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Juicing the Economy by Inflating Wages


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2019 Sep 2, 3:45pm   1,526 views  16 comments

by Shaman   ➕follow (4)   💰tip   ignore  

It’s the bane of every investor: rising wages for workers. But, unlike wealthy investors, workers turn around and reinject their pay right back into the economy, creating demand for more goods and jobs and investment. Inflating wages as President Trump has done by creating a favorable business tax and regulatory climate while restricting the labor supply with enforcement of immigration laws, is the best way to grow the economy! When workers have more money they have more AGENCY to demand more rights, better working conditions, and better political representation!

Basically, all of the other bullshit means almost nothing beside the growth of the working class. As the working class gets richer, the economy grows stronger and more robust, innovation rises, and the good times roll!

Here’s a historical example. Europe during the Dark Ages was stagnant with the nobility totally controlling the working class and making of them near slaves. The Black Plague came to Europe and killed off a quarter of the people, especially hitting the working class very hard. But this created a severe worker shortage! All of a sudden, the nobles had to compete for workers to till their lands and make their goods. So they had to offer them better conditions, wages, and more rights. A rising working class led to a revival of innovation and art and prosperity in Europe that we now call the Renaissance. This movement led to such enormous advances in technology and science and culture, that Europe began to lead and conquer the rest of the world.

Today, instead of the Black Death, we have Trump. Some might prefer the plague, but the result is the same; vastly increased prosperity and a continually rising economy that is very resistant to Recession.

Don’t bet on the bears, unless the Democrats start to win. They represent the old nobility that is loathe to give up its suffocating power.
Trump is our man.
Warts and all.

https://www.breitbart.com/politics/2019/09/02/job-hopping-younger-workers-getting-big-wage-gains-says-business-center/

Comments 1 - 16 of 16        Search these comments

1   marcus   2019 Sep 2, 3:52pm  

:

Massive deficit spending is accompanied by something called "the multipier effect."

After all, all of that deficit spending goes in to the economy. Or at least the part that's not due to tax reductions to the wealthy - that gets socked away. But that's goof for the markets.

If the recession can be put off just a little longer, you will be able to blame democrats. EVen if it happens fairly soon, you can say, "oh it's the uncertainty about the possibility of democrats being elected."

You're shameless.
2   marcus   2019 Sep 2, 3:54pm  

Quigley says
Today, instead of the Black Death, we have Trump. Some might prefer the plague, but the result is the same; vastly increased prosperity and a continually rising economy that is very resistant to Recession.


Interesting fantasies. Gosh, I wonder, did you by any chance vote for Trump ?
3   Shaman   2019 Sep 2, 4:09pm  

Go ahead and keep cheerleading for a Recession. Everyone knows how much the Democrats want that. Everyone.
Sick as it is.

And deficit spending is a bipartisan problem, or did you think that Trump dictated the budget to Nancy Pelosi?
SMH
4   clambo   2019 Sep 2, 4:45pm  

It's the other way around; the economy improving means more demand for workers=higher wages (if they don't import millions of foreign workers)
5   mell   2019 Sep 2, 5:16pm  

clambo says
It's the other way around; the economy improving means more demand for workers=higher wages (if they don't import millions of foreign workers)


Agreed. You can also see that this has nothing to do with inflation that the main inflation racket, house prices, are falling. This is a real boom economy.
6   Shaman   2019 Sep 2, 5:34pm  

clambo says
It's the other way around; the economy improving means more demand for workers=higher wages (if they don't import millions of foreign workers)


What do you think an economy consists of? Mere production? Plenty of that available during 2008-9, yet we had a major Recession. And then businesses compounded the problem by first laying off millions of consumers (further depressing demand for products(and causing fear among the still employed that suppressed their consumption too)) and then companies took advantage of a tight job market and big supply of workers by squeezing every last bit of production out of the workers without offering wage gains or hiring very much. It took years of sustained growth to get out of this self-perpetuating hole, and it’s only now that the labor market is tight that we have started to see an actual boom economy. Labor must be tight to generate an actual Boom. There has never been a Boom economy in history when labor supply was at a large surplus.
7   SunnyvaleCA   2019 Sep 2, 6:50pm  

marcus says
Massive deficit spending is accompanied by something called "the multipier effect."

But that multiplier has been shown to be very small now, especially compared to what it was 5 decades ago. Maybe we should find out what would happen if the government cut the welfare, warfare, and corporate pork. One thing I'll say: That cutting will cause a spike in official unemployment figures, as people get back to trying to be productive members of society. With enough people cut government dole, I'd even guess that USA citizens will take jobs that USA citizens have historically taken and the need for off-the-books-paid illegal aliens would dry up.
8   marcus   2019 Sep 2, 6:56pm  

:
Quigley says
Go ahead and keep cheerleading for a Recession


I'm not cheering for it. But I understand that cycles exist, and I also am of the opinion that tax cuts and deficit spending extended this one.

What's sick is that republicans couldn't have planned it better if a democrat wins in 2020, becasue yes, a recession is coming.
9   Shaman   2019 Sep 2, 7:26pm  

marcus says
What's sick is that republicans couldn't have planned it better if a democrat wins in 2020, becasue yes, a recession is coming.


