The Shuffle

No indictment here, just a consideration of costs/logistics. To me the most salient point about the proposal is its potential for a healthier, more robust society.

Isn’t it only more likely that a stable and healthy economy follows from there?

We should avoid debt. But there is also a great deal of human wealth we should take care not to squander.

Nooo we must have more big government spending and debt! What would the Obozos and Clontins of the world do without it? Maybe get real jobs?

Noooooooooooooooooooooooooooo

Obviously government spending = good and debt is never a problem, not one bit. We can have infinite debt just keep the big gubment welfare checks running! Keep printing the economy into prosperity! How dare you suggest we might even question gubment spending being perfect and sacrosanct??

Liberal leftism 101.

Keynesian economics, it takes more debt to eventually get out of debt. 2+2=3

Haha. More like 1-1=2

Other rumors go that since 1989 China has been accumulating all the gold. Perhaps the ‘grand theft state’ concerning Lybia was a way to compensate that. But these are rumors that are frustratingly unverifiable.

Cryptocurrencies came onto the market at the same time wthat these China gold rumors were at their peak.

Looking more into it, it turns out that real interest rates are negative, i.e. we save money by taking on debt. Interest rates are so low that cash loses value due to inflation faster than we accumulate interest. That won’t always be the case, of course, but it is also significant.

What are you comparing against? If QE pulled us out of the recession, it was absolutely successful. If it stabilized housing prices, increased employment, secured pensions, it was good for “main street”.

When you say it wasn’t successful, do you mean we’d be better off without it? Do you agree that the economy has recovered from the worst part of the recession? Do you think it would have recovered more without QE? Would the economy be stronger if the government had let a dozen of the largest companies in the US just go belly up. and let even more homes go underwater?

Source? What numbers are you using for this? Are you assuming a constant rate of growth in government spending? Borrowing? Inflation? Payoff? Show your work.

Forgive me if I overestimated the significance of supporting the gold standard to your position, but I read this claim to be that it was wrong to get rid of the gold standard, which implies that you believe it would be better to still have a gold standard. I picked on that because it’s pretty easy to show the flaws in the gold standard, so if your position also requires (either as a premise or as a consequence) the gold standard, rejecting the gold standard would be the easiest way to address it.

“Actually” means “fair” market value, what most people would pay for the house, realistically. Do you remember the 2008 housing market crash?

[youtube]https://www.youtube.com/watch?v=MesrrYyuoa4[/youtube]

The prices of houses, $600,000 were shit. During the last 30 years, contractors around the country were building “McMansions” with huge square footage, in places, towns, and areas that could not afford them. The mortgages made for these houses were never intended to be paid off, because the banking system was being rewarded and paid with fees for setting it all up. That $600,000 house was worth half its value, $300,000, or less. In many cases the houses are worth nothing at all. Because nobody can afford them.

Because nobody can afford them.

And why can’t anybody afford them, whether they are $600,000 or $300,000 ? Because the u.s. middle class disappeared, and is currently being replaced still, with minimum wage, part-time jobs, with no raises, no benefits, and no health insurance.

I’ve been reading articles this last year about the job market. Some articles say “there’s too many jobs and not enough workers”. But then you look into the details. Employers have unrealistic standards, shit wages, and practically demand that average people revolve their entire lives around a shit job with shit wage. Of course people won’t take the job, or, won’t hold it for very long. Turn-over is a problem for both employers and employees. Most companies are stupid in this regard. And jobs in large cities are categorically different than jobs in small towns or out in the country. Therefore many of the sweeping generalizations do not apply, except a few.

The rich have gotten wealthier, gutting the middle class, by digging into such markets as “the housing market” and its 2008 crash, or the tech market and “the tech bubble” in 2000.

The only hope most Americans have, then, is hyper-inflation to reset all debts. And if that happened, massive system failures would occur, as again, the rich and top 1% would be the first ones to transfer all their wealth to a different currency than the u.s. dollar. And if the u.s. dollar collapsed, the country would be rolled back a century, all “progress” gone and evaporated over night.

