3 ms·

The poor are really pro at spending money. Then can turn trickle down into firehose-up and given the chance.

by SCAQTony 11y ago

TazeTSchnitzel 11y ago
This is an important difference between the rich and the poor. The poor actually spend their money.
- Aeolos 11y ago
  Which means that BI would stimulate the economy in a way that trickle-down economics cannot.
  - yummyfajitas 11y ago
    You understand that "stimulate" in the Keynesian context means "cause inflation and lower real wages", right? Why would this be a good thing in an economy at full employment?
    - Aeolos 11y ago
      > Why would this be a good thing in an economy at full employment? This is a strawman argument. Apart from (arguably) Switzerland, what other economy is at full employment? > You understand that "stimulate" in the Keynesian context means "cause inflation and lower real wages", right? 1. Real wages have been decreasing year-over-year since the '50s. BI would not change that. 2. This is the least of the worries for the 19.9 million Americans who live in abject poverty, and the many more who have to choose between paying rent, food or transportation (=cannot even afford to find a liveable job.)
      - yummyfajitas 11y ago
        The US is at 5.5% unemployment, the UK at 5.4%, Germany at 4.8%. This is the ballpark of the natural rate of unemployment. Do you really believe there is a significant pool of workers who are unwilling to work currently, but might work if we inflated away the value of their sticky nominal wages (thereby fooling them into thinking they weren't taking a pay cut)? Where are they? (1) is just not true. Real comp (which is actually what I should have said, since comp is what determines buyer and seller willingness to trade) has done nothing but increase. https://research.stlouisfed.org/fred2/series/COMPRNFB https://research.stlouisfed.org/fred2/series/COMPRNFB If BI did not change this then it would not be stimulus. So which is it?
        CuriouslyC 11y ago
        Just to be fair, you should include labor force participation when quoting those low unemployment numbers. If you include people who gave up looking for a job after the meltdown we're closer to 9% unemployment.
        vkou 11y ago
        Don't forget to add underemployment to the list - people who have jobs, but not enough working hours to survive. In the US, at least, an incredibly common opinion is that those people are scum, and deserve nothing. It's very strange to hear you call it the 'natural rate of unemployment.' The human impact poverty has on the unemployed is devastating. (Yes, there is also the working poor.)
        yummyfajitas 11y ago
        It's very strange to hear you call it... https://en.wikipedia.org/wiki/Natural_rate_of_unemployment https://en.wikipedia.org/wiki/Natural_rate_of_unemployment In the US, at least, an incredibly common opinion is that those people are scum I've literally never heard this opinion expressed. Certainly one can criticize the people you describe - they could work, but due to their pride or whatever, they refuse jobs because the nominal wage is too low. They refuse to solve their own problems so we need stimulus to trick them into doing so. But this is a fairly uncommon position - most people have no understanding of sticky wages and don't understand that stimulus is about lowering real wages, or that people could find a job if they lowered their nominal wage demands.
        vkou 11y ago
        > I've literally never heard this opinion expressed. Pretty much everyone who thinks that the unemployed don't deserve state entitlements (Typically, because of the poverty of their character). Nominal wage demands are held up at the bottom end by people needing to make a living wage. Yes, a skilled computer programmer asking for $7/hour could easily find work at the height of the dot-com bust - however, they'd still depend on handouts, be it from the state, or their relatives for survival. And when we move down the wage track, things don't get any better. How would people already receiving close to minimal wage attain employability by lowering their wage demands? This also only solve a problem for the individual, rather then society as a whole - it largely shifts unemployment around, and pulls everyone's standard of living down.

The poor are really pro at spending money. Then can turn trickle down into firehose-up and given the chance.

TazeTSchnitzel 11y ago

This is an important difference between the rich and the poor. The poor actually spend their money.

Aeolos 11y ago
Which means that BI would stimulate the economy in a way that trickle-down economics cannot.
- yummyfajitas 11y ago
  You understand that "stimulate" in the Keynesian context means "cause inflation and lower real wages", right? Why would this be a good thing in an economy at full employment?
  - Aeolos 11y ago
    > Why would this be a good thing in an economy at full employment? This is a strawman argument. Apart from (arguably) Switzerland, what other economy is at full employment? > You understand that "stimulate" in the Keynesian context means "cause inflation and lower real wages", right? 1. Real wages have been decreasing year-over-year since the '50s. BI would not change that. 2. This is the least of the worries for the 19.9 million Americans who live in abject poverty, and the many more who have to choose between paying rent, food or transportation (=cannot even afford to find a liveable job.)
    - yummyfajitas 11y ago
      The US is at 5.5% unemployment, the UK at 5.4%, Germany at 4.8%. This is the ballpark of the natural rate of unemployment. Do you really believe there is a significant pool of workers who are unwilling to work currently, but might work if we inflated away the value of their sticky nominal wages (thereby fooling them into thinking they weren't taking a pay cut)? Where are they? (1) is just not true. Real comp (which is actually what I should have said, since comp is what determines buyer and seller willingness to trade) has done nothing but increase. https://research.stlouisfed.org/fred2/series/COMPRNFB https://research.stlouisfed.org/fred2/series/COMPRNFB If BI did not change this then it would not be stimulus. So which is it?
      - CuriouslyC 11y ago
        Just to be fair, you should include labor force participation when quoting those low unemployment numbers. If you include people who gave up looking for a job after the meltdown we're closer to 9% unemployment.
        vkou 11y ago
        Don't forget to add underemployment to the list - people who have jobs, but not enough working hours to survive. In the US, at least, an incredibly common opinion is that those people are scum, and deserve nothing. It's very strange to hear you call it the 'natural rate of unemployment.' The human impact poverty has on the unemployed is devastating. (Yes, there is also the working poor.)
        yummyfajitas 11y ago
        It's very strange to hear you call it... https://en.wikipedia.org/wiki/Natural_rate_of_unemployment https://en.wikipedia.org/wiki/Natural_rate_of_unemployment In the US, at least, an incredibly common opinion is that those people are scum I've literally never heard this opinion expressed. Certainly one can criticize the people you describe - they could work, but due to their pride or whatever, they refuse jobs because the nominal wage is too low. They refuse to solve their own problems so we need stimulus to trick them into doing so. But this is a fairly uncommon position - most people have no understanding of sticky wages and don't understand that stimulus is about lowering real wages, or that people could find a job if they lowered their nominal wage demands.
        vkou 11y ago
        > I've literally never heard this opinion expressed. Pretty much everyone who thinks that the unemployed don't deserve state entitlements (Typically, because of the poverty of their character). Nominal wage demands are held up at the bottom end by people needing to make a living wage. Yes, a skilled computer programmer asking for $7/hour could easily find work at the height of the dot-com bust - however, they'd still depend on handouts, be it from the state, or their relatives for survival. And when we move down the wage track, things don't get any better. How would people already receiving close to minimal wage attain employability by lowering their wage demands? This also only solve a problem for the individual, rather then society as a whole - it largely shifts unemployment around, and pulls everyone's standard of living down.