He wrote a comment to clarify his position after my post on him. He seems to think that the MW is why we have lots of people out of work.
"The state of nature - is that many people can't survive on their own. That's basic Hobbs Locke etc.
If you ADD IN TO NATURE we are social creatures and have social commitments - which I do - then we recognize people can't survive on their own and we will commit to help them.BUT NOW we have to ADMIT we are HELPING THEM WHEN WE PRICE THEIR LABOR."
"We are spending basically $500B on non-medical welfare this year.And we have 30M+ unemployed. When we set the "Minimum Wage" OUR GOAL IS NO LONGER TO PAY PEOPLE A LIVING WAGE. I repeat: your PROBLEM, is that you hear or think the idea of "Living Wage" and you have a positive happy Pavlovian non-critical feeling that says YES! WE WANT PEOPLE TO HAVE THAT!!!"
"And because you are not thinking critically you say silly things about Minimum Wage:
"I'd argue that when we had a higher MW more people were indeed able to earn enough."
"Saxie you get it wrong here.IF we got rid of the social commitment - IF we didn't spend $500B this year in welfare - wages would be higher WITHOUT ANY MINIMUM WAGE."
"WHY???? Because while yes we would have some people, many people, who no longer could have the 2 bedroom heat hot water, etc."
"We would also have people demanding higher wages SO THEY CAN EAT. What do you liberals always say about Walmart? They are underpaying bc their employees are on welfare!!!"
"At the macro level, when we stop paying taxes to cover welfare, that extra money goes to higher prices to pay people at Walmart more money."
http://diaryofarepublicanhater.blogspot.com/2014/03/morgan-warstler-on-keynes.html
"The state of nature - is that many people can't survive on their own. That's basic Hobbs Locke etc.
If you ADD IN TO NATURE we are social creatures and have social commitments - which I do - then we recognize people can't survive on their own and we will commit to help them.BUT NOW we have to ADMIT we are HELPING THEM WHEN WE PRICE THEIR LABOR."
"We are spending basically $500B on non-medical welfare this year.And we have 30M+ unemployed. When we set the "Minimum Wage" OUR GOAL IS NO LONGER TO PAY PEOPLE A LIVING WAGE. I repeat: your PROBLEM, is that you hear or think the idea of "Living Wage" and you have a positive happy Pavlovian non-critical feeling that says YES! WE WANT PEOPLE TO HAVE THAT!!!"
"And because you are not thinking critically you say silly things about Minimum Wage:
"I'd argue that when we had a higher MW more people were indeed able to earn enough."
"Saxie you get it wrong here.IF we got rid of the social commitment - IF we didn't spend $500B this year in welfare - wages would be higher WITHOUT ANY MINIMUM WAGE."
"WHY???? Because while yes we would have some people, many people, who no longer could have the 2 bedroom heat hot water, etc."
"We would also have people demanding higher wages SO THEY CAN EAT. What do you liberals always say about Walmart? They are underpaying bc their employees are on welfare!!!"
"At the macro level, when we stop paying taxes to cover welfare, that extra money goes to higher prices to pay people at Walmart more money."
http://diaryofarepublicanhater.blogspot.com/2014/03/morgan-warstler-on-keynes.html
Morgan here says I'm wrong here but seems to miss that I'm making an empirical point. We used to have a much higher MW and we had a lot less unemployment. I mean in 1969 we had a MW that factored in for inflation and productivity was $16 an hour. I don't think I have to say anything more-obviously we had much lower uenmployment then than now.
I think Morgan is almost right here about walmart underpaying their employees to be on welfare. I'd say that the whole point of say the Earned Income Credit is to make it possible to Walmart. It's a wage subsidy alright-for Wallmart. The Govt in that sense is subsidizing low wages. Ok causation doesn't cinch causality but we had much higher employment when we had a minimum wage 45% higher. Again, did we have a workers' utopia prior to FDR passing the MW in the 30s-quite the opposite. It's these historical facts Morgan seems to avoid looking at. I get that today a lot of people can't live on their own. Why was this not the case during the time when the MW was very high?
Saxie,
ReplyDeleteYou are close, so here's last point.
TODAY IS NOT YESTERDAY.
What used to happen, cannot happen again.
This is what Summers and DeKrugman and Secular Stagnation are stumbling around, describing. This is WHY so may are screaming about Guaranteed Income.
This is Tyler Cowen noting that there are MORE Zero Marginal Product workers every year.
It's because we have a digital global economy. We only need 57 employees to build WhatsApp.
So now you have ALL the pieces, you have no excuses.
You know today is not yesterday, so what used to be - is no longer going to be.
You can imagine having 50%+ of our population in the future not being able to earn their own way.
So now we can say IF Saxie accepts these two ideas might be true, THEN the WAY to provide social commitment is to FORGET ABOUT LIVING WAGE / MINIMUM WAGE.
