Etcetera

Any reason for optimism, lately?

port1080.

Posted to Etcetera on Thu Jun 07, 2012 at 09:27:15 PM EST (promoted from Diaries by Acefantastik). RSS.

Obama's a mediocre president at best, Romney might be better but will be saddled with a bunch of nutjob Congressmen who want to go back to the gold standard. Neither party really seems to have any new ideas about how to improve governance or fix the economy - Republicans want to cut taxes and cut spending and have no real plan to close the long term deficit, Democrats want to raise taxes and increase spending and also have no real plan to close the long term deficit. Europe looks about two steps away from completely falling apart, Asia's economic growth has been on a remarkable upward trajectory for the past two decades that can't last forever...seriously, is there any reason at all to be optimistic about the next few decades?

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1

Re: Any reason for optimism, lately?

joshv.

Wed Jun 06, 2012 at 08:39:17 AM EST

none

Yes, debt fueled self-delusion will finally come to an end.  It will be a very painful process, but in the end a generation of politicians will emerge that understands first hand the dangers of debt and loose monetary policy.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 08:53:19 AM EST

none

Doesn't do us much good if we're in our 60s or 70s by the time that happens, does it? I see a slow moving trainwreck of stagflation and high unemployment - the institutions are strong enough to prevent a real catastrophic collapse like in the 1920s, but that means the pain will be spread out over a long, long time instead of intense and dramatic.

Allons-y!

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Re: Any reason for optimism, lately?

improper.

Wed Jun 06, 2012 at 09:46:03 AM EST

5.00 (astute)

You know that's laughable. The new politicians will just find their own spending preferences. Right now they talk about cutting spending, but once they are comfortable in their seats they will do their own spending to win over their constituents.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 08:50:50 AM EST

none

See also - population decline. Worldwide population is expected to peak in about 30-40 years and drop thereafter. Pretty much every society that has become economically developed and highly educated has quickly watched its fertility rates drop below replacement. The few exceptions (the US, UK) have mostly relied on recent immigrants to keep their numbers up, or exceptionally generous social welfare policies (France, Sweden) that might not be sustainable in the long term, or exportable to other countries (and even France and Sweden have had to supplement through immigration). Considering world population as a whole will likely start to decline in the second half of this century, this reliance on immigration won't last forever. Every time I bring this up people respond with a very blase attitude - but really, why should we expect that fertility rates will suddenly reverse themselves when the population peaks? All we've seen at the country level are declines - large families simply aren't desirable for most people in a modern economy. It's possible that certain religious faiths will make up for the deficit by expansion through breeding, but the evidence seems to suggest the opposite - Italy has one of the lowest birth rates in Europe, after all. Mormons are losing members at a record pace, so over the long run I doubt salvation comes from there. Presumably at some point the population will stabilize, but do we have any idea how to handle a world economy where the population is decline for five or six straight decades or more? Someone tell my why I'm worrying over nothing here.

Allons-y!

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Re: Any reason for optimism, lately?

Shy Elf.

Wed Jun 06, 2012 at 09:22:46 AM EST

none

I think a fertility around 1.8 or so for a bit would be a good thing, due to resource scarcity, pollution, and land overuse issues, but if you're looking at 1.3-odd like Germany and Japan the retiree ratio problem gets really bad.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 09:30:16 AM EST

none

Even at 1.8 - the basic Western system of social democracy & market capitalism that is in place to a greater or lesser degree pretty much worldwide right now developed in a context of perpetual population growth. I don't think we really have any kind of handle on the way the system will react to perpetual population decline, even if it's gradual (let alone fall-off-a-cliff like Germany, Japan, etc.).

Allons-y!

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Re: Any reason for optimism, lately?

Shy Elf.

Wed Jun 06, 2012 at 10:27:41 AM EST

none

What's really ideal short-term is the transition period when the fertility rate used to be moderate or moderately high and has recently fallen.  Then you don't have to take care of kids, but you don't have many old people either.  There aren't any scenarios with stable fertility rates which have as large a fraction of working age people as we've gotten used to.  This is a problem, but not I think the biggest one at the moment.

Apart from the fact that growth can't continue forever, I think what we really don't have a handle on is the idea that the marginal utility of capital is now negative, at least for reasonably safe investments.  There's just nowhere to put it where it doesn't lose value.

If you assume that we aren't going to have direct intergenerational wealth transfers, and calculate what you need to save to have a decent retirement, and base this on a real interest rate of 0 to -2% instead of 5% to 8%, you find society needs something like 800% - 1600% of GDP held in assets used to hold value for this transfer.

It doesn't really matter so much whether they're $20,000 Babe Ruth baseball cards or ghost cities in China that are too expensive for anyone to live in, you just need some token to pass back and forth that people can agree is going to be worth that much.  And yes, stocks work too, but trying to value them that high gives you crazy P/E and massive volatility.  The "underfunded" amount of generational social transfer mechanisms subtracts from this amount.

It's new in the past century or so that people started to live regularly live long enough to retire.  More recently, economic growth moved out of the social democracies where it was handled partially with a direct generational transfer, to Asian countries where is necessary for people to save a greater fraction of their retirement costs.

The problem right now is basically that everyone is frantically trying to squirrel away nuts that don't spoil, and if you try to do it with financial assets, it's an accounting identity that the net change is zero.

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Re: Any reason for optimism, lately?

zyxwvutsr.

Wed Jun 06, 2012 at 01:06:59 PM EST

none

...market capitalism that is in place to a greater or lesser degree pretty much worldwide right now developed in a context of perpetual population growth
How so?

