Aftershock - Impending Economic Collapse?

[Moraline]

The value of working at most common jobs now is laughable.

They pay minimum wage or a couple dollars an hour more and the people that work them can't afford to live off of them. Single mothers (far too common) can barely afford to pay rent, groceries, utilities, and send their child to school. They end up working in jobs like a waitress, or a clerk, or some call centre, etc...

50 years ago. One member of the family worked and was able to afford all of those things. In some cases they could afford a lot more.

If all you can get or want is a part time job, then yes a person should struggle to live but if you work 40 hours a week at any job you should be able to afford to feed your self, pay rent, and even support a child.

Inflation went up and no ones job wages matched them. They blame the average person for borrowing.... they only did it to survive, each generation had to borrow a little more and a little more until it all exploded.

It's not done exploding, little has changed so far. I don't have all the answers, I can only take care of myself and my family. Something needs to be done though.

[vtboy]

The value of working at most common jobs now is laughable.

They pay minimum wage or a couple dollars an hour more and the people that work them can't afford to live off of them. Single mothers (far too common) can barely afford to pay rent, groceries, utilities, and send their child to school. They end up working in jobs like a waitress, or a clerk, or some call centre, etc...

50 years ago. One member of the family worked and was able to afford all of those things. In some cases they could afford a lot more.

If all you can get or want is a part time job, then yes a person should struggle to live but if you work 40 hours a week at any job you should be able to afford to feed your self, pay rent, and even support a child.

Inflation went up and no ones job wages matched them. They blame the average person for borrowing.... they only did it to survive, each generation had to borrow a little more and a little more until it all exploded.

It's not done exploding, little has changed so far. I don't have all the answers, I can only take care of myself and my family. Something needs to be done though.

The problem is globalization or, more precisely, a global supply of labor competing for jobs which once were American.

Unskilled or semi-skilled workers in the U.S., who could count on manufacturing work to provide a liveable wage when America was the only industrial game in town, now vie for jobs with workers in Asia, Central America, South America, and elsewhere who command much less for their labor. The result is hardly surprising -- all else equal, manufacturers either move their operations to those countries with the lowest labor costs or are trounced by competitors willing to take advantage of favorable wage rates.

Those who would lay blame for the withering of America's middle class entirely at the feet of callous corporations and greedy investors should perhaps consider whether they themselves would be willing to pay, say, another 20% or 30% for the goods from distant lands which now fill their homes. 

[AndyZ]

Right: "Look at all these lazy kids with their pants half off, and college grads living in their mothers' basements and going to Occupy protests.  They need to get off their asses and work for a living!"
Left: "Yeah, maybe so, but there are no jobs for them, so what are they supposed to do?"

Both are right--and neither.  Yeah, there are a lot of unproductive people out there.  Yeah, maybe extended unemployment insurance does encourage dependency and discourage people from seeking work.  But all cutting off unemployment insurance would do is make it so Wal-Mart and McDonald's and the gas station around the corner get 14 applications rather than 11 for every position open.  It's not going to put anyone back to work.  For that, you need paying jobs.  And we don't have them.  And we won't, for a long time, if ever.

The capitalist solution would be to start up more businesses.  I'd love to see that, but since America has the highest corporate tax rate of any country in the world, it doesn't seem likely.  Any business capable of providing any substantial amount of profits/jobs will simply move to other countries, or start there to begin with.

To continue towards the capitalist solution, we'd need to set things up so that it's much easier to start a business in America.  If OSG has any accuracy about how Forbes 400 hypothesis, this won't happen because big businesses don't want the competition.  They can hire huge lawyers and be able to do whatever the crap they want because people don't have any other choices.

The socialist solution (as I understand it) would be for the government to just give people jobs.  You can see how well this is working for Europe.  There just isn't enough money.

To continue towards the socialist solution, we would have to raise taxes on the richest.  However, this wouldn't help, because even after you took every last dime from the highest 1%, there still wouldn't be enough to pay for everything.  Our debt already exceeds our GDP.

The Singularity solution is developing an artificial intelligence which is far more logical and intelligent than we are, which can construct a superior method of government.  This one has my vote.

