13 ms·

> broken perception of risk based on “optimism, underestimation and invincibility" How about artificially low interest rates? An interest rate is exactly the

> broken perception of risk based on “optimism, underestimation and invincibility" How about artificially low interest rates? An interest rate is exactly the coordination between risk and time, with a low interest rate you're subsidizing stupidity and wastefulness, and with its concommittant inflation you're forcing people into making those investments to stay afloat. Maybe if we weren't goosing the interest rate lower for "growth" we wouldn't be destroying the environment. But I guess it is hard to get someone who works for an organization like the UN, who is predisposed to meddle, to see that the problem is meddling, and not that the solution is more meddling.

cryptica 5y ago
This hits the nail on the head. Also, all the money-printing creates extreme market distortions, inequality and injustice. It greatly increases the role of luck and social connections in financial success (due to Cantillon effects) and therefore those who end up at the top, blinded by their extreme survivor bias, tend to be overly optimistic about reality and so they are among the worse qualified to be making complex decisions on a global scale which affect the majority (who are non-outliers by definition)... I doubt anyone is qualified to be making those decisions, let alone extreme outliers who don't fully understand the magnitude of the problems.
- necroblogger 5y ago
  I read it: 'UN wants to curtail their 5-years-plan 'agenda 2030' to be finished in 2025 , cos they are planning to impose you with their might (davos 05-22-2022 who want to overrule health, stripping sovereignty and if thats succsessful, forbidding nationalism world wide) to use the same _scare_tactics_ - as other western nations (media-driven experiment) before (-migration -covid-19 -war in ukraine for example), saying now - 'The UN welcomes you to 1,5 disaster per day beginnig in 2030!' (-; No... and while that wasn't about money, have you ever thought 'rising markets are an equivalent of increased productivity' ? ^^ Some days ago there was a headline: 'productivity is on an 75-year low.' But in terms of asking 'Is that a participation-thing?', i might enjoy what you wrote, sry, won't sound offending... (-:
jolux 5y ago
The problem is that economic growth is extremely important to developing economies as well. It’s one thing to say we should limit growth, or deprioritize it, or whatever, but in practice this means forcing poor countries to accept lower standards of living. That’s the real trade-off here.
- phkahler 5y ago
  Growth can't continue indefinitely. In fact a lot of growth today is actually fudging the numbers to make them look good.
  - dustingetz 5y ago
    innovation can?
    - phkahler 5y ago
      Nope. One of the fudges is saying that a computer based on today's technology is more valuable than on from a couple years ago. I forget what this is called. But it's stupid and could be really abused to say a cellphone is a trillion dollar device, since that's what the processing power would have cost in 1980. Maybe we should measure GDP via wages. Since all spending has to come from that anyway... not sure how to classify B2B transactions though, just thinking out loud.
      - inawarminister 5y ago
        There were proposals for labor-backed currency, where the basic unit is one hourly work of the worker. So B2B transactions will be valued from the man-hours that went to it. Of course this approach breaks when the gigantic corpocracies are able to bloat into larger and larger sizes. But it might be an interesting research topic.
        bluGill 5y ago
        Labor hours fails because some jobs need more incentive to get into. Why would I study in school when I could make just as much doing basic unskilled labor, with careful savings the unskilled laborer can retire earlier since he starts sooner (also likely doesn't have to pay off student debt)
ivan_gammel 5y ago
Let's say you have two possible projects: X is investment in growth, which will result in increase of your revenue in the short term, and Y is investment in reduction of risks which will increase the value of your assets in the long term. If interest rates are low, borrowing money for Y or for both projects becomes more tangible option. If interest rates are high and you are an optimist, you will choose to borrow money for X. Based on this logic, higher interest rates would expose the optimism of the investors better. Whether there is a causal link between them or not, that is an open question.
- I_DRINK_KOOLAID 5y ago
  - ivan_gammel 5y ago
    In Europe we do not have "safe places in colleges". It is an US phenomenon, that has nothing to do with risk aversion - on the contrary, it is based on the optimistic assumption that society is generally mature enough to own firearms and you only need to mitigate some "edge cases". True risk aversion would be to regulate the gun ownership, education and welfare the same way as it is done in Europe, where mass shootings are much less common. As for the interest rates, I don't really get how do you connect wealth and loss aversion here. Interest rates are not taxing wealth, in fact lower interest rates are resulting in lower yields and even in the reduction of the capital (e.g. Germans keep a lot of savings on their bank accounts, yet they have to pay for this service now thanks to negative interest rates).
    - I_DRINK_KOOLAID 5y ago
    - uxp100 5y ago
      So safe spaces have nothing to do with firearms. It’s sort of a concept about the norms of conversation. So if a support group was a safe space it essentially means you’re not supposed to contradict people even if they’re wrong. Circa 2014 this was a big boogeyman, I think triggered by protests at a college in Mississippi (?) where the library was called a safe space for POCs, and white people where not allowed in, and some teacher fought a student to keep them out. That’s not what a safe space is, and uh, you’re entitled to use your schools resources, but anyway, I guess I think the above poster is driving at some symmetry there, but it’s pretty much unrelated to the conversation and only will derail it.
mort96 5y ago
Your last sentence seems to suggest that if we just let the free market do what it does, everything would be fixed and we wouldn't have any environmental problems. Are you not aware of the concept of externalities? How do you, for example, explain the fact that leaded gasoline was only replaced with non-leaded gasoline when "meddling" made it illegal?
- roenxi 5y ago
  Are you of the opinion that letting the free market set interest rates is going to cause measurable levels of brain damage? The official policy position is that the free market won't gamble enough if left alone and that it needs to be forced away from conservative plays. We must admit that this is, potentially, a contributing factor to the lack of responsible long term thinking in markets that are influenced by money (hedging in case there are aspects of life that aren't influenced by low interest rates, if someone spots any let me know). Plus printing money and handing it out to rich people is outrageous. I'm confused at how anyone is can pretend that is a good idea. You didn't say that, I'm just throwing it out there Carthago delenda est style)
  - mort96 5y ago
    I was specifically talking about the last paragraph, that the solution is to not "meddle" in general. It's quite possible that the way interest rates are set is problematic, I'm not qualified to have an opinion on that. But clearly there are problems where meddling is necessary.
    - infogulch 5y ago
      Humans have a strong universal bias towards additive solutions, even when subtractive solutions are clearly better. I doubt regulatory policymakers are immune.
      - mort96 5y ago
        That's a non-statement. Nothing about what I have said assumes that policymakers are immune to any form of bias.
luciusdomitius 5y ago
This is one of the best comments on HN ever. Another problem of the current (non-commodity based) system is that monetary base doesn't map to the resources of the planet which have not increased almost 5-fold as did M2[0]. 0. https://fred.stlouisfed.org/series/WM2NS https://fred.stlouisfed.org/series/WM2NS
RC_ITR 5y ago
One of the interesting parts of humanity is that we make artificial frameworks that become so familiar to us it feels “natural” The entire concept of interest is a human-designed concept (one that some cultures actively reject). To say that interest rates are being “meddled” with is just basically saying “one group of humans is doing one thing that disagrees with how another group of humans do it” I’d argue that humans in general are awful at understanding time values and interest is a very incomplete solution to that problem. Making that incomplete solution marginally better isn’t going to get us anywhere. Shame is, I don’t have any better ideas.

