6 ms·

I get a "please subscribe" pop-up and can't get rid of it without fiddling with the CSS editor. Anyhow... Summary of Truisms: 1) During recessions, employers

by tabtab 6y ago

I get a "please subscribe" pop-up and can't get rid of it without fiddling with the CSS editor. Anyhow... Summary of Truisms: 1) During recessions, employers tend to lay off rather than reduce wages 2) Central bank stimulus helps recessions 3) Too much stimulus causes run-away inflation 4) Non-monetary problems like oil shocks and pandemics can cause recessions 5) Increasing population helps economies. ("Hump to de-slump?" Or immigration?) Summary of areas of disagreement and mysteries: 1) Acceptable level of debt 2) Acceptable level of inflation 3) Effectiveness of public sector versus private sector stimulus. (The left emphasizes first, the right second.) 4) Measuring the true value of intellectual property

samspenc 6y ago
Thanks for the summary. There doesn't seem to be any way of getting around the Bloomberg paywall, outline.com doesn't work either.
- tiahura 6y ago
  Reader view on iOS worked for me.
- em500 6y ago
  I get the full text after disabling JavaScript (Firefox).
- auntienomen 6y ago
  View source, then copy & paste the relevant bits into an .html file.
WalterBright 6y ago
> During recessions, employers tend to lay off rather than reduce wages There's a good reason for that. I've seen both done. An across-the-board wage reduction means your most productive leave. A layoff is getting rid of the least productive.
- Arn_Thor 6y ago
  I believe Germany has done the opposite. Unions have agreed to pay cuts so they wouldn't be let go. Part of the reason may be that wage levels are reasonably flat compared with the US, so the upside in switching jobs for a better paying one at a competitor is limited versus the hassle of doing so. In any case, it's an interesting alternative model which ensures stability for employees and employers alike.
NortySpock 6y ago
Regarding point 5: increasing population via reproduction adds workers in 16-18 years. Immigration adds workers immediately. Additionally, immigration increases both labor supply (obviously) but also labor demand (more consumption, because immigrants buy stuff and services just like anyone else) and as a result wages are flat even when a lot of immigrants join the economy in a short amount of time. "This has been tested under conditions such as the Mariel Boat Lift, where a large number of Cuban immigrants all joined the Miami labor market in a short period of time, increasing labor supply by 7% very quickly. Research found that there was practically no impact on wages and employment for locals." https://www.reddit.com/r/Economics/wiki/faq_immigration https://www.reddit.com/r/Economics/wiki/faq_immigration https://www.jstor.org/stable/2523702?seq=1 https://www.jstor.org/stable/2523702?seq=1
- AnthonyMouse 6y ago
  > "This has been tested under conditions such as the Mariel Boat Lift, where a large number of Cuban immigrants all joined the Miami labor market in a short period of time, increasing labor supply by 7% very quickly. Research found that there was practically no impact on wages and employment for locals." The problem with all of these studies is that they only apply to the specific circumstances of the study which will probably never happen again anywhere. What happens if the immigrants send more of the money they make back to their home countries? What happens if the minimum wage is lower, or the immigrants have a higher skill level, so that the potential downside for wages is larger? What if the unemployment rate or labor demand is different, affecting the number of new workers that displace existing workers? What happens if immigrants' wages are taxed at a higher rate and the money goes to cronies and corporate welfare instead of being recirculated in the economy? Measuring what happened at a different time in a different place doesn't really tell you much.
  - xyzzyz 6y ago
    Also, what would happen if the Miami economy hadn't had been experiencing a boom in cocaine industry during the same time period?
- neilwilson 6y ago
WalterBright 6y ago
> Non-monetary problems like oil shocks and pandemics can cause recessions It wasn't the oil shock of the 70's that caused recession. It was our response to it - Nixon's oil and gas price & allocation controls. We came out of that when Reagan repealed it. Our current recession is not caused by the pandemic, but the lockdown response to it.
- bawolff 6y ago
  That seems like a silly splitting of hairs. Why stop there? By that logic the recession is not caused by the lockdown but by less businesses being open and reduced consumer spending.
  - deleted 6y ago
    [deleted]
  - deleted 6y ago
    [deleted]
  - WalterBright 6y ago
    Let's say Bob insults me and I punch him in the nose. Did Bob cause me to punch him in the nose? Of course not. Just like the Terminator, I scrolled through a list of options, and selected "punch him in the nose". I could have selected "your mother is a hamster and your father smelt of elderberries." I could have selected "do nothing".
    - bawolff 6y ago
      What's your definition of cause here? Human agency? In that case, people could have decided to donate part of their salaries to businesses they previously frequented,or other rediculous "choices" that humans would never do. I don't think there is a coherent notion of cause and effect where both covid does not cause the recession and the lockdown does. I can see very restricted notions of cause and effect where neither "cause" it, and more normak notions where both cause it, but not one where one causes but not the other. And that's ignoring the absolutely rediculous premise that the covid death toll and long term disability toll has no effect on the economic downturn and it was purely caused by the lockdown. There are reasonable arguments that lockdown has been a net positive for the economy in the long run (even more so for non-usa countries that did it competently)
imnotlost 6y ago
Regarding 3; are there examples of stimulus causing run-away inflation? Or has it usually been a political event, a complete loss of trust in the system?
fuzzfactor 6y ago
True, but false ;)

by tabtab 6y ago

samspenc 6y ago

Thanks for the summary. There doesn't seem to be any way of getting around the Bloomberg paywall, outline.com doesn't work either.

