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OldGimletEye

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About OldGimletEye

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  1. I agree that austerity is generally not a good idea during an economic downturn, particularly during a liquidity trap or zero lower bound scenario. During this scenario extra spending doesn't "crowd out" investment, more likely it "crowds it in". But, once you've reached full employment, then your choices are to cut back spending or raise the policy rate (which means ex-post inflation should be hitting a specified inflation target, more or less). Under a full employment scenario, raising the policy rate will cause crowding out. So your best choice is to run lower deficits. Since most economies grow over time, you're right that is a more relative thing than an absolute thing.
  2. There would be nothing wrong with an inflation target of 4-5%, versus 3-4%. Reasonable minds can disagree on which choice is better (assuming you've decided on raising the inflation target as opposed to price level or NGDP targeting). More importantly, whatever target is picked, is to make sure that target stays anchored. In recessions, that means more aggressive fiscal/monetary policy. During good times, that means tightening fiscal/monetary policy.
  3. Just to be clear about my views on inflation. I assume most people's inflation expectations are in align with the FED's target rate of 2%. When ex-post inflation falls below expected inflation, it is strong evidence that aggregate demand is weak, according monetary/fiscal policy is needed. There is a good case the FED should raise its target rate, to say 3% or 4% because that makes more unlikely that we will hit a liquidity trap. The Central Bank shouldn't worry about overshooting inflation, so long as it maintains its target on average. Whatever target the Central Bank picks, it is important that it hit that target, on average, anchoring inflation expectations. When inflation expectations become unanchored and wildly fluctuate, the result isn't pretty.
  4. Don't worry, I don't think I'm proposing anything as radical as you might suppose. I imagine a lot people get started saving for their retirement, because of employer contribution matching. One idea, then, might be giving gig workers, under a certain income, matching contributions to their savings. Or maybe, eliminating the tax benefits for employer contribution matching (like healthcare tax benefits, its not "free". It comes out of somebody's butt, one way or another). A big problem, is simply people are hesitant to save early, They hear about the likes Bernie Madoff, and Enron, and the whole investing process seems mystifying and full of charlatans. Given most people are at least somewhat loss averse, no wonder they are hesitant. We need to figure out someway to make the whole process less mystifying for the average person. Many smart people don't know the difference between a nominal return and a real return. Or they don't understand diversification. Anyway, there is more than one way to solve this problem. But, it is problem we need to figure out, as people live longer and more of them might be gig workers during their lifetimes.
  5. Yes, this is true. Other than making healthcare accessible to everyone, whether they are an employee or independent contractor, another area I think that needs to be fixed is pensions. I'm afraid some of these people in gig work won't or are not saving enough so they can retire at a reasonable age. There are a related set of issues here which include 1) low wages for some people, 2) public policy, and 3) the ability to separate good advice from bullshit when it comes to investment choices.
  6. I don't think independent workers and employed workers have to be at each others throats. For example, one of the reasons I'd like to yank the employer sponsored health insurance system is to help those in the "gig economy". Employer sponsored health insurance in my opinion gives employers more bargaining power. Making independent work look more attractive should help employees have more bargaining power.
  7. What leaves me extremely exasperated and frustrated with the the current left is it continually pushing this idea that "objectivity" doesn't exist, while at the same time certain left wing characters who push this idea have no problem making objective type claims. Where told by certain sorts of people that "objectivity is bullshit" or it is dead, but these same characters have no problem making extremely strong claims. Where told by the left it is the "Party of Science" while at the same time it is telling people that the scientific method was a western plot to hoodwink others. They think they are doing something new, but fact is that their arguments are similar to the religious right in the 1980s. If objectivity doesn't exist, then why on Earth should anybody on the right accept the left's claims? This is a question that many on the intellectual left won't answer. It is probably true that nobody is completely neutral. But, neutrality and objectivity aren't the same. The fact that most people aren't neutral isn't a license to say whatever in the hell somebody wants, ignoring facts, data, and basic logic. In addition, I don't give a whole lot of weight to "lived experience", which many on the current left see as the epistemological gold standard. When Bernie Marcus runs around saying that based on his conservative "lived experience" corporate tax cuts are economic manna from heaven, I don't give it much credence. From Marcus's vantage point (not to mention self interest), Trump's corporate tax cut might make sense, but I prefer to look at through general equilibrium theory and empirical evidence (which admittedly is limited).
  8. There is a joke about the guy who hires a plumber, the plumber finishes his work, and then hands the guy the bill. The guy says, "Man, I'm a lawyer and I don't even charge that!". The plumber looks at him says, "neither did I when I was a lawyer."
  9. In theory they are so supposed to represent the interest of shareholders. How that works in practice is a different question.
  10. I'm entirely aware of how it works (or how it is supposed to at least). But, generally, I think corporate boards are a mess, at least in the United States.
  11. I thought we usually called that the "corporate board". And when all your friends are on the board, who needs unions?
  12. Personally, I don't think a law would be necessary, as UHC would give employees more bargaining power in wage negotiations, as you pointed out. That and for a given level of aggregate demand, employers would have incentive to maintain their output, which would tend to drive up wages paid in cash. I fail to see it too. In fact, it would likely give employees greater bargaining power. To make a point, I wrote down some equations, which made the simplification that firms don't control wage setting, but instead take wages as given. But, that is not quite how it works. Most firms have a degree of bargaining power, largely due to informational problems in the labor market that causes it to depart from the completive ideal. The firm will take into account its estimated value of the new employee. The employee will take into account his outside options, which will be influenced by the state of the labor market and his ability to obtain benefits like healthcare. Firms like Google and Microsoft likely collect economic rents because of the intellectual property they hold and because what is called "network effects". You can think of employer/employee bargaining as trying to divide up these economic rents. The better bargaining power an employee has, because he has credible outside threats, the more likely he is to capture these economic rents.
  13. Employers being able to offer healthcare might make it easier for them to get full time employees, but its not clear to me how that makes having full time employees any less desirable from a firm's point of view. There are potentially a number of reasons, why companies prefer long term arrangements with employees, rather than going to the "spot market" to hire labor when needed. One is the potential variability in employee ability or skills. Another is those many jobs have specific skills to that job that a employee has to learn and becomes more proficient at as he does his job. Another reason is the fixed cost of finding a suitable employee for a particular position. In so far, as big firms having more trouble retaining suitable employees, without providing healthcare benefits, that is not a bad thing, and would likely boost employee wages. Without the issue of healthcare, some employees might decided to work for themselves or start their own firms. Others might opt to go to other and smaller firms. Not trying to be mean, but competition against a giant like Microsoft or Google is actually a good thing.
  14. This is rather a confused point. Surely, you know, that I know that the state of the business cycle will affect the level of employment and wages. If employer sponsored healthcare goes away, and then on the next day there is a financial crises, that leads to a depression, then yeah were not going to see a rise in cash wages. But no matter how compensation is structured, and economic downturn is likely to have a negative effect on it. But, eventually economies do recover (of course the exact policies enacted will determine how long it takes). A number of factors can affect economic outcomes, this why I kept writing "ceteris paribus", or "all things being equal". And its the reason, why when running a regression, a number of control variables go into a model. Its a point worth of the Republican Party. Its akin to trying to determine what the fiscal multiplier is, without taking into account the general business cycle. If you don't account for it, you would likely end up with a misleading conclusion.
  15. Huh? The only reason firms want to keep people is to pay them healthcare benefits? Why exactly does the firm care if it pays healthcare benefits, other then the fact that employees will tend to take lower compensation because of the tax benefits to employer sponsored healthcare?
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