That's One Way to Put It

I find the real estate briefs in the local paper to be a bit odd.  It's clearly written by industry insiders (i.e. realtors, and realty companies) and in part it's just odd copy, but there is a bit of "news" at the tail end of it and in particular this line:

Millennials aren’t in the same hurry as previous generations to start a family and build wealth.

Again, I know that who this is written by and for is probably not actually interested in cause and effect, but it's not that they aren't in a hurry, it's that milliennials ain't got no money because all our economic growth gets ate by the rich and old(er upper middle class white folks).  Houses and family are not cheap, but they've effectively become luxury items for people under 30 (and maybe under 35) in our current version of America.

Mostly "Conservative" Rich but Not Entirely

So the "Rich Think the Poor Have it Easy" do they?  I am genuinely curious about why this belief comes about.  Is it straight up class-ism?  Is it a combination of Fox News and the Wall Street Journal poisoning their brains?  I just don't understand how anyone could really believe that the poor have it easy.

We have a (small) safety net that mostly keeps poorer people from being completely destitute.  It helps keep poorer families from starving and helps keep a roof over their head.  Public schools provide some opportunity for advancement for their children, though it should be pretty obvious how inadequate that is.  Moreover we put less toward alleviating poverty today than we did 40, 50 years ago.

I wonder how much is an age divide.  Older people are more likely to be rich.  They mostly grew up during that time that being poor was less of an obstacle than it is today, and there are dramatic differences in some standard of living/cultural issues that confuse the whole picture--"When I was a kid I didn't have an  Xbox and a 40 in. flat screen to play it on!  I had a stick and a hoop and I liked it!"

...really this post is going to be either too long or incomplete so I'm leaving it incomplete.  I just wish I could understand the astounding lack of empathy among the well off in our society.  On the one hand they complain about how hard it is to get by on only $250k, on the other they think people making $20k/year have it easy.

I'm More Optimistic But It's Gonna Take Change

David Atkins seems a little oddly pessimistic in this post.  On the one hand he is very correct about the progress of technology and what it will be able to do in the future.  On the other he seems to ignore that a future in which all jobs are performed by machines is one in which either people must either all be enjoying immense prosperity or we are hiding from the robot death machines that are keeping insurrection in check (whether they are controlled by an AI or the future's 1% is kind of irrelevant).

While there are times I feel like the doomsday scenario is where we are headed, mostly I don't.  There are a few reasons for that, some positive some negative.  Let's start with the negative...

I don't know that we will really develop machines/software that can truly replace human creativity.  It could be our limit, or that we realize it is a bad idea (more likely the former).  I mean AI's will either enslave or kill us.  It is the sensible thing to do.  Whether our history is actually one of violence and destruction interspersed with periods of peace and prosperity, or the other way around doesn't matter much because our current trend is not good.  Particularly with respect to...

...Global warming, which will vastly change how we live on this planet over the coming decades.  Peoples will move, starve, thirst, die, and wars will start.  Or we will resolve all these issues via a combination of technological development and a vast, global political force for good that sees that that development is distributed to maximize the aid to humanity. (Stop laughing!)

On a more positive note there is the fact that if you replace all people in the workforce with machines: who buys the products the machines make?  In that world either governments/corporations would need to ensure that somehow the bulk of the population had the wherewithal to consume, or the wealthy could move to enclaves where the rabble couldn't kill them.

In reality I suspect that we will not approach any of these things (except global warming which we can't stop at this point and so will have to deal with).  If machines displace enough middle class the economy will suffer so there will be less impetus for further development.  There could be an asymptotic approach, but I think we would find there are local minima/maxima that would really require some heft to get past, and in our current political state we're nowhere close to having it.

I think in the US we will mostly be not as well off as we would like--with the wealthy being increasingly distant from the others--but still sufficiently comfortable that revolution doesn't really happen.

I'm not sure that is really optimism, but it isn't the downward spiral or killer robots of doom so it's something.

Could Have Gone Further

Timmy's book is out and from what I gather it's rather self-serving.  They saved the banks but ignored everyone else, and the economy continues to suffer as a result.  They could have seriously written down/off mortgages and student loans, but they didn't, and so people (even those with good jobs) are more financially constrained than they could have been and so the economy isn't not-sucky.

Must Read

Infuriating and disturbing, but everyone should read this.

Free Money For Everyone

Sounds crazy but it would work.  Since it's really no less likely than fiscal stimulus (infrastructure spending please) pushing for it is not a bad idea.

