/biz/ - Business & Finance

When the poorest people can't fulfill basic human needs.
>low minimum wage
or
>unemployment

There isn't anything bad with the inequality of income. The bad thing is the things that artificially increase that inequality like lobbyism, bailouts, etc.

>>773659
When people can't live as people.

I'm not on minimum wage and neither is my partner, and we just about manage to get enough money each month to pay rent, electricity and utilities and food. We go out for dinner or a movie maybe once a month if we've had a good month of saving, that's it.

I can't imagine what it would be like to be on minimum wage, they have every right to be angry.

>>773659
My friend has a son and he worked minimum wage for a while
He stopped because it literally isn't enough to live on, unemployment pays better
that's a problem

Income inequality insulates the upper classes from societal instability and environmental collapse. Things like crime can rise without well-off neighborhoods noticing it. By the time shit gets really bad within a civilization and the lower classes start to revolt, it's usually too late. I don't think the USA/UK/Oz is close to having this occur yet, but it is an issue. A less educated and unhealthy labor force is not good for productivity or social mobility, making income inequality a sort of positive feedback loop where the rich lobby for government spending on things like private schools that keep their kids in the cycle of nepotism, which also negatively affects productivity.

I can't name a specific point where it becomes bad. I'm not a communist or laissez faire, I support a mixed economy like any realistic person, but decline comes in shades, I guess.

>>773659
When the US finishes killing its middle-class

Your inflation and CPI are also the wrong way round

Have fun with that

>>773699
Australia has the second-highest IHDI in the world, don't group it with the US.

>>773659

It doesnt.

Someone being richer, doesn't make you poorer.

>>773732
>2015
>doesn't know how Fiat Currency works

>>773713
I am Australian, and income inequality certainly isn't as bad an issue as in the USA or UK. The only reason I grouped them together is because they seem to constitute most 4channers, have similar cultures, and are all developed nations. I can't comment on economics in Bumfuckistan because I've never been there.

>>773659
"Erst kommt das Fressen und dann kommt die Moral"

When the richest people can only use their wealth to gamble in the securities market rather than improving their quality of life.

When the only valid use of your income is to invest gratuitously in assets

When their utility from one more dollar is exceedingly close to zero.

All of it is flaky, whimsical shit that can't be quantified. Someone draw us a Lorenz Curve and try to draw a line in it with the exact point

>>773688
It's a problem
But it's not my problem

At any level, it makes it less efficient to support the population with a given amount of resources.

Think about it, if you have 100,000 dollars a year, is it more efficient to give one guy 90,000 a year and one guy 10,000, or is it more efficient to give them both 50,000. Realistically, the more even distribution will increase overall quality of life.

>>773659
Absolutely.

And if employers think you're only worth 10 cents an hour that's what you should be paid.

>>773659
Soon.

>>774347
git gud @ economics, this is literally tumblr tier

> measuring by quality of life and not by rate of return/growth

>>773659
Centralised capital isn't as mobile as decentralized capital. This is bad for demand.

>>774411
>>774347
Also
> GDP is an amount that someone needs to "give" to people, and not something that is produced by efficient factors and skillful entrepreneurship

>>774419
>don't share enough money
>country now has a serf class
>army performs poorly because it draws from these serfs
>lose against the Japs
>lose against the Germans
>Communism

>>774416
Centralized capital creates supply with enough size for economies of scale to occur.
Your turn Mr. Commie.

>>774431
I like your style. You're like a non-sequitur machinegun.

> Poor army just like China's serf army
> Those SJW cucklands, invading anyone

>>774440
>machinegun
I guess my post was russian

>>774432
A) Bill Gates makes another billion
B) 100,000 people make 10,000 dollars each

Who spends more?

>>774448
Of course that is true. Poorer people have higher Marginal Propensity to Consume (MPC). That's why shithole countries like mine stimulate demand by giving poor people money. This shifts Aggregate Demand to the right, generating inflationary pressure while temporarily increasing quantity sold (GDP).
My measure, if the economy can promise an adequate return on investment, would increase Aggregate supply, which reduces inflationary pressure while increasing GDP.

>>774454
I'm not saying we should just distribute everything evenly. My point is simply that pure free market economic philosophies always have some undesirable macroeconomic effects.

>>774454
But inflation is effected by income elasticity of demand , so it wouldnt generate inflationary pressure except on luxury goods.

>>773670

this, but beyond this, really the key issue of it all is when the top becomes so top heavy that the bottom are keen to rebel, ie the crime in Brazil and Mexico.

as long as there is a sliding scale, graduating income, and controls on abuse, a society is just fine.

USA is gonna be in trouble if we don't make some changes prior to 2020. economic collapse and/or criminal rebellion.

>>773677

also this. very good point.

in a perfect world we would not need minimum wage, overtime laws, workplace safety laws, etc..

people would just use common sense and care about their fellow man in an altruistic manner.

but this Merica, and this is capitalism.

>>773732

> tfw when you realize everything we have in life is simply a basis of comparison
> tfw when you realize your happiness is simply a comparison to the established norms of your time
> tfw when realize dragging another person down is perfectly equal to rising yourself up

sociology

>>774463
> undesirable
> mfw

>>774478
I like you

>>774467
According to the definition of normal goods,
as income rises, demand for normal goods (all but inferior) increases.
Inflationary pressure is put on all but inferior goods.

>>773659

at the point we are at right now.

no one has any money to spend and our consumption driven economy is pretty much dead.

the republitards think that rich people make jobs.... the truth is that consumption of goods and services create jobs and the .001% of people in this country that own shit tons of wealth can't outspend the middle class of the 1950s through 1980s. thats why our consumption economy has been in the shitter for 30 years.

