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If you go to the doctor with a problem and get a blood test and they say that everything looks fine, but you don’t feel fine, then you don’t say: “well the numbers are right, I should feel fine”. Rather you try to find what the numbers aren’t capturing, because you know something is wrong. Same with the economy. The perception of the economy being bad is really pervasive as demonstrated by the last election, and perception matters, because selective numbers don’t tell the whole story.
Perception can be manipulated in many ways.
People get used to things and give for granted things that used to be luxuries a few generations back (see "hedonic treadmill")
Combine that with active participants who control the media landscape and have a vested interest in painting a bleak picture so they can be the ones fixing it.
And then of course there is the fact that things are of course objectively hard for many people because not everybody can be the average person.
So in a sense it's correct to say that these numbers don't capture reality while being technically correct. And that's because reality is much more complex than the things those numbers measure.
The question is: are those indicators useful? Provided you understand what they actually measure, can that be used as a control signal to help make choices that will go in the right direction and improve quality of life for everybody?
Perhaps the improvement will be marginal and not everybody's problems will be fixed, but is it unreasonable to think that problems cannot be fixed by a quick single intervention and that instead they will compound over time?
Look at the progress humanity has made in so many fronts. Ask anybody to pick a time in history where they would like to travel back and have a better life. The most frequent answer is either now or a few years ago when they were young and everything was better (likely because of nostalgia for youth or childhood).
Very few people would really want to be the average person in an era with poor sanitation, corporeal punishment, no education, illiteracy, expensive and faint artificial lighting, widespread diseases, non-existent dental care, low life expectancy
Tangently, being poor in a wealthy area is far different than being poor in a poor area.
An example being "cast offs". In my early 20s, I moved from a poorer rural area, to a well to do city suburb.
Walking to various places, I noticed things cast aside that would never, ever be thrown away in the area I grew up in.
Examples being:
* an expensive propane bbq, with damage to one of the hoses. A $10 repair and I had a bbq worth hundreds.
(Even looked brand new)
* A set of cutlery, and plates. One of 8 plates had a crack. The cutlery was missing one fork out of a set of 8.
(For a young man eating off of one plate, this was a big bonus)
* a coat rack, mild discolouration
(10 cents in paint out of a spray can to fix)
Anyhow, you get the point. Very usable items cast off, and I would never have found this treasure trove in a poor neighbourhood.
Just being surrounded by a society of greater wealth, means better access generally.
I take your point. I was at a very preppy east coast school whose name you've definitely heard of.
One day I was walking past a high-end apartment complex where I knew a lot of sorority girls lived. There was one of those expensive chrome-plated Kirby vacuums in a trash dumpster. I took a closer look and it appeared to be brand new.
I pulled it out of the dumpster and carried it down the street to my much more modest apartment complex and plugged it in out on the terrace. Turns out the only thing wrong was the dust bag was full. I had some extra bags, so it didn't cost me anything to get one of the best vacuums money can buy almost brand new.
I couldn't believe someone had pitched it in the bin just because the bag was full. But apparently wealthy people do stuff like that all the time.
Not having to be scanning for threats 24/7 also frees up mental bandwidth for more productive activities.
We moved from a dangerous inner city suburb where that was the case, to the edges of an affluent enclave as a kid, and my grades improving and extra curricular activities like getting good at computers and getting a holiday job which kickstarted my tech career, all followed that move.
So the people who are fed up with how things are currently going are according to your argument here either
- manipulated / brainwashed - entitled / spoiled - outliers (the few who have it bad are too loud). - the problems can’t be fixed anyway - don’t realise how much worse it was in the past ?
I disagree that the sentiment of the general population is not a useful indicator of how good things are going for the general population. I think it is the best indicator, but people in power (and I would count most on this forum among then) don’t want to see anything that threatens their status quo.
Yes people are fed up. Nobody is arguing that people are happy and somebody is misrepresenting that.
What I'm trying to say is that there is an explanation for why this sentiment exists despite measures of material wealth and economic success being positive.
The fact that there is an explanation doesn't magically make people feel better.
I think it all boils down to the attitude one has towards seeking explaination.
One is a scientific approach where one aims at understanding the dynamics of a phenomenon in a way that is detached from it as much as possible.
The other approach is moral one where one seeks an explanation in order to convince oneself (and others) how one should feel about it. "You shouldn't complain, you have indoor plumbing your grandparents had to pump water from a well; shut up".
I'm not making the latter, moral, argument. I'm trying to make the scientific one
> despite measures of material wealth and economic success being positive
Are they? GDP is a measure of national economic success not of personal economic success.
The latter is measured by metrics such as: value of a home relative to wages, value of rent relative to average wage, disposable income relative to the prices, food prices relative to wages.
These are the numbers you don't often hear about in the media, you only tend to hear about GDP and the time derivative of prices, neither of which have much relevance to ordinary people.
Most of those are measures of the housing market and not the economy though. We've chosen to make housing an artificially scarce good which is making fortunes for some people and making life hard for many more. But as far as I can tell, the have-nots are also in favor of keeping everything expensive low density SFH. They just want to be in the have group.
> But as far as I can tell, the have-nots are also in favor of keeping everything expensive low density SFH.
I have no clue why you would think this. Basically ever poor person I know (and I know a lot of poor people) has simply given up on ever experiencing home ownership. None of them can afford to live by themselves. High density or low density, zoning laws, etc, don't even enter the picture because not one of those will actually bring housing into any kind of affordable range. It's just that politicians refuse to campaign on anything but "what type of housing supply should we hope developers build—low or high density" that there's any confusion here.
"When education is not liberating, the dream of the oppressed is to become the oppressor"
And we get into the root of the issue. I wouldn't be surprised if much of the Gen Z support for left wing positions doesn't just boil down to Gimmeism that they'd quickly abandon once they're part of the elite.
Another example is constant controversy over Elite College Admissions, ignoring the 99% of perfectly good but not as reputable State Colleges with high admissions rates.
Normative approach versus a descriptive/empirical approach.
Thanks. In a first draft I used the words descriptive and prescriptive but then I decided to avoid possibly using the wrong terminology. Would "prescriptive" be a synonym for "normative" in this case or is there an important difference?
Yep, positive vs normative might be the words you are looking for.
> I disagree that the sentiment of the general population is not a useful indicator of how good things are going for the general population
I think that there's a factual case that general sentiment is no longer a useful indicator of "how good things are going for the general population".
Sources:
https://www.newsweek.com/economy-strength-politics-yougov-da...
https://www.theguardian.com/us-news/article/2024/jun/09/is-e...
https://www.bloomberg.com/news/articles/2024-03-21/consumer-...
Yes, people readily concerned with the defensiveness of their position are easily manipulated. The conviction towards or against a position is the subjective basis open to modification.
A battery of competing measures compared against historical trends are almost certainly the best gauge of how things are.
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It feels like the opposite is true. Things that used to be fairly common like owning a home or living in a major city have now become luxuries.
In New York City the homeownership rate has been about the same over the last 25 years, about 32%, about about 1% from pre pandemic. Looking at the national average it is about the same 65.5%, up about 1% from 5 years ago, with small changes over the last 50 years. https://fred.stlouisfed.org/series/RHORUSQ156N
In 2024, the average age of homebuyers hit a record high of 56.
This highlights how any statistic can be used to support a narrative.
For instance, while the national average for homeownership rates remains relatively stable, it now comes with the reality that people are working harder and longer to achieve it. On the flip side, homes today are often larger and more feature-rich than in the past, which some might argue offsets the challenge.
The real question is: which of these factors—delayed homeownership or improved home quality—has a greater impact on how people perceive their economic well-being?
Compare the savings rates and this picture no longer looks rosy due to data disappearing when averaged out.
What you have is a bimodal distribution of people who almost never will own a house and those who will. And a bunch of rich people who have whole fleets of houses.
This is why nobody should ever use averages and rates alone without a supporting histogram.
> not everybody can be the average person.
Averages are often misleading.
If one person is a billionaire, and 999 have nothing, the average person is a millionaire. That average is of little comfort to the 999 however.
> Perception can be manipulated in many ways.
Numbers are even easier to manipulate.
I think perception about what numbers mean is even easier to manipulate
There are so many metrics. The act of selecting one metric or another metric to drive a point across is a key way to "lie with numbers". The numbers themselves are usually correct but they paint a misleading picture nevertheless.
A similar thing happens with fiddling with the axis on graphs, e.g. not starting a graph at zero or using the wrong scale.
> The perception of the economy being bad is really pervasive as demonstrated by the last election, and perception matters, because selective numbers don’t tell the whole story.
Well saying "the economy is good" or "the economy is bad" out of context is simply moronic. Good for whom? Bad for whom? It's no secret our entire society is stacked to favor investors and owners rather than workers. The market certainly treats people extremely differently based on where they are in society. Much of the population never economically recovered from the 2008 crash at all—something that won't be reflected by GDP, stock performance, "jobs created", or how many people are collecting unemployment (which is, confusingly, a wildly different figure from counting people who want jobs but can't find one—as best I can tell, a metric not reported by the federal government at all, but appears to be about twice as large as the "unemployment" metric pimped: https://www.richmondfed.org/research/national_economy/non_em.... And this isn't even touching underemployment). The CPI is a little better, but only by a small amount.
And you'd have to be blind to not notice a minimum wage job is no longer sufficient to afford rent in most major metro areas.
A couple of points:
- Headline unemployment _is_ "people who want jobs [enough to be looking for them] but can't find one". The metric you linked to is including people outside the labor force and then weighting in a fairly opaque way. Between labor force participation being at the same point as it was 2014-2016 and unemployment being lower, I don't think it's fair to say unemployment stats are misleading. The point about underemployment is still definitely valid though.
- I'm with you that minimum wage should likely be higher, but federal minimum wage has never been intended to be "comfortable wage in a major metro". Major cities have their own minimum wages -- e.g., NYCs is $16/hr. Making $32k a year in NYC would of course not be comfortable, but is doable (eg you can rent a room in an apartment for $1k/mo, live off of oats and rice, etc). It's not intended to be a "head of household" wage, but "the least amount you can ever pay anyone"
Other than these nits I'm with you that stats don't cover the lived experience of all Americans and there's more too it than simply vibes. However I also do think that some of the vibecession is due to increasingly effective media manipulation to squeeze money from consumers. I (coincidentally just now) wrote a blog post explanding on this hypothesis here - https://medium.com/@digital-cygnet/manipulated-into-malaise-...
i've certainly never been counted towards that unemployment metric any time I've been unemployed. Am I not part of the labor force? The metric only counts people who actively apply for unemployment relief. So either I'm not part of the labor force—doubtful, as I'm employed—or "unemployment" doesn't mean "wants a job and doesn't have one".
Simply: the way the federal government employs the word "unemployment" is, at best, disingenuous; I suspect it is intentional, though, to obscure the intent to leave some part of the population without employment to keep the labor market weak.
In the USA, unemployment is based on a periodic, 60k household survey. You may not have ever been contacted but that's just the nature of sampling. It's true that some countries report unemployment as those who are actually registered as unemployed, but that's not best practice (and a good reason to be careful comparing country unemployment rates)
You can read more on the US system here - https://www.bls.gov/cps/faq.htm#Ques3
I agree it's a bad outcome that someone who gets so fed up with the labor market that they stop looking for work no longer counts as unemployed, but that's why we have labor force participation (and why imho that should be reported in headlines along with unemployment, after adjusting for age and education)
These are usually based on surveys not just the numbers summed up from whatever unemployment offices.
Assigning such intent to a huge bureaucracy is going to lead you to strange and mostly incorrect conclusions.
> And you'd have to be blind to not notice a minimum wage job is no longer sufficient to afford rent in most major metro areas.
Either blind, or detached enough that you think that it's a good thing, as long as the value of your home also goes up and you have access to relatively cheap service labor.
I also wonder how much the USD's role as the reserve currency plays into this. If I build a home for 1 MM USD today which used to cost 150k USD in 2008 - this looks like economic growth, despite the home largely being the same between the two periods.
Certain categories of the CPI have experienced extreme inflation over the last 16 years, this gets reflected in the wages of the economically mobile and in turn raises the GDP - however we don't really price housing into the CPI in a sensible manner, and due to USD dominated trade - imports and products which compete with imports don't inflate.
The discrepancy between PPP and nominal (USD) GDP seem to be telling a story.
Remember that the U.S. Dollar is one of many reserve currencies in the world. Other popular ones include the Japanese Yen, the British Pound, and the Euro. The dollar is just the one that is most dominant and for generally good reasons including sophisticated capital markets, rule of law, and the military might to force resolution of international disputes.
I think the main issue I see with your note about the difference in home prices is that you could stretch that out to say 1915 and 1950, and you’d be hard pressed to explain that economic growth was fake or don’t occur. Even in your example, the economy didn’t grow 6x, but how has resource utilization changed or supply and demand globally? I think a further analysis will show many factors going into that home price, and some of those very much are just simple economic growth and/or supply and demand of materials.
As always it’s also the location. Look at home prices in, idk, Toledo, Ohio. How have those fared in your same time period?
The real question then is why there are no paying jobs in Toledo, Ohio?
After all, it's really cheap estate and lots of reserve labor...
Ah right, and here we come to the critical issue which is horizontal integration. Even shipping to Toledo is going to be more expensive, not to mention availability of variety of things.
Then you get to deal with the interesting "small town culture" vibe, and lack of educational options.
Right, but the specific plight of Toledo in this context was just to illustrate that the argument about home prices increasing is dependent on economic factors. I think the dollar and its usage is of less importance to that original point.
True, it's moronic if you expect to discuss the details of a complex economic system. But in a political context, the finer details aren't interesting
I'm not saying the economy is good. But according to polling, many folks who said the economy was "poor" before the November election now believe it's doing great. All in a very partisan fashion, of course: https://jabberwocking.com/wp-content/uploads/2024/11/blog_mi...
Not to put words in your mouth, but this comment seems to imply that politicians successfully painted a negative picture of the economy that didn't reflect reality and used that to win the last election. While I wouldn't put that past them, why was it successful this time and not every time? Nobody even tried to pretend the economy was bad when Clinton, Bush or Obama were up for re-election, because it obviously wasn't.
> why was it successful this time and not every time?
Isn't there a pervasive belief that Republican administrations are better for the economy than Democratic administrations, despite the economy performing better under Democratic administrations for the vast majority of postwar history?
There is a reason the market rallied when Trump was elected.
Only one reason? Is it because the winner was the side that would have tried to overthrow the election if they had lost? The market probably doesn’t like the prospect of constitutional crisis.
Is it the same reason why the Trump meme coin did also?
In 2016 they absolutely pretended that the economy was very bad, and then suddenly it was very good in February 2017.
When high gas prices are over, they go back down to being relatively low.
When high inflation is over, prices don't go back down, they just increase at a more reasonable rate going forward. But they'll still feel high for at least a few years as people mentally adjust.
Gas is around the lowest it will ever be going forward. The extra energy to pump and refine oil has been and will continue to increase.
when clinton, bush, or obama were elected, the opposing party was much less willing to engage in bad-faith arguments and outright lies for their own gain.
Oh boy. Yes, they did. For example: https://www.nytimes.com/2011/02/12/us/politics/12bai.html
"How the US Economy Is Doing Depends on Your Politics" says that the trend started in late 90s: https://www.bloomberg.com/news/articles/2024-03-21/consumer-...
My guess: the COVID related inflation was visible, made for a relatable talking point, and our modern day communication technologies made it easy to repeat that talking point over and over.
This. Even though inflation is just about back to where it was pre-covid, the winning candidate gave his voters the impression that he could lower the prices that had gone up during the earlier inflationary period. The majority of voters don't understand the underlying economic issues: Unless you get a negative inflation rate (deflation) you're not going to see lower prices. And the only way you get deflation is during severe economic downturns - now it could be that his promise will come true and we'll get a severe economic downturn that leads to lower pries, but I don't think the people that voted his way had that in mind.
Of course people don't really want deflation either, and most people don't really believe prices will magically drop 30% back to where they were in 2019.
But it's still reasonable to punish those who presided over the inflation spike if you think their policy choices played a role in causing it.
Except they voted for the guy who arguably started the inflation spike and will stoke inflation again by imposing tariffs on all imports (not to mention increasing deficits faster than the other guys would have).
> and most people don't really believe prices will magically drop 30% back to where they were in 2019
You'd be surprised. Most people don't, but a most of the people who voted for him did seem to that he was going to magically drop prices.
Except the causes for it are due to multiple elections of people with almost the same policies regarding regulation and taxation, leading to consolidation.
So, punished people by electing people with the same policies, just with more lies. Perverse incentive is to keep the same policies, but lie more.
> why was it successful this time and not every time?
The tools for fooling people are becoming easier to develop and deploy.
There's an ongoing trend of increased polarization, you shouldn't assume that politics and partisanship is the same as 20 years ago.
iirc Trump campaigned on the sluggishness of the Obama-era economy. It was characterized as burdened and shackled, but not downright terrible.
Yeah, there was a perception then (in 2016) that the economy was growing too slowly when in fact it was doing pretty well. Yes, the recovery from the '08 Great Recession was very slow, but by 2016 things were pretty good. Then this time around he ran on the economy being supposedly better during his first term when in fact most of that was just inherited from Obama. Towards the end of Trump's first term inflation was already starting to heat up due to the trade wars and tariffs he started. Covid hits and that inflation goes into high gear. Most of it was from covid and supply chain issues - not really Biden's fault, but it was easy for him to pin it on Biden.
