Minimum wage, or Living wage

piezoe said:
You pulled that out of your ass, in other words. That's exactly as I suspected.
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Ricter said:
But if we can get labor down to zero, we're good.
: )
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You can never get labor down to zero as it takes design and manufacture of robots and such to replace the unproductive labor.
You and peizoe are economic idiots
 
piezoe said:
No I can't. Many thousands of words have been written on this topic, but if you look up a definition you'll find several. Take your pick. The only thing I would say in this regard is that regardless of the definition you choose, such a market does not exist in reality, except perhaps as a localized example in microeconomics. There is disagreement among the various schools of economic thought on the definition of "Free Markets" [see the links I've provided] but there is no disagreement about their existence in the macroeconomic world -- they don't exist. For this reason if you try to look up a definition of "Free Markets" in an economics textbook, you may not find it. Instead economists seem to prefer to speak of ideal constructs such as "a competitive market system" or "private enterprise system" or perhaps "laissez faire capitalism". These constructs don't actually exist either. If only economists could develop a model of a market that, at the same time, was both useful and very closely represented a real macroeconomic market, economics would no longer be the "Dismal Science" and economists would no longer have to be lumped together with the sociologists.

https://en.wikipedia.org/wiki/Subjective_theory_of_value (this may have something to do with your apple orange exchange)

https://en.wikipedia.org/wiki/Free_market (this is a great article, I highly recommend it.)

finally I would encourage you to get hold of a copy of "Capital in the 21st Century" by Thomas Piketty. What's good about Piketty's monumental work, among many things, is that it draws clear lines between models and reality.
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Hello piezoe:

You say about free markets that "such a market does not exist in reality, except perhaps as a localized example in microeconomics.", "there is no disagreement about their existence in the macroeconomic world -- they don't exist."

But the below college economics textbooks both agree that free markets do exist, which proves you are wrong.

Microeconomics by Campbell McConnell - Part 1 Introduction to Economics and the Economy
"Although government ownership of resources and capital in China is still extensive, the nation has increasingly relied on free markets to organize and coordinate its economy."

Principles of Economics by Gregory Mankiw - Part 3
"That is why economists so often advocate free markets as the best way to organize economic activity.

................................................................................................

I could not find any thing in these college economics textbooks to support your claim about free markets that "there is no disagreement about their existence in the macroeconomic world -- they don't exist. "

I would like to know what college textbook or what other reputable source you are quoting for your claim about free markets that "there is no disagreement about their existence in the macroeconomic world -- they don't exist."

Hopefully you can can up with a better answer than simply saying China doesn't exist or these economics textbooks I quoted don't exist or simply repeating your claim with nothing to back it up.

Anubis
 
you don't learn anything about economics when you are corrected... do you?

The hangover you cited is from the 40 to 60 million people we have brought into the country since then. the majority of whom don't pay taxes at all and therefore are not be impacted by the compression of tax brackets. If you had any backbone at all you would acknowledge that you were corrected and drop you counter factual arguments.

Point 2... only about a month or 2 ago... we presented you a study from democrat type sources which showed that if you wish to improve wealth distrubution... eliminate income taxes on anyone no it the .05%.



piezoe said:
Yes, of course, they are most directly to blame, as it was Reagan's economists, such as Wendy Gramm, that started the whole supply-side ball rolling, and that has done so much damage. We have got a hangover from it today. We need to get back to supply side economics as quickly as possible. It was Reagan economists who took so much progressiveness out of the tax brackets that we ended up with nearly a flat tax. That was truly disastrous as it fueled the wealth distribution we have today. An ECONOMIC DISASTER.
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Anubis said:
Hello piezoe:

You say about free markets that "such a market does not exist in reality, except perhaps as a localized example in microeconomics.", "there is no disagreement about their existence in the macroeconomic world -- they don't exist."

But the below college economics textbooks both agree that free markets do exist, which proves you are wrong.

Microeconomics by Campbell McConnell - Part 1 Introduction to Economics and the Economy
"Although government ownership of resources and capital in China is still extensive, the nation has increasingly relied on free markets to organize and coordinate its economy."