Minimum Wage and Jobs

It's one of those things that seems to be taken more on faith than evidence: higher minimum wage means fewer jobs.  But the evidence just doesn't seem to be there.  It seems like it should so people assume it does, but cities, states, and countries with higher minimum wages than the US just don't generally show higher unemployment (there are other social welfare issues that change and probably do lead to fewer jobs).

This article discusses states and cities in the US, referencing side by side county comparisons.  I wish I could find the link, but Austrailia has a much higher minimum wage than us, and pretty damned low unemployment.

Pure economics wouldn't get you here, but maybe a bit more thought does.  Higher minimum wage means more impetus to work, plus more income for those who do.  More workers making more money will then spend more money meaning an increase in the demand for goods and services, which must be provided by employing more people.  Moreover, if you have a business you want to succeed, you can't just fire everyone because their wages must go up.  You can't succeed with zero employees.  Maybe you can pass on some of the cost to customers, but only in a colluding society can that be guaranteed to work.  Most likely the people on top (owners, executives) will end up with less profits, which, I suspect, is the real reason that business leaders oppose raising the minimum wage.

[Note: I would actually guess* the lower profit thing to be an immediate effect in terms of total $ and long term in terms of % profit.]

*Not an economist, and not doing the maths...which in this case are hard even for economists--too many variables--which I further suspect to be one of the reasons why they all "know" that higher min wage reduces jobs: that's what their maths tell them.

Yes, Student Loan Debt is a Problem [Part the Infinity]

Another article, and another day that nothing is going to be done about this.  I still think that a student loan forgiveness by the Fed buying up all the debt and torching it and free college going forward would be the best fix.  One quick note that was in there was about mortgage requirements:

especially under new mortgage rules that limit total debt for a would-be borrower to 43 percent of their annual income.

I did not know that.  I'll be getting married this year, and apparently we wouldn't qualify for a mortgage after that due primarily to student loans (boo debt!).  Good thing I've already got one (hooray debt!?!).

USPS Banking - I Like It

This is a great idea (it actually sounds familiar, but not so much that I'll admit to having heard it before).  Also, while payday lenders and the like would be the biggest losers, and while [big] banks mostly don't seem to want small depositors, I am most curious to know what the effect would be on banks.  There's a lot of inertia in banking, but the USPS has some serious advantages over the big banks even for people not in banking deserts.

People who currently have banks, but only a couple thousand $ in savings, at most, are mostly being screwed over if that money is in a bank.  Switching to credit unions broadly makes sense, but not all credit unions are equal, and many people who won't switch offer as reason credit unions' (and small banks') shortage of locations/ATMs.  USPS clearly doesn't have that issue.

It's Called Social Security

What a weird proposal this is.  Mandatory 6% savings of workers going into a retirement account.  Weird because we already have this thing and it's called Social Security.  Up the percentage from 6.2 to 9.2 (and matching employer--also, too, eliminate the cap) and then adjust SS payouts accordingly.  That has the potential added benefit of immediately boosting current SS recipients' incomes.

The Harkin proposal, on the other hand, is a pretty crappy not-even-second best.

Income Mobility

Since the news came out that income mobility in this country, while crappy, has actually been pretty bad for a while, there's been some changing to the inequality debate.  Mostly not in a good direction.  It shouldn't need to be pointed out that mobility and inequality are very different issues.  It is possible to have very high mobility with simply insane inequality.  Imagine a country where the .01% owned 99% of the wealth, and everyone else was pretty much equal.  There could be a lot of mobility (it could be very easy for someone to move from the 10th to the 85th percentile if it only took an extra 20% of income to get there), but that level of inequality is still a major problem.

So these are two different issues and should be addressed as such.  It's great if people have the same chance as ever of making it to the top tier in this country, but it is pretty disgusting for that top tier to be so far separated from normal people (even upper middle class) as they are.  Two separate issues.  Not really even linked.

What Atrios Said

I wasn't particularly enamored with the Clinton administration (though the insane behavior of Republicans toward him made me take a more favorable view of him at the time).  I thought then--and do more so now--that by shifting so far to the right they were leaving a large swath of the public behind to gain the support of people (and businesses) who were broadly at odds with Democratic ideals which are quite popular.

Obama's rhetoric was good to hear, but his politics are in many ways even worse (i.e. more conservative).  In the end Clinton was more liberal than Reagan.  Obama really isn't.  I don't have high hopes for the upcoming State of the Union or what it will mean going forward.  Even if he sounds more populist, I just don't see any evidence that his policy positions will move that way.

