(no subject)
maxgoof made a really cogent and well-organized post explaining why the minimum wage will increase inflation. I responded as follows:
=====
The amazing thing is that this is really basic economics, and yet it's remarkably hard to convince people that it's true, and essentially inevitable. The usual response I get from Obama's supporters is "History doesn't prove this," despite the fact that (1) history does prove it, and has shown it repeatedly to be true, and (2) given how simple the economic principle, it's difficult to understand exactly how things might be expected to work differently
Part of the reason why is that it feeds into envy: of course the rich companies are keeping too much of their money in profits and of course things would be better, especially for the poor, if the greedy rich were forced to pay out more of their monies in wages. It's hard for people to understand -- mostly because they don't want to understand, that the "greedy rich" make purchasing decisions essentially the same way that you and I do, and the supply and demand curve works the same for them as it does for us. It also comforts people to believe that we haven't been massively malinvesting for years now, that much of this malinvestment won't have to be liquidated with the attendant despair and suffering, and that there is some huge pool of wealth kept (in Money Bins?) by those people, which if only liberated would enrich us all. Because the reality is so much more depressing.
The words I'm hearing from Obama supporters reek of desperate denial as a bubble is about to burst. "No," they say, "raising the minimum wage doesn't have to raise unemployment. Massive inflation is not inevitable, we just have to raise taxes and we'll have all the money we need to pay off the deficit, and we'd be doing it too if only those Evil Republicans weren't blocking Obama."
They're living in a fantasy world. We're about to suffer a major recession on top of a major recession, at which point we will be squarely into the Second Great Depression. And they can't see it because they don't want to see it.
=====
The amazing thing is that this is really basic economics, and yet it's remarkably hard to convince people that it's true, and essentially inevitable. The usual response I get from Obama's supporters is "History doesn't prove this," despite the fact that (1) history does prove it, and has shown it repeatedly to be true, and (2) given how simple the economic principle, it's difficult to understand exactly how things might be expected to work differently
Part of the reason why is that it feeds into envy: of course the rich companies are keeping too much of their money in profits and of course things would be better, especially for the poor, if the greedy rich were forced to pay out more of their monies in wages. It's hard for people to understand -- mostly because they don't want to understand, that the "greedy rich" make purchasing decisions essentially the same way that you and I do, and the supply and demand curve works the same for them as it does for us. It also comforts people to believe that we haven't been massively malinvesting for years now, that much of this malinvestment won't have to be liquidated with the attendant despair and suffering, and that there is some huge pool of wealth kept (in Money Bins?) by those people, which if only liberated would enrich us all. Because the reality is so much more depressing.
The words I'm hearing from Obama supporters reek of desperate denial as a bubble is about to burst. "No," they say, "raising the minimum wage doesn't have to raise unemployment. Massive inflation is not inevitable, we just have to raise taxes and we'll have all the money we need to pay off the deficit, and we'd be doing it too if only those Evil Republicans weren't blocking Obama."
They're living in a fantasy world. We're about to suffer a major recession on top of a major recession, at which point we will be squarely into the Second Great Depression. And they can't see it because they don't want to see it.