Lion of the Blogosphere

Archive for the ‘Economics’ Category

Kylie Jenner to become first social-media billionaire

with 42 comments

I don’t mean becoming a billionaire by creating a social media site, like Mark Zuckerberg, I mean becoming a billionaire by being famous on social media.

According to news reports, Kylie Jenner, 20 years old, is worth $900 million. She become so rich from hawking cosmetics and other stuff on social media.

How does this fit into Ayn Rand’s theories? Is Kylie Jenner a value creator just like Hank Rearden?

Written by Lion of the Blogosphere

July 16, 2018 at EDT pm

Posted in Economics, Wealth

Yes, we need to do something about dumb proles who borrow money for vacations

with 130 comments

Many commenters’ reaction to the previous post was joyous schadenfreude that some of the dumb proles would face financial ruin when they lose their job and can’t pay back the 20%+ interest rate loan for their unnecessary vacation.

You should be ashamed of yourselves. People are born stupid because of their genes, they don’t magically become smart because of life lessons learned. Don’t become an SJW who thinks that with the right “education” they will become great scientists, only replacing college education with school-of-hard-knocks education.

Furthermore, susceptibility to peer pressure is also genetic, related to the personality factor called “agreeableness.” Only those with low agreeableness (like Donald Trump) are able to resist the siren call of peer pressure that says they are a loser unless they go on an expensive vacation.

Only people with high IQ and low agreeableness have true free will, the rest of the masses need to be benevolently directed towards self-beneficial behavior and not be handed nooses that they can use to hang themselves.

And then when the economy crashes because everyone is over-levered and financial institutions have to be bailed out again because they are too big to fail, it’s YOUR TAXES that will be used to pay for the bailouts! So yes, you are doing yourself a favor by supporting laws that protect the dumb proles from themselves.

Written by Lion of the Blogosphere

June 22, 2018 at EDT am

Posted in Economics, Proles

People buying vacations on credit

with 57 comments

Article at Marketwatch about new finance companies like Affirm which allow people to buy all sorts of crap they don’t need on installment plans, with usurious rates of interest.

The article provide a quote from a “financial expert”:

Still, financing a vacation is “a terrible idea all around,” Podnos said. “It’s one thing to finance your education or home purchase, or even a car purchase in some situations … but to finance a vacation is to me just insane. If you can’t afford to pay for your vacation out of cash on hand, don’t take a vacation.”

But it doesn’t go far enough. This is why we need laws against usury. Not only to protect the proles from themselves, but too many proles leveraged up to their eyeballs increases the riskiness of the entire economy and can lead to severe recessions or even depressions. And that’s true even when proles lever up to buy more worthwhile long-term assets like houses and college degrees. Well, a college degree isn’t an asset because it can’t be sold.

This is an example of where the libertarian model of economics fails.

Written by Lion of the Blogosphere

June 21, 2018 at EDT am

Posted in Business, Economics, Proles

Uber drivers earn $3.37/hour in profit

MIT study shows how much driving for Uber or Lyft sucks

That’s pretty crappy. The study is probably not assigning value to the benefit that drivers get to have a car available to them at no additional marginal cost then they are not driving for Uber. That additional benefit, plus the fact that drivers have a low tax rate (explained in the article), probably explains why driving for Uber is competitive with seemingly higher-paying jobs like working at McDonalds. Nevertheless, it’s still a crappy income.

This demonstrates the principle that perfect competition means that no one makes any money. Uber has set up a system where each driver is running his own small business and there’s nearly perfect competition between drivers. You can’t make any money when there’s perfect competition!

Written by Lion of the Blogosphere

March 2, 2018 at EDT am

Posted in Economics

Second Great Depression coming?

Massive government budget deficits because of increased spending combined with Trump tax cut.

Even though the Fed Funds rate has recently gone up a bit, it remains historically extremely low.

If the stock market has a major crash bringing the economy down with it, there is no monetary or fiscal ammunition left to stimulate the economy. It’s already at full stimulus.

This could mean the next recession turns into a second Great Depression. Also, the Illuminati will be happy to have this blamed on Trump so won’t be motivated to stop it from happening.

Written by Lion of the Blogosphere

February 12, 2018 at EDT am

How to get rid of your unwanted stuff

This is not a post about how to identify stuff you don’t want, but how to get rid of it once you’ve so identified it.

If you live in a house in Staten Island, you can just put your unwanted stuff into black garbage bags, leave them at the curb on the evening before a garbage pickup day, and the city will pick them up for free (or at least for no additional charge beyond the taxes you already pay for that service). Anything too big to fit into a black garbage bag can just be left at the curb. Pretty convenient!

However most advice on getting rid of stuff suggests you can sell it or give it away to charity. I don’t really see that as a practical option. My parents’ house is loaded with stuff that they think someone else wants or that they can sell to someone, yet it just keeps sitting there. The reality is that no one wants their junk, not even charities, not even poor people.

There is various junk that my parents believe to be valuable “collector’s items,” but upon looking them up on eBay, I always come to the conclusion that the hassle of selling it exceeds any value you would get for it. That even includes stuff like silver plated tea sets and “silverware.” That silver plated stuff doesn’t contain enough silver for anyone to bother to extract it, and there was a time when everyone who got married got a bunch of silver crap, therefore there are millions of old people with the same crap in their attic, and today no one wants that stuff.

