AngrySkillzz

Every HN thread on economics has a bunch of comments like these that are earnestly misinformed about economics. When commenting on something outside of your wheelhouse, please recall Socrates from the Apology: "I observed that even the good artisans fell into the same error as the poets; because they were good workmen they thought that they also knew all sorts of high matters, and this defect in them overshadowed their wisdom."

I'll point out just two deficiencies in these threads and leave the rest to you. If P/E ratios in the US are "too high," then people would invest their money elsewhere for better return, right? Maybe international stocks or bonds or whatever. And why don't they, if they have every incentive to seek a better return? Because there are no better returns, even in countries with higher interest rates. So how could P/E ratios be too high? The more likely explanation is that this is the "new normal" - savings outpaces investment opportunities for many reasons (aging populations, growth in countries with stronger saving cultures, etc.), which pushes up the premium on assets.

Second, on the subject of interest rates and QE, a little international perspective would make you reconsider the effect on the overall economy. All other developed economies have lower interest rates, more QE, and slower growth than the US. Look at Europe, look at Japan. The issues of "why are asset prices rising" and "why is inflation low" are much larger than just US policy. We are talking global trade and demographic factors that influence these things. The current stance of fiscal and monetary policy is the symptom, not the cause. And in fact the US has been significantly more successful than our counterparts on that topic, as a fast and strong response in 2008 pre-empted the kind of drawn out economic malaise seen in Europe, where the ECB waited years before easing policy to the degree that we had. Now Europe has lower rates, more QE, lower inflation, a worse labor market, and less growth than the US. And that's before factoring in the coronavirus crisis. Policy may have increased inequality in some ways, but if you're going to make that claim you have to also answer the corresponding counter-factual: potentially the poor would have been even worse off (relative to the rich) if there were no policy interventions and the labor market collapsed. There have been some papers on the topic, and it is not at all obvious that inequality is worse now than it would have been if there was less policy intervention.

Which part is incorrect? No offense intended, but I may have a more thorough/more recent understanding of the topic than you do.

Banks have not been reserve constrained in at least a decade, the 0% reserve requirement is a red herring. Other countries have had 0% reserves for a long time. Banks are constrained in lending by regulatory capital requirements (see Basel III), stress test requirements (in the US), and their own risk tolerance.

No. Look at the papers about QE from the financial crisis. Increases in bank reserves had very little effect on consumer price inflation. Even with large scale monetary intervention, we haven't seen significant inflation in any developed economy in decades. There are many reasons for this (decreased wage-push inflation from weaker labor unions, wealth inequality, trade, structural and demographic factors, etc).

Someone else on this post commented on the potential for a bifurcated inflation system, where some goods and services (and assets) are sensitive to local currency, inequality, and labor market conditions and others (e.g. imported goods) are more sensitive to other factors. This is a reasonable hypothesis but last I checked the evidence is not all there yet.

Not really. Look at what happened in 2008. The Fed's LSAPs significantly increased the money supply with no feedthrough to inflation or a weaker dollar. The inflation process is much more complicated than laypeople tend to think. Weaker labor unions, wealth inequality, trade, demographic factors, etc. all contribute to the weakening of the linkage between increases in the money supply and the inflation rate/dollar strength.

One of the reasons for the monetary stimulus is that in a crisis, everyone wants dollars. Which is why the dollar continues to strengthen despite all of those efforts. Additionally, significant portions of the stimulus (repo, dollar swap lines, etc.) are unwound naturally and automatically as the crisis abates. So it's not like the money sticks around to weaken the currency.

Also, increasing bank reserves from monetary policy doesn't tend to increase lending one-for-one as banks have not been reserve constrained in a long time. Lending is dominated by capital requirements and risk tolerance. So asset purchases lead to increased reserve levels, which strengthens financial conditions and increases lending (and thus Main Street consumption and investment) somewhat, but it's not like $2 trillion of monetary stimulus => $2 trillion of ketchup bought off the shelf.

No, it is not at all obvious. Read up on the papers written about QE after the 2008 crisis. Monetary base increases significantly but the money multiplier falls in tandem. The net effect is that the price level is not strongly impacted by this type of program, outside of pre-empting deflation by providing liquidity to counter a potential fall in economic activity due to seizing credit markets.

