5 ms·

Our Covid response really hurt the case for UBI. It turns out, when people are paid to stay at home and not work, even for a short period of time, we get high

Our Covid response really hurt the case for UBI. It turns out, when people are paid to stay at home and not work, even for a short period of time, we get high inflation and product shortages.

flandish 4y ago
The product shortages are due to piss poor profit centric “just in time” inventory schemes. Corporations failing are always corporations fault. This marketing that redirects blame onto “inflation”(a gov failure) or “people being at home” or “shortages” only serves to distract while corporations post profits, layoff while kicking back to shareholders, and continue to pay as little as possible for the labor.
Kim_Bruning 4y ago
Which is frustrating. Being paid to not work is just as conditional as being paid to work. People are incentivized to meet the condition. Paying them to not work means they are incentivized to not work!
digdugdirk 4y ago
Very little of the product shortages (and subsequent inflation) came from people staying home. The vast majority came from global supply chain disruptions. (Which I guess is still technically people staying home, but its a bit different if you're being forcibly locked in your apartment in China vs what the "lockdown" was in the US)
mikewarot 4y ago
We had supply shortages because all the slack has been taken out of systems to "improve efficiency", which was an entirely predictable, but accepted trade-off of those decisions. High inflation isn't the fault of people barely scraping by, its a reaction to supply disruptions worldwide. I expect 10% inflation for the next decade, because of demographic shifts and deglobalization, in the US. The rest of the world will be worse as capital flees to the US.
- jwestbury 4y ago
  Inflation is already falling well below that 10% threshold, even in nations with higher inflation than the US (e.g. the UK and Europe). That said, a decade of 10% inflation would be an awfully cruel joke for millennials, who experienced the worst recession since the Depression around the time they graduated university, a decade of stagnant wages, another recession and global pandemic, and then, even if they managed to find themselves financially stable (e.g., tech employees), still hard-pressed to save for retirement under the weight of inflation.
  - mikewarot 4y ago
    >That said, a decade of 10% inflation would be an awfully cruel joke for millennials Yes, it will be bad for all of us. I've lost the ability to earn an income due to long covid, yet my income is likely to be constrained to the meager cost of living adjustments that are wrangled out of a reluctant Congress in the remaining years of my life... should I make it to age 62 in 3 years to finally get "early" social security. There will be wage growth roughly in line with inflation, so those who can participate in the labor force won't have it as bad as I will. I wish you all luck.
aeschinder 4y ago
Just so I understand...two stimmy checks are to blame for inflation and product shortages? I know this is a popular talking point, but there needs to be some facts to back this up. Supply chains were wrecked by shipping container shortages due to bottlenecking at ports as well as factory shutdowns. There are proven instances where businesses increased prices just because they could.
- cowgoesmoo 4y ago
  At the start of the pandemic, between March 29 and July 25 2020, everyone claiming unemployment benefits got an extra $600/week on top of their normal payment. Later between December 27 2020, and September 4 2021, everyone was paid an extra $300/week for 9 months. For reference, the maximum unemployment benefit previously was $450/week. This is all on top of the checks, of which there were 3. Assuming you claimed unemployment the entire time, you would've gotten paid ~$24k + normal UI.
  - abduhl 4y ago
    FYI unemployment is set at the state level. Some states pay far in excess of $450 per week (MA pays nearly $850). Your main point is still applicable and I agree with it.
  - mikewarot 4y ago
    I never got unemployment compensation even though I was unemployed, I fell through the cracks, and couldn't focus on it (because of long COVID) enough to get it done.
- scotty79 4y ago
  About two years ago the requirement of fractional reserve was removed completely. This allowed banks to create as much money as there was appetite for credit. Completely insane amount of money was created through this mechanism in last two years.
- d23 4y ago
  Another thing I don’t understand is why the 10T we printed isn’t included in the discussion.
whatshisface 4y ago
So... We had record low interest rates for years, the PPP, rolling shutdowns in China... And people are blaming the stimulus checks? Shows you the power of business interests in the media.
scotty79 4y ago
It just tought us that introducing UBI needs to go hand in hand with measures to prevent capturing of this money by landlords. Personally I'd like to see progressive real estate tax introduced. The more property you own, the higher percentage of its value you need to pay each year as a tax.
- nostromo 4y ago
  This would be disastrous. We already have a housing shortage, leading to high prices. The answer isn't to make it more expensive than it already is.
  - gremlinsinc 4y ago
    Pretty sure op means to gradually increase taxes the more properties someone owns, to the point it's hardly profitable to have 100 rental properties, when you make the same with 70, because of taxes, so you can sell these and the rise in supply will lower costs to purchase a home, etc. Though, personally I'm more in favor of a land value tax, I think op is on the right path. Having the tax pegged to factors like average wage / rent of an area would help landlords keep it in check, though.
    - scotty79 4y ago
      Yeah, that's what I had in mind. Gradual smooth raise. It could also be gradually introduced with rates and increase starting from low levels but increasing each year while keeping close eye on the effect it has on the markets with special focus on the poorest members of society. This tax could also be starting not from 0% but from negative value owners of a single small property might get tax credit that could help them with their mortgage in the environment of dropping property prices. For larger families with larger single properties UBI could help. As for land value I'd like to treat the land as just another property and include its value into the total value that the tax rate is based on. I wouldn't pay attention too much about local wages. I think that information influences property values that the tax rate should be based on.
  - scotty79 4y ago
ZeroGravitas 4y ago
A UBI doesn't pay people to stay home. If anything it gives the many extra reasons to go out and work because they won't lose benefits.
earthling8118 4y ago
This is a weak, boring, and non-genuine take. UBI is nothing like the stimulus checks. The amount given (to people at least, not the PPP loans) was miniscule and the inflation/shortages are not from the payments
efsavage 4y ago
When people can't work you get product shortages, and then inflation, but UBI isn't about paying people not to work, it's about people electing to work for more money beyond the "basic".