My guess is that journalism failed this election and social media won it.
* Advertising is failing for news sites, so paywalls are becoming the new thing. Those are a barrier to entry for most potential readers.
* As one of the largest social media platforms, X did made two key moves. First, they limited reach for users who share external links.[1] That breaks news sites' revenue and readership models. Second, the CEO of X came out as a massive Trump amplifier on that platform. Neither of these things limited users' access to information, but it deeply affected their access to truth.
* At the same time Meta backed completely out of the "breaking news" business (maybe on both FB and Threads ... I don't keep track that well).
* Trust in MSM was already declining.
Once the fourth estate was hobbled, social media, podcasts and chat platforms became the dominant means for storytelling. Not only were the Democrats not getting their act together on those platforms, but neither was the press.
Personally? Measured by the number of homeless people I see around me I think the economy is still pretty crappy even though my stock and crypto portfolio is doing great.
[1] https://techround.co.uk/news/musk-limiting-external-links-x/
And if you read other social media platforms like reddit , you would believe that Harris would win in by a landslide.
I don't know a single person in my sphere who feels this way. I think the common sentiment is things will probably improve and the stock market is up. Would be curious to see how UoM did their polling. Does answering truthfully about the state of the stock market indicate that you think that the economy is doing better?
They may be confusing current state sentiments with possible future state expectations and those sentiments, should expectations be met.
I have people in my "sphere"[1] who definitely have positive "let the sanity begin" type responses when the economy is under discussion.
[1] I think I like that term and am referring to the body of people with whom I am familiar enough to speak about in this way. Certainly not for though. I am not doing that!
Polls were very wrong - again. Their methodology is clearly flawed. I owe my friend an expensive steak dinner because I believed the polls.
In the crisis era of non-reproducible science and bad data collection is it any surprise the polls are wrong too?
But the polls weren't wrong [1]. This was a normal polling error. If we expect polls to give us pinpoint accuracy, it's our expectations that are wrong.
[1] https://www.natesilver.net/p/the-model-exactly-predicted-the...
Normal polling errors would lead you to believe that the actual results would fall equally and normally on both sides of the polling forecast. But they don't. The polling error is nearly always in one direction. Polling consistently underreports support for Trump in every case where we have actual results. We don't have this problem with other candidates, or even with other types of polls. There are theories about "low propensity voters" and maybe they don't show up in polls, but I suspect the real reason is more complex than that and involves some amount of self-reported filtering because of the demonization of Trump.
Perhaps Trump -- and Republican -- voters avoid taking polls or some are afraid to go on the record and admit how they're going to vote. For some there is a non-zero risk certain family members may cut off contact.
> ...some amount of self-reported filtering because of the demonization of Trump.
Indeed. He demonizes himself. I was ashamed to admit I voted for him in 2016.
Anecdote:
I know plenty of people who have said they have permanently cut off friends and family for having conservative views. I don't know one single conservative who has said the same.
> I don't know one single conservative who has said the same.
Could it be that progressives haven't behaved badly enough that supporting them warrants cutting off contact?
Like say taking away rights from an enter gender, separating kids from their parents and locking them in cages, granting broad immunity to corrupt ex-Presidents, attempting a coup, openly calling for violence, threatening to use the military against political opponents, etc.
It can probably be explained as an indication that Democratic candidates are "normal" ones, and a win of one isn't a reason for drastic measures, while Republican candidates are "not normal", and a win of a Republican is enough grounds to cut off friends...
I'm ashamed to admit I didn't vote for him this time around because I haven't been in my home state and traveling - couldn't really get access to a ballot or mail in ballot due to my traveling.
Just to clarify, thats a poll about future "expectations" about the economy. Many of the people that voted for Trump based on his economic policies now have good expectations for the economy because they expect him to implement those policies.
That says "expectations index"...
I do not think it means what you think it means.
My understanding is:
* Perception of the economy depends tremendously on whether the president is of your preferred party. Whenever the presidency changes hands, you see a massive and rapid flip in which party supporters are satisfied with the state of the economy.
* If you ask Americans about how they are doing personally, as opposed to how they believe the economy is doing, their response is much rosier.
See also: "vibecession"
AFAIK the former effect has been found to be much stronger among Republicans, though it exists in both parties. It was something like a 50% swing in approval rating versus 10%.
I never saw the term vibecession before. Wiki has a separate page for it!
I wonder if this trend also appears in other highly advanced economies. Example: When UK switched from conservative to labour, was there a similar sentiment swing? My guess: Yes.
Netherlands also moved much more right in the last election after PM Mark Rutte stepped down after 8 years. However, broadly, the NL economy is doing much better than UK economy. Maybe the vibecession effect is stronger when the economy is weak? Could be.
And sometimes the reason you don’t feel fine end up being anxiety, and reframing your experience can make the problem go away. I visited the emergency room with chest pains several times before it actually sunk in that it was my neuroticism getting the better of me
In the US, look at how sentiments about the economy shift depending on party affiliation and who happens to be in power at the time. I do not think it’s as straightforward as saying ”if people think things are worse than they used to be, they definitely are”. There are way too many variables affecting people’s subjective experience
Its entirely because you're looking at different numbers. When the average person complains about grocery prices doubling in the past few years, they're not looking at the GDP. People take "How much money do I get in my pocket at the end of each month?" and compare it with "How much does it cost to buy what I need?". The first answer is generally tracked by the Employment Cost Index. The second is by the Consumer Price Index. If the second increases at a faster rate than the first, then people get angry.
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That’s also not a US phenomenon.
Hearing the exact same in UK too. The stats say things are ok but people standing at grocery checkout disagree
Strong divergence of 1% and rest
As someone doing OK economically, when I go to the grocery I see the same thing they do: Prices are going up on key items much faster than income is rising. I didn't vote based on that, but that doesn't mean they are wrong that it's a problem. It's easy to imagine that if you were barely making it, things are worse now.
Rising income isn't a phenomenon that hits everyone equally.
Indeed. The problem is that for most people income doesn't really go up unless they change jobs. Or, at least it goes up so slowly (0-3%/yr) as to be undetectable compared to, for example, the price of a loaf of bread going from $4.99 (2020) to $5.99 (2023) to $6.99 (July 2024) to $7.99 (December, 2024).
I think the "vibecession" concept makes sense when considering CPI of consumables since individuals are far more attuned to price changes than they are for durable goods.
Not exactly a watertight metaphor as https://en.m.wikipedia.org/wiki/Hypochondriasis and anxiety exist, but I certainly agree that it’s possible to lie or mislead with statistics.
a good economy ≠ a good lower or middle class, just means the rich people got richer
More so when the blood test is measuring something that was deemed important 100 years ago and doctor is ignoring all the advances in the field since then.
We currently lack comprehensive metrics to effectively capture critical factors that normal people consider when asked “is economy doing well”. Here’s what we need:
Home Rent Affordability: Analyzing affordability by profession and location to reflect real-world dynamics.
Home Price Affordability: Assessing how accessible homeownership is across regions.
Education Costs: Understanding the burden of education expenses on families.
School Quality: Measuring the actual quality of education available.
Healthcare Cost Affordability: Evaluating access to essential healthcare without financial strain.
Drug crisis.
Crime.
Vacations and similar things.
Developing such metrics would provide a more accurate picture of economic well-being and social equity.
Luckily smart people have resources and a mandate to study each of those questions at scale. You might be interested in the work that the US Bureau of Labor Statistics (https://www.bls.gov/) does on the economic side of labor conditions, and that the Census department’s American Community Survey (https://www.census.gov/programs-surveys/acs) does on the demographic and social side. Both of these groups study questions like those you asked in ways designed to be broadly comparable over time.
The Housing and Urban Development department calculates fair market rents at the county level to support their rent assistance programs (e.g. [0]), although that starts to get at part of the complexity: for your metric do you care about the economic cost or the amount families actually have to pay after assistance?
On the NGO side, groups like the NBER (https://www.nber.org/) disseminate more exotic socioeconomic studies, and there are others.
And of course you can find a mountain of data at data.gov, the federal portal for such things.
I think the harder part (and the part the policy community specializes in) is grappling with the nuances of those kinds of numbers. What do such high-level observations actually mean in something as complex as a continent-wide collection of 10^9 people, and how much human messiness polluted their measurement?
Yes, the data exists, but it’s so nuanced and complex that you can interpret it to fit almost any narrative.
Take California, for example: asking rents have increased by 26% over the last two years. But this figure reflects only asking rents, not what people actually pay—especially in areas with rent control.
If you’re looking to upgrade to a bigger place (e.g., moving in with a partner or preparing for a baby), it might feel like the economy is in shambles. On the other hand, if you’re staying put in a rent-controlled apartment, things might seem manageable.
The data is there—it’s the context and perspective that shape the story.
Is that the same Bureau of Labor Statistics that revised their numbers down 818K, or 28% of original 2.9M jobs claimed to be added over the last year?
Comment was deleted :(
This is exactly what I tell software engineers. They’re always like “but the software is complex and it’s not straightforward to do what you’re saying” and they gave some nonsense metrics for what complex is. It’s as easy as adding a button to a webpage to create an XML that integrates with this other tool we use but they can never explain why it’s hard. They come up with some “cyclomatic complexity” but it’s obviously easy: a single button. If it’s so easy, as my perception shows, then any numbers they’re coming up with are obviously wrong and they should just make numbers that match what I feel. And once those numbers show that it’s easy, they can just do it instead of making numbers that show it’s hard.
I really hope you forgot the /s?
When you see a headline GDP growth figure, remember that this number does apply equally to all people. The US and its economy is vast, like all 50 countries of Europe put together. Recently, we are seeing that middle class and below really suffered in the last few years from high inflation, but the economic groups above fared much better. Also, new immigrants (usually unskilled) are doing better than natives. To be clear, I don't any of this post with spite for those doing well.
> Also, new immigrants (usually unskilled) are doing better than natives
Is this true in the US?
Yes, it has been widely discussed by economists in the last few years.
https://www.npr.org/2024/10/04/nx-s1-5140039/labor-market-jo...
> Friday's report shows 150,000 people joined or re-joined the workforce last month. Much of this growth is driven by immigration. The foreign-born workforce has grown rapidly over the last year, adding 1.4 million workers, while the native-born workforce shrank by nearly 600,000 workers.That does look like a problem. Yet it doesn't mean unskilled immigrants are going to do better than natives, rather that both will have wages suppressed. And natives will still benefit from social services that may be unavailable to immigrants until they become citizens. So I think the statement is still misleading.
Immigrants are only doing better than their choices back in their country of origin, not better than what natives could attain in the new country.
It's a huge problem. If we keep allowing corporate interests to hire from a pool that is willing to live in 3rd world conditions (all these immigrants are sharing a living space in such a way that natives do not) then not only are we suppressing wages, but suppressing jobs from natives. That leads to homelessness of natives trying to maintain a lifestyle they were previously accustomed to. Some moved back to parents house, some just moved onto the streets.
Agreed. It's also important not to exaggerate or misrepresent a problem, since that undermines the point.
An idea I've seen floated is that during the pandemic a lot of people got a lot of support from the government and under Biden a lot of that was phased out.
So even if "the economy is doing fine" there would have a been a large number of people who would have had something taken away.
People got a glimpse of a more interventionist social democratic government during the pandemic and then it disappeared. So yea for people who benefited from that absolutely everything got worse after.
Typically, loans and credit being more difficult and costly to obtain, higher prices for everything, and a growing number of large layoffs aren't signals of a booming economy. Inflation has a tendency to well, inflate productivity metrics. If we're spending twice as much for the exact same stuff as we did 5 years ago, we haven't doubled productivity.
> perception of the economy being bad is really pervasive as demonstrated by the last election
How does the election tell you anything about the economy? Are you injecting a bunch of your reasons why you think people voted for X or Y or is there a factual argument behind that sentence?
> How does the election tell you anything about the economy?
He didnt say it said anything about the economy, just the perception of it.
Now to answer that question, there is the simple old adage of "its the economy, stupid" that won Clinton his campaign. But the reality is that economy perception is always asked in polls, all year round. So trends can be established wtih decades of data. Secondly, voting attitudes can be understood through economic perception, when people perceive the economy is thriving incumbents do better seeing Biden's poll numbers anyone could tell that the economy perception was not good.
Exit polling asking voters their reasons for voting the way they did.
There is an argument that elections can be understood as a referendum on the previous 4 years. E.g. voting for the incumbent candidate/party means more of the same.
Yes but how would that say anything specifically about a particular topic unless it was a defining and undeniable circumstance that happened during the presidency like a war or major scandal - and even then I think it's hard to confidently say "this is why people voted for X" without proper polling (and even that we know how accurate it is - but at least it'd be data).
Because the single largest thing people vote for is how much better they're doing now than 4 years ago. That's just been true forever.
There was a poll asking "what was your motivation to vote the way you did", and "the state of the economy" ranked pretty high among Trump voters (don't remember where I saw it though, sorry).
As a general rule, it is very hard to win a popular vote (again) when the economy is weak for middle class and below. By definition, this would mean that more than 50% of people are not benefitting enough from current economic growth.
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political propaganda via the skinner boxes in everyone's pockets is probably the reason for the disconnect
let's not act like people's feelings inherently reflect the truth
Or they go to the doctor thinking they have a heart attack and it's really a panic attack and despite all the tests for physical ailments, it is an emotional one.
The numbers are FAKE. How else can you describe a 30% downward revision in jobs numbers this year?
Yeah, stop excluding food, housing, and energy from the CPI basket, they are the largest items people purchase!
Are you suggesting that it's impossible to have mistaken feelings about the economy or about one's own health? I'm pretty sure it's possible for people to deliberately deceive other people about the state of the economy or even the state of their own health.
You're describing hypochondria
> The perception of the economy being bad is really pervasive
Because the economy is bad, and this is a "drank the Silicon kool-aid" article.
In the most recent tax filing season data available, there were tax returns of:
Top 1% Top 5% Top 10% Top 25% Top 50% Bottom 50% All Taxpayers
Number of Returns 1,535,899 7,679,495 15,358,991 38,397,477 76,794,954 76,794,954 153,589,908
Average Income Taxes Paid $653,730 $187,468 $108,251 $50,963 $27,891 $667 $14,279
Adjusted Gross Income (Millions) $3,872,395 $6,182,180 $7,745,525 $10,613,602 $13,191,209 $1,531,038 $14,722,247
1 5 10 25 50 100
Number of Returns 1,535,899 6,143,596 7,679,496 23,038,486 38,397,477 76,794,954
Income Taxes Paid (Millions) $1,004,063 $435,594 $222,966 $294,234 $185,068 $51,225
Adjusted Gross Income (Millions) $3,872,395 $2,309,785 $1,563,345 $2,868,077 $2,577,607 $1,531,038
Average Tax Rate 25.9% 18.9% 14.3% 10.3% 7.2% 3.3%
Average Per Capita Income $2,521,256.28 $375,966.29 $203,573.91 $124,490.69 $67,129.59 $19,936.70
How about, lets look at it a different way. Anybody notice what happened to McDonalds over the last decade and a half? Corporate McDonalds used to have 465,000 employees, now, McDonalds has 150,000. 300,000 employee reduction. 1/3 remain. [1] Btw, they're also -5,000,000,000 under water in equity [2] while they keep making happy meal financial reports. 2/3 reduction in workforce, barely even covered by the news.
The situation looks very similar with almost every peer company. Notably, some of the main jobs where people in the bottom 50% work. Jack in the Box (-$851,798,000, 45,700 -> 1,090 employees), Papa Johns (-$430,933,000, 23,100 -> 13,200), Yum Brands (-7,674,000,000, 90,000 -> 25,000), Dominos (-3,976,640,000, 14,500 -> 11,200). They all went submarine on equity and started shedding employees, yet all anybody will write about is the "booming" tech sector.
[1] https://tradingeconomics.com/mcd:us:employees
[2] https://tradingeconomics.com/mcd:us:equity-capital-and-reser...
I’m pretty sure it’s combination of most of the money flowing uphill to millionaires and billionaires, and people in general are also being fed a ton of propaganda that the USA is falling apart which is BS. We have issues but so does every country. It’s hard to feel great if you have no free time to enjoy life, and as a society for some reason we have become very very consumerist, not taking (or even worse not having any) time to smell the roses, and the world is falling apart every night on the internet and/or television even thought it isn’t really.
"The map is not the territory"
Th
The unemployment rate is very low in the US while tightening of money supply is happening, it is a weird thing to witness as a new comer to the US. But one has to admit Jerome Powell did accomplish something significant given what his detractors like Summers were painting was going to happen given the covid bonus US citizens got.
While unemployment rate is relatively low this measure masks deeper problems felt by those working to try and make a living.
Specifically, labor participation is near an all-time low so discouraged workers, who aren’t counted in unemployment numbers, are excluded.
Also, there has been a marked and ongoing shift from full-time jobs with benefits to part-time, casual, and gig work.
