Capitalism Has Gone Off the Rails • Hacker News Board

Re: Capitalism Has Gone Off the Rails

#91

Post by yummyfajitas » Mon, Nov 03, 2014, 9:46 AM UTC

zanny wrote: post #75

yummyfajitas wrote: post #50

Earlier quoted context omitted.

95% of the biggest nation in the world (or maybe second biggest, no one really knows the exact pop of India and China) lives in far deeper poverty than poor americans. Many of them experience actual suffering - not enough food, no flush toilet, no power. What, precisely, do you believe poor Americans are suffering from? The only concrete answer I usually hear is envy (I.e. "oh noes the inequality"). http://economix.b…

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more than dollar menu cheeseburgers per calorie. And if you don't have a working kitchen you can't cook farmers market produce. And that is at best. A lot of us are unemployed, and families are collapsing in on themselves as y…

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck

This is entirely in the control of most poor Americans. India's GDP/capita is $5500 after adjusting for cost of living, yet India has a 20% savings rate. Poor Americans could reduce consumption and save if they wished.

in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more than dollar menu cheeseburgers per calorie.

Poor Americans tend to be fat. That means they can reduce calories and increase the quality of food while spending the same amount of money.

And if you don't have a working kitchen you can't cook farmers market produce.

3% of poor Americans lack a complete kitchen (see table 2-4).

http://www.census.gov/prod/2008pubs/h150-07.pdf

tl;dr; Poor Americans have some self inflicted problems. That's not much of an argument for protectionism against poor Bangladeshi's suffering from externally inflicted problems.

Re: Capitalism Has Gone Off the Rails

#92

Post by wooter » Mon, Nov 03, 2014, 9:46 AM UTC

zanny wrote: post #75

yummyfajitas wrote: post #50

Earlier quoted context omitted.

95% of the biggest nation in the world (or maybe second biggest, no one really knows the exact pop of India and China) lives in far deeper poverty than poor americans. Many of them experience actual suffering - not enough food, no flush toilet, no power. What, precisely, do you believe poor Americans are suffering from? The only concrete answer I usually hear is envy (I.e. "oh noes the inequality"). http://economix.b…

There is tremendous long run psychological and physical harm associated with living paycheck to paycheck in perpetual debt having to eat subpar foodstuffs because fruits and vegetables cost way more than dollar menu cheeseburgers per calorie. And if you don't have a working kitchen you can't cook farmers market produce. And that is at best. A lot of us are unemployed, and families are collapsing in on themselves as y…

> subpar foodstuffs because fruits and vegetables cost way more than dollar menu cheeseburgers per calorie.

what? not even remotely true.

i frequently buy 6 lb bags of frozen broccoli/cauliflower/carrot for 8 bucks. There is cheap, healthy food out there, some people just aren't buying it.

Re: Capitalism Has Gone Off the Rails

#93

Post by atmosx » Mon, Nov 03, 2014, 9:52 AM UTC

cmdkeen wrote: post #84

atmosx wrote: post #66

Earlier quoted context omitted.

[...] the number of rich people in the world is growing . Thats because many more people become poor. I'm not saying they are directly exploited but indirectly they are, because it is a zero-sum game.

It isn't a zero sum game at all. China, India and Brazil have contributed to the global middle classes growing from 1.8 billion people in 2009 to an estimated 3.2 billion in 2020. That the USA has failed to adopt sufficiently sensible policies to deal with these changes is not the fault of capitalism per se, and indeed in the case of things like a shockingly unequal education system is often driven by left wing peopl…

Sorry but until I see absolute numbers on a paper where the statistical analysis is detailed enough I'll keep my view.

Also, note that Europe (richest content) is undergoing a never-ending crisis which has broadened extremely the poor class, especially in South Europe and Ireland. But things in Britain and France are not looking good either.

Re: Capitalism Has Gone Off the Rails

#94

Post by yummyfajitas » Mon, Nov 03, 2014, 9:58 AM UTC

PhasmaFelis wrote: post #71

yummyfajitas wrote: post #50

Earlier quoted context omitted.

