SoylentNews is people
SoylentNews
"Although today high levels of inequality in the United States remain a pressing concern for a large swath of the population, monetary policy and credit expansion are rarely mentioned as a likely source of rising wealth and income inequality. [...]
The rise in income inequality over the past 30 years has to a significant extent been the product of monetary policies fueling a series of asset price bubbles. Whenever the market booms, the share of income going to those at the very top increases.[...]
[F]inancial institutions benefit disproportionately from money creation, since they can purchase more goods, services, and assets for still relatively low prices. This conclusion is backed by numerous empirical illustrations. For instance, the financial sector contributed massively to the growth of billionaire's wealth"
Source: https://mises.org/library/how-central-banking-increased-inequality
I'll leave my comments as comments, but note that The Mises Institute is proudly, one might say almost by definition, Austrian School. Both the Institute and the School have had their fair share of criticism. Which of course doesn't mean that individual author is wrong on this particular matter. -- Ed.(FP)
(Score: 3, Interesting) by JoeMerchant on Wednesday August 23 2017, @01:54AM (19 children)
Common wisdom for wealth in my family in the early 1900s (eastern Tennessee farming country) was: get some land, then get some folk to work your land for you. That frees up your time to do what you want, including finding other ways to make money. The deal back then was: if you had about 100 productive acres, you could get people to work the land and produce enough surplus to feed both themselves and the land owning family. Without having to work the fields, building and maintaining a fine home was easy work, with plenty of time left over to explore other business opportunities - risky as ever, but if they failed you still had a home and food.
Then in the mid 1900s we got "progress" - everybody had to have a regular job to pay for things like food and shelter, transportation - sure you got your own car, but you had to work even more to maintain that. Taxes went up to pay for roads (the average family of 4 in the US pays on the order of $1000 per year via taxes for road creation and maintenance) defense, healthcare, social security, stronger police, etc.
Basically, I see it as much harder to achieve that position of "having somebody work your land" - what took 100 productive acres back in 1900 seems more like about $2.5M invested in the market today. At least in my family, it was a lot easier to accumulate 100 acres back then than it is to accumulate $2.5M today.
🌻🌻 [google.com]
(Score: 2, Insightful) by khallow on Wednesday August 23 2017, @05:46AM (18 children)
I'm doing it on $10k in capital, mostly in my car and laptop (with the laptop having a very marginal contribution). You don't need 100 productive acres or $2.5 million when you can just get a job.
In other words, you ran out of desperate people to farm those 100 acres for you. That's the secret sauce to the modern society. There's only so much human labor to go around. And technology development makes that human labor more valuable. So old applications of human labor that weren't very efficient get replaced by those that are.
(Score: 2) by JoeMerchant on Wednesday August 23 2017, @10:56PM (2 children)
Yeah, smartass, back in 2009 I did it with a laptop I won from an Intel contest and was commuting to/from the job in a car that cost $2500 to purchase, virtually zero capital there, but I had to work 40+ hours a week to find work, do the work, do the billing and collection. The POINT was how much investment capital does it take to have an income stream that provides all you need WITHOUT requiring much, if any, of your working time or effort?
🌻🌻 [google.com]
(Score: 1) by khallow on Thursday August 24 2017, @12:26AM (1 child)
And my point is that this is a great example of what happens to investments dependent on cheap labor when the price commanded by labor increases. You were attempting to spin this as some sort of sad tale of the failings of modern society while ignoring that the great deal that the holders of the "100 acres" had was not so great for the tenant farmers on the land.
But with progress, the value of the 100 acres as a passive rent generator went down while the former tenant farmers went on to better opportunities. Not everyone benefits equally from progress.
(Score: 2) by JoeMerchant on Thursday August 24 2017, @12:39AM
Never said it was a great deal for the tenants. I did say, and defend the point, that moving from tenant to copious leisure time owner was easier back then than it is now, in large part because the standards of "leisure life of luxury" were quite a bit lower then, but there is no such equivalent now - you can't have a leisure life of luxury today without a vehicle, insurance, and the higher taxes that provide the "amenities" of modern life.
