3 ms·

Honest question, because it’s something I’ve been thinking a lot about: what is a “good” economy vs. a “bad” economy?

by rogerrogerr 8mo ago

JumpCrisscross 8mo ago
> what is a “good” economy vs. a “bad” economy? One that is growing sustainably with broad benefits.
- neves 8mo ago
  And which growth benefits spreads for a great percentage of the population instead of a handful of billionaires
  - deleted 8mo ago
    [deleted]
- enaaem 8mo ago
  I would like to add an example to this. Restrictive zoning and the lack of walkable neighbourhoods makes it very difficult for small businesses that rely on personal service. This isn't just a slight inconvenience, but it completely changes the fabric of society. But in American libertarian circles taxation takes up all the oxygen in the room. People are generally blind to opportunity cost.
xg15 8mo ago
People being able to make a living would be a start?
lazide 8mo ago
One that doesn’t have half the population (or more!) wanting to set the other half on fire?
irishcoffee 8mo ago
The post-WWII economy in the US is the answer you’re looking for, and the whole world has been chasing that dragon ever since.
- leptons 8mo ago
  MAGA seems to want to go back there, and they're trying to start WWIII to get there.
  - irishcoffee 8mo ago
    If you take the blinders off you’ll understand why focusing on maga isn’t the play.
- kldavis4 8mo ago
  does that include the 90% marginal tax rates? :)
  - nxm 8mo ago
    It includes a pre-globalization world
  - forgetfreeman 8mo ago
    Yep. Otherwise capital accumulates to the point where power inverts and you end up with a government that exclusively services capital.
vjvjvjvjghv 8mo ago
A good economy is an economy that benefits most of the population and not just a few percent at the top. I would argue it should be a political goal to keep income distribution relatively stable. A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people. In a crash rich people lose a lot of paper money but not-rich people may have trouble affording shelter or food. Or middle class may lose their savings.
- JumpCrisscross 8mo ago
  > it should be a political goal to keep income distribution relatively stable This penalizes economic dynamism and moves economic decision making from risk taking to whoever defies the baseline distribution. > A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people Not necessarily–plenty of social systems let the market boom and bust without causing social distress. And again, smoothing out the business cycle penalizes risk taking.
  - tartoran 8mo ago
    Risk taking should be penalized harshly when the risk is high, that’s the nature of risk. If it pays off good, it was a good move but if it was bad one let the risk taker suffer.
    - JumpCrisscross 8mo ago
      > Risk taking should be penalized harshly when the risk is high, that’s the nature of risk If the odds (and pay-outs) are 10,000:1 and you cap pay-outs at 1,000:1, you've made a high-risk/high-reward risk unworkable in your economy. Systems that target a distribution tend to wind up in that mode, with the risk takers taking their risks (and producing their rewards) outside the system. Keeping distributions stable means capping upsides. There are better ways to redistribute wealth.
  - thrance 8mo ago
    > Not necessarily–plenty of social systems let the market boom and bust without causing social distress. And again, smoothing out the business cycle penalizes risk taking. The wealthy are shielded from most negative consequences of their degenerate gambling. The working class ends up bearing the full cost of their reckless actions, literally every time. What the modern world needs isn't insane risk-taking, it's robust chains of prductions that can accomodate a shifting climate, while redistributing the global production more fairly.
crawfordcomeaux 8mo ago
A "good economy" is one that isn't compulsory. One that doesn't require enslavement and genocide. One that doesn't require oppression. One that is aligned with the environments it operates in. One that we can walk away from without necessarily risking premature death or enslavement for doing so.
2OEH8eoCRo0 8mo ago
I think that a good economy is one that lifts all boats. Broad prosperity that is shared by most rather than concentrated in a few.
mlsu 8mo ago
One should look at the real activity of the economy to understand it -- not at the flow of money. A good economy is one where there is lots of value for the consumers. How does value flow to consumers? Through a price signal. A price signal which is accurate is one where the flow of money in one direction is commensurate with the flow of value in the other direction. One can think of the flow of money as if it were a nervous system: the nerves send signals, and the muscle moves. In a competitive marketplace (such as restaurants), the most successful restaurants are almost always the ones with the best food, the best ambiance, etc. Money flows away from bad restaurants and to good restaurants, because there is a lot of market competition between restaurants. If you serve bad food, you're out of business. The muscle is well controlled by the nerve. Now, in the US economy, in many sectors, there is no real competition. For example, in online advertising, there is only two companies that one can use. In groceries, there is only 3 major grocery chains. In insurance, in food, etc etc. There is functionally no competition in those sectors and very frequently there is outright collusion. In this case, the signal is far less meaningful. What signal does it send to Google, if I drop them for Facebook? The answer is, not much of a signal, because there's not meaningful competition between these two entities. They both suck and they both know that they won't lose customers if they degrade their services, commit fraud, or stagnate. Many many swathes of the American economy are like this. The obvious ones, like healthcare, are so monopolized that your signal means absolutely nothing. They will do nothing to keep you as a customer. They will do nothing to meaningfully improve their services. You will still pay. This is like a muscle that sucks nutrients but is completely disconnected from the nervous system. That is a "bad" economy. Of course, the market value of these companies has never been higher. Why? Because there are very few sectors of the economy where capital can flow that are actually competitive. This has knock-on effects, like having capital flow into other assets like bitcoin or housing, in search of returns. It's not that these corporations are "too wealthy" by some ethical definition. They are too concentrated, which makes them inefficient. Dealing with a large health insurance company today is not unlike dealing with USSR bureaucracy in 1970. Our economy is slowly being transformed into one where a very small group of private central planners manage the allocation of the whole of social resources. This quite predictably impoverishes everyone. The USA economy today is like a paraplegic. We can still get around but there is a lot of dead nerves.
samrus 8mo ago
Its all about fluidity of value In a good economy, value can flow from source (supply) to destination (demand), easily. You have plenty of opportunities to sell your labour, and the compensation you recieve is good enough to buy you the things you need like housing and food Everything else derives from that