Two things:
1)Don’t worry about a Democrat inheriting a Recession in 2021. The President will still be Trump.
2)There will be no Recession for a while still. Five years at the least, depending on how much idiocy gets passed by the Left.
10   marcus   2019 Sep 2, 7:37pm  

:

Recessions aren't bad, they are a natural process forcing better, more efficient and productive allocation of assets and labor, and resetting market pricing (which actually helps avoid the 2008 type of situation).

What is bad though is wasting trillions extending the up cycle for political reasons.
11   MisdemeanorRebel   2019 Sep 2, 8:15pm  

Moderate inflation is a win win for everybody except those who live wholly off CDs, Bonds, and Debt Instruments. Or are depending on continued heavy appreciation of assets in a low-inflation environment (ie California Homeloaners)

It takes a bite out of debt, both private and public (since most of the debt currently in existence was low-interest fixed bonds or mortgages).

Lack of inflation is a "Tell" that an economy isn't really growing for everybody.

Every Generation fears what was wrong when they were young. For Boomers, this is stagflation. But when you have good growth with moderate inflation, it's a win-win for everybody.
12   marcus   2019 Sep 2, 9:17pm  

HonkpilledMaster says
Moderate inflation is a win win for everybody except


I disagree, especially if we get the kind of inflation we are sure to get , that effects prices more than it effects pay.

Inflation will be good for those with a lot of debt, including low interest rate mortgages. Those with highly leveraged assets (such as Trump) will benefit the most.

Workers on the other hand, will see (once again) their cost of living going up more than their incomes. This should be obvious to anyone that understands what's going on.
14   Shaman   2019 Sep 3, 5:13am  

marcus says
What is bad though is wasting trillions extending the up cycle for political reasons.


Sure, but it’s not government spending that’s holding the economy up right now. Government spending is utterly beside the point in this economy, and should have been curtailed already. Unfortunately, our politicians are nearly universally corrupted and won’t cut spending because their donors and patrons require more easy government money. Even programs that make no sense like ethanol subsidies are continued at great taxpayer expense. And the military machine continues to grow of course, with Hawks always looking for the next war.
15   MisdemeanorRebel   2019 Sep 3, 3:30pm  

marcus says


I disagree, especially if we get the kind of inflation we are sure to get , that effects prices more than it effects pay.

Inflation will be good for those with a lot of debt, including low interest rate mortgages. Those with highly leveraged assets (such as Trump) will benefit the most.

Workers on the other hand, will see (once again) their cost of living going up more than their incomes. This should be obvious to anyone that understands what's going on.


Wrong. Because the #1 debt is Home Loans, mostly fixed. If you got nothing but a COLA for Inflation at 7% per year, in about 10 years your mortgage payment would be cut in half relative your buying power. That's without any extra money from a raise or promotion - only if you got a cost of living adjustment.

A mortgage that is eating up 40% of your take home becomes just 20%. The 20% difference can be invested, or spent on other things, further fueling the economy.

There is no such thing as an extended period of low inflation with a rise in Real Incomes for the majority.

Economists like to do their teledildonics with hedonistic calculations, but the fact is that the Iron Costs of Living - Housing, Medicine, Food - has surpassed wage gains in the past 20+ years. The CPI overweights appliances, electronics, etc, and underweights Gasoline, Housing, etc. in order to make inflation look lower than it is on the things you can't avoid paying for. You must have a place to live in today; you don't need a new laptop which could be deferred months later

It's less important that a laptop is $300 instead of $1300 when rent went from 20% of your income to 33% of your income. Or Groceries/Gas went from 5% of monthly spend to 10% of mothly spend.

Again, people overfocus on problems that existed when they were 16-30 and are overconcerned about those problems.

We had moderate inflation from 1950-1970 during the biggest boom in human history (esp. for ordinary people). We didn't have low inflation. Stagflation had more to do with a huge onslaught of demand from a huge crop of boomers all becoming adults in a 10-year period and trying to form households all at once, the Oil Crisis and the Bretton Woods collapse contributed but were side issues. There is no such demographic shift coming on the horizon.
16   marcus   2019 Sep 3, 10:30pm  

:
So in other words, you're okay with inflation that effects cost of living more than income, based on the fact that at least some people will have enough mortgage debt to almost offset that ?

Wow !! I didn't know there were people that set their expectations that low. So folks, you better get mortgaged up to the hilt, so you can cash in on the only game that's left ? It's called paying your debt off with dollars that are worth a lot less than the ones that you borrowed.

I'll grant you, this is a good deal for those with mortgages. and our system certainly incentiveses this. But wtf ? Really ? You're going to say that for this reason, cost of living going up more than incomes is a good thing ?

HonkpilledMaster says
There is no such thing as an extended period of low inflation with a rise in Real Incomes for the majority


Well at least if you keep inflation low enough, it becomes pretty hard for real incomes to decrease without serious deflation. Whereas, with inflation, where cost of living goes up faster than incomes, it's very easy for real incomes to decrease.

So you want inflation? Really ?

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