🌻🌻 [google.com]
(Score: 2) by JoeMerchant on Thursday August 24 2017, @12:48AM (14 children)
Not so much. Specifically speaking of agriculture, automation hit there first, and hard, concentrating wealth in the hands of large landholders and squeezing out the little players. But the principle doesn't just apply to agriculture, in the 1960s a nice big pile of investment capital could set you up in any number of money making ventures, and bank interest was reliable enough that 10-15 years of ordinary income "in the bank" was enough to give you reliable ordinary income just from the interest.
Tell that to the industries that are being outsourced to low-income areas like India, and North Dakota.
Maybe so, but that value isn't translating to more purchasing power for the majority of the population, at least in the U.S. - you might say that China and India are getting a big increase in purchasing power, but I don't envy the working/living conditions they are enduring to gain that purchasing power one bit, unless you want to compare them to early factory workers in Europe and the U.S. (talking late 1800s...)
Efficient for who?
🌻🌻 [google.com]
(Score: 1) by khallow on Thursday August 24 2017, @04:09AM (13 children)
My take is that you're letting nostalgia cloud your common sense. The 1960s were an unusually strong decade of economic growth. The 1980s and 1990s were, aside from the recession around 1990-1991, similarly strong. But the US economy has recessions too. Investments aren't so reliable during recessions.
Working/living conditions would have been worse otherwise. And comparing them to factory workers in Europe and the US (talking early 20th century since that is more realistic) is a good idea. It's a key part of the reason I believe we'll see global wage growth through to at least the year 2100. Basically, these countries will at their own pace follow the path of the developed world over the past century. China is already around the level of 1940 or 1950 US in GDP per capita (adjusted for inflation).
Customers and laborers. The developed world spends remarkably little on food, for example, even with agricultural subsidies, for example. Similarly, with better paying work out there, laborers can get more wealth for the same input of work.
(Score: 2) by JoeMerchant on Thursday August 24 2017, @11:22PM (12 children)
Yes, the "food problem" is sort-of solved, but not in what I would call an ideal fashion. Nobody (in the developed world) starves due to lack of money to buy food - if they don't have enough, charities and government programs easily provide. The quality of food provided is another thing entirely.
🌻🌻 [google.com]
(Score: 1) by khallow on Friday August 25 2017, @01:43AM (11 children)
Who solves it better?
Another common problem with these discussions is that real world systems of all sorts are compared to ideals. The real world will always fall short. We can use this falling short to discuss ways to improve what we have. That is a constructive way to consider the real versus the ideal. But we can also use that to tear down the systems we have, even when we have nothing better to replace them with. Here, I see complaints that aren't practical to be fixed. Food distribution and quality will never be perfect; century old business models will never be protected forever; people can never consume zero energy (one poster cited [soylentnews.org] less energy per capita as part of the evidence for the supposed superiority of primitive cultures); the AC who speaks [soylentnews.org] of "stops all wars, feeds the starving and cures AIDS and cancer" as if it were merely the choice of economic system that holds us back from achieving these things; billionaires keeping you from walking every possible beach; developing new technologies without obsoleting old ones; and so on.
And this is not a new thing. The last time we discussed the 100 acres [soylentnews.org] thing, you wrote:
Later, you wrote:
Sure, these ideals can be used to suggest improvements to society, but far too often it's just a propaganda tool for advocating the replacement of decent, but flawed systems with shitty systems. Sorry, I don't buy that wealth inequality is a problem that needs to be solved just because the world is flawed. I don't buy that resetting the world back to the day of the "100 productive acres" will work for most people who don't own those 100 acres. Nor do I buy that there's a point to comparing the problems of modern society to some fantasy society with a few orders of magnitude less people. Whenever you compare the real world to a fantasy ideal, the real world will always come up short.
