I thought I was going to read something interesting, and while yes, America has significant problems and we are likely on the decline under this administration (and likely before), backing the dollar by gold is the same crackpot nonsense that Ron Paul people loved to hammer on about. What is even his point?
The Demoralization is just Beginning
141–150 of 812 posts
Re: The Demoralization is just Beginning
#142Earlier quoted context omitted.
Exactly, people forget we build things for the sake of consumption, not the other way around. You can build a thousand factories for some good but it's dead weight if there is no one to buy their outputs.
The Soviet Union had strong consumption power, but they did not know how to manufacture. The final result was obvious.
Yeah I think this might actually be backwards; the Soviet Union had explicit production targets, and (iirc) in like the 70s they actually had more industrial output than the US. Remember the "missile gap," when the US was concerned that the industrial might of the USSR would bury the US?
But the output was mismatched to demand; it was a classic example of "when the measurement becomes the target, it ceases to become a good measurement" -- the centrally-planned industrial targets were inefficient, so a lot of that industrial production went to waste.
And to be fair, this is what's hard about economics: you can't just count tractors, or tons of steel, or whatever, as the output of an economy. Because every marginal ton of steel matters a different amount based on demand. The genius of capitalism (yes, I said it!) is it is an extremely elegant system for optimizing an incredibly high-dimensional system with a slippery, dynamic cost function, by incentivizing a bunch of independent agents to collaborate in price setting (and therefore sending signals about production via pricing, vis a vis supply and demand).
This is also why China's economy has done better than the USSR; let's not forget that Deng Xiaoping's "limited market reforms" helped unleash the modern Chinese economy. The structural issues in the Chinese economy now stem from the lack of development of consumer demand, which does echo some of what the USSR struggled from. But China has come very far; the criticisms of its current economy that I like best are well-articulated by Michael Pettis, fwiw. But I'd encourage you to do your own reading and form your own opinions.
Re: The Demoralization is just Beginning
#143I get tired of people talking about how the US doesn't "make anything". I spent my adult life creating software that was super valuable. Along the way I worked with a bunch of people (from all over the world) who-- because of their brains and their education-- could have made almost anything very well. They didn't make steel or automobiles because that wasn't where their skills were best deployed.
Re: The Demoralization is just Beginning
#144Earlier quoted context omitted.
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, economi…
I think some people need to step back and ponder what's the purpose of economics? Why do we even study it? What are we hoping to achieve in analyzing it?
I can only think it began with the philosophy for making better decisions, solving problems, and improving society - particularly in the allocation of its resources.
As so, I think a huge part of the problem with economics, including most economists, is that people equate value for wealth. Value certainly is subjective, I mean, do you value having $80k, or a nice car? How about a pool, or a boat? Do you value your time less than the cost of a flight? All very subjective. But I think it's flawed to conflate value for wealth. Wealth is something real, the things you are evaluating in trade. Time is wealth. Money is wealth. Oil is wealth. Land is wealth. Why don't we simply measure these things, and how they're allocated? IMO, it seems more practical and more noble of pursuit to figuring out if someone actually needs food in society, rather than what people with plenty of resources ascribe their values to.
Re: The Demoralization is just Beginning
#145Earlier quoted context omitted.
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.
Or even better, The Economist's "Big Mac Index":
https://en.wikipedia.org/wiki/Big_Mac_Index https://worldpopulationreview.com/country-rankings/big-mac-i...
Re: The Demoralization is just Beginning
#146Earlier quoted context omitted.
I dont think Brin Drain is a win-win outcome in a globalized world. USA benefits but at expense of mostly poor nations sending their elite talent.
would this elite talent be that productive there like it is here? I don't think so. I think moving talent to the most productive environment is the win for the civilization as a whole.
This is probably a key thing which gets buried in the details. Potential value and actual realized value of a resource can be really different depending on the opportunities. Individuals rarely exists in isolation, every time they do better, they impact others in positive way, sort of uplifting everyone around them by some margin.
A simple manifestation of this is how we start up coal fire. The idea is similar, bring the hot blocks together so they produce a lot more heat which in turn heats up the entire coal load. Move away the red hot blocks to isolation and the fire would die away in no time.
Re: The Demoralization is just Beginning
#147It's a surprisingly retro economic take from a tech guy. Kind of crazy to see famous tech personalities pivoting from "software is eating the world" to "it's fake unless it is made out of metal."
Re: The Demoralization is just Beginning
#148For his solutions: "Brain drain" is what we had been doing for the past 80 years or so. It worked great. We're specifically driving people away now. "Gold standard" is an idea every sane economist rejected decades ago.
Some serious macroeconomists think fiat money was a bad idea on balance.
Re: The Demoralization is just Beginning
#149The real scam was all these Silicon Valley "geniuses", who are lately outing themselves as total morons. Never have heroes.
Re: The Demoralization is just Beginning
#150> Back the dollar by gold [...] The second will prevent a lot of the scams. Oh boy... Bitcoin in many ways is idealized gold (unlike the real one, its supply is actually limited), yet there is no shortage of scams around it. On the contrary, a gold standard would remove one of the most essential tools modern governments have: That of monetary policy. That sounds like a good idea if and only if there's an extreme shor…
The monetary policy we have coerces people into passive investing, creating bubbles. When rates are low, you see bogus "tech" plays like wifi water dispensers, that's the scam the author means. Also makes taxes weird, e.g. why capital gains aren't the same as income (today USD ≠ past USD). Gold standard is wasteful though; Fed could just keep a steady money supply instead. But it's our scam. The Fed isn't only diluti…
I think it's probably worth learning a little bit about economic history before talking about the benefits of the gold standard. Before the fed was created, the US economy was constantly booming and busting. There were recessions every few years in the 19th century [0].
Why folks are so eager to return to that era is beyond me.
[0]https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...