Honest question, because it’s something I’ve been thinking a lot about: what is a “good” economy vs. a “bad” economy?

JumpCrisscross 8mo ago

> what is a “good” economy vs. a “bad” economy? One that is growing sustainably with broad benefits.

neves 8mo ago
And which growth benefits spreads for a great percentage of the population instead of a handful of billionaires
- deleted 8mo ago
  [deleted]
enaaem 8mo ago
I would like to add an example to this. Restrictive zoning and the lack of walkable neighbourhoods makes it very difficult for small businesses that rely on personal service. This isn't just a slight inconvenience, but it completely changes the fabric of society. But in American libertarian circles taxation takes up all the oxygen in the room. People are generally blind to opportunity cost.

xg15 8mo ago

People being able to make a living would be a start?

lazide 8mo ago

One that doesn’t have half the population (or more!) wanting to set the other half on fire?

irishcoffee 8mo ago

The post-WWII economy in the US is the answer you’re looking for, and the whole world has been chasing that dragon ever since.

leptons 8mo ago
MAGA seems to want to go back there, and they're trying to start WWIII to get there.
- irishcoffee 8mo ago
  If you take the blinders off you’ll understand why focusing on maga isn’t the play.
kldavis4 8mo ago
does that include the 90% marginal tax rates? :)
- nxm 8mo ago
  It includes a pre-globalization world
- forgetfreeman 8mo ago
  Yep. Otherwise capital accumulates to the point where power inverts and you end up with a government that exclusively services capital.

vjvjvjvjghv 8mo ago

A good economy is an economy that benefits most of the population and not just a few percent at the top. I would argue it should be a political goal to keep income distribution relatively stable. A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people. In a crash rich people lose a lot of paper money but not-rich people may have trouble affording shelter or food. Or middle class may lose their savings.