>>773659

Whenever the gap becomes so wide that it limits class mobility. The poor have no incentive and lose hope, production falls off, the government has to give massive hand outs to keep these people from going postal

>>774494
No no no. People spend on luxuries and vacations. A single guy doesnt need 2 apartments. A family doesnt need 2 houses. Eating out? Luxury . Food in the fridge? A need.

Im saying the pressure will only effect luxury goods and services and its fine if the prices of those gp up because that creates more business opportunities whereas a sudden increase in the price of corn just causes hunger

>>774496
> consumption of goods and services create jobs
Y=Consumption+Investment+Govt.spending+eXports-iMports = Pricelevel x Velocity of money
Not even the most communist approach backs your sources

>>774501
>The poor have no incentive and lose hope, production falls off, the government has to give massive hand outs to keep these people from going postal

See: Bread and circuses.

The citizens of Rome were unemployable. Not that there wasn't plenty of work to do, it's just they had too many rights. They couldn't be forced to work when they didn't want to. They could demand and get a decent wage. They had to be respected and had legal recourse if they were mistreated.

So there was massive unemployment in ancient Rome. Not that there wasn't plenty of work to do, it's just the people who did the employing liked buying slaves rather than employing Romans.

So, what do you do with a massive population that has no job, little money and nothing to do?

Bread and circuses.

>>774524
> the pressure will only effect luxury goods
apply yourself. Only the most basic of needs are fall in demand when income rises (ie. rice). Chicken, for example, would be a normal good. Why do you hate proteins?
Source: Literally taken from Nobel-prize winning communist P Krugman

>>774527
Consumption of goods IS velocity of money newfriend

>>774537
Supply and demand. If i get an extra 10k bonus i dont take on a sevond mortgage , I only need one roof over my head. I dont buy a second car , I can only drive one at a time. I dont buy double the amount of the same foods and let half rot.

I go on vacation and use a hotel , I rent a car or hire taxis and I eat out. I spend the increase income on luxury goods. Im not saying the demand for beans and rice wouldnt fall but you have to take it beyond "normal /most" and "inferior"

>>774454
But only rightward shift in long run aggregate supply constitutes a long term rise in gdp

>>774496
>tfw investment is the only way to boost gdp in the long run

>>774342

>Gamble in securities market

You apparently have no clue what Wealth Management actually does.

>>773659

when the poor bitch about it.

>>774534
>not joining the Legion
>205AD
>being this plebian
It's like you don't even want free land...

>>773659
We need an NGDP target that we achieve by just cutting every citizen a check every month.

>>774411
Why would I measure by anything other than quality of life for the population?

Money exists to buy quality of life, it isn't an inherent good.

>>774419
I never said that. I just pointed out that inequality makes the real effects of GDP per capita on the population less beneficial.

Hence why despite all the economic growth in Latin America, there is widespread and extreme poverty.

>>774545
Nope, it is the rate at which goods are exchanged. No goods need to be consumed, it just refers to transactions.

>>774552
> extra 10k bonus
You can buy another property as a rental, you can buy another car for your family. You'll buy better food.
All of those goods you say (vacation, hotel, taxi) ARE normal goods, and you correctly assume that demand will rise as income rises. But chicken, meat and pork too. mfw commies h8 protein

>>774591
precisely, that's why my country is shitty

>>774623
> Why would I measure by anything other than quality of life for the population?
Because that's how you hamper economic growth, and therefore, long term quality of life.

>>774623

And we reward those who contribute the most. It creates incentive. Otherwise there would be no reason to work or help society advance.

>>774630
Commies will kneejerk against this with their typical
> but muh humen rights
> society advance is wealth distreebuted

>>774633

I can tell you most Americans would be perfectly content doing nothing of any significance all day, every day. Ever see the movie Idiocracy? That's literally how the world would work.

>>774628
>>774630
I agree.

I'm not advocating a socialist system. It's been proven time and time again that a free market is the best way to provide for the common well being.

I'm just saying, all things being equal, wealth inequality is harmful to a society. Providing public services aimed at improving social mobility can increase both economic productivity and public welfare.

>>774636
kek. Of course, idleness is the egoist, rational* result to socialism

* in the instrumental sense

>>774640
> Providing public services aimed at improving social mobility can increase both economic productivity and public welfare
Authentically curious. Sources?

Bump

>>774642
Well, to give you one example, apparently providing vitamins to pregnant women in the third world and keeping the newborns and toddlers on a vitamin regimen for a while has a 25/1 profit to expense ratio. The vitamins help prevent birth defects and increase mental development, and the baby gets some extra IQ points and becomes more effective in the workforce.

For any kind of government program, investments > entitlements.

If you find a program like that that has a superb ROI but can only really be used by the government, that's the general kind of thing you want the government doing.

>>774646
> 25/1 profit to expense ratio
You are taking me to the dark side my boy. I like it.
More examples, please!

>>774650
The GI bill is another good example of this. I don't have any numbers, though. You prove you're worthy by being honorably discharged from the military, and the government will fund your education, making you a more valuable member of the economy.

>>774650
Well, health in general is full of things like this.

If you give kids good sex education, the reduced prevalence of STIs (read: more workers paying taxes) and unplanned pregnancies (read: less ill-behaved, criminally inclined little shits) will net you increased income tax returns over the long term.

If you want even more devious and capitalistic examples, look at how Japan and South Korea industrialized in the 1960s. The government picked competitive looking businesses (read: friends of the regime) and then made sure they could compete in the global market. They picked and chose sectors of industry to promote and did all kinds of dirty shit like negative interest loans, strike breaking, and allowing firms to run short term losses so they could build up long term capability. You had the economy of Japan growing by like 12% a year in the 60s.

