3 ms·

Your comment, particularly the part where you talk about "simply send that person $X and produce most of the same benefits" underscores your complete and utter

by jbooth 17y ago

Your comment, particularly the part where you talk about "simply send that person $X and produce most of the same benefits" underscores your complete and utter lack of comprehension of his post. Try reading it again.

mos1 17y ago
Thank you for saying this for me. I knew he was off the rails as soon as he indicated that my claims were based on an assumption of duration of employment. That statement only makes sense if you use the same model that the parent used, in which the only value captured is the worker's salary.
pg 17y ago
It would be better if you explained in a neutral way what you thought was the source of the misunderstanding.
- jbooth 17y ago
  Ok, although IANASS (not a social scientist) (edited to add: and sorry anamax for the uncivil tone, long day): Economic activity has benefits for society at large -- we get stuff out of it, and there's a feedback loop where more people with money in their pocket means more demand, which means more people employed, which means money in their pocket, etc. Recessions are when the economy gets out of balance (historically inventory oversupply, more recently it tends to be financial meltdowns) and that feedback loop goes negative -- less money in pocket, so less spending, so less production. Counter-cyclical spending is, according to economic theory, the one point in the cycle where the government should be encouraged to spend money like they're in vegas, up 50k and hanging at the strip club. Breaking this negative feedback loop is priority #1 -- debt can be paid back later, and if you've been breaking out your counter-cyclical toolkit, you've already lowered interest rates to near-zero so this is really cheap debt, 1% interest or lower -- if you produce any return at all, you've got a win in addition to the counter-cyclical effects. Once you've decided to spend, you've got to decide how. Giving money to people in lump sums (which was in fact about 40% of the bill, the bill was 40% tax cuts) is fast and simple, so it certainly has a place, but keeping people in a job is far more effective because you create externalities. That job is producing something of value to the economy, that person is gaining skills/experience leading to future employability, and assuming that business is ok, their labor might lead to additional job openings at the same company later. These are all sustainable improvements that build on themselves and contribute back towards that positive feedback loop. Just spewing money out to people without any targeting whatsoever can only be a brake on recession -- it doesn't really help lay the foundations for the bounceback.
  - deleted 17y ago
    [deleted]
  - mos1 17y ago
    Frankly, I don't think there's a need to complicate this discussion with mentions of Keynes or interest rates. Their error starts far earlier, at the basic measurement of value. Joe works at WidgetCo and makes $60,000/yr. His loaded costs are a little over $100,00/yr. WidgetCo pays this because his skills are worth about $125,000/yr to them, so it's a great deal. At this point, if you are a well-meaning, but rational cherub, what is the highest rational price to pay to get Joe working again? I'm guessing anything up to $125,000. ---- But that's not the end of our grossly simplified model. We also have the fact that Joe spends his paycheck on niggles. He fucking loves the shit out of niggles. As he consumes $60,000/yr of niggles, he personally pays for 1/2 of an employee at the niggle factory (and that guy spends his money on something too...) So now we have to recognize that if Joe loses his job, there's going to be a negative ripple effect, and if Joe gets a job, there's a positive ripple effect. So now, as a well-meaning, but rational cherub, what's my highest rational price? Well.. at this point I'd probably call in an economist to help me figure it out, but it's clearly more than $125,000/yr... it's likely close to $200,000/yr. ---- And now somebody hands me a "stimulus" proposal, and it turns out that I could create a job for Joe for about $150,000/yr. So let's see... $200,000/yr of value for $150,000/yr... sounds like a great investment to me! Very good value for money, even if it does lead to an annoying headline indicating "$60,000/yr jobs cost silly cherub $150,000!" ---- Obviously this is grossly glossed over (I didn't even mention the obvious fact that if people are buying widgets, they must provide value), and actual models of costs and benefits of various scenarios are quite complex, but I simply meant to demonstrate that simply dividing the total cost of a package by the number of jobs is silly, and misses the point widely.
    - hga 17y ago
      Isn't that an example of the "multiplier effect" ... which has never really been seen in the wild (or so I understand)? E.g. because on the other side of the ledger the government crowds out private borrowing (see my comment in this thread to byrneseyeview) and/or taxes others to get this money, plus this almost always is accompanied by attacks on businesses of all sorts, on Main Street as well as Wall Street. Extreme examples include 1937, when capital in the US went on strike and we had the Recession of 1937–1938 and didn't really recover until WWII changed the game. In serious times of trouble, can you point out examples where this has worked in more than the short term? It didn't for the US in the Great Depression, and Japan is now nearing the end of it's second lost decade (we through they were pulling out of it, but that turned out to be a side effect of the world wide bubble that popped a little later this decade).
tokenadult 17y ago
This is unresponsive to the idea that private actors individually acting in the aggregate may make many more better externalities than a few "targeted" government programs funded by deficit spending.

