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Old 2014-01-18, 04:46   #1
Fusion_power
 
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Default Ye Olde Mystery economic theatre 2014

Ok, so we had one thread that got on somebody's nerves. Here is a fresh start. Please keep posts ON TOPIC. The topic is the economy and relevant financial discourse.

Here is a summary, my anecdotal impression of the current economy.

The massive economic meltdown of 2007/2008 was primarily driven by massive mortgage fraud. This fraud was based on borrowers who had no income to support the loans they were given and lenders who decreased standards until a corpse could get a loan (I think I saw it breathe, it definitely moved!).

The meltdown was followed by economic chaos for 3 years with massive bankruptcies in the business (GMC) and governmental (Birmingham Alabama) arenas. European conditions were severely challenged by defunct economies in Greece, Ireland, Iceland, Italy, Spain, and Portugal that resulted in several bailouts. Large banks in the U.S. were bailed out via a series of money injections that kept them afloat transferring risk from the bank owners onto citizens. Jobs were difficult to find and often involved pay decreases into the minimum wage range.

Regulatory oversight was and still is seriously compromised. While about $50 billion in fines are expected to hit large banking interests, this does not even begin to reflect the trillions of dollars of losses incurred in the overall economy.

Current 2014 conditions in the U.S. are somewhat improved compared to 5 years ago. The overall jobless rate is a few points below highs reached 4 years ago. Worrisome issues include manufacturing jobs that have migrated to lower wage countries like China, movement of workers into service sector jobs that typically pay low wages, and a trend toward more automated manufacturing. The number of young people entering the workforce exceeds the job creation rate which is producing a wage stagnation/regression environment. All of these indicate extreme challenges in the next 20 years to maintain a viable economy.

Retirement concerns are the focus of a large number of people in the 45 to 65 year old range. Roughly 65% of current retirees have to rely primarily on social security for retirement income. Savings rates for retirement are affected by reduced wages, loss of jobs, and a still limping economy.

So have at it. What economic malaise should we dig into?

Last fiddled with by Fusion_power on 2014-01-18 at 04:51
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Old 2014-01-18, 13:16   #2
Nick
 
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A practical attempt to build new ways of doing things:
http://www.opendemocracy.net/can-eur...e-alternatives
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Old 2014-01-18, 17:02   #3
kladner
 
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Quote:
Originally Posted by Nick View Post
A practical attempt to build new ways of doing things:
http://www.opendemocracy.net/can-eur...e-alternatives
That looks like a site with a great deal of interesting material. Thanks, Nick.
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Old 2014-01-28, 21:56   #4
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Snakebite victim charged $89,000 for 18-hour hospital stay
Quote:
Eric Ferguson, 54, from Mooresville, N.C., was taking out the trash at his home last August when he was bitten on the foot by a snake. He drove himself to Lake Norman Regional Medical Center, where he was treated with anti-venom medicine.

According to his bill, the hospital charged $81,000 for a four-vial dose of the medication.

Shocked at the price tag, Ferguson told the Charlotte Observer he and his wife found the same vials online for retail prices as low as $750.
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Old 2014-02-07, 04:24   #5
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I am happy to announce that there is good news on the labor front! Alas, it appears to be confined to the domain of "whitepapers by government economists". As far as the real world is concerned, the following trio of articles paints a less happy picture:

Obamacare Creates Incentive to Work Less; CBO Estimates Obamacare Will Cost 2 Million Full-Time Equivalent Jobs by 2017

Martin Wolf Sounds Cautionary Note on Rise of Robots
Quote:
Martin Wolf, the highly regarded chief economics editor at the Financial Times, has roused himself to take up the topic of whether robots represent a threat to the economic and social order. He takes the case for concern seriously and lays out a set of potential dangers
Over 1 in 6 Men in Prime Working Years Don’t Have a Job
Best reader comment (IMO):
Quote:
Field Marshal Macluhan February 6, 2014 at 7:24 am

I am a former news industry grunt, mostly in TV as an assistant and writer. Lost my last professional job five years ago after my employer was convicted of fraud (interesting but long story there) and I couldn’t find anything else in my field. I took retail jobs, tried and failed as an ESL teacher, even spent a year as a bike courier – all while battling serious depression, which my situation was doing nothing to help.

About a year ago, while I was working as a messenger, I had a breakdown and couldn’t keep working. There are no job protections of any kind for an ‘independent contractor’, so it was either move in with mom and dad or find a nice sewer grate to sleep on. I chose mom and dad. After a few months, when I was able to crawl out of bed again, I kept looking for work, but with a deep hole in my resume where a career should have been, I knew I faced towering odds against anything securing better than another menial, bullshit job.

The situation has since taken on a very different character. This summer, both of my parents were diagnosed with serious – in my father’s case, almost certainly terminal – cancers. I now do the majority of the housework, the driving, some light nursing duties, though those will get heavier as things progress. I’ve gone from being the sick one to the caretaker. It’s given me a sense of purpose, of neededness, that I have not felt in a long time. But at horrible cost.

I have gone a very long time without professional, white-collar work. Barring an extraordinary turn of events, I imagine that things will stay that way. When the natural sequence of events has run its course, I will probably go back to school again – the usual scam, as Yves said above, but what else is there? I have been filtered out by a society that simply does not require me to exist, and that, outside of a small (and rapidly shrinking) circle of friends and family, doesn’t particularly care whether I continue to do so. I am the dispensable man.
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Old 2014-02-07, 06:31   #6
cheesehead
 
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Quote:
Originally Posted by ewmayer View Post
As far as the real world is concerned, the following trio of articles paints a less happy picture:
... and the first one paints a misleading picture.

