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The returns that capital demands (and the government obliges to) are ultimately unsustainable. That's the core problem here. Rising wages? There has been no me
by jmyeet 4y ago
The returns that capital demands (and the government obliges to) are ultimately unsustainable. That's the core problem here.
Rising wages? There has been no meaningful real increase in wages in 40 years despite a massive increase in productivity. Profits keep going up and up. The expectations for profits keep going up. The problem here is that the people who make companies possible don't get to share in the proceeds of what they contribute to.
Rising wages and lower profits would actually represent in workers actually getting an actual real increase in wages and getting a greater share in the fruits of their labor. But no, that's unacceptable. We have to raise prices to maintain the profits and effectively erode those wage increases.
The real failure here is the government.
Take rising energy prices. The government could take action to hasten development of existing leases and/or restrict the export of refined petroleum products. Oil hasn't gotten more expensive to produce. Oil and gas companies are simply raking in massive profits.
What we actually need is a system like Norway where we don't simply give away natural resources like this for private investors to profit off. At least in Norway, the government is making a ton of revenue from the increased prices, which it can direct back to people who need it.
Housing? Shelter is or should be a human right. What we're allowing to happen here through investors buying up housing stock (and jacking up the prices), second homes, AirBnB and so on has reached the point of being a human rights violation IMHO. Also those skyrocketing rents do even more to erode the income of particularly lower income people to keep them living paycheck to paycheck.
This is modern serfdom in action. The government acts at the behest of the capital-owning class regardless of party and part of that is having a compliant labor pool. This is turning into the West's version of Pakistan's brick kilns.
After going into massive debt for college, having to pay a huge amount for your car, gas and rent and so on, you're absolutely showing up to work. That's the point.
A budget shortfall is built into your existence.
- tonguez 4y ago
- TheBlight 4y ago>What we're allowing to happen here through investors buying up housing stock (and jacking up the prices), second homes, AirBnB and so on has reached the point of being a human rights violation IMHO. There are plenty of affordable places to live. People just don't want to move there. Buying a house in a hip U.S. city/suburb isn't a human right.
- ProfessorLayton 4y agoFair enough, but constraining supply of housing in desirable places by placing absurd obstacles on those that want to build more units isn't a human right either.
- ervine 4y agoIt's not just the hip spots anymore. This comment is pretty out of touch.
- TheBlight 4y agoPlenty of homes available for <100k here: https://www.zillow.com/detroit-mi/ https://www.zillow.com/detroit-mi/
- ervine 4y agoIt's alright man, we'll agree to disagree. Housing is artificially constrained by treating it as an investment opportunity. Your solution is to pick up and leave everyone and everything you know because someone else decided that housing should be used as a game at the casino. I know it's allowed, but is this what we want for society? I hope not.
- flyandscan88 4y agoI hope you get shown similar sympathy when your house value crashes
- TheBlight 4y agoI don't view housing as an investment. I look at it as I need a place to live. If I make money on it after I'm done living there then that's great.
- brandall10 4y agoIf that's the case, why not just rent?
- whiplash451 4y agoThe Norway example is really annoying. It keeps coming back as an example to follow, when everybody knows it is a complete outlier that cannot be reproduced elsewhere. Norway is sitting on a gigantic pile of offshore gas that it uses to generate massive profits that go into a huge fund they don't know what to do with, all of that for a 5M population that drowns into social programs. There is literally no country in the world that has this ratio of natural resources $ / capita. Yet, when you look at what Norway has actually produced over the past few decades in terms of innovation, companies, etc. the picture is very, very empty.
- Seanambers 4y agoIn Norway the state is rich. The people not so much. Best way for Norwegians to feel rich is to travel abroad.
- Barrin92 4y agoNorway's state oil&gas revenue pays and subsidizes pensions, tuition free education and healthcare while actually growing rather than shrinking most of the time. Unless your definition of feeling rich is the government buying you a lambo I'd feel very rich in Norway based on services provided at no or little cost alone.
- notch656a 4y agoI can see how getting a bunch of stuff without working for it appeals to a certain segment of the populace. Venezuela (and Libya) also had oil-backed welfare for their populace. Best not to get too used to it. Yes I know Venezuela is not Norway.
- eecc 4y agoAh the old patronizing saw "you just want free stuff"... no sir, I don't. I'm just playing another Game with a different equilibrium. One where everyone doesn't get to die for lack of health-care, like animals in the wilderness. One where my neighbor's education is not considered a threat to the small place under the sun I've managed to rip out of their hands, like predators quarreling for some spoils.
