4 ms·

How about more things? Credit, which was literally created to hose the poor. How about goddamn product marketing which merely has the effect 1) robbing poor p

How about more things? Credit, which was literally created to hose the poor. How about goddamn product marketing which merely has the effect 1) robbing poor people of their time and 2) jacking up costs of goods at the expense of 1? It's all wrong.

NiftyFifty 11y ago
Its a product for normal people, not those who are unable to manage their budgets. Oh wait ... crack whore money n shit. Keep forgetting about that.
dnautics 11y ago
I always thought credit was created by merchants to screw the nobility. If there's anything that screws the poor, it's inflation.
- eru 11y ago
  The poor don't have money. How does inflation screw them?
  - elchudi2 11y ago
    Prices of goods usually adjust quicker than salaries
    - eru 11y ago
      Do we have statistics on that?
      - dnautics 11y ago
        it's pretty much true all the time, except notably in the US during the 50-60s when we had wage led inflation. moreover, having wage increases lag price increases is a part of the policy reason for having state-driven inflation, in the name of employment. http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/?_r=0 http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hig... "Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."
- aidenn0 11y ago
  Inflation screws people with savings, which excludes the poorest.
  - dnautics 11y ago
    it benefits people with debt, but only if the interest rate is lower than the inflation rate. Who gets loans at low interest rates? The ultra-wealthy (more collateral), and banks. Moreover, wealthy investors can take advantage of instruments (margin trading, leveraged funds, forex, shorts, options) that are debt-based instruments that exist because of low interest rates. The wealthy are more indebted than you think, but in most cases it's very rapidly able to be liquidated. Do a simple math experiment: Imagine being poor and spending 90% of your income on day to day, inflation-sensitive expenses, versus being rich and spending 20% of income on these expenses. A 10% inflation for you means that now you are spending 99% of your income, resulting in a 90% loss in living margin. For the rich person there is only a 2.5% loss in living margin. (I picked 10% because that is an easy calculation, the effect is true at any inflation level). Now the common retort is that wages will catch up with inflation. But is that true? If that were, why would periodically increase the mininum wage? In fact, not having wages catch up with inflation is part of liberal economic policy (it's good for employment![1]): http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/?_r=0 http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hig... [1] I guess one good way of keeping employment metrics high is keeping your population enchained to a moving economic treadmill that brutally nudges them toward finding employment.
    - aidenn0 11y ago
      Let's play a game: you loan me money at 10% interest. Now, am I better off with 9% inflation or 1% inflation? Clearly the former, despite it being lower than the interest rate. Similarly, I deposit funds in a CD with 3% interest; am I better off with 4% inflation or 9% inflation? Clearly the former despite it being higher than the interest rate.
      - dnautics 11y ago
        You're better off with 1% inflation if you're spending 99 dollars out of 100 to stay alive. Do the math out. In one case, you will have to take out extra loans, in the other, you will not.
- lotharbot 11y ago
  Clarification, for the benefit of the sibling comments: inflation screws the poor because (1) the poor are most likely to be on either fixed incomes, or incomes where cost-of-living adjustments are substantially time-delayed relative to the increased cost of living, and (2) they're least likely to have any sort of hedge against inflation or sudden shocks to the system, such as having a paid-off house, a fixed-rate mortgage, adequate savings to handle an emergency, or investments in assets other than plain ol' US Dollars That Only Come In On The First And Fifteenth. The middle class weather inflation just fine -- they're likely to get yearly raises that outpace inflation, to have savings to be able to handle unexpected price increases, and to have at least some assets that keep up with inflation even if their liquid accounts don't. And the wealthy benefit from inflation, because their factories keep producing widgets but their labor costs go down relative to the price of widgets.
  - johnchristopher 11y ago
    Sorry, I downvoted your post by accident.
- dclowd9901 11y ago
  That may have been the original intent a thousand years ago, but now with its sophistication, it's become a highly-available crutch to the poor and middle class, putting downward pressure on wages and allowing banks and creditors to get a piece of every dollar someone spends. Not to mention, if you don't "play the game" and you abstain from using credit, you're still subject to the cost of credit, as merchants have to charge more for their products to cover the cost of credit processing (which is exorbitantly high).