Principles of Economics by Gregory Mankiw - Part 3
"That is why economists so often advocate free markets as the best way to organize economic activity.

................................................................................................

I could not find any thing in these college economics textbooks to support your claim about free markets that "there is no disagreement about their existence in the macroeconomic world -- they don't exist. "

I would like to know what college textbook or what other reputable source you are quoting for your claim about free markets that "there is no disagreement about their existence in the macroeconomic world -- they don't exist."

Hopefully you can can up with a better answer than simply saying China doesn't exist or these economics textbooks I quoted don't exist or simply repeating your claim with nothing to back it up.

Anubis
More...
One of the best discussions of this topic is to be found in Chapter 16 -- "Free Markets Versus Regulation" of George Soros's Book "The Alchemy of Finance.' This is available from Amazon in Paper back for not much money. I can't recommend this ~400 page work too highly to anyone who really desires to understand financial markets. Soros is not the clearest writer. One gets the impression he his arguing with himself as he writes. He apparently wrote this particular book for himself. Its real purpose seems to have been to help him clarify his own thinking. Most of us, including our former Fed Chair, Paul Volcker, have had to read "Alchemy" two, or even three, times to get the most from it. One person who did exactly that, and paid attention too!, is Stanley Druckenmiller, who Soros hired ~1988 to run the Quantum fund.

You quoted McConnell's
"Microeconomics by Campbell McConnell - Part 1 Introduction to Economics and the Economy,"
"Although government ownership of resources and capital in China is still extensive, the nation has increasingly relied on free markets to organize and coordinate its economy."​

Do you think that McConnell believes that pure free markets exist?

I have mentioned that when one reads the term "Free Markets" it is critical to remain aware that 1) The term may not be being used as you think, because there are (at least) two very different meanings attached to the term "Free Markets". I mentioned this in an earlier post. For that reason, Economists generally shy aware from use of this term except in loose comparisons, such as McConnell's remark above. They might prefer to use the term "laissez faire," because this is less ambiguous. Laissez fair, in economics, means the absence of government regulation and government interference with business. And 2) When I say "Free Markets do not exist in the macroeconomic world," I am of course meaning pure Free Markets, and not just hit and miss occurrence of some elements of a free market. And as previously explained, I am using the term "Free Markets" to mean "Free Markets" in the layman's sense of that term. The Layman almost always, by use of the term "Free Market," means a market where participants (buyers and sellers) are free to participate on exactly equal terms in an atmosphere of perfect competition where neither participants nor the State has erected any barriers that would bias the market in favor of buyers or sellers.

I am confident that you will agree that these kinds of markets do not exist. But that raises what, to me, is an interesting question: "Could they exist?" To answer this question, you might read Soros. But I will play the spoiler here, for which I apologize, and give you the answer: "They can not exist for fundamental reasons."

Once we understand this, the question of whether "Free Markets" exist, becomes moot. If they can't exist, then it follows they don't!

Even if I were to use the term "Free Markets" in the sense that economists use it to mean a market resulting from laissez faire business practice, it would still be true that "Free Markets" don't exist.

There are two different economic worlds (perhaps more) the black and white world that exits only in theoretical models described in textbooks such as Mankiw's, which I own, and McConnel's, which I probably also own but have lost track of, and the gray, everyday, world that really does exist. In your quote of McConnell he means to refer to China's economic policy that is increasingly moving away from a much higher degree of State control and in the direction of the ideal, but mythical, laissez faire, "free market". He doesn't mean, nor would he want you to interpret his remark as meaning that a pure, true free market actually exists. That's not what he said, and not what he means. That's something you have inferred.

Similarly Mankiw's statement must not be interpreted to mean that free markets exist, but rather that economists advocate the relative absence of government interference in markets. Economists believe (most of them) that the relative absence of government interference will produce markets that behave more like the ideal model. But we must never forget that the ideal model takes no account of , i.e., it ignores, the morass of cartels and monopolies, that pure laissez faire markets would quickly deteriorate into. We have approached, to a considerable degree, laissez faire markets during various periods of the past, and indeed these largely unregulated markets deteriorated rapidly.

