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Boomers: The Evil Generation!

Discussion in 'Off-Topic' started by Birdjaguar, Mar 26, 2019.

  1. Birdjaguar

    Birdjaguar Entangled Retired Moderator Supporter

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    Who might have benefited?
    • Home buyers
    • People with secure jobs (BTW 90% of the workforce remained employed)
    • Rich people
    • Companies wanting to trim payroll costs
    • Auto repair businesses
    • Accountants
    • Home remodeling businesses and stores
    • Bargain and discount stores
    • Beer, wine and liquor businesses
    Those who lost:
    • Marginal workers
    • Many debtors
    • The 10% of the work force that lost jobs
    • Those who lost houses, savings, etc.
    • Many investors
    • Those just entering the work force
    • Weak small or large businesses go bankrupt
    And this most recent recession forced businesses to seriously realign how they did business often to the detriment of their workers: a huge change was the switch from full time to part time workers without benefits.

    The fate of the big internet companies is still TBD and I think that breakups will happen. What those look like we'll have to see. It has happened before across different industries.

    I certainly am not enamored with the current way capitalism works, but its benefits are huge. The two biggest problems I see are income/wealth inequity and money in politics. Things like the following should be up for discussion:
    • Wealth Taxes
    • Pay caps
    • Increased regulations in many areas including banking
    • Health care that eliminates the leading role of insurance companies
    • A tax system that encourages giving ones wealth away for social good
    • Real campaign donation limits
    • Non partisan redistricting
    • Forced matching of large political donations to social programs
    • I think UBI is coming
    There are more, but this is enough for now.

    You keep talking about central planning as the solution. I do tend to think of that as a mostly Marxist approach solving economic problems.

    Absolutely.
     
  2. Lexicus

    Lexicus Warlord

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    "might have" is a weasel phrase. Fortunately, we already know who in fact benefited from the recession. I'll give you a hint: it's not 90% of workers as you tried to imply. Closer to the opposite. But things are clearer now. Your list of people who "might have" benefited from the recession is longer than the list of people who "lost"! If you genuinely believe the recession was a good thing for more people than it was a bad thing for, I would submit you are delusional and your idea of the "huge benefits" provided by capitalism is based on a false appreciation of reality.

    Corporate profits are historically high. The idea that precarious employment has been forced on employers by tough circumstances is nonsense.

    Mentioned it once as something worth exploring, actually.
     
    Last edited: Apr 24, 2019
  3. Truthy

    Truthy Non-boolean

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    I've had some fun treating this as a thought experiment for managing the economy of, say, the Netherlands in the 1600s. I'm assuming all the privacy invasions to gather the training data are already in place and several weeks of computation time on a google or AWS GPU/TPU cluster is available. You could conceivably handle a lot of resource allocation by modeling people's preferences with some really high dimensional feature vectors in a graph neural network. Or for some tasks you could just use matrix factorization if the dimensions are small enough. Roughly what I'm imagining is a network of things analogous to recommendation systems used at places like Spotify and Netflix. And so maybe if the planner is forecasting a lot of demand for sugar, it can schedule x fluyts to import y scheepslasts of sugar (after ranking this as better than, say, just letting everyone go without sugar). I reckon existing ML algorithms can already do a fair amount of what's needed to plan a simple economy. More would be needed, but hey, maybe a few more decades of research (especially with the help of the big tech companies) can create a model (or big set of models) that could potentially understand what's going on at the periphery of the 17th century Dutch economy with high enough resolution that it doesn't gain much by switching to a decentralized system (whereby processing is distributed back to Dutch merchants). And we know a good optimizer for learning the parameters of the model(s) because the wisest people in the land have convened and they came up with a reasonably good function to approximate what's socially optimal for 17th century Dutch folk for different configurations of the economic state.

    My issue is that something like this seems utterly unthinkable for managing the economy that produced the AI in the first place. I get you've already discounted the idea heavily, but I'm going to bite anyway. Realistically, what'll happen (and what is happening) is that lots of firms and individuals will use AI to make decisions and forecasts. If we have really good planning AI tech, people are going to be using similar tech at the local level to create very good models of the ground-level economic conditions. The ground-level AIs will tend to know more about their domains than the planner. When aggregated together, they'll have vastly superior knowledge and computation/inference power. The central planner could try to model them, but this is problematic. One, they could be more advanced than the central planner AI. Maybe they can better model the central AI than vice versa and therefore game it (even if not, they could probably game it anyway). If the central AI perfectly models the local AI, then they're probably just part of the central AI, which means all we've done is imagined an even better central AI (or we've imagined a distributed system). But again, we should expect independent AI to exist (and, in general, we should expect the total computing/predictive power of the economy to be orders of magnitude greater than that of the central planner). So the problem is recurrent. Two, when they communicate their info to the central AI (or the central AI tries to infer their actions), information is going to be lost and that'll add up to inefficiencies. To reduce information loss, the planner could delegate the decisions to the local AI. But that means we're shifting to a distributed system.

