What's the deal with universities‽‽‽‽‽‽‽‽‽‽‽‽
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tend to just spend it frivolously, instead of being smart about it and investing.
Because they either never had the money to spend, or they already created a habit of bad spending.
You can't take the gas out of the engine and put it into the tires and expect the car to go anywhere, no matter how strong your argument is that tires support the whole car.
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Except, as @xaade pointed out with his anecdotal evidence...
I'll stop you there...
I've actually spent time recounting anecdotal evidence
And there...
Now, I will admit that there are other families that don't fall into the group that I just described. There are families that need help, that need a leg up for a while.
According to xaade, no one can be helped by an influx of cash. So you disagree with him, just like me.
But if you go out among the "underprivileged", I bet you'd be surprised how many are living beyond their means.
I would not be, because I've had the same experience. So I can see your point.
When I was a kid... (new post) wait...
You can't take the gas out of the engine and put it into the tires and expect the car to go anywhere, no matter how strong your argument is that tires support the whole car.
I take it back, xaade. You can use my analogy. You're terrible at this.
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Except, as @xaade pointed out with his anecdotal evidence...
I'll stop you there...
So you're one of those people who won't accept something as true unless it comes in the form of a Scientific Study™? In that case, here's a link:
http://www.marketwatch.com/story/why-lottery-winners-go-bankrupt-1301002181742
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There's a power generation concept which is basically just a kilometer-long tube of some well-insulated material with a turbine in the middle; the turbine is powered by temperature differential.
I've also seen the idea proposed for the air (where it works too, but holding the tube up is a lot harder, but you also don't need as much insulation.)
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You're terrible at this.
I keep trying with the car thing.
Ok, if you take money away from the people that generate wealth by identifying market needs and creating opportunities, and hand that money to people who just 'work' for a living (even if that work is energy spent trying not to work), then they'll just spend the money on frivolous things and not improving their position in life. It doesn't matter how HARD they work (how much the tires support the car), if you take wealth (gas) out of the engine (wealth creators) and put it in the tires (workers), you stall the car (economy).
Geez, there's are so many economic classics out there that describe this very big gulf between consumers and engines.
Both are needed, but the wealth needs to remain with people that move the economy.
Now, I'm not saying there aren't people that are outliers to this. People that inherit money and aren't responsible, or people that have hit a low and need a hand up.
But do not confuse a hand up with a hand out. Sometimes people just need someone to take a risk and employ them.... a wad of cash would do those people more harm than good.
Out of the horse's mouth. I heard on the radio the other day, a guy asking for this same exact thing. "Please do not give me money, hire me."
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A better spot to jump on:
@abarker said:
Except, as @xaade pointed out with his anecdotal evidence...
I'll stop you there...would be later in the post starting on own anecdotal:
When I was a kid...
though the study works too.
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It doesn't matter how HARD they work (how much the tires support the car), if you take wealth (gas) out of the engine (wealth creators) and put it in the tires (workers), you stall the car (economy).
Except that you can't actually put wealth in the workers reliably, because it's income at that point. It only becomes wealth when the workers manage not to spend it all.
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I gots an idea, lets make wealth publicly owned.
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Is that cheaper than building a windmill?
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Both? Almost certainly no. I doubt the one sticking up a KM into the sky could ever possibly work, at least not for longer than maybe a couple months at a time.
But the power output is really, really stable. If you do get a working one. So it can generate base-load, unlike wind and solar.
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Are these outcomes rare? A recent study of ***Florida*** lottery winners suggests no.
Well, there's your problem.
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Geez, there's are so many economic classics out there that describe this very big gulf between consumers and engines.
Here's the problem -- the "weath creators" are really wealth accumulators nowadays -- more akin to Smaug than anything else. And you certainly don't want hoarders like Smaug roaming around your economy, because they siphon the gas out of it just as much as handouts to the "spendist underclass", if you will, do.
(IOW: the super-rich don't spend enough in proportion to their earnings to support the economy alone -- it is the upper-working/middle-class spenders that do support the economy, and that's what is being crushed these days. Or, statically hoarded wealth has no benefit -- it is the exchange of money for goods and services that keeps the economy flowing, and the super-rich simply don't generate enough of that exchange on their own to keep us afloat.)