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 01:18:00 PM EST

none

Maybe "context" wasn't exactly the right word - I'm not trying to say that our current system developed because of population growth or anything like that (maybe you could make that argument, maybe not, but it's irrelevant to the point I'm trying to make). All I'm saying is that the modern system didn't exist before the 19th century, or if you really want to take it back, we could say the 17th century. Either way, considering that world-wide population has never shrunk during that time period, my point is simply that we don't know how our economic or governmental systems will handle population shrinkage. We're in uncharted waters. We have assumptions we can make, but they're all untested - this has never happened before.

Allons-y!

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Re: Any reason for optimism, lately?

improper.

Wed Jun 06, 2012 at 01:33:17 PM EST

none

Oh the horror!

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Re: Any reason for optimism, lately?

joshv.

Thu Jun 07, 2012 at 09:23:58 AM EST

none

I think it's clear that for any reasonably expected ratio of workers to retirees, we have enough surplus to provide the basics - housing, food, clothing and medical care - for retirees.  The problem is that many retirees are accustomed to much more than the basics, and many workers won't want to part with their surplus earnings.  The end result will be a lower standard of living for everyone.  The political question is how do we get from here to there without spawning revolutions.

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Re: Any reason for optimism, lately?

Shy Elf.

Wed Jun 06, 2012 at 09:05:45 AM EST

none

that can't last forever

Timely comment, that.  Housing is a much bigger part of China's GDP than it ever was in the US.

I wonder about the inflation numbers, too.

that rate for taxi fares in Beijing hasn't changed since 2006 (six years) even though fuel prices in that period have soared.  The result is a dire shortage of available taxis, especially at peak periods, despite the fact that most people I talk to in Beijing -- and I'm talking local people, not foreigners -- are able and willing to pay more, if it meant they could find a cab.  I'm told, by reasonably reliable sources, that the reason the authorities refuse to raise the fare is that taxis are in the CPI basket, and it would boost the official inflation figure.

Perhaps cooked inflation numbers have something to do with this.

India is slowing, too.

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Re: Any reason for optimism, lately?

zyxwvutsr.

Thu Jun 07, 2012 at 07:34:02 AM EST

none

Perhaps the Chinese leadership has realized that "stimulus"of the sort tried in 2008 does not work. If that's the case, they are a lot wiser than the Democrats in the US.

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Re: Any reason for optimism, lately?

thefadd.

Thu Jun 07, 2012 at 10:38:11 AM EST

none

The Chinese government does have the decided advantage of taking the long range approach.

I HAD HAD SEX WITH HUNTER S THOMPSON. HE CAME IN MY MOUTH AND I SWALLOWED IT. I SHOULD HAVE HAD HIS BABY. WE WOULD BE BALLIN' LIKE KOBE'S SON!!

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Re: Any reason for optimism, lately?

Gaius Petronius.

Thu Jun 07, 2012 at 02:51:41 PM EST

none

The problem with "taking the long range approach" is that it can often be called "kicking the can down the sidewalk". For example, the reason San Jose voted for pension reform is because its pension bill grew from $73 million to $245 million in only a decade. Decisions made (or avoided) 30 or 20 years ago have come home to roost. china may be facing the same problem.

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Re: Any reason for optimism, lately?

tjb.

Thu Jun 07, 2012 at 03:11:02 PM EST

5.00 (informative)

Astounding how much you can backload a contract, isn't it?

I am still sort of surprised that Measure B didn't fracture the police and firefighters unions - the young ones were facing layoffs and/or furloughs just so that 50 year old "retirees" with side businesses could wreck the city budget.  San Jose is already a high-tax, high-fee jurisdiction - total tax take is probably as high as it can realistically get and a lot of major city projects (redevelopment agency, moving the Oakland A's into downtown SJ, expansion of BART) were being sacrificed to pay a bunch of perfectly healthy ex-cops $120K+/year pensions to not work for the city.

The situation was tuning so absurd that liberal voters in the libbiest area that ever libbed passed pension reform by a nearly 70% margin.

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The Optimism Bias

Shy Elf.

Wed Jun 06, 2012 at 11:11:14 AM EST

none

...

What we wanted to know was whether people will take the information that we gave them to change their beliefs. And indeed they did -- but mostly when the information we gave them was better than what they expected. So for example, if someone said, "My likelihood of suffering from cancer is about 50 percent," and we said, "Hey, good news. The average likelihood is only 30 percent," the next time around they would say, "Well maybe my likelihood is about 35 percent." So they learned quickly and efficiently. But if someone started off saying, "My average likelihood of suffering from cancer is about 10 percent," and we said, "Hey, bad news. The average likelihood is about 30 percent," the next time around they would say, "Yep. Still think it's about 11 percent."

....

This is my collaborator Ryota Kanai. And what he's doing is he's passing a small magnetic pulse through the skull of the participant in our study into their inferior frontal gyrus. And by doing that, he's interfering with the activity of this brain region for about half an hour. After that everything goes back to normal, I assure you.

,,,

Now we interfere with the region that we found to integrate negative information in this task, and the optimism bias grew even larger. We made people more biased in the way that they process information. Then we interfered with the brain region that we found to integrate good news in this task, and the optimism bias disappeared. We were quite amazed by these results because we were able to eliminate a deep-rooted bias in humans.

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Re: The Optimism Bias

port1080.

Wed Jun 06, 2012 at 12:50:01 PM EST

none

I've always been a severe pessimist...does this mean I can blame it on brain damage?

Allons-y!

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Re: Any reason for optimism, lately?

tjb.

Wed Jun 06, 2012 at 01:05:40 PM EST

5.00 (interesting)

Reasons for optimism:

  1. The overwhelming support that Scott Walker and, more locally for me, Measure B got indicates that the public opinion is finally shifting to reeling in profligate public spending on people who literally bring zero value to society.

