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The Demoralization is just Beginning

geohot.github.io

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Re: The Demoralization is just Beginning

#121

Post by ryandamm »

Rury wrote: post #95
ryandamm wrote: post #74

Earlier quoted context omitted.

Two quick thoughts… one, because every transaction in theory happens because the purchasing party values the good or service more than the money, every transaction does — in theory — create wealth, velocity of money is sort of measuring a proxy for growth. But I agree it’s weird. Second, “GDP/watt” is absolutely an economic metric, and it captures something about energy efficiency but also the mix of an economy. Soft…

I don't buy the argument that every transaction in theory creates wealth. The only way that holds true, is by using a subjective/arbitrary meaning of wealth, which would imply, I can become wealthier/poorer by merely changing my mind. In such a case, I can be the wealthiest man in the world, and the poorest 10 minutes later, when no transaction or anything really even happened. Sure mind over matter, but I'd prefer u…

If you can truly come up with an objective measure of wealth, I believe there might be a (quasi) Nobel Prize in economics for you.

The reason economics is hard, in part, is that there isn't some core firmament you can rest on; there is no fundamental, provable truth. And yet, with fancy statistics and clever experimental design, you can still make intelligent statements and understand the world better.

To me, economics is the field with the purest expression of "all models are wrong, some are useful." Which is actually sort of cool, if you let it be.

Re: The Demoralization is just Beginning

#122

Post by lxgr »

systemf_omega wrote: post #118
lxgr wrote: post #92

Earlier quoted context omitted.

Adjust for living expenses and the situation already looks very different. Then adjust for quality of life...

This has been done before, and America comes out consistently on top. Even the median purchasing power parity (PPP) in the US is frequently ranked highest in the world. The majority of American households in the poorest US states are doing better than the majority of Europeans. This gets amplified if you're a highly sought after professional. Top senior engineers are getting paid $500k-$1M in the US. These are figure…

Yes, if you're a professional in high demand, you can live a great life in the US. But how does the quality of life of everybody below the median look like?

> This gets amplified if you're a highly sought after professional. Top senior engineers are getting paid $500k-$1M in the US. These are figures you'll never find in Europe or Asia, not even close.

But what does that buy you really, in a high cost of living area? What if you ever want to do something else? What if demands for your profession change? How expensive is it to raise children?

I have first hand experience of both the US and Europe, and while nominal salaries are (much) lower in the latter, subjective feelings of safety and quality of life seem much more comparable than the numbers might make you believe.

That said, the US system of highly rewarding relatively few people at the top certainly motivates the masses like few others: Most people are bad at statistics and like playing the lottery.

Re: The Demoralization is just Beginning

#123

Post by frontfor »

Perenti wrote: post #111
systemf_omega wrote: post #59

Earlier quoted context omitted.

The US is already the brain drain destination #1. Nowhere else can highly skilled people generate comparable levels of income.

Was. Was the brain drain destination #1. It's been Europe, India and SE Asia for a while now. Not everyone with a brain just wants more money. Some want to do interesting research that doesn't have a short term commercialisation strategy.

Do you have the statistics to back this up?

Re: The Demoralization is just Beginning

#124

Post by ryandamm »

Terr_ wrote: post #80
ryandamm wrote: post #74

Earlier quoted context omitted.

Two quick thoughts… one, because every transaction in theory happens because the purchasing party values the good or service more than the money, every transaction does — in theory — create wealth, velocity of money is sort of measuring a proxy for growth. But I agree it’s weird. Second, “GDP/watt” is absolutely an economic metric, and it captures something about energy efficiency but also the mix of an economy. Soft…

I know you qualified it as "in theory", yet I find myself thinking of wash-trading as an example where transactional value is neutral or even very slightly negative, because they actually value manipulating the metrics.

That's a fair counterexample.

In that case, you could argue that "true GDP" didn't change at all, merely our measurement of it had error. But pretty soon you ask 'well, what is the real signal?' And it's turtles all the way down.

Again, economics is weird, but perhaps interesting because it's weird. (I'll confess I didn't care about the field at all until it suddenly got very interesting in ~2008.)

Re: The Demoralization is just Beginning

#125

Post by trhway »

lxgr wrote: post #116
trhway wrote: post #107

Earlier quoted context omitted.

Technological and scientific progress flows back spreading around the world like the tide rising all boats.

In a world without intellectual property rights and no entrepreneurial moats I'd share your optimism.

Western computers for example were big advance in Russia 30 years ago even though we had to pay for them.

Re: The Demoralization is just Beginning

#126

Post by ryandamm »

Rury wrote: post #95
ryandamm wrote: post #74

Earlier quoted context omitted.