So what are economies in the real world like? Real world economies are always a mix of two extremes. Each extreme represents a polar opposite in economic thinking. In one, the optimum allocation of resources is believed to be achieved by tight regulation of markets by the State. The Marxian economy approaches, but does not reach, this extreme. In the other extreme, their is no regulation at all, pure laissez faire business practice pertains, and that, it is believed, will produces the optimum allocation of resources.

These two extremes, in their pure form, are models based on two different schools of economic thought. Real markets, the ones that exist in practice, always incorporate a mix of characteristics of these two economic extremes. The debate is over the degree and type of regulation that will best move us toward the optimum, while recognizing that the optimum is not attainable. We find this expressed in the final, two-sentence paragraph of Chapter 16 -- "Free Markets Versus Regulation" in Soros's "Alchemy..., where Soros writes, (ca. 1986)

"After nearly half a century of what now appears as excessive regulation, we have been moving towards excessive deregulation. The sooner we recognize that some kind of regulation is necessary in order to maintain stability, the better our chances of preserving the benefits of a nearly free market system."**​

The bolding and underlining are mine of course. Soros is under no delusions that the optimum allocation of resources is attainable. He knows it isn't. And of course he knows that ideal, pure "Free Markets", i.e. those that don't quickly deteriorate into cartels and monopolies, or those that I refer to when I use that term, are equally unattainable. That's why he is careful to qualify the term "Free Market" by adding "nearly". But I would say "nearly" is a little too optimistic. I think we will always remain somewhat further from optimum than we might otherwise achieve if only our understanding could be improved and our natural inclination to embrace fallacy reduced.

________________________
** Soros penned this in the mid 1980s. His remark proved to be prophetic. While others were still extolling the virtues of the massive deregulation of the 1980s, Soros recognized that deregulation had already gone too far. It would be another decade and a half before this would become widely recognized. In 2008-9 we experienced first hand a deregulation catastrophe. And now we seem to be in a period, once again, of excessive regulation.
 
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piezoe said:
One of the best discussions of this topic is to be found in Chapter 16 -- "Free Markets Versus Regulation" of George Soros's Book "The Alchemy of Finance.' This is available from Amazon in Paper back for not much money. I can't recommend this ~400 page work too highly to anyone who really desires to understand financial markets. Soros is not the clearest writer. One gets the impression he his arguing with himself as he writes. He apparently wrote this particular book for himself. Its real purpose seems to have been to help him clarify his own thinking. Most of us, including our former Fed Chair, Paul Volcker, have had to read "Alchemy" two, or even three, times to get the most from it. One person who did exactly that, and paid attention too!, is Stanley Druckenmiller, who Soros hired ~1988 to run the Quantum fund.

You quoted McConnell's
"Microeconomics by Campbell McConnell - Part 1 Introduction to Economics and the Economy,"
"Although government ownership of resources and capital in China is still extensive, the nation has increasingly relied on free markets to organize and coordinate its economy."​

Do you think that McConnell believes that pure free markets exist?

I have mentioned that when one reads the term "Free Markets" it is critical to remain aware that 1) The term may not be being used as you think, because there are (at least) two very different meanings attached to the term "Free Markets". I mentioned this in an earlier post. For that reason, Economists generally shy aware from use of this term except in loose comparisons, such as McConnell's remark above. They might prefer to use the term "laissez faire," because this is less ambiguous. Laissez fair, in economics, means the absence of government regulation and government interference with business. And 2) When I say "Free Markets do not exist in the macroeconomic world," I am of course meaning pure Free Markets, and not just hit and miss occurrence of some elements of a free market. And as previously explained, I am using the term "Free Markets" to mean "Free Markets" in the layman's sense of that term. The Layman almost always, by use of the term "Free Market," means a market where participants (buyers and sellers) are free to participate on exactly equal terms in an atmosphere of perfect competition where neither participants nor the State has erected any barriers that would bias the market in favor of buyers or sellers.