  2. The US is turning into an energy producing powerhouse and will be a net energy exporter by the end of the decade if not sooner and North America as an economic unit will become a net oil exporter.  The geopolitical ramifications of this are pure win.

  3. The impending collapse of the Euro will force an end to German mercantilism via exchange rate mechanisms as they will no longer have captive markets that are unable to devalue.  This will simultaneously be good for US exporters who will have a large, rich market that is more accessible and German consumers who will become materially much wealthier.

  4. The impending economic doom in China, which is merely a question of when at this point, will, I believe, bring about substantial political reform in China, mostly for the better.  A China that moves towards a freer, richer future is an incredible net benefit to humanity in general.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 01:21:50 PM EST

5.00 (astute)

reeling in profligate public spending on people who literally bring zero value to society. Are we talking already retired pensioners or government workers in general? Even if you think that what the government does could be better done by private industry, I find it difficult to accept an assertion that government employees bring "literally zero" value to society - someone needs to pave the road, educate the children, prevent crime, serve in the fire department, sweep the streets, collect trash, etc. Government might be doing this in a less efficient way than otherwise, but they're still services of value.

Allons-y!

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Re: Any reason for optimism, lately?

tjb.

Wed Jun 06, 2012 at 01:28:54 PM EST

5.00 (agreed)

Are we talking already retired pensioners or government workers in general?

Retired pensioners.  The city of San Jose was spending more money on people who weren't working for the city than on people who were, and many of those "pensioners" were working other jobs after "retiring" in their mid-to-late 40s.  Defined benefit pensions, particularly in the public sector, are fiscal timebombs that simply need to be done away with.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 01:42:24 PM EST

none

Relating back to this, though:

If you assume that we aren't going to have direct intergenerational wealth transfers, and calculate what you need to save to have a decent retirement, and base this on a real interest rate of 0 to -2% instead of 5% to 8%, you find society needs something like 800% - 1600% of GDP held in assets used to hold value for this transfer.

It doesn't really matter so much whether they're $20,000 Babe Ruth baseball cards or ghost cities in China that are too expensive for anyone to live in, you just need some token to pass back and forth that people can agree is going to be worth that much. And yes, stocks work too, but trying to value them that high gives you crazy P/E and massive volatility. The "underfunded" amount of generational social transfer mechanisms subtracts from this amount.

- is it actually viable for society to be funding retirement / elder care entirely through self-saving? I do agree that defined benefit pensions have become a bit absurd, but they got that way because governments were allowed to offer them without fully accounting for their costs. In the private sector, it's widely agreed that 401ks and other voluntary private retirement accounts have been somewhat of a failure, because people don't save enough in them. We could make them mandatory, but then they're functionally not that different from a defined benefit pension - they're just better accounted for (from the employer's perspective) since the money is taken from the employer up front and there aren't any open-ended commitments. That makes it harder to ignore their cost, but the flip side is that if we're accounting for them through savings rather than pay-as-you-go that saved money has to go somewhere - what if there's nowhere to put it that has a positive rate of return over the long haul?

Allons-y!

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Re: Any reason for optimism, lately?

tjb.

Wed Jun 06, 2012 at 01:55:55 PM EST

none

they're just better accounted for (from the employer's perspective) since the money is taken from the employer up front and there aren't any open-ended commitments.

Umm, yeah - that is pretty much the whole point.  The combination of optimism bias, politics/vote-buying and nominal wage rigidity mean that open ended commitments are practically guaranteed to screw the public.  If private companies want to fuck themselves over in this fashion, well, more power to them (though I wish we wouldn't bail out the pensioners) - a contract is a contract in that case until the inevitable liquidation.  Ripping off the taxpayers via what is essentially soft corruption is a whole different ball of wax, though

what if there's nowhere to put it that has a positive rate of return over the long haul?

I don't think that is a realistic scenario unless you think that technological progress is going to suddenly halt for some reason.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 02:04:13 PM EST

none

I don't think that is a realistic scenario unless you think that technological progress is going to suddenly halt for some reason. I think demand is going to drop - fewer people, less demand for services, less demand for goods - I'll go out on a limb and say that in real dollar terms, housing will never again (literally, never) be as valuable as it was in 2006, on average, worldwide. Migration could change the local picture, but on average...what's going to drive it? Once population actually starts dropping, values will drop even more. As for goods and services - people can only consume so much, can only do so much - see what I'm getting at with my worry about population decline? Unless the robots are selling goods and services to other robots, or something...without an increase in people, where does the increase in aggregate demand come from?

Allons-y!

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Re: Any reason for optimism, lately?

zyxwvutsr.

Wed Jun 06, 2012 at 02:41:33 PM EST

none

...fewer people, less demand for services, less demand for goods
Demand is not constrained by population, but by wealth. Technological progress drives productivity and therefore wealth.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 02:44:56 PM EST

none

Demand is not constrained by population, but by wealth. In theory - but like I said, that's a theory that's never been tested. We certainly know that demand for housing, at least, is most definitely driven by population. Do you deny that?

Allons-y!

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Re: Any reason for optimism, lately?

zyxwvutsr.

Wed Jun 06, 2012 at 03:31:13 PM EST

none

...that's a theory that's never been tested
Don't be ridiculous; it is an empirical fact. For example: I make (nominally) more than 10 times what I did when I first entered the workforce. If demand were driven solely by population I would be buying the same amount as I was way back then. But I'm not.