The same argument applies to institutions that either hoard money themselves or pay it out to investors, instead of plowing their profits back into R&D, capital spending, and other such economic force multipliers that do send that money back into the economy to do more work.
OTOH:
Out of the horse's mouth. I heard on the radio the other day, a guy asking for this same exact thing. "Please do not give me money, hire me."
is so true that I can't QFT it enough.
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Except, as @xaade pointed out with his lottery article, just giving people a chunk of money generally isn't a solution. People who are just given a wad of cash tend to just spend it frivolously, instead of being smart about it and investing.
It depends upon what you mean by "solution". If you limit that to, "They won't need money given to them in the future," that's possibly/probably correct.
That doesn't mean that the money given does nothing. They bought a car. That employed people at the dealership, at the transport companies, at the factory, at the mine.
Here's the problem -- the "weath creators" are really wealth accumulators nowadays -- more akin to Smaug than anything else. And you certainly don't want hoarders like Smaug roaming around your economy, because they siphon the gas out of it just as much as handouts to the "spendist underclass", if you will, do.
And that's the thing. Economies run on moving money. People who have no money buy no cars. If no one buys cars, the people at the dealership, transport, fatctory, and mines are out of a job.
We call moving water a flow and it's continuously fresh. Water that is impounded becomes stagnant, which is bad. It is not in-apt that the same word is used in the term "stagnant economy". Those are bad: No money is flowing.
Now if the "Smaugs" invest the money, that might do some good for the economy. But today, it's largely invested in real estate, or art, or other precious things; or squirreled away in a Swiss bank. This does nothing for the economy, which makes the "Smaug" comparison really apt. They take in money...but then they sit on it and from then on it does nothing--it stagnates.
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It depends upon what you mean by "solution". If you limit that to, "They won't need money given to them in the future," that's possibly/probably correct.
In this case a solution is taking a person fighting to feed their family and helping them to a situation where they can reliably put food on the table.
Giving said individual money which they then spend unwisely is not a solution in that sense, irregardless1 of the trickle effect.
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That doesn't mean that the money given does nothing. They bought a car.
And if the rich person didn't have his money taken away he would have bought a boat.
The real problem is like this
the "weath creators" are really wealth accumulators nowadays
But do not confuse a hand up with a hand out.
@tarunik did a good job of showing that the problem can exist on both sides of the spectrum.
In the case of the poor, being handed money and spending it is no different than the money spent by the rich people if they got to keep the money.
The problem on both sides is one of productivity. Productivity increases wealth for everyone up and down the scale.
For the rich, that means investing their money in growing their businesses.
For the poor, it means making their work more productive with education/training or simply getting them to work in the first place.
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I just want to point out something quite obvious. Wealth redistribution is not about blindly "giving money to the poor". You spend it on infrastructures and services on poor areas, like schools, police, etc. Or you give it to the poor, but then carefully monitor what they are doing with it (works well with the extremely poor).
The point is, it's obvious that money can make people's lives better IF you spend it on the right things, not on drugs and hookers. That's where you bring science into action.
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In the case of the poor, being handed money and spending it is no different than the money spent by the rich people if they got to keep the money.
Which is where the crux of my argument lies -- the rich people often aren't spending the money in economically significant ways. It's either in the form of a hoard (incl. investments), or winds up being funneled down other non-economically-significant paths (such as campaign contributions, although that money eventually does find its way back into the economy...), vs. being plowed directly back into the economy either as personal spending or capital investment in business.
The problem on both sides is one of productivity. Productivity increases wealth for everyone up and down the scale.
QFT, at least to a point.For the rich, that means investing their money in growing their businesses.
For the poor, it means making their work more productive with education/training or simply getting them to work in the first place.
Yeah, neither the Smaugs nor the spendist beggars help the situation.You spend it on infrastructures and services on poor areas, like schools, police, etc.
Yep. Infrastructure and training are far more valuable than handouts ever will be.The point is, it's obvious that money can make people's lives better IF you spend it on the right things, not on drugs and hookers.
Or on spendist artifacts such as consumer electronics gadgets...
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it's obvious that money can make people's lives better IF you spend it on the right things, not on drugs and hookers.