There is also the problem that my parents (and their relatives) always bought the cheapest stuff, and the only things that are collectors items are stuff that started out expensive in the first place. For example, my mother always believed that her cousin’s old Lionel train set was somehow valuable. I tried to explain to her that the train cars made from plastic are not valuable, they are just junk, but she won’t listen.

* * *

This is all an example of how our economy is shifting to a post-scarcity model. Stuff is so plentiful that it has negative value! 1-800-GOT-JUNK charges a lot of money to get rid of stuff.

Written by Lion of the Blogosphere

January 23, 2018 at EDT am

Posted in Economics

Why is liberal California the poverty capital of America?

This op-ed in the LA Times written by a conservative-libertarian (probably anti-Trumper) type asks the right question but reaches the wrong answer.

It is true that California has the highest “supplemental poverty measure” of any U.S. state (according to a chart in a Wikipedia article), but then look at the demographic composition of California, which is only 37.7% non-Hispanic white (according to another Wikipedia article).

Massive immigration of poor Mexicans means you wind up with a lot of poor people living in the state. Poverty in California is not caused by a minimum wage that’s too high or other libertarian nonsense. Washington State has the highest minimum wage of all states, but a relatively low supplemental poverty measure. Washington is 69.5% non-Hispanic white, with 9% of the minority population being Asian.

To lower poverty, we must restrict immigration, deport illegal aliens, require mandatory E-Verify by employers, and build the Wall.

I believe there is only one factor contributing to poverty that libertarians happen to be right about, and that’s land-use and zoning policies that prevent more housing from being built. California has a lot of that. That’s why super-liberal Vermont also has relatively high supplemental poverty measure (although still below the U.S. average) despite being the nation’s second-whitest state. But Vermont also has a shortage of jobs because there are no major cities, and in the modern economy the jobs are migrating to major cities. Vermont is a place where a certain type of relatively affluent white people from the northeast retire.

Written by Lion of the Blogosphere

January 14, 2018 at EDT pm

Posted in Economics, Immigration

Clutter, a sign of a post-scarcity economy

I came across The Minimalist Plate, yet another blog devoted to getting rid of clutter.

The Google Ngram Viewer shows how the word “clutter” exploded in use in the 20th century.

And no, “clutter” is not a newly invented modern word, it has existed in the English language for a long time. In the Webster 1828 dictionary, clutter means the same thing as it does today. It’s just that in the 19th century, people didn’t have enough stuff for clutter to become a problem worth mentioning in books.

It’s a sign of post-scarcity that stuff is so cheap that getting rid of it is a bigger problem for most Americans than acquiring it in the first place.

* * *

maryk writes in a comment:

There are tons of books out there about how to “de-clutter.” But don’t buy more than one or two or you’ll make the problem worse before you make it better.

I am never again going to buy another dead-tree book, they just take up too much space, and it was so emotionally painful throwing out hundreds of books from my childhood and younger adulthood.

Written by Lion of the Blogosphere

December 22, 2017 at EDT am

Posted in Economics

Where does all that increased earnings and productivity go?

The forty-hour workweek became a thing in the early 20th Century. Eighty years since the New Deal, and productivity has massively increased, so why do we still have to work 40 hours per week? On top of that, there has been a large increase in female labor force participation. And for many white-collar workers who don’t get paid overtime, 40 hours is considered a light week. So in aggregate we are working a lot more hours than we did in technologically primitive times.

Where are all of the extra earnings going for all that high productivity work going?

1. Cost disease

2. Positional goods. A house (or apartment or condo) in a “good” neighborhood is the most expensive positional good.

3. Goods and services that were once considered luxuries or didn’t even exist at all, but are now considered essential to live a normal life. Here’s a list of some:

Car + car insurance
Clothes washer & dryer
Air conditioning
Microwave
Television
Smartphone
Computer and internet

Plus the following services are possibly candidates for this:

College
Health insurance

There’s a lot of overlap between the three categories. Some of the goods and services listed above definitely have intrinsic value, but also to an extent they are required because everyone else has one, and society has changed because of that.

The last two services on the list, college and health insurance, have been the most affected by cost disease.

College, I believe, is mostly a positional good. The labor force has changed such that today you probably can’t get a decent paying job, and almost certainly can’t get a self-actualizing career, without a degree. Society has changed, turning something that’s intrinsically not worth that much money into a necessity.

So there’s an economic rule to be gotten out of this. When real per-capita income increases, it gets entirely eaten up by increasing prices for positional goods and cost disease, plus occasionally some new product becomes a “necessity” because everyone else now has one.

Thus, we can predict the futility of tax cuts (everyone has more money, so certain “necessary” things go up in price as a result, eating up all of the money from the tax cut), and the negative-sum effect of increasing labor-force participation.

Written by Lion of the Blogosphere

December 13, 2017 at EDT pm

Posted in Economics

Economic transcendence and the singularity

The singularity is the time in the future when computer intelligence becomes more capable than human intelligence. By definition, this means that computers would be able to do any work that humans normally do, and robots powered by singularity-level computing power would make human labor superfluous and there would be an infinite amount of goods and services for humans to consume (because robot would build more robots), limited only by the planet’s available resources.

However, economic transcendence could also happen before the singularity happens. Computer automation could still make most human jobs unnecessary even if the computers aren’t more intelligent than humans. For example, self-driving cars will put the 3 million people (1% of the population) who work as drivers out of work, even though the self-driving cars themselves aren’t as smart as humans.

Written by Lion of the Blogosphere

December 12, 2017 at EDT am

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