We certainly know that demand for housing, at least, is most definitely driven by population. Do you deny that?
Sure, but not solely by population. I've driven around Utica and seen streets lined mostly with empty houses, but if I decided to move there I might build a new house rather than move into an abandoned one.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 03:40:45 PM EST

none

For example: I make (nominally) more than 10 times what I did when I first entered the workforce. If demand were driven solely by population I would be buying the same amount as I was way back then. But I'm not. That's not the point - the point is, are you consuming 10x what you did when you first entered the work force? My guess is, probably not - your income has increased faster than your rate of consumption, and you're saving some of that money. Those two lines diverge even more for the super wealthy - Warren Buffet probably makes millions of times (at least, hundreds of thousands) more per year than he made when he first entered the workforce, but he doesn't consume anywhere near that in goods and services. Without population growth, it seems to me that the world-wide aggregates of personal income and personal demand for goods and services could start to diverge in a similar manner. but if I decided to move there I might build a new house rather than move into an abandoned one. That's meaningless in the aggregate, though, if new construction isn't making up for the value lost in old houses being abandoned. The averages will still come out negative.

Allons-y!

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Re: Any reason for optimism, lately?

Shy Elf.

Wed Jun 06, 2012 at 10:15:50 PM EST

none

That's a good point about the marginal propensity to consume going down by a lot the richer someone is.  Eventually it gets spent, but if you look at the Rockefeller clan, for example, they're still working on spending John D.'s money.  There's taxes, wealth division by splitting it amongst heirs, and the occasional massive philanthropic foundation.  Sometimes they'll come up with a new business to spend it on, and this will become aggregate demand regardless of whether they were correct and it was a profitable enterprise.  When you're rich enough, you're the corporate governance, so you don't need to worry about corporate governance appropriating a certain fraction of the company to themselves every year, whether they deserve it or not, which can be a significant fraction of total returns when total returns are low.

If you assume 1% spending per year and 10% of production leaking into the hands of the very rich, that means you need additional assets of around 1000% of GDP to generate enough additional spending.

Regarding the house you reference, it's still aggregate demand.  if someone is rich enough, knocking down a perfectly good house and replacing it with a new one becomes something like  repainting the walls a different color and changing the drapes.  If they like the new house slightly better, it's marginal utility for someone who is very rich and whose marginal utility cannot be easily impoved, and therefore it is pareto-optimal.

When there's enough of a housing surplus, this becomes the only reason to ever build new housing.  Due to farm depopulation, we've been there for quite some time in, say, rural and small town Iowa.

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 03:42:20 PM EST

none

Fuck, I hate it when I forget to switch from HTML back to auto-formatting :-(  Let's try this again in a more readable format:

For example: I make (nominally) more than 10 times what I did when I first entered the workforce. If demand were driven solely by population I would be buying the same amount as I was way back then. But I'm not.

That's not the point - the point is, are you consuming 10x what you did when you first entered the work force?  My guess is, probably not - your income has increased faster than your rate of consumption, and you're saving some of that money.  Those two lines diverge even more for the super wealthy - Warren Buffet probably makes millions of times (at least, hundreds of thousands) more per year than he made when he first entered the workforce, but he doesn't consume anywhere near that in goods and services.  Without population growth, it seems to me that the world-wide aggregates of personal income and personal demand for goods and services could start to diverge in a similar manner.  

but if I decided to move there I might build a new house rather than move into an abandoned one.

That's meaningless in the aggregate, though, if new construction isn't making up for the value lost in old houses being abandoned.  The averages will still come out negative.

Allons-y!

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Re: Any reason for optimism, lately?

zyxwvutsr.

Wed Jun 06, 2012 at 06:16:11 PM EST

none

It is precisely the point. My demand increased without my population increasing. You have not given any reason why that cannot be the case in aggregate as long as wealth increases even as population declines.

Also: what's so special about housing? What if population was declining and everyone on earth already had a home? What worries you about that idea?

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Re: Any reason for optimism, lately?

port1080.

Wed Jun 06, 2012 at 08:52:14 PM EST

none

It is precisely the point. My demand increased without my population increasing. You have not given any reason why that cannot be the case in aggregate as long as wealth increases even as population declines.

Population growth is a huge multiplier though.  If every person's demand for goods and services grows, let's say, 10x over the course of their lifetime on average due to increasing technological efficiency, if population also doubles during their lifetime that's a massive aggregate increase in demand.  That's all that's ever occurred during the modern era - we've had both large scale productive increases and large scale population increases.  Now we're going to just have productivity increases.  You don't have any worry that this might not have unintended side effects that we can't imagine?

Allons-y!

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Re: Any reason for optimism, lately?

zyxwvutsr.

Thu Jun 07, 2012 at 07:39:06 AM EST

none

You don't have any worry that this might not have unintended side effects that we can't imagine?
Unintended side effects come from government intervention into the market, so I don't know what you are talking about.

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Re: Any reason for optimism, lately?

port1080.

Thu Jun 07, 2012 at 08:31:02 AM EST

none

Let's say unforeseen, then - it's not like population decline has a will of its own to exert on the side effects, so unintended was, admittedly, not the best way to phrase it.  

Allons-y!

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Re: Any reason for optimism, lately?

zyxwvutsr.

Thu Jun 07, 2012 at 09:07:27 AM EST

none

Will there be unforeseen effects? Do you really need to ask?

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Re: Any reason for optimism, lately?

Payool.

Fri Jun 08, 2012 at 02:15:52 AM EST

none

Also: what's so special about housing?

In theory, probably nothing. In practice, a lot of people currently have a substantial fraction of their equity in their homes. If population declines, housing will continue to lose value and those people will be screwed. In the very long term, a transition to a mostly-rental market is probably beneficial but there will be a lot of medium-term pain.

Especially since after 50+ years of consistent growth in house prices, it's become a built-in assumption that's hard to shake. In the presence of depressed prices, homeowners who aren't in dire straits are likely to hold off on selling, reducing supply and exerting upwards pressure on prices. The effect will be negative on the economy as employment mobility is reduced.  It could take a generation to overcome our bias towards housing as an investment.