See also "banks don't lend out reserves." The linkage from "cash" (i.e. bank reserves) to the market price level of goods is not very strong.

Not "buying crap," we are talking fallen angels AKA companies that were previously rated investment grade that have been downgraded due to the crisis. "... rated at least BBB-/Baa3 as of March 22, 2020 ..." in the press release. It's not like the Fed is buying WeWork bonds, just closing a loophole in the previous investment grade bond buying facility to cover bonds that were recently downgraded. Which is kind of the point, extending credit to otherwise-strong firms that are impacted by the social distancing measures.

Fed does not have the authority to do that, per se. Fiscal stimulus is congress and the Treasury's job. Monetary policy is a completely different thing. The Fed is already buying Treasury bonds, which are in part being used to fund the direct stimulus measures in the form of PPP grants/loans, unemployment payments, and the $1200 check. In addition to buying PPP loans themselves. So the current situation is about as close to what you are suggesting as is legally possible.

There's no justification for it, people are just speculating. The BoJ buys equities because of long-term structural issues with the Japanese economy (e.g. low birthrate, low immigration, aging population) that cause deflationary pressures in all asset classes. The current situation in the US is nothing of the sort.

Twin Oaks already does this - they grow most of their own food, have a few external businesses, and I'm pretty sure a few of their members have external jobs (at least one of which is a programmer, if I remember). They practice "income sharing," so all money goes into a common pool and is spent on the needs of the community.

It's not that profound. Both networks form through "preferential attachment." Large networks of galaxies form because gravity causes the largest conglomerations to get larger. Similarly, neurons are more likely to connect to other neurons that already have a large number of connections. It's the same principle exhibited by different mechanisms; also the reason social networks look the way they do. See Barabasi-Albert model, preferential attachment, and scale-free networks.

U-3 is the commonly published "unemployment rate," aka the thing that is currently 4.4%. I don't think many people actually looks at U-1. You can get a better picture by looking at U-5 or U-6 together with the participation rate (LFPR).

Sorry but that's not true at all. You are counted as unemployed if you do not have a job and are actively looking for work. There is no "cut-off." Look up the definition at the BLS, there is no excuse for spreading this crap through laziness.

If you stop looking for jobs you are not considered unemployed as someone not actively seeking work is not considered to be in the labor force. That is a different issue entirely and you will have to look at a different statistic. There are different types of "unemployment rate" and maybe what you want is U-4 or U-5 which include discouraged workers. Either way you can not expect a single number to encapsulate something as large and complex as the US labor market.

Google is scary bad at providing accurate information and I think it's a big problem, skewing people's view of the world. Just search anything related to nutrition, supplements, medicine, etc. and you'll see that most of the top results are from crank blogs, "alternative medicine" websites, or otherwise sources with no basis in fact. And if you don't know much about how culture happens on the Internet, you might be satisfied just to click on the first few and accept that information as truth. Scary stuff.

They are trying to gaslight us. Foreign powers want to misinform and distract the public in democracies; a misinformed populace puts pressure on elected governments to govern poorly. If democratic governments flounder because of this, that gives authoritarians an opportunity to get more power and influence over world politics.

Not to say that western nations aren't engaged in their own information operations. Just that it is asymmetric warfare, authoritarian regimes have a lot less to fear from a misinformed or disengaged public.

Pushing an agenda is one thing if the person is doing it in good faith, even if I think their ideas are bad or not supported by evidence. In all likelihood there are large scale information operations going on with world powers trying to subvert each other's populations.

The really sinister thing is that we have paid, bad faith actors whose full time jobs are to spread misinformation and shape narratives online. There is just no way you and I, amateurs commenting sporadically in our free time, have the resources to combat armies of paid trolls.

I spent a lot of time thinking about it this weekend and it sounds bleak. Not only do they spread misinformation, the presence of bad faith actors in social spaces causes a breakdown in trust between all participants, leading to less dialogue and more polarization. Why bother debating me if I might be a paid agent from Belarus? Why bother investigating claims from the other side of an issue if there's a good chance it is paid propaganda? Meanwhile leaving yourself vulnerable to propaganda on your own side that increases group identity and groupthink.

