Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (927575)	3/24/2016 7:58:07 PM
From: bentway	Respond to of 1575178

>>For you, how can you grow a consumer spending driven economy like ours by cutting wages and income? And/or by replacing them with machines?<< Dave hates to admit it, but he KNOWS we're going to need some major socialism to transition our economy from people to machines! I think it's time for a guaranteed minimum income, paid for by the machine owners. That way, we consumers can consume the crap the machines produce 24/7/365, and the owners get a return.

To: combjelly who wrote (927575)	3/25/2016 2:04:38 AM
From: i-node	1 Recommendation Recommended By FJB Read Replies (2) \| Respond to of 1575178

>> how can you grow a consumer spending driven economy like ours by cutting wages and income? First, you have to recognize that our economy is "driven" by production, not by consumer spending. A lot of people are confused about this but it does make a difference when you're trying to get an economy to move off dead center. But cutting wages and income will eventually lead to what we've had under Obama -- stagnation of household incomes. It is a product of supply outstripping demand, and that is a process that will continue. Obama simply sped it up by making bad decisions. I think I've already explained this to you but perhaps you had trouble with it. When the supply of labor increases for a given level of demand (i.e., when real unemployment is high) the price paid for labor will go down. When substitution (by automation) is cheap, the price paid for labor will go down even more. Is this complicated? If you want the real price paid for labor to go up you can't just order it done through a minimum wage. As we've seen in Seattle, that just causes the gap between supply and demand to increase even further. It is a hard thing to do. You have to encourage production which will feed workers and then allow them to spend their money for more goods and services. It is a different thing from the idiocy that was Keynesianism, which has failed every time it has been tried. Ever. You encourage productions with things like R&D credits (which causes, e.g., software developers to write new stuff [innovate]) and Section 179 (which causes, e.g., businesses to buy capital goods) or Section 38 credits (which JFK made popular) which also causes the purchase of capital goods. These are the policies that cause stimulation of the economy, NOT buildings roads and bridges, which simply takes money from taxpayers, rakes 20-40% off the top for government's take, and puts the rest back into the economy, doing nothing, just as in 2009. Until you develop an understanding of this economic cycle, you're not going to understand why stimulus doesn't stimuluate and short recessions are dragged out into decade-long affairs, to the point you can't tell recession from boom anymore; they all look the same.