JumpCrisscross 8mo ago
> it should be a political goal to keep income distribution relatively stable This penalizes economic dynamism and moves economic decision making from risk taking to whoever defies the baseline distribution. > A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people Not necessarily–plenty of social systems let the market boom and bust without causing social distress. And again, smoothing out the business cycle penalizes risk taking.
- tartoran 8mo ago
  Risk taking should be penalized harshly when the risk is high, that’s the nature of risk. If it pays off good, it was a good move but if it was bad one let the risk taker suffer.
  - JumpCrisscross 8mo ago
    > Risk taking should be penalized harshly when the risk is high, that’s the nature of risk If the odds (and pay-outs) are 10,000:1 and you cap pay-outs at 1,000:1, you've made a high-risk/high-reward risk unworkable in your economy. Systems that target a distribution tend to wind up in that mode, with the risk takers taking their risks (and producing their rewards) outside the system. Keeping distributions stable means capping upsides. There are better ways to redistribute wealth.
- thrance 8mo ago
  > Not necessarily–plenty of social systems let the market boom and bust without causing social distress. And again, smoothing out the business cycle penalizes risk taking. The wealthy are shielded from most negative consequences of their degenerate gambling. The working class ends up bearing the full cost of their reckless actions, literally every time. What the modern world needs isn't insane risk-taking, it's robust chains of prductions that can accomodate a shifting climate, while redistributing the global production more fairly.

crawfordcomeaux 8mo ago

A "good economy" is one that isn't compulsory. One that doesn't require enslavement and genocide. One that doesn't require oppression. One that is aligned with the environments it operates in. One that we can walk away from without necessarily risking premature death or enslavement for doing so.

2OEH8eoCRo0 8mo ago

I think that a good economy is one that lifts all boats. Broad prosperity that is shared by most rather than concentrated in a few.

mlsu 8mo ago

One should look at the real activity of the economy to understand it -- not at the flow of money. A good economy is one where there is lots of value for the consumers. How does value flow to consumers? Through a price signal. A price signal which is accurate is one where the flow of money in one direction is commensurate with the flow of value in the other direction. One can think of the flow of money as if it were a nervous system: the nerves send signals, and the muscle moves. In a competitive marketplace (such as restaurants), the most successful restaurants are almost always the ones with the best food, the best ambiance, etc. Money flows away from bad restaurants and to good restaurants, because there is a lot of market competition between restaurants. If you serve bad food, you're out of business. The muscle is well controlled by the nerve. Now, in the US economy, in many sectors, there is no real competition. For example, in online advertising, there is only two companies that one can use. In groceries, there is only 3 major grocery chains. In insurance, in food, etc etc. There is functionally no competition in those sectors and very frequently there is outright collusion. In this case, the signal is far less meaningful. What signal does it send to Google, if I drop them for Facebook? The answer is, not much of a signal, because there's not meaningful competition between these two entities. They both suck and they both know that they won't lose customers if they degrade their services, commit fraud, or stagnate. Many many swathes of the American economy are like this. The obvious ones, like healthcare, are so monopolized that your signal means absolutely nothing. They will do nothing to keep you as a customer. They will do nothing to meaningfully improve their services. You will still pay. This is like a muscle that sucks nutrients but is completely disconnected from the nervous system. That is a "bad" economy. Of course, the market value of these companies has never been higher. Why? Because there are very few sectors of the economy where capital can flow that are actually competitive. This has knock-on effects, like having capital flow into other assets like bitcoin or housing, in search of returns. It's not that these corporations are "too wealthy" by some ethical definition. They are too concentrated, which makes them inefficient. Dealing with a large health insurance company today is not unlike dealing with USSR bureaucracy in 1970. Our economy is slowly being transformed into one where a very small group of private central planners manage the allocation of the whole of social resources. This quite predictably impoverishes everyone. The USA economy today is like a paraplegic. We can still get around but there is a lot of dead nerves.

samrus 8mo ago

Its all about fluidity of value In a good economy, value can flow from source (supply) to destination (demand), easily. You have plenty of opportunities to sell your labour, and the compensation you recieve is good enough to buy you the things you need like housing and food Everything else derives from that