There's a saying in aerospace that sums up this fallacy: the best rocket in the world is made of paper. That's because you can design a rocket on paper and hand-wave away all the problems that real world rockets have. As long as you never make that rocket, you can never be wrong.
(Score: 2) by JoeMerchant on Friday August 25 2017, @02:18AM (10 children)
Short on time now, but I'll just hit this one:
It's not the billionaires, once you pass net worth of 10M or so, you can be "in" the Ponte Vedra beach-house club if you so choose - you can't easily live there and work many places, but at $10M net worth, the beach house isn't a primary residence anyway. Still, $10M net worth is the less than 1% club.
A VERY large part of the desirable, otherwise accessible to the population beaches in Florida are locked up by walls of private estates. Ponte Vedra is a great example - one public parking lot at Mickler's Landing with capacity for ~100 cars and effectively no other public access for ~5 miles north and ~3 miles south. A population of approximately 200,000 within 5 miles or less of Mickler's landing, and parking capacity for about 200 people to access that one point in an 8 mile stretch, meanwhile each $10M+ beach-house has unrestricted access all along their coastal property line. Longboat Key was developed mostly by the Arvida corporation in the 1970s, mostly condos sold to absentee owners who come to visit a week or so a year, less than 2% effective occupancy rate - 14 miles of coastline locked up and at the end of the 1970s there was one public parking lot left on the extreme tip of the island with beach access, capacity for approximately 12 cars - for 14 miles of beach. There are only ~700 miles of beaches in Florida (depending on what you call a beach), a couple hundred of those miles of beach are difficult/impossible to access via land (which is not, in and of itself a bad thing), but of the remaining potentially accessible beaches, we're past 50% of them being "locked up" with highly restricted access, tiny or non-existent parking facilities, for those who don't have access to this 1% club real-estate, and a great deal of that "locked up" access is very much in-your-face in the high density population areas, public beach is over there with the overflowing parking lot along 100 yards of beach while miles and miles of beach is landlocked by private property. The situation is improving, very slowly, with public pressure to re-open access, but it is still a vast perversion of the "freedom of the seas, public access up to the high tide mark" law.
🌻🌻 [google.com]
(Score: 1) by khallow on Friday August 25 2017, @06:32AM (9 children)
(Score: 2) by JoeMerchant on Friday August 25 2017, @05:35PM (8 children)
We don't have this issue with access to parks, nor shopping, nor privately owned real-estate, nor national forest lands, nor virtually every other public resource except beaches. Beaches are, by law, public lands - but problems with access via land transport to public lands are almost exclusively reserved for beaches - given the age old excuse of: well, if you want access you can come by water - which isn't really in the spirit of the law at all - no other broad access implementations (in the continental US) require access by water or air.
🌻🌻 [google.com]
(Score: 1) by khallow on Friday August 25 2017, @06:16PM (7 children)
First, half those items aren't public goods: shopping, privately-owned real estate, and some parks. Second, of the items you did mention explicitly (public parks, national forest lands), we do have access issues with them. For example, at Yellowstone National Park, where I happen to live and work, there is a right of way road that passes through a local church/cult's retreat just outside the park. You can pass through on foot, but golly, there's like a zillion trees down on that road, all conveniently lying fully across the road. You're not getting through in a vehicle, unless it's a tank or bulldozer. The church has no incentive to make the road accessible because their retreat would have all these strangers driving through it and they are a bit xenophobic.
My point here is that it is irrelevant that there are problems. Instead, you have to show that the problems have been fixed better in other systems. And let us remember that just because something is a problem, doesn't mean that solving it is the better approach. Most solutions to problems come with trade offs. For example, making more access to public beach will likely reduce the value of the private real estate that is next to the beach. That means less property taxes for the local governments (and of course, the decline in property values happens because the value of the beach has been impaired for the property owner).