50 years ago. One member of the family worked and was able to afford all of those things. In some cases they could afford a lot more.

If all you can get or want is a part time job, then yes a person should struggle to live but if you work 40 hours a week at any job you should be able to afford to feed your self, pay rent, and even support a child.

Inflation went up and no ones job wages matched them. They blame the average person for borrowing.... they only did it to survive, each generation had to borrow a little more and a little more until it all exploded.

Going to agree about inflation.  Look at the prices of food and there's no freaking way it's only 1.4%.

Does that mean that you want the government to print and spend less money?

Those who would lay blame for the withering of America's middle class entirely at the feet of callous corporations and greedy investors should perhaps consider whether they themselves would be willing to pay, say, another 20% or 30% for the goods from distant lands which now fill their homes. 

Are you suggesting tariffs?

[gaggedLouise]

The problem is globalization or, more precisely, a global supply of labor competing for jobs which once were American.

Unskilled or semi-skilled workers in the U.S., who could count on manufacturing work to provide a liveable wage when America was the only industrial game in town, now vie for jobs with workers in Asia, Central America, South America, and elsewhere who command much less for their labor. The result is hardly surprising -- all else equal, manufacturers either move their operations to those countries with the lowest labor costs or are trounced by competitors willing to take advantage of favorable wage rates.

Those who would lay blame for the withering of America's middle class entirely at the feet of callous corporations and greedy investors should perhaps consider whether they themselves would be willing to pay, say, another 20% or 30% for the goods from distant lands which now fill their homes.

I agree the meltdown can't just be blamed simply and squarely on individual greedy skunks among the top 0.5% - that notion is just the mirror image of the idea that it was caused by lazy, procrastinating and fraudulent working people, ditto jobseekers and their inept, "dumb" family members and choices. The greed and abusive treatment of assets is a business culture thing, and it also comes out of a state of affairs where corporations often don't *need* the "common people - not as a large sheet of buyers, neither as workforce. They need their aspirations to try to climb, but they don't need a dozen million of regular U.S. workers and employees anymore. Ford, Apple or Exxon wouldn't hire people on that scale now even if they could afford it: they prefer to let the machines or highly trained specialists carry out the brunt of the work. And those work pullers - machines or geeks - don't really need to be located in the U.S., or in Western/Central Europe. It's much cheaper if most of them can be located to india, Peru or China.

But banks and stock exchanges are not really doing the job of allocating money and assets to the places where they tend to come to the best use (the "invisible hand" of money and stock trading). What's rational about the hype around Facebook and the initial price of its shares when they were listed? It was plainly a piece of subculture hype and the media were 99% uncritical about it. Much of what happens on the stock exchange now is little more than pyramid games or guesswork, and insight abpout long-term trends or relations that would limit the prospects of a company or a venture are *not* rewarded if they don't "sound right" at the point when they are made. There's a huge amount of insider trading (violating the legal demands for transparency and fairness), backscratching and hype in the stock exchanges and banking world - and this is not rational or helpful.

**'


I'd like to add to my earlier pst, that when I suggested we need some other yardstick than money as a means of formalizing prices, wages, the exchange of work, goods, information and assets, I was thinking of a system where a couple different exchange axises coexist at the same time. I was not imagining a world where money is not an important base of wages and prices, but one where it's not the only ultimate base.

[gaggedLouise]

Are you suggesting tariffs?

If the crisis goes on, all around the world - China could well be next -  and there is no real upturn that seems to begin to get close to where the economy was in 2005 (statistically there will be upturns, but that's because we've been so low down already!) then more and more countries will be forced to tariffs and protectionist measures because that's the only well-tested way to protect your own industries and trades in the modern world, if you can't achieve growth on the worldwide open market. Well, short of war, because war and arms races often makes the industry boom too, at least if you got the raw assets and knowledge to keep going.

[Oniya]

Are you suggesting tariffs?

