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WTF Happened in 1971? (2019)

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Re: WTF Happened in 1971? (2019)

#301

Post by wffurr »

pnathan wrote: post #139
wffurr wrote: post #38

It's more like WTF happened between 1945 and 1971. I think that was an ahistorical period of low income inequality, and now we're back to "normal" such as it is.

That's also a great point. The 70s have a lot of divergence vs the prior 20 years, but what if we run the clock back to, say, 1875? (I don't know. But it has to be asked)

Piketty goes into some detail on that: https://www.vox.com/2014/4/8/5592198/the-short-guide-to-capi...

The answer is that 1875-1920 looks an awful lot like 1975-2020.

Re: WTF Happened in 1971? (2019)

#302

Post by monknomo »

Ericson2314 wrote: post #166

I highly recommend https://www.versobooks.com/books/3717-automation-and-the-fut... (or read https://newleftreview.org/issues/ii119/articles/aaron-benana... ) It's a solid back-to-the-basics refresher. Without making causal guesses, the stats clearly show that demand stopped absorbing increasing supply, the Keynesian feedback loop was broken, and everything went to shit since. The causes seem numerous and intricate bu…

4 day work week!

Re: WTF Happened in 1971? (2019)

#303

Post by proverbialbunny »

wffurr wrote: post #38

It's more like WTF happened between 1945 and 1971. I think that was an ahistorical period of low income inequality, and now we're back to "normal" such as it is.

Beyond the obvious, the Fairness Doctrine was enacted at that time. It put regulations on news reporting which allowed US citizens to be informed voters. The Fairness Doctrine was removed, and since then .. well, you can see what has happened to the country. Fighting between groups. Definitions for terminology that differs depending on what political groups understand creating misinformation. Citizens getting only half of the reporting, even if that half is truthful. People being outright lied to by the "news". And the list goes on. It's back to how it once was.

When we're unformed voters, then who we vote for and what policies end up getting enacted to not serve our best interests.

While this at first may not seem like much, it's a key butterfly effect for many of the other problems we have today. It's not the whole picture, but the root of a larger picture.

Re: WTF Happened in 1971? (2019)

#304

Post by wffurr »

wffurr wrote: post #38

It's more like WTF happened between 1945 and 1971. I think that was an ahistorical period of low income inequality, and now we're back to "normal" such as it is.

Here's a better question - how do we replicate the 1945-1971 period without a world shattering war and tens of millions of deaths?

Re: WTF Happened in 1971? (2019)

#305

Post by shrimp_emoji »

RhysU wrote: post #176
ohyes wrote: post #109

This is clearly because 1970 is the Unix epoch when this version of the simulation began. It took about a year for things to get sufficiently out of whack so that stuff started to diverge in a noticeable way. I hope our implementors are proud of me for making reference to the simulation that we're all in.

A coworker and I were recently indulging in dark humor about pandemics being due to load shedding required on account of unexpected simulator platform downtime.

If we start defining irrational values ad infinitum (supposing that they're generated by the simulation on the fly as opposed to set, infinite constants), will that kernel panic their machines as their RAM and swap partitions overflow?

Re: WTF Happened in 1971? (2019)

#306

Post by notahacker »

CarelessExpert wrote: post #258
justinzollars wrote: post #202

Earlier quoted context omitted.

Sounds like you are going down with the ship. Its completely irrational to believe you can print yourself into prosperity. I could just as easily point to Tech stocks, Tesla, gold, silver, bitcoin or any other inflated commodity as a counterpoint.

> Its completely irrational to believe you can print yourself into prosperity. This is clearly a straw man. MMT provides an alternative theoretical basis that might explain the apparent disconnect between money supply and inflation: https://www.investopedia.com/modern-monetary-theory-mmt-4588... > According to MMT, the only limit the government has when it comes to spending is the availability of real resources, like…

In between the extremes of 'hard money' enthusiasts arguing that the amount of money an economy needs to grow automagically happens to coincide with levels of worldwide gold mining and MMTers (and 1950s Keynesians) arguing it coincides with whatever the government needs to spend is basically the entire field of economics and the mechanism the money supply actually operates based on (which is central banks looking at numbers to ensure the supply of and demand for credit are in balance)

Re: WTF Happened in 1971? (2019)

#307

Post by Ericson2314 »

jandrese wrote: post #214
Ericson2314 wrote: post #172

Earlier quoted context omitted.