Look, man STOP worrying about wages and FOCUS on consumption.
If we do GI/CYB the poor get to consume more immeidately.
And once GI?CYB is in place, when you and the left want to increase consumption, you DO NOT HAVE TO ARGUE ABOUT MINIMUM WAGE!!!
You don't have to fight conservative economists, you just want to INCREASE the Social Commitment.
By moving to GI/CYB - you are GRANTING that people are not worth a living wage!
You are arguing they are worth a Social commitment.
And that is a EASIER argument for you to win.
Interesting Morgan,
DeleteTell me though, have your thoughts on our econ problems and their solutions evolved some over the last 4-5 years? I've been reading your comments for about that long and I distinctly remember you making a claim (on Sumners site I think) that we needed to REDUCE consumption on the macro level, in order for savings to increase ( I believe that was your point if I remember correctly).
This comment at least recognizes the folly of that position. Whether its for Social commitment reason or for pure economic reasons asking people to allow the poor to consume more seems quite at odds with a conservative position. Most conservatives will not be in favor of anything that allows THEM to consume more if it doesn't get some work out of them too.
The social commitment argument will fail with conservatives when the commitment is to THEM!!
I suspect you know this already and this is therefore a feature not a bug in your argument.
Abolishing a min wage and relying on the social commitment of conservatives to help "others" is a bad deal for the "others". Always has been
Greg, there's bunch here to unpack. First I've always been and always will be in favor of consumption increases. But I want those to come from productivity gains, from technology gains, from entrepreneurial innovation not from debt spending.
DeleteThe main thing to get over is that today is not yesterday.
Once you are over that hump there is a ton of upside, namely that there is no digital scarcity and there can be no digital ownership.
Let's use teachers as an example. I come at it 100% sure that sooner than later, it will be IMPOSSIBLE for live humans teachers, no matter who they are to out perform the video / game, flipped classroom model of evergreen content.
meaning a Econ 101 online class will be better able to teach 99.99% of the students complete grasp of material int he shortest amount of time.
This doesn't mean each kid learns it as fast as the other, it means that any given kid, no human teacher will be able to teach the material in 29 days, when the online class can do it in 30.
And that digital thing will be, should ought be free, nearly free.
Telecommuting will trump offices, mobile government will trump govt. so no more federal debt, no more commercial mortgage paper, no more SAFE INVESTMENTS.
Digital companies don't use debt, they sell equity in themselves.
Now do I prefer to reduce atomic consumption and increase digital consumption as fast as possible? yes.
BTW, the big change with me is that when I met Sumner, I was of the opinion that the GOP ought to spend all the money run up huge debts, and leave them to the Dems to clean up. As such, i was against any extra printing.
Even now I am very happy to see greece having to have its first current account balance in 150 years.
This is because I have done biz with greeks start ups and rather than their country building their system around keeping entrepreneurs happy, they built it around statists.
So all that greek suffering is fine with me, bc it is FORCING Greece to respect the best people, who for hundreds of years have not gotten their due in that country.
BUT, Scott did convince me in Nov 2012, this was our bet, that leaving the Dems with the tab did nt ensure that they wouldn't spend even more money.
infact, Sumner was right, that not staying on NGDPLT path led directly to Obama's stimulus and the obamacare and all these things that really have to be state based systems.
Again, I'm not opposed to the argument "the poor need more stuff"
I am opposed to using that argument as a reason to increase the # of public employees or public employee pay.
In fact I'm WILLING to give the poor and middle class every single dollar that comes from cutting the cost of govt. administration.
And it is no small amount, I think we can easily move $500B annually from public employees to poor and middle class via GI/CYB
Hey Morgan
DeleteThanks for the response. This feels like we are having a conversation ;-)
"First I've always been and always will be in favor of consumption increases. But I want those to come from productivity gains, from technology gains, from entrepreneurial innovation not from debt spending"
Okay, but I do think your debt spending comment needs more unpacking. You mean not form borrowing form a bank or govt deficit spending which raises public debt?
I get that the world has changed and that digitalization has made many things different. We don't need as many people to do the things that we've been doing the last century or so. I think that is a good thing. We could all be working 15 hr work weeks and playing the rest of the time so what is preventing that?
I have no doubt that you are correct about teaching, in the sense that kids may well be able to absorb and test higher for content knowledge in a shorter period of time using video/game learning but I have my doubts that this will mean we have a lot less need for human to human interface in a classroom. I think kids might be able to learn content to pass a test via that method but I don't think they will be able to fully integrate that stuff and become truly knowledgable without some interaction with another human. Preferably not just their parent either.
I don't necessarily think our goal should be to get kids at college level understanding by 12 years old. Content knowledge is only one part of education.
"And that digital thing will be, should ought be free, nearly free."