Finally, the widely cited consumer price index is a very politicized and skewed measure of the true inflation facing consumers. It ignores the real cost of home ownership via owner equivalent rent measures. It uses a process called substitution to replace suddenly expensive goods with cheaper goods. It includes arbitrary adjustments for improved quality of goods that aren’t always perceived by purchasers who only see the higher prices and these adjustments only work in one direction to skew CPI lower. That’s why consumers often perceive inflation to be higher than the CPI measure.
This is an interesting take, because it contrasts with GDP PPP [0] which is suggesting that America is in fact being overtaken by its rivals although it has managed to outpace the EU. China is claiming to already be ahead and India is well on track to gain absolute economic ascendancy relative to the US. And I expect that Asia is going to start developing some serious military muscle on the back of that because they have access to the history books and have a pretty good view into how Western leadership thinks.
If the US is benchmarked against Europe then all is well. The problem is that Europe is now a distant 3rd in terms of economic power - it can't face up to China. Arguably, if we put China in its own category and India into "Asia" then the EU might be pushing towards 4th. Everyone is still ahead of Africa I suppose.
[0] https://ourworldindata.org/grapher/national-gdp-wb?tab=chart...
A lot of macro economic statistics should be taken with a grain of salt, or more literally: approximations with a measurement error.
PPP GDP is useful to compare, particularly politically because if the cost of goods in a country is lower people are more likely to be healthy / comfortable with less income. I think it is a little dubious when you use PPP to compare th3e size of two economies because 1) you are taking two approximate measurements and multiplying them 2) countries with lower GDP / person typically have higher relative purchasing power.
In "rich country" (high GDP /person) you can charge a lot for a cup of coffee. In "poorer country" you are likely to charge less. Therefore you can say that person in the poorer country is not as badly off as the absolute numbers suggest. However, if "poorer country" got to the same GDP / person purchasing parity might end up being almost the same. Or, countries with lots of poor regions will have a better PPP, but the cost of living in the places where people have high income may have similar costs.
And in general the most valuable purchasing power differences don't happen for the most valuable and traded goods. An equivalent airplane is going to cost as much in India as the USA, on average. At some point the absolute number is also important.
gdp is really bad, countries don't even use the same counting methods. I think in the Netherlands they started using criminal activity to pad up gdp growth. Also money printing and inflation is a good way to up gdp.
I like energy production and consumption a lot more, modern economies pretty much come down to using energy to either transfer or modify goods, services or data.
> energy production and consumption a lot more
which is all well and good, except when you have increases in efficiencies in energy consumption, which would show up as a drop.
Increasing efficiency often causes an increase in consumption, not less [0]
Except for when it doesn't. E.g. lightbulbs are now 20x more efficient than in my childhoos. But I certainly don't use >20x more light(bulbs). In fact, I'm quite sure it's 1x.
You probably have LEDs in everything though.
This is actually my preferred measure too. I was happy to use GDP PPP figures because they tell a similar story to the energy statistics on ourworldindata.org. Asia miles ahead, China the most dominant, then the US and then EU. India looking to overtake the EU fairly rapidly if they follow China's footsteps.
Of course the per-capita numbers favour the US still. But by absolute figures, the crown goes to Asia. And per capita the Europeans can realistically be said to be behind China for policy making purposes, the trends are clear.
The EU is number one in quality of life and that’s all that matters to me. If we work just hard enough to maintain and maybe even improve it, other countries can do their pissing contest.
This feels like a huge generalization to me.
The US, UK, EU and realistically most developed countries I would say have fairly similar quality of life within margin of error. I've travelled a fair amount and everywhere is basically the same.
For an individual it's really going to come down to lifestyle and what you prefer. Some people like urban living and walkability, if that's you then you probably want Japan or old world metropolitan European cities. Some people want a house on a few acres and national parks the size of countries, if that's you then you probably want the US.
Working cultures are different but then there is no average on that either. People on HN tend to assume everyone is an office worker or something which is actually a fairly narrow slice of the middle of the spectrum.
Equally though, online (you can see it in this thread) there's sometimes a weird focus on the absolute worst outcomes which I've always found baffling. If you're planning to become a poor fentanyl addict then yeah, don't go to the US, find a country with a safety net, it'll be more fun.
> The US, UK, EU and realistically most developed countries I would say have fairly similar quality of life within margin of error.
Having lived in the EU (Netherlands) and the US (California), I would say the inequality in the US is much worse. Especially in larger cities. To the point where I sometimes wonder if I'm living in a "developed" country.
I'm British. When I visit the US I would agree that inequality is significantly higher, but it also seems quite clear that overall wealth is significantly higher too. Second and third tier cities in the US are clearly still fairly well off in a way that just isn't the case across Europe.
The thing I tend to always fall back on is the last part of my comment. You don't want to be poor in the US; there is no bottom. Whereas if you're poor in Europe usually there's a minimum standard that you'll fall to.
For most people the relevant factor I think is what the QoL in their cohort is like. I say it's a bit of a wash, because basically, if we limit the discussion to EU and US, if you're well off the US is probably better, if you're poor Europe is probably better, if you're in the middle then there are trade offs.
Do I want to live in a country where it’s comfortable to be poor? That implies everything from people defending poor as a lifestyle, such as classmates insistently you that working in class is a stupid lifestyle choice, to people joining the country on the basis that they don’t like producing much, and living in a general country that is second at everything (or falls down to Chile level in terms of studying math in school).
If I had a passport for the US, I’d move yesterday.
There is more to life than "producing much" and "getting rich". There is no single answer and it depends on preferences and tradeoffs. But, labeling an ideology that takes care of the unfortunate, and lets the people live life without "if you dont produce much or work every minute of your life towards getting rich" as lazy or incentivising to be poor is just naive and ignorant.
I'm saying as someone from Asia having lived equal number of years in both US and EU.
> You don't want to be poor in the US; there is no bottom.
How do you figure? US has SNAP, Medicaid, UI, TANF (for families with children), Section 8 housing, SSD, SSI, Childcare Assistance amongst other programs.
These aren’t much of course but are something.
There is also a lot of impact from immigration that the US has that Europe has not. Immigrants tend not to be at the high end. The US has had a large influx of immigrants (around 14% of the whole population right now) vs just 6% for Europe. (from quick Google checks.) I'm not saying that is good or bad, but if you keep adding at the lowest end of income you increase the inequality if the most wealthy are experiencing gains.
> The US, UK, EU and realistically most developed countries I would say have fairly similar quality of life within margin of error.
Ahem... Have you seen the standards in the UK get diluted year after year post-Brexit?
There's more to the story than the listed examples.
Environmental standards dictate your risk of developing various diseases later in life so are a big difference in quality of life. E.g., if you drink tap water from UK vs other countries, with high PFAS levels, where it essentially comes from a spring in the mountains - that's a huge difference.
Another difference is job security which again has a huge impact. Consider France: If you get an unlimited contract at a company you're essentially set for life (unless the company goes busy, or you mess up in a very bad way). Compare that to the scare many US dev employees hat to ensure in spring 2023 when all the big tech companies were doing layoffs. Also, France had a much shorter work week.
So, no, quality of life doesn't even compare remotely between these countries. Only perhaps for the upper 3% it is similar - if you're an average tech dev, your life will be much much nicer in Paris than in a random SF/LA suburb.
I guess I have a physicist mindset but basically I feel that these things are within margin of error. We're talking 20%, 40%, whatever. And because the lifestyle is so different it's hard to compare directly, it depends on your personal vision of what you want in life, as I mentioned some people want Paris, some people want the mountains.
I do think that if you're going to live in a Big City(tm) then the old world just does cities better. Then again I haven't visited SF, just NYC.
Job security isn't something I've ever cared about in my life. Starting from zero (no parental wealth), beyond about age 20-22 I've always had a minimum of six months savings, who cares, just find another job. It's business, you're not married. If you're an actual adult and you need a job continuously to get by you've fucked up somewhere.
It kind of just feels like a leverage decision, anyone middle class or above has a net worth in the x00k's, it's just about whether you have anything liquid vs locked up in home value etc.
If you have 0 in the bank then unless you're in North Korea or something you have bigger issues than "which country has better QoL" in my opinion, you need to work on yourself first.
Not every adult plays the game of life on easy mode, to get most rewarding experience one has to invest some serious time and energy into matters.
Also, for most folks here its trivial to be independent and successful financially if alone, past decades have been good in ways mankind has not experienced ever before. Get 2 or more kids into the equation of life with everything that they bring and challenge goes up tremendously. But as said, there are rewards, and most of them can't be achieved in any other way (that is coming from somebody doing fair amount of extreme sports, mostly in mountains).
Also, these matters are not within margin of error. Quality of life is way more important than cashflow once one is not poor. Also in Europe extremely expensive matters like universities for kids or more intense healthcare are simply non-topic when it comes to finances, you simply need less money to have similar quality of life and peace of mind. You are always just 1 error, often not even yours, to have quality and quantity of your remaining life massively dependent on quality of the healthcare, or just bad luck with genetic lottery. If you feel invincible now, give it a decade or two and you will reconsider.
I stopped reading at “life on easy mode”, sorry, just crabs in a bucket bollocks.
> UK [..] realistically most developed countries
Its also really uneven. It contained in 2016 6 of the lowest GDP per captia regions of the entire EU.
However we should of course treat GDP as a suspect measure of living standards. Whilst those people living in those areas will tend to have curtail life chances, they did at the time have access to _good_ healthcare and housing (in certain circumstances)
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> The USA is a horrible country to anyone looking in from the outside.
When I was at a multinational corporation we had people from our EU and Asia offices fly out to the United States for a couple weeks at a time (their choice).
We'd go out to lunch every day and some of us would have them over for dinner at our houses to get to know them.
Many of them were young and had developed their idea of the US from Reddit, Twitter, and TikTok. They'd show up thinking they were walking into a hellscape of a country because that's what they saw on Reddit.
It was a rite of passage for all of them to slowly realize that the US in person is different than the US according to Reddit or TikTok.
One example that came up frequently was minimum wage. Reddit talks about the federal minimum wage all the time as if Americans everywhere are making minimum wage. We'd have to explain that our state minimum wage was significantly higher than the federal minimum wage. We'd also explain that it's basically impossible to find a job paying that minimum wage right now because even the post office and local fast food places were hiring at higher wages.
The list went on and on. I remember several coworkers who went from thinking the US was a horrible country to asking us to sponsor their moves to the US.
> No one would actively choose to live there if it wasn’t for high salaries in certain fields.
That's a chronically online take, but it's completely wrong. Immigration demand to the United States is extremely high, even for jobs that don't pay high salaries.
>Anectodotally back when I was studying in USA the local Panera was hiring for like 20 bucks n hour. Which is more than the mean wage where I live now.
I have literally lived in the US before. I spent 12 years in Canada, right next to the US as well. Awful place to live.
And of course your multinational coworkers want to move there. They’d make a lot of money to insulate them from the awfulness. Not to mention a huge raise compared to working in their home country.
> I have literally lived in the US before. I spent 12 years in Canada, right next to the US as well. Awful place to live.
How long did you live in the US? And what part of Canada did you live in to be near the US?
Most of the Canadian border is sparsely populated on the US side. So I can't see how being in Canada would give you much of a feel for median/mean U.S. life.
I lived in Connecticut for 6 months if you care.
And Canada is relevant because I visited the US multiple times per year for both work and pleasure and got to see what living in different cities would be like. And it was awful.
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> That's a chronically online take, but it's completely wrong. Immigration demand to the United States is extremely high, even for jobs that don't pay high salaries.
I would complement that it's completely wrong as long as you're unaware of the hidden health hazards the US poses (which are a consequence of low regulation). These won't affect your day to day life and thus are easily overseen, and are invisible - unless they start affecting you years down the line. Most people are uneducated in terms of en
Examples are the superfund sites in California, the high sugar added to most foods, etc.
Even if you live in the top 1% it's hard to escape these - if your company office is near a superfund site (eg Nvidia HQ) then good luck, your money won't help with that. Yeah you can buy organic foods but if you're going to a restaurant with friends you'll still have to deal with bad quality ingredients.
I'm often amazed how nad the internet it is too when I talk to friends in Silicon Valley.
Bottom line: your high earning salary can only get you so far to offset and insulate you from the health hazards living in a low regulation society impose
A society that bans the sale incandescent light bulbs and washing machines that can be set to rinse clothes with warm or hot water is not a low regulation society.
What you read online can definitely sway your opinion, especially if you’ve never traveled to or lived in that country for an extended period of time. It can give you a misleading perspective.
I’ve lived in both EU and US, and EU definitely has the better quality of life for the average person. I 100% agree.
However if you are at all an ambitious youngster with huge dreams, the EU is where dreams go to die lol. EU living is what i’d call “coasting in life”. It’s a safe, sheltered life, the government is very functional and “takes care” of you which i’m sure is comforting for many. It’s not for everyone though.
In other words, I would recommend the typical person moves to the EU if they have the opportunity. Their quality of life would improve and they would be happier. For anyone that’s very ambitious or very talented at something, your efforts will pay off 10x in the US, and you’ll have a better quality of life than your EU counterparts.
Depends what quality of life means to you right? My parents were average income but I never had money stress; worst that happens is the state pays for them or me etc. I have many millions now because selling some businesses; my life is the same; high quality. So what do you mean? I can only read 'more cars' or something in your post.
your last comment made me chuckle because I actually hate driving. :-) I agree with you, quality of life is very personal!
I’ll share what a quality life means to me. For context, I grew up middle class, my father was a city employee, and my mother was a stay at home mom for a number of years.
• large emergency fund (zero stress about paying mortgage or losing job).
• I don’t have to look at prices when buying groceries or eating out.
• Time and money for 1-2 vacations per year. At least 1 international. My spouse and I love to visit new places.
• I can work remotely outside the US for 4 weeks internationally per year. I typically stay with my dad’s side of the family (in europe) for 3 weeks each year, while working remotely. Great way to spend lots of family time and not burn vacation time.
• No stress about medical care or costs.
• Ability to start a family without money stress.
• Good work life balance, no more than 40yrs on average. Minimum 3 weeks vacation per year.
• Ability to retire earlier, to pursue hobbies, if i wish.
• Easy access (45 min or less) to quality outdoor recreation on the weekends. Things like hiking, kayaking, etc.
A lot of those are luxuries, but certainly feel like a quality life for me. Yes, I realize how lucky I am. MOST people in the US are not so fortunate. I’m just explaining what quality of life might mean to someone… It’s not about buying pointless junk for me.
Your quality points are similar to mine, but then I don't get the US part? Many of these are basically guaranteed here. And the others are similar; for me it was never hard (because I am programmer since I was a kid) to make stupid money, but stupid money doesn't mean billions. The only reason I can see the US for is to make billions instead of millions. But the point is; if either of that fails, at least I always knew I am never living in a trailer park or on in my car or under a bridge here. Whatever risk (well outside dope) I take, it won't be that bad.
I cannot see how the US helps here positively unless you are don't mess up; I have got all you listen with very little effort and no risk (if it failed, I would live very much exactly the same) except maybe the family starting part as I never wanted kids. But the rest I have. I don't have a mortgage to care for either; I don't care for goods (like you), so I have a simple abode with a lot of (hiking and kayaking) land, which happens to cost next to nothing here.
>>>>large emergency fund (zero stress about paying mortgage or losing job).
I don't know about the EU, but in the UK I know their mortgages are usually fixed for only like 5 years. In the US they are typically 30 year fixed. That can cause a lot of instability when interest rates go up.
Your quality of life points boil down to being rich. If you’re saying that you’re more likely to end up rich in the US then sure, but most people don’t end up rich.
> Depends what quality of life means to you right?
I recently got laid off for the 2nd time in 4 years (probably better off than most, to be honest). I'm done with shooting for the moon. I am now strongly considering a "boring" job - the kind that keeps the basics of society running and has government contracts. I can bootstrap my own moonshots over the weekend (I'm probably going to make split keyboards with Rust firmware FWIW).
So, yeah totally, it can even change for an individual pretty drastically.
I’m not reading anything online, I literally lived in Canada for 12 years and saw first hand how awful the US is.
You would have to pay me a lot to live there, which explains the astronomical wages for tech workers.
And I disagree about your efforts paying off more in the US. In a couple areas like tech sure, but most people would be better off somewhere else.
That doesn't explain the astronomical wages for tech workers at all. Tech workers are paid highly because their employers are generating huge revenues per employee and the cost of living in these coastal hubs is exceptional [even before the most recent tech boom]. Tech workers not in Seattle, Bay Area, LA/Irvine, Boston, NYC and DC/NoVA are not getting paid nearly the same as tech workers in those places. Even in Chicago, Miami, Houston, Austin, Denver, Boulder, Raleigh, Charlotte, Philly -- they're all 20% or more lower comp. And what I'm not sure most folks on the outside looking in realize is just how much better tech companies pay for tech roles than non-tech companies pay for the same roles (usually in "IT" organizations). A SWE with 5yr experience at Google might be making $325k/yr total comp, but a SWE with 5yr experience at a F500 manufacturing company might be making $100k (and possibly working on harder problems).
The Google engineer is probably working directly on a product (or at least in a job function that is paid as if their members are working on the high-margin part of the business). The F500 manufacturing SWE is treated as part of the costs (and probably as NRE or overhead rather than as part of the product or even part of COGS).
