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kaleberg
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I almost thought this was a serious article until I read: "Moreover, capital markets provide the opportunity for lower-income households ..." Is someone confusing 'payday lenders' with 'capital markets'? No one that out of touch should be taken even slightly seriously. It takes a certain kind of imagination to even pretend that someone with a minimum wage job could go to the 'capital markets' to get the $200 it takes to repair their car so they don't lose their job. Granted, I think that giving low income households access to capital markets would be a good idea, but I can't imagine a bank or investment firm that would touch that line of business, save at 200%-300% interest rates. Granted, this is a good argument for the Federal Reserve opening a retail window.
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It's really time for economists to start pointing out the simple fact that private property is a valuable government service and rather than simply letting people grab as much of that service as they want, there should be a fee based on how much private property you want. The libertarian approach would be to allow people to opt out. If you don't want access to the court system to sue people who defraud you and you don't want the police to come when you are robbed and you don't care if people uphold their end of the contract, then you can avoid paying the fee. We have inequality, because we have a communist attitude for private property and don't charge for it. It's like bread in the early days of Lenin's Soviet Union.
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Bring back the 90% marginal tax rate on high incomes. Right now, CEOs work hard and spend hours to issue themselves huge pay checks. High taxes would discourage this hard work and leave more money for everyone else.
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They sell do it yourself kits for minor surgery at Walmart. Europeans are always amazed to see this. I wonder if the ACA and eventual Medicaid expansion will change this?
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"No banks, no business"? That's not actually true. People will make their own bank-like institutions if they need them and they'll do so surprisingly quickly. I live near a Lauridsen Boulevard. Lauridsen was famous for responding to the 1907 financial crisis by issuing his own currency and serving as the local banking reserve. Needless to say, this was illegal and he was slapped down when the crisis was over, but some local folks still have a few of his bills. The 1933 Bank Holiday led to an increased use of checks as IOUs and increased use of store credit instrument exchanges. It only lasted a week, so there was no need for a long run solution, but you could see alternate institutions developing. As one economists of the day noted, "Did they expect people to climb trees and shy coconuts at one another?"
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This raises all sorts of interesting questions. Would you rather have a defined benefits pension with an automatic cost of living increase or a 38% higher chance of surviving a heart attack? Would you rather have some level of job tenure and ability to negotiate salary, benefits and working conditions with your boss or a smartphone? Would you rather graduate from college debt free or a 53" flat screen television? I'll be honest. These are tough questions. There is also the issue of whether they are actually addressing trade offs or just historical accidents. Most of the technological trends were in place by the 1960s. The economic changes started in force in the 1980s. Was there some connection, or are we just seeing historical accident. If it is the latter case, we could a 38% chance of surviving a heart attack and some way of fighting for better working conditions.
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Online education is nothing new. In the 1930s, the big new thing was correspondence courses. They used to advertise in matchbooks and magazines. The student would receive the written course materials and would send back a filled in test, an essay or a drawing. A variety of graders would then send back the graded test or whatever along with the next set of course notes. I think the drop out rate was 80% or so, and if you haven't been paying attention, correspondence courses haven't replaced live courses. Despite the official blather, videos are no substitute for a live lecture. I don't know how many times a lecturer has slowed down and gone over something again when the class seemed baffled. I don't know how many times a lecturer riffed on an interesting tangent in response to an enthusiastic class. A lot of lecturers opened lectures with a question about the recent homework, and built the lecture from there. That does not happen with canned videos. Besides, learning from a video is a learned skill. It isn't any easier than learning from a book or a live lecture, it is just less familiar. Also don't get me started on automatic grading systems. They are currently absolutely god awful. They are like antique punched card data entry systems where you need to get the format exactly right. I've tutored high school and college students using these systems and banging on them until they accept the right answer often takes more time than coming up with the right answer. More seriously, they cannot look at your work to give partial credit, or more importantly, to see where you slipped up and build the next lecture around that. I'm sure there are valid uses for online courses. They are perfect for simple technical subjects, like qualifying for a food handling license, but are rather awful for anything more complex. I learned how to use a dual timebase oscilloscope from a video back in the early 70s, and it's a skill I have today. More seriously, online courses are perfect for scams, both by those operating the course and by those taking the course. Besides, you now what is going to happen. Online courses are going to be used as a weapon to cut teaching costs, freeing up money for more buildings and higher administrator salaries. That is just what our kids need.