I don't buy this because we could have easily kept on building nuclear power plants. There was temporarily an energy shock, but the long-term issue is insufficient demand not (energy) supply.

Nuclear Power Plants don't move people and goods around, at least not with 1970s battery technology.

False. Trains. Surely it is no coincidence that high speed rail and nuclear power both became common around the same time.

Re: WTF Happened in 1971? (2019)

#308

Post by AnimalMuppet »

Ericson2314 wrote: post #196
justinzollars wrote: post #171

I'm a proponent of the Gold Standard because inflation is a hidden tax. Worse, it is a regressive tax on the poor. There is a cost to having 6 fleets of aircraft carriers, 20 years of endless war and a huge unfunded pension liability. If we decided to pay for our promises in an honest way - it would equal 10% of our GDP for 75 years. Gold is honest money. Fiat currency is not.

Pure inflation is actually progressive: wages and prices go up in tandem (workers are fine), but savings (right peoople's) are debased.

Wages and prices don't go up in tandem. Wages typically lag.

Let's say there was 10% inflation instantaneously today. Everything costs 10% more starting today. When does my paycheck increase? Not today. Probably not next pay period. Either when I get my annual cost of living increase, or when I can negotiate it to happen, or when my boss decides that the company really needs to take care of me. Whichever way it happens, it happens later.

Re: WTF Happened in 1971? (2019)

#309

Post by firethief »

RhysU wrote: post #176
ohyes wrote: post #109

This is clearly because 1970 is the Unix epoch when this version of the simulation began. It took about a year for things to get sufficiently out of whack so that stuff started to diverge in a noticeable way. I hope our implementors are proud of me for making reference to the simulation that we're all in.

A coworker and I were recently indulging in dark humor about pandemics being due to load shedding required on account of unexpected simulator platform downtime.

Apparently it was no longer enough to frequency-scale the lower-utilization human brains.

Re: WTF Happened in 1971? (2019)

#310

Post by dnautics »

bryanlarsen wrote: post #25

The author obviously wants you to believe that it was the abandonment of the gold standard, but there are several other theories that have more credence with mainstream economists. The early 70's was the start of a horrible period of stagflation: stagnation coupled with inflation. Some do blame the loss of the gold standard, but the leading theory is the OPEC oil crisis. Others blame market regulations, the EPA was p…

> but there are several other theories that have more credence with mainstream economists

It's baffling that mainstream economists don't believe this (of course a single event with explanatory power diminishes the utility of the economist profession, and the Upton Sinclair quote comes to mind). In the words of a VERY mainstream economist:

https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...

"when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment"

In short: as a policy, we should reduce the real returns to labor in order to "keep the labor class employed". This policy choice (enabled by the end of bretton-woods) is quite well-captured in all of these graphs. This is how the end of bretton-woods pummeled the lower-income segments of society.

As for how the end of b-w benefits capital owners, inflation makes the cost of long-term borrowing lower, which means that the market price of risk is decreased; and folks with greater means are more effective at capturing arbitrage between the real cost of risk and the price of risk. For example, high finance instruments (like options, shorts, FOREX, etc) have a higher cost to execute in an environment with higher interest rates. If you go to, say, hunter's point/bayview you will not find people taking advantage of these instruments.

Some will claim "the poor are in debt so they will benefit from inflation" but in reality those debts are typically short-term, high interest rate instruments (sometimes even inflation-adjusted as in the case of some low-end home loans), and so the benefit to diminishing the real value of nominal debt is lower for them than it is for the truly wealthy.

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