And let us note here that this problem exists in the first place because not everyone in society is on board with increasing access to public beaches. Divergence of interests is a standard problem of all societies and you have yet to indicate why the US approach to resolving those is worse than other ways.
(Score: 2) by JoeMerchant on Friday August 25 2017, @08:09PM (6 children)
Things are better, and worse, than they ever have been. What has been demonstrated (necessarily in the past) in other systems won't necessarily work as well in today's world, and why should we even settle for having things sort of as good as they used to be.
So, you've got some messed up access laws with that church - requiring grant of access but being unable to demand maintenance of the access sounds like a defective law, in need of revision - either to nullify the access altogether (since it is effectively nullified in the current state), or correct the maintenance issue and force access as is done in eminent domain or landlocked property cases (in some states, YMMV).
IMO, most of Yellowstone should be restricted from vehicular access, A) because I've never been there and don't really give a damn about access to it, and B) because it will probably be in better condition if fewer people can get to it, especially lazy jerks who can't lift their butt out of the Winnebago without a hoist. That's my perspective from 2000 miles away, same as your "f-all who cares about one beach vs another." There's a hell of a difference between being able to bike, walk, or drive in less than 10 minutes to a beach and having to load up for a day-trip to get there. I'm assuming that most Yellowstone users are driving multiple days to get access, and the half dozen or so people who live nearby ;) can go hike all kinds of other places if they should want to. Restricting access to large parks to a few road entrance points is generally accepted as "by design" and good for the overall health of the site. Restricting beach access by a wall of privately owned condominiums is about as un-neighborly and non-community oriented as you can get.
BTW, I don't "have to show" you anything, this is an internet rant, not a grant proposal.
🌻🌻 [google.com]
(Score: 1) by khallow on Friday August 25 2017, @10:59PM (5 children)
Because we may not know how to improve the situation. Way too often I see people proposing to make a problem worse because they're obsessed with the imperfection, but unable to see that their solution is worse than doing nothing. There's way too much of it. People who think that they can just force employers to pay more without consequence, that printing money and giving it out in a deliberately useless way will bail you out of a recession, that we have just as much need to regulate pollution now in the developed world as we did in the 1950s, or that optimizing some minor resource allocation just a little more is more important than peoples' time, lives, and resources.
(Score: 2) by JoeMerchant on Friday August 25 2017, @11:59PM (4 children)
Whoa, are you actually saying that we don't need as much pollution regulation today as we had in the 1950s?
Go to Houston, hang out in the Seabrook - Pasadena area for a few days, see the sights, smell the smells - run you hand over your car in the morning and feel the tar-dust that settles constantly across the area. Read the cancer statistics, ponder why M.D. Anderson - the premier cancer treatment center in the world is located nearby... Listen to the local industry apologists explain "oh, that, that that you see there, that's mostly steam" - then listen to the stories of daily unplanned fires barely under control in the refineries and process plants, take a drive through the industrial park and breath deep the chlorine, ammonia and other potent chemical smells that completely blanket the neighborhood.
Economics, stimulus packages, minimum wages - yeah, that's a bunch of political spin guessing what's going to happen next and usually getting it more wrong than right. Pollution is much more black and white. Are there some small segments of industry that are needlessly over-regulated? Certainly. Will taking a broad-axe to the current regulations stimulate short term business profits and stock market gains? Absolutely. Is de-regulation of industry's pollution controls a good idea for the health or welfare of people who live near and/or work in those industries? in >99.9% of dimensions, when measured on a scale of decades, NOT.
The Gulf hurricanes of 2005 effectively deregulated industry pollution standards in Houston as they moved gasoline refinement back on-shore (since the offshore rigs were wiped out), gave industry the nod to ignore their rules and just keep the gasoline flowing. The change was dramatic and swift. It may be cleaning up again now, but we got out in mid 2006 because it was absolutely disgusting to live there - you could feel your body react to the pollution as you drove into town (that's mostly ozone), and see the effects everywhere.
