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The Demoralization is just Beginning

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Re: The Demoralization is just Beginning

#21

Post by roenxi »

jfengel wrote: post #6

For 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.

> "Gold standard" is an idea every sane economist rejected decades ago.

I don't think any sane economists have ever "rejected" the gold standard, it is known to work. Pretty much any empire ever founded was built on a gold standard. The US jumped away from it because they were going to go bankrupt and picked a system that put the pain off until a later date. Now, 50 years later, they appear to have lost the title of the world's major superpower.

It is relatively unusual for effective economic ideas to gain any traction in politics. It seems to be partially random whether a specific policy gets a tick or a cross when an economist is asked about it.

Re: The Demoralization is just Beginning

#22

Post by gjsman-1000 »

ryandamm wrote: post #20
gjsman-1000 wrote: post #13

Earlier quoted context omitted.

“there is more to an economy than manufacturing” Not really, no. If China cut off the US, for any reason, who gets hurt more? Who has a bigger house of cards to collapse? Who will have a harder time rebuilding? If the next leader is bolder than Xi, and is of the same kind that once killed tens of millions of people, losing an arm and a leg to behead an enemy might be a viable strategy.

Arguing that manufacturing is strategic is not the same thing as manufacturing being “all that matters in an economy.” There’s a logical fallacy in your rebuttal.

How about I put it this way: Manufacturing is the bedrock of power. Everything else above it, particularly fiat currency, is built on that bedrock. While those cards can be mighty attractive, losing the bedrock for any reason would destroy everything.

Apple isn’t going to be worth $3 trillion when they can’t sell an iPhone for the next decade. Heck, General Mills won’t be selling much breakfast cereal, when the parts to the equipment can’t be imported. How much do you think a bare shelves Walmart is worth? Heck, how will American manufacturing rebuild when the CNC motors are made in China? When even a Prusa uses motors from China (LDO)? Will software sales save us with no hardware to run it on?

The value of everything on the stock market collapses in such a scenario, and the power of the US Dollar goes with it.

Re: The Demoralization is just Beginning

#23

Post by corimaith »

ryandamm wrote: post #20
gjsman-1000 wrote: post #13

Earlier quoted context omitted.

“there is more to an economy than manufacturing” Not really, no. If China cut off the US, for any reason, who gets hurt more? Who has a bigger house of cards to collapse? Who will have a harder time rebuilding? If the next leader is bolder than Xi, and is of the same kind that once killed tens of millions of people, losing an arm and a leg to behead an enemy might be a viable strategy.

Arguing that manufacturing is strategic is not the same thing as manufacturing being “all that matters in an economy.” There’s a logical fallacy in your rebuttal.

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.

Re: The Demoralization is just Beginning

#24

Post by toast0 »

EmpireoftheSun wrote: post #9
jfengel wrote: post #6

For 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.

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.

Depending on the origin country, there's a non-insignificant amount of people coming to the US, making a lot of money, then going back to their country of origin and building businesses or charities back home. Often with some amount of remitances in the meantime. I think that can be a win-win, but the ratios probably matter.

Re: The Demoralization is just Beginning

#25

Post by Spartan-S63 »

ryandamm wrote: post #11

I prefer my economic takes from economists, or people who actually study these things. -there is more to an economy than manufacturing. Using manufacturing metrics to rate an economy is like scoring a soccer game based on how far your players run: in some contexts correlated with “winning” but in others it’s not. -gold is not a good currency or basis for monetary policy. -these ideas only sound self consistent withou…

> But solution point 1 — brain drain the rest of the world — is an absolutely first rate policy. The fact that the US requires newly-minted PhDs educated here to get a different visa or leave is absolutely self-defeating. We should be welcoming skilled immigration from everywhere.

Even better, let them keep their visa and if they revoke their citizenship, we'll relocate their entire family if they come from a repressive regime.

Brain-draining the world is really the key to cementing American Hegemony in a post-Cold War world. Additionally, we should be funding basic research at historic levels and incentivizing, via the tax code, corporations to productize and apply this basic research. We should be expanding the frontier of knowledge without regard to its immediate application.

Re: The Demoralization is just Beginning

#26

Post by jazzyjackson »

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 emigration was a factor leading up to the Great War.

Anyhow consider me demoralized, i cant picture anything the US could do in the next decade to turn the ship around from the fuck-it-all perestroika we've adopted as federal policy. (Speaking of turning the ship around, I'm looking forward to my 8 day east bound crossing from NYC to Southampton at the end of the month. The ship is capable of doing it in 5 days but the demand isn't there to pay the extra cost to run the turbines at full steam.)

Re: The Demoralization is just Beginning

#27

Post by corimaith »

nico wrote: post #5

> The reason the banking industry is so big is that it is close to the source of the made up dollars. If currency is gold backed, you could imagine something similar happening to the mining industry instead. However, the mining industry is real! It uses steel and aluminum to build physical things This is an interesting thought. I don’t like mining too much, as it has a lot of negative externalities. But the compariso…

The banking industry is big because global economies are big and business need ways to finance and issue debt.

There's not a single tower or factory or mine or business I would imagine that has been financed via dome form of debt coming from elsewhere, because if we're waiting for raw cash to build things we'd be missing out of most business opportunities and the entire economy would slow.

Re: The Demoralization is just Beginning

#28

Post by lxgr »

> 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 shortage of trust in the government and institutions, and even then it's only the lesser of two evils (the other being inflation) and comes at a high price.

Re: The Demoralization is just Beginning

#29

Post by Finnucane »

roenxi wrote: post #21
jfengel wrote: post #6

For 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.

> "Gold standard" is an idea every sane economist rejected decades ago. I don't think any sane economists have ever "rejected" the gold standard, it is known to work. Pretty much any empire ever founded was built on a gold standard. The US jumped away from it because they were going to go bankrupt and picked a system that put the pain off until a later date. Now, 50 years later, they appear to have lost the title of…

What is the gold standard 'effective' at? In the 19th century, the US had a more or less continual stream of panics and recessions. In 1932, everyone had to get off the gold standard because there was no mechanism to stop the deflationary death spiral otherwise. 'Bretton-Woods' failed to control inflation, and it became possible to arbitrage gold across markets.

Re: The Demoralization is just Beginning

#30

Post by stephen_g »

nico wrote: post #5

> The reason the banking industry is so big is that it is close to the source of the made up dollars. If currency is gold backed, you could imagine something similar happening to the mining industry instead. However, the mining industry is real! It uses steel and aluminum to build physical things This is an interesting thought. I don’t like mining too much, as it has a lot of negative externalities. But the compariso…

Here's a thought experiment - would the amount of gold a country has be expected to correspond to the amount of money that country's economy needs? I believe the answer is - absolutely not.

So we can set some conversion rate to get things started with the correct kind of corresponding amounts. Great. But - over time, both the amount of commodity available and held, and the amount of money the economy needs will shift. Can we expect the conversion rate to stay the same then? Again, the answer is no.

That's why pegs to commodities (i.e. gold backed currency) or other currencies always fail eventually - they can start off fine but will always drift away and you either have increasingly large inflation or deflation when things don't match up (which ironically is exactly what the proponents of commodity-backing claim it prevents, but the history is pretty clear).

It doesn't matter then about whether the mining industry is 'real' and if the financial industry is 'artificial', as interesting as the argument is. Practically gold-backing always tends to fail, so it's a moot point.

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