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Why is it an absolute given that the economy is definitely going to flop? As the days pass I'm convinced more and more that the general economy (and the 1 or 2%

Why is it an absolute given that the economy is definitely going to flop? As the days pass I'm convinced more and more that the general economy (and the 1 or 2% of people who are directly benefited by it) will do just fine, even though the majority of the population is jobless and moneyless. This will finally lay bare that the contribution from the majority of the working population is quite optional for the GDP or any measure of economic productivity, and push comes to shove, the institutions (factories, offices) will start realising they can maintain or even increase productivity without involving the majority of the population in the process. Hence the people who have the money now (and are hence in positions that don't necessarily get lost in this process) are likely to continue prospering, while the people who are losing jobs and houses are never going to get them replaced.

cheschire 6y ago
I've been thinking along those same lines. Basically feels like we're returning to a form of feudalism, with a rather established aristocracy and nobility already in place. I'm just waiting for the financially ailing counties to start selling themselves in their totality to corporations and those corporations begin providing employment in exchange for literal cradle-to-grave services.
- eindiran 6y ago
  The seignorialism aspect of feudalism is now absent though: the lord needed peasants to work his lands. This new ruling class doesn't need the labor of the growing unemployed and forgotten class - only their consumption.
  - bottled_poe 6y ago
    It needs their attention more than their consumption I suspect.
  - Cthulhu_ 6y ago
    The lords need some work done, but they're making sure people earn as little as possible, have zero ties, and no transferable skills. I'm thinking of McJobs; zero-hour contracts, contractors, gig economy work, that kinda thing.
    - bamboozled 6y ago
      This is IMO more what I see, we're all working harder, for less, but we're all still working.
      - AnthonyMouse 6y ago
        That's the way of it, because automation makes things cost less, but only the things that get automated. But if things cost less then you can pay people less. So what happens is that all the money goes to the places with artificial scarcity. We don't have meaningful scarcity anymore, not for the essentials anyway. There is a finite amount of land but not a finite amount of housing units, because you can build arbitrarily many of them on top of each other. We can produce more food than people have any need to eat and producers then spend rather a lot of money convincing them to buy more than that. Medicine is only genuinely scarce to the extent that it's limited by labor availability, which means labor should move there and drive down the price unless something is constraining it. But if you can make something like housing or medicine artificially scarce, you can suck all the surplus out of everybody's paycheck. And that's the problem.
  - bamboozled 6y ago
    Can you name one industry where labor is truly no longer needed, where it once was (in recent times)? Maybe an example of a person who makes a large some of money through having zero employees where they used to have many and where those people were replaced with automation and completely obsoleted. Not challenging you, I'm just interested in your theory.
    - AnthonyMouse 6y ago
      Pocket calculators. Paper calendars. Film cameras and film development labs. Alarm clocks. Analog telephones, one for every room. Pens and paper and correction fluid and typewriters and typewriter ribbons and typewriter repair service, as physical things that required labor to exist. A phone/computer replaces all of those, but it's one product instead of hundreds. It doesn't take anywhere near the labor to produce as all of those things once did.
    - uzakov 6y ago
      I would say IT is an industry that made itself, as well as other industries greatly reduce the number of employees. Not quite zero employees but numbers were reduced greatly, ie accounting. Example: accounting, before you needed a team of accountants for a mid level enterprise, not sometimes even one is sufficient.
      - bamboozled 6y ago
        Do you work in IT? Because I'm constantly gobsmacked by inefficiencies and companies that have too many people involved in achieving simple goals?
        uzakov 6y ago
        I do work in IT. > Because I'm constantly gobsmacked by inefficiencies and companies that have too many people involved in achieving simple goals? That is also true, by no means I am implying that. There is a lot of inefficiency in many companies, but at the same time what took X people in the past now takes X-Y people for many sectors, ie accounting. Another good example is website creation and development for Small-Medium Enterprise. In the 90-s/2000s you had to pay someone to create a website for you, where now there are countless website builders, some of which are really great.
koonsolo 6y ago
It's not all about productivity. Who is going to buy the new iPhone, or the new car, or an XBox?
- bottled_poe 6y ago
  That’s easy - the ones with the money. If the wealth divides, so will the product offferings from those companies. A bit of an inconvenient truth for many of us.