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His view was that the atomic bomb was the ultimate berserker weapon in a berserker war.
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The best explanation I have for how World War II escalated and ended was in http://www.leesandlin.com/articles/LosingTheWar.htm
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Kagan was better than Chaucer. Chaucer thought Alcibiades was a woman.
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Re: Hipsters http://catandgirl.com/?p=2061
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Even I, a yankee, have heard of Pickett's charge. Yes, it was suicidal, but there is a long tradition of lauding jackass suicidal military actions if they are suitably valiant. Did it start with Alexander assaulting the defensive walls beyond the Indus and dying of his wounds? The British, especially, seem to be love this kind of story. I had a friend taking Anglo-Saxon and translating a poem about the Battle of Brunanburh in which the defenders of an invincible fortification came out one at a time to be slaughtered, but, hey, they were valiant. She was sure she had totally misunderstood the account as it made no military sense, but she got an A on her translation. Then there was the Charge of the Light Brigade, gallant, valiant, and an excellent demonstration of the effect of artillery on cavalry. Then there was the Miracle of Dunkirk which was as much a miracle of PR as on the field. If you look at British military literature, it is full of such stories. Somehow, despite this military ethos, they did manage to conquer a fair bit of turf. In other words, don't underestimate these goons.
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In general the education thing is a red herring. More advanced technologies are just as likely to be easier to use than harder. I remember a late 19th century article on the future of the Erie Canal. Mule power just wasn't competitive against steam powered railroads. They considered reviving the canal using steam powered tow tractors, but discarded the idea claiming it would require a more educated work force. I know steam power can be tricky, but have you ever worked with a mule? Besides, nowadays there are maybe 200,000,000 people who could operate whatever tow vehicle was used. Otto cycle engines and their descendents are even easier to use than steam. If you are old enough to have been taught how to use a typewriter in school, you know what I mean. As for Grandpa Bill, it's not surprising he was able to build a successful construction company back in the 1960s. The US was still using demand-side economic policies back then, so there were rising wages, low interest loans, industrial planning, road building, neighborhood planning and so on which provided all sorts of opportunities for people in the construction trades. Nowadays, the government policy is supply-side, so the government is more concerned with maintaining company profit ratios, providing cheap credit for speculation, offering sweetheart contracts, preventing competition and so on to help incumbent suppliers maintain their incumbency. Breaking in is that much harder than when the pie is growing.
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There might be problems, but look at the Washington-Idaho border. The low Idaho minimum wage hurts Idaho employers since the work force prefers to work in Washington and they prefer to spend their money where they work. There was a NYTimes article on this some years back. Exactly how this would play out in LA is uncertain, but people tend to shop where they work.
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I never could take Heinlein in more than small doses. Some of his short stories were charming, but his longer works often had elements that grated. I read The Moon is a Harsh Mistress as a Marxist parable full of libertarian argument. It was dissonant. Farmer in the Sky was similar, a tale of pawns in a government run space farming initiative spouting individualist platitudes. I tried Stranger in a Strange Land and was bored as well as annoyed. It wandered and maundered and didn't seem to have a plot or a point.
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We should learn from history. The Soviet Union was done in by low wages. They used to say: "They pretend to pay us, and we pretend to work." You hear that at places like Walmart, just not in the public relations releases.
Toggle Commented Jun 11, 2015 on Walmart and Wages at Economist's View
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The problem with the guessing game is that in the real world it takes time to reach a consensus, so every investor learns to think a bit ahead, but not too far ahead. Even if you think a company is worthless in the long run and that someday everyone will realize this, you can still make money on it, since, for the time being, it still is accepted as having some value. (I remember doing this with Kodak in the 90s, for example.) If you accept the popular theory that human decision making is fundamentally Bayesian, you recognize that different parties update their priors at different speeds. Why not? It is often possible to do quite well by delaying updates rather than following every trend as it first appears. Let's face it. We don't go to the supermarket and not buy groceries because some day we are going to be dead and not need to eat. Keynes's insight on the beauty game is excellent advice for investors. Since most money is the hands of a small group of people, the primary source of value is following their combined opinion. Since their basic needs were met and flat wages limit investment opportunities, they had no choice but to bid up the prices of a small group of items in pursuit of returns, that is, the ability to sell them to someone else at a higher price. So, things like Manhattan real estate, certain gallery approved art works, and S&P 500 stocks have soared in value. This effect was obvious by the early 90s by which time wage stagnation was fully realized as policy.
