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The Demoralization is just Beginning

geohot.github.io

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Re: The Demoralization is just Beginning

#91

Post by roenxi »

ryandamm wrote: post #74
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…

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…

Normalising GDP for the amount of money in the system suggests that velocity of money is the is actually the interesting metric.

Say the monetary base is $100 and the GDP is $1,000 initially, then the monetary base doubles to $200 and the GDP doubles to $2,000. It looks suspiciously like no real economic activity was generated and that suggests that velocity is the growth measure.

Re: The Demoralization is just Beginning

#92

Post by lxgr »

systemf_omega wrote: post #59
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…

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

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

Re: The Demoralization is just Beginning

#93

Post by Panzer04 »

tmn wrote: post #73
zzzeek wrote: post #51

Earlier quoted context omitted.

seemed like a good article until he went into "back the dollar on gold" and revealed he was a total crackpot, sad

Care to elaborate? It’s thought provoking as a mechanism to reduce all of this zero sum (or even worse, parasitic) effort that dominates our system.

Making an inelastic resource (gold) the unit of exchange in a growing economy is a recipe for deflation. You don't want the most economically sensible decision to be holding onto capital, since that results in precisely nothing useful being done.

Re: The Demoralization is just Beginning

#94

Post by Finnucane »

roenxi wrote: post #82
Finnucane wrote: post #69

Earlier quoted context omitted.

When gold was money, most people were poor. Gold was mainly good for the aristocracy.

Wealth generation has been growing exponentially for 200, 300 years. Maybe longer. Noting that people in the past had less wealth than today is hardly a point. Anything but the most jaw-droppingly stupid economic systems would have todays population being very wealthy compared to those of yesteryear. Even the experiments in authoritarianism and communism have managed that although they killed a lot of people along th…

but that doesn't really answer the question of why a gold stabndard is better. The gold standard didn't make the industrial revolution happen. And the gold 'standard' was arbitrary itself, and the government could alter it at will. It was just as 'fiat' as anything.

Re: The Demoralization is just Beginning

#95

Post by Rury »

ryandamm wrote: post #74
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…

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 using a more objective definition for wealth, rather than an arbitrary one. It makes measuring and comparing things much more sensible, otherwise you are free to reason whatever you want and have no culpability, which is very unscientific.

Re: The Demoralization is just Beginning

#96

Post by lxgr »

hot_gril wrote: post #85
lxgr wrote: post #28

> 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…

Yes, inflation incentivizes spending and/or investments, and (in moderation) that's generally a very good thing.

The only other alternative that doesn't create incredibly bleak incentives for anyone that doesn't inherit wealth would be wealth and estate taxes, but good luck getting either passed or reformed.

Re: The Demoralization is just Beginning

#97

Post by philipkglass »

almaight wrote: post #37
corimaith wrote: post #23

Earlier 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.

I would say that the Soviet Union had strong manufacturing power but they manufactured too many units of things that their citizens didn't want, and not enough of what they did want. By the end they could make more tanks and tractors than anyone needed but household goods were in short supply.

Re: The Demoralization is just Beginning

#98

Post by 45511ff515f7 »

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.

At what quantile of an R1 does graduate education become something other than a visa scam? What domestic student is going to toil for years for poverty-level wages? The further pursuance of policies that are turning research institutions into immigration scams is a bad idea.

Re: The Demoralization is just Beginning

#99

Post by janalsncm »

jazzyjackson wrote: post #55
janalsncm wrote: post #31

Earlier quoted context omitted.

> like scoring a soccer game based on how far your players run That’s a pretty good analogy for what GDP is counting, actually. But I think the larger point is that manufacturing is grounded in something real. It’s a measure of how many tanks and fighter jets you can make, no matter how much they cost to make.

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.

Re: The Demoralization is just Beginning

#100

Post by lxgr »

trhway wrote: post #14
EmpireoftheSun wrote: post #9

Earlier 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.

Only if there's something flowing back that amounts to more than crumbs falling off the edge of the table, i.e. ownership of what these talented people help build, not just salaries/remittances.

Silicon Valley is actually pretty good at that, compared to e.g. academia in the US.

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