  - koonsolo 6y ago
    So that implies that when companies keep the same revenue, their offering will become more expensive (Nobody needs 5 iPhones). This also implies that the ones that are able to buy an iPhone, will pay significantly more for it. Which will make the ones that can afford it even more narrow. There is something wrong with the reasoning that losing a big part of the market has no influence on companies and consumers that are still able to afford things. This impacts everyone, there is no question about that. Maybe some more than others, but everyone will feel it.
  - ClumsyPilot 6y ago
    That makes no sence, many demands are not elastic. You are bot going to buy 10x mor macbooks, shoes, and baking powder if you are 10x wealthier.
    - brewdad 6y ago
      No, but you might buy that $1200 iPhone instead of the $400 model.
      - ClumsyPilot 6y ago
        Okay, how large % of your total expenditure is iPhones? do you buy them weekly?
- Cthulhu_ 6y ago
dicomdan 6y ago
> though the majority of the population is jobless and moneyless This doesn’t match the actual unemployment numbers.
- ClumsyPilot 6y ago
  You could categorise lots of zero hour contracts and self employed folks as jobless and moneyless. I would say that most people living from paycheck to paychek are moneyless.
ForHackernews 6y ago
I think this was already the case. This piece is from 2016: https://morecrows.wordpress.com/2016/05/10/unnecessariat/ https://morecrows.wordpress.com/2016/05/10/unnecessariat/ > Here’s the thing: from where I live, the world has drifted away. We aren’t precarious, we’re unnecessary. The money has gone to the top. The wages have gone to the top. The recovery has gone to the top. And what’s worst of all, everybody who matters seems basically pretty okay with that. The new bright sparks, cheerfully referred to as “Young Gods” believe themselves to be the honest winners in a new invent-or-die economy, and are busily planning to escape into space or acquire superpowers, and instead of worrying about this, the talking heads on TV tell you its all a good thing- don’t worry, the recession’s over and everything’s better now, and technology is TOTES AMAZEBALLS!
Cthulhu_ 6y ago
The economy as a whole? Probably not, because it's more measured according to the country's whole GDP and stock market instead of personal tragedies like getting evicted or bankrupted. (disclaimer: not an economist, just a dude in an armchair with an Opinion)
- jacobkania 6y ago
  But if ‘personal tragedies’ make up a quarter of your country’s population, it starts to look more like a whole-economy issue, right?
bamboozled 6y ago
No, the robots haven't taken over, at all. The reason Apple's share price is booming is because "consumers" are buying their products so their earnings were great. Many of them probably spending printed stimulus money. Same for Amazon. There is really no magic here except the illusion of unlimited money through quantitative easing. The QE is the only thing holding things together, if that stops, everyone is going down the same drain to poop town. Edit: I should also mention many investors are probably putting a lot of money into Apple as it's seen as a safe haven for equities right now.
- bsaul 6y ago
  side question , but do you happen to have any resources explaining what could be the limit to unlimited QE and what precise series of event will be triggered when that limit is reached ( knowing that everyone is doing the same at the moment, from us to eu to cn).
  - ric2b 6y ago
    I'm not sure there's a limit, it's just perpetual shifting of value from people with savings to the government and financial institutions.
  - oblio 6y ago
    That's the thing, nobody knows. QE is just the end state for Keynesian economics, at least as far as I can tell. I'd be amazed if it ends well, we haven't invented a perpetuum mobile yet...
  - bamboozled 6y ago
    Like the other poster mentioned, we don't really know. I'm not an economist, just an interested investor and from my understanding, using QE on this scale is just an easy short term solution to a longer term, hard problem. Printing money like this has never really been done before on this scale, but the fear is that "printing money" like this will potentially lead to very bad debt and hyperinflation inflation crisis (maybe already started). The limitations of QE aren't entirely known, but will be known as more money is printed and money becomes more worthless. Will having a lot of "monopoly money" in circulation be a problem? Time will tell; however there have been many examples where hyper inflation has caused economies to fail, such as Venezuela recently and the Roman Empire in the past. The US Federal Reserve should probably be careful with their actions because they wouldn't be the first country to run into dire issues doing this. What I fear is, the people at the top of the US are blinded by greed and the desire to be reelected and aren't concerned about the lessons of history.
vorpalhex 6y ago
> even though the majority of the population is jobless and moneyless Unemployment is high, but much lower than the initial surge from coronavirus. It's likely we're still seeing significant hour/shift reduction, but as lockdown measures relax that will mostly let up or those workers will shift to different fields. We are seeing things shift away from brick and mortars, but that isn't new just accelerated. It seems like ecommerce is eating everyones lunch now.

