a demand constrained economy. One of the problems I think is that economists and politicos tend to always be fighting the last war. In the late 1970s to early 1980s -- the last time the economy seemed this systemically bleak -- the problem was insufficient capital available for investment combined w…

A large component of 70's stagflation was just supply shocks for oil. Why this never gets brought up, or is just brushed aside casually is beyond me. > do modern industrial economies actually tend to oscillate between demand constrained and supply constrained failure modes This is probably a pretty good way to look at it. The solution is something like http://en.wikipedia.org/wiki/Functional_finance The meat: 1. The…

> A large component of 70's stagflation was just supply shocks for oil. Why this never gets brought up, or is just brushed aside casually is beyond me.

This is how David Graeber starts his book "Debt: The first 5000 years"

Re: The Economy

#57

Post by dageshi »

api wrote: post #20

I have gradually become convinced by mountains of evidence from many quarters that the Keynesians are right-- we are in a demand constrained economy. One of the problems I think is that economists and politicos tend to always be fighting the last war. In the late 1970s to early 1980s -- the last time the economy seemed this systemically bleak -- the problem was insufficient capital available for investment combined w…

My view on Keynesianism is that it's basically been bastardised to the point where it's unworkable. I say that because my understanding is that Keynes originally proposed a system where the government ran a surplus during the "good times" and then ramped up borrowing and spending during the "bad times". This actually makes a great deal of sense because during a recession investors are usually falling over themselves to park money with the government at very low interest rates.

But no modern government seems capable of running a surplus for any length of time. And modern Keynesians have basically done away with the surplus requirement so that you can borrow in the good times and borrow more in the bad...

I'm sure they have academic studies that back up that being possible, the issue is the general public don't believe it and the general public elect the politicians who'll have to implement it.

On the other hand if governments did run a proper surplus during the good years, I think there would be much wider acceptance in the general public for significantly more government spending during recessions. The "Keynesian blast" so to speak.

Given all that, any Keynesian response by modern governments will always fall short of what's required for it to actually work because the voting public don't trust the modern incarnation of it.

Re: The Economy

#58

Post by plaxis »

But it's not a bad economy VC/PE. It's basically loads of 0% money and no tax via carried interest. If you disagree, come see the number of entire floor apartment renovations happening on 5th ave.

<3 NYC

Re: The Economy

#59

Post by ericd »

moblahbl4hblah wrote: post #9
doyoulikeworms wrote: post #8

Earlier quoted context omitted.

I thought that they were called entitlements precisely because we pay for them.

They are called entitlements to make people think that some undeserving class is getting over...they think they are "entitled"...is the way that is put. It was done on purpose by conservatives. Its a dog whistle.

I don't think that comes from where you think it does. I think it comes from the fact that people are literally entitled to that money via the legal contract we've set up - it is spoken for.
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