More like, if the corps wanted to keep the same profit margin while paying even minimum US wages for an American to make the widgets, prices would end up being raised by that amount.  If they can pay a worker in the Grand Duchy of Fenwick less than minimum US wage, that's what makes them put their factories in the Grand Duchy of Fenwick.  If the US - by whatever means (tariff, boycott, 'buy local' movements) - were to insist on Americans making their widgets, in American factories, the corp would have to raise prices or lose profits.

[AndyZ]

I'd like to add to my earlier pst, that when I suggested we need some other yardstick than money as a means of formalizing prices, wages, the exchange of work, goods, information and assets, I was thinking of a system where a couple different exchange axises coexist at the same time. I was not imagining a world where money is not an important base of wages and prices, but one where it's not the only ultimate base.

This makes me curious.  The idea of currency is supposed to be a means of exchange.  So, I can see how this would work, because we have gold, silver, stocks, and other things which go up and down in value over time when compared to currency.  I can see how it would work but not sure what the unit would be.



Tariffs do present an interesting solution.  Prices would go up for goods and services, but jobs would come back to match.  Overall, I'm pretty good with it, although I could be persuaded otherwise if someone can show why it would really hurt us...or can I?  Let me think.

Although, I can think of a couple possible ways.  For one, if the USA puts a tariff on any one country, that country will almost certainly put a tariff on the USA in return.  That hurts our exports and damages GDP as a result.  I wouldn't really object to more of a push for having the USA be more self-sufficient, though.

For another, it's not just wages that push companies away but regulations and taxes.  The USA would have to be competitive in all of the things.  If businesses look at all the options and would still rather be in Fenwick, retaliation might be to raise the tariffs even higher, raising the price of goods on things.

I'm not sure I trust politicians to keep tariffs as purely punitive and not a source of income as well.  Let's look at cigarettes and how the government now relies on cigarette taxes.  I have no evidence for this, but I believe that the government is now deep in bed with tobacco in order to make sure that that money keeps on coming in.  Thus, I fear (perhaps irrationally) that government may end up giving special favors to those who pay the tariff money, as opposed to those who just come here.

All in all, I'm pretty happy with the idea of tariffs.  That's the best I can do at playing devil's advocate unless anyone else has suggestions why it'd be bad.

[Oniya]

This makes me curious.  The idea of currency is supposed to be a means of exchange.  So, I can see how this would work, because we have gold, silver, stocks, and other things which go up and down in value over time when compared to currency.  I can see how it would work but not sure what the unit would be.

Maybe there wouldn't be a unit.  Someone suggested the idea that a teacher could be partially compensated with room and board - food and shelter, maybe even a uniform if the school does that sort of thing.  What does this person provide that the community needs?  What does the community have that this person needs?  What balance can be struck between the two? 

Of course, without a unit, the federal government couldn't really get their cut...

[AndyZ]

It sounds a lot like going back to the barter system, then.  I like the idea of the federal government not swooping in and demanding their cut, although even with the barter system, I'm sure they'd find a way.

Perhaps I'm wrong, but I feel like this method would simply be treating a symptom, and it's not so much the currency causing the issue as other things that affect the currency.

[Oniya]

I'm just theorizing.  But basically, all currency is simply a compact way of trading goods and services.  Instead of having to make change for a yak, you bring a token that represents a yak, and the shopkeeper gives you your goods, and enough tokens to make up for what a yak is worth.  He can then trade in your yak token for a yak, while you trade in your change for a pig and two chickens.  Gradually, a 'yak' token ends up with a standard value, whether it's buying yaks or tomatoes - and you have currency.

[AndyZ]

Well, also, prices go up and down thanks to supply and demand.  That's why prices on things are constantly fluctuating, either to go up or go on sale.

It does remind me of an argument for the gold standard, though, where currency is fixed upon something rather than simply being fiat currency that they can print as much as they want.

That's about my limit of the understanding of how it all works, though.

[OldSchoolGamer]

The capitalist solution would be to start up more businesses.  I'd love to see that, but since America has the highest corporate tax rate of any country in the world, it doesn't seem likely.  Any business capable of providing any substantial amount of profits/jobs will simply move to other countries, or start there to begin with.

