Capitalism Has Gone Off the Rails

How do we pull up the poor when the elites filter the entire economy through their pockets?

If the goal is to pull everyone out of poverty, is there a way to accelerate the process? I'd say, yes. Predicate the elites selling their people's labor to wealthier powers on improving labor's situation in that country. They are not doing it on their own, at least not fast as they could.

I think we can help both the poor people in the US and everywhere else. We just need to squeeze the top a bit harder.

That happened 25 years ago. I was only meaning to reference growth since 2008. it's not clear why recent growth should be impacted by an ancient supply shock.

The same country's economy grew at double digit rates while recovering from their entire country being leveled to the ground. [1] It's not clear that supply shocks [necessarily] suppress growth at all.

[1] http://en.wikipedia.org/wiki/Wirtschaftswunder

Don't discount the economic impact of a human emotion. The entire global economy operates on what billions of humans want, and a good portion of them don't even need most of the things that they want.

We have an entire industry--advertising--devoted to making people want more things.

So something like envy, which is to say wanting something that someone else has, is a significant driving factor behind economic activity. Mental suffering and physical suffering amount to the same thing: unhappiness with the current state of affairs. It does not matter if one person wants to not die of cholera while another wants a new smartphone with a faster processor. It only matters what that person is willing to do or to forego to get that thing.

The first person may be willing to spend a week with a shovel in a pit filled with sewage to get adequate sanitation for the rest of the year. The second person already has a flush toilet, complete with sewer and treatment plant, so maybe they're just giving up new tires for their second car.

All of economics is just individual humans making choices about what they want.

Poor Americans have been told throughout their lives that they can have a certain lifestyle--pretty good in comparison to a lot of other countries--if they are willing to follow certain rules and spend some time working rather than playing. Many of them are finding that to be a lie. So perhaps they are suffering instead from a perceived betrayal of a social compact? Everyone willing to produce shall be able to consume in equal measure?

What I am seeing through my biased eyes is that significant limitations are being placed on ordinary people's ability to produce valuable goods and services, and so their ability to consume is falling below that required by their former customary standard of living.

> I've heard the idea that banks are keeping foreclosed houses off the market a few times. Do you know of a reference that describes the scale of that?

This estimates the number at 85-90% of foreclosures:

http://realestate.aol.com/blog/2012/07/13/shadow-reo-as-much...

You can literally see it with your own eyes. Walk down a street in a working class neighborhood. You'll see plenty of homes with a piece of paper on the front door saying the house has been foreclosed and "winterized" but no realtor's sign or other indication that the house is on the market.

Not selling foreclosures is completely rational behavior for the banks. The houses are usually on their books at the price the original owner paid for it, so selling it at the current market value causes them to take an accounting loss and makes the bank's CEO look bad. Meanwhile the homes are still assets they can collateralize and trade as securities without actually allowing anyone to live in them, which is all the bank was ever interested in anyway, and not allowing anyone to live in it keeps overall housing prices higher, which is more important to mortgage banks than anyone else in the world. Meanwhile the value of the home isn't actually going down, which is what would happen if they sold them at scale.

Using only the statistics skimmed from elsewhere in the thread, a 1% workforce participation rate feeds everyone in the US, and several other countries that import from the US. A 9% rate does that plus manufacturing all goods. I think it is not unreasonable to think that 10% of all people able to work might just do so because they want to do something meaningful with their lives.

If everyone takes the basic income, they will spend their 16 free hours a day doing things that they find value in, but not necessarily valuable enough to others to support their basic needs.

In the degenerate case, a self-sustaining automated economy produces a massive surplus for human consumption. Robotic slave labor, programmed not to want anything or complain, will serve all your basic needs.

A good portion of the robotic production army is already in place, but it still requires human maintenance and operators. All that is required is a sub-economy that produces more than it consumes, and requires zero inputs from anyone outside it.

Autotrophic organisms already do this. Everything else on the planet eats them. If you want to feed more people for free, you just design a better algae or plankton, and they build themselves. The rest of the ecosystem simply builds on top of them.