>Tech workers are paid highly because their employers are generating huge revenues per employee and the cost of living in these coastal hubs is exceptional
These are factors common to all (e.g.) Google employees. But the folks cleaning the toilets aren't getting paid as much as the software engineers. So there must be a bit more to it than that. I'm not saying that the factors you listed aren't factors, but they aren't the whole story by any means.
If salaries weren’t so high nobody would choose to work for Google in the US vs in other places.
it’s funny because most of the US has the perception that canada is a mess and a horrible place to live too. Awful job prospects, migrant problems, horrible weather, and a housing market that makes the US look cheap. Just to name a few.
Not sure if that’s true at all, i’ve never been to canada! So take those opinions with a huge grain of salt lol.
What’s my point? I guess that perceptions can be very different.
Anyway since you left canada, I hope you found someplace where you are happier. :-)
The difference is that I’ve never met a Canadian who hasn’t been to the US at least once. The same can’t be said for US citizens, as evidenced by you.
I lived in Connecticut for 6 months too for what it’s worth. Awful place.
Canada is much better, but has its problem. These days I live in Tokyo and love it.
Over half of Canadians live within 70 miles of the US border and up to 90% (methodologies vary) live with 100 miles of the border. The converse isn't even close to being true.
This isn’t a pissing contest.
The point is that Canadians understand the US far better than USians understand Canada.
i’ve lived in connecticut for 3 years. Can confirm it sucks!
maybe i should actually visit canada one day, see it with my own eyes.
they're all true, and all (mostly) exaggerated, on both sides of the border
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Most of the murders are just in a few zip codes[1]. In some cities they are literally concentrated in a few city blocks. So if you move to the U.S don't live in obvious high crime areas and you'll be fine. The best way to tell if an area is high crime is to look for Starbucks. The more comfortable the seating in the Starbucks, the less crime there is. High crime areas have no Starbucks or they have Starbucks without seating or bathrooms. These are known as "Problem" Starbucks and they progressively remove things like outlets, seating, toilets, operating hours until problems stop. If things don't improve, they just close.
[1] https://crimeresearch.org/2017/04/number-murders-county-54-u...
I personally would like to live somewhere where all the starbucks are comfortable. That’s why I live in Tokyo.
So you felt like living in Canada gave you a clear understanding of the high cost of living and low wages in the US (we'll ignore how wrong you are about this for the moment), and your example of a more affordable place to live is... Tokyo?
Thanks for making it clear I should treat your posts as a regurgitation of terminally online zoomer talking points from here on out.
Yes, Tokyo is WAY more affordable than any city in Canada or the US.
And I lived in Connecticut too btw, but Canada was longer and more relevant since I visited a lot more of the US while living in canada.
I'd agree Tokyo or East Asian Cities certainly has a much better quality of life than the dump that is the Bay Area, but if take everything bad about the US labour market that's pretty much amped to 100 in Asian societies and for lower pay and longer hours. You won't have the time to enjoy much of that comfort in the same way as you might in a vacation.
Anybody ambitious would agree it's still far more optimal to work in a USA and build a career there first before moving to Asia as an expat to better negotiate terms. And even then, the supply of interesting jobs there is going be much less.
That’s not really true anymore! Japan works on average less hours than the US does at this point, especially if you’re in tech like me. I’ve never worked more than 40 hours per week here.
And Japan actually has more time off for people to enjoy the fruits of their labor too!
As far as moving goes, I wouldn’t be so sure. Plenty of people start off their career in their home country before moving to HK or Singapore or Tokyo, skipping the US entirely.
Anecdotally, a relative of mine worked at a firm in Hong Kong as an Architect, and the firm literally refused to do anything about nearby construction that there was dust blowing into the office ever day. That's the kind of labour standards you may see in Asia :)
She's working in London right now and alot more happier, tbh having grown up there in HK most of my cohort have moved to US or Europe.
Tech as an expat is a bit of bubble, most of the "hard work" in building a career is achieved in the less competitive environment. Growing up there in those cities is another matter, the academic pressure and job market can be soul-crushing. If you don't get into a top university many large firms won't hire you. That's not to say similar things happen in USA, but it's relatively easier to get into Ivy League, and outside of Banking or Law most other careers are willing to give you a chance to prove yourself.
Well, as I’m sure you know HK is in a different country (and hemisphere!) than Tokyo.
This is like saying you almost got murdered in El Salvador and that’s why you don’t go out alone in Nashville.
Are you saying that for people making median level of income, the US is a horrible place to live compared to the rest of the world?
As someone who was able to experience both perspectives (immigrated to the US and became a citizen) I cannot agree at all with this statement.
Yes, that’s exactly what I’m saying. Keep in mind median income is 37K, 50K in cities. If you think you can live a fulfilling life on that income then I’d be impressed.
>> Are you saying that for people making median level of income, the US is a horrible place to live compared to the rest of the world?
> Yes, that’s exactly what I’m saying.
I just came back from Chad. I've also spent time in Mozambique, Madagascar, Ethiopia, and South Africa. I'm pretty sure that the quality of life for those at median income is quite a bit worse in all of those places than in the US. So perhaps it's a bit hyperbolic to make a statement such as that, comparing the US to the rest of the world.
This thread is a bit reminiscent of the old days when the East German government used to claim - with a straight face - that the Berlin Wall was there in order to keep the westerners from overrunning the Workers' Paradise of the east.
Revealed preference shows that way, way, way, more people are trying to move into the US for economic reasons than are trying to leave.
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There is way more anti-US propaganda than pro-US propaganda at this point.
No there isn’t. Everyone where i’m from thinks moving to the US will solve all their financial problems.
Right, right, it must be the propaganda.
That's why Bill G, Larry E, Jeff B, Mark Z, and Warren B have all left, because the US is a shithole (your word) and they can afford to go anywhere they want.
Pointing out that the billionaires haven’t left your tax haven doesn’t exactly prove it’s a great place to live you know
As almost the only country* in the world that charges its citizens on worldwide income, the US is the last place that could be called a tax haven.
*Eritrea being the other...
For you, the question is theoretical. For me, I've lived it.
Before I transitioned into software, I had a very a fulfilling life being paid a mediocre salary as a graphic designer, supporting my family for years and investing plenty of time and money into my hobbies.
I don't know how to convince you of the very real experience I and many others here are having, and I don't really feel like it's a good use of my time. Feel free to keep holding onto your theories.
Really happy for you mate! This isn’t theoretical for me either :)
I’m glad your experience was good, but I don’t think that holds true for most people.
Every international median income ranking I've seen, which attempts to compare median income on an apples-to-apples basis, puts the US very near the top. Here's one example:
https://en.wikipedia.org/wiki/Median_income#Median_equivalis...
Median household income is way higher than 37K. More like 80k+
Ok, well I’m a person and not a household so i’ll stick with my number.
You are a member of a household, even if your household size is only 1. So yes, you are a household.
Imagine a household of two parents and one 17-year-old dependent. One parent works in this household and the 17-year-old has a part time job working 15 hours a week at $9/hr.
The parent who works has an income of $90,000. The 17-year-old makes ~$6,480 for working 48 weeks in the year. The other parent's income is $0. The median pre-tax personal income of this household is ~$6,480. Is this the right statistic to understand the wealth of this population?
Let's then add a household of one making $38k. Then another with one person making $22k and another making $110k. $0, $6.4k, $22k, $38k, $90k, $110k. So now our median personal income is $22k, but a median household income of $96.4k. Does the individual income really reflect the actual average purchasing power of the people in this community?
Going by the median personal income, you're including people who choose not to work or choose to only work few hours or a non-high-paying job potentially because they've got access to other forms of wealth. You're also including retirees who essentially just get by with a small pension or using their savings because they already own their home or live with family or whatever. Going by household income gives a much better understanding of wealth and purchasing power of inter-related people (even people not officially related).
I can understand this perspective if you've never been here and base it all on what you read online.
I lived in Canada for 12 years and regularly visited the US for pleasure and work.
Versus people who live in the US in this thread who told you otherwise?
I lived in Connecticut too!
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Then you'll be surprised to learn that the USA is the country that attracts the most international migrants by far.
https://www.statista.com/chart/30815/top-destination-countri...
Yeah sure, the US is better than India and it has a large scale immigration program, doesn’t mean people would choose to move there if they had other choices.
The US easily tops this survey of desired migration destinations FYI: https://news.gallup.com/poll/468218/nearly-900-million-world...
Lots of reasons for that, still don’t mean it’s a good place to live.
Which place? It's large and diverse
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Could you please stop posting unsubstantive comments and flamebait? You've unfortunately been doing it repeatedly. It's not what this site is for, and destroys what it is for.
Nationalistic flamebait in particular is not welcome here (regardless of nation).
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
Are you on the outside looking in, and this is what the US looks like to you?
My commentary as someone on the inside who has also been on the outside looking in:
> Incredibly expensive, low wages
Pick one. Wages trend higher where it’s expensive. Wages trend lower where it’s not.
There are also tough-to-see subsidies like prop 13 and rent control in CA (as an example).
Currently the US appears expensive from the outside due to a strong dollar.
From the inside, it’s more nuanced — specifically, the distribution of wealth across the capital class and the worker class is skewing much more towards the capital class than at any time in our lives, but is trending towards a common state if looking at a longer time scale.
> no safety net,
No European-style safety net.
Japan doesn’t have a safety net either. Is it “horrible”?
The US has a substantial safety net via charity. Most of the people seen in the news who need it (e.g., homeless folks) choose not to use it, since it comes with restrictions like not being on drugs.
> car and health insurance are mandatory,
Yay?
Fwiw, health insurance is federally subsidized for low income folks.
Car insurance is a good thing, imho.
> homelessness everywhere,
In many cities, yes. Outside of those… not really. If you don’t live or work in a city, this is only something you see on TV.
> gun violence is rampant,
None of my friends, family, or acquaintances in my entire life have been a victim of gun violence. I know of three people who committed suicide with their own guns (which is counted in “gun violence numbers”), but I don’t think that’s what you’re referring to.
I realize that’s a class issue, and that there is more gun violence in the US than in Europe, but it’s just not part of the day-to-day reality for most people.
> and the government is a dictatorship disguised as a democracy
Objectively not true, at least for now.
The system of checks and balances baked into the US system is failing tragically at the moment, but we are not at the level of a dictatorship yet.
> No one would actively choose to live there if it wasn’t for high salaries in certain fields.
I don’t think that this is universally true.
I know plenty of immigrants who make their money, retire, and choose to stay in the US. Some people go back, but a lot stay, and with purpose.
Realistically I think the guy is centering on the experience of the poor only and using that as the quality of life index.
In another comment he talks about car insurance and food costs as if those are even major expenditures?
For a European moving to the US the only actual difference is health insurance, and even then, at low income you probably end up paying about the same or slightly more as European taxes, at a higher income you come out significantly ahead.
I also don't know a single person in the entirety of Europe/UK who doesn't own a car outside of the megacities like London, Paris etc, so it seems like a daft comparison given that car insurance rates are fairly similar in UK and US.
I only have 1 friend that has a car where I live. It’s pretty great.
You either don't know a lot of people or surround yourself with a very particular crowd...
Nope, I have tons of friends from all different walks of life. Cars are seen as a burden, so only people that need one buy one.
>Cars are seen as a burden, so only people that need one buy one.
I don't know where exactly you are located but it sounds like a delusional place. Can't name one first-world country where getting a car is seen as 'a burden' and not 'a massive improvement of one's life'
>None of my friends, family, or acquaintances in my entire life have been a victim of gun violence. ... I realize that’s a class issue, and that there is more gun violence in the US than in Europe, but it’s just not part of the day-to-day reality for most people.
I'm curious roughly how old you are. I grew up in a fairly well off suburb of Seattle and am in my mid 30s. At some point around 2020 I realized that among my friends, parents/kids of friends, and coworkers there had been 8 or 9 incidents of newsworthy gun violence in my fairly close contacts. In a way I would consider myself as having grown up fairly sheltered and so it was a surprising realization.
Newsworthy used to avoid digression about mass shootings vs shootings, as you did about suicide. I think most were reported as mass shootings but I'm not certain now.
*posted from a new account while traveling, I'm not meaning to come off as a troll jumping in to focus on guns as a topic. It just stood out to me as I was reading.
> I'm curious roughly how old you are.
50s.
Note that I grew up around guns, and most areas I have lived in while in the US are gun friendly.
In my family and peer group, gun safety was taught at a very young age, and it was taught strictly — guns weren’t to be treated like toys, don’t even appear to mishandle a gun (e.g., by flagging someone, even if obviously unloaded), and don’t wield a weapon unless you’re willing to pull the trigger and neutralize/kill them (n.b., avoiding the situation or running away is often the best option).
That said, I know of three people (not close to me, but in my wide circle of acquaintances) who have had their guns confiscated by LEOs, each time by a spurned spouse who alleged that they were in danger or the gun owner was a danger to themselves, and each time was a generous interpretation of the circumstances, imho.
> there had been 8 or 9 incidents of newsworthy gun violence in my fairly close contacts.
If you don’t mind me asking, was there a common theme to the incidents, or was it just random stuff?
> I'm not meaning to come off as a troll jumping in to focus on guns as a topic.
Quality comment. Not troll at all, imho.
I've mostly lived in places that you might consider gun unfriendly. I don't own a gun and am not always comfortable in places where they are too present. I know enough about safety from friends that I've avoided shooting with certain people in my greater friend circle. That said, living in the mountain west friends of mine own guns, hunt, and one set of friends owned a gun related business for several years.
For the incidents 3 were school/university shootings, 3 were in malls or similar public locations, and 1 was a house party. I don't know of any real common theme beyond gatherings of people. One I included in the earlier post was a domestic incident with several deaths and so it might not belong with the others.
I've noticed my 50-60 year old friends and their children in high school are more concerned about school shootings than I ever was. That may just be excessive concern due to increased news coverage, but I think there is also something about the availability of guns and teenage brains that is a real concern for them.
My personal experience has only been hearing gunshots nearby, although one incident involved a death. I don't think of myself as being in dangerous places but it has happened more than a few times. Guns and gun violence aren't something I think about much at all, but when I do it's surprising by how much it touches my life and my friend's lives.
All that said, one thing I do appreciate about this country is the variety of it. A friend who grew up sheep ranching told me they were allowed knives up to a certain length and guns at his school. Meanwhile mine would have had a lock down if students did the same thing.
> Are you on the outside looking in, and this is what the US looks like to you?
No, I lived in Canada for 12 years, my family lived in the US for 6 years, and I regularly visited for work and pleasure. My first hand experience is that the US is a shithole.
> Pick one. Wages trend higher where it’s expensive. Wages trend lower where it’s not.
No. Slightly higher wages do not offset the incredible cost of living in cities. And likewise, if you live in a cheap area you still have to compete with everyone else for certain goods.
> Japan doesn’t have a safety net either. Is it “horrible”?
Japan does have a safety net.
> The US has a substantial safety net via charity
lol. Guess I'll die unless Jeff Bezos decides to give me money.
> Fwiw, health insurance is federally subsidized for low income folks.
It should be federally covered for everyone in the country.
> None of my friends, family, or acquaintances in my entire life have been a victim of gun violence
Yes, that's statistics for you. I'm Brazilian but I haven't been murdered even though lots of people are murdered in Brazil.
> I know of three people who committed suicide with their own guns
This is gun violence.
> it’s just not part of the day-to-day reality for most people.
It literally is. A ton of people own guns for "protection", because what if the other person has a gun. There are areas of cities you avoid because they're dangerous. If you get stopped in your car by a cop, there's a non-zero chance you will get shot. Kids literally have active shooter drills in school. It literally is part of day-to-day reality for most people. You're just in it so you don't realize it.
> The system of checks and balances baked into the US system is failing tragically at the moment, but we are not at the level of a dictatorship yet.
Yes you are. You get a choice between two parties who are basically the same. 70% of the country's vote is thrown away in federal elections. A vote in Wyoming counts for 4x more than a vote in California. Counties are gerrymandered so badly your vote doesn't matter even in local elections. Voter suppression is table stakes. That's not a democracy.
>> I know of three people who committed suicide with their own guns
> This is gun violence.
Huh? Do you count people who hang themselves as victims of "rope violence"? Are people who kill themselves by sucking on the vehicle's tailpipe victims of car accidents? People who jump off of buildings are counted as construction accidents?
People choose guns because they’re very lethal. If a gun wasn’t around they might not choose that route, and eventually get out of the dark place they’re in.
American wages are quite a bit higher than European on average: https://www.worlddata.info/average-income.php?utm_source=cha...
And most of that money goes to higher food prices, health insurance and cars.
No, it really doesn't.
PPP-adjusted disposable income per capita (meaning, after all the necessary expenses) is by far the highest in the world: https://www.statista.com/statistics/725764/oecd-household-di...
Food spending as a portion of total expenditure is the lowest in the world: https://ourworldindata.org/grapher/food-expenditure-share-gd...
Out of pocket health care expenditure as a share of GDP per capita is fairly low in comparison with other wealthy nations. Of European nations, only Monaco, Luxembourg, the Netherlands, and France are lower (and not by much!).