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Re: Any reason for optimism, lately?

zyxwvutsr.

Fri Jun 08, 2012 at 07:23:18 AM EST

5.00 (astute)

If population declines, housing will continue to lose value and those people will be screwed
Those people will be dead. I mean, we're not talking about depopulation from something rapid like a global pandemic, but a gradual decline over generations.

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Re: Any reason for optimism, lately?

Shy Elf.

Wed Jun 06, 2012 at 04:42:44 PM EST

none

I don't think I'd call it more than marginally viable, but that's pretty much where we are at the moment.  I'm not even certain at this point that we aren't going to deal with our elderly by letting them starve or freeze to death or die of treatable medical conditions, where they don't have savings or the help of relatives.  As I said, it's where a lot of Asia is now, by default.

Swiss 2 year bonds are yielding negative 0.23% (nominal) today, up from negative 0.27% yesterday.  I don't think there's anything all that special about exactly 0% real returns.

It doesn't require storing assets, but with pay-as-you-go, there's still the same demand mismatch.  When there are a lot of workers and a lot of them have only recently become wealthier, demand smoothing results in a high savings rate.  The resulting change in the marginal utility of capital is inefficient whether it goes negative or not.

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Re: Any reason for optimism, lately?

Shy Elf.

Wed Jun 06, 2012 at 09:33:13 PM EST

none

Obviously 0% real returns is where it's optimal to not invest in building something new, but there are a lot of things that give a return not much less than 0%, like gold or buildings that will be needed eventually, but aren't now.

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Re: Any reason for optimism, lately?

Otto Maddox.

Mon Jun 11, 2012 at 11:51:07 AM EST

5.00 (dissonant)

Repeat after me: "America is richer than it has ever been and can no longer afford the things that it used to."

Repeat ad infinitum. Or until you actually believe it.

"It is difficult to get a man to understand something if his salary depends on his not understanding it" ~Sinclair

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Re: Any reason for optimism, lately?

Shy Elf.

Wed Jun 06, 2012 at 02:23:30 PM EST

none

I don't think making up their investment losses exactly counts as "spending money who weren't working".  Yeah, though, 2.5% of salary per year vesting is very high, and the "Final salary" tie tends to get gamed a lot.  If we're just talking San Jose in particular, year, they need to be lower.

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Re: Any reason for optimism, lately?

novy.

Sat Jun 09, 2012 at 11:30:07 AM EST

none

Your reason 2. causes me to be optimistic all by itself, even as I find your other reasons for optimism arguable at best.

North America will be (at least) self-sufficient in energy soon. That means no more wars in southwest Asia or North Africa to fuel cars; that means millions of new high-paying jobs, and millions of new associated spin-off jobs; that means hundreds of billions of dollars that used to be spent every year on energy imports will stay home to fuel America's economy; and that means that tax revenues to pay for former profligacy will soar. America looks to be getting lucky once again, but as someone famous once said, God seems to love children, drunks, and your country. (He has been nice to Canadians and Australians too, though.)

As for Scott Walker, relish your days of triumph, as they will likely vanish in five months. As for euro collapse, if it happens, it will cause more problems in America than you acknowledge, starting with your stock (equity) markets. As for "doom in China", America doesn't need it to climb back up. I understand how badly conservatives want China's stimulus policies to have been seen to fail, but it remains way too early to say for sure.    

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Re: Any reason for optimism, lately?

mycena.

Tue Jun 12, 2012 at 03:03:32 PM EST

none

"North America will be (at least) self-sufficient in energy soon."

That self-sufficiency will not come from hydrocarbons, though: the price of natural gas is predicted to double 2 years from now, as oil&gas majors are investing in LNG plants to transport that fracking gas to Asia & Europe. Count your profit: Henry Hub gas sells at $2 per mmbtu, while natural gas sells at $10-12 per mmbtu in Ukraine.

No, the USA will become self-sufficient (given another Obama administration) but mainly by means of wind power: big wind farms in breezy locations such as the Great Plains are now completely competitive with (!) new coal-fired power stations -- by 2016, the average wind farm in the US won't need a subsidy at all, dixit a Bloomberg fella' quoted in a recent FT special report. And then there's the fact that prices for photovoltaic modules have been driven down by 75 percent over the past three years.

82

^ 69

Re: Any reason for optimism, lately?

novy.

Sat Jun 16, 2012 at 02:41:10 PM EST

none

I would be delighted if North American energy self-sufficiency came from wind and solar rather than hydrocarbons, but I think it will come no matter what. After decades of negative trade balances, that will change things enormously.

17

Re: Any reason for optimism, lately?

improper.

Wed Jun 06, 2012 at 01:38:23 PM EST

5.00 (astute)

I agree with TJB about the retired pensioners, but I can't help but think if this was about CEO pensions/golden parachutes then people would be screaming "a contract is a contract is a contract..." Somehow contracts do not matter as much as when they protect low-level and mid-level employees.

34

^ 17

Re: Any reason for optimism, lately?

HidingFromGoro.

Thu Jun 07, 2012 at 12:22:33 AM EST

5.00 (astute, astute)

If nothing else, unions should take the hint and refuse any offer they get of benefits or pension in lieu of wage increases.  There's apparently no telling when some politician will manufacture a revenue problem via tax breaks and use it to fuck up pensions/benefits- so they should always go for wage increases and accept no alternatives.

I got more styles than prison got bricks- ain't that some shit?

37

^ 34

Re: Any reason for optimism, lately?

zyxwvutsr.

