# Lol, QE3? Try raising wages and giving something back to people to SPEND



## Mrmagoo (14 September 2012)

Minimum wages in the USA were far too low. Plus a range of other issues.

They should use 40 billion a month to employ people to build things or work in and build state owned and run hospitals.

Suddenly the economy would then fix itself.

Discuss.


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## clowboy (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Minimum wages in the USA were far too low. Plus a range of other issues.
> 
> They should use 40 billion a month to employ people to build things or work in and build state owned and run hospitals.
> 
> ...




In theory they are, just at an interest rate of between 1.5-4% depending on what exactly u want to use it for.


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## notting (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Minimum wages in the USA were far too low. Plus a range of other issues.
> 
> They should use 40 billion a month to employ people to build things or work in and build state owned and run hospitals.
> 
> ...




Rubbish.
You can't offer working people employment and quality of life whilst competing with China slave labour and manipulated low Yaun.  Both Europ or USA have to print to preserve an employed society.
Of course it's far from ideal, as nothing in economics is.
Simple!


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## white_goodman (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Minimum wages in the USA were far too low. Plus a range of other issues.
> 
> They should use 40 billion a month to employ people to build things or work in and build state owned and run hospitals.
> 
> ...




its not fiscal policy its Fed policy, even in its unconventional stance of buying the long end of the curve and buying MBS, i hardly think theyll ever get into buying/planning infrastructure projects....

raising minimum wages in the US will reduce employment, there is no economic debate on this whatsoever

the Keynesian method of digging up ditches filled with cash is moronic in creating real wealth, akin to the 'economic growth' via an earthquake..


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## skc (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

What's the talk about QE4 now?


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## tech/a (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

They are printing money to pay out the bonds which guarentee the 
money printed to pay off the bonds,which is used to pay off the cost of debt
which leads to more debt and more money being printed and more bonds to guarentee the debt.

The Greatest *PONZI* scheme on the planet.


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## baby_swallow (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

The biggest problem of America is they have lost a substantial part of their manufacturing base. Most of the large companies who employs millions of Americans have shipped their factories abroad in the last 30 years or so, because of rising local wages and to maintain high profit levels.
The goods are then imported back to the country with American brand labels on them, fooling the majority consumers in thinking that they are still buying "American made products". 
(I am amazed that no politicians or economists wanted to talk about this issue. I think because they are all drinking the same Kool-Aid).

On this basis, I say "No amount of QE will save American jobs"

Any QE or stimulus will just flow to the stock market (further inflating stock prices), and further fatten the wallets of Ben's banskster mates. We've seen it before and it will just go on and on. 

In the old days, economic stimulus solution used to work because low-cost foreign labour were not accessible yet.

USA will follow Japan footsteps - already racked up a public debt more than 200% of their GDP and still no significant economic improvement 

- My 2 cents


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## CanOz (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

I really don't know what all the fuss is about...the markets have probably been pricing this latest round of printing in already. The next week or so will tell I would think. The gold price has been pricing it in yeah?

CanOz


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## tinhat (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

I don't know much about monetary economics. I wonder if anyone does? If you were to argue that economic growth requires growth in the money supply then if the financial sector is not growing the money supply then the central bank can step in to grow the money supply.

The problem is that you can't trust people to implement balanced economic policies. I always laugh when people argue that Keynesianism is responsible for the massive public debts in much of the developed world. Yet Keynes didn't argue that governments should run defecits throughout the entire business cycle - quite the opposite. Same with monetarism. Theoretically, when money supply over-inflates, the Fed will need to absorb money and hike up interest rates again. But will that happen and can it happen politically if we end up back in the stagflation of the 1970s - high unemployment and high inflation?


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## white_goodman (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



CanOz said:


> I really don't know what all the fuss is about...the markets were have probably been pricing this latest round of printing in already. The next week or so will tell I would think. The gold price has been pricing it in yeah?
> 
> CanOz




overlay the gold chart with the balance sheets of the combined Fed/ECB, gold has priced it in .. 

my question which was the same question I posed to my RBA advising lecturer, what do they do when theyve amassed all this 'assets' on their balance sheet, what happens to the price when they try and get out... I cant imagine another TARP situation where they make money/scratch... his response was that CB's are willing to take a loss for the better of the economy...


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## Joules MM1 (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



CanOz said:


> I really don't know what all the fuss is about...the markets have probably been pricing this latest round of printing in already. The next week or so will tell I would think. The gold price has been pricing it in yeah?
> 
> CanOz




sounds like a reasonable call.....ya think there's more that can be rung out of the upside, yeah, suspect so......

http://blogs.wsj.com/economics/2012/09/13/a-look-inside-the-feds-balance-sheet-15/
the us fed's  balance sheet

i always enjoy the way people talk about this stuff and swing from vague economics to vague politics and think theyre the same thing.....lulz


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## white_goodman (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



tinhat said:


> I don't know much about monetary economics. I wonder if anyone does? If you were to argue that economic growth requires growth in the money supply then if the financial sector is not growing the money supply then the central bank can step in to grow the money supply.
> 
> The problem is that you can't trust people to implement balanced economic policies. I always laugh when people argue that Keynesian-ism is responsible for the massive public debts in much of the developed world. Yet Keynes didn't argue that governments should run deficits throughout the entire business cycle - quite the opposite. Same with monetarism. Theoretically, when money supply over-inflates, the Fed will need to absorb money and hike up interest rates again. But will that happen and can it happen politically if we end up back in the stagflation of the 1970s - high unemployment and high inflation?





what happens is they will rework the new Phillips curve again similar to Ptolemy's universe. Allegedly many of the 'Keynesian' models are in fact Hicksian in the name of Keynes, my reading on this is still in amazon transit. My main gripe with 'Keynesian' policies is that its not very conducive to the democratic political realm in which we live, France has been running deficits for 3 decades, surely the Great Moderation was time to go into surplus, in effect populations expectations,living standards,addiction to living above our means are ratcheted, with politicians looking to getting re-elected as the nations caretakers/lessee's.

Regarding money supply and output growth. Just looking at a basic ISLM model, they are having issues with ZIRP and the LM curve hitting the 'zero bound' (the indifference to money and bonds as bonds earn no return), so the recipe, according to the model which im not sold on, but that is there understanding is for the IS curve to shift.. so basically they are trying to game the economy into shifting which is a nightmare in a private deleveraging environment... great for markets tho


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## lusk (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

Pretty hard to fix a problem when you vote in a president to "change" things and he employs the same turkeys that created it  or do they want to fix it


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## white_goodman (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



lusk said:


> Pretty hard to fix a problem when you vote in a president to "change" things and he employs the same turkeys that created it  or do they want to fix it




they obviously need to "Hope" more


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## Joules MM1 (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

*The Fed's QE3: how does it work and what are the risks?*



CHICAGO | Thu Sep 13, 2012 4:05pm EDT

excerpt


> (Reuters) - The U.S. central bank on Thursday said it will launch a fresh round of bond-buying to stimulate the economy, purchasing $40 billion of mortgage debt each month until the outlook for jobs improves substantially.




http://www.reuters.com/article/2012/09/13/us-usa-fed-easing-idUSBRE88C1CT20120913


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## Knobby22 (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



lusk said:


> Pretty hard to fix a problem when you vote in a president to "change" things and he employs the same turkeys that created it  or do they want to fix it




Very, very true. Neo classical economists whose theories have been proved wrong stimulating the economy through debt to try and do something without attacking the crux of te problem. No idea. Why don't they hire someone with different viewpoints - Neo Keynsians and Austrian economists. Istead we get the same robots from the same universities.

If the economie was truly run in a Keynsian fashion then instead of debts there would have been reserves and government would have been reducing spending during the good times (reducing the bubble) instead of increasing. If they then had the reserves instead of the debt they could have been building infrastructure now to make the economy more competitive as well as reducing unemployment.

Unfortunately this is against politicians interests.


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## white_goodman (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Knobby22 said:


> Very, very true. Neo classical economists whose theories have been proved wrong stimulating the economy through debt to try and do something without attacking the crux of te problem. No idea. Why don't they hire someone with different viewpoints - Neo Keynsians and Austrian economists. Istead we get the same robots from the same universities.
> 
> If the economie was truly run in a Keynsian fashion then instead of debts there would have been reserves and government would have been reducing spending during the good times (reducing the bubble) instead of increasing. If they then had the reserves instead of the debt they could have been building infrastructure now to make the economy more competitive as well as reducing unemployment.
> 
> Unfortunately this is against politicians interests.




largely agree with an asterisk next to infrastructure (ie what types),

they dont hire people with different orthodoxy cos basically they are constantly at war, how would you go seeing a Steve Keen at the RBA (I wouldnt be over-joyed tbh) or a Jim Grant in the Fed. "The sate of macro is good" (blanchard 08), they see crises as an aberration to their econometric modelling (like modelling works well - LCTM, climate models et al), and dont wanna throw the baby out with the bathwater...


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## sammy84 (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

Seems like a no-brainer to me. Announce QE3 which in turn devalues the USD. A low USD helps for the US to become a net exporter of goods. Only this way no other countries can say the US is artificially trying to keep the USD low, they are merely stimulating their economy.


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## Knobby22 (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



white_goodman said:


> largely agree with an asterisk next to infrastructure (ie what types),
> 
> they dont hire people with different orthodoxy cos basically they are constantly at war, how would you go seeing a Steve Keen at the RBA (I wouldnt be over-joyed tbh) or a Jim Grant in the Fed. "The sate of macro is good" (blanchard 08), they see crises as an aberration to their econometric modelling (like modelling works well - LCTM, climate models et al), and dont wanna throw the baby out with the bathwater...




Good point. Reminds me of a joke.

A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Lets smash the can open with a rock." The chemist says, "Let’s build a fire and heat the can first." The economist says, "Lets assume that we have a can-opener..."