Fake wealth, propped up on the fake value of a dollar. Again, what is the real value? What if the real value of the u.s. dollar is 50% of what people trade it? What if nobody wants u.s. dollars? What if the u.s. dollar is not worth kindling your fire place? There are answers to these questions. Do foreign banks, countries, and people want u.s. dollars? With China, the answer is ‘No’. China demands interest payments on their loans to the u.s. to be paid for with gold. Real currency, real value. Something more substantial. Chinese then gain double on their loan, by demanding representation of value.

With gold, things are clearer. It becomes obvious who is inside and outside “the system”, the markets, the governments, and the banks.

Most or all other problems in the u.s. including this “shuffling” of people migrating between u.s. states.

When the economy down-turns, people quit moving and migrating. And they begin investing in their own families and kin. Because at least then, people know where their money and investments are going, rather into corporations, into banks, or into the government.

Side-point:

Facebook.com is not worth $1,000,000,000.00. It’s worth 50% or less. Why? Because internet websites and such, anything dominated by marketing and advertisement, is false-value. A “commercial” is worthless. It isn’t real. It isn’t based on reality. These are images and propaganda, almost always, used to push people further into debt, by stimulating people to buy shit they don’t need, and probably don’t even want. Commercials have a net negative value in markets.

All marketing, commercial, and advertising, take that out of the market, and how much of America’s “value” is lost? How much value is true versus how much is false? How much value is real versus unreal?

Are you going to take a $1,000,000.00 loan out to run a few commercials on television and the internet? To sell some shampoo, or to promote the 2017 Ford truck, which is also worth half its advertised value? Waste of money.

Carleas wrote

Yes. Corrupt companies who only care about their shareholders and upper management need to croak.

I can accept this. What you describe afterward, though, is a case in which people bought houses at one price, and then something changed that affected the actual value of the house. A house might be worth $600k when credit is flowing, because that means more buyers who can borrow more money to buy a house. The same house is then actually worth less when the market changes, credit dries up, and fewer people are buying. What you described is an actual change in value caused by an exogenous change in the market context, which affects the liquidity of the house as an asset. The fair market value of the house changed.

I don’t think this is true. I’m under the impression that migration increased significantly during the Great Depression. Do you have a good source on this question?

That is not incompatible with the claim that a significant portion of the US economy is tied up in those companies, and that allowing them all to croak at once would also lead to the croaking of a significant portion of the US economy, which would have hurt everyone.

I basically think there’s a middle ground here. I think it’s possible to defend the bailouts and QE, and simultaneously think that we should have (and still should) break up any companies and industries that could put us in a position like that.

A lot has changed since the Great Depression, obviously. Most property is bought and taken up in the u.s. now. Cheap land is rare and becoming rarer with each passing year. So the era is different and un-comparable. During the Great Depression, poor farmers were forced off their lands, and moved, because they had nothing to lose. Today’s setting is completely different.

It’s common sense. When people don’t have much money, and limited options, they return home when desperate. The “boomerang kids” phenomenon of the Millennial generation returning to home after college with $30,000-$150,000 debts. They have nowhere to go. Now, today’s current migrations maybe because of jobs. If a great job opens up across the country, then yes, that may merit a move. But that’s rare, not common.

I remember during the 2010s hearing about individuals needing to commute 3 hours, one way, 3 hours back, to keep jobs. That’s desperation and bad sign of times ahead.

A $100,000 salary job is becoming a gold mine, harder to find and more difficult to gain access to. The baby-boomers are hanging onto all the high salary positions, unwilling to give them up, and keep working into their 70s and 80s.

The wealth is stagnating and not being passed around anymore, like all previous decades.

Oh, you didn’t pay $5 for a gallon of gas or pay 25% increases in all food costs due to shipping cost increases?

Urwrong, I basically agree with what you said, but I also think it supports my point: a poor economy doesn’t drive a lack of migration. I think the generational effects you point out are a large part of that, because in order for young adults to go back home, their parents have to well enough off that there’s a home to go to.