    So in my mind, the crux of the issue is that in an economy where something like central planning AI is possible is one where that planner wouldn't be more efficient than a distributed system. And as such, it would be prone to gaming, AI black markets, and hostility from people or AI who want to switch to a distributed system to benefit from the better efficiency. Part of the issue is that an economy with this kind of AI is going to be vastly more complex than an economy without it and therefore at least as unamenable to central planning. Really, I think all we've done is added scifi flavor text to the same old problems central planning has always had.
     
    Last edited: Apr 24, 2019
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  4. Birdjaguar

    Birdjaguar Entangled Retired Moderator Supporter

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    "Benefited" is an equally weaselly word unless you define it. If the recession forced a person who lost their job to seek new skills and change their career path, might that not be a benefit? It is not always black and white.

    Corporate profits rose from 2008-2012, were mostly flat 2012-2018 when the rose again. Under our current system corporations are driven by profits whether one likes it or not. To maintain or boost profits many corporations forced their workers into part time positions as they faced and endured the downturn and slow recovery. That is the way the system works for most large companies. Smaller companies have more freedom to treat workers better.
     
  5. Lexicus

    Lexicus Warlord

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    The definition I'm using is simple: those who benefited saw their net worth and share of national income increase. Those who did not saw their net worth and share of income reduced. As I said, we know who benefited from the recession, and who didn't. You seem to be under the impression that the group of those who did benefit is much larger than it actually is...
     
  6. Birdjaguar

    Birdjaguar Entangled Retired Moderator Supporter

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    OK. Since we are only talking money now. How many people contributed to their IRAs and 401ks? How many people got raises from 2008 through ???? How many people were lucky to have companies match 401k contributions? How many people new to the work force after 2008 got jobs?

    It is really a silly question. It is a very complex calculation. What do know is that it devastated many millions of people and many of those will never recover fully. This recession was worse than the previous ones. Richer people are almost always better off before, during and after harsh economic events. The moral of the story is that is better to richer than it is to be poorer. The real question is: how can we improve the economic well being and resilience of the bottom 50% of the population.
     
  7. Hrothbern

    Hrothbern Warlord

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    Depends on what state capitalism is.

    If it means actively managing big corporates, you run in all kinds of issues.

    If it is restricted to the shareholder position of ownership in the fashion of a conservative big institutional investor, it is totally something else.

    Considering that the total value of global sharers is (currently) roughly the same as global GDP ($ 80 Trillion).
    Considering that the total annual dividend paid is (currently) roughly 1.25% of the share value.

    Say for example that from past wealth taxes and progressive income taxes, the governments would own as institutional shareholder 50% of the shares, worth 50% of national GDP.
    Not to bonfire them, but just to collect the dividends and spend only those in their budgets.

    => this is only a 50% structural shift from private shares ownership to public ownership.

    Do you think that public ownership, by a government, is bad ?
     
    Last edited: Apr 25, 2019
  8. Hygro

    Hygro soundcloud.com/hygro/

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    Corporate profits rose because we ran huge deficits that weren't just tax cuts for net-saving individuals.

    I was thinking back to 2008. My Dad kept his job. He runs a small law firm. Nominally everything was fine. There's your 90% @Birdjaguar.

    Our family had to refi the house and lean hard on our relations, however, because his business credit was reduced. As a lawyer you run into huge debt and clear it with big payouts. You might go a year on credit. All of his wealth could have collapsed (and the bigger subsequent consequences...) had things been even less fortunate, even though his business was fine. The recovery has been good to us but it was a scary moment.

    I was thinking about it recently, because we were arguing on the value of things like QE. I was saying the reason it didn't do anything (the bond buying part, not the mortgage purchases) was that you don't get banks to lend more by giving them more reserves. You get them to lend by giving them viable demand for loans.

    He was like "I had viable demand for loans, and they took my credit away overnight". The assumption was the banks were playing it safe.

    But after reading @Synsensa 's reply to @Lohrenswald on keeping prices down and gentrification (rants thread), and thinking about cash holders winning the recession I got thinking.

    We know that these financial crises are driven by control fraud. It's very simple. The incentives and cover are available for one big control fraud collusion each business cycle. 2000-2007 was especially egregious.

    There were cash winners. People who took home the bonuses and whose wealth was unleveraged. When the market collapsed we had the greatest buying opportunity in history. Why would the winners want to share it with the people who they normally extend credit to? Not a chance. After Bear Stearns broke (someone had to lose for everyone else to get defended), the banks were made invincible by the US Government. The more people who failed, the better the buying moment. And the fewer people who could leverage credit for property purchases, the lower the prices were and the more there was to buy.