Our Covid response really hurt the case for UBI. It turns out, when people are paid to stay at home and not work, even for a short period of time, we get high inflation and product shortages.

flandish 4y ago

The product shortages are due to piss poor profit centric “just in time” inventory schemes. Corporations failing are always corporations fault. This marketing that redirects blame onto “inflation”(a gov failure) or “people being at home” or “shortages” only serves to distract while corporations post profits, layoff while kicking back to shareholders, and continue to pay as little as possible for the labor.

Kim_Bruning 4y ago

Which is frustrating. Being paid to not work is just as conditional as being paid to work. People are incentivized to meet the condition. Paying them to not work means they are incentivized to not work!

digdugdirk 4y ago

Very little of the product shortages (and subsequent inflation) came from people staying home. The vast majority came from global supply chain disruptions. (Which I guess is still technically people staying home, but its a bit different if you're being forcibly locked in your apartment in China vs what the "lockdown" was in the US)

mikewarot 4y ago

We had supply shortages because all the slack has been taken out of systems to "improve efficiency", which was an entirely predictable, but accepted trade-off of those decisions. High inflation isn't the fault of people barely scraping by, its a reaction to supply disruptions worldwide. I expect 10% inflation for the next decade, because of demographic shifts and deglobalization, in the US. The rest of the world will be worse as capital flees to the US.

jwestbury 4y ago
Inflation is already falling well below that 10% threshold, even in nations with higher inflation than the US (e.g. the UK and Europe). That said, a decade of 10% inflation would be an awfully cruel joke for millennials, who experienced the worst recession since the Depression around the time they graduated university, a decade of stagnant wages, another recession and global pandemic, and then, even if they managed to find themselves financially stable (e.g., tech employees), still hard-pressed to save for retirement under the weight of inflation.
- mikewarot 4y ago
  >That said, a decade of 10% inflation would be an awfully cruel joke for millennials Yes, it will be bad for all of us. I've lost the ability to earn an income due to long covid, yet my income is likely to be constrained to the meager cost of living adjustments that are wrangled out of a reluctant Congress in the remaining years of my life... should I make it to age 62 in 3 years to finally get "early" social security. There will be wage growth roughly in line with inflation, so those who can participate in the labor force won't have it as bad as I will. I wish you all luck.

