Re: Mother, mother, mother - there's too many of you crying.
 

Listen, algorithm, as a replaceable factotem, you don't fucking need to know about what your betters might have had in mind. Paris accord? Paris is an ISIS hotbed. I don't d'accord anything about it. And why do you keep bad mouthing the only hebrew in a position of power in the admin?

Re: Mother, mother, mother - there's too many of you crying.
 

I mean, right? Sebby and I look at the same facts - development spreading across the world - and he sees doom while I see mostly positive change, with industrialization raising the world's poorest into the world's middle class. And joining the ranks of the world's consumers.

Sure, maybe that has a damping effect on further growing the prosperity of the middle of the world's richest groups (i.e., American and European middle classes) but the answers there seem like they should be primarily domestic - greater redistribution of the resources accumulated by the very top.

And in the global world, that may requires greater, not less, cross-border regulatory and tax convergence.

Re: Mother, mother, mother - there's too many of you crying.
 

It's a little too easy to say that this sort of thing gets you President Trump, but I'll just say it: This sort of thing gets you President Trump.

Re: Mother, mother, mother - there's too many of you crying.
 

That was so easy!

But no, it's not doing anything about it that gets your Trump.

Re: Mother, mother, mother - there's too many of you crying.
 

Inequality in developed economies is driven in considerable part by globalization and tech. The superfluous are wedded out of the system and fall down the ladder. The young and able retrain; the old fade away. The wage costs eliminated funnel up to the very top and investors.

You're absolutely right that Piketty's entrenched wealth (that's a simplification, but unpacking his theories in their entirety would take fifty posts) concept is also a huge driver of inequality. I believe that it works hand in hand with globalization and tech and enables even more extreme inequality than either of those forces would unleash on their own. Those with wealth are the investors I described above. They soak up the savings corporations enjoy by cost-cutting labor via globalization and tech.

Even further increasing inequality is Fed policy and a tax code favoring investors over labor. The low rate environment simply propped up the market and real estate. People who already had assets and corporations saw a recovery. But instead of it trickling down to the little guy in reinvestment in operations and business expansion (read jobs), it turned into buybacks and speculation (abroad and here).*

Balkanization, and perhaps war, check inequality in developed nations while making it worse in non-developed ones. That is true. People who favor those policies are just a different variant of the people who insist everything is peachy and the status quo should be preserved at all cost. Trump, Putin, Erdogan, at al. merely want to freeze everything and hold their power. And yes, this would lead to extreme inequality within their countries/spheres of influence, as we can see from Russia.

We're facing extreme inequality in any circumstance. And you are correct -- policy will have to be implemented to fix it. But what policies can be put in place when corporations and other multinational actors have more power than the states? Universal Basic Income is probably a necessity, but this is politically near impossible.

This is a long way of saying, you're right -- the forces Piketty cites are a big part of it. But they're not alternative to the forces noted in the article I cited. They're all working in concert to accelerate inequality.
_______
*John Stewart still had the best fix for the 2008 crisis: Give the bailout money to Joe Sixpack and let him use it to pay off his debts. That would free up dollars for consumption and act as real pump priming. See Nick Hanauer on the very true argument that all growth starts with consumption at the bottom, rather than saving the asses of the already affluent at the top.

Re: Mother, mother, mother - there's too many of you crying.
 

I'm going to stop you right there for a moment. I said, "There's an implicit assumption here that inequality is driven by globalization. It's possible, but it's also possible that absent globalization you would see inequality." You're not adding anything -- you're just making explicit what was previously implicit, an assumption that globalization drives inequality. (Does it? It certainly creates winners and losers, but absent globalization maybe you would just see different winners and losers. Does globalization drive more inequality than the alternative?)