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## McLovin (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Knobby22 said:


> Good point. Reminds me of a joke.
> 
> A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Lets smash the can open with a rock." The chemist says, "Let’s build a fire and heat the can first." The economist says, "Lets assume that we have a can-opener..."




I like it!

What about..

Three economists were out mountain climbing. After getting terribly lost they stopped to study the map they had with them. One of them poured over the details with a compass, every now and then referring to the position of the Sun. Finally he said to his companions, "see that mountain over there" and pointed far off into the distance. "Yes" they all replied. To which he knowingly informed them "Well according to the map, we're standing on top of it."


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## notting (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

One thing to remain just a little mindful of is that so far it's a 40b QE!
Hard to disappoint, excite, politicise, speculate, anticipate, pontificate, or debate on the next round of stimulus or whether this was enough or not enough, given it's open at both ends.  

Poker face Ben.


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## white_goodman (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



notting said:


> One thing to remain just a little mindful of is that so far it's a 40b QE!
> Hard to disappoint, excite, politicise, speculate, anticipate, pontificate, or debate on the next round of stimulus or whether this was enough or not enough, given it's open at both ends.
> 
> Poker face Ben.




its $40billion per MONTH, open ended


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## notting (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



white_goodman said:


> its $40billion per MONTH, open ended




Yes, for eternity the suckers seem to think.
Just like ECB now with the mandate to buy 'unlimited bonds.'
It's all just a show of strength, "We have the capability so stop shorting us or we will bankrupt you."
"Hey everyone look at the markets there rocketing, the inflection point at last!"
Psssst, "Tell fricken congress to fix hole, whilst we hold this thing at bay."
Confidence works,  why not?!


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## Uncle Festivus (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

There appears to be 2 fundamental forces at work here - demographics & structural emigration? 

The demographics of the aging baby boomer generation implies a reducing propensity for discretionary spending, which is showing up in retail etc followed by governmental expenses in looking after this aging sector.

The structural emigration is present in nearly all 1st world, developed economies where the production of stuff has been undercut by countries where the sole focus is on employment at the expense of profits - exibit A, China. 

Until both of those issues are dealt with no amount of push priming QEX is going to bring back the 'good' times any time soon - in fact the next wave isn't due until around 2020.......so it's all downhill till then, that's if things don't get worse sooner??


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## notting (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

People are spending, it's just that their getting it all a hell of a lot cheaper from the global market place. Giving the illusion of conservative spending.
If you look at quality brands that are difficult to imitate convincingly or have a high level of respect from consumers they are are booming, luxury, watches, brands and cars are going fine.
Hmmm what's another example,
Oh yeah - Apple!


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## IFocus (14 September 2012)

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baby_swallow said:


> The biggest problem of America is they have lost a substantial part of their manufacturing base. Most of the large companies who employs millions of Americans have shipped their factories abroad in the last 30 years or so, because of rising local wages and to maintain high profit levels.
> The goods are then imported back to the country with American brand labels on them, fooling the majority consumers in thinking that they are still buying "American made products".
> (I am amazed that no politicians or economists wanted to talk about this issue. I think because they are all drinking the same Kool-Aid).




So why are the Germans different....sort of......... high wages, high productivity, high manufacturing base?


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## Intrinsic Value (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

It is really taking a long time for western governments to realise the impact of a truly globalised economy.

The middle classes are an endangered species in all western countries. 

The shrinking middle class is a result of technological advances and a resultant decrease in white collar middle class jobs.

What you get in all countries not just western then is an elite of 10-20 percent with the rest on struggle street.

To make things worse the tax take is dimishing from western countries as globalised multinationals are able to shift funds to low tax environments. Further the very wealthy always seem to have ways to evade some tax through various mechanisms. And of course with a shrinking middle class a further loss to the backbone of the tax take.

Manufacturing for the most part cannot compete with low cost countries in Asia and so there is a large pool of unemployable workers in many western countries.

The social policies of most western countries include things like pensions, unemployment benefits, sickness benefits etc. Long term most of these policies will be unsustainable especially given there are going to be  more and more old people and more and more disadvantaged people.

At the moment Australia is somewhat insulated from this via the mining boom but inevitably when this runs out of steam Australia will also be in the same situation as the rest of the western countries around the world. Fiscal policies will have to be adjusted and there will inevitably be a lot of pain and of course there will be massive social dislocation as a result of having a society of haves and have nots.


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## Mrmagoo (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Intrinsic Value said:


> It is really taking a long time for western governments to realise the impact of a truly globalised economy.
> 
> The middle classes are an endangered species in all western countries.
> 
> ...




You're so full of it. Globalization is only a good thing for the economy. The problem is governments allow mega corporations to under pay workers and dodge paying tax leading to the problems you describe.

If people are paid high wages, they consume, this creates the need for a middle class. Without it you just have a bunch of unemployed people. 

As we're a smaller population, what wealth we do produce is spread on a smaller base and is used to purchase goods from countries with a production advantage. It works well if you force the winners (big corporations) to compensate the losers (small workers) by paying higher minimum wages. See basic economics book, ie pareto optimality.


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## Mrmagoo (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

LMAO at classist arguments destroying an economy.

Only reason to cut social programs and minimum wages is to hurt the poor and in the end it ruins the economy pushing those who want that kind of thing to give themselves a feeling of superiority into the poor house !

How many broke ass americans of today were the ones pushing for cuts to wages and programs for the lower and working class !


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## gav (14 September 2012)

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white_goodman said:


> the Keynesian method of digging up ditches filled with cash is moronic in creating real wealth, akin to the 'economic growth' via an earthquake..




Rubbish! Start smashing some and get this economy going! :


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## gav (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



tech/a said:


> The Greatest *PONZI* scheme on the planet.


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## notting (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> LMAO at classist arguments destroying an economy.
> Only reason to cut social programs and minimum wages is to hurt the poor and in the end it ruins the economy
> How many broke ass americans of today were the ones pushing for cuts to wages and programs for the lower and working class !




C'mon! Social programs have done wonders for Spain and Greece.


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## Mr Z (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

Pharrrk!

YOU CAN"T PRINT WEALTH ---> END OF STORY!

Everything else is a wealth redistribution program.


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## Mrmagoo (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



notting said:


> C'mon! Social programs have done wonders for Spain and Greece.




Erm. I think you will find a key problem in Greece is tax evasion, corruption and you guessed it, poor people.

I know the reason for this and it is because those with a little bit of money like to feel special, like they're on of the elite and the best way to do this is to hurt the poor. 

Raising wages for the working class does nothing but benefit an economy so long as it is done responsibility. For example, the wages of trades people in Australia are a clear example of killing off industries. While the low wages of retail workers in the US are a clear example of killing off entire communities.

Australia used to be a low cost, high wage society and we saw the benefits of that in the early 2000s.


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## Mrmagoo (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Pharrrk!
> 
> YOU CAN"T PRINT WEALTH ---> END OF STORY!
> 
> Everything else is a wealth redistribution program.




lol what ? all wealth is printed.

Wealth, as defined as the ability to make things and create value is not defined by the ability to pay workers less. That just means that workers get paid less.


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## notting (14 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Pharrrk!
> 
> YOU CAN"T PRINT WEALTH ---> END OF STORY!
> 
> Everything else is a wealth redistribution program.




No one is saying you can, that's the point .  
You just have to keep the  tap dripping just enough to keep the others running way ahead of you to ensure they win the race to the bottom. 
Get it?


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



notting said:


> No one is saying you can, that's the point .
> You just have to keep the  tap dripping just enough to keep the others running way ahead of you to ensure they win the race to the bottom.
> Get it?





Yeah... but it is a fallacy! Weak currency equals weak economy the whole process takes resources from the successful and gives them to the unsuccessful who do the wrong thing with them. This wastes resources and further engenders mis-allocation of capital i.e. it encourages the successful to do the wrong thing in response to the mis-allocated spend. In the end it distorts an economy to the point that it simply will not function.

Germany was an exporting powerhouse with a strong deutschmark!

The OP's proposition is lunacy, you cannot set a minimum wage and finance  it with new money and have the whole economy fix itself! Markets set wages, if you pump the minimum up artificially you lose jobs... it is a simple as that. The only way to fix it is to retrench debt (default or repay, NO BAILOUTS), fix structural and regulatory issues (get the gubmental types right out of the way!) and it will recover.

This is madness on a global scale, what is more it is madness that history shows us ends badly.

What else is there to say, but maybe "This time it is different!"


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Yeah... but it is a fallacy! Weak currency equals weak economy the whole process takes resources from the successful and gives them to the unsuccessful who do the wrong thing with them. This wastes resources and further engenders mis-allocation of capital i.e. it encourages the successful to do the wrong thing in response to the mis-allocated spend. In the end it distorts an economy to the point that it simply will not function.
> 
> Germany was an exporting powerhouse with a strong deutschmark!
> 
> ...




So basically more of what they've already done for the last 30 years ? Your religious following to a bunch of malformed ideas is sad.

Haha. Nice pack of lies. The last time the US injected money to the working class was probably 20 years ago, since then wages have basically fallen, healthcare and education declined and most benefits were given to big corporations to trickle down. Look at the result - they went to far, the bottom fell out of the economy and it all came crashing down.

It is interest rate zero money so why not loan it to the poor at an interest only fixed rate of 0% through increased minimum wage payments.

Better than giving it to some bank to not lend to people.

The whole economic theory is insane and that is why we're in the situation we're in right now. People like you making up crap that if you take money away from the rich and give it to people who will spend it and create jobs it will hurt the economy (that you're somehow actually taking it when it probably wasn't physically theirs to start with) has just never been proved to work. The US has had 2 decades of that sort of **** and look at where it has landed it.

You spout that stuff like it is proven gospel when nothing is further from the truth.

