Forget what Steven Mnuchin said about Greta Thunberg needing to study economics before offering climate change proposals. That was an asinine thing for him to say.. But read that article in the Washington Post for the ideas. They spoke to an economist about climate change and how economics comes in and it’s worthwhile for that.
People might argue that we need to do something about climate change, but we can’t afford it. If you want to argue back, the article can help.
We don’t talk much about poverty anymore. We talk about the middle class a lot. We don’t talk about the upper class or the rich anymore: instead we talk about them in terms of percentage points. And we don’t talk about the poor as much as we talk about those who are homeless. But there are still poor people in our society, and one member of that group wrote about it here: Falling.
He has a home, he was middleclass, and now he is poor. The story is sad but not exceptional.
I don’t know why we don’t talk about the poor so much any more. Perhaps we see poverty as shameful, not for the people who are poor, but shameful for people who don’t see themselves as poor. I don’t know. I think we do need to talk about it and the spectrum of financial status, and I think we need to work towards a fairer and more equitable society. First, we need to look and talk about it more clearly.
I have thought about this piece on capital often since I read it: Continuations by Albert Wenger : Capital Is No Longer Scarce.
I realize it is relative and that there are people and organizations that have difficulty accessing capital. But I believe overall there is an abundance of capital. I believe that is why you see a lot of the behaviours you see in the world, from negative interest rates to bogus unicorns like We and Uber and Lyft to high housing valuations to no inflation.
It seems to me that the law of supply and demand stops working from time to time. But I think that is wrong, and pieces like this remind me that I am wrong: How Walmart has successfully recruited truck drivers amid a labor shortage crisis.
The reason I think it stops working is because I see wage growth stagnating in many places. But I also see productivity stagnating too, and I think there is a relationship between that. There is some elasticity there that allows wage growth to stagnate but in return productivity growth stagnates too.
In Walmart’s case, the elasticity is gone: if they can’t get truckers, they lose business. It’s simple. But for businesses without such hard and fast metrics, you might just continue to see slack productivity and slack wage growth.
Worth reading: Senior Citizens Are Replacing Teenagers as Fast-Food Workers – Bloomberg.
- the reasons to hire older workers for fast food places is also true for other work as well.
- the notion of retirement needs to be rethought. People are living lives well past traditional retirement ages, and some people retire involuntarily decades before they die. Additionally, many of them cannot afford to not work all that time. Having work and an income in their later years makes sense.
- Good work is uplifting. If you can find good work as you get older, you can find a way to make your later years more worthwhile.
This piece, Opinion | Still Haunted by Grocery Shopping in the 1980s – The New York Times, by a Brazilian economist highlights the emotional scars that economic hardship has on a person. Key quote for me was this:
Research has found that children living in poverty are at increased risk of difficulties with self-regulation and executive function, such as inattention, impulsivity, defiance and poor peer relationships. It takes generations until society fully heals from periods of deep instability. A study in the early 2010s showed that Germans were more worried about inflation than about developing a life-threatening disease such as cancer; hyperinflation in the country ended almost 100 years ago.
Not only does it touch people individually, but you could make the case that it gets embedded into the culture. Germans are still worrying about inflation! Indeed, I remember my mom telling me how the Great Depression affected her mother to the point that she adopted behaviors she could never shake, not matter how much she had in the future.
Economics can seem dry, especially when people focus on numbers. But those numbers paper over how people are really affected. What is the emotional impact of high (or low) unemployment? What do we see happening in the culture when housing becomes unaffordable or work impossible to get. The numbers are an essential part of the story but they are also just the start of the story.
This is the question reviewed here: Are plagues and wars the only ways to reduce inequality? | Aeon Essays. (It’s a long read but a good one.)
If you are not familiar with this idea, consider this graph:
The higher the red line is, the greater inequality is. Throughout the last 2000+ years, inequality has been reduced only by terrible events like plague and war.
For a time post World War II, inequality was declining in much of the world. Then, around the 1980s, it started to increase and continues to do so. Now we have a race on. Population declines should occur over the next 100 years, leading to greater equality. To counter that, we have greater automation occurring which may boost inequality as those with the means to control the automation make much of the income and increase their wealth. Will this inequality lead to events that once again levels off the distribution of wealth and income? Or will we reach a balance somehow?
I highly recommend the article. Rising inequality will be one of the great strains on the 21st century, and this article helps to provide some context on the subject.