If you live out by Yellowstone, you may not care what goes on in the chemical plants and gasoline refineries - but many millions of people do live and work there, and I don't want to live in a society that lets them suffer diseases and decreased life expectancies, just so I can have cheaper gasoline and WD-40.
🌻🌻 [google.com]
(Score: 1) by khallow on Saturday August 26 2017, @05:16AM (3 children)
I'm saying that the advocates for yet more pollution regulation are acting like nothing has happened since 1950 and that we still need just as much new regulation now as we needed in 1950 when rivers were catching on fire.
Just imagine, if you can, how much worse that was in 1950 without the regulations that make it so safe and clean now.
What the hell. The 2005 hurricanes weren't that damaging to off shore rigs. Nor was there very much off shore refining going on (it's usually cheaper to just lay some pipe to the mainland aside from some small, isolated fields). Glancing through the Wikipedia article [wikipedia.org], there is indication that off shore refining, such as it is, was actually expanded in the Gulf after 2005.
Finally, it was an emergency situation which in a year or two wasn't an emergency any more (this incidentally indicates the onerous nature of these regulations that they have to ease up on them when infrastructure damage occurs). So maybe you're right, maybe the regulators did ease up for a little while on regulation. But it's completely unrealistic to claim, for example, that these refineries somehow weren't regulated for the whole of the Obama administration, particularly after the 2010 Deepwater Horizon accident, to name yet another glaring bit of historical revisionism.
What does your concern have to do with the real world? Sure, the environment of refineries is hazardous. But we already regulate those environments. And people get higher pay for the hazard. All looks good to me.
(Score: 2) by JoeMerchant on Saturday August 26 2017, @05:47PM (2 children)
FYI https://en.wikipedia.org/wiki/Cuyahoga_River [wikipedia.org] the "big" river fire was in 1969. There were some others.
1950s Houston would have been both worse, and better than today - development and population density were MUCH lower in the 1950s, though they had pretty much gotten a handle on malaria by then, so that was nice.
The offshore refineries were absolutely shut down for months after Rita and Katrina, and took over a year to come back up near capacity. Too lazy to read your wikipedia article in depth, but I think where you are off-target is the Floating distinction. There's drilling rigs: http://www.houstonpress.com/news/hurricane-harvey-pushing-texas-refineries-offshore-rigs-offline-9732031 [houstonpress.com] and then there's a few major offshore platforms that include refining capacity. I'm going to sound looney-toons here, but I think some of that information is being kept somewhat quiet in sources like Wikipedia - there was a lot of concern back when we lived there (2003-2006) about the "two guys and a pickup truck full of hand-grenades" attack which had potential to cause damages in the billions if they knew just where to throw them. Although an offshore platform is a little harder to target than the land based operations, as you can see from the map - there are too many of them to effectively protect them all. There was one major platform in operation that we always heard about because so many people worked on it, and it was shut down for quite a while after the storms - and lots of operations re-activated in the Texas City area to take up the slack.
So, yes, the regulations are in-place, and enforced to varying degrees depending on the need for gasoline, among other things I'm sure. During the Rita evacuation, a (then) French owned plant was doing something that billowed huge volumes of black smoke straight out of the Lord of the Rings Mordor imagery as we drove out of town - whatever that was couldn't have been allowed long-term, maybe as an exception because of the coming storm. Here's the thing: storms happen, you can't just throw all the rules out the window because a hurricane is approaching, you really need to be able to operate safely and cleanly even when one is approaching. I'm not claiming that the regulations weren't on the books, I am claiming that enforcement of them was clearly lax after the big hurricanes hit. And this should have zero connection to Deepwater Horizon, except to state that liability for damages to nature needs to be better calculated and collected than it has been historically.
Since people get higher pay, it's all good? That's the remedy, the answer, the balance? When working is optional for basic survival (ala basic income), I'll start to consider agreeing with you. As long as people are threatened with homelessness and starvation unless they take a crappy job they don't want, I think there need to be protections in-place.