Of course, both of these massive economic booms ended in serious busts, but not before they'd taken the entire country from rags to riches.

http://en.wikipedia.org/wiki/Miracle_on_the_Han_River
http://en.wikipedia.org/wiki/Japanese_post-war_economic_miracle

>>774656
Anytime the debate on sex ed in schools comes up I always refer people to this image.

What can you tell me about the sex ed program in states with the highest birth rates?

>>774660
God damn.

I have a whole new respect for New England.

>>774661
Hell yeah, the South might be warm but we don't have to deal with the people.

>>774665
It's a shame there seem to be no jobs Northeast of Massachusetts.

And I refuse to live in Massachusetts. I'm a cross boarder from /k/. No AWB for me.

>>774666
Yeah, I'm from PA and considering moving to New England after school.

PA isn't bad though. Just a lot more hicks and hillbilly shenanigans, but that gives it character.

>>774669
You could head down to Virginia.

The economy usually goes pretty well here and the people are friendly. Just avoid NOVA.

>>774660
/texas/ here. Sex ed is non-existent in public schools. You get the standard, creepy videos on puberty. Health class in high school will mention the fact that unprotected sex can make a baby.

And that's it.

The burden then gets laid on teen's initiative to learn about safe sex practices and their parents. Since teens are retarded, they don't learn anything by themselves. And since the state is very conservative when it comes to sex ed, most hormonal, horny, stupid teens are told by their parents simply to not have sex. Few even mention what to do in the event that they do have sex in order to prevent STDs and pregnancy.

>>774672
/o/ is my home board.

Going over 80mph or over is a Class 1 misdemeanor in Virginia, which is as close to a felony as you can get. That's completely unacceptable. I cruise at 80mph on the PA turnpike. This is the cool thing about the U.S. though, you basically get to pick whatever set of laws you want.

>>774676
Teens are gonna fuck, no matter what. If they don't get how to prevent kids, kids are gonna happen. It's literally that simple, and there's no excuse for the south's refusal to teach safe sex practices.

>>774680
I'll tell you from personal experience that nobody South of the Mason Dixon line obeys speed limits.

>>774345
ayn rand detected
go live in your isolationist world
i'm sure you're too good for peasants, right?

>>773659
>argues you should be paid minimum wage for minimum work

>overnight minimum wage is sky rocketed to $200/hr

>argument is trash now

>>773928
>I can't comment on economics in Bumfuckistan because I've never been there.
We're doing alright, pretty meh but compared to the majority of Europe we're doing great. Rea; wages have been slow to pick up after the recession but in the last year they're starting to rise

>>774347
You are suited to be a utilitarian. You'll enjoy reading about it and JSM

>>774650
instead of buying a car worth £50,000 you could prevent 1,000 people becoming blind.

>>775494
>>774654
>>774656
I'm worried about the accounting of these policies: how to measure the real impact in monetary terms?

>>773686
in south africa we have camps of poor people were rent is super low(R400 a month) they also tend to have cattle or form mini communisms to survive

>>775510
That's what a responsible government does with their investments. You can't just throw the money out and hope for the best.

Sadly, there's a lot of muh feels in public policy, but you do get people that actually try to assess the results of government policy and adjust accordingly.

http://en.wikipedia.org/wiki/Evidence-based_policy

>>775518
>form mini communisms

>>774496

This guy gets it.

Jesus I wish more people could understand this.

>>774660

> Nobody wants to fuck in cold weather

what this chart really means.

>>773659
Where the US was in 2010.

>>774501
...because this.

>>774454
>>774496
Pretty much these.
http://blog.mpettis.com/2014/03/economic-consequences-of-income-inequality/

As for the solution of increasing aggregate supply, that's exactly the problem. We're in a vicious catch-22 where we have a shitload of capital floating around, but it's mostly going toward speculation rather than productive investment. Why? Because businesses rationally cut back on investment in an economy that doesn't look like it has much future consumption capacity, and the economy ended up like that partly because at a certain level, high income inequality leads structurally to lower overall consumption.

>>773699

How does being rich protect a person from environmental collapse?

>>775519
THIS SHIT IS LIKE ME MADE POLITICS

I always giggle when I see americans talking about minimum wage.

We don't have mininum wage here in Italy, yet somehow we end up as communists, along with the rest of Europe, in pretty much any discussion involving basic human rights like healthcare.

Lol.


Oh, by the way not having minimum wage somehow hasn't made it so that everyone is working for 10 cents an hour as most liberalfags would predict.

Guess what, that only happens if you're a shit tier factory worker which could be easily replaced by a mindless robot, and luckily most people couldn't - they add at least SOME value with their work.

Which is precisely the point of technological progress, by the way.
What the fuck kind of job is it to move a piece of metal from slot A of machine 1 to slot B of machine 2 all day every day.
If that's not handled by a robot, you're doing it wrong.

>>773686
I work a minimum wage at 28 hours a week, but I do fine.

>>776422
You must live in Seattle.

>>776424
No, Utah. Why do you say that?

>>776432
>.
$15/ min. minimum wage.
There is no way you are "doing fine" on $400/ paycheck. The cheapest rent in shitty 30+ year old apartments in TN where I live is around 500. Unless you are splitting an apartment or house with a ton of people like a poorfag.

>>773659

The premise of OPs question is simply wrong. It's based on the premise that income inequality actually exists. One can easily be misled by statistics that it does exist because it's clear that different people make different amounts of money - but that tells you nothing.

More or less, people are paid based upon the demand for and the profitability of their skills as well as their ability to deliver on those abilities.

Now, the reasons people don't reach the point where they're making bug bucks varies quite a bit from education to desire to competing priorities and everything in between. Some things are in our control while others are not.