95% of the biggest nation in the world (or maybe second biggest, no one really knows the exact pop of India and China) lives in far deeper poverty than poor americans. Many of them experience actual suffering - not enough food, no flush toilet, no power. What, precisely, do you believe poor Americans are suffering from? The only concrete answer I usually hear is envy (I.e. "oh noes the inequality"). http://economix.b…

> What, precisely, do you believe poor Americans are suffering from? Well, just for starters, they're suffering from entirely treatable diseases and injuries because they don't have health insurance, or don't have non-shitty health insurance. Quite a few of of them are suffering from childhood malnutrition, leading to lifelong cognitive and developmental defects. On the lowest rung, they are suffering from homelessne…

Well, just for starters, they're suffering from entirely treatable diseases and injuries...

If that were the case, the increasing access to health care should make them healthier. It didn't.

http://www.nber.org/oregon/

Do you have evidence for childhood malnutrition?

Once you come up with a definition of "rotting, roach-infested", feel free to check what fraction of poor Americans actually fit that definition. See table 2-4: http://www.census.gov/prod/2008pubs/h150-07.pdf

Suffice it to say, probably the majority of my friends are poor by American standards. But then again, I live in India. And even when I was a poor American I still lived better than they do. Though I'm usually told that grad school doesn't count as poverty, even though the economics of it are the same.

Re: Capitalism Has Gone Off the Rails

#95

Post by woodpanel » Mon, Nov 03, 2014, 10:00 AM UTC

mattmcknight wrote: post #27

Animats wrote: post #17

This is an important article, but I doubt there will be a useful discussion of it here. The developed world has incredible productive capacity. With 1% of the workforce in agriculture and 8% in manufacturing, the US produces as much stuff as China. There are no significant shortages of any manufactured good anywhere in the developed world. Quality is pretty good across the board, too. This is unique in history. That'…

This is not an important article, it is a rant against people with "tacky mansions", a turn of phrase that is more indicative of the author's point of view than the other conventional points about not understanding creative destruction. I think it is this overly nationalist view of economics that needs to die, not "capitalism". There is not less productive work to go around, it's just not being done in the US. We are…

"turn of phrase that is more indicative of the author's point of view" - this point of view is what 'Der Spiegel" is known for.

In their defense: German school curriculums lack a fundamental economic education. IMHO this non-education is one reason that everyone who has read "Economics in One Lesson" knows more about economics than 99% of German journalists.

Re: Capitalism Has Gone Off the Rails

#96

Post by adventured » Mon, Nov 03, 2014, 10:04 AM UTC

tormeh wrote: post #80

jvm wrote: post #21

There's a lot of conflation in this article between distribution and economic growth, which I think arises from the Spiegel's European perspective. Going back to the start of the DAX tracking (mid-2011), we see okay performance in German DAX index, stagnation for the French CAC and British FTSE, and strong performance in the US S&P 500 and Japanese Nikkei. [1] Eurozone unemployment has soared into double digits of la…

Japan has stagnated because its working age population is in decline. Apart from the demographics, Japan's doing great.

Japan is in dire condition in fact.

They've stagnated because instead of generating real growth, they were faking continued prosperity by accumulating massive sums of debt. It was all meant to cover the fallout from the late '80s / early '90s asset bubble exploding.

Debt servicing costs are roughly 23 trillion yen, compared to tax revenue of 45 to 47 trillion yen for 2014. So half their budget is now just going to paying interest on debt. That's a fiscal death spiral. Things are about to get a lot worse in Japan.

It's already so bad they've taken to destroying the Yen to buy a very short amount of time, which is accelerating the overall erosion and rapidly dropping the standard of living. All of their projections for recovery have fallen flat (the failed Abenomics), as anybody with a basic understanding of non-Keynesian economics would have known ahead of time.

Want to know what comes next? A more dramatic debasement of the Yen, as a means to stave off default a bit longer. It won't work, their debt situation will get worse, and the cost to service that debt will climb, sapping even more of their tax revenues; confidence in the Yen will fall, and their ability to prop up the debt situation by debasing the Yen will begin to weaken; sooner than later, they will no longer be able to maintain the facade.

Re: Capitalism Has Gone Off the Rails

#97

Post by Erwin » Mon, Nov 03, 2014, 10:06 AM UTC

SwellJoe wrote: post #58

ef4 wrote: post #41

Earlier quoted context omitted.

Agreed, but that's actually a separate problem. There are so few CEOs relative to average workers that their aggregate pay isn't enough to explain why workers in the west aren't experiencing wage growth.