🌻🌻 [google.com]
(Score: 1) by khallow on Saturday August 26 2017, @08:27PM (1 child)
If you're operating a refinery in a path of a hurricane, then you're not operating it safely no matter what rules you happen to be obeying. That "black cloud" was probably a fast way to shutdown some part of the refinery.
I also note in your argument a lack of nuance. Following rules need not be safe. With a hurricane coming, it'll matter a lot more if the hydrocarbon products at the refinery are safely contained than if the plant exceeds air quality limits for a few hours. Those plumes of black smoke are irrelevant to the important issue of preventing dangerous spills at the refinery in question.
Regulator crackdown on safety issues in the oil/gas sector following the accident. That's what makes it relevant.
Yes. People take on hazardous jobs all the time. Increased pay is the key way that they are compensated for this higher risk.
(Score: 2) by JoeMerchant on Sunday August 27 2017, @01:25PM
Your language dismisses important details - this isn't the 1950s anymore, the solution to pollution is not dilution. Perhaps, in the reality of how the plant is currently built and operated, it was preferable to blast a few hundred (perhaps thousands, I only saw a snapshot, it's possible that emission ran for 12 hours or more) tons of soot into the sky than risk a liquid spill in the event of storm damage to the plant. A) the storm was predicted as probable to hit the area for at least 72 hours prior to the cloud emission - the operation could have been shut down sooner, and perhaps even cleanly with the extra time, but waited until the morning of mandatory evacuation because: money, B) regardless of advanced notice, the process could be built safer, more storm resistant, and less needy of Mordor cloud emission, but again was not because, again: money. Thus: regulation.
During the 3-ish years we lived in the area, workers died in plant accidents on a regular basis, 2 here, 3 there, a batch of 12 one day, not all events made the news more than a one time mention because it happened roughly monthly, almost always contractors (read: un-, or severely under- trained, usually immigrant, usually not english-speaking, and also not really paid much at all - perhaps 3x minimum wage for jobs that would run from 1 day to a couple of weeks.) If $18.75/hr is sufficient compensation for a significant risk of injury or death, more needs to be invested in training and safety to reduce those risks.
I think of Deepwater Horizon as a classic example of "all the regulations in the world don't prevent a major accident" coupled with "regulations before the accident were clearly inadequate to incentivize industry to operate safely" and a splash of "just like NASA before the Columbia disaster, what's broken isn't the rules, it's the culture that willingly ignores them." You might try to call the first two "cognitive dissonance" but they actually do co-exist because of the third.
In my industry, they started regulating process instead of results (in the mid 1990s - "design controls"), they decided that "quality can't be tested into the product, most major problems have their roots in design, process, and failures of administrative oversight." So, now we document how we make our design decisions, the processes we follow and the execution of those processes, it's f-ing painful, and expensive, and we're in the middle of 2 weeks of group meetings to address shortcomings in meeting this process just now. What does it cost? A lot, and virtually nothing, depending on how you look at it. From the "oh noes, regulations are killing us" perspective: one product I worked with had a cost of goods in the range of $200, labor of assembly and packaging around $50, and regulatory overhead (all this design control paperwork) of about $350 - OMFG! more than doubling the cost of the device, right? Well, not actually, fully loaded cost of manufacture packaging and shipment to the customer was $600 - but the retail sale price was $15,000 - the company did about $100M/yr in sales, and was just breaking even because the cost of sales ran over $14K per unit. During the years I was with the company a tiny net profit or loss (in the range of ~$1M/yr) and miscellaneous overhead not attributed to sales made up the gap. So, whine about regulation all you like but at least in that company the true inefficiency was the air-travel, lodging and commissions (anywhere from $1K-3K per unit sales commission depending...) of the sales staff to execute their "hands on pull" model that was successfully growing sales volume by about 10% per year. In that crazy industry, cost of regulation is both huge, and irrelevant.
🌻🌻 [google.com]