Of course there are (pretty rare) exceptions but the truth of the matter is, the only thing stoping a lot of people from putting themselves on a path to make more money in whatever it is they do - from employment to investing - is themselves.

I've also found that a lot of people complaining about income inequality are young millennials raised in a world of non-competitive sports and gold stars for effort who are shocked at this idea that they aren't handed a six figure salary out of college. Then there's those working in shitty low paying jobs that anybody could do that think they should be paid more. The former might have the mental ability to reach higher income after they've humbled themselves a little bit. The latter simply lacks the education to understand that to acheive fincancial success, it takes deliberate decision making over one's career.

"Inequality" never really enters the picture here because that word implies there's nothing anyone can do to change their situation. That's complete bullshit and the money is reserved for those who've figured that out. There's nothing unfair about it.

>>773659
Also - the fact that people don't make the same amount of money is actually good for the economy because it drives people to seek jobs that are in higher demand and thus results in the production of more of the things people want.

If everybody were paid the same - people would go for the job that was the easiest for them and not struggle towards what is in higher demand, resulting in more shortages of what people want, increased prices for those things due to decreased supply and ultimately, a damaged economy that lacks the ability to effectively deliver what people want.

>>776439
That depends on one's definition of what "fine" means. Some people feel cramped in a 3000 sq foot McMansion. Others live in a fucking 400 sq foot trailer and are happy as can be.

>>776467
Some inequality is tolerated by the market, but when you reach the point where the vast majority of people are living on subsistence wages or less and an extremely small minority are sitting on more money than anyone could ever possibly spend, it's going to hurt consumption which will ripple throughout the economy.

Higher wages put more money into the hands of people who will spend it immediately, it's stupid to ignore that fact.

>>776463

Yeah yeah, we know you're from /pol/ and you hate all your friends that got laid at OWS, but there are no amount of mental gymnastics you can do to deny that income inequality is a thing. You're coming in here trying to start /pol/ shit about how income inequality is justified with this fedora-tipping fiscal Darwinism shit, when all people are concerned with in this thread is how fast the inequality is changing and what the threshold for inequality in a stable society is. Stay on topic my man

>>776494
People who make minimum wage can't afford a 400 square foot trailer. They can afford slums, but only if they have Section 8.

>>776463
Most of what is in this thread is wrong because it's biased by unrealistic leftist internet politics. "Income inequality" is false concept that's a big circle-jerk for self-loathing closet communists when the real problem is wealth inequality. Healthy capitalism is based on meritocracy that naturally develops as income inequality. What we have now in the U.S. is a vampire economy where very few people control vast sums of wealth and exercise the power of it over the rest of us, a plutocracy which is capitalism in it's worst form.

>More or less, people are paid based upon the demand for and the profitability of their skills

That's sounds pretty fair though when it's abused- and it always is nowadays in the form of legal loopholes like "outsourcing" and "immigrant workers visas" businesses rape the local economy to unfairly concentrate wealth for themselves at the expense of others. And they do it legally because they themselves make the laws. "Survival of the fittest" becomes an excuse for psychopathy.

tl;dr: nigga, please. The U.S. is the richest country in the world, everyone who works here deserve a living wage. Fuck all this other nonsense.

>>776508
I have never considered the distinction between wealth and income inequality, but I think you're right. They're both bad for the economy if unrestrained, but I agree that wealth concentration is the real driver of inequality both economic and social.

>>776508
> when it's abused- and it always is
> legal loopholes like "outsourcing"
> businesses rape
> unfairly concentrate wealth at the expense of others.
> psychopathy.
pls go.

If you really care so much about corporate ethics, then ask the customers who give them profits why they are buying from these enterprises

>>776516
Because they pay them so little that they literally can't afford to shop anywhere that doesn't game the system to lower prices, c.f. Walmart.

>>776504
I see a lot of hate, sarcasm, straw men, and ad hominem in your post. This is a good start because it demonstrates some amount of defensiveness because whatever I wrote challenged your sense of the world and perhaps changes your mind just a little, which is scary to you so you lash out.

>>776523
You're complaining that you don't like the tone of his post instead of explaining why you're not wrong.

>>776498
Or stupid to ignore history. There was no shortage of jobs and income in the United States from 1941 to 1945. People made a lot of money. But they didn't have anything to spend it on because everything was rationed and many factories were in war production mode. What happened in this situation? The same thing that happens in any situation where money is plentiful and desirable products are not - things just cost more. AKA inflation.

The same thing happens when wages are equal because everybody has the same amount of money and no desire to produce the things people want to buy. Hence shortages, hence increased prices, hence the money you're making is worth less because you have to use more of it to buy the things that you want. AKA Inflation. This is pretty simple economics.

>>776508
>tl;dr: nigga, please. The U.S. is the richest country in the world, everyone who works here deserve a living wage. Fuck all this other nonsense.

You're right about something here. The US is the richest country in the world. So rich that even the poorest here are in the top 10%. Poor people have fucking cable and eat themselves to obesity here. Americans have no idea what poor is. They just know from their brand loyal, consumer driven culture that they don't have enough to buy "that" so instead of trying to figure out how to get enough to buy "that", they complain that they are poor beyond comprehension while they wait for a living wage at their burger flip job and watch government subsidized cable on their days off while texting their friends on their government subsidized mobile phone about how poor they are.

>tl;dr: "nigger please"

>>776516
>>776520

This is bullshit too. Maybe a few Hollywood limousine liberals buy things for "ethical reasons" while the vast majority of us buy things because we fucking want it and it's the right price. Nothing will change that. Read it: NOTHING.