cheschire 6y ago

I've been thinking along those same lines. Basically feels like we're returning to a form of feudalism, with a rather established aristocracy and nobility already in place. I'm just waiting for the financially ailing counties to start selling themselves in their totality to corporations and those corporations begin providing employment in exchange for literal cradle-to-grave services.

eindiran 6y ago
The seignorialism aspect of feudalism is now absent though: the lord needed peasants to work his lands. This new ruling class doesn't need the labor of the growing unemployed and forgotten class - only their consumption.
- bottled_poe 6y ago
  It needs their attention more than their consumption I suspect.
- Cthulhu_ 6y ago
  The lords need some work done, but they're making sure people earn as little as possible, have zero ties, and no transferable skills. I'm thinking of McJobs; zero-hour contracts, contractors, gig economy work, that kinda thing.
  - bamboozled 6y ago
    This is IMO more what I see, we're all working harder, for less, but we're all still working.
    - AnthonyMouse 6y ago
      That's the way of it, because automation makes things cost less, but only the things that get automated. But if things cost less then you can pay people less. So what happens is that all the money goes to the places with artificial scarcity. We don't have meaningful scarcity anymore, not for the essentials anyway. There is a finite amount of land but not a finite amount of housing units, because you can build arbitrarily many of them on top of each other. We can produce more food than people have any need to eat and producers then spend rather a lot of money convincing them to buy more than that. Medicine is only genuinely scarce to the extent that it's limited by labor availability, which means labor should move there and drive down the price unless something is constraining it. But if you can make something like housing or medicine artificially scarce, you can suck all the surplus out of everybody's paycheck. And that's the problem.
- bamboozled 6y ago
  Can you name one industry where labor is truly no longer needed, where it once was (in recent times)? Maybe an example of a person who makes a large some of money through having zero employees where they used to have many and where those people were replaced with automation and completely obsoleted. Not challenging you, I'm just interested in your theory.
  - AnthonyMouse 6y ago
    Pocket calculators. Paper calendars. Film cameras and film development labs. Alarm clocks. Analog telephones, one for every room. Pens and paper and correction fluid and typewriters and typewriter ribbons and typewriter repair service, as physical things that required labor to exist. A phone/computer replaces all of those, but it's one product instead of hundreds. It doesn't take anywhere near the labor to produce as all of those things once did.
  - uzakov 6y ago
    I would say IT is an industry that made itself, as well as other industries greatly reduce the number of employees. Not quite zero employees but numbers were reduced greatly, ie accounting. Example: accounting, before you needed a team of accountants for a mid level enterprise, not sometimes even one is sufficient.
    - bamboozled 6y ago
      Do you work in IT? Because I'm constantly gobsmacked by inefficiencies and companies that have too many people involved in achieving simple goals?
      - uzakov 6y ago
        I do work in IT. > Because I'm constantly gobsmacked by inefficiencies and companies that have too many people involved in achieving simple goals? That is also true, by no means I am implying that. There is a lot of inefficiency in many companies, but at the same time what took X people in the past now takes X-Y people for many sectors, ie accounting. Another good example is website creation and development for Small-Medium Enterprise. In the 90-s/2000s you had to pay someone to create a website for you, where now there are countless website builders, some of which are really great.

koonsolo 6y ago

It's not all about productivity. Who is going to buy the new iPhone, or the new car, or an XBox?