I'm not some left wing tree hugging hippy either I hate the left wing hippy nonsense but I'm also an economic realist and you're all screaming one thing at the top of your lungs like a spoiled five year old wanting a lolly and all around the economy is crashing.

All it comes down to is a stupid, selfish, classist argument - HOW DARE THE WORKING CLASSES BE ABLE TO AFFORD ANYTHING !! It is political, not economic and as a result the economy suffers.


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> So basically more of what they've already done for the last 30 years ? Your religious following to a bunch of malformed ideas is sad.




NO!!!!! Jezz talk about misinformed!



Mrmagoo said:


> Haha. Nice pack of lies. The last time the US injected money to the working class was probably 20 years ago, since then wages have basically fallen, healthcare and education declined and most benefits were given to big corporations to trickle down. Look at the result - they went to far, the bottom fell out of the economy and it all came crashing down.




Oh dear.... you really need to go back and look at what has happened. Yes it feel apart and precisely for the reasons I am stating!



Mrmagoo said:


> It is interest rate zero money so why not loan it to the poor at an interest only fixed rate of 0% through increased minimum wage payments.




Because it will destroy jobs. BTW interest rates at zero is a huge part of the problem, they also are not market set!!!!



Mrmagoo said:


> Better than giving it to some bank to not lend to people.




I seem to recall saying NO BAILOUTS or something to that effect.... they should have and needed to go broke for the sake of the economy. 



Mrmagoo said:


> The whole economic theory is insane and that is why we're in the situation we're in right now. People like you making up crap that if you take money away from the rich and give it to people who will spend it and create jobs it will hurt the economy (that you're somehow actually taking it when it probably wasn't physically theirs to start with) has just never been proved to work. The US has had 2 decades of that sort of **** and look at where it has landed it.




The US has had more than two decades of increasing "transfer payments" in various forms... it is one of the major reasons we are in this mess. You really need to learn what has happened here before you sling off! The US has not done anything like what I am suggesting and yet you hold it out as an example????? WTF? 



Mrmagoo said:


> You spout that stuff like it is proven gospel when nothing is further from the truth.




It is pretty well established, again read history and try reading Austrian economics! 



Mrmagoo said:


> I'm not some left wing tree hugging hippy either I hate the left wing hippy nonsense but I'm also an economic realist and you're all screaming one thing at the top of your lungs like a spoiled five year old wanting a lolly and all around the economy is crashing.




What? You are and economic fantasist and way further left than you may realize. Ever had a poor man give you a job.... chit!



Mrmagoo said:


> All it comes down to is a stupid, selfish, classist argument - HOW DARE THE WORKING CLASSES BE ABLE TO AFFORD ANYTHING !! It is political, not economic and as a result the economy suffers.




NO YOU GOOSE! It is simply the fastest way to build an economy that can support EVERYONE to a good standard, it is how the US was built. There is nothing "classist" about it, that is a very silly and emotional way to look at things!

I have not got the time to spoon feed you this morning... but really, go read, most of this stuff is counter intuitive, look at Iceland post default and compare with Greece.... GET IT?

Faaaaark!


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

Bwhahaha, enjoy your far right wing neo-conservative psuedo science. This would be like trying to argue with a born again Christian that there is a lack of evidence for Jesus rising from the dead. Luckily, the US economy seems to have zero impact on Australia  so all good.

PS. I'd loooooove to see an impartial analytical literature review which proves that the minimum wage destroys jobs ! because there are countless arguments to the contrary ! 

Unfortunately most of it would be along the lines of - " minimum wage, according to page 52 of the text book harms the unemployed and according to my statistics most unemployed are low income workers ! therefore the minimum wage is bad."

Ok - me go learn economics from people who led the world to economic collapse. Weeeeee, fractional banking system, quantitative easing all working wonderfully !!!! *sarcasm.


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

How to be an economist who designs cars :

1) develop a theory saying ULP can run on diesel as the free hand of the market will change the engine
2) when car blows up blame the government for intervening by building roads which caused the engine to explode
3) demand all roads be sold to china fire everyone at the petrol station so that costs are lowered
4) car blows up because diesel destroys the engine
5) there are no roads or petrol at the petrol station
6) ask for a government bail out


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Ok - me go learn economics from people who led the world to economic collapse. Weeeeee, fractional banking system, quantitative easing all working wonderfully !!!! *sarcasm.




Ya see right there, you go wrong right there.... the people that lead the world to economic collapse are siting on your side of the fence. Austrian principles have not been applied ANYWHERE in the last 100 years!

As for QE, if you had any sense you would realise that I am arguing against it!

Mr Magoo... what an apt handle!


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Ya see right there, you go wrong right there.... the people that lead the world to economic collapse are siting on your side of the fence. Austrian principles have not been applied ANYWHERE in the last 100 years!
> 
> As for QE, if you had any sense you would realise that I am arguing against it!
> 
> Mr Magoo... what an apt handle!




It has been tried, just not in entirely as they've tried bits of it and realised how stupid austrian economics is and how much it does not work and just causes destruction.

If someone told you putting your hand in boiling water would make you pretty and you dip your fingers in and they get burned badly so you pull out and they say "no you must put your ENTIRE HAND IN FOR 10 SECONDS" do you do it, or assume they're wrong ?


----------



## young-gun (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Ok - me go learn economics from people who led the world to economic collapse. Weeeeee, fractional banking system, quantitative easing all working wonderfully !!!! *sarcasm.




Sarcasm? In the property thread you were bashing on about just how wonderful banks are and how much we need them, and it's never their fault that anything bubbles? So which is it? Are they good or bad, do they help to create asset bubbles or not? 

And are you a communist?


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## Trembling Hand (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> PS. I'd loooooove to see an impartial analytical literature review which proves that the minimum wage destroys jobs ! because there are countless arguments to the contrary !




You ever owned a business Mrmagoo?


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> It has been tried, just not in entirely as they've tried bits of it and realised how stupid austrian economics is and how much it does not work and just causes destruction.
> 
> If someone told you putting your hand in boiling water would make you pretty and you dip your fingers in and they get burned badly so you pull out and they say "no you must put your ENTIRE HAND IN FOR 10 SECONDS" do you do it, or assume they're wrong ?




Tried, where? What country has been run on Austrian Economic principles? I will give you a clue, one came close and it has been such a blinding success considering its resource base that you would probably not want to mention it. 

You sir are a liar or profoundly ignorant.


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Trembling Hand said:


> You ever owned a business Mrmagoo?




No, he cannot have, he has no clue as to the knock on effects of government setting input costs artificially high.

Hey Magoo... at the end of the day the business you work for has no security, no guaranteed right to exist, no mandated minimum success level... it has to justify itself every single day and when it can't it must change or close. There is no guarantee in life as a worker you are as safe as the business for which you work. They can't dictate price to the market so why should you have a right they don't.

If you are at minimum wage level that is the economy screaming at you that it no longer needs what you do and by offering others a lot more it is telling you what it needs. Grow up, reskill and earn more, if all low wage workers did that then the economy would naturally raise a market set minimum in good time and all would prosper. 

Instead of sitting on your entitled a$$ and expecting "mother government" to make it better for you DO SOMETHING! If collectively fingers are pulled out THEN the economy will fix itself, so long as the government is not artificially setting prices like wages and oh say the cost of money!!!!!!


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



young-gun said:


> And are you a communist?




More a trollunist!


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## Joules MM1 (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

and now for something completely diff.....






> *Sovereign Debt Default Risk Plummets*



Friday, September 14, 2012 at 08:31AM



> The recent rise in global stock market prices has coincided with a big drop in sovereign default risk.  Below is a snapshot of current 5-year credit default swap prices for dozens of countries around the world.  For each country, we also show how much default risk has fallen from its 2012 highs.
> 
> The average country on the list has seen default risk fall by 40% from its high.  Default risk for Austria and Portugal has fallen the most at more than 60% for each country.  Spanish default risk is now down 45% from its high on July 24th, while Italian default risk is down 44%.
> 
> Germany's default risk has fallen the most of the G7 countries at -53.95%.  Japan's has fallen by 50%, while French default risk is down 49%.  US credit default swaps have fallen the least of the G7 countries at -29.59%, but the US still has the lowest default risk in the G7.  Out of all the countries on the list, though, the US is not the least risky.  That title goes to Norway, whose 5-year CDS is now trading at just 22.67 basis points.




-----------------------------------------------

i say i say i say.......what country/province has no central bank yet is doing just fine (thankyou very much!) ?


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## Joules MM1 (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> More a trollunist!




humourist slash troll-u-ciopath


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Joules MM1 said:


> humourist slash troll-u-ciopath




Moi?

LOL...

Isn't it funny that all the things in life that are hard to achieve are actually the better option for you. Tell a society that it has to do some hard yards for its own good these days and you are branded anti social or much worse!

Long live socialism, it works well till you run out of other peoples wealth.


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Joules MM1 said:


> i say i say i say.......what country/province has no central bank yet is doing just fine (thankyou very much!) ?




Panama Has No Central Bank neither do Monaco and Andorra.


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## Joules MM1 (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Panama Has No Central Bank neither do Monaco and Andorra.




exactimodo.....singapore has a central monetary authority and does not, that i'm aware of, alter rates like central banks

my point of asking, as is always the (my) case,  is that money as a function is really about the users not the politics or supposition of it's use or the mythical impact of central banks.....afterall, if the cheap money was the reason as a mechanic then we would not have this ongoing drama queen episode......that is how to focus on what people are actually doing with it.....everything else is cheese.....take away the central banks and communities dont function differently, people dont change because of a central bank, zero interest rates wont make people borrow if they have no taste for debt.......domo origato.....if you know i mean......