Transportation spending is indeed higher in the US than most of the developed world, but it doesn't eat away much at the increased disposable income per capita -- proportionate to household income we're talking about a few thousand dollars higher, and most of that is a very recent development as costs went way up over the last few years.
And yet we have the highest disposable income in the world: https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
Certainly food and cars is not more expensive than most European countries. Health insurance is also not that much expensive, it is only the way you pay it which in Europe is by tax. There is the issue of not being covered if you don't have a job but that's has nothing to do with price. The US is one of the cheapest countries in the world with pretty decent salaries and endless variation in house prices, there also always cheaper cities or alternative states. Try that in Europe or Australia or Canada, good luck.
>The (average) income is therefore calculated according to the Atlas method from the quotient of the gross national income and the population of the country.
Ah yeah, surely that doesn't get insanely screwed up by America's near top of the list inequality?
The average salary for 9 homeless people and 1 CEO is $100k! Americans are definitely better off than Europe!
I mean, the same is true of median income as well. People overestimate how much inequality affects the actual end numbers in the US. The median incomes in the poorest US states are still higher than most of the world.
West Virginia has a higher median salary than the United Kingdom.
I don't think you know what dictatorship means. Anyone living in a real dictatorship would be offended by your comment.
Comment was deleted :(
I have an objectively higher QoL than almost anyone in the EU or Japan who wasn't born rich.
After many years as a SWE without a college degree, I was able to buy a large 5 new 5 bedroom house within ~25 minutes of my employer in a beautiful city, I have a full time nanny for my children, a luxury car, padded retirement, and plenty of other money to buy what I want.
Where else can a smart, hardworking person achieve that who didn't come from generational wealth?
I'm not so unique either, I have some friends I've known who similarly didn't come from money and have been able to build up careers that support a wonderful lifestyle.
Europeans have a bottomless admiration for generational wealth (old money), and equivalently despise individual success (nouveau riche). Centuries of monarchy does that to the spirit of a people.
Yeah dude, you’re just rich. Most people aren’t, and wouldn’t be even if they were in the US.
I can’t retire and continue my current lifestyle, I would need some sort of job. Therefore, I don’t consider myself rich.
More importantly though, I have this lifestyle due to a job, one that is quite common (software engineer). I didn’t luck into some unique position or business opportunity.
I’m happy that you don’t consider yourself rich with your 5 bedroom house and full time nanny, but that’s what you are. You’re rich.
And yes, software engineers stand to profit from moving to the US. There’s very few other jobs like it though.
Your comment is interesting to me as a comment further up sates that: "People move from China to India despite the higher prices in America precisely because the increase in wages is more than enough to offset the higher prices." https://news.ycombinator.com/item?id=42321211
So while expensive holds, the low wages does not.
> no safety net There are safety nets in the US, just not one singular one nor is it always easy to apply or get benefits.
> car and health insurance are mandatory What countries don't have mandatory car insurance? Which ones don't have mandatory health insurance?(Universal health care doesn't count, as that is mandatory and taken from taxes.) Further, you can eschew health insurance in the US. Many people do(for various reasons, cost being one of them), it is just not that wise of a move as healthcare here is very expensive.
> gun violence is rampant We have pockets of areas where violence, not just gun, is rampant. I think a fairer analysis shows that it is the intersection of poverty and also drugs but I can not speak fully to this topic.
>the government is a dictatorship disguised as a democracy. Is this talking about the current government(Joe Biden?), the future administration(Donald Trump) or the administrative government(deep state?)?
I would agree that our government is not functioning as well as it could, I am also not sure if I have seen any other governments do any better.
Japan: Due process with police holding suspects and trying to force confessions.
South Korea: Recent Martial Law issue
France: Numerous protests occurring
Great Britain: Prime Minister just told all farmers "If you don't like the changes we have implemented, you can leave." Protests and counter protests with violence on both sides but police seem more focused on arresting people for social media posts.
I can't think of any recent issues from the Scandinavian countries but that is more likely due to my lack of exposure to media than lack of issues.
Please let me know which countries you find to be great.
Yeah, every country has its problems, but that doesn’t mean they’re all as bad as each other.
Yes, Japan has a problem with allowing police to hold suspects for 3 weeks with no outside contact. But the reality is that very few people are ever arrested, to the point that nobody is afraid of police.
The same can’t be said for the US, where black parents have to tell their kids to not trust cops.
In my experience Japan is pretty great, so that’s where I live.
Other places I consider top tier are Holland and Scandinavia. Western Europe and developed Asia is tier 2, some of Eastern Europe and Canada are tier 3, USA and most of South America are tier 4, and any other countries I wouldn’t live in.
The bizarre thing is that the problems are fixable. The federal government already spends more per capita on healthcare than other developed countries, just that our healthcare is so much more expensive and for no good reason.
Our healthcare system, to the extent that it was intentionally designed at all, implicitly prioritizes consumer choice and immediate access over cost efficiency. While there are certainly gaps in access and affordability, the typical middle-class voter can still get elective care quickly from a variety of local providers. Most other developed countries have longer queues or certain services are less available. We also subsidize drug development costs for the rest of the world. Whether those are good reasons for paying more is a matter of opinion.
Of course there's also a certain amount of waste, fraud, and abuse that inflate our costs.
The US certainly does not subsidize drugs for the rest of the world. It literally would rather enforce patents than save lives.
And there are no long queues for healthcare where I live. Service is cheap and insurance is nationalized.
> The US certainly does not subsidize drugs for the rest of the world.
It literally does. The costs of producing drugs are mostly borne by the US market, allowing drug manufacturers to charge less elsewhere while still investing the billions of dollars necessary to develop the drugs.
Interesting
- Why doesn’t this happen in other fields? Why don’t we pay 10x more for iPhones?
- When did the american public chose to engage in this magnanimous largesse?
More likely it’s a scam and regulatory capture
Economists, and pharma lobbyists, argue against US drug price regulation because new drugs produce large positive externalities.
I think it's a mix of pharma lobbying and also altruism. Pharma lobbies Congress to do the altruistic thing, and many Congresspeople agree, because they believe in markets and understand incentives.
I’m arguing AGAINST the drug price regulation that allows pricing to be much higher in the US
For example the prohibition on importing drugs from other countries, or the rules that prevent medicare from negotiating price for drugs
If you think that’s for the benefit of the rest of the world then I’ve got a bridge to sell you.
No one claimed that it's for the benefit of the rest of the world. But the reality is that if US drug prices were fixed by the government at lower levels then there would be less new drug development. The US develops around 75% of world's new drugs. Would you prefer to have fewer new drugs going forward?
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Nope. Nobody changed the argument. No one said "USA subsidizes drug development out of a societal sense of charitable obligation to the rest of the world." It just so happens that - due to the unfortunate design of our system - the rest of the world is receiving a subsidy.
In fact, there are European-HQ'd pharma companies that also make the lion's share of their profits in the US - so that's certainly not benefiting the US.
It’s not the rest of the world getting subsidized, it’s pharmaceutical companies. The rest of the world is getting fleeced trying to buy vaccines.
If your government wants to give even more profits to big pharma then go ahead, just don’t claim everyone else should be thankful.
> just don’t claim everyone else should be thankful.
They did not claim that.
>> it’s good to let people die because they’re poor
They didn't say that either.
What dishonest responses...
You left out one of the most important products of our system, profits!
> much more expensive and for no good reason
There is a good reason: profits and management pay. And greed is good, right?
> the problems are fixable
Fixable in theory. The US would first have to fix the underlying issue, which i.m.o. is government, media and even judicial capture by financial interests. Billionaires are now openly buying "shares" in those. I don't see any sign of it changing anytime soon. It only seems to get worse.
It's not just profits and management. Administrators, nurses, and yes, definitely doctors, get paid far higher in the U.S. than in other countries. Who wants to be the one to say we need to cut staff, and cut wages for nurses and doctors, in order to bring down costs? Just cutting fat from insurance companies, or having the government step in as insurer with no other changes, wouldn't move the needle much.
I'm pretty sure healthcare costs in the US are also higher as a percentage of GDP compared to EU, so higher wages would not explain the difference. Also productivity should be higher?
I think pharmaceutical, hospital, insurance and legal companies take all the money.
Doctor and nurse pay is like 13% of costs. Massive savings are elsewhere
Yes there’s tons of overhead and extra costs, but it isn’t mostly at the insurance company level. It’s spread all around the system, that was my point. There’s no one “quick fix” that leaves everyone with the same job and fat salary as they had before.
That’s right you’d need to eliminate most administrative jobs, all the jobs at PBMs, etc
Then these folks can contribute to the economy constructively, somewhere else instead of being a giant helksink of cost. A win-win for everyone
>There is a good reason: profits and management pay. And greed is good, right?
I tried to find a health care CEO to comment, but they're all busy hiding from assassins.
I’m an American living in France for the past two years and cannot wait to move back to the USA. The taxes are so extreme and salaries so low that no one can even invest in the stock market. If I stay here, I will be able to leave virtually nothing to my kids when I die. The EU can take its 5 weeks of vacation and go fuck itself.
On the other hand, it's absolutely fantastic to have a young daughter and have her virtually not impact our finances at all for many years, between clothes/toy gifts from friends, gov subsidy, free healthcare, free education and low levels of keeping-up-with-the-Joneses on after-school activities, plus knowing I won't burden her financially either as I happily live out my retirement on a decent pension.
I may not leave her a lot of inherited wealth, but she may also not really need any to have options.
(That said, my personal frame of reference for why this is better and wonderfully stress-free is years lived in South Korea--that ultra-low fertility rate has reasons--, not so much the US.)
“may not need any to have options”. I hope you’re right, but hoping the EU continues to prosper over the next 20-30 years is not what i’d call a plan. The future is unpredictable.
I think this is the fundamental cultural difference between countries like the USA (and Australia) vs most of the EU.
Folks here expect and trust the state to provide for the future, private provisions are easily dismissed as unnecessary. As a result of this the median household wealth of the area I live in is 5x lower than my home country of Australia, despite incomes (adjusted for purchasing power) not being drastically different.
Whether that trust is wisely placed we'll have to wait and see[1]. However I do need to narrow that down a bit, it's not the whole EU, mostly France/Germany. There are other nations moving ahead with private pension schemes etc and much higher household wealth (Denmark, Sweden, Netherlands).
1. My main concern is government investment is inherently slow, politically charged, and pathologically risk averse vs the private sector. This means in the aggregate, over the long term, private household investments will out perform.
This is entirely a problem of putting all of eggs in one basket. Or rather, only having one basket in which you’re allowed to put your eggs. The German pension system is already insolvent, and I suspect it’s not the only one. European welfare states are great n’all, but it would seem they were set up when the going was good and populations were growing. Now with stagnation, they don’t look much like staying solvent and populations don’t have anywhere else to turn
The German pension system is completely insane. There is no fund backing it, and disbursements already exceed contributions to the tune of 127B EUR per year (which is subsidized from the general budget) and the gap is only growing.
Probably explains a good chunk of Germany's and the EUs anemic growth. Simply put, that's 127B EUR that can't be spent investing in the future and growing the economy.
> I won't burden her financially either as I happily live out my retirement on a decent pension.
What is a decent pension and where it will come from? I'm projected to get a decent SSA pension (bigger than a median income in top tier EU countries), but I am not counting on it. What gives you confidence that government will be able to support you through retirement?
> What gives you confidence that government will be able to support you through retirement?
Laws that obligate the country to do so
At the current trajectory of the EU though, don't count on it. She will regret you guys not having built up an inheritance for her, considering that EU tier 1 and tier 2 towns and cities are being rapidly bought up by American private equity.
Source?
Source is me. I worked at a major PE firm in a past life doing exactly that. Also check who's the new landlord at many European cities - Paris, Munich, Frankfurt, Stockholm, Copenhagen.... More often than not it's either of the two American investment firms which start with B (and I worked at one of them). European real estate is highly attractive to hedge fund investors because of stable growth and low volatility due to forced undersupply - much better for them than actually working for their 2 and 20 paycheck.
Hmm so anecdata
and this I think highlights a really big difference in perspectives: how do people feel about equality in origin, opportunity and outcomes? As an upper income Canadian I'm getting pretty tired of paying for all that equality, and I think Canada is not yet at the same level as most European countries. My kids may be the first generation that should leave Canada for opportunities.
As a fellow Canadian I don't think it's equality that's the issue. It's services rendered for the payment given
I understand why one would prefer the US way, but these are some weird arguments.
I understand why you would want higher net income to enjoy a wealthy life, but for "investing in the stock market"? I also understand why you would want to earn more so that your kids can have a better life, but why "after you die"?
If anything, the latter can be turned into an argument for the EU way. Your kids don't need you dead, they need you to be alive and caring. So you have vacations so you can spend time with them, public education so that they have the skills to help themselves, so they don't need your inheritance, and healthcare to keep you alive even if your "stock market investments" are at a low point.
What’s even nicer is if kids don’t need their parents to leave them an inheritance just so they can afford a roof over their heads.
The U.S. is filled with homeless people. Even Italy, which was doing economically terrible when I visited, didn’t even have a fraction of the homelessness problem as in the U.S.
"The U.S. is filled with homeless people." is a popular, completely unsubstantiated statement from people who live elsewhere. Everywhere is filled with homeless people would be more accurate.
> Everywhere is filled with homeless people would be more accurate.
Except Finland and Danemark[0]
That's weird, because France has a higher rate of homelessness than the US. The French average, 45/100k pop, is comparable to NYC.
Italy is much lower at 8/100k.
I caution against trying to compare homeless statistics internationally.
The definition of who is homeless and how they are counted varies dramatically between countries to the point where comparing headline numbers is largely useless.
In Seattle it is over 400/100k, by some estimates higher than 500/100k.
45/100k would be an incredible improvement.
Though looking up Paris, it is ~200/100k, which is still half of Seattle's rate!
Leave Paris and Marseille and you'll be golden. I'd be curious to see that kind of data.
well get out of the major, mild US cities and it drops substantially as well.
> The U.S. is filled with homeless people. Even Italy, which was doing economically terrible when I visited, didn’t even have a fraction of the homelessness problem as in the U.S.
Interestingly, these are not unrelated. Italy's housing prices are very low because of how badly it's doing economically.
If so then its better if it did worse economically until homelessness becomes zero or close enough.
Not that closely related. Much of homelessness is still not a housing price issue, and housing price issues are partially but not completely remediated by a contraction in the economy.
And also... no -- homelessness is one bad problem, but there are other problems. Bad economies cause a myriad, including declining healthcare availability and reductions in life expectancy.
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> Correction: the west coast is filled with homeless people due to democratic supermajorities. Most of the country is extremely clean.
This is such a bias tinted view of reality. There are homeless in all parts of the country including suburban and rural areas. You find the majority of homeless in cities because that is just where people in generally are so if by most of the country is extremely clean you mean most of the country is extremely empty and void of life then yeah.
But you don't find massive unhoused homeless encampments (which is really all that matters for most people) in all cities. The problem is of a completely different scale in East coast, Midwest, Southern cities.
Let's just ignore the rural areas and suburbs. Let's even ignore party (since most big cities are democrat run at this point).
Even with all of those things held the same, the West Coast cities are still uniquely bad not just in the people without permanent housing but also their lack of ability to do anything.
This particular article points to housing supply. Again, this is a simple choice. For example, my city of Portland, which is very high on this list, makes it impossible to build anything (tree planting requirements, years long waits for final premits, rent control, urban growth boundary, high tax state gov't, etc). It's terrible. At the end of the day though, Portlanders are Americans and will experience the same outcomes should the state just be normal
> This particular article points to housing supply. Again, this is a simple choice. For example, my city of Portland, which is very high on this list, makes it impossible to build anything (tree planting requirements, years long waits for final premits, rent control, urban growth boundary, high tax state gov't, etc). It's terrible. At the end of the day though, Portlanders are Americans and will experience the same outcomes should the state just be normal
That isn't a democrat problem, indeed the unwillingness to build new things is, by definition, a conservative tendency to "leave neighborhoods as they are".
Historically Seattle's city council was full of "conservative democrats" who didn't rock the boat much and who worked well with local businesses. The city council may be willing to build bathrooms for any gender, but no way in hell are they willing to rezone "historic" neighborhoods. However they've had no qualms about building large amounts of shelters in minority neighborhoods, devastating many of them. Likewise the police don't bother shutting down open air drug markets in Chinatown, but I'm pretty sure if a few dozen dealers and several hundred customers congregated on Queen Anne the crowd wouldn't last long.
Show me a republican candidate who is willing to run on the platform of "extreme property rights, get rid of all zoning except for heavy industry, do whatever you want on your land." The reality is outside of a few places in Texas, republican controlled cities are just as heavily restricted and zoned as democrat controlled cities.
No city in the PNW has had anything resembling a conservative anything for many decades. The people here are so out of touch with the rest of the country, it's a bit worrisome honestly.
> The reality is outside of a few places in Texas, republican controlled cities are just as heavily restricted and zoned as democrat controlled cities.
I mean... you're ignoring the largest Republican state for what reason exactly?
But anyway, I think a lot of zoning policy is set by the state.
For example (and this is frankly why efforts like DOGE are necessary), it is simply true that politicians of both parties will seek to maximize their power. State codes typically grant cities zoning powers. They don't have to. But most do. Thus, one can expect that any politician will wield that power.
