3 ms·

> Financial instruments such as derivatives and hedge funds do very little to put money back into the real economy. If they did, then you would .. see run-away

by dualogy 13y ago

> Financial instruments such as derivatives and hedge funds do very little to put money back into the real economy. If they did, then you would .. see run-away inflation on store shelves before year's end ;) Sounds flip but think about it.. are you really suggesting there's not enough money circulating in the real economy? Are you sure that's what you want? The vast expansion of dollars over the last decades was never a real problem because the new cash largely didn't enter the real economy and ended up abroad or in ultimately arbitrary asset valuations, from stocks to houses to bitcoins to xyz. You want all those dollars to circulate in your local real economy? Think hard and long on this one ;D > Note that the decoupling of productivity and wages coincides with the advent of microcomputers and industrial robotics, and job losses have been greatest in the industries which those innovations affected. So the story of technology-driven wage stagnation and unemployment is not some speculative story about the future: it's the story of the developed world's economic development over the last 40 years. You're right but that all that automation could instead very well also have led to real wealth gains for the masses of people, middle class and low income -- if the wealth tech created hadn't been fully gobbled up by Fed, Wall St. and US Govt. That's my own crazy theory.. ;)

nkoren 13y ago
The issue isn't the total amount of money in the real economy -- it's the distribution and accessibility of money within the real economy, as workforce participation falls off due to the lack of jobs. While the financial economy does hoover up vast amounts of money, the people who own the "wealth" in the financial economy (and you're right: they're pretty much arbitrary asset valuations rather than real actual wealth) are also increasingly the only ones with real access to the real economy. The gains from automation weren't gobbled up by the Fed, "Wall St." (generically), and the US Govt. They were gobbled up (specifically) by the IP holders and financiers who enabled that automation. Those entities not only lack any incentive for their gains to be redistributed to the poor and middle classes -- they don't even have the means to perform such redistribution (shareholders' rights prevent banks and technology firms from acting as charities). The only solution I see is for a portion of those gains to be channelled into a Universal Basic Income, in which case automation would genuinely enable real wealth gains for everyone. At present, however, it is not.

by dualogy 13y ago

nkoren 13y ago

The issue isn't the total amount of money in the real economy -- it's the distribution and accessibility of money within the real economy, as workforce participation falls off due to the lack of jobs. While the financial economy does hoover up vast amounts of money, the people who own the "wealth" in the financial economy (and you're right: they're pretty much arbitrary asset valuations rather than real actual wealth) are also increasingly the only ones with real access to the real economy. The gains from automation weren't gobbled up by the Fed, "Wall St." (generically), and the US Govt. They were gobbled up (specifically) by the IP holders and financiers who enabled that automation. Those entities not only lack any incentive for their gains to be redistributed to the poor and middle classes -- they don't even have the means to perform such redistribution (shareholders' rights prevent banks and technology firms from acting as charities). The only solution I see is for a portion of those gains to be channelled into a Universal Basic Income, in which case automation would genuinely enable real wealth gains for everyone. At present, however, it is not.