Elizabeth Warren is Awesome

I'm not really sure it's anti-government left so much as anti-establishment left, as she--and her supporters--is a very big supporter of government (to regulate, equalize, level the playing field...).  She just thinks it's currently broken.

Interesting Historical Note

England had, for a brief period of time, something much resembling a basic guaranteed income.  It seems like it worked quite well, though it had some issues--mostly to do with how it was implemented, though other marginal ones as well.  It was then and is now the moralistic argument against this that seems to resonate strongest and it is one that isn't easy to push back against rhetorically--experience, on the other hand pushes back nicely, but people like anecdotes over data and you can always find the anecdote that proves your side right.

Waiting for a "Let Them Eat Cake" Response...

I think one of the things that a national income could very conceivably do is increase (not decrease) wages for lots of folks.  Think about the protesting fast food workers.  Now imagine that they all got $15k/year national income (roughly the equivalent of $7.50/hr).  On the one hand, it may seem like they would be fairly happy with only $5/hr for working, but that isn't quite right.  We have placed a value on non-working life of $7.50/hr, and have given those people the opportunity to reject working for wages that are insufficient.  Many people, could now afford to look into better opportunities, including going into business for themselves.  The pool of individuals willing to work for the current $8/hr mentioned may actually go down, while the number of customers, and the need to fill slots goes up.  This would mean that McDonald's would need to pay higher salaries in order to fill enough spaces to deal with their business.

Starting to Dread the Race for Guv

I'm at the point that I really hope Allyson Schwartz looses in the primary.  No Democrat should be able to vote to cut Social Security and ever again hope to win a primary election.

Student Loans

I still think the Federal Reserve should use its awesome power to buy up all the student loan debt and make it go *poof*.  More money for mostly younger people who will tend to spend it, or maybe take the chance to strike out on their own.  Right now, it may mean extra presents for the holidays.

Ok, I Don't Get It

Maybe I'm misunderstanding the minimum guaranteed income, but I don't get Tyler Cowen's "problems" at all.  All of them stem from:

Must a guaranteed income truly be unconditional?  Might there be circumstances when we would want to pay some individuals more than others?

and my answers are simple: "yes" and "no".  My understanding is that the minimum income is just paid out to everyone [who files a tax return].  So everyone gets, say $1000/month check to do with as they please, and that doesn't go down if they happen to work so work = more money!  Depending on the level it was set at it may be able to replace food stamps and/or cash welfare and/or housing assistance but there is no good reason to drop medicare/medicaid/social security, as those are highly efficient, targeted programs that both do good and are very popular.

(Yes, I suspect that "getting Republicans to go along with this" would probably mean cutting or eliminating those programs, but that certainly shouldn't be considered a problem with min income itself, rather a politics problem.)

I would think a bigger issue is that it would likely push up inflation at the bottom end of things (particularly low end rents and eating out would be likely to go up), though that means an even greater incentive to work for low income individuals.  In the middle it would serve as extra savings or allow a bit of extra extravagance, and at the top it would be pretty much useless, particularly as it would be way more than offset with the higher taxes required to afford it.

Luxury Goods

I don't really get pretty much any luxury goods.  I'm willing to spend more on a good quality suitcase, and whenever I get around to updating/renovating my kitchen I will likely buy a refrigerator that is both of good quality and that looks good. Still, there's a world of difference between a high quality carry-on suitcase and this or even this.  (Also, while I'll admit to having spent way too much going out to dinner on occasion, it was nothing like these burgers.)

I do understand paying more for quality and style, and I understand paying for something a bit different/unique, but with the variety of options out there I don't understand anyone spending outrageous sums of money for, really, anything (worst: people who spend tons to get the exact same stuff as other rich people...what a weird mindset).

I suppose that this is the reason I drive a 10 year old compact station wagon (albeit a kinda sporty one: Mazda5), and why I got a house that is less than 1500 sq ft.  I could be given millions of dollars and I still wouldn't see much need to get a new car or a new house (though, yes, I would renovate, but I'm planning on doing that anyway).

So a $6000 smart phone?  Sure, why not?  I'm not their target any more than I am Bentley's.  While I may think it a pretty stupid thing to do, the people who would buy that, buy plenty of other things I consider very stupid...and someone needs to take their money away from them since the government won't.

Damned Liberals