America has the highest marginal rate, yes.  With more holes in it than a chunk of Swiss cheese.  The effective tax rate (what companies actually pay) is much lower.  For some very big firms, it's zero.  Can't get lower than zero...unless you're an oil company, that is.

To continue towards the capitalist solution, we'd need to set things up so that it's much easier to start a business in America.  If OSG has any accuracy about how Forbes 400 hypothesis, this won't happen because big businesses don't want the competition.  They can hire huge lawyers and be able to do whatever the crap they want because people don't have any other choices.

This I agree with.  I think we could significantly cut the red tape small businesses have to endure.

The Singularity solution is developing an artificial intelligence which is far more logical and intelligent than we are, which can construct a superior method of government.  This one has my vote.

If you think the IRS is bad, try these guys:

[AndyZ]

Well, we agree on cutting red tape on small businesses.  I'll take it.

Oh, and a silly question, but: what logical reason would an artificial intelligence have for wanting to destroy humans?  Other than if we try to destroy it after programming it with a stringent self-preservation algorithm.

[Oniya]

Well, it depends on whether we remember to program in the Three Laws of Robotics.  If we don't, then the AI might determine that the source of all the 'inefficiencies' is humankind and try to 'correct' that problem.

[gaggedLouise]

Well, also, prices go up and down thanks to supply and demand.  That's why prices on things are constantly fluctuating, either to go up or go on sale.

It does remind me of an argument for the gold standard, though, where currency is fixed upon something rather than simply being fiat currency that they can print as much as they want.

That's about my limit of the understanding of how it all works, though.

The beginnings of philosophy in Greece happened around the same time and place that rulers and cities first began to strike regular coins, and that might not be a historical accident. I've heard people in classical studies argue that some of the concepts of early philosophers - Thales, Pythagoras, Heraclitus - were influenced by coins and gold emerging as standards to settle a "token value" and simplify trade/change. Heraclitus actually said at one point that "all things come out of fire and return to it, as gold can change into all things and all things can change back into gold" and to him, fire was the creative principle. A direct allusion to the use of (gold) coins as a link between the values of things?

[AndyZ]

Well, it depends on whether we remember to program in the Three Laws of Robotics.  If we don't, then the AI might determine that the source of all the 'inefficiencies' is humankind and try to 'correct' that problem.

Personally, I always figured that as of the Singularity, AIs would work in synergy with humans.  Both sides would be pretty good at doing some things and terrible at doing others.

Of course, maybe I'm looking too far ahead.  The Singularity is the point where the AI is so smart that it's better than humans at making AIs, and we have a rocket boost in technological advances.  Perhaps AIs are just pretty stupid before then.

The beginnings of philosophy in Greece happened around the same time and place that rulers and cities first began to strike regular coins, and that might not be a historical accident. I've heard people in classical studies argue that some of the concepts of early philosophers - Thales, Pythagoras, Heraclitus - were influenced by coins and gold emerging as standards to settle a "token value" and simplify trade/change. Heraclitus actually said at one point that "all things come out of fire and return to it, as gold can change into all things and all things can change back into gold" and to him, fire was the creative principle. A direct allusion to the use of (gold) coins as a link between the values of things?

I have absolutely no evidence of this, but I always figured that gold became a measure of currency when people found this pretty, rare, shiny rock and started using it as its own system of trade.  The rock wasn't good for much on its own beyond jewelry, so people could make it into stuff to wear and be pretty if they had enough of it, but otherwise they just used it to trade.  The great thing was that it didn't rot or age or change, unlike yaks, furs, grain and other stuff you might trade.

Eventually, people realized that some rocks were bigger than others and used some method of making even-sized bits of gold in order to keep everything level.  Why coins?  Crap if I know.  It may have even started out as balls or something else, up until somebody wanted to stamp his face on them and proclaim himself the ruler of that area.  Coins would be great for that.

Again, no evidence, just how I always figured things went.

[OldSchoolGamer]

Oh, and a silly question, but: what logical reason would an artificial intelligence have for wanting to destroy humans?  Other than if we try to destroy it after programming it with a stringent self-preservation algorithm.