Thu Jun 07, 2012 at 07:44:52 AM EST

5.00 (brilliant, astute)

There's a much simpler solution: do not allow anything other than defined contribution plans and insist on full funding in each fiscal year. Most of the problems with state and municipal pensions are because the unions have negotiated defined benefits plans and the governments do not fund the plans adequately because doing so would reveal the absurd levels of compensation put in place by the unions and their political cronies.

45

^ 37

Re: Any reason for optimism, lately?

HidingFromGoro.

Thu Jun 07, 2012 at 09:50:13 PM EST

none

Fully funded defined-benefit plans sound great in theory, but who's to say some nutjob politician won't get elected and renege on the deal?  We live in an imperfect world, so the pragmatic solution is probably just to go with the wage increases, working-condition improvements, stuff like that.  

Maybe GoodFellas had it right: "Fuck you, pay me."

I got more styles than prison got bricks- ain't that some shit?

48

^ 45

Re: Any reason for optimism, lately?

zyxwvutsr.

Fri Jun 08, 2012 at 07:27:49 AM EST

5.00 (defined)

Fully funded defined-benefit plans sound great in theory...
Read again: I wrote "defined contribution plans."

...the pragmatic solution is probably just to go with the wage increases...
That's not pragmatic because it requires immediate tax increases (or spending cuts on non-employee costs) and would be noticed by taxpayers.

21

Re: Any reason for optimism, lately?

Ephraim Gadsby.

Wed Jun 06, 2012 at 02:05:32 PM EST

none

You left out this.

33

Plenty of reason for optimism

thefadd.

Wed Jun 06, 2012 at 10:18:16 PM EST

5.00 (delphic)

Most people are stupid and wrong most of the time hence the shock at the 08 financial crisis and the inability to discern a recovery.

I HAD HAD SEX WITH HUNTER S THOMPSON. HE CAME IN MY MOUTH AND I SWALLOWED IT. I SHOULD HAVE HAD HIS BABY. WE WOULD BE BALLIN' LIKE KOBE'S SON!!

38

^ 33

Re: Plenty of reason for optimism

zyxwvutsr.

Thu Jun 07, 2012 at 07:53:38 AM EST

5.00 (informative)

That ignorance is a manifestation of what is sometimes called pessimistic bias.

49

Re: Any reason for optimism, lately?

Tim Burr.

Fri Jun 08, 2012 at 06:38:51 PM EST

5.00 (trolled)

I admit you guys had me going for the first few posts. Realizing the confines of the false trolling style of blanket bullshit this thread is makes me optimistic that this site is probably going to die of an mutual negative admiration society.

For fuck sakes?

Obama's a mediocre president at best, Romney might be better but will be saddled with a bunch of nutjob Congressmen who want to go back to the gold standard.

50

^ 49

o la falta de

Acefantastik.

Sat Jun 09, 2012 at 12:15:19 AM EST

none

One upon a time, I composed a note to one of our regular posters.  I'd rather not degrade the lad by naming him, but he is interested in dystopian neighborhoods near Lake Erie, and his mother-in-law's breasts.  From what I understand, she poses for him two weekends a month and he has quite a collection of watercolours and oil paintings.  (Pro-tip: the left nipple is the winner.)

The contents of this missive regarded his overuse "that" when composing a long sentence.  I opined the word is as much a delay tactic crutch as "umm" or "err" is when speaking.  There is a place in fluid conversational writing to use "that", but as a fan of readability, it chafes to digest unneeded text.

I don't think he was amused.  But! I do think he got the hint, as his sentence composition substantially improved after the bitchy message I sent.

YEAHBUT! I''d gladly admit I am better at correcting other's errors than I am avoiding my own.

You want to judge trolling?    You know nothing.  And you suck at flaming.  KTXKBAI.

52

^ 50

Re: o la falta de

Tim Burr.

Sat Jun 09, 2012 at 06:43:23 PM EST

none

The premise that Mitt Romney is running for president and may perhaps be better for America than almost everyone I've associated with in life, let alone our current president is at best fucking ridiculous. He is an extremely wealthy charlatan, propped up by people and institutions that can barely tolerate him.  

You profess to be a superior writer and I believe you are. I am comparative newcomer in sentence structure and the full realm of the English language. As far as logic, I am 100% correct on my first sentence.

Trees and Things desperately needs political diversity and opposing viewpoints, perhaps I am not that guy. Who knows you will probably never see that guy, which is sad because this particular site has potential.  

53

^ 52

Re: o la falta de

port1080.

Sun Jun 10, 2012 at 05:01:24 PM EST

none

I'm not sure how much time you actually have spent reading here, but I think you're confused about the level of diversity of political opinion.  I certainly wasn't concern trolling about Obama, or whatever you think I was doing - if you look at my posting history over the lats four years I've gone from a very strong Obama supporter, to my current state of relative disillusionment.  Romney is a cipher to me - I don't think he actually believes most of what he says, I do think he's reasonably intelligent (certainly more so than Bush), and I don't think he'd be a disaster as president.  I've unfortunately come to the opinion that Republicans in Congress will do whatever they can to sabotage a Democratic president, even if it wrecks the economy, but Democrats in Congress aren't that bloody minded and are willing to compromise - so a Romney presidency with a Democratic Senate might be more productive than a continued Obama presidency with a Republican House.  All of that is a very long-winded way of saying that I don't reflexively support either party, I lean Democrat but don't think they're very effective at governing, and right now I'm just feeling very cynical and depressed about the state of the country.  Do you honestly think that four more years of Obama, combined with a Republican house (very likely scenario) are going to lead to anything but gridlock and further stagnation?  At least Romney would be able to do some Keynsian stimulus - it might come through pumping up the military budgets or something, but it'd be better than what we'll get with a Republican House + Democratic presidency.  

Allons-y!

