So according to your logic, GDP would increase massively if we could just somehow infect everyone with crippling and preferably fatal illnesses? I guess that is why the Black Death was so good for the European economy during the Middle Ages. Let's pray for a global pandemic to pull us out of this recession!
"Permanent job loss" fallacy. There is no permanent job loss!
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So according to your logic, GDP would increase massively if we could just somehow infect everyone with crippling and preferably fatal illnesses? I guess that is why the Black Death was so good for the European economy during the Middle Ages. Let's pray for a global pandemic to pull us out of this recession!
Rather than continue to point out the obvious absurdities in almost all the replies to the initial poster, I'll just point out a pretty simple way to verify his claim.
If there were permanent job losses, then clearly unemployment would have a permanent rise with each recession and eventually - after enough recessions - lead to 100% unemployment. Since this has never happened in any economy, then clearly there are no permanent job losses. Either there are no job losses at all (obviously incorrect since lots of people get fired each year) or jobs lost get replaced with other jobs.
So - either jobs lost get replaced with others, and thus there is no permanent job loss, or unemployment is 100%. Take your pick.
Secondly, if the replacement jobs were, in totality, worse than the jobs lost, then wages and output, and thus living standards, would be lower. Human history would therefore see a pattern of falling living standards and falling real wages over time. Yet the opposite has been the case in all relatively open economies - with the exception of wars, huge natural disasters etc, open economies generally experience significantly higher living standards over each generation.
So - either we are much poorer than our grandparents generation, who were in turn poorer than serfs in the Middle Ages, who were in turn poorer than tribes in ancient times, who were in turn poorer than Stone Age cavemen, OR replacement jobs are better in totality than the ones lost. Take your pick.
All those who think we are poorer than Stone Age cavemen, and think unemployment is 100% or headed there within the foreseeable future, please post on this thread so we know where you stand.
If there were permanent job losses, then clearly unemployment would have a permanent rise with each recession and eventually - after enough recessions - lead to 100% unemployment. Since this has never happened in any economy, then clearly there are no permanent job losses. Either there are no job losses at all (obviously incorrect since lots of people get fired each year) or jobs lost get replaced with other jobs.
So - either jobs lost get replaced with others, and thus there is no permanent job loss, or unemployment is 100%. Take your pick.
Secondly, if the replacement jobs were, in totality, worse than the jobs lost, then wages and output, and thus living standards, would be lower. Human history would therefore see a pattern of falling living standards and falling real wages over time. Yet the opposite has been the case in all relatively open economies - with the exception of wars, huge natural disasters etc, open economies generally experience significantly higher living standards over each generation.
So - either we are much poorer than our grandparents generation, who were in turn poorer than serfs in the Middle Ages, who were in turn poorer than tribes in ancient times, who were in turn poorer than Stone Age cavemen, OR replacement jobs are better in totality than the ones lost. Take your pick.
All those who think we are poorer than Stone Age cavemen, and think unemployment is 100% or headed there within the foreseeable future, please post on this thread so we know where you stand.
This really all comes down to education. If nothing else, the government should at least provide for free education for anyone with the willingness to learn. This would make it much easier for people to transition to a new career that at least pays a living wage.
If a working adult wants to go to college, he or she is usually forced to attend an expensive for-profit university. Most state run or private colleges don't offer many night or evening courses and are geared towards the 18-25 crowd.
People are finishing school with tons of debt for jobs that pay very little, if they can even find a job. The system needs to be overhauled.
If a working adult wants to go to college, he or she is usually forced to attend an expensive for-profit university. Most state run or private colleges don't offer many night or evening courses and are geared towards the 18-25 crowd.
People are finishing school with tons of debt for jobs that pay very little, if they can even find a job. The system needs to be overhauled.