We won't go to a restaurant because they pay people "fairly" (whatever that means), we will buy clothes made by third world children and fuck the environment, I'm getting a Porsche as soon as I can afford it and flooring it bitch.

How do you reconcile this reality that the money and resources used to produce stuff you'll buy with it, can just materialize in order to support this imaginary concept of a "living wage" for work that isn't in high enough demand to pay that naturally?

>>776463
>It's based on the premise that income inequality actually exists

It does though.

There's a paradox in that it's good to reward those who produce more than others, but at a certain point, if not enough people can consume that production, there will be a lot more unemployment from lower overall demand, and then a bunch of angry poor people who will eventually force change.

Opinion about these angry poor people aside, income inequality is a serious problem and the focus should be on how to reduce it without warping incentives. Saying "fuck those hippies" doesn't change the fact that the economy depends on those hippies to keep buying.

>>776530
Not complaining. I'm seeing the bright side in the post.

>>776544

>>776545
>if not enough people can consume that production, there will be a lot more unemployment

I'm not sure how paying people equally solves this problem. A so-called living wage only raises the bar of what a person living at the very bottom brings in every month. It changes the number, not what they can buy with it. In fact, if the "living wage" were measured in IPADs rather than dollars - what I'm trying to say might make more sense.

Say a living wage is enough to buy I dunno, 3 iPads a month. So you go ahead and give everybody at the bottom a raise so they can buy 3 iPads. But what happens the next month? Well, some of those living wage people actually build iPads for a living and paying them raised costs so it raised the cost of the iPad. It also raised the cost of their grocery bill because the guy at the grocery store is now making a so-called living wage too as is the farmer, the delivery driver, etc. They can't go to a restaurant for the same price either - the increased cost of paying wait staff has resulted in higher prices on the menu.

End result? The buying power of the person with the shittiest job ends up being the same as it was before. They have a higher number of dollars in their pocket but each dollar is worth less because so does everybody else.

The real goal in people's minds behind living wage is increasing people's buying power. How can you possibly do that by just increasing the money supply. The answer is you can't. Instead you increase the product supply which is exactly what many advanced western economies have been doing which drives down prices, increases efficiency and buying power goes up.

How many people complaining they don't have a living wage own a fucking iPhone or worse, the iWatch? How is that even fucking possible? Did the minimum wage make it possible or did the fact that expensive though those fuckers are, we're making pocket sized computers with more power than desktops a few years ago, for pennies on the dollar?

>>776565
Take something beyond ECON101 and come back to this thread.

>>776565
See my post here >>775622.

I'm not arguing for the concept of a "living wage" in particular, but the stagnation of purchasing power among the poor and middle class has bad and inescapable structural effects.

The most troubling problem for me is that what's good for individuals (thriftiness, being paid a lot more for more productivity), if it leads to too much concentration of wealth and income at the top, will be bad for the economy as a whole.

The two permanent ways to resolve higher income inequality are 1) more unemployment or 2) more productive investment. 2 doesn't seem to be happening right now. Just look at all the asset bubbles we have. So we're left with 1, and the nature of democracy is that 1 will likely get resolved in an unpleasant way unless something is done. Looking down on retards who buy iPhones on minimum wage doesn't acknowledge or solve the problem.

>>776569
Excellent contribution. I like the way you dotted the "i" in "this." Oh, that was your keyboard? Oh, ok... then I didn't like anything in your post and it is not becoming of the lesser sex to post things I do not like.

If you are indeed a man though, please consider losing some weight as fat cells produce estrogen and that hormone is well known to cloud judgement.

>>776574
I think the stagnation of purchasing power is a much more productive discussion to have and really gets at what the root of the problem people are ultimately trying to solve.

But the question is: is purchasing power actually in decline? I would argue the things available to buy for x % of your monthly income are better and more widely available than they ever have been in the past and that continues to be the trend. But with that increase in standard of living has also come an even faster increase in desire for more than one currently has. Hence, the perception that purchasing power is stagnant even though it is anything but.

>>776584
>is purchasing power actually in decline?

Overall, I would say it has since the 70s. Everyone knows about the real income statistics, so I won't bother to link to those, but note that the most drastic improvements we've had are qualitative advancements in computers and cars (which is why poor people buy iPhones), but the cost of many big-ticket fundamental things like real estate, education, and health care have skyrocketed.

This also doesn't address the problem of jobs. The biggest issue is that businesses have no reason to invest much in an environment of permanent lower expected future demand, which means more people will not have jobs.

>>776596
You bring some other good points. Namely real estate, education, and health care and increasing costs as a percentage of income. These are indeed real things. And it's another example of what comes out of a discussion geared towards buying power rather than the number written on a check every month that represents something we call currency, not to be confused with money.

So since we drop the focus on what kinds of paychecks people get for their work that is or isn't in demand, we instead focus on WHY some things are starting to cost more as a percentage of their income.

Now, is further expansion of the currency supply (living wage) the way to make those things more affordable? Or is tackling why those things cost more the answer.

Just throwing these out there as reasons those three things you mention cost more:

Real Estate - Credit is too availble even to unqualified individuals. Increases demand, supply can't keep up - prices rise.

Education - Federal and other aid even in the form of loans yield no immediate consequences to a school for raising tuition.

Health Care - Insurance removes the consumer mindset from the transaction. Cost is no longer considered so there is nothing holding back the price.

>>776612
Funnily enough, most of the stuff you mention are linked to debt, and that post I linked to points out that rising debt is one of the temporary ways that we get economic growth in an atmosphere of rising income inequality.

Things like 2008 happen once people run out of debt capacity and the economy is forced to choose either 1) unemployment or 2) productive investment, and when there is a lack of 2 you're going to get 1.