Ah, and you added "tech" as a cause of inequality. Doesn't that undercut the whole argument? "Tech" is short for "technology," which is short for "the fact that technology is constantly getting better, just as it did five years ago, fifteen years ago, fifty years ago, and almost all of human history and pre-history, except for a few isolated instances like when Japan gave up firearms, the Dark Ages fell and we forgot some Roman stuff, and that time when the glaciers advanced over Northern Europe and everybody ran to the south of France." If "tech" is the cause of inequality, then that article adds nothing, because inequality would be increasing no matter what we did, unless glaciers, but the globe is warming, not cooling.

I believe Marx noticed this. Or Shakespeare. Anyway, prior thinkers, dead now.

OK, so we now have many, many causes of inequality on the table, so many in fat that it's a little hard to tell what the argument is. Maybe there isn't one anymore?

1) Balkanization happens in south Central Europe, not in developed nations.
2) Why do you think "Balkanization" checks inequality in developed nations, whatever that means?
3) Why do you think "Balkanization" makes inequality worse in non-developed nations?
4) People who preserve the status quo make inequality extreme, which sounds like a change. Do they understand this? The Law of Unintended Consequences?
5) Do you think about what you're typing as you type it, or do you just let your fingers do the walking?

The word "extreme" doesn't really add much if we see it all the time. But now I think your argument is, things are fucked pretty much no matter what happens. Which is grim, although it could be worse (glaciers).

This is rather far afield of that article you linked, isn't it?

All of this reminds me of a Superfund site, both in that we're talking about a toxic mess, and in that when every party that ever had anything to do with the site is jointly and severally liable for the whole thing, it's impossible to clean up. Maybe what we need to do is to be a little more focused and critical about the problem we want to solve.

Re: Mother, mother, mother - there's too many of you crying.
 

Citizens of nations do not live in The World. They live in their countries. Try the argument, "But your loss, Joe Sixpack, is at tremendous gain to a laborer in Bangladesh!" See how far that gets you.

And when they take your job and mine - and they will, as neither of us is doing anything that cannot be replaced by tech - will you be a citizen of the world?

Tax the top at 100% and two things will occur:

1. They will leave;
2. You'll pay for one yer of debt service.

Additionally, we are talking about politics. Politics is national.

Finally, I do not see doom and gloom. I see what I see. Personally, I think volatility is a great thing. If doubt of official narratives creates more of it, good. People should be more skeptical. Look to all the problems of the world and you'll find one common theme: Herding.

Re: Mother, mother, mother - there's too many of you crying.
 

What does this even mean? Like, how is labor helped by higher rates? Or harmed by lower rates?

Which is why employment is returning to normalish levels.

Pick any corporation. Ask it's leadership whether it thinks it's more powerful than any of the various states that regulate it. Even do it under the cover of attorney-client privilege. You won't get a "yes."*

*Okay, there's probably a megalomaniac or two (looking at you, Mr. Ellison) who would say that but be wrong.

Re: Mother, mother, mother - there's too many of you crying.
 

Actually, there's a significant long-term positive effect on the development of the world economy in this way. It has become harder and harder to offshore to low wage jurisdictions because -- surprise! -- wages rise after this happens and the local population gets the skill set to compete globally. The walmart commodification folks are now finding labor costs in core Chinese cities, India, Mexico, and even places like Vietnam to be too high for them, in many cases higher than they have in Alabama or Tennessee (though they can often access a more educated workforce in China). They're driving toward the Philippines and Indonesia, with the next stop being Africa.

The underlying mistake of the US and European labor movement was to embrace protectionism rather than internationalism - if the process of raising these standards had started happening 15 years earlier, in a period when American based multinationals were wildly exploiting labor in those countries, we'd be in much better shape today.

At some point, we'll become globally competitive again, and we will see manufacturing growth. The key is to be in the treaties like TPP that establish floors for labor standards internationally so that we move the whole process along.

Re: Mother, mother, mother - there's too many of you crying.
 

And here I thought we were trying to discuss the actual effects of globalization. But no, you just want lower-common-demoninator political analysis. Carry on on your own then.