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Joules MM1 said:


> exactimodo.....singapore has a central monetary authority and does not, that i'm aware of, alter rates like central banks
> 
> my point of asking, as is always the (my) case,  is that money as a function is really about the users not the politics or supposition of it's use or the mythical impact of central banks.....afterall, if the cheap money was the reason as a mechanic then we would not have this ongoing drama queen episode......that is how to focus on what people are actually doing with it.....everything else is cheese.....take away the central banks and communities dont function differently, people dont change because of a central bank, zero interest rates wont make people borrow if they have no taste for debt.......domo origato.....if you know i mean......




Hmmmm... I don't totally agree. The price of money deeply impacts how we behave economically and secondarily it impacts social mood. It is the single most important price in the economy and it is way too important to leave in the hands of a central bank, markets need to set rates. By and large in practice most central banks effectively follow the market but they can and do deviate artificially supporting the market at times (NOW!). This will always lead to a situation where the market will eventually win out and force a correction, the problem being that it is a much larger correction than it really needed to be, this has tangible downside. I agree that at the peak or a credit cycle no amount of rate cutting will change behavior simply because people have borrowed too much and even @ 0% you can only cover so much principle. Once this alters bull market perceptions to bear confidence cannot be resorted just by keeping money cheap, we need to retrench the debt before we will establish a sound footing again. 

Look a Prechters Socioeconomics, they do interesting work on the interaction between finance and social behavior.

http://www.socionomics.net/

... it can probably be argued as to what follows what but I would certainly argue that mis pricing money and in doing so extending boom periods profoundly impacts social mood and behavior.

In truth I beleive that an economy is a complex eco system that centralized authorities struggle to model let alone control with a blunt time lagged instrument such as setting short rates.

JMO.


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## Joules MM1 (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> The price of money deeply impacts how we behave




from my lofty armchair, this is the precise point that most economists and opines leap off a huge faith in logic......it is completely back to front in the function of what people actually do.......

the price of money, the demand or lack of demand for money, for credit debt and all things to do with perception of value must first stem from the idea of value and desire for that value from the essence, that is, the starting point of all things: People.

a pricing cannot be decided until people first desire a pricing, to wit; all prices start with people, to wit, how we *behave deeply impacts the price of money* and even tho our behaviour is not logical to a calculator our emotional logic drives us to reach for the calculator and decide on price, or its value, as a relative event that we create to conduct or achieve what we want.....horse and cart.......how we behave, how people are constructed by nature, leads to new pricing.....we determin pricing as prices are a reflection of our sense of valuation, price cannot determin itself......even tho pricing is an exogenous event (by some over others as an external cost of doing business) we still react to its cost input by our emotional logic......if we are uncomfortable with deep debt then zero interest does not make us desire more debt......in the 1980's did high interest rates quell rampant debt risk pre-'87 crash? and the '87 crash did not diminish the desire for more debt with the emotional acceptance (of time)

again, Japan is the perfect example of this/my opinion, that, the country has a shriking population and refusal to expand debt and indebted balance sheets, a country in excess 120% debt to gdp and a prime minister whom has just been quoted as saying (paraphrased) we shall have inflation within the next 1 to 3 years......so you see, despite the rampant flushing of money into an eco-system, the numeric extent aside, the people who want to loan out the money must be matched by the peoples desire to be in debted to that available supply......

if my credit cards are full at 5% then giving me more credit cards at 1% wont necessarily encourage me to take more when my fears out-weigh my optomism........*changing the number is a reflection of a changing emotion not the other way around
*

to me, this is simple logic that is not taught enough, especially in schools.......(it must be saturday...oh, yeah)


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## Joules MM1 (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

if an event is the reason people get angry or desire less money so the cost of it goes down, then, what is the event that causes people to do the opposite?

riddle that question and you'll reason the same conclusion that horse and cart or cart and horse


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



young-gun said:


> Sarcasm? In the property thread you were bashing on about just how wonderful banks are and how much we need them, and it's never their fault that anything bubbles? So which is it? Are they good or bad, do they help to create asset bubbles or not?
> 
> And are you a communist?




No I'm not a communist and banks are awesome AND people need to be paid good wages for the economy to work they're not mutually exclusive. I also think people who work hard and succeed should be paid a LOT more but that also does not mean those that don't succeed shouldn't be paid, because we need them to keep the economy going. Sheesh.


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Trembling Hand said:


> You ever owned a business Mrmagoo?




Too funny. If wages are sending you broke your business sucks and you should quit and join the Centrelink Que.

My father runs a business (which he started well and truly after I was an adult) and he tells me lots of stuff.


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> No, he cannot have, he has no clue as to the knock on effects of government setting input costs artificially high.
> 
> Hey Magoo... at the end of the day the business you work for has no security, no guaranteed right to exist, no mandated minimum success level... it has to justify itself every single day and when it can't it must change or close. There is no guarantee in life as a worker you are as safe as the business for which you work. They can't dictate price to the market so why should you have a right they don't.
> 
> ...




Everything you just said is nonsense. Not all Businesses get by scraping $2 an hour profit off someone else's work.

FYI I am doing probably about average financially, my total package is about 90k and I'm still studying. 

There is no way motivation and just being better is going to fix the economy, it is a complex balancing act which in its simplest form amounts to how much people earn vs how much they have to spend against what levels of these things can sustain businesses. 

The end point of a strong economy is companies making huge profits and stock prices going up and a government with a surplus. We should be facilitating business to make obscene profit by making sure they always have a good consumer base from which to generate a profit and discouraging short term benefit for the long term detriment. Those who work hard need to be rewarded but to do that you NEED economic growth first and foremost. There, did I address your political us vs them mentality ?

Under the modern models, jobs and skills are lost, lowering wages, so to compensate these losers and keep the oil of the economy flowing we need some wage to make sure people are paid enough to consume.


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## Trembling Hand (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Too funny. If wages are sending you broke your business sucks and you should quit and join the Centrelink Que.
> 
> My father runs a business (which he started well and truly after I was an adult) and he tells me lots of stuff.




My list of kids who have never done anything, know everything AND are on my ignore list grows.


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## notting (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Too funny.
> My father runs a business (which he started well and truly after I was an adult) and he tells me lots of stuff.




*Too funny* is right.
Does he tell you all his stuff whilst changing your nappies?


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Trembling Hand said:


> My list of kids who have never done anything, know everything AND are on my ignore list grows.




Wait, so because I have a father, and am an adult, that makes me a kid who has never done anything ? I certainly hope that is not the kind of logic economists are applying to their theories ! (although given the current load of nonsense they've developed it is probably not far off !)


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



notting said:


> *Too funny* is right.
> Does he tell you all his stuff whilst changing your nappies?




Not going to respond to your offensive, harassing remarks. 

If you can find evidence of how low wage rates have improved economic conditions in the US I'd love to see it. If you can show evidence of a low wage worker being able to consume more due to price decreases I'd love to see where this has actually occurred and if possible some supporting data. As such a situation has never occurred, we must assume there is no evidence to support the idea that a low wage is a better wage in the USA, cheers


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## tech/a (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Too funny. If wages are sending you broke your business sucks and you should quit and join the Centrelink Que.
> 
> My father runs a business (which he started well and truly *after I was an adult*) and he tells me lots of stuff.




Too funny.


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



tech/a said:


> Too funny.




I assumed a degree of bullying would result, so I tried to qualify the statement accordingly. 

On second thought I should not have answered the question as it was an obvious attempt at a personal attack. In any case the US economy will not improve until such a time as wage rates are increased. I would have thought investors would be interested in getting to the truth of it, rather than depending on economic theory proven to be wrong. 

I guess class warfare is simply too strong of an influencing force.


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## Joules MM1 (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



tech/a said:


> Too funny.



mm1 news vine


> outrage on social networks as rumour runs rife that the grave of Jim Backus has been disturbed.....the family of the late celluloid star said no comment when asked about possible revenge attacks by zombies on posters baring the late stars animation name.....more on this later.....mumble mumble mumble





 yeah, def saturday


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Everything you just said is nonsense.




Anyone paying you 90K is getting ripped off, you obviously have difficulty thinking.


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## jancha (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

From my own personal experience I'd have to agree that when it comes to spending money the average wage earner is quicker to part with it. Example: Once upon a time there were two florist shops..one in a poor suburb and the other in a wealthy suburb. 
 In the later a BMW would pull up...The potential well dressed customer would come in ask the cost of each individual flower.... then ask how much to put it into an arrangement. You then had to explain the added cost of the vase the oasis backing ect. After explaining all of this and adding a further charge of $5 for labour....the customer would sometimes walk out because they thought the extra $5 was'nt warranted. (ave. cost back then was $15 for an arrangement)
Yet the in other shop a customer with workman clothes on would happily put $50 on the counter and ask for an arrangement to be sent to his mum. In and out in no time.
Not saying this is the case with everyone but for the majority... the rich are rich for a reason.
The shop in the poorer area had a much higher turnover.
When that $800 bonus was handed out from the Rudd goverment way back for stimulus...the ones with money and a house car ect. would put towards paying of their credit card or morgage but they did not go and spend it. Why? Confidence in the economy was'nt there and it still is'nt so I dont see the QE3 doing anything other than raising the POG. Ps Would never advise to be in the floral trade. Fast food business is the go. People have to eat.


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> If you can find evidence of how low wage rates have improved economic conditions in the US I'd love to see it.




Not low wages... MARKET DETERMINED wages, by setting wages artificially high you are destroying a price signal the most important mechanism in the economy. The mere fact that what you do is a low wage job is telling you that the economy really needs you to be doing something else. Don't you understand that?


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## Mr Z (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Joules MM1 said:


> to me, this is simple logic that is not taught enough, especially in schools.......(it must be saturday...oh, yeah)




You have me jiggered with that line of thought! 

Tamarra!