So removing the excess of credit from those areas would simply reduce unsustainable credit-fueled expansion, but it would not address the main effect of high inequality.

>>776618
To add more speculative comments, the costs of real estate, education, and health care would likely still rise in proportion to the paychecks of poor/middle class people given that the people getting wealthier at the top would be willing to pay more for them.

Education in particular gives a high ROI even with today's insane costs because of the way more income is captured by highly educated professionals. Rising inequality by itself would push up the value and therefore the cost of education.

Real estate is very likely to experience continual bubbles and busts under rising income inequality, regardless of loose lending standards, because the excess savings of the rich that are not redirected toward productive investment will find their way into speculative investment. For example, I don't think those wealthy Chinese people elevating Canada/Australia's property markets are taking out mortgages.

Healthcare is a whole another ballgame, so I won't get too much into it. However, the cost-distancing effect of insurance is likely not the main reason for higher costs given that people in most other developed nations are even less exposed to the direct costs of care but pay much less for healthcare per capita.

>>776439
Abloo bloo, why can't I live the American dream with a house in the suburbs, a homemaker wife, a dog, a nice car, and two kids in college while flipping burgers at McDonalds?

Someone needs to make sure I can afford the BASIC NECESSITIES OF 'MURICA

>>776577

Economics, though a liberal and social science, is still a science.

What you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this thread is now dumber for having read it. I award you no points, and may God have mercy on your soul.


>>776544
>[money and resources just materialize]

they don't just materialize. you take the materials and resources from the corporations and the rich owners... this can be done in several different ways and has a couple impotant outcomes... none of which are the magical materialization of anything except for a better standard of living and a booming GDP.

you take the money from the corporations and rich folk by imposing higher taxes, and higher pay rates for the workers, and possibly by limiting compensation at the top of the super manager hierarchy. this eats into their profits for the most part, but as all business have done for the last almost 5 decades (of no wage growth) the corporations will find efficiencies and ways to be quite profitable. corporate profitability is at an all time high again, even with flagging sales....

when you give a 5k a year raise to several million people in the US (effectively taking a couple million from super wealthy people that weren't going to spend the money anyway) that money is IMMEDIATELY returned to the economy as purchases for necessary goods and services that poor people were living without before.

>thisExplodesTheGDP.tiff
>thisCreatesJobs.exe
>thisLowersUnemployment.bmp
>thisExplodesTheGDP_v2.0.tiff

Any nothing is magically materialized out of anything. The economy just starts to work again... like it worked back in the 50s and 60s when we had a flourishing middle class and a healthy consumption economy. 1/2

>>776637

Our problem is that most of our citizens at this point are too poor to consume at levels that would be healthy for our economy. This is because of asset allocation by a very few rich individuals, and no rules forcing them to share their wealth or power. This is the end game of free market capitalism and it creates asset bubbles, market volatility, and kills the economy.

2/2

>>776577
This is the most autistic and cringeworthy post I've read on 4chan in a long time.

>>776637
>they don't just materialize. you take the materials and resources from the corporations and the rich owners... this can be done in several different ways and has a couple impotant outcomes... none of which are the magical materialization of anything except for a better standard of living and a booming GDP.

So let me see if I understand this correctly. By stealing capital from people who have proven they are extremely productive (tens of thousands to millions of times more productive than average people, even you or I) and adept at allocating capital and giving this capital to people who are less productive (we know they are less productive because they are paid very little) and less adept at allocating capital then standards of living will rise and the GDP will boom? That does sound magical indeed.

Also, the 50s and 60s were not a magical time of communist triumph. America was king because the rest of the world was literally rubble. America was the only game in town so naturally all profit flowed to it. If America today decided it wanted to nuke the fuck out of Europe, China, Japan, the Middle East, and anyone else who's got two nickles to rub together you'd see another "golden age of prosperity" dawn on the land of the free. It wouldn't actually be an age of prosperity since it would just concentrate the world's remaining existing wealth in the US and not actually create any wealth at all but it sure would make America look like enlightened kings compared to the fallout ridden have-nots that would surround them.

>the corporations and the rich owners
>for the workers
>the super manager hierarchy

Go to bed Karl Marx. Your shit is a century past its expiration date and it's really beginning to smell.

>>776643
Objectively, rich people are less likely to spend their money than poor people.

So if you have to take money to provide public services (you do), it should always be from rich people primarily. For the simple reason that it doesn't effect consumer spending the way taxes on the middle and lower class do.

>>776648
Objectively, you're fucking retarded. Rich people spend nearly 100% of their money on investments. Where do you think that money goes? Poorfags spend their money on food and shelter. Richfags allocate their capital to improving businesses, hiring workers, producing innovative products and services, etc.

>>776653
>Rich people spend nearly 100% of their money on investments.

The problem is when this leads to harmful asset bubbles, as in what's happening right now, rather than investment that would lead to increases in productivity and aggregate supply.

Right now, we have an excess of capital and a lack of demand. The question becomes how we will resolve this problem. In the 30s, it was ultimately resolved through destruction of capital (market crash+WWII) and forcible political redistribution of wealth and income.

>>773659
Without regulations keeping the average Joe from starting a business, never. Wealth can be created, not just distributed.

>>776658
>Right now, we have an excess of capital and a lack of demand.
100% this.
Capital is thrown at anything new with a bit of potential because all the old ideas are exhausted. The problem is that the newer ideas receiving funding are not things such as fusion power, which can improve the whole economy by lowering the price of electricity, but apps like Instagram (no hate on that, just an example).

>>776636
This doesn't even make sense. He's talking about an apartment, just rent. Then you jump to all that shit? What?

