Sommerswerd said:
You're right that your skills don't make you middle class, its your money/wealth/income, relative to your standard of living. But you're drawing a distinction without any substance. The point is that people don't have the qualifications/training/certifications/degrees/skills/"quwan" whatever you want to call it in order to be hired into the jobs that pay middle class wages.
Alright, this is a more cogent argument but still incorrect. You're missing the point that being paid a middle class wage is not a matter of having necessary skills, but of having sufficient power relative to your employer to claim a middle class wage. Having rare skills may be part of this but the 'real problem' in the economy is not a general lack of necessary skills.
Sommerswerd said:
Saying that "lack of demand" is the problem is off base. There's plenty of demand. There is not plenty of money. People want iphones and new cars and deluxe cable TV packages, they just don't have enough money to buy it all. Give them the money and they will buy it.
I am using "demand" in the sense it is used in economics, not whatever metaphysical sense of the word you're using here. I certainly don't mean that people don't have enough consumerism in them. The problem is a lack of money.
You can want all the things in the world - this doesn't translate into 'demand' unless you have the money to actually buy them.
metalhead said:
His are negligibly better than others, but will also fall woefully short.
Perhaps. There is also the fact that, were he elected, he would not be able to get a recognizable version of his policies through Congress.
metalhead said:
I think it is painfully obvious that you are spot on - the supply- and capital- side has far too much of the nation's wealth and income, while the demand side has far too little. It's quite telling that several extended rounds of QE caused no real inflation. The stock market remains at near-historic highs in terms of P-E ratios, and also appears badly overvalued in terms of prices relative to actual corporate assets. Now, some of this disparity comes from the growing value of intangible property, but it's still pretty far out of whack.
Well, for some time now macro policy has largely centered on maintaining asset prices in a foredoomed attempt to prop up the rate of profit. Because the link between productivity and wages has been broken by the successful assault on unions and the abandonment of full employment as a policy goal, this hasn't translated into broad-based prosperity.
And of course QE wasn't going to work - it was/is based on a fundamentally misguided economic theory that totally misunderstands the central bank's actual role in the economy. But anyway...
metalhead said:
However, there are limited methods by which to correct this, and all involve massive transfers of wealth. The only real way to cut right to the heart of it is to impose a near-100% estate tax on estates over a very small threshold, say $2 million. No exceptions. Use the money to implement a basic income. This will help divorce aggregate demand from employment, which should not only help alleviate the affects of recessions, but help prevent them from ever starting. Basic income also has the benefit of reducing the supply of labor, potentially driving up wages especially at the bottom end of the wage spectrum.
Well, there are plenty of ways to expropriate capital through policy. A large estate tax would certainly do it. I'd probably want of a progressive wealth tax as well. I'm in favor of both a full employment policy through job guarantee and a basic income guarantee.
As you may have gathered I'm something of an MMT disciple, so I'm in favor of increasing the government's deficit to fund the fulfillment of human needs generally. The deficit right now is too small.
Ultimately I think we're probably going to need to abolish the profit motive in production, which I see as the root cause of our cancerous 'growth for the sake of growth' mentality. After all the basis of the 'post-war golden age' was essentially that continuous strong growth would obviate distributional conflicts. And subsequent events have proven the real sacred cow was profits, not social order or increasing living standards for the bulk of the population.
metalhead said:
Inflation is a threat, but so is artificially high stock prices. I think we're far from a happy medium in terms of supply- and demand- sides, and I wish presidential candidates would take the time to explain this. It's actually not that complicated at the basic level, though obviously in reality the various economic forces are incredibly complex.
Inflation is certainly not a threat under current conditions. We're in no danger of Weimar-style hyperinflation (nor would we be if Sanders' agenda was enacted in its current form), despite what the Wall St Journal editorial page says
... But thank J for the vote of confidence.
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