I don't know.  But I work with computers for a living, and they're quirky beasts.  I'm not going to assert as fact that a superadvanced AI would see all humans as a threat and try and go Terminator or Reign of Steel or Matrix on us.  But I also don't think you can assert as fact that something like that is impossible, or even highly improbable, either.  So while I'm not opposed to the building of AIs like that (under carefully controlled and supervised conditions) I don't believe in trusting them with anything important.  Certainly not key infrastructure, or anything sharp or nuclear.  I would not, for instance, allow it to network with any other system except itself and devices attached to it (no Internet connection).

[AndyZ]

Fair enough.  I'll accept that it's an unknown and not worth the risk even if the risk is small.  I guess I just...always figured that the rational and logical thing would be to work in harmony, and never saw any other reason.

Though, I will say that I'd rather give AI control as opposed to most of our politicians, but that's barely a fair comparison.

Sorry for hijacking the thread, folks.

[Vekseid]

Well, we agree on cutting red tape on small businesses.  I'll take it.

Oh, and a silly question, but: what logical reason would an artificial intelligence have for wanting to destroy humans?  Other than if we try to destroy it after programming it with a stringent self-preservation algorithm.

Most AGI doomsday proponents imagine that it will instead be a mistake of some variety. "Make everyone happy!" Well...

In the worst case scenario we create a zone of death expanding at some not-too-insignificant fraction of c. Tile the universe with copies of Britney Spears CDs or something.

Rapid-singularity proponents believe that whomever comes up with this first wins. Whatever ideas they have, however they design it - their singular invention will be the greatest event in Earth's history since the origin of life. What ever government they tell the AGI is ideal, will be theirs to enforce. There's no stopping them - they simply win.

I don't subscribe to that view, it's not necessarily a given that we'll achieve AGI before we start significantly expanding human capacity directly - not necessarily through cybernetics or genetic modification, either. But there's still certainly going to be a relatively small group of people with both the knowhow and resources, at that point, to actually determine humanity's future. I sortof wonder if this is what Marx actually feared - socialism is about public ownership of the means of production.

If, privately, one person controls enough automata to declare war on the entire planet and win - do they deserve it?

If you believe in the singularity solution, you pretty much have to accept that as a possibility.

[AndyZ]

Stupid question but search engines don't seem clear on it: what's the difference between AI and AGI?

[Vekseid]

Artificial General Intelligence

Many problems in AI are considered to be 'general' - you solve one, you solve all of them. An AGI is assumed to be a sapient entity. Early ones might not function on a fully human level but the capacity would clearly be there.

[vtboy]

Are you suggesting tariffs?

Absolutely not. I am only pointing out that the popular vilification of businesses for "outsourcing" jobs is, at best, overly simplistic and, frequently, downright hypocritical.

Tariffs are mechanisms by which A's economic difficulties are shifted to B's shoulders, but not made to go away. In essence, B is forced to subsidize A.

Placing a 20% tariff on clothing imported from China, for example, might create room for less competitive American textile manufacturers to enter the market. But, while A, an unemployed textile worker, might be grateful for the resulting job opportunity, B, a single mom struggling to keep her kids clothed, is likely to prefer cheaper t-shirts and jeans. Or consider the likely ramifications of placing tariffs on an industrial commodity like steel. Though goosing the price of foreign steel might lead to more jobs in America's steel industry, it would also likely increase the costs of production and prices of America's manufactured goods in which steel is a major component (e.g., cars). If those American goods then cease to be competitive with their foreign counterparts, in both domestic and international markets, labor force reductions in American manufacturing are likely to follow. I am not sure how vigorously B, an unemployed auto worker, is likely to celebrate the good fortune of A, a recently hired steel worker, under these circumstances.   

And then, of course, there is the specter of trade wars.     

[TheGlyphstone]

Well, it depends on whether we remember to program in the Three Laws of Robotics.  If we don't, then the AI might determine that the source of all the 'inefficiencies' is humankind and try to 'correct' that problem.

Right up until the Zeroth Law develops and we get the problem anyways.