>>776669

because poor people are always 100% at fault for their problems. /sarcasm

i whole heartedly believe that there is no such thing as a self made man. everyone who is successful is lucky. yes, wise investment and hard work are both necessary, but those 2 alone won't do it

>>776663
If incomes aren't rising for most people, the rise in consumption has to come through lending from the haves to the have nots.

>>776658
Forgot to say that having too much wealth concentrated into the upper portions of society also hurts productivity and GDP growth.

Because
>rich people buy financial assets with that money
>the financial industry increases
>draws talent away from productive industries
>increases the size of extremely volatile securities

Interesting article about it
http://www.economist.com/blogs/buttonwood/2015/02/finance-sector-and-growth

>>776674
While the not all poor people are a fault for their problems, many in fact have a solid hand in their own misfortune.

I can agree that no one is truly self made.

>>774660
We may be shitty drivers and generally shut-in pessimists in MA, but the one thing we do have going for us is that having a child would financially ruin us due to cost of living, so we're absolutely terrified of unsafe sex.

>>775627
>How does being rich protect a person from environmental collapse?
Build walls and a fortified greenhouse.

>>773659
When people stop working (like right now)

>>774448
Who invests more my keynesian friend?

Earlier in this thread people were talking about Evidence based-policy. I suggest to you all a book called A Path Appears: Transforming Lives, Creating Opportunity by Sheryl WuDunn and Nicholas Kristoff.

Basically it talks about macro and micro approaches to altruistic forms of aid. But instead of being a feel good-y suggestion of donating some food, they talk about the documented economic effect things like food security, sexual/gender based violence, and maternal and child health can have on economies abroad and domestically (speaking of the US)

For example, de-worming children in Africa is a cost effective way of keeping them in school, thus providing them with the social mobility to acquire economic opportunities to give back to their community, and this happens enough to where you see a macro effect.

Domestically speaking, there is research documenting the importance of maternal and child health, and that educating at-risk pregnant women and mothers on the do's and do nots of child care. It also mentions a study that suggests the amount of attention/nursing and words spoken around an infant impacts their vocabulary and ultimately their IQ. For low poverty communities this significantly impacts high school graduation rates, pregnancy rates, and crime rates as well.

tl;dr; real cool book on how you can be a raging leftist and still have good economic ideas.

>>776736

since when is investment an absolute good? especially when you look at the recipient of all of that money

>>776745
That was my point you can't take an absolute demand or supply side of the economy

>>776637
The person I was responding to: >>776569 was posting something idiotic. I was treating that with the seriousness that he took his argument. What else was I to do with a post like that? Respond like he was acting like a mature adult?

Now to your points, which are a bit more on par with a mature adult, your belief is based upon the idea that resources will move if a larger amount of currency is funneled into jobs that currently do not currently demand that pay. The problem with that is that currency isn't valuable - it represents value. In this case, it represents the value of the labor. The value of the labor does not change just because you force a larger amount of paper to pay for it. The value of the things people want to buy with that same currency does not change either. What does that even mean? More currency is required to do the same things you could do with less before.

Perhaps you get there by redistributing wealth. That's certainly a lot of people who believe that. It's also been tried before but I won't get into that. If you bought into that argument, you wouldn't have written what you did. Karl Marx is dead but his ideas are alive and well despite over almost century of evidence against them.

>>776653
I was in line behind some poor people at a gas station. They were buying $50 in lottery tickets. The gas station attendant was giving them "advice" on which tickets had better bang for the buck. I was laughing on the inside only because here I am, on my way to play golf. listening to two poor people give each other advice on how to get rich.

A little education in high school regarding basic money management skills would probably do a lot more to help these people than any wealth redistribution or currency printing scheme (AKA living wage).

>>776569
meet
>>776639

That's what I was responding to dude. See, I can tune my intellectual level based upon the people I am dealing with. He posted something idiotic and useless. I could either ignore it, write a paragraph he wouldn't read, or have a little fun.

I'm sorry you cringed. Have a shot of whiskey. It'll help.

>>776738
The issue is like this.

Rightists think that the government can't do anything right. Leftists think that business can't do anything right. The reality is that you need both working in concert.

>>776637
> Quoting the 50's, when the world's productive capacity was concentrated in the USA, while Europe was destroyed and Japan was still nuked.
Also, read >>774454
, long term increases in GDP are only caused by shifts in LRAS.

>>776691
> Financial industry (or any FIRE industry)
> Not being an integral part of a society's capital allocation scheme
The financial industry generates a position in which savings can be safely invested into productive capabilities (stocks and bonds). The stock and bond markets are merely the logical conclusion behind free-floating sales and purchase of negotiable instruments.
Investors win because their liquid assets can now become productive capital. Industries gain because of their newly found access to capital, which they may use to increase productive capacity.
Only because its results are intangible does not mean that it is economic masturbation.

>>776439
Memphis?

>>773659
when it becomes too great, duh

>>774695
I bet you felt pretty proud of yourself with that comment.

>>776508
>living wage

When the masses can't buy what the rich produce.

>>773686
fucking commo

>>774695
^
cute lefties

>>775622
tldr: I'm just going to assume that you believe socialism will solve problems.

When aggregate demand drops to the point where it starts to suffocate growth.

>>778064
Shit nigga, AD is composed by many components
See >>774527
If prices are competitive, consumption demand will be replaced by world demand (ie. exports)
Low wages keep prices competitive, then the world buys from you. See: Chinese balance of payments

>>778243
one of which is wealth and income inequality.

>>778383
If that is your way of calling the consumption function, we agree. However, it is not the only source.

>>774471
>USA is gonna be in trouble if we don't make some changes prior to 2020. economic collapse and/or criminal rebellion.

Do you have any recommendations?