I am confident that you will agree that these kinds of markets do not exist. But that raises what, to me, is an interesting question: "Could they exist?" To answer this question, you might read Soros. But I will play the spoiler here, for which I apologize, and give you the answer: "They can not exist for fundamental reasons."

Once we understand this, the question of whether "Free Markets" exist, becomes moot. If they can't exist, then it follows they don't!

Even if I were to use the term "Free Markets" in the sense that economists use it to mean a market resulting from laissez faire business practice, it would still be true that "Free Markets" don't exist.

There are two different economic worlds (perhaps more) the black and white world that exits only in theoretical models described in textbooks such as Mankiw's, which I own, and McConnel's, which I probably also own but have lost track of, and the gray, everyday, world that really does exist. In your quote of McConnell he means to refer to China's economic policy that is increasingly moving away from a much higher degree of State control and in the direction of the ideal, but mythical, laissez faire, "free market". He doesn't mean, nor would he want you to interpret his remark as meaning that a pure, true free market actually exists. That's not what he said, and not what he means. That's something you have inferred.

Similarly Mankiw's statement must not be interpreted to mean that free markets exist, but rather that economists advocate the relative absence of government interference in markets. Economists believe (most of them) that the relative absence of government interference will produce markets that behave more like the ideal model. But we must never forget that the ideal model takes no account of , i.e., it ignores, the morass of cartels and monopolies, that pure laissez faire markets would quickly deteriorate into. We have approached, to a considerable degree, laissez faire markets during various periods of the past, and indeed these largely unregulated markets deteriorated rapidly.

So what are economies in the real world like? Real world economies are always a mix of two extremes. Each extreme represents a polar opposite in economic thinking. In one, the optimum allocation of resources is believed to be achieved by tight regulation of markets by the State. The Marxian economy approaches, but does not reach, this extreme. In the other extreme, their is no regulation at all, pure laissez faire business practice pertains, and that, it is believed, will produces the optimum allocation of resources.

These two extremes, in their pure form, are models based on two different schools of economic thought. Real markets, the ones that exist in practice, always incorporate a mix of characteristics of these two economic extremes. The debate is over the degree and type of regulation that will best move us toward the optimum, while recognizing that the optimum is not attainable. We find this expressed in the final, two-sentence paragraph of Chapter 16 -- "Free Markets Versus Regulation" in Soros's "Alchemy..., where Soros writes, (ca. 1986)

"After nearly half a century of what now appears as excessive regulation, we have been moving towards excessive deregulation. The sooner we recognize that some kind of regulation is necessary in order to maintain stability, the better our chances of preserving the benefits of a nearly free market system."**​

The bolding and underlining are mine of course. Soros is under no delusions that the optimum allocation of resources is attainable. He knows it isn't. And of course he knows that ideal, pure "Free Markets", i.e. those that don't quickly deteriorate into cartels and monopolies, or those that I refer to when I use that term, are equally unattainable. That's why he is careful to qualify the term "Free Market" by adding "nearly". But I would say "nearly" is a little too optimistic. I think we will always remain somewhat further from optimum than we might otherwise achieve if only our understanding could be improved and our natural inclination to embrace fallacy reduced.

________________________
** Soros penned this in the mid 1980s. His remark proved to be prophetic. While others were still extolling the virtues of the massive deregulation of the 1980s, Soros recognized that deregulation had already gone too far. It would be another decade and a half before this would become widely recognized. In 2008-9 we experienced first hand a deregulation catastrophe. And now we seem to be in a period, once again, of excessive regulation.
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So there aren't any econ textbooks that prove your point. Only a writing by a convicted insider trader. LOL

Looks like you did nothing but pull that assertion out of your ass.
 
Lowering interest rates is one of the primary causes of income inequality. It looks like the Fed is starting to finally figure this out.

Lowering interest rates causes asset prices to increase in value including the stock market. Who owns the vast majority of the assets?