----------



## Joules MM1 (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> You have me jiggered with that line of thought!
> 
> Tamarra!




yes, at school, at least in the western tradition, we are taught that the future is oft determined by an event or extraneous input, whereas, to have and take responsibility, have freedom of thought and artistic flair, come from understanding the nature of things as they, as we are, as we are driven,  not as an invention or a subsequence of an event......one idea precludes and allows a person, or a society, to take actions on independent self-power rather than sitting around, or worse, frozen and become inept,  awaiting what someone else might say or do.......oh dear......now my head hurts, too.....

it's food for thought......or a cheese burger...

torro torro, my son, let it all begin.......


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## Mrmagoo (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Not low wages... MARKET DETERMINED wages, by setting wages artificially high you are destroying a price signal the most important mechanism in the economy. The mere fact that what you do is a low wage job is telling you that the economy really needs you to be doing something else. Don't you understand that?




I understand perfectly that the area of a triangle is maximised if you consider the entire triangle. If you cut the triangle in half, then yes, the area is usually smaller than 2 halves. You know, it is possible that the market might not be a triangle. It could be a bean. 

As I said, evidence please. Workers who had high minimum wages, doing better, in a better economy when those wages are taken away due to falling prices. You can't find evidence, for something which has never happened.


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## Joules MM1 (15 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

oh dear.......i sense a morfing by the semi-blind one to.....Mister Bean 


i think sunday will see asprin.......more asprin


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## Uncle Festivus (16 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Not low wages... MARKET DETERMINED wages, by setting wages artificially high you are destroying a price signal the most important mechanism in the economy. The mere fact that what you do is a low wage job is telling you that the economy really needs you to be doing something else. Don't you understand that?




Society has already determined that if left to it's own devices, _the market_ would have 2 classes - the rich & the poor? The problem now for our consumerist society is that the middle class is disappearing. It's the middle class that does the bulk of the heavy lifting - it consumes the most? Job security allows planning for the future ie home loans etc. 



> Overall, Americans have been steadily paring debt since the financial crisis. Household debt, including mortgages and home equity lines of credit, has declined for 16 straight quarters to $12.9 trillion in March, according to a separate Fed survey on consumer finances. That is down from $13.8 trillion in March 2008.



If we all are on contracts from day to day, which is what _the market_ wants in a completely de-regulated labour force, then consumption would drop as people would not know if they even had a job next week. The flow on would be that _the market_ would then suffer from lower sales? 



> Still, the job market has weakened substantially from the start of the year, which is keeping downward pressure on spending. In August, employers added just 96,000 jobs, down from 141,000 in July and well below the average 226,000 jobs a month in the January-March quarter.



It's in the markets own interest to have a healthy, adequatly rewarded, labour force. It's just that countries like China are undercutting everyones standard of living with their misguided (and unsustainable) policy of employment before profits....

There is a belief that lowering wages will promote more employment? Perhaps, but if we are all getting $2 per hour then who's going to spend & consume? Sure we'd all have jobs but we'd probably be living 10 to a room with the in-laws too?

Substitute _the market_ for _employers_.....same thing?


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## Mrmagoo (16 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

This guy, he drew a triangle on a page and gave it an axis ! He must be some sort of scientist ! Wow, economics is evidence based now !


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Uncle Festivus said:


> Society has already determined that if left to it's own devices, _the market_ would have 2 classes - the rich & the poor?




Tripe.


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> This guy, he drew a triangle on a page and gave it an axis ! He must be some sort of scientist ! Wow, economics is evidence based now !




You talk about economics as a whole like is a homogeneous science with uniform agreement of what is correct and what isn't. That is not the case and even given the sad state of the mainstream in this "science" they would all agree it is hopelessly compromised by political directives skewing the playing field, which ironically is what you are proposing more of.


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Uncle Festivus said:


> The problem now for our consumerist society is that the middle class is disappearing. It's the middle class that does the bulk of the heavy lifting - it consumes the most? Job security allows planning for the future ie home loans etc.




The income gap is directly attributable to monetary inflation by political directive, that is what is destroying the middle class. The massive irony here is that the middle class seem to be supporting the very actions that are undermining them. If they let the market be, they would be better off, sooner... but we will never find out just how well that works because no government has let the market be in well over 100 years.

The market is just you as a collective sorting out how best to use what we have to serve what you need. Why the fear? Why the need for some "know all" mummy government to direct all aspects of it.. you really think any government is that capable or indeed has that power?


----------



## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Joules MM1 said:


> if my credit cards are full at 5% then giving me more credit cards at 1% wont necessarily encourage me to take more when my fears out-weigh my optomism........*changing the number is a reflection of a changing emotion not the other way around
> *
> 
> to me, this is simple logic that is not taught enough, especially in schools.......(it must be saturday...oh, yeah)




I really do think you have it backwards, the market action and our reaction to it can be explained by a small handful of concepts. Price as set by genuine supply and demand, both of good/services and money. The concept of marginal utility feeds back into demand and is the key concept in understanding the current lack of credit demand despite the low price. Your observations in no way justify putting social mood above all other things, on the macro level we are all products of our environment despite our valiant attempts to control as much of it as we can.


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> You talk about economics as a whole like is a homogeneous science with uniform agreement of what is correct and what isn't. That is not the case and even given the sad state of the mainstream in this "science" they would all agree it is hopelessly compromised by political directives skewing the playing field, which ironically is what you are proposing more of.




Economics is not a science. Science involves experimentation.

I proposed a pretty logical null hypothesis : when you have more money - you have more money to spend. 

I challenge you to find evidence to disprove this self defining law. You cannot find a single instance in a similar economy, where lowering wages has led to increased consumption.


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## Joules MM1 (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> I really do think you have it backwards, the market action and our reaction to it can be explained by a small handful of concepts. Price as set by genuine supply and demand, both of good/services and money. The concept of marginal utility feeds back into demand and is the key concept in understanding the current lack of credit demand despite the low price. Your observations in no way justify putting social mood above all other things, on the macro level we are all products of our environment despite our valiant attempts to control as much of it as we can.




how do you arrive at any number in the first instance?......it's like smoking, the next cigarette fixes the hook from the first one.....eventually, no matter how many numbers are given out, the group using them becomes exhausted, doesnt matter if the number s are positive or negative its the exhaustion of one trend that defines the next .......remember, liquidity is merely a facility.....think on it


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Economics is not a science. Science involves experimentation.
> 
> I proposed a pretty logical null hypothesis : when you have more money - you have more money to spend.
> 
> I challenge you to find evidence to disprove this self defining law. You cannot find a single instance in a similar economy, where lowering wages has led to increased consumption.




Why should I find evidence for something I am not arguing?

You have very obviously NOT understood what I am saying.

For some reason you persist in arguing "wages" as a ubiquitous whole and linking them to some uniform economic outcome, they are not ubiquitous and I am not arguing for lower wages. Go back, read and think.... you are over simplifying things.

Keep this in mind --> In the end you cannot successfully fix any price in a market that is free to respond to such an action. Take Nixon and price controls for an instance! The market will always undo in some form or fashion what you do, overprice it and demand will fall away, there will be less of any given job if the wage is forced to an artificial high, there is always an alternate for business and they will, import, mechanize or simply close or not establish businesses that are impacted by wage mispricing. SME's choices are being slowly limited in this country but they still have some freedoms and they are free to respond!  So comrade, who will your seek to control next after wage fixing fails. Will you dictate to the consumer what they must buy and how much they must pay?

:bekloppt:


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Joules MM1 said:


> how do you arrive at any number in the first instance?......it's like smoking, the next cigarette fixes the hook from the first one.....eventually, no matter how many numbers are given out, the group using them becomes exhausted, doesnt matter if the number s are positive or negative its the exhaustion of one trend that defines the next .......remember, liquidity is merely a facility.....think on it




Thanks to the egg to suck...   marginal utility & the cost of money more that adequately explain the phenomena you keep bringing up.

Essentially in manipulating the interest rate you are artificially setting the price of an item with high marginal utility. This will produce a strong economic reaction, due to the nature of money and its high margin utility it will impact social mood. However in the end even money reaches the limits of its marginal utility, a point at which at any cost you don't need or want to buy another dollar. Altering the price merely accelerates the trip to, and extends the magnitude of, the extreme in the cycle. In the short run CB's controlling the short term rates works, this has been proven over and over again. Eventually it fails once we reach an extreme, unfortunately the extremes are far between and political memory is not that long.... so we attempted to do what is doomed to failure while looking at the recent past for supporting evidence when we should be looking further back for a practical working example. It is a debt super cycle after all!


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## Joules MM1 (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Thanks to the egg to suck...   marginal utility & the cost of money more that adequately explain the phenomena you keep bringing up.
> 
> Essentially in manipulating the interest rate you are artificially setting the price of an item with high marginal utility. This will produce a strong economic reaction, due to the nature of money and its high margin utility it will impact social mood. However in the end even money reaches the limits of its marginal utility, a point at which at any cost you don't need or want to buy another dollar. Altering the price merely accelerates the trip to, and extends the magnitude of, the extreme in the cycle. In the short run CB's controlling the short term rates works, this has been proven over and over again. Eventually it fails once we reach an extreme, unfortunately the extremes are far between and political memory is not that long.... so we attempted to do what is doomed to failure while looking at the recent past for supporting evidence when we should be looking further back for a practical working example. It is a debt super cycle after all!




youre working harder and harder to find mechanics to drive price and a market (people), yet, you are not explaining say, Singapore, which invokes none of the mechanics that are proffered as a driving reason for price movement.....in short the fed or a government, so long as they do not impede a market, cannot, ultimately, decide for a market what it's trend is going to be......such are the opportunities.......remember a "cycle" is brought about by the trends within not a mechanic......mechanics are, in my experience, borne of a reactionary within a trend, in other words, actions that fit within, commensurate with a trend, which, of course, you as a trader need to determin where you are within that trend......

what is fair to say is that temporary bounces are bought about by fears and the mechanics that are introduced by those fears simply, as far as i've seen, embellish the ultimate larger swing or larger cycle.....the difference is the amount of time taken to play out what would have played out if the larger authority had not interceded into that cycle with a synthetic hope-hold.......