>>773659
>>ITT : people waving a magic wand to magically eliminate any effects of the theory of competitive advantage

We'd have a lot more horses around today if theyd had the opposable thumbs to drive tractors.

In a society where the government doesn't over-restrict business, one person making money has no affect on another person, plain and simple.

>>774660
BASED MASSACHUSETTS

>>778442
>In a society where the government doesn't over-restrict business, one person making money has no affect on another person, plain and simple.

This is so stupid you're either trolling or a libertarian.

>>779126
>the thought that the rich guy making money is making me poor is so ingrained in my mind that I can't even think of an argument to defend it

>>779143
>>I believe that altering one part of a system has no effect on the other parts.

Yep, that's how stupid you are.

>>779143
>Wealth distribution has absolutely no effect in micro or macro-economics

Let's translate this into some other job fields so we can properly display the full extent of your stupidity.

>One atom spinning around has no effect on another atom, plain and simple
>One football player has no effect on the others on the field, plain and simple
>One band member's playing has no effect on the other band members, plain and simple
>One number in an equation has no effect on another number in the equation, plain and simple

>>779164
>>779185
There's obviously factors like competition, but him having a dollar doesn't mean he took it from you or that you can never have a dollar. Zero-sum fallacy.

>>779255
>There's obviously factors like competition,

Right, so one person making money does have an effect on another person. Glad we're in agreement then.

>but him having a dollar doesn't mean he took it from you or that you can never have a dollar. Zero-sum fallacy.

Never said anything of the sort, but good job exercising those ego-defence mechanisms.

>>776439
It's because he's living with his parents. Minimum wage isn't so bad when you having no living expenses. It's fucking hell though if you have rent and bills to pay.

>>774534
The never ending growth of the entertainment industry (cinema, music, film, tv, radio, vidya, comics, manga/anime, toys, sports) pretty much supports your theory.

>>774478
I wish it wasn't as simple as that, but the mere fact that in every product or service one could possibly buy, there is always a "luxury/exclusive" version of that makes it very clear there exists a huge drive in our society to consume things other people can't consume so we can establish ourselves as superior. anon tries to outwit anon #2 with edgy comment so he can feel better, in real life Jones merely tries to outspend his neighbor.

>>774595
WM is a status symbol at this point.

>>776463
Inequalities do exist. You are refusing to look at the problem in the eyes.

>>776508
That is interesting.

>>776531
War economy. I'd rather not we go back to that method of boosting the economy, Mr Speer.

>>776584
>>776596
I can't believe I don't have this backed up but I once calculated the (average hourly wage for low skill entry level job) / (simple McDonald's menu).
Basically how many meals does an honest hour of work costs? From several it drops to basically one now.

>>776653
You are reasoning with the mindset of a 60s investor:
invest > hire more workers >build new and (more of it) stuff > sell > ROI
But the 2015 version goes:
invest > fire workers > increase productivity/worker to compensate >launch social media campaign to compensate for loss of popularity > sell > ROI


Honestly I feel like I reached the point where I abandoned all hope of "making it" while being productive to society and make it better. I seriously wonder everyday If going into full selfish mode is worth it? Anyway I look at it, becoming really financially independent and wealthy involves contributing to what fucks middle/lower-classes, the environment and future generations.
Anybody else feels conflicted about it?

>>779185
Warren Buffett has decried redistribution of wealth....to the upper class in the United States who can buy politicians to change tax laws and provide corporate welfare.

I am the fucking job creator. If I earn more money I spend more. If I spend more, the fuckhead "leaders" as the HBR calls them, will hire more people to make whatever I am buying more of. I am the fucking job creator, not some CEO.

>>780674
>Anyway I look at it, becoming really financially independent and wealthy involves contributing to what fucks middle/lower-classes, the environment and future generations.
I doesn't have to be this way breh.

First time posting to /biz/, I haven't used 4chan in months now because I've been too busy working, working out, reading, and learning arabic. So I decided a couple months ago that I want to be rich. So I have come to you for advice, I've been reading books on finance, mutual funds, ect ect. I am going to be my own boss, a business owner. I'd like to start a business centered around green energy however I'm pretty sure that it's unrealistic. I'm 19, have no loans to pay, I pay $400 a month rent+utilities not including food, making $12.50/h USD as a landscape foreman with my mentor. Just finished a car loan and now have about 1 grand saved up. Going to start a youtube channel, bike across the country next year, and will also be starting a charity with that hot 501c for young athletes. If you could offer many any advice or reading material based on any of this shit, I'd appreciate niggas

>>780674
>invest > fire workers > increase productivity/worker to compensate >launch social media campaign to compensate for loss of popularity > sell > ROI
Is this what they teach in the classrooms these days? You kids are fucked if you believe this shit. Where do you even get this crap? You want me to prove you wrong or something? It doesn't work like that kiddo. It works the same way it always has. The way it did in the 90s, and the 60s, and the 30s, and the turn of the LAST century. How you do business and make money hasn't fundamentally changed since the patronage system in England.

>>782025
He's not that wrong about relative trends, actually.

Again, expectations of lower future demand means there's less need to expand production capacity. Profit margins are abnormally high these days due to cost-cutting (like what 3G Capital does).

>>774432

This image never fails to make me rage the fuck out.

>owned four houses
>I *am* the 99%

>>776637
>>776638

You're not making the choice you think you are. Redistribution isn't free; the bulk of money that will be taken from the rich and corporations will effectively vanish from the economy, maybe 10% of the money will actually be earmarked for productive use, and you'll have destroyed the credibility of the government in the process.

>>773962
>"Erst kommt das Fressen und dann kommt die Moral"

First comes food, then comes morality, for anybody wondering.