Even worse, bad actors can start trends or spread falsehoods that end up motivating and encouraging good faith actors. There are plenty of people who have been caught up in an information operation, unwittingly propagating and defending someone else's manufactured data. That's scary.

Authoritarian regimes have much less to fear from this. If we disrupt public opinion in China, who cares? They don't really need public consent to do anything. Manipulating the public in democracies will lead to poor decisions and bad governance, giving authoritarian countries ample opportunities to seize more power on the world stage. We can't even fight back effectively.

I was not quite precise saying it is self-reported; it was measured through a 10 item questionnaire that is self reported. Still, it's not watertight (as is often the case in psychology research). I'm just encouraging you to consider that your view may be flawed or incomplete, that's all.

Interestingly, that is the opposite of what I've seen in the scientific literature.

Trait self-control seems to better relate to removing temptations from our lives via planning rather than having a high threshold for resistance. People who identify as "having good self-control" tend to have fewer strong desires and weaker resistance. Tellingly, trait self-control also doesn't seem to change the relationship between resistance and enactment. So people with self-control are just as likely to succumb to temptation when it is present, but less likely to be confronted by temptation in the first place.

Check out Hofmann et al. Everyday Temptations for an example (2011).

Reading is fundamental. 0.6 on a rate of 6.2. That's roughly 10%. What would you do if your savings was 10% larger?

Sorry, these jokes aren't funny anymore.

A lot of people would say that, actually. World leaders throughout history have always picked up religions, ideologies as a way to get additional support, not because it's something they believe in or want implemented.

A man who literally said the worst thing about the KKK was that they smoke weed.

It does not mean always as in "the same voter every time." What it means is that if more than two voters have a preference ranking which is digested by a social choice function, the outcome should not be exactly the same as any individual voter. I argue that doesn't make any sense, because there are plenty of situations where the best choice of ranking might coincide with the preferences of a particular voter, completely by coincidence.

Nice low-effort comment punk.

The electoral college was created as a part of the three fifths compromise. In order to get southern states on board, the framers needed to find a clever way to count slaves as population without letting them vote. Three-fifths plus the electoral college let them do that. It's an ugly hack that should be patched.

And don't give me any of that "republic" crap. As if anyone has any idea who their electors are, or cares. No voter honestly thinks they are selecting an elector qualified to relay popular opinion to the government. They're voting for the president.

The EC was imagined in an era where people thought the government would be more a federation of states than a central government. That is not what we have today. The system does not make sense in the current context.

Maybe you'll play the "regional interests" card. Sure. Is it any more fair that a minority candidate can be elected by the less populous states, rather than having a majority candidate elected by the more populous states? No. It's a facile argument that falls apart with any examination.

Given the poor modern justification for the EC, and all of the negative externalities it causes (election of less popular candidates, voter suppression and apathy in partisan states, etc.), it deserves to be abolished.

No one is saying that campaigns and voting behavior wouldn't change. Just that the electoral college is a ridiculous system in the first place and should be gotten rid of.

Exactly. This is why Arrow's theorem has no applicability to practical use of voting systems in the real world. The dictatorship property is often misinterpreted.

You have to look very closely at what the definition of "flawed" is. The dictator rule in Arrow's thm is not what it is commonly portrayed to be. All it says is that there should be no voter whose preferences are the same as those produced by the choice function. That doesn't really sound all that objectionable. Often people word the dictator rule as "one person decides the outcome" but that is not what it is at all.

And like the other response said, the fact that no scheme is "perfect" doesn't mean all schemes are equally flawed.

That's nice. Wanna talk about it?

Even worse, the only reasons the mid-century was so great in America are 1) we had all the gold (from exporting during WW2), and 2) the productive capacity of most other developed countries was completely destroyed (by WW2). Even if globalization and automation were not issues, there would still be no way of life to go back to.

Not true on food.[1] CPI for food has fallen off a cliff in the last year+ compared to core CPI (ex food and energy). It is even negative currently, so yes food prices are decreasing. It seems to have been moderately lower on net since the end of the great recession.

[1] http://imgur.com/a/p0ELF