What if 2009-2010 is how the economy really "should" be?

[Recursion]

Last edited Fri Sep 21, 2018, 09:33 AM - Edit history (1)

Bear with me.

That period saw much higher unemployment, true. But it also saw lower housing costs, a vastly reduced trade deficit, essentially zero illegal immigration, lower carbon output -- things that are broadly popular except, apparently, when they actually happen.

What if the problem is that we have too many people working, based on artificially high asset prices, and need to find a way to make fewer people need jobs to begin with?

[Hoyt]

1. Guaranteed to get one bashed, but maybe it's impossible to return to the high paying jobs growth of

the 50s - 90s and that American Dream.

I know wealth has been concentrated in a few, but even if you took every penny of that away from them -- which would be a mistake -- it wouldn't make a lot of difference in our lives, would likely make it worse. We definitely need to tax the wealthy more and provide better healthcare, education, etc., for all citizens.

Truth is, maybe we were living too high during that good old American Dream (with the exception of minority groups who were unfairly excluded).

Point is, I think you are right that trying to artificially employ everyone is a mistake. How we provide for people -- especially in this political environment -- is going to be difficult. The shift will require a partnership between government, business, and people, that I doubt they are ready for. Rather than business producing returns mostly for stockholders, society needs to become a stockholder. Some of that can be done with taxes, but it needs to be more than that. It needs to be a commitment to society.

Big, complex topic, but good discussion. One things for sure, it will be an ugly transition and any politician who is truthful about our situation will probably not make it through primaries. American voters like unreasonable promises, and avoidance of the real issues.

Good luck with this discussion.

[Quemado]

2. Capitalism's biggest fail over the past 11 years

The inability of capitalism (i.e. the market economy) to produce more and better paying jobs that would transition the economy from fossil fuels to green and renewable energy.

You make an interesting case, but it comes at a price: lost jobs and jobs that pay less.

Lower housing costs, a result of the real estate bubble that popped, was a good thing for renters and buyers, not necessarily for property owners looking to rent or sell. Probably not directly job related.

The reduced trade deficit was probably due to lower consumer demand, probably resulting from job losses.

The essentially zero illegal immigration was probably due to a lower availability of work available to illegal immigrants, again, a version of job losses.

Lower carbon output was probably due to a lower level of productivity. Perhaps people were driving less and economic activities that produce pollution were in a decline. Somewhat related to job losses.

[Recursion]

3. Lost jobs is only a "price" in a scarcity model

In a potlatch model, lost jobs is wonderful: we can have the same stuff we have now for less total work.