I've never met a politician who didn't fully exercise their power. Those who do become folk heroes like Cincinnatus -- so rare is the accomplishment.
At the end of the day, we the people simply need to remove the power from the state, one way or another. If DOGE works, it would provide a good model for how this could happen.
From my perspective, I think that every decade, the citizens should elect a 'deregulation' committee whose only power is to remove regulation. Or, randomly pick a group of 12 people to sit on a grand jury to eliminate laws periodically. That's their only power, and they'd be anonymous. Maybe that'd work.
> No city in the PNW has had anything resembling a conservative anything for many decades.
Up until a year or two ago Kirkland had a long standing (and well respected) republican on its city council. Small r republicans used to hold multiple positions in the PNW, but after the party purge post 2016 the Republican party in Washington State has done nothing but run absolutely unelectable candidates. They used to run candidates who ran on a fiscally conservative platform and who didn't engage in culture war stuff.
But aside from that, fiscal conservatives and social conservatives are two different axis, and historically Democrats in Washington have been rather fiscally conservative.
The Seattle city council worked very well with the local businesses communities and they were adverse to adding new taxes.
While the council's behavior has changed in recent years, the history is that up until less than a decade ago, Washington was rather purple when it came to actual policies.
Hell the super liberal local independent newspaper used to put some small r republicans on their voter guide now and then.
Cities in the midwest and east bus their homeless to the west coast. California tried to do the same but turns out people really like the weather.
As far as they lack the ability to do anything, you're right. Cities are NIMBY trapped and unless they fix that they won't be able to make any real progress on the problem.
The Guardian did an article on this about a decade ago when this claim was still popular and found that this was not the case. Cities like SF bus more people out than are bused in.
Because nobody wants to live in the south, midwest and east coast.
The west coast was a great place to live, people moved there, they didn’t build enough housing, people lose their jobs and can’t afford rent, they go homeless.
False.
These are the fastest growing regions of the country. Texas and Florida are going to take several West Coast electoral votes if trends continue.
False.
They’re growing now because people can’t afford the west coast anymore.
That doesn't change the fact that people literally want to live there vs the west coast
It's not that they don't want to live in the west coast. It is that they can't. Again, NIMBYs, rising rent, supply and demand etc etc.
It means people literally don't want to live there, but choose to because the west coast is too expensive.
You know, “forcing homeless people off the streets” so they die somewhere else isn’t the amazing policy you think it is
I don't want them to die. I would prefer they be warmed and kept alive in homeless shelters, but city governments are uninterested. For example, my city of Portland built a suitable building for a homeless shelter (well the county did) and immediately left it empty for 10 years until a private group bought it and is now running a shelter. Meanwhile, Oregon state is preventing them from running it at capacity, and the county is pulling funding.
They don't care. Meanwhile, 100s of millions were spent on tents.
Again, this is a simple problem where we fix it by funding homeless shelters and getting people off the streets. For a while, due to Oregon's incorporation of Martin v Boise into state law, police weren't even able to force people into a shelter. It's honestly insane.
100's of millions spent on tents? Please, where do you get your information? The expected cost for tents in FY 2025 is $230,000, paying for approximately 6,500 tents – or about 0.05% of the total Joint Office budget. Plus, they halted the tent procurements after commissioner Gonzalez protested earlier this summer.
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Daycare in my city in the US is around 30k a year.
The city just dismantled its gifted program for schools, so if your kid is a high achiever plan on another 40k a year for schooling.
Even swim classes have a huge waitlist and are expensive. Any type of children's activity is absurdly expensive due to the high cost of living.
Housing is absurd, if you have a couple kids plan on spending 4k a month on rent for a place in a nice neighborhood.
Most Americans have around a thousand dollars in savings and that is it. Americans are, by and large, not even able to save up for retirement, with zero hope of leaving anything to their kids.
Tech worker salaries are a small bubble in all of this.
I've lived in LCOL, MCOL and VVHCOL cities in the US. Just because everything is outlandishly expensive in the bay area, that doesn't mean the same is true everywhere in the country. In large swaths of LCOL and MCOL areas, your money absolutely goes further in all the areas you listed.
I would suggest, though, that if you didn't grow up in the bay area and have family property here, as a relocation target it should be considered similar to gold mining. You're moving here for work because of the amount you can save [as a result of ludicrous tech compensation] and then use elsewhere, not because it makes sense financially to actually be living here.
I'm not in the bay area! I'm in Seattle, which used to be the cheap west coast alternative to the bay area!
I'm third generation here. Although I'm remote, my wife's job is tied to a location here. We both want to live someplace with a strong international community, access to an airport with lots of overseas flights, and that is a reasonably large population center. (IMHO Seattle is still small, and we are lacking many things for it, although that has gotten better over the last decade or so.)
The only other locations that meet our criteria have either garbage politics or garbage weather. (not that I'm happy with Seattle's politics, but at least our city council is mostly incompetent and a little bit malicious, as opposed to mostly malicious and a little bit incompetent!)
So you want to live in what would be an extremely desirable area but also have the cost of living be very low, and feel like you have a high quality of life while you have a tendency to exaggerate the negative aspects of your community.
Best of luck to you on your endeavor.
> So you want to live in what would be an extremely desirable area but also have the cost of living be very low, and feel like you have a high quality of life while you have a tendency to exaggerate the negative aspects of your community.
I don't want a super low CoL, but I realize that housing prices have gone up in excess of what they should have due to restrictive housing policies.
Seattle used to be 1/2 the price of the Bay Area, or less! Engineers here earned less than in the SF, but we were OK with it because the QoL was great at a much lower cost.
But the city and surrounding areas refused to upzone, to such a degree that the state legislature finally had to force the issue, but even then the laws passed are too little too late.
The reason for the high CoL is lack of construction, plain and simple. Getting simple residential permits can take half a year or more, environmental regulations have limited what even homeowners can do with their own houses, and the majority of the city is still zoned for only single family homes.
The high price of building means that daycares can't open (too expensive to justify), and workers in all fields demand ever higher pay just so they can afford rent, which drives up the cost of everything.
For the last decade we've built 1/2 as many houses as we've had people moving to the city, and a large percent of new dense construction is rental only, which means money leaving the city and residents not building up any equity (or long term stake) in the city.
Bad policies lead to bad outcomes.
> Most Americans have around a thousand dollars in savings and that is it.
Per the US government's own BLS, the median household has >$1,000 leftover each month after all ordinary expenses. Americans may not save much but it isn't for lack of available income.
Medians mean nothing in a society that has a bimodal distribution of wealth.
America is full of people who are working a job and a half (with a good chance both are 30hr a week jobs that offer no benefits, and may have "flexible" scheduling where the employee is called in to work different computed selected shifts each week), and people who are working in offices earning good money.
In the middle you have some people working trades still.
We switched over from a manufacturing economy that made things and gave people stability and enough money to raise a family to a "service" economy, and then we started telling everyone working service jobs that "those jobs aren't real careers, so of course you are being treated and paid poorly!"
Isn't it alarming to you that you are optimising for what you leave behind when you die (stocks) over what you can have while you live (vacations)?
Right. And the vacations are something you ‘give’ your kids too. You won’t lie on your deathbed and think: “I shouldn’t have taken my kids to Vienna that summer. Should’ve put it all in Vanguard ETFs. Man what a bummer.”
If your kids appreciate your money more than your time is when you know you screwed up.
He's optimising for (kids) over (himself). It's noble.
Kids also want to see their parents (particularly when young). That’s also an important gift to children.
heck, raising your kids is the one and only tasks which should really count in your life (if you have children ofcourse). Wealth can dissapear in an instant, and considering the stability of the world seems to be only decreasing, raising and seeing your kids grow up seems far more important than investing in the stock market to me.
first the government will take 50+% of everything he leaves to his kids. if there is still significant funds that he leaves them they will 100% become bums.
he should spend every penny he’s got to spend every minute he can with his kids - especially while they are young. and his kids will say the same.
not noble at all - naive, dangerous and downright stupid thinking
> first the government will take 50+% of everything he leaves to his kids.
Not if you do the slightest bit of planning.
“slighest”? give me one? I have been doing “slighest” for about last 18-ish months so we would love to hear what this “slighest” is all about - hit me
(Assuming US.)
If you will have under $7M in your estate, the slightest is literally nothing. You will not owe a penny of federal estate tax.
If you have over $7M in your estate, it's worth consulting an estate planner, but the basics look like gifting and establishing trusts while you are alive (and ideally while the exclusion amounts are high).
The current exclusion is $13.61M per person, or 2x that per couple and set to drop down to $5.6M in 2017 dollars on January 1, 2026.
If there's a chance that you'll have over $7M and die in 2026, the slightest is gift some of it now [directly and/or via trusts or 529 plans] while the estate tax exclusion is still $13.61M and file form 709.
Imagine complaining about having to pay IHT on >7M$. The richest are the loudest complainers.
Leaving money to your kids isn't a bad inclination or anything but I don't see why it's the be-all end-all. Maybe my parents will leave me some money when they pass, or maybe not, I'm certainly not expecting or planning on anything. I hope they spend what they can to enjoy their life while they're alive.
Also, any inheritance money would come way too late to be useful in my life.
Not to mention, you cannot predict the future and you might lose your wealth outside your control. wealth is only able to grow if the state and society itself is stable, otherwise you might have worked for naught, and lose everything in the process thanks to war/climate change/economic depression etc anyways. (my SO's family lost all their wealth in world war two for example, and i am talking generational wealth here).
Raising your kids to be able to stand on their own and deal with the harshness of the world is far more important in my opinion.
Leaving more money for your kids vs spending more time with your kids seems like a rough choice.
Is that not a false dichotomy? I make quite a lot of income and still have lots of time with my kids. At least as much as I'd have anywhere in Europe, I bet. It is not a hard requirement to make good income that you sell your soul to the corporation.
Original post talked about 5 weeks vacation each year. I suspect the assumption is that working hard in the U.S. would not allow for that 5 week vacation.
Therefore that's 5 less weeks with the kids each year — or about 1.6 years total by the time they leave home for college.
Then there's parental leave: Sweden offers 390 almost fully paid days plus 90 days optional with minimum payment per child, split on the parents.
I could consider going to the US to earn some money while young but never to start a family.
So you either get 5 weeks of vacation or 0?
I have 4 weeks of vacation plus 11 federal holidays, which is close to the norm in nearly every professional job I'm aware of.
I use it and make a very healthy wage when I'm at work.
I hope so, but I feel it holds true in general. It's certainly true where I work that no Americans take 5 weeks of vacation.
It's not technically 5 weeks, but I'm American and get 24 days (96% of 5 weeks) of PTO plus 7 company-chosen holidays. And I take every one of them, even if some are just "I'm not working the next 3 Fridays, because I want to putter around the house."
We start with 19 + 7 days and get 1 extra day per year of service until 5 years. (We also get a 4 week contiguous block once every 5 years.)
Several years ago (when I was a manager at Google) one of my employees needed to relocate overseas in order to facilitate coming back under a more preferable visa type, and they were looking at options. For the same role where they were earning $135k base in Mountain View, it was going to translate to about $115k in London, $155k in Zurich, and only $89k in Paris. They chose Zurich and ended up staying there for over five years before moving back to the bay area.
the eu quality of life has a higher minimum but a far lower median
It can't be overstated how much of this is cultural. Quality of life is simply less materialistically driven in Europe.
If Americans give up on home ownership and luxury items, they too can enjoy a European quality of life; living in an 800sqft rental and enjoying a rich social life.
https://www.scientificamerican.com/article/americans-are-lon...
Americans are much lonelier than their European counterparts.
In addition, lifespans in the U.S. are declining even post COVID relative to their European counterparts, largely due to increases in “deaths of despair” (drugs, suicides, etc).
The idea that Americans have a “rich social life” is not true relative to Europeans. Even the church going etc. is for most people forced upon them as opposed to something they want to do, as evidenced by the increasing number of people saying they’re faithless but onto church anyways.
That doesn’t mean that people with rich social lives don’t exist or even that the lack of such a rich social life is a problem for a majority of people.
What it means is that the U.S. broadly isn’t doing as well as Europeans and further things are getting worse.
I always wonder what would happen if you took these studies and actually broke down the US into units the size of the European countries we're being compared to.
It's easy to make a study that shows that the US has more X than some number of European countries—you just compare the entire US to all European countries and then cherry pick the ones where we do worse. But the US is a big place with a lot of variety in living conditions—even if you just broke down the results by broad geographic region rather than state, you would get dramatically different results than taking the US as a whole. What happens if you compare loneliness in the South with loneliness in Denmark? Or what about loneliness across the entire US with loneliness across the entire EU?
my point was the opposite, that Europeans have rich social lives, and this is responsible for their quality of life, despite fewer material luxuries.
This is the cultural aspect.
this is true but less and less so… I am European living in the US for the last 30+ years. spend my summers in europe and noticing each and every year that this culture is slowly dying. playgrounds where hoards of kids used to be are mostly deserted, mobiles and social media are slowly taking over the lives of europeans too. this may be difficult to see if you are not looking hard cause european cities get A LOT more tourists than US cities (tourists are on their phones too :) )
I have no doubt that materialism and consumerism is eroding social life in Europe too. My point is primarily that the US is way ahead of the curve on this, and it explains much of the difference.
I have a lot of friends who went the opposite direction of you, and chose a cheaper but more fulfilling life in Europe.
Instead of making 200k a year in the us, they make modest salaries and rent 100-year-old farmhouse flats that Americans would call a slum. They drive economy cars and spend their ample time socializing or outdoors.
My personal opinion is that Europeans simply place a higher priority on social interaction and incorporate it into their daily lives. Many of them have more modest financial aspirations, and don't expect to ever own a house, vacation property, or boat.
100% agree!
I basically explain this by comparing my life (US of A) to my sisters (EU). My sister makes great money - my sister spends ALL of this great money. she lives paycheck-to-paycheck which in US would mean she is poor, in EU she is living large (just came back from UAE, heading to Kenya in a couple of weeks, January Macedonia and Austria…). I make 789x what she does and put away 60+% - been doing this for 25 years now, almost done with working though
Do people honestly think Americans don't have rich social lives? Just because we socialize differently doesn't mean it isn't rich. Most Americans seem to prefer church groups, and small friend and family gatherings at their homes rather than going out and mingling in urban entertainment districts and bars.
Europeans get most of their perspective on US social living conditions from the terminally online, who are disproportionately likely to have no social life. The average American living in, say, the Midwest doesn't show up in the anecdotes that stereotypes are built around.
I'm an American and it definitely seems like we are in a significant and worsening loneliness crisis. I have no idea to what degree any of it is unique to Americans. Social connectedness, socialization rates, and companionship have all been declining for quite a while now. Lot's of potential causes and theories about it. [1] is a decent overview.
Like personally I'm doing great, and so are a lot of people I know, and I'm sure you as well. But I think a lot of Americans are struggling badly with their social lives.
#1 Reason is likely the urban fabric of places being non-walkable & car dependent. It's a physical structure that doesn't lead itself to spontaneity and new connections.
That doesn't make any sense as an explanation for rising rates of loneliness. The US isn't more car dependent today than it was 10 years ago.
I recommend reading Robert Putnam's Bowling Alone (2000). American civic and social engagement has been declining in almost every measurable way for 50 years now. There is no way to deny this.
The largest contributor according the book's surveys and studies (and I love saying this) is television outcompeting in-person fun. Car dependency is a factor, but IIRC was factor #2 or #3. While this ranking was true at the time of publication, I would wager that time spent on "screens" is likely factor #1, #2, and #3 now.
Please read the version with the 20 year update: https://www.amazon.com/Bowling-Alone-Collapse-American-Commu...
I would wager that many people are fleeing their hometowns to socialize in cities not because they're walkable, but because the density of people increases, allowing you to have better odds meeting real humans who haven't been lost to the allure of the indoors.
The average American watches 4 hours of television a day, and I don't think that includes cell phone web scrolling.
I don't think you can have a realistic conversation about American physical or mental health without centering this fact
I'm not sure that's a correct characterization of Americans' social lives. Many, many Americans, especially young ones, go bar hopping.
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That's a very convenient way to frame it! You can't possibly be wrong because every counterexample is obviously either unwilling or brainwashed.
It’s just an acknowledgement of the spread of cults in the US. Just look at Utah.
This lifestyle is literally impossible in most US cities unless you’re a high income earner.
No, it is trivial to spend an afternoon with friends or go for a walk.
Go for a walk where? On the side of the stroad? With your friends who live 10Km away and have to drive to meet you because there's no public transport?
Sure, why not?
My take is that Americans like to make infrastructure an excuse for everything when it really boils down to priorities and preferences.
10 km is a 20 minute bike ride if you're not too obese to fit on one. 10 minutes if you pick a coffee shop, pup, or Park that is halfway. Unfortunately, most people prefer Netflix and the fridge which is even closer
>10km is a 20 minutes
e-bike ? otherwise you have to be riding race type bike with really good dedicated bike lane
I don’t think you’ve ever biked in a city if you think 10km is 20 minutes
in 89.65% ‘going for a walk’ is not possible unless you want to walk in circles around your house 76km away from the first tree/park/coffee house… you may though go for a drive in a pickup :)
Maybe if you're living in the Alaskan wilderness, but pull up a map of San Francisco, Austin, or Denver and you'll find a plethora of parks, coffee shops, and pubs. That doesn't stop people from sitting at home watching Netflix alone
Those homes are so expensive that only high income earners can afford rent. Hence my comment.
lol america to non-american who watch a lot of movies might be SF, Denver, Austin… and even in those urban areas (which is not typical America) most people would need a serious drive to find a park (I used to live in Denver area, walking to a park would have been like 110k steps :) )
Strange, I pull up downtown Denver and I see like 20 parks within a square mile.