    It seems so obvious.

    There was little incentive to provide credit. Even to worthy borrowers.

    There was great incentive not to. Even to worthy borrowers.
     
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  9. Lexicus

    Lexicus Warlord

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    But you know, go ahead and keep up with this "the recession wasn't actually that bad" stuff, then wonder why the centrist Democrats who say things like "America is already great" lose elections ;)
     
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  10. Farm Boy

    Farm Boy The trees are actually quite lovely.

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    You'll also notice, no doubt, the fight in the moment was that the controllers of those invincible institutions didn't stop paying themselves enormous cash bonuses while we were directly paying them to do so with our promises of futurework. Too much Hoovering to be done.
     
    Last edited: Apr 25, 2019
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  11. Hygro

    Hygro soundcloud.com/hygro/

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    It certainly does suck.
     
  12. aelf

    aelf Ashen One

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    Don't get what you're trying to say or why it's directed at me.
     
  13. Hrothbern

    Hrothbern Warlord

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    Let's go back then.

    You said: "Good thing most people don't simply recommend replacing captalism with state capitalism (that's the conventional term - there's no "state socialism"), then"

    There is a confusing amount of definitions what state capitalism is. That's why I pictured a minimal hybrid version. But let's skip that complication and go back to your post:

    So perhaps better to ask: why do you think replacing capitalism with state capitalism is not good ? What did you mean in that post ?
     
  14. Birdjaguar

    Birdjaguar Entangled Retired Moderator Supporter

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    Learn to read. Those graphs are great and I'm sure that the data since 2016 will show improvements. I would think that the Pew data includes housing and reflects the dramatic loss of value in home equity. Unless a family was selling at that time or needed to sell, the home equity loss will be recovered over time, similar to stocks. If my house lost $100,000 in value in 2008 my net worth would lose that amount and show a big drop. If by 2018 it has recovered that, then my net worth will gain that amount. For those who lost their homes totally, there is no recovery. That is why I said the problem is a complicated one. If you re-read my post above, you will see my position on the matter.
     
  15. Birdjaguar

    Birdjaguar Entangled Retired Moderator Supporter

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    Hindsight is clarifying. The corporate world likes to create opportunities for profits that they can get into and out of before they go south or folks grasp what they are actually doing. Putting 100 bankers in jail for 5 years as felons would have been a great response. One problem with our justice system is that it doesn't remove wealth as a penalty for financial wrong doing except in extreme cases.
     
  16. Farm Boy

    Farm Boy The trees are actually quite lovely.

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    Kinetics wouldn't have gone entirely amiss.
     
  17. Birdjaguar

    Birdjaguar Entangled Retired Moderator Supporter

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    I don't know what that means. Please explain.
     
  18. Farm Boy

    Farm Boy The trees are actually quite lovely.

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    J = Δp

    Was musing on the alternatives to 100 bankers in jail for 5 years.
     
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  19. aelf

    aelf Ashen One

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    I said "conventional", and there's only one conventional meaning of state capitalism.

    The problem with state capitalism vis-à-vis the environment in the context of Soviet-style systems is that the planning authority will consider only its own (national-level) goals. In the Soviet Union, for example, this resulted in the goal of mass irrigation being met with hastily and cheaply-built irrigation canals that eventually caused the disappearance of the Aral Sea - an environmental catastrophe. Alternatively, state capitalism might create giant state-owned corporations that behave no differently from their private counterparts (see China). Environmental protection needs broad-based representation. Corporations and central authorities tend not to pay too much attention to it.

    This would have been great but would also have undermined capitalism. There are many who would therefore not want it.
     
  20. Hrothbern

    Hrothbern Warlord

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    There are quite some state capitalism models... but ok with your examples :)

    So yes
    It does not really matter in that respect who owns the companies (or big companies)
    If there are no regulations that protect the population (or workers) for other factors like environmental pollutions, long term effects like Climate, etc etc.... companies will cause damage to the people as side effect.
    Those regulations need to be controlled by the people in a democratic fashion where every citizen has the same strenght of opinion in his vote.

    And again
    I think it does not really matter in that respect (environment etc) who owns the companies: private capital, private family ownership, the workers of a company together, or the state.
    Those regulations have to take priority, just like the law has to take priority.
    But IF... if that priority has been arranged, is in place..... the democracy works at those elements...
    The national state could own the shares for roughly 50% (to lessen the wealth accumulation effect of dividends to the private very rich)
    (meaning they are not directly responsible for the management, and can easier maintain an independent democratic position regarding their prime responsibilities on laws and regulations)

    You would have no issues with such an hybrid ?
     
    Last edited: Apr 27, 2019

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