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## Joules MM1 (17 September 2012)

thanks, Mr Z ........i think i get where youre coming from......thanks, for the generous opines


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## young-gun (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> It is a debt super cycle after all!




Amen.

Putting money directly into the publics pocket would more likely spur inflation harder and faster than buying MBS's. jmo. Or worse, have people start paying down debt and saving. Then this wonderful world of credit contracts even more, which is exactly what bernanke doesnt want. You can't make people spend.

 Then magoo, you will then be complaining that things are too expensive(if the former were to occur).


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Joules MM1 said:


> youre working harder and harder to find mechanics to drive price and a market (people),




Not at all... you are the one proffering the nebulous theory that markets change because we collectively feel like it and not in response to stimuli. So far you are not convincing. 



Joules MM1 said:


> yet, you are not explaining say, Singapore, which invokes none of the mechanics that are proffered as a driving reason for price movement.....




So what? If price is set by a market or a central bank the mechanism still exists and functions well only the inputs to the mechanism are changed. You may as well say Singapore is immune to gravity!



Joules MM1 said:


> in short the fed or a government, so long as they do not impede a market, cannot, ultimately, decide for a market what it's trend is going to be......




It is a mistake to think that is what I am arguing. Directing trend and fueling a preexisting fire are two very different things.



Joules MM1 said:


> such are the opportunities.......remember a "cycle" is brought about by the trends within not a mechanic......mechanics are, in my experience, borne of a reactionary within a trend, in other words, actions that fit within, commensurate with a trend, which, of course, you as a trader need to determin where you are within that trend......




All trends in financial markets are heavily impacted by the underlying mechanics of the money supply, this is what central banks ultimately cannot control. This is what caught goldbugs short in 2008



Joules MM1 said:


> what is fair to say is that temporary bounces are bought about by fears and the mechanics that are introduced by those fears simply, as far as i've seen, embellish the ultimate larger swing or larger cycle.....the difference is the amount of time taken to play out what would have played out if the larger authority had not interceded into that cycle with a synthetic hope-hold.......




Again so what? If you understand the argument I put forward it fully explains both short and long term cycles and the limits of central bank intervention, exactly where they can have an effect and why and similarly where they can't and why. More importantly it makes it obvious as to why they should not mis-price money and why they should leave it to the market to set rates.

There are four elements that decide price, supply and demand for the item and supply and demand for the currency that the item is price in. You are effectively arguing that altering the supply and demand for money will have no impact on price. This is patently not so, in the short run it can artificially buoy price if there is sufficient marginal utility left in the market and in the long run it pushes price beyond the normal limits that a market would tolerate. 

This may help you....playing with money supply is directly analogous to taking cocaine, the dynamic is damn near identical to the introduction of an artificial stimulus to the body. It will take you to higher highs and lower lows faster than you would achieve in a normal balanced state. Jiggering rates is altering the money supply.... !

Your argument is complete nonsense to me, the idea that we collectively move in a pack for no apparent reason is an affront to reason! You may not get the reason, as appears to be, but none the less we do nothing without reason.


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## Mr Z (17 September 2012)

Joules MM1 said:


> thanks, Mr Z ........i think i get where youre coming from......thanks, for the generous opines




Ru ro.... you appear to have had a change of heart?! Seriously?


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



young-gun said:


> Amen.
> 
> Putting money directly into the publics pocket would more likely spur inflation harder and faster than buying MBS's. jmo. Or worse, have people start paying down debt and saving. Then this wonderful world of credit contracts even more, which is exactly what bernanke doesnt want. You can't make people spend.
> 
> Then magoo, you will then be complaining that things are too expensive(if the former were to occur).




No you can't.... but damn it they will try!

Bernanke's tool box is fast becoming ineffective, the scary thing is that a logical extension of this mess is completely nationalizing the banking and credit system in a desperate attempt to stabilize the increasingly unstable monster they have created. Goldbugs beware, if this happens at this point they will come for your gold, you do need a plan B and if gold is your plan B you need a plan C.... this is not a market to ride to the end. JMO but I am keeping an eye out for alternates that make sense, alternates that will not be attractive taxation targets or as with gold confiscation targets. FWIW Australian law supports gold confiscation now, little or no change required as far as I understand it.

This is not as extreme a view as you might think considering the gobsmacking derivatives pile that is sure to go bang sometime!


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*

​


Mr Z said:


> Why should I find evidence for something I am not arguing?
> 
> You have very obviously NOT understood what I am saying.




The law of numbers tell us that 2>1. i.e if i have 2 dollars I have more to spend than if I only had 1 dollar.

You're suggesting that if we aggregate all the dollars in the economy, certain people having more dollars due to a minimum wage increase, does not result in them having more money to spend. You're also postulating this reduces overall wealth. 

You need to reject the idea that this would simply be a wealth transfer. You need to  find evidence to reject the idea that more is more if you're going to argue that minimum wage increases harm the economy.

Just like I would need to reject that same idea to prove that a minimum wage increase benefits the economy.

Now I don't honestly expect (or want) you to go off and research this because that would be pretentious and silly but what I'm saying is that Austrian ramblings devised using rigid assumptions in a text book are not scientific, nor have they in any way been proven. 

Infact the US economy, with its lower wages, and more "agile" employment laws should be experiencing much greater prosperity than the Australian market if this were to be true. Even in the low growth areas of the eastern states not associated with mining this is starkly untrue. A broke ass Australian is miles better off that his US counter part in a great many ways.

Never mind the externalities of broke crack heads with nothing to live and no hope of finding well paying employment.


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



young-gun said:


> Amen.
> 
> Putting money directly into the publics pocket would more likely spur inflation harder and faster than buying MBS's. jmo. Or worse, have people start paying down debt and saving. Then this wonderful world of credit contracts even more, which is exactly what bernanke doesnt want. You can't make people spend.
> 
> Then magoo, you will then be complaining that things are too expensive(if the former were to occur).




I have the idea that high inflation is not caused by general wage increases, but EXCESSIVE wage increases in targeted groups. That means if all the tradies in an area get a 100k raise, the market would simply aim its products at those workers as they're able to make a higher profit for less effort. Low cost goods are not allocated for scarce capital.


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## white_goodman (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> No I'm not a communist and banks are awesome AND people need to be paid good wages for the economy to work they're not mutually exclusive. I also think people who work hard and succeed should be paid a LOT more but that also does not mean those that don't succeed shouldn't be paid, because we need them to keep the economy going. Sheesh.





you seem to have never payed any attention to economics whatsoever, show me the link between pareto efficient/optimal conditions and a high minimum wage above the market rate??

If you think high minimum wage is the source of prosperity you should export your ideas to the Sth Americas and Africa, they would become world super powers within no time at $50/hr min wage..

There is NO debate in economics that high minimum wage above market rates causes lower unemployment... there is none, I award you no points, may god have mercy on your soul


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



white_goodman said:


> There is NO debate in economics that high minimum wage above market rates causes lower unemployment... there is none, I award you no points, may god have mercy on your soul



*
An analysis of supply and demand of the type shown in introductory mainstream economics textbooks implies that by mandating a price floor above the equilibrium wage, minimum wage laws should cause unemployment.[14][15] This is because a greater number of people are willing to work at the higher wage while a smaller numbers of jobs will be available at the higher wage. Companies can be more selective in those whom they employ thus the least skilled and least experienced will typically be excluded.

According to the model shown in nearly all introductory textbooks on economics, increasing the minimum wage decreases the employment of minimum-wage workers.[16] One such textbook says:

    If a higher minimum wage increases the wage rates of unskilled workers above the level that would be established by market forces, the quantity of unskilled workers employed will fall. The minimum wage will price the services of the least productive (and therefore lowest-wage) workers out of the market. ... The direct results of minimum wage legislation are clearly mixed. Some workers, most likely those whose previous wages were closest to the minimum, will enjoy higher wages. This is known as the "ripple effect". The ripple effect shows that when you increase the minimum wage the wages of all others will consequently increase due the need for relativity. (Formby, J., Bishop, J., & Kim, H.. (2010). The Redistributive Effects and Cost-Effectiveness of Increasing the Federal Minimum Wage. Public Finance Review, 38(5), 585. Retrieved April 18, 2012, from ABI/INFORM Global. (Document ID: 2140268271).) Others, particularly those with the lowest prelegislation wage rates, will be unable to find work. They will be pushed into the ranks of the unemployed or out of the labor force. Some argue that by increasing the federal minimum wage, however, the economy will be adversely affected due to small businesses not being able to keep up with the need to subsequently increase all workers wages. (Belman, D., & Wolfson, P.. (2010). The Effect of Legislated Minimum Wage Increases on Employment and Hours: A Dynamic Analysis. Labour, 24(1), 1–25. Retrieved April 18, 2012, from ABI/INFORM Global. (Document ID: 1960232931).) [17]
*
ect ect herp derp.

Criticism of the "textbook model"
*
The argument that minimum wages decrease employment is based on a simple supply and demand model of the labor market. A number of economists (for example Pierangelo Garegnani,[20] Robert L. Vienneau,[21] and Arrigo Opocher & Ian Steedman[22]), building on the work of Piero Sraffa, argue that that model, even given all its assumptions, is logically incoherent. Michael Anyadike-Danes and Wyne Godley [23] argue, based on simulation results, that little of the empirical work done with the textbook model constitutes a potentially falsifying test, and, consequently, empirical evidence hardly exists for that model. Graham White [24] argues, partially on the basis of Sraffianism, that the policy of increased labor market flexibility, including the reduction of minimum wages, does not have an "intellectually coherent" argument in economic theory.