However, this kind of whataboutism illustrates my point. There's a near infinite number of places humans can congregate to enjoy each other's company. It can be a park or a coffee shop or a pub or your kitchen table for tea.
The fact that none of these are suitable demonstrates that the desire to get together is not there.
> "downtown Denver"
downtown Denver can house minuscule part of the population of the Denver metro area - only those affluent enough to afford it. America (again) is not downtown Denver or downtown SF or downtown anything...
Can poor people afford to live there? In Europe poor neighborhoods has that as well, so everyone can get that if they want.
yeah, there are also open spaces and shops in the suburbs and country outside of urban centers.
EU homes are generally tiny. Homes in Mississippi for example are huge compared to EU homes
hasn't this always been the case? most european land and cities has been densly populated for centuries.
Also, a lot of american homes seem to need space for luxuries which are simply weird for many europeans.
A bathroom per bedroom for instance? Why not share a bathroom with the entire household,and have a seperate small toilet instead?
American kitchens also seem really large compared to most european one's i have seen, but they also seem to have a more social function then what kitchens are used for normally. (preparing food)
> Why not share a bathroom with the entire household,and have a seperate small toilet instead?
Why would you if you don't have to? It's great to have space.
source?
> The taxes are so extreme and salaries so low that no one can even invest in the stock market.
There's a special "retirement plan by actions" (PEA) with lower capital gains tax, and the reason why most French people don't invest in the stock market is mostly lack of education around it. For most, real estate is the main way of investing/saving money. The stock market is dangerous and you can lose everything, and many have personal references (their parents/themselves bought stock from efforts such as the Eurotunnel that failed, financially) to that effect.
How would your situation change if you didn’t have to account for US income tax while living abroad? Does it offset at all due to agreements with France?
The US excludes the first $120K of income for expats, IIRC. That probably works out to >100% for the majority.
That only excludes basic wage income. If you have any other income, investments, etc then the tax situation becomes indefensibly punitive.
Instead, you'd rather spend all of that money on healthcare in the US and still have nothing left behind.
What's the point of inheriting a life in a corporate hellscape (presuming you live in a tech city).
because you're an inmigrant going backwards. move south to stay wealthy
Idk why you think your kids should get your money when you die. If they didn’t earn it then they should get a small amount and have to work for the rest, just like everyone else.
Because I earned it and that's how I want to spend it.
Did a charity work for my money? No. They just supposedly will (but possibly not) use some of it for something aligned with my interests. Just like giving my money to my children.
You earned it, you spend it. Not your children. They’re gonna have to work too!
After a certain stage, parents are working knowing that the value they are generating will be passed down to their children, it is no longer for them in their lifetimes, but their employer and society still benefit.
If parent’s work beyond what they can spend in their lifetime is not given to the children, who would continue to choose to work? Already in Canada you can exceed 50% tax rate and many adults who could see more patients, write more books, take more cases, do more work, choose not to as the marginal benefit decreases.
Ok, but then you end up with children who don’t need to work for as long because they have a head start. And so on until you have oligarchs who are born eating caviar and will never have to work.
Because families passing down assets is a tale as old as time?
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I guess we should go back to feudalism then?
Be careful making such massive leaps, you might injure yourself.
You're the one that thinks "it's as old as time" is a good enough reason to keep doing it
1) Sorry I didn't list other reasons in order for you to understand that there is more than one reason it's done. 2) You bringing up feudalism is still completely random lol. I get you're trying to make the point "just because something was done in the past doesn't make it a good idea", but the contrary is also true - just because something was done in the past doesn't make it a bad idea. Using your logic, I suppose we should stop cooking food since it was done in the past and everything done in the past is akin to feudalism lol
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You can't leave money for your kids in the USA unless you have several million dollars lying around, because health care will eat up all of your savings in old age.
If you have a good relationship with your kids, give them (or trusts for them) the money as you are aging (and before the 5-year look-back period).
Then, your family will have a choice as to whether to spend that money on you/your spouse or to not spend it on you and to rely on Medicaid.
Why would healthcare eat up all your savings in old age? Everyone in America is required to have health insurance.
No one actually pays $50k out of pocket for surgery. Most of it is covered by insurance.
There are gaps in Medicare coverage. There's long term care that isn't covered by Medicare; people can self insure, or purchase separate coverage, or many rely on Medicaid which requires exhausting assets first.
I've watched both my parents go through this, with significant chronic health issues. They had good private insurance on top of Medicare, they routinely had $10-30K annual itemized deductions for health related expenses that were not covered by their insurance. And that was with a daughter who is an MD who invested a massive amount of time and effort to get insurance to cover as much as possible.
I live in France and invest in the stock market. Sounds like you just need to find a better paid job.
> virtually nothing
Older kids will only have virtual needs. They'll have a job and health insurance.
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I invoke Poe's Law. Please explicitly mark your satire.
Is that satire? The last time I seriously looked at moving to Europe, it was a pretty fundamental part of why I aborted the effort. Unless something has changed recently, for software engineers income is vastly better in the US.
I care about income as a proxy for quality of life, not as an end in itself. For me, the quality of life I get in Europe for X salary is better than what I would get in the USA for 1.5X salary. Ymmv
If, when it comes times to retire, and your Us counterpart has $1,500,000 to your $1,000,000 to retire on, that extra $500,000 seems material.
I agree, YMMV. But the average software dev salary in western Europe is half what it is in the US. The guy in the US can buy better insurance than what is provided through taxes in Europe, and still have way more money to invest in their future and increase their quality of life.
You look stressed, maybe you can do some talk therapy through the socialised health care system :)
Have you seen the steep exponent on the US debt? You won't be able to leave anything to your kids if you move to the US either. Might as well enjoy 2 weeks vacation, rather than 2.
> The EU is number one in quality of life and that’s all that matters to me
Probably it is time for you to learn the plight of fellow Europeans then. The society is stewing for quite some time now, for example https://en.wikipedia.org/wiki/Yellow_vests_protests
The symbol has become "a unifying thread and call to arms" as yellow vests are common and inexpensive, easy to wear over any clothing, are associated with working-class industries, highly noticeable, and widely understood as a distress signal.
Rise of far right parties across Italy, Germany, Hungary, Poland, France and many other countries is another clear signal that EU's quality of life may not be great for everyone there.
Pole here, what "far right" parties are you referring to? If it's PiS then they were ousted in the elections last year with a 30-year record breaking voter turnout of 75%.
As for the other party that fits this description they're their own worst enemy, as they're an amalgamation of groups which don't really have common interests aside from a few talking points.
I mean, I know that right now every party not endorsed by liberal mainstream media is "far something", but calling PiS "far right" is an obvious hint that any further discussion on politics is pointless.
If you believe that PiS doesn't have a strong base to count on, you're naive.
All it takes is another term of pain, and they'll be back.
Case in point, America. A former president who by all counts should have lost the election a year ago, was literally begging on Truth Social for donations, facing numerous criminal trials and convictions, just retook the hot seat.
> If you believe that PiS doesn't have a strong base to count on, you're naive.
I've met their voter base. The young, educated, city-dwelling part.
Of course they'll be back, but like every political movement based on cult of personality, they have no coherent plan what to do should Kaczyński die/retire, aside from infighting. Arguably the vultures started circling already. The MAGA party will face the same predicament once their leader inevitably leaves the stage.
My take is that since both Kaczyński and Trump haven't appointed a successor, their political projects will die with them. Their opponents need only to survive until that happens.
> their political projects will die with them
I so wish that you are right. I am afraid you are not though. Trump is a symptom of the growing discontent in the society. If not Trump, it would be Bernie or someone else. But the tinderbox is there. Someone just needs to take a match to that.
Yep. As a simple exercise, visit e.g. the Ireland subreddit and see how many young people there are complaining about the cost of living and are talking about emigrating.
Being number one doesn't say it's good for everyone here. It says more about how bad it is in the rest of the world.
Also, here in The Netherlands the yellow vests were mostly conspiracy theorists who would pull something to protest against out of thin air. That movement died down pretty quickly.
Protests here are almost always against (perceived) government overreach. In most countries even being able to protest is considered a luxury. That's why you don't see that many in the US.
The idea that conspiracies could thrive under economic stress doesn't even occur..
Well being loopy isn't too good for economic success so that's a factor? Though for sure I've met some incredibly loopy people that had some great dice roll streaks.
But there are a lot of other factors in the problem and making it an economic issue really obscures some of the more important factors.
Intellectual laziness, idle brains, idle hands, toxic memes and bad actors making bad use of them.
schizophrenia has been proven to be stress triggered and im just not interested to listen to humanity idealization by engineers any more, with the endless utopias and perfect characters, and the blame on everyone not fitting into that template under duress. What good is a construction plan for a machine with all parts carved from diamond? If you cant integrate a real humanity in your perception , your plans and interests, why even waste public bandwidth on your ideas and the terrors they will become ?
I would accept the point that stress triggers schizophrenic behaviors.
When we look at magical thinking as one of those light schizotypical behaviors large portions of the population exhibit these symptoms.
They drink from the cup of nonsense to excess.
There should always be room for drinking from the cup of nonsense but too much and its difficult to be useful to yourself and your family.
Actually, I think our quality of life is going downhill. Things are very expensive and the taxes are still high. I think that the reasons the far right is winning everywhere is because people feel they have lost something. I agree. We have. We bought into the neoliberale thought mill and simultaneously lost our belief in social democratic welfare state. We are in short, becoming more like the states. But without the things that make the states so great. The states can basically print money and then other countries will begrudgingly buy dollars to keep it from inflating top much. So its basically global nation state socialism.
Life in the EU is amazing for me, and probably for you too, as well as many others enjoying it here. However, we can't overlook the struggles of those who are turning to radical populist parties.
I don't think the far-right is fueled by economic stagnation, but I do think that, were we living in an economic golden age, people would be able to ignore and excuse the increased prevalence of foreigners on "their" streets.
If their kids could afford to buy houses nearby, they'd probably be a bit more OK with it. But when their own kids are priced out and told they don't have the relevant skills (thanks to education provided by the government unequally) for the new jobs, it's easy to point fingers at the new people in town.
And those people don't have to be foreign or a different race: just see the anti-tech waves that have rolled through the Bay Area in the past, directed more based on attire and mode of transport than race. And a lot of people here would agree those new workers are to blame for a lot of Bay Area problems, but it's easier to dismiss others as bigoted than wrestle with the reality of winners and losers behind each statistic.
> I do think that, were we living in an economic golden age, people would be able to ignore and excuse the increased prevalence of foreigners on "their" streets.
I don't fully know what's going on in Europe, but in the US we have several TV news networks dedicated to making you upset about the increased prevalence of foreigners. And they've been doing it for 30+ years, so it's working, no matter how good the age is or isn't.
In Europe the terrorist attacks and crime is real though, that doesn't happen much in the US but in Europe it happens quite a lot since the immigrants are different. So there is no need for any propaganda to get people to turn against unlimited immigration, what they see on every news station paints the same picture.
The news in western EU never cover the bad parts of illegal immigration, only the rosy part, so the people turning against immigration aren't doing it due to what they see on the news but mostly due to what they, rightfully or wrongly, perceive themselves .
Not sure about the EU, but in the UK the support for the far-right is highest in areas with the fewest numbers of immigrants. It's not about peoples personal perceptions, as the areas with relatively high numbers of immigrants are invariably also the areas where there's low support for the far right.
We need to distinguish between legal and illegal immigrants. Plenty of legal immigrants also vote right wing because they hate illegal immigrants which is the core issues.
Except the places in the UK where illegal immigrants, asylum seekers, and refugees, tend to congregate (cities) are the places with the lowest support for Farage etc.
I.e. people voting for Farage are not the ones living next door to asylum seekers.
Maybe it's different in the EU and US.
People see problems (mainly caused by the cost of housing) and hear people like Farage blaming it on the "small boats", and people on the other end of the spectrum blaming it on millionaire landlords.
The reality is it's not caused by the 3 asylum seekers per 10,000 people increasing demand, but instead by essential legal immigration (to perform jobs as the native workforce reduces in number) and crucially the inability to build enough houses for everyone.
This thus pushes up price thanks to the age old supply/demand curve. How else would we ration housing? Nepotism? Sexual favours? Lottery?
>crucially the inability to build enough houses for everyone
Sure, but if you have an inability to produce more housing, how is importing more foreigners helping with the situation of the locals who are already struggling with the housing market?
I'm not defending Farage or his voters, but don't people have a right to be pissed about this situation?
But people aren't actually pissed at the cause of the problem. They will go out and march against a new housing development in their local area before turning around and sending a letter to the paper complaining about a lack of housing. They'll moan about a lack of staff in their local hospital but then support the immigration rules which prevent people from working for the NHS. They'll complain about low wages in the public sector but then fight against the growth in the economy which would allow those wages to increase. They'll complain about millionaires and then whine that it's unfair millionaires are taxed "so much".
The last terror attacks in my country were part of an organised campaign to try and burn down mosques explicitly because of unhinged propaganda on TV and online. The fact that these attacks were not called "terrorist attacks" on any single news station tells you all you need to know about propaganda here.
There is no such thing as unlimited immigration
Can you point to any statistics which indicate life is even remotely as dangerous in Europe as life in the US is?
I can't even come up with enough terror attacks in Europe to reach 100 deaths in 2024.
I don't need any TV channel nor statistics for my girlfriend to come home shocked because a friend of her got his apple watch and bag stolen that day, to witness a Japanese girl at an event having her bag stolen during the night, to be aggressed verbally in the station, to have a friend shot in a terror attack (Bataclan), to have an islamic attack at the Christmas market in my town, etc. all the common point here are immigrants or their descendants from non white and non Asian countries.
> I can't even come up with enough terror attacks in Europe to reach 100 deaths in 2024.
Go touch grass ffs! Your reply is infuriating to any victim of terrorism. A single death or wounded from islamic terrorism (the only that really exist) is too much already. If that's not enough for you, please line up with your family and friends and sign to be the next victims and we'll see if "not even 100 deaths" is a good thing or not.
I have lived in Europe all my life. I cannot name a single person I know, nor anyone that they know, that has ever been remotely affected by Islamic terrorism.
I can however name a hundred other things that affect most of their lives daily like inflation, racism, corruption of both the media and political organs by corporate interests, degrading of public infrastructure and institutions that are not aimed at churning out a profit, declining quality of the education system to systemic stress imposed on teachers, etc.
Should we extend that "zero tolerance" principle for, say, traffic deaths? Even 1 death is too much right? Yet over a hundred people die on European roads every day. Surely we should tackle this many times more seriously than we tackle the comparatively minor issue of Islamic terrorism?
What about pollution? Kills thousands upon thousands of people too! Why are we wasting our time and attention with 24/7 news reports about terrorism every time some nutter stabs someone in the street, when we could be directing our efforts towards eradicating coal, diesel engines, etc?
See where I'm going with this?
> Should we extend that "zero tolerance" principle for, say, traffic deaths?
Many already are.
I didn't mean to belittle anyone impacted by terrorism personally. I just am saying it is so rare that it doesn't register as relevant for me. I worry more about speeding cars.
As a society we must focus our attention to those things which really matter. Terrorism is just trying to get our attention.
I also live in a town of 4m which was impacted in the last 10 years by a single terror attack. Should it affect my life? Should I be suspicious of every member of the ethnic group from which the terrorist comes? I couldn't even identify them.
>In Europe the terrorist attacks and crime is real though, that doesn't happen much in the US but in Europe it happens quite a lot since the immigrants are different.
We're having some similar problems in the US, but not at the same scale. It used to be MS-13 was the big foreign crime boogeyman, now it's the Venezuelan gang "Tren de Aragua": https://www.zerohedge.com/commodities/its-spreading-americas...
https://www.zerohedge.com/political/migrant-population-charl...
Also a lot of our terrorist attacks aren't described as such by the media. it seems you're not a terrorist if you're a white US citizen.
The actual "far right" is much smaller than they'd have you believe. It is very small. It's just that the term is abused to create fear.
I don't think that the economy in general is key, though high immigration does dampen wages and that is mostly felt at the lower end of incomes. I think what we're seeing are the social and cultural consequences of very high immigration from countries of completely alien cultures and whose people do not assimilate in Europe. This has been going on for decades now but completely ignored by successive governments and that only hardens people's reaction against it. This is compounded by the apparent powerlessness to act "because whatever treaty/law" that we seem to have shackled ourselves with...
That is just because of inequality those populists feed on, while at the same time being rich. However, being unconvential, having a sound media strategy, and no doubt being helped by (foreign?) disinformation - they quickly gain a foothold in an era of unlimited social media.
However, I often think about that drawing where three people are at a table. A blue-collar worker (mine worker or construction worker), a black sad looking black person (immigrant), and a rich guy in suit.