Two quick thoughts… one, because every transaction in theory happens because the purchasing party values the good or service more than the money, every transaction does — in theory — create wealth, velocity of money is sort of measuring a proxy for growth. But I agree it’s weird. Second, “GDP/watt” is absolutely an economic metric, and it captures something about energy efficiency but also the mix of an economy. Soft…

I don't buy the argument that every transaction in theory creates wealth. The only way that holds true, is by using a subjective/arbitrary meaning of wealth, which would imply, I can become wealthier/poorer by merely changing my mind. In such a case, I can be the wealthiest man in the world, and the poorest 10 minutes later, when no transaction or anything really even happened. Sure mind over matter, but I'd prefer u…

Also, "I become richer just because I think I'm richer" was actually a thing Donald Trump once said in a deposition:

"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feelings." [1]

1: https://en.wikipedia.org/wiki/TrumpNation#:~:text=During%20d...

Re: The Demoralization is just Beginning

#127

Post by ryandamm »

janalsncm wrote: post #99
jazzyjackson wrote: post #55

Earlier quoted context omitted.

Right, velocity of money! I think this is the meatier part of the essay and I wish geohot would have skipped the bit about the gold standard - our main measure of growth is how quickly we hand money back and forth (is there another measure that allows expenditures to cancel out ? Net Domestic Product ?) The graph that shocked me tho was the electricity production, I didn't realize US was so flat but it rings true, I…

Intuitively, if a toaster costs 5x in the US what it would cost in China, GDP says that a sale in the US was more productive when in reality it’s the same thing in both places. My opinion is the money is a means to an end and we’d be served better by focusing on those ends instead: healthcare, housing, education, life expectancy etc.

That's what PPP is meant to measure.

Re: The Demoralization is just Beginning

#128

Post by kawaiikouhai »

lxgr wrote: post #87
rayiner wrote: post #42

Earlier quoted context omitted.

> Brain-draining the world is really the key to cementing American Hegemony in a post-Cold War world. Why should we want that instead of an orderly, well-governed democracy? Do you think people in Sweden or Denmark are upset their countries aren't hegemons? And what would that do to the country? Do you really think that, say, the top 5% of India and China (100 million people) would do better maintaining a democracy t…

My suspicion is that for a lot of people that grew up in and only know the US, there's a sense of impending doom if "American hegemony" ever were to be replaced by something else. But since there's no real practical experience of how that would actually feel (or rather, how a very high quality of life and subjective happiness are possible without an US salary in many other countries), they instead project from someth…

Exactly. I had this exact thought experiment of "What if America were no longer Hegemon".

So, I looked at other historic examples. The British, Dutch, and Spanish. (You can add German/Austrian and the French, close contenders).

They're all still very well-off!

Re: The Demoralization is just Beginning

#129

Post by unethical_ban »

jazzyjackson wrote: post #26
ViktorRay wrote: post #4

Steve Jobs told Obama something similar once. The idea was to provide worker visas to engineers who did well and graduated from good American universities. Basically give those workers a visa along with their diploma. Obama thought the idea was intriguing and mentioned it multiple times to his advisors. It never went anywhere though. Brain draining the rest of the world is one of the main reasons for America’s succes…

Im reading a charming book called Tramps and Ladies, an autobiography of a ship captain of the Cunard line in the transition from sail to steam. The last chapter I read paints a picture of the unrestricted immigration of the 1900s - anyone with 5 pounds could hop on a ship in Hamburg, Liverpool, or Piraeus and start a new life in the States, and people poured into New York in the millions. I wonder if the mass emigra…

What cruise line? I want to do a true transatlantic crossing, not some Caribbean jaunt.

Re: The Demoralization is just Beginning

#130

Post by ryandamm »

harimau777 wrote: post #102
ikiris wrote: post #78

Earlier quoted context omitted.

It's only a debate if you reject the very principals of science. I realize we're getting there for a lot of people, but merely disbelieving in science is not a refutal of it. This ignores so called Austrian economists however, who are just flat out lying to either themselves or everyone else depending on the person.

I think the problem might be that it's difficult to perform experiments in economics due to the size of the thing being measured and the fact that the people making up the economy generally aren't going to be alright with you performing experiments on them.

Economics experiments are actually a thing. You can have natural experiments, or you can uncover patterns in data, or you can try controlled experiments (in microeconomics), though that sometimes just feels like applied psychology. I dunno, I've never formally studied it.

But I have read NBER papers, and can confirm that there is real research. It's not a hard science, but among the social sciences it's pretty rigorous, and often very quantitative. I know how this crowd likes it quantitative.

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