Gary Fields, Professor of Labor Economics and Economics at Cornell University, argues that the standard "textbook model" for the minimum wage is "ambiguous", and that the standard theoretical arguments incorrectly measure only a one-sector market. Fields says a two-sector market, where "the self-employed, service workers, and farm workers are typically excluded from minimum-wage coverage… [and with] one sector with minimum-wage coverage and the other without it [and possible mobility between the two]," is the basis for better analysis. Through this model, Fields shows the typical theoretical argument to be ambiguous and says "the predictions derived from the textbook model definitely do not carry over to the two-sector case. Therefore, since a non-covered sector exists nearly everywhere, the predictions of the textbook model simply cannot be relied on."[25]

An alternate view of the labor market has low-wage labor markets characterized as monopsonistic competition wherein buyers (employers) have significantly more market power than do sellers (workers). This monopsony could be a result of intentional collusion between employers, or naturalistic factors such as segmented markets, search costs, information costs, imperfect mobility and the 'personal' element of labor markets. In such a case the diagram above would not yield the quantity of labor clearing and the wage rate. This is because while the upward sloping aggregate labor supply would remain unchanged, instead of using the downward labor demand curve shown in the diagram above, monopsonistic employers would use a steeper downward sloping curve corresponding to marginal expenditures to yield the intersection with the supply curve resulting in a wage rate lower than would be the case under competition. Also, the amount of labor sold would also be lower than the competitive optimal allocation.
*
ect ect all copied from wikipedia in about 5 seconds,doesn't sound like there is "no debate whatsoever".


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> The law of numbers tell us that 2>1. i.e if i have 2 dollars I have more to spend than if I only had 1 dollar.




Not always, nominal v real values and time come into play. A dollar is not a fixed measure so what you say is only true at any given point in time, i.e. in a static analysis. An economy is neither static or linear and as such if the new dollar is created from nothing it changes all other relationships to one degree or another.



Mrmagoo said:


> You're suggesting that if we aggregate all the dollars in the economy, certain people having more dollars due to a minimum wage increase, does not result in them having more money to spend. You're also postulating this reduces overall wealth.




Over time yes, you will lose jobs and spending power in line with the distortion you have introduced. Lets keep it simple, x minimum wage rise means that it is cheaper to import widgets than to make them in Australia. The importers will win out over the local producers and jobs will go. There will be no net benefit here, same case if they mechanize. If that cannot happen costs will be pasted on, to the degree which that cokes demand (you cannot tell a buyer what they will pay!) you will lose jobs and you will also deter new players in that space, restricting job growth... the jobs lost that government never seem to understand are potentially there.



Mrmagoo said:


> You need to reject the idea that this would simply be a wealth transfer. You need to  find evidence to reject the idea that more is more if you're going to argue that minimum wage increases harm the economy.




You need to come to grips with the reality that is is simply a wealth transfer that cannot alter possible improve the situation. It is far better to encourage re-skilling and have a workforce that commands a higher market driven wage than to give people money they are not earning.

You also need to come to grips with the idea that in a open system such as an economy more is not always more... as said infinitum the system will and can adjust to unrealistic prices.

Falsely set minimum wages destroys jobs, it is far better that people get the price signal that a low wage is delivering, reskill and pursue higher paying jobs. When this happens the whole economy benefits and eventually that will lift the minimum wage via the market mechanism (where it is possible), as less people are doing the lower skilled jobs and more people are earning more and don't mind paying more for hamburgers or whatever.  



Mrmagoo said:


> Just like I would need to reject that same idea to prove that a minimum wage increase benefits the economy.




Things in complex systems are often very counter intuitive if you are ignorant of the underlying mechanisms. 



Mrmagoo said:


> Now I don't honestly expect (or want) you to go off and research this because that would be pretentious and silly but what I'm saying is that Austrian ramblings devised using rigid assumptions in a text book are not scientific, nor have they in any way been proven.




Not true, they are as close to making economics a functional science as you will see. The Austrian school argues discipline, but we all know that you can't get elected preaching truths about hard work and discipline hence we have heavily politicized economic practices that are just plain dysfunctional. 

You have not read Austrian economics, I can tell from you arguments, until you do you are in no position to judge the school of thought. 



Mrmagoo said:


> Infact the US economy, with its lower wages, and more "agile" employment laws should be experiencing much greater prosperity than the Australian market if this were to be true. Even in the low growth areas of the eastern states not associated with mining this is starkly untrue. A broke ass Australian is miles better off that his US counter part in a great many ways.




You are ignoring the myriad other issues in the US economy, mostly rooted in goverment, you simply cannot do that and make any sensible analysis. Yes the flexibility of the US economy is still superior to most and it is still a strength that will allow them to surprise in many ways BUT they are still lifting a big fat old government and transfer payment system. More people take from government in the US than give to it, it is past the tipping point and heading toward a government induced crisis that is unavoidable now.



Mrmagoo said:


> Never mind the externalities of broke crack heads with nothing to live and no hope of finding well paying employment.




All governments own work... sad ain't it. Talk to an American in business about the crap they have to wade through in order to give someone a job. Then you may understand why fewer and fewer are game to try... it is the same way here. I for one would like to run a business but not in this environment and not with the red tape in the system. My response to suggestions like yours has been to invest elsewhere.... now do you think that the government is counting the jobs that I didn't create in Australia by starting a SME locally? Not on your life... they are like you... static and linear in their view. Sometimes 10% tax is greater than 20% tax, despite the indisputable fact that 20>10.... because the system responds! Get it grasshopper?


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> I have the idea that high inflation is not caused by general wage increases, but EXCESSIVE wage increases in targeted groups. That means if all the tradies in an area get a 100k raise, the market would simply aim its products at those workers as they're able to make a higher profit for less effort. Low cost goods are not allocated for scarce capital.




Inflation is an increase in the money supply and one of the potential symptoms of this is price rising. 

Price changes due to a supply demand imbalance in the good/service or the unit used to pay for the good/service. Changing pressures in any quadrant will alter price, it doesn't matter how uniform or not a change in any quadrant is, as in your example. In your example supply would respond in short order and only if we had an increased pool of money would prices settle at a new high.

Inflation is a simple notion yet it acts in complex ways and with a lag, not an easy thing to attempt to control given our systems.


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> ect ect all copied from wikipedia in about 5 seconds,doesn't sound like there is "no debate whatsoever".




Academics that have never had to survive in business can argue all sorts of bull****.

Riddle me this... if it works why not set a minimum of 150K and end poverty in Australia forever! Do you really believe that would work? After all if as you suggest we have established what I am saying is just a lie then we are only discussing magnitude. If it is valid then why not 150K? We'd all be spending like drunken sailors and happy as... no?

You know that is absurd, yet you try and justify the same on a lesser scale... all that happens is the same as would happen @ 150K but on a lesser scale.

Face it, when they set a minimum wage these idiots can argue anything because they don't look close enough to see the 2,3,4,5% of low paying jobs that disappear over time. 

Sure some things cannot be imported or mechanized etc but in the end the money that pays the extra wage $$$ comes from someone who would have spent it elsewhere creating other jobs that better serve their real needs. If effect and as always government takes from the successful and gives to the unsuccessful and in doing so rewards the wrong action. If you reward something you get more of it, in this case we are rewarding FAILURE to do what the wider economy needs. If you can rationalize how that benefits all in an economy you are probably delusional.


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## white_goodman (17 September 2012)

http://www.economist.com/node/494922

theres also that which can be used to support your view guess what, it means very little... we could have rising minimum wages and lowering unemployment or lowering minimum wage and rising unemployment, and it still wouldnt prove a thing.. i see what these econometrics gurus put in their models, it always has a funny knack of having a massive 'catch-all' variable or error term that is the bulk of the explanation.. These econometrics models are pseudo science at best, A happens whilst B happens, therefore A causes B.. the high minimum wage with mining boom probably trumps the low minimum wage and balance sheet recession of the US.. its not a simple high vs low wage.

Simple logic is all that is required..

would you expect employers in this country to hire more or less if the minimum wage was increased to $500/hr?

my prediction for the next 30years, a good bulk of the mathematisation of economics will end up on the scrap heap, many of the neo-classical models will be shown the door and a revert back to classical-esque theory...


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Academics that have never had to survive in business can argue all sorts of bull****.
> 
> Riddle me this... if it works why not set a minimum of 150K and end poverty in Australia forever! .




Because that is not a riddle it is :

http://dictionary.reference.com/browse/disingenuous

and 

http://dictionary.reference.com/browse/asinine


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## Mrmagoo (17 September 2012)

white_goodman said:


> http://www.economist.com/node/494922
> 
> theres also that which can be used to support your view guess what, it means very little... we could have rising minimum wages and lowering unemployment or lowering minimum wage and rising unemployment, and it still wouldnt prove a thing.. i see what these econometrics gurus put in their models, it always has a funny knack of having a massive 'catch-all' variable or error term that is the bulk of the explanation.. These econometrics models are pseudo science at best, A happens whilst B happens, therefore A causes B.. the high minimum wage with mining boom probably trumps the low minimum wage and balance sheet recession of the US.. its not a simple high vs low wage.
> 
> ...




Hey would you expect employers to hire more or less people in this country if everyone could only earn $1 a day to buy some rice and sleep outside their work ? What would happen to employment then ? How would anyone buy anything ? What would happen to all those people associated with producing goods that used to be purchased ?

Focus on common sense - could a person on $8 an hour consume and contribute to the economy ? If no, then maybe make it $15 an hour to keep consumption going. Then study the empirical evidence.

As I said this is a political thing : those "born to rule" do not want to see the poor crawling their way out of the gutter without their express permission to do so.