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a hoard (incl. investments)
No, many investments are not hoarding. If you buy stocks or bonds, for example, the money ends up in a company's or a government's hands, for the entity to spend as it pleases. Even when you buy a piece of art, the artist (or the auction house, or whatever) then takes the money and spends it as he pleases. Shoot, even when you put money in a bank, the bank then may lend out that money. Every single economic transaction has two sides.
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@tarunik said:
a hoard (incl. investments)
No, many investments are not hoarding. If you buy stocks or bonds, for example, the money ends up in company's or a government's hands, for the entity to spend as it pleases. Even when you buy a piece of art, the artist (or the auction house, or whatever) then takes the money and spends it as he pleases. Shoot, even when you put money in a bank, the bank then may lend out that money. Every single economic transaction has two sides.As @lolwhat has so kindly started to point out, there is only one way to hoard wealth: stick it under your mattress. Of course, then it doesn't get bigger, and will probably get smaller, so that's not really a viable option.
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Shoot, even when you put money in a bank, the bank then may lend out that money
That's what a bank is.
Banks borrow short and lend long.If everyone puts their $500 monthly wages into the bank on payday, and then spends the lot by next payday, on average there's $250 to loan out.
So the bank lends it to businesses and individuals, minus a small margin.
If the institution doesn't do that lending, they are not a bank, they're a safety deposit box or a mattress.
If they borrow long and lend short, they're not a bank.
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At least in Europe, there is such a thing as savings banks.
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At least in Europe, there is such a thing as savings banks.
Sure, but do they not also offer loan products?
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Here's the problem -- the "weath creators" are really wealth accumulators nowadays -- more akin to Smaug than anything else.
So your theory is that hedge funds are just Scrooge McDuck vaults?
Or, statically hoarded wealth has no benefit
This is an unfounded assertion. I assert that this generally doesn't happen.
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That doesn't mean that the money given does nothing. They bought a car. That employed people at the dealership, at the transport companies, at the factory, at the mine.
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And that's the thing. Economies run on moving money. People who have no money buy no cars. If no one buys cars, the people at the dealership, transport, fatctory, and mines are out of a job.Broken windows all the way down, eh?
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Only if you're using enough of it.
Context is always important. Violence isn't a bad thing, in and of itself.
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The guys who own the businesses and who are getting super rich off them pay a lot more taxes than me. It's not unfair if they leverage that into greater benefits.
I didn't say unfair. I said inordinate. Excess returns. A technical term. You're projecting your politics onto me. I must presume it's because of your lack of experience in economics, and a personal conviction in some kind of libertarian politics. (Maybe with a capital 'L').
Hint: you're denying the existence of Ricardian rent (one of the foundations of classical and neo-classical economics)
You don't know my politics, and you can't infer them from a concept you demonstrably don't understand. And you certainly can't use my politics to discredit facts you don't like.
Hint: Like a good business man, I try to capture rent. Competition is bad for business.
Let's say I wave a magic wand and lower your employer's production costs by 50%. Who benefits? It's not your customers. The business won't lower its prices unless it has to. It's not you. They won't pay you any more unless they have to (of course, at your level of qualification, they have some idea how much they have to, and probably have scheduled raises and the like. They're already budgeted, though. You won't get any of the new surplus). Who is left? The owners. They benefit. Ceteris paribus, they're the only ones who do.
Bullshit. I get that stuff too, perhaps in different ways.
Not unless you're producing for yourself you won't. You don't have a production frontier. The company you work for does. (No offense is meant here, but) If you go home and play video games or with the kids all evening, that's great and all, but it's not production. You're not even allocating time to production.
You can say 'bullshit, the owners will spend the money" but that's just the broken window fallacy.
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Ok, so this article says 50% of educators at universities are non-tenured adjuncts, who make so little that a significantly percentage of them are on food stamps.
What fucking schools are they teaching for?? I recently stopped teaching because I do not have the time to do so anymore, but when I was I got $2300 for teaching 5 classes that were 5 hours each. While they were supposed to be 5 hour classes, it probably worked out to more like 27-28 hours in total including time spent grading, etc. That is $82/hour.
The first two times I taught that class, there was a lot of prep work that brought down that average hourly number. After everything was prepped though, it was dead easy and there was little work to do outside of class. Even then, I probably averaged $40/hour for those classes. That is not exactly food stamp wages...