cryptica 5y ago

This hits the nail on the head. Also, all the money-printing creates extreme market distortions, inequality and injustice. It greatly increases the role of luck and social connections in financial success (due to Cantillon effects) and therefore those who end up at the top, blinded by their extreme survivor bias, tend to be overly optimistic about reality and so they are among the worse qualified to be making complex decisions on a global scale which affect the majority (who are non-outliers by definition)... I doubt anyone is qualified to be making those decisions, let alone extreme outliers who don't fully understand the magnitude of the problems.

necroblogger 5y ago
I read it: 'UN wants to curtail their 5-years-plan 'agenda 2030' to be finished in 2025 , cos they are planning to impose you with their might (davos 05-22-2022 who want to overrule health, stripping sovereignty and if thats succsessful, forbidding nationalism world wide) to use the same _scare_tactics_ - as other western nations (media-driven experiment) before (-migration -covid-19 -war in ukraine for example), saying now - 'The UN welcomes you to 1,5 disaster per day beginnig in 2030!' (-; No... and while that wasn't about money, have you ever thought 'rising markets are an equivalent of increased productivity' ? ^^ Some days ago there was a headline: 'productivity is on an 75-year low.' But in terms of asking 'Is that a participation-thing?', i might enjoy what you wrote, sry, won't sound offending... (-:

jolux 5y ago

The problem is that economic growth is extremely important to developing economies as well. It’s one thing to say we should limit growth, or deprioritize it, or whatever, but in practice this means forcing poor countries to accept lower standards of living. That’s the real trade-off here.