by jbooth 17y ago

mos1 17y ago

Thank you for saying this for me. I knew he was off the rails as soon as he indicated that my claims were based on an assumption of duration of employment. That statement only makes sense if you use the same model that the parent used, in which the only value captured is the worker's salary.

pg 17y ago

It would be better if you explained in a neutral way what you thought was the source of the misunderstanding.

jbooth 17y ago
Ok, although IANASS (not a social scientist) (edited to add: and sorry anamax for the uncivil tone, long day): Economic activity has benefits for society at large -- we get stuff out of it, and there's a feedback loop where more people with money in their pocket means more demand, which means more people employed, which means money in their pocket, etc. Recessions are when the economy gets out of balance (historically inventory oversupply, more recently it tends to be financial meltdowns) and that feedback loop goes negative -- less money in pocket, so less spending, so less production. Counter-cyclical spending is, according to economic theory, the one point in the cycle where the government should be encouraged to spend money like they're in vegas, up 50k and hanging at the strip club. Breaking this negative feedback loop is priority #1 -- debt can be paid back later, and if you've been breaking out your counter-cyclical toolkit, you've already lowered interest rates to near-zero so this is really cheap debt, 1% interest or lower -- if you produce any return at all, you've got a win in addition to the counter-cyclical effects. Once you've decided to spend, you've got to decide how. Giving money to people in lump sums (which was in fact about 40% of the bill, the bill was 40% tax cuts) is fast and simple, so it certainly has a place, but keeping people in a job is far more effective because you create externalities. That job is producing something of value to the economy, that person is gaining skills/experience leading to future employability, and assuming that business is ok, their labor might lead to additional job openings at the same company later. These are all sustainable improvements that build on themselves and contribute back towards that positive feedback loop. Just spewing money out to people without any targeting whatsoever can only be a brake on recession -- it doesn't really help lay the foundations for the bounceback.
- deleted 17y ago
  [deleted]
- mos1 17y ago
  Frankly, I don't think there's a need to complicate this discussion with mentions of Keynes or interest rates. Their error starts far earlier, at the basic measurement of value. Joe works at WidgetCo and makes $60,000/yr. His loaded costs are a little over $100,00/yr. WidgetCo pays this because his skills are worth about $125,000/yr to them, so it's a great deal. At this point, if you are a well-meaning, but rational cherub, what is the highest rational price to pay to get Joe working again? I'm guessing anything up to $125,000. ---- But that's not the end of our grossly simplified model. We also have the fact that Joe spends his paycheck on niggles. He fucking loves the shit out of niggles. As he consumes $60,000/yr of niggles, he personally pays for 1/2 of an employee at the niggle factory (and that guy spends his money on something too...) So now we have to recognize that if Joe loses his job, there's going to be a negative ripple effect, and if Joe gets a job, there's a positive ripple effect. So now, as a well-meaning, but rational cherub, what's my highest rational price? Well.. at this point I'd probably call in an economist to help me figure it out, but it's clearly more than $125,000/yr... it's likely close to $200,000/yr. ---- And now somebody hands me a "stimulus" proposal, and it turns out that I could create a job for Joe for about $150,000/yr. So let's see... $200,000/yr of value for $150,000/yr... sounds like a great investment to me! Very good value for money, even if it does lead to an annoying headline indicating "$60,000/yr jobs cost silly cherub $150,000!" ---- Obviously this is grossly glossed over (I didn't even mention the obvious fact that if people are buying widgets, they must provide value), and actual models of costs and benefits of various scenarios are quite complex, but I simply meant to demonstrate that simply dividing the total cost of a package by the number of jobs is silly, and misses the point widely.
  - hga 17y ago
    Isn't that an example of the "multiplier effect" ... which has never really been seen in the wild (or so I understand)? E.g. because on the other side of the ledger the government crowds out private borrowing (see my comment in this thread to byrneseyeview) and/or taxes others to get this money, plus this almost always is accompanied by attacks on businesses of all sorts, on Main Street as well as Wall Street. Extreme examples include 1937, when capital in the US went on strike and we had the Recession of 1937–1938 and didn't really recover until WWII changed the game. In serious times of trouble, can you point out examples where this has worked in more than the short term? It didn't for the US in the Great Depression, and Japan is now nearing the end of it's second lost decade (we through they were pulling out of it, but that turned out to be a side effect of the world wide bubble that popped a little later this decade).

tokenadult 17y ago

This is unresponsive to the idea that private actors individually acting in the aggregate may make many more better externalities than a few "targeted" government programs funded by deficit spending.