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@blakeyrat said:
Ok, so this article says 50% of educators at universities are non-tenured adjuncts, who make so little that a significantly percentage of them are on food stamps.
....Even then, I probably averaged $40/hour for those classes. That is not exactly food stamp wages...
I propose that they're including grad students who grade and TA courses... their stipends don't work out to much.
Also, part-time faculty teaching semester-long classes get paid at a rate that you wouldn't want to live on. The folks I know doing that are teaching are doing it for other reasons on top of actual jobs.
No, those reasons are not "picking up chicks".
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part-time faculty teaching semester-long classes get paid at a rate that you wouldn't want to live on.
I was part-time. I sure as shit wouldn't teach as my primary form of income. I did it for personal development.
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I didn't say unfair. I said inordinate. Excess returns. A technical term
"Excess" implies unfair.
You're projecting your politics onto me.
No, I'm just reading your words.
Hint: you're denying the existence of Ricardian rent (one of the foundations of classical and neo-classical economics)
You're not reading my posts very carefully, then.
You don't know my politics, and you can't infer them from a concept you demonstrably don't understand. And you certainly can't use my politics to discredit facts you don't like.
I'm only judging what you've written here. You're applying a judgment by calling certain returns inordinate. I'm just disagreeing about your judgment and trying to get to the bottom of why we disagree.
Not unless you're producing for yourself you won't. You don't have a production frontier. The company you work for does. (No offense is meant here, but) If you go home and play video games or with the kids all evening, that's great and all, but it's not production. You're not even allocating time to production.
You're thinking too small here, and only considering obvious dollar stuff. My quality of life is immensely better and things cost me less and so I benefit indirectly from a lot of stuff.
You can say 'bullshit, the owners will spend the money" but that's just the broken window fallacy.
I'm saying bullshit for entirely different reasons, but you're onto something with the broken window fallacy. But here I'm talking about hidden benefits, or maybe the hidden costs to me if that stuff didn't exist.
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"Excess" implies unfair.
Not in economics. It just implies that it is larger than the optimal value, and that there's (at least theoretically) an opportunity to run the overall system differently to achieve greater efficiency, at least in the ways that economics normally measures. Whether that's unfair or not is a value judgement that depends on what you consider to be the correct basis for evaluating the goodness of a situation. And whether you consider unfairness to be good or bad. :)
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I was part-time. I sure as shit wouldn't teach as my primary form of income. I did it for personal development.
Clearly. I think I said that... ;)
Not sure whether you are adding to or countering me...
I'm just saying the counts of number of "poorly paid" educators are driven higher by grad-students and part-timers ...
(also exacerbated by the fact that part-timers are generally teaching fewer courses - 1 or 2 - so you need more teaching bodies)
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Not in economics. It just implies that it is larger than the optimal value, and that there's (at least theoretically) an opportunity to run the overall system differently to achieve greater efficiency, at least in the ways that economics normally measures.
Yes, fair enough. Of course, he didn't actually use that word at first, and i don't think the context of the posts really justified assuming econ jargon.
I'd be interested in seeing an argument about what's "optimal" about who gets what out of public goods like we were talking about, though it'll likely turn out to be TRWTF.
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Of course, he didn't actually use that word at first, and i don't think the context of the posts really justified assuming econ jargon.
It's @Captain therefore it's going to be econ jargon. I've argued a few times with him in the past, and that's definitely a constant. ;)
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I guess so. I'll just wait for him to justify his idea of optimal distribution of benefits from public goods.
I still think I'm right on what he's saying / thinking, even if he's come up with a different rationalization, though it's possible that he's just not thinking things through far enough, as my last reply to him said.
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Not sure whether you are adding to or countering me...
Me either. All I know for certain is that I had not had coffee yet.
Regardless, I was offered to teach as much as I wanted to and $80/hour is not exactly minimum wage. ;)
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You were also teaching (presumably) something useful, the knowledge of which (and the willingness to teach) is fairly scarce. You weren't one of a multitude of desperate bullshit studies PhDs.
Supply and demand.
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You weren't one of a multitude of desperate bullshit studies PhDs.
The world does not need more underwater basket weavers?