phkahler 5y ago
Growth can't continue indefinitely. In fact a lot of growth today is actually fudging the numbers to make them look good.
- dustingetz 5y ago
  innovation can?
  - phkahler 5y ago
    Nope. One of the fudges is saying that a computer based on today's technology is more valuable than on from a couple years ago. I forget what this is called. But it's stupid and could be really abused to say a cellphone is a trillion dollar device, since that's what the processing power would have cost in 1980. Maybe we should measure GDP via wages. Since all spending has to come from that anyway... not sure how to classify B2B transactions though, just thinking out loud.
    - inawarminister 5y ago
      There were proposals for labor-backed currency, where the basic unit is one hourly work of the worker. So B2B transactions will be valued from the man-hours that went to it. Of course this approach breaks when the gigantic corpocracies are able to bloat into larger and larger sizes. But it might be an interesting research topic.
      - bluGill 5y ago
        Labor hours fails because some jobs need more incentive to get into. Why would I study in school when I could make just as much doing basic unskilled labor, with careful savings the unskilled laborer can retire earlier since he starts sooner (also likely doesn't have to pay off student debt)

ivan_gammel 5y ago

Let's say you have two possible projects: X is investment in growth, which will result in increase of your revenue in the short term, and Y is investment in reduction of risks which will increase the value of your assets in the long term. If interest rates are low, borrowing money for Y or for both projects becomes more tangible option. If interest rates are high and you are an optimist, you will choose to borrow money for X. Based on this logic, higher interest rates would expose the optimism of the investors better. Whether there is a causal link between them or not, that is an open question.

I_DRINK_KOOLAID 5y ago
- ivan_gammel 5y ago
  In Europe we do not have "safe places in colleges". It is an US phenomenon, that has nothing to do with risk aversion - on the contrary, it is based on the optimistic assumption that society is generally mature enough to own firearms and you only need to mitigate some "edge cases". True risk aversion would be to regulate the gun ownership, education and welfare the same way as it is done in Europe, where mass shootings are much less common. As for the interest rates, I don't really get how do you connect wealth and loss aversion here. Interest rates are not taxing wealth, in fact lower interest rates are resulting in lower yields and even in the reduction of the capital (e.g. Germans keep a lot of savings on their bank accounts, yet they have to pay for this service now thanks to negative interest rates).
  - I_DRINK_KOOLAID 5y ago
  - uxp100 5y ago
    So safe spaces have nothing to do with firearms. It’s sort of a concept about the norms of conversation. So if a support group was a safe space it essentially means you’re not supposed to contradict people even if they’re wrong. Circa 2014 this was a big boogeyman, I think triggered by protests at a college in Mississippi (?) where the library was called a safe space for POCs, and white people where not allowed in, and some teacher fought a student to keep them out. That’s not what a safe space is, and uh, you’re entitled to use your schools resources, but anyway, I guess I think the above poster is driving at some symmetry there, but it’s pretty much unrelated to the conversation and only will derail it.

mort96 5y ago

Your last sentence seems to suggest that if we just let the free market do what it does, everything would be fixed and we wouldn't have any environmental problems. Are you not aware of the concept of externalities? How do you, for example, explain the fact that leaded gasoline was only replaced with non-leaded gasoline when "meddling" made it illegal?

roenxi 5y ago
Are you of the opinion that letting the free market set interest rates is going to cause measurable levels of brain damage? The official policy position is that the free market won't gamble enough if left alone and that it needs to be forced away from conservative plays. We must admit that this is, potentially, a contributing factor to the lack of responsible long term thinking in markets that are influenced by money (hedging in case there are aspects of life that aren't influenced by low interest rates, if someone spots any let me know). Plus printing money and handing it out to rich people is outrageous. I'm confused at how anyone is can pretend that is a good idea. You didn't say that, I'm just throwing it out there Carthago delenda est style)
- mort96 5y ago
  I was specifically talking about the last paragraph, that the solution is to not "meddle" in general. It's quite possible that the way interest rates are set is problematic, I'm not qualified to have an opinion on that. But clearly there are problems where meddling is necessary.
  - infogulch 5y ago
    Humans have a strong universal bias towards additive solutions, even when subtractive solutions are clearly better. I doubt regulatory policymakers are immune.
    - mort96 5y ago
      That's a non-statement. Nothing about what I have said assumes that policymakers are immune to any form of bias.

luciusdomitius 5y ago

This is one of the best comments on HN ever. Another problem of the current (non-commodity based) system is that monetary base doesn't map to the resources of the planet which have not increased almost 5-fold as did M2[0]. 0. https://fred.stlouisfed.org/series/WM2NS https://fred.stlouisfed.org/series/WM2NS

RC_ITR 5y ago

One of the interesting parts of humanity is that we make artificial frameworks that become so familiar to us it feels “natural” The entire concept of interest is a human-designed concept (one that some cultures actively reject). To say that interest rates are being “meddled” with is just basically saying “one group of humans is doing one thing that disagrees with how another group of humans do it” I’d argue that humans in general are awful at understanding time values and interest is a very incomplete solution to that problem. Making that incomplete solution marginally better isn’t going to get us anywhere. Shame is, I don’t have any better ideas.