Who is proposing that?

Oh, so you mean like greater global harmonization might be important, which is the exact opposite of what the article you cited said? Huh.

Re: Mother, mother, mother - there's too many of you crying.
 

Right, but Sebby tells us that those new members of the middle class in China will be "snuffed" as low-wage labor jobs move elsewhere. Because, you know, the amount of labor needed is not only zero sum now but declining over time. Because, further, it's obvious that the billion or so people in China, India and the rest of the developing world that have moved out of abject poverty and into the global middle class don't consume any more than they used to.

Only negative things have dynamic effects. Positive things don't.

Re: Mother, mother, mother - there's too many of you crying.
 

Just a reminder: The prime-age employment-to-population ratio remains at levels that before 2010 we would have characterized as depressed and indicating substantial economic slack.

It is true that things are improving. It is also true that we are many years into a recovery which can't last forever.

Re: Mother, mother, mother - there's too many of you crying.
 

There are a lot of US jobs created by globalization.

Re: Mother, mother, mother - there's too many of you crying.
 

Globalization drives inequality. So do many other things. Full stop.

No. Automation is interchangeable with it for these purposes.

See above. See also, tech's severe (not "extreme") acceleration in recent decades.

Well, when you put the rabbit in the hat so authoritatively...

Every riff's been played before (even Cohen's "secret chord"). Show me a man who expects to hear something previously unsaid and I'll show you a seriously frustrated motherfucker.

You should work for the GOP wing of climate deniers using this sort of logic.

I was unaware of this. Oh, dammit... I just shit my pants again.

It's regionalism, which allows the developed regions to retain their advantages over the non-developed ones. It also curbs labor arbitrage. How is this not obvious?

Perhaps its doesn't so much worsen it, but sustains it at present levels, as the labor arbitrage necessary to allow developing nation labor to enjoy more work and better pay is curbed.

They don't care. Hell, I don't care. I just like being the guy who cites the Law of Unintended Consequences and says, "Ha ha" when shit happens.

I think they're also high on the hubris they can tame risk and manage society.

Have you ever engaged in a conversation where you weren't carefully guarded, even at loss of any truly interesting discourse, to seem like the most clever and deeply thoughtful person in the exchange?

Most amusing is your criticism of me for saying what's been said many times before. You realize neither you (nor Brad DeLong) has said anything new. I'll grant that at least your repackaging is grammatically much better than his.

They are. But I'm also agreeing with you that there could be a policy fix. There probably will be, but not in our lifetimes.

I've never met an aside I wasn't willing to indulge.

I couldn't agree more with the approach. But it seems we long ago passed the point at which eating the elephant in bites was an option. I see great similarity between our environmental and economic situations.

This is why I'm not really freaked out by Trump. Nobody ever does anything significant without a severe crisis. If that clown brings it on, so be it. I'd rather get it over with now and leave a better world for the kids than find more ways to kick the can down the road and lave it blow up in their faces more spectacularly later.

Re: Mother, mother, mother - there's too many of you crying.
 

Thanks! While we're reminding each other of stuff:

Right, but:
Hey, look! If monetary policy is at all effective (I'm open to arguments that it isn't!) the low rate environment has done more than prop up asset prices (not even sure it's meaningfully done that).

Re: Mother, mother, mother - there's too many of you crying.
 

How is that good?

How is that not bad?

You're not bothered by Trump because ultimately you're a Trump voter. What you want most is to stick it to people who you find smug and condescending and you don't much care who gets hurt (because you're confident it won't be you) to make it happen.

Re: Mother, mother, mother - there's too many of you crying.
 

You posted a link to an article. I tried to read it, and couldn't figuring out what it was arguing or adding. If it's not saying anything new, fine, but then I'm going to close that tab instead of reading it. At least it's clear what Delong is saying.

Re: Mother, mother, mother - there's too many of you crying.
 