- hamsand 4y ago
- bogomipz 4y ago>"This is turning into the West's version of Pakistan's brick kilns." Could you elaborate on this reference? I am not familiar with this.
- jmyeet 4y agoBrick kilns in Pakistan (and also Bangladesh and possibly other places) are a form of neoslavery [1]. What happens is that depserate people are forced to take a job but as part of that job they go into debt. The company provides housing? You'll have to pay that back. They provide food too. You'll have to pay that back. That's the point. For most there is absolutely no escaping that debt so they can't possibly get out of this situation (hence "neoslavery"). This form of coercion is violence and that's the point of having a budget shortfall in your existence: to make you a compliant worker whether you want to be or not. Another term for this (and what people think we're heading to) is neo-feudalism because we're getting closer and closer to being serfs effectively. [1]: https://www.aljazeera.com/features/2019/10/21/the-spiralling-debt-trapping-pakistans-brick-kiln-workers https://www.aljazeera.com/features/2019/10/21/the-spiralling...
- bombcar 4y agoThe railway heyday in the US was famous for this, extremely high wages at the time, but company town, company store, and miles and miles from anywhere. Few were able to come out the other end much better off. You load 16 tons, what do you get? Another day older and deeper in debt St. Peter, don't you call me 'cause I can't go I owe my soul to the company store
- bullen 4y agoI think wages only can go up with abundant energy. This time around interest is lagging inflation by atleast 1 year. In the 70s the rate and salaries increased BEFORE the inflation occured = inflation was rate/salary driven and because debt level was lower. Today salaries are not increasing 10% per year for most people. So I actually think the interest rate hike increases the scarcity inflation eventually since energy production need low interest loans to build new sources. The only sure thing about the hike is that ZERO new companies will be created, for good and for bad.
- dillondoyle 4y agoHow is it possibly true that ZERO companies will be created if interest rates go up. How many businesses are equity funded in the first place? We did not have capital to start our business. Most small businesses starting from zero can't get capital in the first place (excluding personal funds, family funds which aren't usually charging interest tied to the Fed benchmark) Those tech companies that do get tons of capital despite negative value are somewhat unique and for sure interest rates will eventually affect that. Valuations are already starting to come back to at least the Stratosphere ;)
- bullen 4y agoIt's deflationary (atleast on what you can borrow for), so usually people wait. Just like you would not buy a house now, you wouldn't start a business. I'm talking statistically, not like a rule. ZERO relative to lower rates.
- imtringued 4y ago>So I actually think the interest rate hike increases the inflation since energy production need low interest loans to build new sources. You mean wind, solar and nuclear power? I mean they are capital intensive because the operational costs are dwarfed by the initial investment. With coal and gas, the fuel is an ongoing and high expense compared to the power plant itself.
- bullen 4y ago
- alephnan 4y agoThanks to serfdom, we have IPhones and Gadgets. Which consumer products do you own come from Norway?
- mellavora 4y agoAn earlier poster mentioned something about gas and oil. There is also some really interesting scientific research.
- trashtester 4y agoNorway doesn't produce consumer tech products. Most of Norway's tech exports are oil or shipping related, in particular some state-of-the art offshore machinery. The only consumer product that is produced in volume, is fish. Keep in mind that Norway only has a population similar to South Carolina. There is a limit to how diverse the tech sector can be. Sweden, the closest neighbour, is governed in very similar ways, and has plenty of familiar consumer oriented products.
- lovecg 4y agoI like my reMarkable tablet, thank you very much
- alephnan 4y agoDesigned in Norway, made with low margin electronics and components from Asian supply chains. Either ways, 10 times more IPhones are sold in a quarter than ReMarkable tablets have ever sold in the entire history. This is not a knock against ReMarkeable, but the aggregate value-add of Norway is abysmally small compared to America. Are you wearing Norwegian made clothes ? Is your house filled Norwegian made appliances ?
- lovecg 4y agoSo is iPhone. You do have a point, though think a comparison to Sweden (only double Norway’s population, but with many worldwide household name businesses) is more fair.
- ren_engineer 4y ago>Oil hasn't gotten more expensive to produce a huge chunk of oil has been taken off the global market and refining capacity can't be increased instantly >After going into massive debt for college college used to possible to be paid for with a part time job before the government started handing out loans which jacked up prices
- maxerickson 4y agoThe number of people attending college massively increased and government funding stayed about the same or declined. Easy to get loans certainly have an impact on prices, but non tuition spending has declined on a per student basis.