(2006)
"...there is still the myth that with the right education and training, the resourceful displaced worker can find a job as good as the one they had."
http://knowledge.emory.edu/article.cfm?articleid=1002
(1995)
"Clearly, financial pressures facing families have intensified in the past two decades. Many families are striving to achieve a comfortable standard of living by increasing weekly hours of work and by additional income from working wives. However, this effort is often hindered by declining earnings and nonwage compensation, in addition to increased housing costs. Real earnings declined 30 percent from the early 1970s to the late 1980s for those with a high school education or less and for all young families."
http://upjohninst.org/publications/newsletter/jk_595.pdf
(1997)
"We find evidence indicating that the average 1990`s two-earner family would prefer to receive the 1980`s real wage package (were it available) instead of the real wage package it actually faces."
http://ideas.repec.org/a/spr/jopoec/v10y1997i3p237-250.html
(2006)
"In sum, the American economy has been spending well beyond its means, borrowing more than $2 billion a day from abroad, an amount equivalent to more than 6 percent of the Gross Domestic Product. Yet even this level of borrowing has not been enough to prop up low- and middle-income familiesâ standard of living."
http://www.cbpp.org/cms/?fa=view&id=854
"We consider both changes in general health, proxied by improvements in life expectancy, and changes in the prevalence of two particular diseases: malaria and tuberculosis. We find that the effects of health improvements on income per capita are substantially lower than those that are often quoted by policy-makers, and may not emerge at all for three decades or more after the initial improvement in health. The results suggest that proponents of efforts to improve health in developing countries should rely on humanitarian rather than economic arguments."
http://ideas.repec.org/p/bro/econwp/2008-7.html
"In 2008, total national health expenditures were expected to rise 6.9 percent -- two times the rate of inflation.1 Total spending was $2.4 TRILLION in 2007, or $7900 per person1. Total health care spending represented 17 percent of the gross domestic product (GDP).
U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.3 TRILLION in 2017, or 20 percent of GDP.1"
http://www.nchc.org/facts/cost.shtml
Is your normal mode of debate to totally avoid answering all rebuttals? The stuff you are citing was not addressing the points I was making.
Please explain how a person becomes more economically productive when they are dying of cancer, or an economy filled with such people is better off then one filled with people who are healthy and can work and produce. Show some examples of economies where output soared as a result of a lethal pandemic wiping out a good chunk of the population.
Please explain how a person becomes more economically productive when they are dying of cancer, or an economy filled with such people is better off then one filled with people who are healthy and can work and produce. Show some examples of economies where output soared as a result of a lethal pandemic wiping out a good chunk of the population.
Actually, they did.
You're also a pretty smart fella, I see no need to hold your hand while walking you through them.
Cutten, you are so far off the mark from what I wrote that you've missed the planet...
So, what gives?
Is the OP a blood relation, or are you simply off to an early start on what looks to be an extraordinarily bad week?
Quote from Misthos:
One day soon we will arrive at the conclusion that many jobs are indeed worthless. They contribute very little and have only grown in size due to the asset value/debt based service sector economy (FIRE ECONOMY) grew along with fiat money. So yes, job losses will be permanent - at least for my lifetime - until the next monetary expansion/super debt cycle grows in another 50 years only to implode yet again 70-80 years hence.
so true. How many times do you drive past a road crew, and 5 people are watching while 2 people are working???
Not to detract from the main argument, but to point out that in certain cases, replacement jobs can be produce less value.
eg, the rubber workers in Manaus, Brazil circa 1915 probably weren't too happy when they start to get hollowed out by rubber workers in Malaysia.
In their case, the decline was permanent and the local labour and capital resources didn't get redeployed into a more profitable venture.
Also, in revolution, unrest and regression that follows, jobs in accounting, insurance and other tertiary services can evaporate, to be replaced by lower value ones like a boost in shoe cobbling, or watch repair. Economies can get worse, say post war or revolution when the state implodes, or when a greedy bastard takes over the country, as is common in Africa.
When those situations occur, you *can* get genuinely lower value job substitution as the economy regresses.
But these are special exceptions and do not refute the argument that you can't create value by smashing windows and calling for the glazier.
eg, the rubber workers in Manaus, Brazil circa 1915 probably weren't too happy when they start to get hollowed out by rubber workers in Malaysia.
In their case, the decline was permanent and the local labour and capital resources didn't get redeployed into a more profitable venture.
Also, in revolution, unrest and regression that follows, jobs in accounting, insurance and other tertiary services can evaporate, to be replaced by lower value ones like a boost in shoe cobbling, or watch repair. Economies can get worse, say post war or revolution when the state implodes, or when a greedy bastard takes over the country, as is common in Africa.
When those situations occur, you *can* get genuinely lower value job substitution as the economy regresses.
But these are special exceptions and do not refute the argument that you can't create value by smashing windows and calling for the glazier.