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They won't pay you any more unless they have to
Which is because there's someone out there at a better cost/skill ratio.
If businesses can't be morally good, they also can't be morally evil. They are not moral entities.
Let's say I wave a magic wand and lower your employer's production costs by 50%.
It's also unfair to even mention a hypothetical scenario like this.
You're only furthering the myth that businesses just rake in tons of money.
Apartments, for example, are driven by paying off debt. It's rare for one to actually be above water. But that's ok, because it's lucrative over time. Banks make money, the owner makes money, but you're always just paying off and saving to buy the next complex.
Walmart can't afford to randomly hand out $100 to all its employees.
And after looking at costs, I honestly don't know how mom and pop restaurants make money.
wave a magic wand
And suddenly half of your apartment renters leave. What does the owner do now, other than raise the price of the renters that stayed? And yet, his employees still want their yearly raises, because the price of vegetables went up 10%.
Employment has relatively zero risk, compared to owning a business.
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You're thinking too small here, and only considering obvious dollar stuff. My quality of life is immensely better and things cost me less and so I benefit indirectly from a lot of stuff.
Sure it is. Don't disagree. And it's better for a business owner in the same ways. And then in other ways that you're not counting.
I'd be interested in seeing an argument about what's "optimal" about who gets what out of public goods like we were talking about, though it'll likely turn out to be TRWTF.
The neoclassical position is that perfect competition is optimal. Real businesses don't work that way. They seek ways to extract rents/excess profits/arbitrage. Firms wouldn't start taking on risks just to earn the market-equilibrium price. They might as well buy risk-free bonds and earn the risk-free rate.
I don't have a position on the optimal allocation of pure public goods, because you're 100% right about them. They're free for all. But remember that pure public goods don't really exist, and that there are costs to transport infrastructure we are ignoring to say this much.
I'll just wait for him to justify his idea of optimal distribution of benefits from public goods.
I haven't been talking about "optimal distribution of benefits from public goods". I've been talking about the benefits of public goods being economic rent paid to businesses. Which is fine. I am not making an ethical judgement. It would be wrong for a business to turn it down. But it would be just as wrong to pretend that the rent doesn't exist.
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But it would be just as wrong to pretend that the rent doesn't exist.
But then the customers of the business benefit from these particular rents. And the employees.
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You got something out of that post? I just see words.
I'm still trying to make this leap.
@Captain said:The neoclassical position is that perfect competition is optimal. Real businesses don't work that way. They seek ways to extract rents/excess profits/arbitrage.
v-----v
Firms wouldn't start taking on risks just to earn the market-equilibrium price. They might as well buy risk-free bonds and earn the risk-free rate.
I mean they're both valid, so to speak.
But I can do that too.
The traditional belief is that birds use their wings to fly.
Birds build nests to keep their eggs safe.
benefits of public goods being economic rent paid to businesses
Um... I guess you can make a statement about the direction of every relationship, but I don't see how that's helpful.
I suppose you could say, government builds a road exclusively to reach business A, in hopes that it would drive the economy. Therefore the government is paying business A to exist.
But geez.... I could fly halfway around the world and make a more direct point.
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You got something out of that post? I just see words.
It's a lot of fluff that once again mostly asserts that business owners are getting inordinate benefits. Whether he wants to admit it or not, a word like "inordinate" is subjective and requires some judgment. I claim his judgment is unjustified for certain reasons and he hasn't convinced me that those reasons are incorrect or even (honestly) if they didn't exist that he's correct.
It reminds me of the guy who kept arguing that businesses would go bankrupt without welfare or something.
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No, they don't.
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It reminds me of the guy who kept arguing that businesses would go bankrupt
Yeah, I remember that one.
The business gets to pay employees cheaper because the government pays part of the salary.
The problem with that idea, is that the business isn't paying for the economic success of the employee, they are buying the highest labor-skill/cost ratio.
Without welfare, if someone still accepted the lower pay, the business wouldn't be affected. The other possibility is that the business just hires less people.
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With as indirect of paths that you are using... as far as you define benefit...
My dog benefits from the poor man begging for money down the street.
You have no real way of defending your ability to say that employees of a business benefitting from a public good, don't benefit from that good indirectly.
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Exactly.
Material conditional - Wikipedia