- tagami 4y agoAlaska has been paying residents since 1976 https://en.wikipedia.org/wiki/Alaska_Permanent_Fund https://en.wikipedia.org/wiki/Alaska_Permanent_Fund
- coryfklein 4y agoAnd if you're not interested in the daylight issues that far north, Tulsa, OK is paying a $10k incentive to attract remote workers. At least two of my coworkers moved there during COVID.
- onlyrealcuzzo 4y ago> Rising wages? There has been no meaningful real increase in wages in 40 years despite a massive increase in productivity. If you're telling me that the AVERAGE person in the West is worse off now than in 1925 or even 1965, you're delusional. MAYBE the average white male. But even that I am highly skeptical... Was life better in 1995 or 2005 or 2012? I dunno. There's ups and downs. The trend line has been obvious.
- libeclipse 4y agoThat's literally not what they said
- dpweb 4y agoMoney drives the political process. We refuse to change it. Stockholm syndrome. Just getting corporations and billionaire individuals to pay some taxes would be a nice start.
- gizmondo 4y ago> The returns that capital demands (and the government obliges to) are ultimately unsustainable. That's the start of the top comment, really? We're emerging from the era of unprecedentedly low returns on capital. There are trillions in bonds with negative nominal yield ffs.
- cyanydeez 4y agoLast budget and tax cut was 2017.the real solution is to tax wxcess wealth and force wealth creators to pay for society
- BizarroLand 4y agoThey're drinking the water while choking the river. If you have to have ever-increasing profits, you have to ALSO have purchasers with ever-increasing purchasing power. You can slide by for a while by wedging yourself into a currently existing system and tapping some of its resources, but eventually if that drain isn't backfilled with more then it will run dry.
- ayngg 4y agoProductivity has risen, but it isn't a tide tide that raises all boats. Look at what has boomed since the 70s, finance and tech. Finance because markets were liberalized and the economy financialized. They are at the junction where capital gets allocated in the economy, so they are able to take rents on all the capital that flows through them. The more money moving around the more they slurp up. Tech is where the lions share of productivity was created. All of the huge tech companies are able to leverage the internet to reach a market way larger than any physical store could before. A software development team is automating the workflow that would have gone to physical store employees running a Sears or whatever, a company manufactures a machine that does the work of 5 people 10 times faster, etc. That is why they get paid so much. Meanwhile the rest of the economy de-industrialized, manufacturing jobs became more scarce because technology increased productivity, whatever was too labor cost intensive went overseas, and whatever jobs couldn't be offshored, retail and service jobs, aren't capable of having the same productivity gains as what was happening in tech. There are pretty hard limits to what restaurant staff, or retail employees, or other regular jobs can do to become more productive. That is why their wages are stagnant, the only reason those jobs exist is because they can't be exported, in some places they even import foreign workers to do those jobs to keep wages low. This is why unions fell out of favor, labor has no leverage anymore since their jobs can just be exported, or they cant but they are low skill jobs so employers can just churn people or grab import immigrants to do it because employees are nothing more than cogs in a machine that Amazon hasn't figured out how to automate yet. Keep in mind that this is all by design, capital was liberalized, economies globalized, college loans guaranteed, nimbys limiting development in real estate and energy, these were all policies that people wanted and politicians enacted, whether or not they were fully aware of the second order consequences which are why things feel so messed up now.
- cudgy 4y ago> these were all policies that people wanted What people wanted to send almost all labor intensive jobs like manufacturing overseas? Or sending almost all the production of semiconductors which are the primary building blocks of technology overseas? The corporate ownership? Yes. The vast population of citizens? No. Do you realize that the United States mainly exports cardboard and oil plus a few car parts for BMW? While we import almost everything else. Finance and tech remained because they are top-heavy industries that require only a few high paid people to execute the majority of those businesses. Bottom line is that this is not sustainable over the long haul. People will revolt as they fully realize that a basic task like buying their own property for their family is unachievable and other basic expenses like healthcare, rent, transportation, and food take up all or more of their income.
- Auracle 4y agoQuestion for anyone that knows - have healthcare costs eaten away at what possible wage increases could have happened? It seems to me that for the average almost-minimum wage full time worker the insurance cost to their employer is probably a very large portion of their wages.
- jansen555 4y ago