Response:

"FACT CHECK: Anti-Obamacare chorus is off key"
http://finance.yahoo.com/news/fact-c...--finance.html
(with my underline emphasis)
Quote:
WASHINGTON (AP) — New estimates that President Barack Obama's health care law will encourage millions of Americans to leave the workforce or reduce their work hours have touched off an I-told-you-so chorus from Republicans, who've claimed all along that the law will kill jobs. But some aren't telling it straight.

The analysis by the nonpartisan Congressional Budget Office predicts the law will give several million people an opportunity to work less or not at all, because they won't be stuck in jobs just for the sake of keeping the health insurance they get from employers. To some Republicans, that amounts to "wreaking havoc on working families," ''dire consequences for workers" and a shower of pink slips across the land — conclusions unsupported by the report.

The study estimates that the workforce will be reduced by the equivalent of 2.3 million full-time workers by 2021 as people choose to leave it. More would take early retirement, work fewer hours or otherwise rearrange their work-home balance to take advantage of new subsidies for health insurance and new markets for individual policies that don't depend on having a job.

In a key point overlooked in the GOP response, the report says, "The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses' demand for labor."

In other words, workers aren't being laid off. They are taking themselves out of the workforce, in many cases opening job opportunities for others.

As if recognizing that fellow Republicans were getting a bit overheated, Rep. Paul Ryan of Wisconsin, House Budget Committee chairman, introduced a reality check when questioning Douglas Elmendorf, budget office director, during a hearing Wednesday. "So just to understand this, it's not that employers are laying people off, it's that ... people aren't working in the workforce, aren't supplying labor," he posited.

. . .

... Of more consequence is the expectation that millions will take themselves voluntarily out of the labor force because they can afford to.

The budget office forecast that over the next several years, there will be plenty of unemployed people available to fill those jobs.
But over the longer term as the economy improves, the supply will shrink, and because of that, total employment and the number of hours people work will be less than it would have been without the health care law.
(BTW, how do Republicans propose to significantly lower health care costs while not having any health-care-related workers laid off?)

Quote:
. . .

But the predicted withdrawal from the labor market is no more a killer of jobs than today's surge of retirements by baby boomers entering old age. If anything, it could open job opportunities for people who can't get in the workforce now.
Some Republicans would have you believe that the retirement of Baby Boomers is a negative consequence of the Affordable Care Act. Don't fall for their con.

Last fiddled with by cheesehead on 2014-02-07 at 06:33
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Old 2014-02-07, 07:16   #7
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Well put, Richard.
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Old 2014-02-07, 07:20   #8
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First of all, this is a bit premature -- the effects won't really be felt until the ACA's major provisions are turned on in 2016.

Second, everyone who knew what they were talking about expected the ACA to reduce the number of hours worked. The issue here is that a more careful study suggests that the loss (vs. the pre-ACA legal landscape) will be closer to 1% than 0.5% (from 1 million FTEs to 2 million FTEs). Of course we'll surely learn more once it actually happens.

More interesting to me is the expected outlay in government healthcare spending, which the report predicts to increase by 1% of GDP from 2015 to 2024:

Quote:
Outlays for the major health care programs—Medicare (net of premiums and other offsetting receipts), Medicaid, the Children’s Health Insurance Program, and subsidies offered through health insurance exchanges and related spending—soon exceed outlays for Social Security. Spending for those programs is estimated to total 5.1 percent of GDP in 2015 and to grow rapidly in coming years because of changes mandated by the Affordable Care Act, reaching 6.1 percent of GDP in 2024.
No doubt Republicans will say this is bad (spending more than we can afford) and Democrats will says it's good (more total healthcare).

(There are more interesting parts of the report, but I'll limit myself to parts related to the ACA here.)
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Old 2014-02-08, 11:30   #9
cheesehead
 
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Quote:
Originally Posted by CRGreathouse View Post
First of all, this is a bit premature -- the effects won't really be felt until the ACA's major provisions are turned on in 2016.
The CBO report is a prediction of what will happen after those provisions come into effect.

Last fiddled with by cheesehead on 2014-02-08 at 12:24
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Old 2014-02-11, 22:28   #10
ewmayer
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Interesting goings-on in Bitcoinlandia:

Another Bitcoin Flash Crash Imminent? Second Major Exchange Follows MtGox In Suspending Withdrawals
Quote:
A “massive and concerted attack” has been launched by a bot system on numerous bitcoin exchanges, Andreas Antonopoulos has revealed.

The chief security officer of Blockchain.info said a DDoS attack is taking Bitcoin’s transaction malleability problem and applying it to many transactions in the network, simultaneously.

“So as transactions are being created, malformed/parallel transactions are also being created so as to create a fog of confusion over the entire network, which then affects almost every single implementation out there,” he added.
One wonders whether the touters of the "stateless" aspect of BTC envisioned the above state-machine interpretation of that term.
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Old 2014-02-11, 22:40   #11
chalsall
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Quote:
Originally Posted by ewmayer View Post
One wonders whether the touters of the "stateless" aspect of BTC envisioned the above state-machine interpretation of that term.
One might also wonder why someone would want to (or, perhaps more importantly, who would be the most motivated to) "undermine" an untraceable cyber currency.
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