Actually, in some of the most egregious examples (Walmart), management and/or owners are paid enough to make a real difference in what workers are paid. The six Walton heirs hold as much money as the entire bottom 42% of Americans combined. A pay raise of $2/hour for every non-management Walmart worker (raising hundreds of thousands of people out of poverty), and/or giving them reasonable benefits, would not change t…

According to the wikipedia 2013 stats, WMT has 2.2 million employees and and Walmart family owns "over 50%" of Walmart (let's assume 50%). 2014 net was 16 billion but 6 billion was paid in dividends to shareholders. Assuming a 2000 hour work-year, if ALL of the non-dividend was spent on wage increases, that's a $2.27 extra per hour all 2.2 million employees could get.

Well, boards often approve costly "incentive plans" for employees, but would a board approve 10 billion dollars to be distributed to employees every year? What would that mean for the future stock price?

Keep also in mid the other 50% ownership - probably pension plans funds.

You also mention already accrued wealth in form of stock, not income originally. How would distributing that work exactly? Would you add some kind of extraordinary tax on every WMT stakeholder? Their dividend alone (6 billion) is not enough to cover the wage increase.

Re: Capitalism Has Gone Off the Rails

#98

Post by adventured » Mon, Nov 03, 2014, 10:10 AM UTC

nostrademons wrote: post #74

adsenseclient wrote: post #64

Earlier quoted context omitted.

I am curious to know the proportion of GDP generated by publically vs privately owned companies in the US and how it has changed in the last 150 years

It's possible to estimate this using public, easily Googlable data: http://www.google.com/publicdata/explore?ds=a7jenngfc4um7_ Total U.S. GDP is about $15T. Of that, $8T is compensation of employees, so roughly half accrues to wage-earners (this ranges from the janitor to the CEO, but is probably exhibits a bit less inequality than returns to capital. $5.6T is gross operating surplus: this is profit that accrues to i…

Just a small correction. US GDP is closer to $17 trillion. Going by the IMF and World Bank.

Re: Capitalism Has Gone Off the Rails

#99

Post by jvm » Mon, Nov 03, 2014, 10:20 AM UTC

adventured wrote: post #96

tormeh wrote: post #80

Earlier quoted context omitted.

Japan has stagnated because its working age population is in decline. Apart from the demographics, Japan's doing great.

Japan is in dire condition in fact. They've stagnated because instead of generating real growth, they were faking continued prosperity by accumulating massive sums of debt. It was all meant to cover the fallout from the late '80s / early '90s asset bubble exploding. Debt servicing costs are roughly 23 trillion yen, compared to tax revenue of 45 to 47 trillion yen for 2014. So half their budget is now just going to pa…

> Things are so bad they've taken to destroying the Yen to buy a very short amount of time, which is accelerating the overall erosion and rapidly dropping the standard of living in Japan

This is an interesting perspective. If the falling yen is so bad for consumption, why is the yen anti-correlated with equity performance? Equity performance should be a measure of real expected national income. If a falling yen meant less income, equities should drop as well, just as inflationary shocks in the 1970s were met with sagging equity prices.

Also the Nikkei is up roughly 50% from the time Abenomics was announced in late 2012.

If you are correct that Abenomics will fail, you should be able to make a killing in the markets.

Re: Capitalism Has Gone Off the Rails

#100

Post by vegancap » Mon, Nov 03, 2014, 10:21 AM UTC

Classic case of 'not looking at the bigger picture'. If you look at standard of living in the west, since the industrial revolution, it's increased exponentially, massively. More than anywhere else in the world, and it almost directly correlates to the more economically free parts of the world.

Yet every time there's a minor blip in that massive, massive rise in wealth and standards of living, people band together t blame Capitalism, forgetting the massive improvements to quality of life it's given us.

Actually what we have now, despite all that is somewhat broken and it's not even Capitalism in its truest sense. We're constantly battling against the feverish symptoms of Corporatism. Big business bail-outs, state monopolies, printing fiat currencies and the inflation it causes.

So whilst there are problems, don't blame 'Capitalism', blame those who try to 'improve' or 'skew' the heart of Capitalism. Which is free-trade, entrepuanlerialism and innovation. Not price fixing, inflation or quantitive easing.