54

^ 53

Re: o la falta de

HidingFromGoro.

Mon Jun 11, 2012 at 12:23:48 AM EST

none

Romney is a cipher to me - I don't think he actually believes most of what he says, I do think he's reasonably intelligent

Romney is essentially 2008-candidate Obama.  A focus-group tested, corporate-donor approved, "alternative" that every voter is free to project their own ideas onto.

I got more styles than prison got bricks- ain't that some shit?

55

^ 54

Re: o la falta de

Tim Burr.

Mon Jun 11, 2012 at 07:01:57 AM EST

5.00 (independent)

First of all I would like to apologize to those I've offended. I'm a shitty writer.  I earned Acefantastiks gaming acronym as a parting shot. (what a fucker)

Whenever I see people actually endorsing Romney I lose it. HidingFromGoro is onto something, Romney is Obama White. With a twist though, he will run our economy as managed bankruptcies and deny the affordable health care act his first day in office (which actually is his idea). Worst he will have the opportunity to stack the SCOTUS.

 I've noticed a much larger segment of the voting public hushed this election cycle. Forums such as trees and things have less outspoken members and many great minds are internalizing our current predicament. This is the first cycle of  "Citizens United"  style of elections. As of June 11, 2012, 590 groups organized as Super PACs have reported total receipts of $220,454,152 and total independent expenditures of $121,454,665 in the 2012 cycle. A group of the wealthiest people on the planet call themselves "Citizens United" and they are deciding through the media how to influence our votes. The very media they own is also condemning real citizens by tagging groups such as Occupy Wall Street nutcases.

Trying to voice an opinion on my meager wages and lack of broadcasting skills is ridiculous. But I'm going to do just that because I passionately believe the acceleration of selling out the idea of "We the People" and the certain death of needed social programs is going to irreversibly ruin not only the US, but the planet. We need a government for us now more than ever. We also need more people welcome to voice their opinion on sites like this.

This has been my Thunderclap Newman moment. I am much better suited to write about music than politics. Which I will probably do next

56

^ 55

Re: o la falta de

zyxwvutsr.

Mon Jun 11, 2012 at 07:30:42 AM EST

none

How can you claim that Romney is the same as Obama and then immediately mention two significant differences?

You should celebrate the money going into political speech: it is a sign of freedom.

The Occupy Wall Street people really were nutcases.

57

^ 55

Re: o la falta de

port1080.

Mon Jun 11, 2012 at 10:30:53 AM EST

none

deny the affordable health care act his first day in office (which actually is his idea)

As long as Democrats hold on to the Senate (or even just hold on to enough seats to filibuster), he won't be able to really do much about the ACA.  De-funding it without repealing the mandate would be political suicide - people would be forced to buy healthcare they couldn't afford (since de-funding would remove the subsidies).  He could chip around the edges and maybe reform it (which wouldn't necessarily be a bad thing - the bill certainly wasn't perfect), but I don't think he could repeal it.  The real battle with the ACA is at the Supreme Court right now.  If they overturn the mandate, it's all a moot point anyway.

Worst he will have the opportunity to stack the SCOTUS.

This is very true...sometimes I forget this.  I hate being a one-issue voter, but as someone who really feels strongly about gay rights and reproductive rights, I really, really worry about giving Romney the chance to appoint Ginsburg's successor.  I can't understand why she didn't retire before this term and give Obama a chance to appoint her replacement.  On the flip side, I also support gun rights, personal property rights, and civil liberties, and the conservative justices are often better than the liberal ones on those issues (except when it comes to sex and drugs...sigh), so I can't feel completely thrilled at the idea of Obama packing the court to the liberal side either, if Scalia, Kennedy or Thomas should decide to retire or (more likely) die unexpectedly of some illness in the next four years.

Allons-y!

58

^ 57

Re: o la falta de

Anywhere.

Mon Jun 11, 2012 at 10:56:01 AM EST

none

De-funding it without repealing the mandate would be political suicide - people would be forced to buy healthcare they couldn't afford (since de-funding would remove the subsidies).

I think whether or not that would be political suicide would really depend on who people blamed for it: the people who created the mandate, the people who de-funded the subsidies, or the people who prevented a complete repeal.  My money is on the first group, but it would really depend on who was able to get their message out the best which the Democrats have proven inept at lately, particularly concerning ACA.

59

^ 58

Re: o la falta de

Tim Burr.

Mon Jun 11, 2012 at 11:33:33 AM EST

3.00 (astute)

How can you claim that Romney is the same as Obama and then immediately mention two significant differences?
Politically packaged the same as I referenced from HidingFromGoro, packaging and product are two different things.

You should celebrate the money going into political speech: it is a sign of freedom.
The money is buying the parties. It is a sign of purchasing power in our elections.

The Occupy Wall Street people really were nutcases.
That fucking nutcase should put down his sign, get out in the real world, and help the rich get richer.  

62

^ 59

Re: o la falta de

zyxwvutsr.

Mon Jun 11, 2012 at 12:26:16 PM EST

none

The money is buying the parties
What does that mean?

That fucking nutcase should put down his sign, get out in the real world, and help the rich get richer
I doubt he has the wherewithal. None of the Occupy Wall Street protesters I saw looked particularly industrious.

63

^ 62

Re: o la falta de

improper.

Mon Jun 11, 2012 at 12:54:27 PM EST

none

Why didn't they look industrious? Because they weren't Men's Warehouse/JosABank suits?

64

^ 63

Re: o la falta de

zyxwvutsr.

Mon Jun 11, 2012 at 02:09:49 PM EST

none

65

^ 64

Re: o la falta de

Tim Burr.

Mon Jun 11, 2012 at 07:21:33 PM EST

none

61

^ 55

And you know that it's right

Ephraim Gadsby.