This is a positive side to the process the article I cited described.

But this is not much comfort to labor. As the wages in developing economies increase, the firms doing the arbitraging move to cheaper labor locations. When that happens, the wages in the developing nations freezes or drops with the lost demand for it.

And I'm not so sure that once the wages and skills increase, those developing nations have a workforce that can compete. When ACME Widgets leaves Indonesia for Africa, its Indonesian workers are not going to run out and start a competing entity with their labor and the leftover plants.

I'd run that clock back 40 years. But then, would we have had the great American Century? A lot of the golden years from WWII onward accrued from our dominance and exploitation.

The question is, when is that some point? Because if you're among the labor losing in the game right now, in the US or any other developed nation, what time frame do you care about beyond your work life expectancy? On what rational basis would you vote for anything that causes greater competition?

Re: Mother, mother, mother - there's too many of you crying.
 

Delong's next sentence:

And the short term trend may be favorable, but the long term trend is not. That is the bigger point. Saying that things are improving is whistling past the graveyard. As is dismissing problems as political.

Re: Mother, mother, mother - there's too many of you crying.
 

It is good for labor in developed nations. That's just a fact. I don't think it's good, but what I think is immaterial. The question on the table was the impact on developed nation labor.

See above.

Flattery will get you everywhere with yourself. But here's pro tip - masturbation provides a much better payoff.

Re: Mother, mother, mother - there's too many of you crying.
 

If technological change drives inequality, then does globalization really make a difference? You could have trade wars and less global economic integration and still have technological change driving inequality. Seems like this is an important thing to sort out before trying to do something about it. And to do that, you need to drill down a little more. Which would also be interesting.

I don't understand why you think we are getting something over with now and will get to a better world for the kids. Trump could really fuck things up in a way that doesn't sort itself. For example, if you think that US participation in the Paris Accord is good, then Trump pulling us out would be bad, and it's hard for me to see how that would naturally lead to a reaction that would undo the bad. Maybe it will, but I'm not taking it for granted. Maybe Trump makes things worse in a way that's hard to fix. For example, by reducing trust, that people have in their government, or that other countries have in doing deals with us.

Re: Mother, mother, mother - there's too many of you crying.
 

As wages increase and lots leech to lower labor cost locations, they will see their wages drop or freeze. Their middle class can pick up the slack, but the growth will be pared.

It's all about where you are, and the timeline. If you're developed nation labor right now, the timeline is ominous. You'll favor protectionism. It won;t work, of course... But you'll hope it can. And when it doesn't, and there are lots of you who are pretty pissed, let's hope someone like Ty is in charge and suggests serious policy fixes (debt forgiveness and universal basic income to start... both of which will have positive economic impacts which will ease some of the pain the working classes will be feeling).

Re: Mother, mother, mother - there's too many of you crying.
 

They work in concert. Both do it, but together, they move it forward at a rate that makes policy fixes to address their negative impacts difficult.

(I also don't think they could ever exist without each other, for obvious reasons.)

True. But with globalization, the process is accelerated. More knowledge shared more quickly, etc.

Agreed. But... this is a limited forum.

Agreed. But I don't think so. We've got a lot of advantages to burn, even with that screwball in charge.

Capitalism has reached Marx's self-devouring point. We need a system reboot. What we have now does not deserve trust.

Re: Mother, mother, mother - there's too many of you crying.
 

God, you loved Econ 101 didn't you? This is like listening to the kids who thought they understood the world based on getting through a text book while hung-over back in the 80s.

Fundamentally, the dominance of America int he post-war years had to do with the strength of our unions, the consuming power of union workers, and the age and efficiency of our industrial plant. Stronger unions over seas at the time would have been great for the American union worker, increasing the number of consumers of their products and nipping the wage competition in the bud. Our multinationals had a vested interest in keeping wages low abroad and exploiting the raw materials produced there, as well as some of the industrial production, but that benefit accrued to only a sliver of the economy, not working folks.

