We are gradually returning to The REALLY Good REALLY Old Days of ... "Feudalism" ...

May 3, 2012 -- 11:10AM, catboxer wrote:

If by using the word "recovery" people mean "back to the way it was before y2K," that will never happen. For one thing, oil is selling for $103.62 a barrel this morning, and it's not going to go below $100 again. The price of oil effects the prices of everything we buy, because it all has to be transported.

Mostly, though, we're never going back to the good old days because so much unemployment, underemployment, and people being forced into dipshit jobs is structural -- and I don't mean that in the way "structural" is usually used. The actual architecture of the economy has been re-tooled by our "pluted bloatocrats" (Stephen King) to their advantage.

Robert Reich, Clinton's labor secretary, writes: Payrolls used to account for almost 70 percent of the typical company's costs. But one of the most striking legacies of the Great Recession has been the decline of full-time employment - as companies have substituted software or outsourced jobs abroad (courtesy of the Internet, making outsourcing more efficient than ever), or shifted them to contract workers also linked via Internet and software.

That's why most of the gains from the productivity revolution are going to the owners of capital, while typical workers are either unemployed or underemployed, or else getting wages and benefits whose real value continues to drop. The portion of total income going to capital rather than labor is the highest since the 1920s.

Increasingly, the world belongs to those collecting capital gains.

But before we start weeping and moaning about not having a future, let's look at the possibilities. The oldest cliché, "Necessity is the mother of invention," comes into play here.

Do you know how much food you can grow in your back yard? You'd be surprised.

Would it be possible to drive 75 percent less than you do now?

A part-time job pays a little money, and it's not a "career" you have to devote your life to.

Have you thought about the possibility of building networks of mutual support in your town or neighborhood? In my town there's a store that sells only locally-produced food, and the variety and quality are surprisingly top-shelf.

What I'm saying is the economy which has been deliberately shoved into the tank by the moneyed aristocrats "who float serenely over the (former) middle class like blimps made of thousand-dollar bills" (Stephen King) is presenting us with an opportunity to start living a different kind of life, and a better one.

"Living well is the best revenge," says another true cliché. It's even better than beating them up and taking their lunch money, and in the end we'll do that too.

Am I the only person on this board who passed Economics in College?

May 3, 2012 -- 1:18PM, SecondSonOfDavid wrote:

Am I the only person on this board who passed Economics in College?

No, but I think most of us tend to take the Liberal line.

May 3, 2012 -- 1:43PM, SecondSonOfDavid wrote:

May 3, 2012 -- 1:33PM, Jasr wrote:

May 3, 2012 -- 1:18PM, SecondSonOfDavid wrote:

Am I the only person on this board who passed Economics in College?

Well to be truthful I did not take economics until grad school.

Why do you ask?

I ask because this thread is chock full of emotional rants, but pretty much zilch based on known economic behavior and data.

The screed, for example, that oil is "never" coming back down.  If I were a betting man, I'd give you odds gasoline will be cheaper in November than it is right now.  Why?  Because historically gas prices ALWAYS go up in the Spring in the U.S., then decline in the fall, with sharp drops with the end of hurrican season.  Part of that is the mix used for the gasoline formulas, which is different for Summer or Winter, and part because when hurrican season ends, refineries feel more comfortable operating at full capacity whcih increases supply.

The same kind of rules apply to food, textiles, machined goods, tech products and so on, but no one here seems to note that at all.  A lot of conspiracy theories and hysteria, as well as a mandatory gloom and doom, but nothing from just stopping and considering what our own history shows us.

 

Our own history also shows us that trends change. Regarding oil, it is now becoming more expensive to extract because it is further down, it is embedded in shale, it is embedded in sand, and other reasons. So there's a logic to the notion that oil will never come down below $100. Even if that turns out to be false, it's still sound reasoning. Besides, if it comes down below $100, it likely won't stay there for long. Other countries are drinking up that oil as fast as we are now.

The same can happen for other commodities. High oil prices will affect the prices we pay for food, textiles, and other goods. And if the honeybee population collapses, will we continue to get our California almonds as cheaply as we do now? Does economics address that? Does economics know that we'd have to replace them with bumblebees and other insects that aren't as efficient as honeybees?

The fact that you passed economics doesn't mean you understand economics. It may just mean you understood what the hot new theorists believed. But they come and go.

May 3, 2012 -- 2:08PM, MMarcoe wrote:

The fact that you passed economics doesn't mean you understand economics. It may just mean you understood what the hot new theorists believed. But they come and go.

 

Nice duck, but you missed the point.  I noted that there are facts behind every event, and the problem here is that most of the posters are just spewing emotional rants, usually derived from a deep-seated Chicken Little complex.

May 3, 2012 -- 2:08PM, MMarcoe wrote:

Our own history also shows us that trends change.

Yes, but there are facts and history behind those changes as well.  Gasoline, for example, did not displace coal overnight, but over a half century.  Understanding the history of past trends helps us see signals of current trends.  Panic, however, is just a waste of adrenalin.

May 3, 2012 -- 2:08PM, MMarcoe wrote:

Regarding oil, it is now becoming more expensive to extract because it is further down, it is embedded in shale, it is embedded in sand, and other reasons. So there's a logic to the notion that oil will never come down below $100.

A false and simplistic answer.  False because it is simplistic.  We can not only drill deeper than before, we also have drilling techniques that make it possible to reach and develop oil fields once thought imfeasible.  Also, the key bottleneck now is not petroleum drilling, but refinery processing.  A Rice University study prepared for the OTC in 2010 concluded that national gas prices at the pump would drop by $0.50 a gallon if a single new major refinery were built along the west coast.  So it's politics that keeps gas prices high, more than anything else. 

May 3, 2012 -- 2:08PM, MMarcoe wrote:

Even if that turns out to be false, it's still sound reasoning. Besides, if it comes down below $100, it likely won't stay there for long. Other countries are drinking up that oil as fast as we are now.

Nice scary story, but not really true if we handle our logistics correctly.  The United States has a large number of promising oil fields available; we just need to develop them.  The mistake up to now has been this stupid notion that buying oil from countries who hate us makes more sense, economically and politically, than using our own oil and creating US jobs. 

May 3, 2012 -- 2:08PM, MMarcoe wrote:

The same can happen for other commodities. High oil prices will affect the prices we pay for food, textiles, and other goods. And if the honeybee population collapses, will we continue to get our California almonds as cheaply as we do now? Does economics address that? Does economics know that we'd have to replace them with bumblebees and other insects that aren't as efficient as honeybees?

Ah, the 'Butterfly Wings' canard.  Yes, factors influence a range of products, but your phobia ignores the facts of economics.  The economy is much more robust than you seem to understand.  Obviously, the size and scale of macro-economics makes it hard to find quick fixes just as much as to create disasters, but let's get off this 'fragile eggshell' crapology.