NiftyFifty 11y ago

Its a product for normal people, not those who are unable to manage their budgets. Oh wait ... crack whore money n shit. Keep forgetting about that.

dnautics 11y ago

I always thought credit was created by merchants to screw the nobility. If there's anything that screws the poor, it's inflation.

eru 11y ago
The poor don't have money. How does inflation screw them?
- elchudi2 11y ago
  Prices of goods usually adjust quicker than salaries
  - eru 11y ago
    Do we have statistics on that?
    - dnautics 11y ago
      it's pretty much true all the time, except notably in the US during the 50-60s when we had wage led inflation. moreover, having wage increases lag price increases is a part of the policy reason for having state-driven inflation, in the name of employment. http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/?_r=0 http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hig... "Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."
aidenn0 11y ago
Inflation screws people with savings, which excludes the poorest.
- dnautics 11y ago
  it benefits people with debt, but only if the interest rate is lower than the inflation rate. Who gets loans at low interest rates? The ultra-wealthy (more collateral), and banks. Moreover, wealthy investors can take advantage of instruments (margin trading, leveraged funds, forex, shorts, options) that are debt-based instruments that exist because of low interest rates. The wealthy are more indebted than you think, but in most cases it's very rapidly able to be liquidated. Do a simple math experiment: Imagine being poor and spending 90% of your income on day to day, inflation-sensitive expenses, versus being rich and spending 20% of income on these expenses. A 10% inflation for you means that now you are spending 99% of your income, resulting in a 90% loss in living margin. For the rich person there is only a 2.5% loss in living margin. (I picked 10% because that is an easy calculation, the effect is true at any inflation level). Now the common retort is that wages will catch up with inflation. But is that true? If that were, why would periodically increase the mininum wage? In fact, not having wages catch up with inflation is part of liberal economic policy (it's good for employment![1]): http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/?_r=0 http://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hig... [1] I guess one good way of keeping employment metrics high is keeping your population enchained to a moving economic treadmill that brutally nudges them toward finding employment.
  - aidenn0 11y ago
    Let's play a game: you loan me money at 10% interest. Now, am I better off with 9% inflation or 1% inflation? Clearly the former, despite it being lower than the interest rate. Similarly, I deposit funds in a CD with 3% interest; am I better off with 4% inflation or 9% inflation? Clearly the former despite it being higher than the interest rate.
    - dnautics 11y ago
      You're better off with 1% inflation if you're spending 99 dollars out of 100 to stay alive. Do the math out. In one case, you will have to take out extra loans, in the other, you will not.
lotharbot 11y ago
Clarification, for the benefit of the sibling comments: inflation screws the poor because (1) the poor are most likely to be on either fixed incomes, or incomes where cost-of-living adjustments are substantially time-delayed relative to the increased cost of living, and (2) they're least likely to have any sort of hedge against inflation or sudden shocks to the system, such as having a paid-off house, a fixed-rate mortgage, adequate savings to handle an emergency, or investments in assets other than plain ol' US Dollars That Only Come In On The First And Fifteenth. The middle class weather inflation just fine -- they're likely to get yearly raises that outpace inflation, to have savings to be able to handle unexpected price increases, and to have at least some assets that keep up with inflation even if their liquid accounts don't. And the wealthy benefit from inflation, because their factories keep producing widgets but their labor costs go down relative to the price of widgets.
- johnchristopher 11y ago
  Sorry, I downvoted your post by accident.
dclowd9901 11y ago
That may have been the original intent a thousand years ago, but now with its sophistication, it's become a highly-available crutch to the poor and middle class, putting downward pressure on wages and allowing banks and creditors to get a piece of every dollar someone spends. Not to mention, if you don't "play the game" and you abstain from using credit, you're still subject to the cost of credit, as merchants have to charge more for their products to cover the cost of credit processing (which is exorbitantly high).