Higher wage costs abroad have happened very quickly. Ten years ago when we were structuring international ops there was focus on wage costs abroad; now you see less of that and more focusing on competitive advantages abroad, like available engineers to hire. The US meets labor needs here only by importing educated folks from abroad; if those people don't stay after coming to school here, the operations will leave and the whole set of jobs, professional, skilled, and unskilled, will leave with them. But that labor availability has more to do with whether company X hires here or in China than competitive labor costs.

Re: Mother, mother, mother - there's too many of you crying.
 

1. Where has this happened? I can think of places where it happened due to outside meddling (colonialism & cold war and soft imperialism) and authoritarian misrule, but none caused by globalization.

2. You're completely leaving out the increased demand for stuff that comes with rising wages in the developing world.

Re: Mother, mother, mother - there's too many of you crying.
 

Right. It was wrong that "structural changes and hysteresis on the downside had made it next to impossible to get those missing prime-age workers back into employment." Since the time he feared it was next to impossible we've learned that it's not, and they're coming back, just not as fast as we'd like.

Which is why he's arguing that we are not currently at full employment (I agree!) and the fed shouldn't start acting like we are (I also agree!).

ETA: Implicitly, he's arguing against your point that labor participation is trending down, btw.

This is only true if "long term" means beginning from the historical peak.

Re: Mother, mother, mother - there's too many of you crying.
 

Only if you think of people as units of labor and only units of labor. If those labor units are also consumers, you at least have multiple effects you need to account for.

Maybe on net labor loses, except that basically every attempt to get to an empirical answer says no.

Yeah, again, "stuff costs more" is not a net positive for anyone.

Re: Mother, mother, mother - there's too many of you crying.
 

You might be onto something there, Dr. Solow.

Re: Mother, mother, mother - there's too many of you crying.
 

One driver of measured median wage stagnation might be simple demographics.

Re: Mother, mother, mother - there's too many of you crying.
 

apropos of globalization, it's kinda old and kinda stupid: https://theawl.com/all-spicy-food-is...a-317740a93ee3

Re: Mother, mother, mother - there's too many of you crying.
 

Fundamentally, the dominance of America in the post-war years was a result of the effects of World War II everywhere else. Germany and Japan were wrecked, as was much of Europe. China was in revolution. As everywhere else got back to normal, they were bound to catch up.

Re: Mother, mother, mother - there's too many of you crying.
 

Exactly. And we exploited that advantage, gifted to us largely by geography (we did not have our infrastructure and resources destroyed), for all it was worth.

It was a nice run. It created an abnormally robust middle-class. That's over now. We have to compete with the rest of the world. And as far as labor costs go, their advantage is near insurmountable.

... unless we reset the chessboard with another war.

Re: Mother, mother, mother - there's too many of you crying.
 

I don't believe he is, and that's not my point. Measures of labor participation are trending down, but my view (and Delong's, I think) is that people are not currently participating because the economy is not serving them and they have become discouraged and unhappy. This means economic loss, because regardless of what "full employment" might mean to different people, the economy is not fully employing its human resources. It also means political turmoil.

Re: Mother, mother, mother - there's too many of you crying.
 

That explains relative position, not the absolute position. Post-War America was itself on a big upswing economically, not just drawing from international markets but drawing from the strength of its own market.

Now, the US build up for the war had something to do with that, of course, but I think your point and mine aren't opposed to each other, they're explaining different parts of the same point : the US was in a good position compared to itself historically and compared to others.

Re: Mother, mother, mother - there's too many of you crying.
 

American Exceptionalism at its best!

Re: Mother, mother, mother - there's too many of you crying.
 

This is loopy. Our work force has huge productivity advantages over many, and we continue to have geographical advantages. The last six months aside, we have a stable political environment conducive to business and innovation, and a government that respects the rule of law.