tiahura 6y ago
Reader view on iOS worked for me.
em500 6y ago
I get the full text after disabling JavaScript (Firefox).
auntienomen 6y ago
View source, then copy & paste the relevant bits into an .html file.

WalterBright 6y ago

> During recessions, employers tend to lay off rather than reduce wages There's a good reason for that. I've seen both done. An across-the-board wage reduction means your most productive leave. A layoff is getting rid of the least productive.

Arn_Thor 6y ago
I believe Germany has done the opposite. Unions have agreed to pay cuts so they wouldn't be let go. Part of the reason may be that wage levels are reasonably flat compared with the US, so the upside in switching jobs for a better paying one at a competitor is limited versus the hassle of doing so. In any case, it's an interesting alternative model which ensures stability for employees and employers alike.

NortySpock 6y ago

Regarding point 5: increasing population via reproduction adds workers in 16-18 years. Immigration adds workers immediately. Additionally, immigration increases both labor supply (obviously) but also labor demand (more consumption, because immigrants buy stuff and services just like anyone else) and as a result wages are flat even when a lot of immigrants join the economy in a short amount of time. "This has been tested under conditions such as the Mariel Boat Lift, where a large number of Cuban immigrants all joined the Miami labor market in a short period of time, increasing labor supply by 7% very quickly. Research found that there was practically no impact on wages and employment for locals." https://www.reddit.com/r/Economics/wiki/faq_immigration https://www.reddit.com/r/Economics/wiki/faq_immigration https://www.jstor.org/stable/2523702?seq=1 https://www.jstor.org/stable/2523702?seq=1

AnthonyMouse 6y ago
> "This has been tested under conditions such as the Mariel Boat Lift, where a large number of Cuban immigrants all joined the Miami labor market in a short period of time, increasing labor supply by 7% very quickly. Research found that there was practically no impact on wages and employment for locals." The problem with all of these studies is that they only apply to the specific circumstances of the study which will probably never happen again anywhere. What happens if the immigrants send more of the money they make back to their home countries? What happens if the minimum wage is lower, or the immigrants have a higher skill level, so that the potential downside for wages is larger? What if the unemployment rate or labor demand is different, affecting the number of new workers that displace existing workers? What happens if immigrants' wages are taxed at a higher rate and the money goes to cronies and corporate welfare instead of being recirculated in the economy? Measuring what happened at a different time in a different place doesn't really tell you much.
- xyzzyz 6y ago
  Also, what would happen if the Miami economy hadn't had been experiencing a boom in cocaine industry during the same time period?
neilwilson 6y ago

WalterBright 6y ago

> Non-monetary problems like oil shocks and pandemics can cause recessions It wasn't the oil shock of the 70's that caused recession. It was our response to it - Nixon's oil and gas price & allocation controls. We came out of that when Reagan repealed it. Our current recession is not caused by the pandemic, but the lockdown response to it.

bawolff 6y ago
That seems like a silly splitting of hairs. Why stop there? By that logic the recession is not caused by the lockdown but by less businesses being open and reduced consumer spending.
- deleted 6y ago
  [deleted]
- deleted 6y ago
  [deleted]
- WalterBright 6y ago
  Let's say Bob insults me and I punch him in the nose. Did Bob cause me to punch him in the nose? Of course not. Just like the Terminator, I scrolled through a list of options, and selected "punch him in the nose". I could have selected "your mother is a hamster and your father smelt of elderberries." I could have selected "do nothing".
  - bawolff 6y ago
    What's your definition of cause here? Human agency? In that case, people could have decided to donate part of their salaries to businesses they previously frequented,or other rediculous "choices" that humans would never do. I don't think there is a coherent notion of cause and effect where both covid does not cause the recession and the lockdown does. I can see very restricted notions of cause and effect where neither "cause" it, and more normak notions where both cause it, but not one where one causes but not the other. And that's ignoring the absolutely rediculous premise that the covid death toll and long term disability toll has no effect on the economic downturn and it was purely caused by the lockdown. There are reasonable arguments that lockdown has been a net positive for the economy in the long run (even more so for non-usa countries that did it competently)

imnotlost 6y ago

Regarding 3; are there examples of stimulus causing run-away inflation? Or has it usually been a political event, a complete loss of trust in the system?

fuzzfactor 6y ago

True, but false ;)