Mon Jun 11, 2012 at 12:00:03 PM EST

none

I would like to second your reference to Thunderclap Newman.

66

^ 55

Re: o la falta de

HidingFromGoro.

Mon Jun 11, 2012 at 09:40:23 PM EST

none

Hate to break it to you but Obama's not going to give you any more affordable health care than Romney.

Also never apologize, it's the internet dude.

I got more styles than prison got bricks- ain't that some shit?

67

^ 52

Re: o la falta de

Acefantastik.

Tue Jun 12, 2012 at 07:39:15 AM EST

5.00 (brilliant, funny)

Trees and Things desperately needs political diversity and opposing viewpoints

Dude.  We don't have a gigantic population, but we do have plenty of diversity and opposing viewpoints.  Here's your checklist:

Avowed leftists:

HidingfromGoro, Acefantastik, MCNally, LauptunMachine (?)

semi-liberals who like to kvetch

port1080, anywhere, Shy Elf, wayhip, natophonic

middlebrow horseshit consensus (NOTE: NOT AN INSULT, JUST A HIPSTER DISS

novy, ms sue, Haggis, John Adams

right leaning yet socially liberal badasses who are still rad with a come-at-me bro-libertarian-posture

p0157, thefadd, improper, T_Slothrop

conservative possibly self identified democrats

zyxwvutsr, gerrymander, Gaius Petronius

conservative and unabashed:

tjb, Ephraim Gadsby, joshv, TheWelcomeRain, arromdee, jackkeefe

Possibly retarded:

ThePlague

And so: we are a small group, but our voices are worthy. Fuck you if you don't like my hat! Apologies to the regulars who I forgot to name-drop.

68

^ 67

Re: o la falta de

zyxwvutsr.

Tue Jun 12, 2012 at 09:11:05 AM EST

none

Why do you believe I am a conservative?

Also, I am only a Democrat because I registered on the day of the primary so I could vote against Hillary Clinton. I will un-register one of these days.

72

^ 68

Re: o la falta de

Acefantastik.

Tue Jun 12, 2012 at 04:14:16 PM EST

none

Why do you believe I am a conservative?

Mainly because I believe you are neither leftist, nor liberal.  A decade's worth of reading your posts has led me to conjecture you have conservative tendencies.   You'll note I didn't slander you by naming you as a Republican.  

76

^ 72

Re: o la falta de

zyxwvutsr.

Tue Jun 12, 2012 at 06:07:15 PM EST

none

What conservative opinions have you seen me express?

70

^ 67

Re: o la falta de

Tim Burr.

Tue Jun 12, 2012 at 03:15:05 PM EST

none

Don't you wish I would just go away?

73

^ 70

Re: o la falta de

Acefantastik.

Tue Jun 12, 2012 at 04:18:44 PM EST

none

Don't you wish I would just go away?

You flatter yourself by assuming I think of you at all when I'm not replying to something asinine you've written.  No, I don't wish you'd go away.  I flamed you because you waded into one of the stories I promoted to say some jackass thing about the community here.  You played with fire, I burned you.   If anything, drawing attention from the resident troll (that's me!) is a sign you are part of the club.   But hey: if the sockpuppet you want to wear has an aggrieved woe-is-me attitude,  that's delightful for me as well, since I'm quite adept at zinging precious little pansies.  

78

^ 73

Re: o la falta de

Tim Burr.

Tue Jun 12, 2012 at 07:13:34 PM EST

none

You flatter yourself by assuming I think of you at all when I'm not replying to something asinine you've written.  No, I don't wish you'd go away.  I flamed you because you waded into one of the stories I promoted to say some jackass thing about the community here.  You played with fire, I burned you.   If anything, drawing attention from the resident troll (that's me!) is a sign you are part of the club.   But hey: if the sockpuppet you want to wear has an aggrieved woe-is-me attitude,  that's delightful for me as well, since I'm quite adept at zinging precious little pansies.

Do you ever get tired of pretending you're not a total bitchin' rock star from Mars?

71

^ 67

Kali yuga

Ephraim Gadsby.

Tue Jun 12, 2012 at 04:05:30 PM EST

none

I left conservatism behind some time ago.

74

^ 71

عن عميق

Acefantastik.

Tue Jun 12, 2012 at 04:22:44 PM EST

none

I certainly apologise for the mislabel.  It wasn't my intent to cast aspersions on anyone (well, Haggis, but he deserves it).

But I am curious:  if you've moved beyond conservatism, what political persuasion do you currently adhere to?  I don't always agree with you, but since you are interesting, and I'm a fan of your links,  I'm genuinely curious.

75

^ 74

Re: عن عميق

Ephraim Gadsby.

Tue Jun 12, 2012 at 04:46:46 PM EST

none

No need to apologize. I suppose you could call me a reactionary, or a right wing extremist. The problem for conservatism in the present situation is there is little left worthy of conserving.

77

^ 75

Re: عن عميق

zyxwvutsr.

Tue Jun 12, 2012 at 06:19:54 PM EST

none

Is West Coast rap worth conserving?

79

^ 77

Re: عن عميق

Ephraim Gadsby.

Wed Jun 13, 2012 at 01:20:39 PM EST

none

I think Krispy Kreme is based out of the dirty dirty south.

80

^ 79

Re: عن عميق

Tim Burr.

Thu Jun 14, 2012 at 12:39:37 AM EST

none

I believe that Krispy is the first documented rapper to kill an anaconda snake from the inside, using only his fist, and on top of that, after telling it what it had done wrong

81

^ 80

Re: عن عميق

Ephraim Gadsby.

Thu Jun 14, 2012 at 12:15:34 PM EST

none

That's what goes down on the street these days.

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