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

[notting]

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.

 

[white_goodman]

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.

its $40billion per MONTH, open ended

 

[notting]

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

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?!

 

[Uncle Festivus]

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??

 

[notting]

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!

 

[IFocus]

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).

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

 

[Intrinsic Value]

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.

 

[Mrmagoo]

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.

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.

 

[Mrmagoo]

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 !

 

[gav]

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

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! :

 

[gav]

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

The Greatest PONZI scheme on the planet.

 

[notting]

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
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.

 

[Mr Z]

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.

 

[Mrmagoo]

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

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.

 

[Mrmagoo]

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.

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.

 

[notting]

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.

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?

 

[Mr Z]

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

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!"

 

[Mrmagoo]

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

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!"

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.

 

[Mr Z]

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

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!

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!

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!!!!

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.

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?

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!

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!

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!

 

[Mrmagoo]

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.