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## white_goodman (17 September 2012)

Mrmagoo said:


> Hey would you expect employers to hire more or less people in this country if everyone could only earn $1 a day to buy some rice and sleep outside their work ? What would happen to employment then ? How would anyone buy anything ? What would happen to all those people associated with producing goods that used to be purchased ?
> 
> Focus on common sense - could a person on $8 an hour consume and contribute to the economy ? If no, then maybe make it $15 an hour to keep consumption going. Then study the empirical evidence.
> 
> As I said this is a political thing : those "born to rule" do not want to see the poor crawling their way out of the gutter without their express permission to do so.




exactly why they promote minimum wages...

if the minimum wage was $0, would people work for $0? can people earn more than the minimum? how many would be paid at the minimum?


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Inflation is an increase in the money supply and one of the potential symptoms of this is price rising.
> 
> Price changes due to a supply demand imbalance in the good/service or the unit used to pay for the good/service. Changing pressures in any quadrant will alter price, it doesn't matter how uniform or not a change in any quadrant is, as in your example. In your example supply would respond in short order and only if we had an increased pool of money would prices settle at a new high.
> 
> Inflation is a simple notion yet it acts in complex ways and with a lag, not an easy thing to attempt to control given our systems.




Inflation is measured as a general increase in the price of goods and services. There are considerations for substitutions and improved quality but they're far from perfect.

If all the tradespeople in an area suddenly got raised to 1.5 mill a year, they'd stop buying bread and start having their breakfast cooked by the restaurant industry the  CPI just wouldn't' be able to handle that sort of a shift and would assume people still have bread for breakfast when working out the weighted basket of goods. Meanwhile 3 out of the 4 town bakeries have closed down and all the bread being sold now costs $4 instead of $1 an the price of restaurant cooked food has gone through the roof as the 1.5M tradie will glady pay for it.

The person on minimum wage say $17 an hour, is stuck eating $4 loaves of bread. 

In your world, there is now only one bakery in the town and a fancy restaurant. The bakery employees are now all unemployed, leaving the remaining bakery to increase it's price to $5. 

The end result is less jobs - less bakeries and due to monopolistic position is raises the price to $6. People are broke and hungry. 

In my world 10% of income is spent on bread, bread went up 400% means you get a 40% raise in the minimum wage which means all of the bakeries stay operational, selling bread at $4 a loaf to workers on $23.8 an hour enough to keep pace with the increased price of bread due to a re-structuring of the economy.

My shares in the bread company continue to increase by 8% every six months and everyone is happy - inflation also bumps up those share prices and the bread company retains profitability AND there is a booming restaurant industry in the town.

Oh, the tradies however, extracting maximum utility due to the monopoly position of their labour can only extract $7 an hour less from the company as it has to pay an increased minimum wage.

End result - bread companies more profitable - restaurant and tradies slightly less profitable winners compensated the losers.

A few tradies are pissed off that poor people can afford bread. We call them "austrian school economists"


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## Mrmagoo (17 September 2012)

white_goodman said:


> exactly why they promote minimum wages...
> 
> if the minimum wage was $0, would people work for $0? can people earn more than the minimum? how many would be paid at the minimum?





Old bull**** video.


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## white_goodman (17 September 2012)

Mrmagoo said:


> Old bull**** video.




solid argument, im laying bets that Mr Magoo isn't a sydney uni arts student working in a cafe


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Because that is not a riddle it is :
> 
> http://dictionary.reference.com/browse/disingenuous
> 
> ...




YOU HAVE NO ARGUMENT! So you resort to this sort of bollocks, gawd if I had a dollar for every little Internet troll that has resorted to calling me disingenuous, asinine or better still, a sociopath... LOL --> simply because they can't muster an argument to save their sorry butts!

GO ON... tell the folks at home why 150K a year minimum wages would fail and then in the next breath tell them why say a 35K minimum wage would work and just what is so different, that is aside from scale!

I mean you yourself argue that more is better right? 2 is > 1 and 150 is > 35 

Can't do it can you?


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## Mr Z (17 September 2012)

Mrmagoo said:


> Old bull**** video.




You deserve what you get... CYA!


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> Inflation is measured as a general increase in the price of goods and services. There are considerations for substitutions and improved quality but they're far from perfect.
> 
> If all the tradespeople in an area suddenly got raised to 1.5 mill a year, they'd stop buying bread and start having their breakfast cooked by the restaurant industry the  CPI just wouldn't' be able to handle that sort of a shift and would assume people still have bread for breakfast when working out the weighted basket of goods. Meanwhile 3 out of the 4 town bakeries have closed down and all the bread being sold now costs $4 instead of $1 an the price of restaurant cooked food has gone through the roof as the 1.5M tradie will glady pay for it.
> 
> ...




LOL... I just had to preserve this gem.

And you are the guy telling people they are spouting nonsense.

DUDE! If you can't see why that is wrong NO ONE can help you.

Take the blue pill and let the fantasy resume.

Don't go into business, your head would explode having to deal with free market realities! 

BUT

Thanks for the chuckle.


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> LOL... I just had to preserve this gem.
> 
> And you are the guy telling people they are spouting nonsense.
> 
> ...




You're depending on an argument from a first year introductory text book which has been proven to have no practical application at all.


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## Mrmagoo (17 September 2012)

white_goodman said:


> solid argument, im laying bets that Mr Magoo isn't a sydney uni arts student working in a cafe




If I were an arts student I would care about the human side of all of this. I personally hate people. I don't care if they're rich or poor, but I do want to live in an environment where I can one day invest and become wealthier than other people so that I can have power of them.

For that to happen I need two things :

1) The economy to grow
2) I need to earn enough to be able to one day invest in said economy

As for working in a Cafe, I wish. Lots of sexy young ladies work in Cafes. I could try and impress them with my office job. Unfortunately I'm not good looking enough to work in a Sydney Cafe. Otherwise I would get a weekend cash job for play money and to ruthlessly hit on the women working there.


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> You're depending on an argument from a first year introductory text book which has been proven to have no practical application at all.




Even if that was the case, cite reference please, the argument is very sound and it stands head and shoulders above NO ARGUMENT AT ALL! 

Come on dufus U can do better than that! :


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## Mr Z (17 September 2012)

Mrmagoo said:


> I personally hate people.




This would explain the desire to pursue destructive economic policy!


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## notting (17 September 2012)

Mr Z said:


> This would explain the desire to pursue destructive economic policy!




Laughing....


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Even if that was the case, cite reference please, the argument is very sound and it stands head and shoulders above NO ARGUMENT AT ALL!
> 
> Come on dufus U can do better than that! :




I just gave you an entire page of references. It is obvious I'm being trolled.

If you have some emperical evidence I would love to see it. I am happy to be proven wrong.


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## Mr Z (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> I just gave you an entire page of references.




Not for that last claim you didn't. You LIE!



Mrmagoo said:


> It is obvious I'm being trolled.




Come now Gloria, complain to a mod if you feel an affront upon your person has tarnished your, ahem, impeccable reputation.



Mrmagoo said:


> If you have some emperical evidence I would love to see it. I am happy to be proven wrong.




After you my dear fellow... but we get ahead of ourselves, first you should present a logical argument... a coherent thesis as to why peoples asses don't get fired when employers are forced to pay them too much!

Pssssst.... you are talking to someone who has actually replaced low paid positions with better equipment and fewer but more highly paid operators due to minimum wage requirements. 

Before you call me heartless the move defended the company, giving the rest of the employees greater security, my first duty was to actually stay in business.

Ya see kid I have actually been there and done it...


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## gav (17 September 2012)

Saw this today and thought it was a good "economics for dummies" approach of showing just how much debt the US has, and how little would result from "taking it all from the rich".  Unfortunately, he didn't show what effect would be made if spending was cut back to a "bare bones" govt.

[video=youtube_share;jboTeS9Okak]http://youtu.be/jboTeS9Okak[/video]


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## Mrmagoo (17 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mr Z said:


> Not for that last claim you didn't. You LIE!
> 
> 
> 
> ...




You lost me at "C". 

Your argument amounts to this :

There was a rabbit on a stone, so I shot the kangaroo and then ran out of pink paint. That is why you should never leave you umbrella out in the sun !

You'd be surprised to find I've actually been involved with similar obviously not controlling all of it myself and the funniest part is that it was nothing to do with minimum wage. Infact the low skilled workers were already on more than that.


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## Mr Z (18 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> You'd be surprised to find I've actually been involved with similar obviously not controlling all of it myself and the funniest part is that it was nothing to do with minimum wage. Infact the low skilled workers were already on more than that.




Then you haven't been involved have you? You where dealing with a market set wage above minimum, you had the possibility of offering lower wages and retaining the positions.... interesting that you still chose the knife. We put it off as long as we could but in the end union storm troopers kept trying to stir our shop up and ended up forcing our hand.

Magoo you have done it again!

It is very obvious you don't really get this, put yourself in the driving seat of a small business, ask yourself how you would handle a wage that the market will no longer allow you to pay, what gives genius?  

You still need to say why we can't set the floor at 150K and put Australian workers at the top of the international tree. Why, if your argument (such as it is --> cut and paste from a wiki) is correct can't we just do that? STOP RUNNING AWAY FROM A LEGITIMATE QUESTION.


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## white_goodman (18 September 2012)

*Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND*



Mrmagoo said:


> You're depending on an argument from a first year introductory text book which has been proven to have no practical application at all.




US teenage and black unemployment figures pre and post effective minimum wage (the first 10 years of the minimum wage was so low it effectively didnt exist due to ww2 inflation)...

your example of the $1.5million dollar tradie is ridiculous... if tradies pay went to $1.5 million and everything else ceterus paribus, what sort of price would the business charge to make a profit with such high costs? How many consumers would they find at said prices? Would people not be attracted at such high wages as to increase the supply of labour and thus bring wage prices down for tradies?

You are a pyromaniac in a field of strawmen


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