So the monetary policies that liberal economist such as Krugman have advocated is one of the primary causes of income inequality.

https://www.stlouisfed.org/on-the-economy/2016/may/does-stock-market-impact-income-inequality?&utm_source=Twitter&utm_medium=SM&utm_term=financial&utm_content=oteblog&utm_campaign=9358

Are Rising Stock Prices Related to Income Inequality?

The authors pointed out that inequality began to rise in the 1970s. The Congressional Budget Office estimated that between 1979 and 2011:

  • Market income grew an average of 16 percent in the bottom four quintiles.
  • It grew 56 percent for the 81st through 99th percentiles.
  • However, it grew 174 percent for the top 1 percent.1
Regarding stock returns, the S&P 500 Index grew from 92 in 1977 to over 1,476 in 2007. By comparison, it grew only 50 percent in the 30 years prior. The authors noted: “As stock prices rise, the gains are disproportionately distributed to the wealthy. Lower- and middle-income families who are also wealth-poor are less likely to expose their savings to the higher risks of equity markets.”

Owyang and Shell concluded: “The increase in income inequality in the 1970s was accompanied, in part, by gains in the stock market. Comovement between stock prices and income inequality results from the fact that gains in the stock market tend to benefit those in the wealthiest portion of the income distribution, who have better access to and higher participation in these asset markets.”


 
I think I posted a paper internal to the FED saying the very same thing. I don't remember what thread it was at this second.

They understand this conundrum quite well. The problem isn't knowledge, it is the consequences of the reality of having kept IRs so low for so long. Lowering them was a no brainer into 2008/2009/2010. One or two rounds of QE was probably also needed. However, probably the FED should have started raising them slowly in 2012 to a normalized level, letting the air out slowly. By now we would be at 3%, and maybe with the US markets near where they are without terrible volatility. They saw no bad consequences to endless ZIRP since they saw no inflation. They forgot the most powerful force in market, psychology and expectations.

Now, I fear it might be too late. The markets are a heroin addict for cheap money. And the FED is a terrible parent - when the child throws a tantrum, the child gets its way.

May the FED vaya con Dios.

WeToddDid2 said:
Lowering interest rates is one of the primary causes of income inequality. It looks like the Fed is starting to finally figure this out.

Lowering interest rates causes asset prices to increase in value including the stock market. Who owns the vast majority of the assets?

So the monetary policies that liberal economist such as Krugman have advocated is one of the primary causes of income inequality.

https://www.stlouisfed.org/on-the-economy/2016/may/does-stock-market-impact-income-inequality?&utm_source=Twitter&utm_medium=SM&utm_term=financial&utm_content=oteblog&utm_campaign=9358

Are Rising Stock Prices Related to Income Inequality?

The authors pointed out that inequality began to rise in the 1970s. The Congressional Budget Office estimated that between 1979 and 2011:

  • Market income grew an average of 16 percent in the bottom four quintiles.
  • It grew 56 percent for the 81st through 99th percentiles.
  • However, it grew 174 percent for the top 1 percent.1
Regarding stock returns, the S&P 500 Index grew from 92 in 1977 to over 1,476 in 2007. By comparison, it grew only 50 percent in the 30 years prior. The authors noted: “As stock prices rise, the gains are disproportionately distributed to the wealthy. Lower- and middle-income families who are also wealth-poor are less likely to expose their savings to the higher risks of equity markets.”

Owyang and Shell concluded: “The increase in income inequality in the 1970s was accompanied, in part, by gains in the stock market. Comovement between stock prices and income inequality results from the fact that gains in the stock market tend to benefit those in the wealthiest portion of the income distribution, who have better access to and higher participation in these asset markets.”
More...
 
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Here’s how much you need to make to afford rent in every state

"...Nationally, the report concludes, the housing wage — the amount that a worker would need to make working full time in order to afford a one-bedroom apartment comfortably — is $16.35/hr...."

Vox_wage_map.png


http://www.cnbc.com/2016/05/27/heres-how-much-you-need-to-make-to-afford-rent-in-every-state.html
 
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