aeschinder 4y ago

Just so I understand...two stimmy checks are to blame for inflation and product shortages? I know this is a popular talking point, but there needs to be some facts to back this up. Supply chains were wrecked by shipping container shortages due to bottlenecking at ports as well as factory shutdowns. There are proven instances where businesses increased prices just because they could.

cowgoesmoo 4y ago
At the start of the pandemic, between March 29 and July 25 2020, everyone claiming unemployment benefits got an extra $600/week on top of their normal payment. Later between December 27 2020, and September 4 2021, everyone was paid an extra $300/week for 9 months. For reference, the maximum unemployment benefit previously was $450/week. This is all on top of the checks, of which there were 3. Assuming you claimed unemployment the entire time, you would've gotten paid ~$24k + normal UI.
- abduhl 4y ago
  FYI unemployment is set at the state level. Some states pay far in excess of $450 per week (MA pays nearly $850). Your main point is still applicable and I agree with it.
- mikewarot 4y ago
  I never got unemployment compensation even though I was unemployed, I fell through the cracks, and couldn't focus on it (because of long COVID) enough to get it done.
scotty79 4y ago
About two years ago the requirement of fractional reserve was removed completely. This allowed banks to create as much money as there was appetite for credit. Completely insane amount of money was created through this mechanism in last two years.
d23 4y ago
Another thing I don’t understand is why the 10T we printed isn’t included in the discussion.

whatshisface 4y ago

So... We had record low interest rates for years, the PPP, rolling shutdowns in China... And people are blaming the stimulus checks? Shows you the power of business interests in the media.

scotty79 4y ago

It just tought us that introducing UBI needs to go hand in hand with measures to prevent capturing of this money by landlords. Personally I'd like to see progressive real estate tax introduced. The more property you own, the higher percentage of its value you need to pay each year as a tax.

nostromo 4y ago
This would be disastrous. We already have a housing shortage, leading to high prices. The answer isn't to make it more expensive than it already is.
- gremlinsinc 4y ago
  Pretty sure op means to gradually increase taxes the more properties someone owns, to the point it's hardly profitable to have 100 rental properties, when you make the same with 70, because of taxes, so you can sell these and the rise in supply will lower costs to purchase a home, etc. Though, personally I'm more in favor of a land value tax, I think op is on the right path. Having the tax pegged to factors like average wage / rent of an area would help landlords keep it in check, though.
  - scotty79 4y ago
    Yeah, that's what I had in mind. Gradual smooth raise. It could also be gradually introduced with rates and increase starting from low levels but increasing each year while keeping close eye on the effect it has on the markets with special focus on the poorest members of society. This tax could also be starting not from 0% but from negative value owners of a single small property might get tax credit that could help them with their mortgage in the environment of dropping property prices. For larger families with larger single properties UBI could help. As for land value I'd like to treat the land as just another property and include its value into the total value that the tax rate is based on. I wouldn't pay attention too much about local wages. I think that information influences property values that the tax rate should be based on.
- scotty79 4y ago

ZeroGravitas 4y ago

A UBI doesn't pay people to stay home. If anything it gives the many extra reasons to go out and work because they won't lose benefits.

earthling8118 4y ago

This is a weak, boring, and non-genuine take. UBI is nothing like the stimulus checks. The amount given (to people at least, not the PPP loans) was miniscule and the inflation/shortages are not from the payments

efsavage 4y ago

When people can't work you get product shortages, and then inflation, but UBI isn't about paying people not to work, it's about people electing to work for more money beyond the "basic".