4 ms·

Why does the standard economic answer have any credibility yet? Standard economics are a simplistic model that fails hard to account for the effects of their o

Why does the standard economic answer have any credibility yet? Standard economics are a simplistic model that fails hard to account for the effects of their own simplifications. No one sees physicists saying that a bouncy ball will bounce forever because it loses a negligible amount of energy in each bounce, but we see economists talk about a magical system where they get pretty much every assumption wrong and don't account for how it makes the model deviate from reality. (I had a list of aspects where the assumptions go wrong, but it's a bit too long to fit in the margin of this post)

eru 2y ago
It sounds like those mythical economists you mention are men of straw?
- dietr1ch 2y ago
  Today economists use things like GDP to understand the economy and you still hear about it and still guides decisions with big impact. Things like the Gini coefficient is over 100 years old and it showed that the economy could be doing great based on averages, despite it only being true for a few, yet there's still no push away from metrics that misrepresent how most people are doing. Well, maybe they are also ignored scientists that we all know have ideas on how to improve things, but are powerless too. Things obviously going downhill for 40+ years, but maybe working as intended, - https://en.wikipedia.org/wiki/Economic_inequality https://en.wikipedia.org/wiki/Economic_inequality
  - eru 2y ago
    GDP correlates really well with just about anything we value. > Things obviously going downhill for 40+ years, [...] Global economy inequality has decreased markedly over the last few decades. More and more people have it better than ever before.
    - torginus 2y ago
      Not it doesn't - capitalism has been off the rails for at least a decade or two. Not going to go into a rant here, but just observing the basic fact that capitalism cannot create certain resources we value - such as living space - which comprise a certain percentage (lets say a third) of things we value. This leads to these goods with inflexible supplies inflating in dollar value (see housing crisis). If housing price increase outpaces wage growth (which it does), with GDP growth being concentrated in very few pockets, this leads to decreasing living standards for most of the population, at least in this aspect.
      - lazide 2y ago
        Capitalism has no problems creating more living space - when it’s not being strangled by building codes which specifically prohibit building more living space.
        bottom999mottob 2y ago
        Yes but the problem isn't just more living space, but more affordable living space. Sure we have developers in Texas, Oklahoma, Florida, etc plopping down houses >$300-500k, but can the average person afford them? Yes I agree building codes in places like California make houses expensive, but the current market in the United States does not incentivize building affordable housing.
        lazide 2y ago
        Uh, new housing has always been more expensive than older housing. That’s normal. When more supply goes on the market, existing stock goes lower in price - when there is enough supply. That is how it always has been. Even old ‘shotgun shacks’ are too expensive because zoning restrictions (and too much easy money) has caused everyone to inflate everything.
        eru 2y ago
        > Uh, new housing has always been more expensive than older housing. That’s normal. > When more supply goes on the market, existing stock goes lower in price - when there is enough supply. Yes, that's part of why the housing stock today is nicer than the housing stock 200 years ago: over time the average newly built home was always better than existing houses.

eru 2y ago

It sounds like those mythical economists you mention are men of straw?

dietr1ch 2y ago
Today economists use things like GDP to understand the economy and you still hear about it and still guides decisions with big impact. Things like the Gini coefficient is over 100 years old and it showed that the economy could be doing great based on averages, despite it only being true for a few, yet there's still no push away from metrics that misrepresent how most people are doing. Well, maybe they are also ignored scientists that we all know have ideas on how to improve things, but are powerless too. Things obviously going downhill for 40+ years, but maybe working as intended, - https://en.wikipedia.org/wiki/Economic_inequality https://en.wikipedia.org/wiki/Economic_inequality
- eru 2y ago
  GDP correlates really well with just about anything we value. > Things obviously going downhill for 40+ years, [...] Global economy inequality has decreased markedly over the last few decades. More and more people have it better than ever before.
  - torginus 2y ago
    Not it doesn't - capitalism has been off the rails for at least a decade or two. Not going to go into a rant here, but just observing the basic fact that capitalism cannot create certain resources we value - such as living space - which comprise a certain percentage (lets say a third) of things we value. This leads to these goods with inflexible supplies inflating in dollar value (see housing crisis). If housing price increase outpaces wage growth (which it does), with GDP growth being concentrated in very few pockets, this leads to decreasing living standards for most of the population, at least in this aspect.
    - lazide 2y ago
      Capitalism has no problems creating more living space - when it’s not being strangled by building codes which specifically prohibit building more living space.
      - bottom999mottob 2y ago
        Yes but the problem isn't just more living space, but more affordable living space. Sure we have developers in Texas, Oklahoma, Florida, etc plopping down houses >$300-500k, but can the average person afford them? Yes I agree building codes in places like California make houses expensive, but the current market in the United States does not incentivize building affordable housing.
        lazide 2y ago
        Uh, new housing has always been more expensive than older housing. That’s normal. When more supply goes on the market, existing stock goes lower in price - when there is enough supply. That is how it always has been. Even old ‘shotgun shacks’ are too expensive because zoning restrictions (and too much easy money) has caused everyone to inflate everything.
        eru 2y ago
        > Uh, new housing has always been more expensive than older housing. That’s normal. > When more supply goes on the market, existing stock goes lower in price - when there is enough supply. Yes, that's part of why the housing stock today is nicer than the housing stock 200 years ago: over time the average newly built home was always better than existing houses.