But it’s still the case that for most of these people, moving would improve their prospects of getting a job. Particularly if your local job economy sucks, it’s very unlikely that you already live in the best local job market. There are certainly many places in the country where there plenty of jobs. But it’s hard to move there when you don’t know anything about the cities, don’t have any connections to them, and have never really left home or spent much time with people from somewhere else.

I don’t follow. Are you saying price increases are inconsistent with the claim that things would have been worse if every major bank had gone bankrupt within a year? I’m not saying there wasn’t a recession, I’m saying that it was not as bad as it could have been. Do you disagree with that?

“QE pulled us out of recession”, wow. I mean really. Just wow.

  1. You’re misquoting me (and not just because you dropped the word “the”). That was the first half of a conditional statement: “If QE pulled us out of the recession…”

  2. I’m open to argument or evidence that QE wasn’t an important and effective part of the response to the recession. “Just wow” is neither.

The fact you framed it as a hypothetical doesn’t change that it’s the claim you’re making. It just allows you to make the claim more subtly, so as to blunt the argumentative edge of the position contrary to your own. People fall for this tactic a lot, I’ve noticed. NPR is one of the masters of it. I notice you also did it during the discussion on Shakespeare in the Park, holding back from openly making the claim that is clearly the claim you are actually pushing. But with me, I will always go right to the actual point being made, sophistry aside.

And to claim that QE 1-4 has been anything but an unmitigated disaster for the American people, but a huge win for banks and big government, is crazy. The game is rigged, and anyone who defends it either is protecting their own interest in it being rigged or is simply following the status quo narrative because that’s easier than thinking against the grain.

I think framing a claim as a conditional is useful and valid. In this case, Otto scoffed at the idea that QE has been successful and was good for non-bankers. I asked him what he’s comparing against, and then offered two conditional statements, to say, “if this is the context, then your implication that QE has been unsuccessful or bad for ‘main-street’ is wrong”. In context, they aren’t assertions, they are demonstrating that it matters what baseline we’re using to evaluate a claim like “QE has not been successful”. “Stabiliz[ing] housing prices” can still leave a lot of people in a shitty place, with houses worth much less than they paid for them, while still being a lot better for those people than some alternative.

And it’s a legitimate response to say, “I agree with the conditionals but I reject the antecedent”, and it’s useful because it moves the conversation to what the antecedent should be, e.g. without QE, X would be the case, and with QE, Y is the case, and therefore QE is unsuccessful.

I read Otto to be saying more or less that QE didn’t fix everything. I agree. I agree that the US economy isn’t in an ideal state, there’s a lot wrong with it, and the banking system is part of what’s wrong with it, and I lean towards agreeing that QE exacerbated certain problems with the banking system (but I haven’t looked into it and my belief is only weakly held). I don’t see any of these claims as incompatible with the claim that QE was successful, because I understand the goal of QE to be to inject liquidity in the market in order to keep consumer interest rates low. It has done that, and even if the benefits have been unequally distributed, the result for the average American has been net positive.

Can you provide evidence or argument beyond “just wow” to contradict any of that?

Reminder:

When people are suckered into a $600,000 mortgage on a $300,000 house, and after they spend 25 years paying it down by half, they still do not own the house.

That’s where America is at right now. The country doesn’t even own its own assets. The banks do.

How much actual wealth do Americans even own, as a percentage of the national debt and GDP??? What I mean, how many American assets are paid-off and not in debt?

25% maybe??? I think I’m being generous in this estimation.

Reminder:

A college education is not an asset. It is not a real value. It is not materialized. It is not a thing. And in most cases, you cannot resell it.

And why are we charging American youth to be educated in the first place? Isn’t it an obligation of parents, of teachers, of professors, of society, to educate their youth for free?

It’s like a parent charging his or her biological child rent after 18 years, for being born. “I brought you into this world, but you owe me $500 rent per month, for 18 years.”

Fucked. Up. You people are sick, and make me sick.