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>"Crack Theory That Everyone Is Going To Hate" Because you're going to have to explain how it works. >way to ensure that people with the "right" educational a

>"Crack Theory That Everyone Is Going To Hate" Because you're going to have to explain how it works. >way to ensure that people with the "right" educational and professional pedigree were getting the spoils of the money-printing that was preventing the utter collapse of our economy. How is giving money to the "right" people supposed to do that? >tech workers are just a convenient receptacle to prevent a wage-price spiral in the broader economy. How is giving money to these people in particular different than giving money to, say, nurses?

badcppdev 3y ago
It's because the tech economy is a new pathway for money to flow. The wage inflation spiral that terrifies economists is where current jobs start paying more which leads to inflation in prices for goods and services which leads to the requirement for higher wages... I think that's the theory of the wage spiral. So OPs theory is that the government can print money, boost GDP, and pay out profits to the owners/shareholders but not trigger the inflation... until now
- yterdy 3y ago
  Correct. The people we're talking about - Ivy League alums, the children of professionals, immigrants, and people who want to be like them - are much likelier than the average American to drive their wealth into assets and savings. Housing prices, stock prices, retirement portfolios would balloon, not (for the most part) the prices of everyday goods. Which is what happened; the wage-price spiral that we did see was largely localized to Silicon Valley/San Francisco (and, to a lesser extent, a few big cities). Until the Sept. '19 repo crisis and then the pandemic, of course.
tl 3y ago
> How is giving money to the "right" people supposed to do that? According to various studies there is a limit to how much money per year changes your base happiness. The ones I have read say $80,000 but inflation probably makes that a dated number. Everybody meaningfully burning more than that is either a member of the upper class buying superyachts or stuck in a red queen race like a speculative real estate market or collectibles. The ones who make more than the happiness threshold who don't have some other sink for it (the majority) prudently lock it into index funds where it's made available to the people who didn't want to lose control in the first place. That is the "how". > How is giving money to these people in particular different than giving money to, say, nurses? Canonically, there are three competing types of people getting paid out with some overlap: 1. Small business professionals. The standard here is your family doctor or dentist. Restaraunt owners also qualify. These groups deal with fairly intense regulation / "insurance" policies to limit how successful they are. 2. High-end white collar workers. Prior to the tech bubble conscripting software engineers, the usual suspect was lawyers. Lawyers have a wide gulf in compensation between "Ivy League Grads at BigLaw" and everyone else. That trend mirrors the current trend of BigTech vs. everyone else as described in the "Crack Theory". Look up "bi-modal salary" for more details. 3. Strikers. The halls of power are more than willing to max out the happiness threshold of anyone from auto workers in the 50s to airline points in the 90s who can make a credible threat that the spice will not flow. Power is willing to do this because they have spare money to print and the ability to strip the compensation long term by shifting jobs around. Based on current events in NJ, you may or may not get to watch this pay out in real time with your nurses.

badcppdev 3y ago

It's because the tech economy is a new pathway for money to flow. The wage inflation spiral that terrifies economists is where current jobs start paying more which leads to inflation in prices for goods and services which leads to the requirement for higher wages... I think that's the theory of the wage spiral. So OPs theory is that the government can print money, boost GDP, and pay out profits to the owners/shareholders but not trigger the inflation... until now

yterdy 3y ago
Correct. The people we're talking about - Ivy League alums, the children of professionals, immigrants, and people who want to be like them - are much likelier than the average American to drive their wealth into assets and savings. Housing prices, stock prices, retirement portfolios would balloon, not (for the most part) the prices of everyday goods. Which is what happened; the wage-price spiral that we did see was largely localized to Silicon Valley/San Francisco (and, to a lesser extent, a few big cities). Until the Sept. '19 repo crisis and then the pandemic, of course.

tl 3y ago

> How is giving money to the "right" people supposed to do that? According to various studies there is a limit to how much money per year changes your base happiness. The ones I have read say $80,000 but inflation probably makes that a dated number. Everybody meaningfully burning more than that is either a member of the upper class buying superyachts or stuck in a red queen race like a speculative real estate market or collectibles. The ones who make more than the happiness threshold who don't have some other sink for it (the majority) prudently lock it into index funds where it's made available to the people who didn't want to lose control in the first place. That is the "how". > How is giving money to these people in particular different than giving money to, say, nurses? Canonically, there are three competing types of people getting paid out with some overlap: 1. Small business professionals. The standard here is your family doctor or dentist. Restaraunt owners also qualify. These groups deal with fairly intense regulation / "insurance" policies to limit how successful they are. 2. High-end white collar workers. Prior to the tech bubble conscripting software engineers, the usual suspect was lawyers. Lawyers have a wide gulf in compensation between "Ivy League Grads at BigLaw" and everyone else. That trend mirrors the current trend of BigTech vs. everyone else as described in the "Crack Theory". Look up "bi-modal salary" for more details. 3. Strikers. The halls of power are more than willing to max out the happiness threshold of anyone from auto workers in the 50s to airline points in the 90s who can make a credible threat that the spice will not flow. Power is willing to do this because they have spare money to print and the ability to strip the compensation long term by shifting jobs around. Based on current events in NJ, you may or may not get to watch this pay out in real time with your nurses.