It'd be nice, verrrrrrrry unlikely though. Now you are projecting that ownership of these digital classrooms won't be in private hands.
"Now do I prefer to reduce atomic consumption and increase digital consumption as fast as possible? yes."
Just consuming more information but not more stuff?
"Even now I am very happy to see greece having to have its first current account balance in 150 years."
Why is a current account balance so important to you? Are you suggesting that every country should have current account balances at all times?
"This is because I have done biz with greeks start ups and rather than their country building their system around keeping entrepreneurs happy, they built it around statists."
Interesting take, but Greeces current accounts were imbalanced towards importing, meaning they were buying more stuff from others than they were producing. So are you suggesting that its statist to run an import business versus an export business? Are Germans automatically not statist because they net export? Seems to me plenty of entrepreneurs can be involved in either importing or exporting. The balance of trade has very little affect on whether one is entrepreneurial or not. USA is a net importer and the old USSR was a net exporter, who was more entrepreneurial? I don't get your link between entrepreneurs, balance of trade and statism. Its not as clean as you seem to be implying
"So all that greek suffering is fine with me, bc it is FORCING Greece to respect the best people, who for hundreds of years have not gotten their due in that country."
Gotten their due? Like whom?
Look, I am not opposed to looking at all public expenditures and saying "is this the right amount of compensation for the work they are doing?"...........
but this same question can be asked of everyone. I don't think corporate boards should be able to give Jamie Dimon a 100 million$ bonus either. I think we should consider a Maximum wage. Allowing people to extract as much as they can from their business leads to people trying to extract as much as they can from their business and businesses are the way we build and retain real capital in a capitalist economy. We should encourage the building and retention of real capital, not stripping it of all the value it has when you get the chance.
I know you'll have much to disagree with here, so have at it.
I think modern day Australia is a better example then USA in the 60s. They have a minimum wage that is about 16$(US). They also spend way less on "welfare" type programs AND they have universal health care and dental included in the costs of welfare. Its quite simple, Australia says "Employers, YOU fund the cost of living for people who work for you don't look to us"
ReplyDeleteTo my knowledge Australia is quite a place to live. I know no one who has been there who thinks its on the brink of being some sort of hell hole where success is penalized. (Its an admittedly very small sample of people who know me well AND have been to Australia AND have expressed their views on what a future lifestyle in Australia might look like) ;-)
Now, those who say Australia is much smaller than the US must be reminded that Australia is also much much much larger than Washington DC, where a local initiative to raise the minimum wage was met with cries that it would kill business in DC. So it really doesn't matter the scale, conservatives just hate min wages......blindly. Even when you hold out a success like Australia they find a reason to oppose it everywhere else they can.
"Let's use teachers as an example. I come at it 100% sure that sooner than later, it will be IMPOSSIBLE for live humans teachers, no matter who they are to out perform the video / game, flipped classroom model of evergreen content."
ReplyDelete"meaning a Econ 101 online class will be better able to teach 99.99% of the students complete grasp of material int he shortest amount of time."
"This doesn't mean each kid learns it as fast as the other, it means that any given kid, no human teacher will be able to teach the material in 29 days, when the online class can do it in 30."
In principle you're right. However, this doesn't mean that human teachers will be extinct. I'm always bumping into people-not to get sexist but it's very often women-who don't want to take online classes who feel they can't learn outside of the traditional structured human teacher evniornoment. I'm sure there are plenty of males like this too.
It's like in principle why does anyone go to a tax preparer when they could do it for free online? Why does H&R Block still exist? Because there are always people who will still feel too cowed by 'all that math'-I worked for H&R Block and always marveleed at how much people would p'ay to do a simple return.
However, there are always people who don't use the most efficent methods just because of how they're wired. I do think you're a little over optimistic on tech-though I love tech and want to believe in its power, I mean you're talking to someone who watched the X Files for how many years and read books like 'The Singularity is Near.'
http://www.amazon.com/Singularity-Near-Humans-Transcend-Biology-ebook/dp/B000QCSA7C/ref=sr_1_1?s=books&ie=UTF8&qid=1395487207&sr=1-1&keywords=the+singularity+is+near+by+ray+kurzweil
The reason why these women and others need to go to a physical class room is that they have a hard time learning on their own. For guys like you and me it's plausible as we are motivated learners who learn well on our own.
DeleteI mean I was talking to my brother's wife-my sister in law-and she's a teacher and what they're doing these days is making learning more and more collective-anti individual. So they learn in circles-you don't sit by yourself at your own desk.
I would have hated that. My least favorite assignments were always group projects. However, this kind of learner who can't learn without other people to help them along will always exist. As much as I want to be a Utopian I understand there are certain congenital limits to mankind as well.
"I don't necessarily think our goal should be to get kids at college level understanding by 12 years old. Content knowledge is only one part of education."
ReplyDeleteA big function of modern schools is socialization.