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If you see interest rates as reflecting belief in a nation's future, it would appear that the US gave up on its future in the 1980s.
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The discount rate in this discussion is being used to make decisions about what to do and when to do it. Almost every last number is going to be bogus, and if you are talking about 100 to 200 years out, you need a new metric for the cardinality of the bogosity required. That said, talking about discount rates can be useful, but really only for comparing break even points. In fact, it probably makes some sense to run a variety of scenarios and see what the break even return rates are given the level of uncertainty. Trying to come up with a single number is really overreaching, even if you are often stuck having to make a single decision.
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Disney has the line jumping thing down to a science with long lines for the hoi polloi, shorter lines for those with a few extra bucks and private entrances for the VIPs. Granted, the last time I was at a Disney park, Steve Jobs had rented it for an evening so the NCC attendees could celebrate Apple going public. I got to ride every last roller coaster. Steve Jobs really shared the line jumping joy. Cowen seems to be retelling the old joke about the [famous impressario or theater owner] whose show wasn't doing too well, so he hired a horribly slow ticket booth person who soon had the line running around the block. Needless to say, the line served as its own advertisement for the production which went from the red into the black. As with many jokes, there is some wisdom there, just really not enough to sustain a whole column.
Toggle Commented Feb 20, 2015 on 'The Upside of Waiting in Line' at Economist's View
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That was also the period that the US started its big fail in ship building. The US never really managed the shift from sail and wood to steam and steel. US ship building costs were way too high. The only US built ships were either military or built for the protected US port to US port market. ---- I think 1870 is about right. Most historians place the start of the move to modernity around then with many of them focusing on the 1876 Philadelphia Exhibition with its telephone, Corliss engine and countless new inventions. (It also introduced the idea of having a decorative fireplace in one's living room, a room which soon replaced the parlor.) You could argue for the big changes wrought by the telegraph, steamship, railroad and the industrialization of agriculture that took place before the Civil War, but that system didn't really start clocking until the post-war era. There were too many gaps. The transcontinental railroad was finished in 1869, so that's another point that fits. The Civil War spending in the north, and the removal of southern obstructionists in Congress for the duration, set the stage for the advent of our modern civilization in the US. (e.g. There was no way Dixie was going to stand for a transcontinental railroad or for shipping subsidies, except maybe for cotton.)
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One thing not noted is that the US never got with it in the construction of steam powered, iron hulled merchant ships. Our costs were always much higher than most European and other producers, and we only maintained a ship building business by dint of government subsidies and restrictions on foreign vessels carrying from US port to US port. In contrast, the US was noted for some of the fastest and most cost effective sailing ships, but steam was reserved for the railroads, not for our ship building. Could this have been because of the extreme returns available from building railroads? We had an inland empire full of natural resources just waiting for a transportation solution. We also had extensive internal markets. Alternatively, it could just have been higher US labor costs.
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One of the interesting things about theses series - thank you Anne - is that you see wealth share increasing dramatically even as income share remains more or less the same. As a rentier I've come to appreciate this. After all, I don't pay taxes on increased wealth until I need the money. The downside are the underlying forces involved. Stagnant wages and a vanishing middle class mean a lack of investment opportunities which fuels an asset bubble as the prices of prestige goods, like shares of corporations, rise. I'm not complaining - pecunia non olet and all that - but this can't be healthy for our society in the long run.
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You are right. It was the antitrust driven break up that ended Bell Labs, but it was the antitrust pressures that led companies like Xerox, AT&T, RCA and Kodak to fund prestigious research laboratories, to justify their immense monopoly profits. Yeah, I noticed that about software entering a sort of coma. Still, there has been some progress. For example, Apples new Swift language uses the same type inferencing and compilation strategy as early 1970s MacLisp, and only 40 years later. Granted, I dont think they have the generic/optimized run time control of MacLisp, but they are learning. - K
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I think the real effect we are seeing is that it is so much easier to place a job ad and screen applicants that the number of job posts has soared. You used to have to place an ad in the classified section. That cost money. Now, you can go online and place ads on several job sites for next to nothing. That has to have made a difference. It's the same reason Harvard used to take one out of ten applicants, but now takes one out of sixteen. It's cheaper and easier to apply. You don't have to type out a fresh essay, you can just cut and paste and apply online. Further, Harvard used to charge $25 to apply. That should be $150 nowadays, but the current fee is only $75. If it's cheaper and easier, people will do it more.
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