Re: Mother, mother, mother - there's too many of you crying.
 

Agreed, but dominance (your word) is relative.

Maga
 

We won't have to. That war already started in Europe and Merkel and her feckless pussy allies in France and Belgium continue to supply the ammo. In 3-4 years, most of Sweden and France, large swaths of Belgium, Germany and Denmark, will become unvisitable (and uninhabitable).

So, yeah, set the pawns and move the rook and the bishop to protect the king. Jimmy crack corn - I don't care. Never thought I'd become an Isolationist, but fuck 'em. Reap what you sow.

HOWEVER, I only logged in here thinking you guys - someone, anyone - might be talking about how Hillary has now completely gone fucking insane.

No comments on this? The last 2 days have been scary.

Blaming her loss on the DNC? The NYT? Facebook? Netflix? FFS, Macedonian tech? CNN - a friendly network, to say the least - listed some 30 targets she now blames for losing.

Her public meltdown is approaching the level of Captain Queeg with the marbles and the strawberries. Or for the kids that don't know film, Chuck in "Better Call Saul".

Every day she opens her mouth, another vote is cast - rightly or wrongly - for the GOP. (Chelsea too, for what it's worth.)

SlaveNo(Hillary - the gift that keeps giving)More

Re: Maga
 

I biked through "Little Mogadishu" on my way to the office this morning.

No idea why you're still paying attention to what she's saying.

Elizabeth Warren
 

Aside from my general dislike of her persona, she was on Pod Save America this week (where I actually was fine with her persona) and said some things that make me worry about her.

Asked whether we should break up the banks, cable companies and airlines, she casually said, "yes." And then went on to mention retail drug store competition and Walmart in a discussion about antitrust enforcement.

As if retail isn't dying right now. And as if drug stores, for the non-drug stuff they sell, aren't just as much subject to competition from online and mass retailers. Sure, like convenience stores, they have some degree of protection from competition on non-drug stuff because people will still have to come to them for drugs, but it's not like people are going to switch where they get their prescriptions week-to-week because of the price of whatever incidental purchase they make at the same time. More drug stores doesn't really change that. And as to the drugs, it's not like the real issues aren't with the distributors and PBOs. But people know what a drug store is, so that's what gets in the sound bite.

Same thing for Walmart and "killing small businesses." Most of that is competition on the merits. You might be able to find some novel monopsony theories if you dig around in their practices, but the surface stuff people complain about is pro-competitive.

Moreover, antitrust can't really protect small businesses. There's very little it can do for companies with 25 employees. But if you stray from protection competition into protecting competitors, you certain can do a lot of harm to consumers by protecting the inefficient employers with 1000 employees from the more efficient one with 5000.

And as for those break ups, what are they going to do? How does anyone benefit from more regional cable monopolies? They don't. There's still one set of wires going to everyone's house. The options are regulate their prices and offerings or publicly own the distribution network a foster competition on supply of content. No court is going to order that. You need to make the political case for it and do it via the political process.

It's more or less the same thing with airlines. Unless you're going to dictate that your broken up airlines serve concurrent route systems, they're going to avoid head-to-head competition with each other. Heck, it might be even easier to do with more, smaller airlines. Also, the low hanging fruit on airline competition is allowing foreign carriers to operate domestically.

And that brings us to banks. Is there really a lack of competition there? Or are we trying to solve bank-regulatory issues - e.g. too big to fail, moral hazard, etc - with an antitrust remedy?

There's room to criticize the past decade or so of antitrust enforcement. Maybe Whirlpool/Maytag shouldn't have happened. Although I still think DOJ would have had a hard time countering the argument that Korean and Chinese manufacturers were going to kill Maytag, even if the Chinese manufacturers haven't turned out to be as successful as we might have thought.

But most of what's now fashionable on the left to complain about as lack of antitrust enforcement is not particularly susceptible to antitrust enforcement.