Comment by artificialLimbs | Hacker News Reader

Comment by artificialLimbs | Hacker News Reader

artificialLimbs

Inflation will potentially reduce the US to a third world country. I'm not saying it's bad that they are getting raises at this sawmill, but this article is brushing aside much broader implications and paints nothing but rosy pictures of what's going on at a higher level. When you have to pay employees more, costs go up. When costs go up, prices go up. When prices go up, people get poorer. This lesson has played out in history innumerable times.

>> Everything is cyclical, so I don’t know how long it will last.

Right up until the bread runs out, boo.

>> The demand is for middle income and upscale housing, Hill said.

Because people with a bit of money stashed away that can are fleeing the highly populated areas due to pricing insanity.

>> Perhaps just as important is that those hard-working sawmill workers may find life a little easier and the stresses that lead to poverty and crime and all other sorts of societal ills may be relieved a bit.

This... is not generally how gaining more and more external population works.

This whole article is contrived euphoric delusion.

There are plenty of countries that have higher minimum wages than the US and don't experience greater inflation. One reason is that the money for these higher wages comes not from higher prices, but from executive and investor compensation. If workers have more leverage and companies compete in a competitive market then prices can stay low by cutting fat from above to feed those below.

That higher wages == inflation is a self serving argument that only gets rolled out when those wages are blue collar wages. You don't see it applied to the ridiculous amounts of money the managerial and investor classes earn.

The 50's and 60's saw modest inflation and rapid wage increases. Workers had more leverage and the US wasn't nearly as unequal.

It's funny how inflation is blamed on increases in the salaries of the lowest-earning folk. This in an age of record high corporate profits, stock market highs, and massive concentrations of wealth.

Inflation will potentially reduce the US to a third world country.

America is already a third world country. https://www.rollingstone.com/politics/politics-news/six-ways...

> America is already a third world country.

The first/second/third world distinction is pretty irrelevant these days, but the US is unalterably a first-world country in it.

You can't just say somewhere is a first world country. You have to look at it and see what life is like there. America is only a nice place for the rich. For everyone else it sucks. That is not true for most other first world developed countries. Practically every metric demonstrates that very clearly.

The term "first world" comes from the separation of countries aligned with the USA (first world), the communist countries (second world) and whatever remained (third world). Its origins have little to do with wealth or social development.

South Africa and Morocco aren't exactly the wealthiest countries in the world, but they're still decidedly first world. Ireland and Sweden are third world countries, despite their relative wealth.

Now that the second world has mostly fallen or become capitalist, the term "third world" is often used to refer to developing nations (which is silly, as if not aligning with the USA inherently makes you poor) but its origins explicitly make it impossible for the USA to be part of anything other than the first world.

And let's be honest, even with its terrible labour laws, unmaintainable healthcare system, two-party political system and income inequality inequality, the USA is still far ahead of the developing nations people call "third world". Compare the poor American states to the poor European countries and the USA still comes out ahead on average. America is a country of extremes, where the rich are extremely rich and the poor are extremely poor, especially given the wealth that surrounds them. I'd much rather be homeless in Europe than be homeless in the USA, but being middle class in most of Europe leaves you more budget constrained than being middle class in much of the USA.

I am genuinely curious: you seem unhappy with the economic circumstances presented in the article (and in the country in general), so what is your preferred alternative in terms of policy and outcomes?

Complain until hungry people kill him and take his stuff, I'd wager.

Conservatives have thousands of years of history to look to and see that pattern play out over and over again, and yet they think it'll be different this time if only they implement this one weird trick.

Unfortunately it really is that simple. Wealth concentrates and people revolt. So if you don't want the revolt either give away your wealth or let the wealth erode slowly over time (higher wages eat away at relative wealth).

> Inflation will potentially reduce the US to a third world country.

While the US may well get there, is there a reason to believe inflation will drive it, rather than any number of other idiotic foot-guns your leaders seem determined to apply?

>When prices go up, people get poorer. This lesson has played out in history innumerable times.

Your hypothesis doesn't make any sense when looking at the entire history of the dollar. Most of the economic growth happened during years of moderate 3-5% inflation and people have gotten richer over the last two centuries.

If you pay spherical cows in a vacuum really high wages, then sure, you're completely right.

But a lot of models have funny behavior when you get closer to the edges.

I think you can intuit that if you pay people some amount they actually work more efficiently because they're happier and healthier and better fed and better educated. Of course if you pay them a very large amount, the efficiency gains per dollar will likely drop off again because there's only so much a person can improve themselves (as per your intuition before) .

So it turns out you're really dealing with an optimization problem.

I think a lot of people just assume the model behavior is linear and end up picking a point far too low down on the curve.

(People have had some clue for a long time though: consider the saying "Penny wise, pound foolish")

>I think you can intuit that if you pay people some amount they actually work more efficiently because they're happier and healthier and better fed and better educated. Of course if you pay them a very large amount, the efficiency gains per dollar will likely drop off again because there's only so much a person can improve themselves (as per your intuition before) .

Those two are the income and substitution effect. Unsurprisingly better compensated individuals tend to work more not less.

https://youtu.be/8Pk654J8-5c

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