bottled_poe 6y ago
That’s easy - the ones with the money. If the wealth divides, so will the product offferings from those companies. A bit of an inconvenient truth for many of us.
- koonsolo 6y ago
  So that implies that when companies keep the same revenue, their offering will become more expensive (Nobody needs 5 iPhones). This also implies that the ones that are able to buy an iPhone, will pay significantly more for it. Which will make the ones that can afford it even more narrow. There is something wrong with the reasoning that losing a big part of the market has no influence on companies and consumers that are still able to afford things. This impacts everyone, there is no question about that. Maybe some more than others, but everyone will feel it.
- ClumsyPilot 6y ago
  That makes no sence, many demands are not elastic. You are bot going to buy 10x mor macbooks, shoes, and baking powder if you are 10x wealthier.
  - brewdad 6y ago
    No, but you might buy that $1200 iPhone instead of the $400 model.
    - ClumsyPilot 6y ago
      Okay, how large % of your total expenditure is iPhones? do you buy them weekly?
Cthulhu_ 6y ago

dicomdan 6y ago

> though the majority of the population is jobless and moneyless This doesn’t match the actual unemployment numbers.

ClumsyPilot 6y ago
You could categorise lots of zero hour contracts and self employed folks as jobless and moneyless. I would say that most people living from paycheck to paychek are moneyless.

ForHackernews 6y ago

I think this was already the case. This piece is from 2016: https://morecrows.wordpress.com/2016/05/10/unnecessariat/ https://morecrows.wordpress.com/2016/05/10/unnecessariat/ > Here’s the thing: from where I live, the world has drifted away. We aren’t precarious, we’re unnecessary. The money has gone to the top. The wages have gone to the top. The recovery has gone to the top. And what’s worst of all, everybody who matters seems basically pretty okay with that. The new bright sparks, cheerfully referred to as “Young Gods” believe themselves to be the honest winners in a new invent-or-die economy, and are busily planning to escape into space or acquire superpowers, and instead of worrying about this, the talking heads on TV tell you its all a good thing- don’t worry, the recession’s over and everything’s better now, and technology is TOTES AMAZEBALLS!

Cthulhu_ 6y ago

The economy as a whole? Probably not, because it's more measured according to the country's whole GDP and stock market instead of personal tragedies like getting evicted or bankrupted. (disclaimer: not an economist, just a dude in an armchair with an Opinion)

jacobkania 6y ago
But if ‘personal tragedies’ make up a quarter of your country’s population, it starts to look more like a whole-economy issue, right?

bamboozled 6y ago

No, the robots haven't taken over, at all. The reason Apple's share price is booming is because "consumers" are buying their products so their earnings were great. Many of them probably spending printed stimulus money. Same for Amazon. There is really no magic here except the illusion of unlimited money through quantitative easing. The QE is the only thing holding things together, if that stops, everyone is going down the same drain to poop town. Edit: I should also mention many investors are probably putting a lot of money into Apple as it's seen as a safe haven for equities right now.

bsaul 6y ago
side question , but do you happen to have any resources explaining what could be the limit to unlimited QE and what precise series of event will be triggered when that limit is reached ( knowing that everyone is doing the same at the moment, from us to eu to cn).
- ric2b 6y ago
  I'm not sure there's a limit, it's just perpetual shifting of value from people with savings to the government and financial institutions.
- oblio 6y ago
  That's the thing, nobody knows. QE is just the end state for Keynesian economics, at least as far as I can tell. I'd be amazed if it ends well, we haven't invented a perpetuum mobile yet...
- bamboozled 6y ago
  Like the other poster mentioned, we don't really know. I'm not an economist, just an interested investor and from my understanding, using QE on this scale is just an easy short term solution to a longer term, hard problem. Printing money like this has never really been done before on this scale, but the fear is that "printing money" like this will potentially lead to very bad debt and hyperinflation inflation crisis (maybe already started). The limitations of QE aren't entirely known, but will be known as more money is printed and money becomes more worthless. Will having a lot of "monopoly money" in circulation be a problem? Time will tell; however there have been many examples where hyper inflation has caused economies to fail, such as Venezuela recently and the Roman Empire in the past. The US Federal Reserve should probably be careful with their actions because they wouldn't be the first country to run into dire issues doing this. What I fear is, the people at the top of the US are blinded by greed and the desire to be reelected and aren't concerned about the lessons of history.

vorpalhex 6y ago

> even though the majority of the population is jobless and moneyless Unemployment is high, but much lower than the initial surge from coronavirus. It's likely we're still seeing significant hour/shift reduction, but as lockdown measures relax that will mostly let up or those workers will shift to different fields. We are seeing things shift away from brick and mortars, but that isn't new just accelerated. It seems like ecommerce is eating everyones lunch now.