The blue collar worker has a single cookie on his plate, the immigrant no cookies at all, and the rich guy a plate full of cookies. The rich guy with his plate full of cookies, looking at the worker, points to the immigrant. “He wants your cookie”.
People prefer jobs, not handouts, but handouts is what your scenario implies--wealth distribution from the rich to the workers. This is where the academy has led liberal/left parties astray. Yes, inequality is at the root of discontent, but the academy over stresses inequality of outcomes rather than of opportunity; and while inequality of outcomes matters, people gauge their success by looking to their neighbors and social circles, not to groups far removed from their physical and social geography. Likewise, modern economic theory says that tax + redistribute is the most economically efficient solution to addressing inequality, but it falls short for the same reasons.
It's a very difficult sociopolitical problem, and it has as much to do with psychology as it does headline statistics. Contemporary media dynamics has much to do with the psychological aspect, but it's also corrupting the way people think about these issues across the ideological spectrum.
> People prefer jobs, not handouts
Or being paid more for the same jobs. Fairer than wealth distribution via taxation but has the same effect.
Yeah maybe if you abide by a god given ideology where you cannot question the distribution of resources with respect to one's relation to the productive organs of an economy on a microscopic level and instead only focus on re-distributive tax policies or reorganization of the political super-structure on a macroscopic level, without interrogating the underlying mechanisms.
Nobody’s asking for a “handout”.
Money is power. Elon Musk would be a cringe lord if he wasn’t rich. But because he’s rich he gets to play government.
That’s the point of taxation. It’s not to fund anything. The government doesn’t need your money to fund anything.
> People prefer jobs, not handouts, but handouts is what your scenario implies--wealth distribution from the rich to the workers
Labour's share of wealth produced (vs capital's share) has been declining in the developed world since the 1970s, and is now well past Gilded Age levels and still getting worse.
So yes, it's both about better jobs and about distributing away from the rich and towards the working class: these are the same thing.
I just think the current emphasis on inequality of outcomes and headline numbers like income share leads us down the wrong path. Those are effects, not causes or even the effects that directly drive discontent; yet by emphasizing those aspects we spend an inordinate amount of time on measures that attempt to address those symptoms specifically rather than the causes. But also...
1) Income share is complicated: https://equitablegrowth.org/labors-share-lost/ There are structural issues, like automation and immigration, underlying those trends. Immigration isn't, per se, irrelevant, especially when you consider dynamics like volatility and displacement. (But, again, it's complicated.)
2) Throughout history vilifying the rich has not worked out well for the poor and working classes, neither in absolute nor relative terms. Where sustainable improvements have been seen, they're the result of a flattening of the social hierarchy (not necessarily in monetary terms!), but in a way that shifts norms to the type of long-term, group management that you see in the upper middle classes, not the winner-take-all, rat race rules of the poor (at least, that they see as governing inter-class conflict, not necessarily among themselves). The cookie metaphor, both in the model it presents and the devious motivations it insinuates, is rat race rules, and rat race rules favor the rich much more than cooperative, inclusive norms. What you want is for the wealthier to identify with the poorer, but that can only happen (if at all) to the extent the poorer identify with the wealthier. If some wealthy person perceives themselves as having been wholly self-made, despite what's obvious to everybody below him, good! That implies he at least values agency and work ethic, norms that in the United States can be and are shared with people below him on the ladder, and therefore a way to sell political concessions as being in his self-interest (psychologically).
3) Wealth (as opposed to income) doesn't work as implied in the cookie metaphor. Elon Musk is a trillionaire, but there's no bank vault with a trillion in gold bullion that he can go to at will. At any point in time--hour by hour, even--his nominal wealth is primarily a function of the future expectations of others, including expectations of social contentment and economic growth. You can't take half of Musk's cookies and redistribute to everyone; it's entirely non-sensical to think that way. Our intuition breaks down at scale; certainly from a process perspective (as opposed to a static context). Just like running a $30 trillion national economy isn't the same as running a small business (for one thing, nobody runs it), the cookie metaphor leads to horribly misguided ideas about the nature of our problems and the viability of remedies.
Yes, inequality of outcomes matters (at least at the margins), it just doesn't provide much if any insight into causes and solutions. Imbibing in zero sum cookie narratives is counterproductive. Like other forms of social injustice, e.g. racism, it's paradoxical--how can you fix something without identifying the effects with an intention to address them; yet, such a fixation has a tendency to solidify (reify?) the divisions undergirding them. If you look at critical theory, especially critical race theory, you can see an admission of this paradox at the core of the literature. People like Frantz Fanon and Derrick Bell came to the conclusion that it's impossible to completely overcome racism--systemic and otherwise. Their perspective is understandable given the seeming intractability of these sorts of problem, I just don't share the fundamental pessimism at the heart of how these issues are framed by contemporary social justice thinking. And it's that framing that I saw in the cookie metaphor. I don't have the right answers, but history has shown us the wrong answers.
You misunderstand the cookie metaphor.
The metaphor is not zero sum, and not about handouts.
It's about deliberate diversion of attention, obfuscating the source of inequality to those that experience it. This is something that absolutely happens, both overtly (by endlessly misrepresenting causes of poverty) and covertly (by cultural suppression of socialist ideas).
Kind of like your post.
@wahern. Nah you can just have a strongly progressive tax system that is used for large investments that create steady supply of jobs and innovation. Thats actually what the states so as well, via darpa and the like. It works very well.
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Well said. Better than I could put into words
No, it's just an inspid rant. Let's pick a spot at random:
But at the same time the state somehow has money to house feed and medically care of millions of illegal immigrants
Do you honestly think the government is literally simply "housing" all the authorized immigrants? As in, literally writing checks to their landlords? And literally paying their grocery bills, each and every week? Do you actually think that's what's happening?
Remember, the rant wasn't referring simply to new arrivals, but literally to all the "millions" who have been here for decades. With the tacit approval of US society at large, for the simple reason that (authorized or not) the vast majority form an indispensible part of its workforce, doing the hard work that most Americans refuse to do.
I'm not saying the migrant crisis isn't a huge, costly mess. But for whatever is happening, I just don't get these weird, distorted and emotionally manipulative narratives.
You're commenting from a US perspective but the person you're responding to was commenting from a European perspective.
In Europe (including the UK), we have seen an enormous surge in asylum seekers and they're housed, fed, etc, with tax money. I believe the latest annual figure is around £5bn, which is not insignificant.
I don't know what the solution is, as an immigrant to the UK myself I find it difficult to judge or comment, but you need to keep in mind that Europe has a welfare model quite different from your US. We typically pay more taxes and have a higher expectation of public services. When those services are deteriorating, people look for someone to blame.
Immigrants are an easy target.
In reality, it is much more to do with the aging population and fewer in the workforce, but that doesn't mean that we're also not paying a lot of money for asylum seekers.
The UK costs are due to the previous government not processing asylum seekers and other irregular immigrants in a timely manner and also the fact all the processing, care etc is outsourced to profit making private companies
We’re generally only talking about 50,000 people a year coming in via these routes
Of course Brexit didn’t help with the policing of it all either
> In Europe (including the UK), we have seen an enormous surge in asylum seekers and they're housed, fed, etc, with tax money. I believe the latest annual figure is around £5bn, which is not insignificant.
That number sounds big, but for some perspective my city (Seattle) is spending more than that to build light rail tracks to one particular (not that very dense!) neighborhood.
0.42% of the UK budget is spent on helping people who have had everything in their lives ripped away. People who have watched family members get shot, had their houses destroyed by bombs, and for some, their entire homeland turned into rubble.
The UK populace spent decades electing corrupt leaders who purposefully destroyed civic institutions. Of course things are falling apart. Immigrants don't have much to do with that...
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It depends on the country. I know that in the UK this actually tends to be the case last I checked. I was reading this from a UK perspective (western) not a US . I don’t know how much housing the US provides
Ok, let's try the UK then.
Actual estimates for the total number if illegal migrants (including children) in the UK top out at around 800,000. Yet the commenter above said that your government was paying to house and feed "millions" of them. Last we checked, "milions" means >= 2,000,000.
Do you still think that what the commenter is saying "actually tends to be the case" in the UK?
Previously you said authorized (legal). Now you’re changing your argument to illegal.
How about you look up how many refugees European nations are paying to house vs getting emotional and changing the goalposts. I suspect the number is not millions, but this does not include medical care or other humanitarian care.
The GBP/EURO/USD spent is in the billions and the cost was the premise, not necessarily the number of people. If OP exaggerated, correct it and move on to the substance of the argument. It doesn’t make their entire post insipid (your words)
Previously you said authorized (legal). Now you’re changing your argument to illegal.
I meant "unauthorized". It was just a typo, honest.
How about you look up how many refugees European nations are paying to house
It was the conflation of "refugees" with "illegal immigrants" in the commenter's post that I took issue with. The two categories might sound the same but are entirely different.
In particular the latter category definitely do not receive subsidized subsidized housing or benefits the way actual legally recognized asylum seekers, aka "refugees" do.
all the authorized immigrants
That should have read "unauthorized", and without the negating particle the rest makes very little sense.
>No, it's just an inspid rant.
This exact attitude is what gets the right wing growing.
> As in, literally writing checks to their landlords?
In some EU countries (where I'm from), yes. A student friend of mine was even rejected by landlord who wanted Syrians because the government would pay their rent.
But thank you for your valuable contribution to this conversation.
A student friend of mine was even rejected by landlord who wanted Syrians because the government would pay their rent.
And are they there ... illegally? Or legally?
Are there, in fact, per what you said, "millions" of illegal immigrants being housed and fed in the EU on public subsidy?
I know you said "illegal immigrants and refugees", so I misquoted you slghtly. But the bigger point is -- why conflate the two, when the numbers and overall situations are obviously entirely different? (In particular - while legally recognized asylum seekers might be eligible to obtain housing subsidies, illegal migrants quite definitely cannot).
To be charitable, one can assume there was no manipulative intent, and you were just being careless. But if so, then you'll have to acknowledge that that's why your missive appeared, at first glance, to be well, a rant.
The solution is to listen to their worries and take action to fix them instead of ignoring them and calling them stupid
It isn't the concerns of the voters, but the relentless cognitive distortions we keep hearing about push-button topics such as this one (generally promoted by ideologues and pundits, rather than the voters themselves) that are, for want of a better term, stupid.
(And on the subject of stupid, my initial response contained a horrible typo -- should have said "unauthorized", rather than "authorized").
> And are they there ... illegally? Or legally?
Not relevant to the political question. The point is there is anger at the number of migrants European politicians let in.
This is part of the illusion that it is as if our politicians let anybody in. Not a single politician would welcome even one more asylum seeker.
The immigrants by large are coming from the worst imaginable conditions and fighting their way into Fortress Europe. It is the failure of our societies to help the countries like Syria, Afghanistan, etc to be liveable. We are paying the price for this failure.
> Not a single politician would welcome even one more asylum seeker
There were absolutely pro-migration politicians, e.g. Merkel.
> immigrants by large are coming from the worst imaginable conditions and fighting their way into Fortress Europe
Europe continues to have generous refugee obligations, protections and benefits. There also isn’t a robust deportation regime, in part because there isn’t anywhere to legally deport them to. That’s probably what these voters take offence to. (I unfortunately don’t see any non-radical solutions.)
The concern is the distorted and manipulative rhetoric.
Which in turn further drives and exploits the anger.
> the concern is the distorted and manipulative rhetoric
That’s a concern. The working poor’s concern is the labor competition from one side and welfare competition from the other.
Well if the US and UK hadn’t invaded Iraq and Afghanistan, and fermented civil war in countries like Libya and Syria maybe we’d have a lot less
Of course Russia and China aren’t innocent when it comes to Syria and large parts of Africa
In Portugal, illegal immigrants have lots of rights. For example rights now the government is struggling with having enough medics and ambulance drivers to meet demand. To the point several people died waiting for ambulance because no driver was available.
Yet, the government gave 100% free treatment to 48k immigrants that had no information. Many of then pregnant women from Asian countries with complicated situations that coat lots of money. Some illegal immigrants even got right to have treatments with medicines that cost millions.
This is what gets you flagged on HN.
> Are there, in fact, per what you said, "millions" of illegal immigrants being housed and fed in the EU on public subsidy?
There is North of 700 000 illegal residents in France alone. So yes, millions in the UE. Here, they have free health care (CMU) costing more than a billion euros per year while the government wanted reduced refunds on medical acts and medicine for people paying for it. How do you justify things like illegal immigrants having a 75% off on their subway pass[1] in Paris (I just paid mine 86€ today for the month) while a French national on unemployment benefits like I am currently doesn't even have a 25% off? It's exactly why people as voting for the so-called "far"-right party, with are still quite leftist in comparison to the ruling parties of countries like Japan, Thailand, etc.
[1] https://www.iledefrance-mobilites.fr/titres-et-tarifs/detail...
That's why I stressed the "being housed" part, which the commenter to whom I responded asserted was being provided for all illegals residents (or at least multiple millions of them anyway). And in France would cost (at the very inside) some 4.2 billion euros per year, by some napkin math. That is, at least 4x the cost of health care.
So that was my concern -- what purpose is served by promoting a grossly exaggerated characterization of the actual cost of having these people around?
How do you justify things like illegal immigrants having a 75% off on their subway pass[1] in Paris (I just paid mine 86€ today for the month) while a French national on unemployment benefits like I am currently doesn't even have a 25% off?
If it were up to me, I'd stick it incrementally to you-know-who have you also getting a Solidarité reduction. But that's obviously not kind thing the voting public wants to hear these days.
And are they there ... illegally? Or legally?
In France, if you are illegal, you get free healthcare.
https://fr.m.wikipedia.org/wiki/Aide_m%C3%A9dicale_d%27%C3%8...
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Yes, you are.
I'm not, and it's difficult to see what you think you might gain from this conversation style.
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The "but" is a denial of what preceded it.
I think you misread me there. It wasn't a denial at all.
It was simply saying: whatever the state of the mess -- weird, distorted narratives about the mess don't help us out of the mess. And in fact are a huge part of the mess.
Exactly as you put it.
> In my neighborhood
This is one of those moments I wish people had a way (I guess you could just add it in the notes) to mark their HN account with a region. Are you in the UK, maybe?
The immigration issue sounds very different in the EU vs US, even if many of the sound bites rhyme.
Why the scare quotes?
'Scare quotes' is not the only use of the double quote.
In this case it seems that the author is pointing out that the incumbents do not in fact have any inferred or conferred ownership of these public spaces.
I think that is the most likely interpretation, but it doesn't seem like a reasonable interpretation of what was said literally in context. From a local v. foreigner perspective the roads are literally their roads. Locals do have an inferred and conferred ownership of public spaces in their capacity as the public. The foreigners don't own the streets, the streets are commons property to the locals.
I decided to treat it as a minor typo and read it as 'people would be able to ignore and excuse the increased prevalence of "foreigners" on their streets' instead. Ie, the foreigners aren't really foreigners, just citizens of non-aboriginal ethnicity.
The public spaces of a state belong collectively to the citizens of that state. The state government only administers them. That's essentially what statehood means.
By putting the word their in quotes the poster is implying the unstated assumption that states aren't legitimate.
That's what the chinese thought in the 18th century :).
A fun quote for the europeans here:
"Our land is so wealthy and prosperous that we possess all things. Therefore, there is no need to exchange the produce of foreign barbarians for our own." - The emperor at the height of Qing China
This was in fact so true that the Brits forced the matter:
There are a few centuries and a lot of decline between those.
If your lesson from history is that hubris works, then that's very interesting.
That is the point - the Brits were able to force the matter. If you aren't up-to-date on technology, specifically military tech, you're going to have matters like this forced upon you. Que the Ukraine giving up the nukes (and later getting rid of even non-nuclear missiles).
Ironically, the most drug liberal places in the world, i.e. Silicon Valley, are the source of what this article talks about, productivity gains!
You just need the right drugs, in this case, Psychedelics.
The Emperor is not necessarily the guy to go to for the man-in-the-street view from China.
The higher quality-of-life was likely true at one time but I think it is quite arguable now in much of Europe. There is a palpable sense of decline that weighs too heavily on everything. How "quality" is a life without meaningful optimism for the future? It is the quality-of-life of a pensioner waiting for the graveyard.
An underrated benefit of the markedly higher standard of living in the US is that people can choose to trade standard of living for quality of life if they wish. American culture seems to preference maxing standard of living but that is optional, and there are plenty of people that make other choices.
How is the “standard of living” in the US in any way higher than europe?
The US has wealth disparity, not lack of wealth.
The US is an incredible place to live if you have valuable skills, and a below average place to live if you don't.
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Air conditioning
You can just buy an AC in Europe, most of the time you don’t need it though
Quality of life costs money, and if we're not competitive, sooner or later that money will run out.
Exactly and the fact that, for example, West and Central Africa are waking up [1] to the fact that France has been scamming them out of untold billions, probably trillions is going to shift power significantly.
This is happening now. Senegal are following Chad in cutting ties with French military.
[1] https://theconversation.com/cfa-franc-conditions-are-ripe-fo...
The economy is not a zero sum game. If other countries are doing well, all the better.
Zero sum game means for someone to benefit someone else must be worse off, but a positive sum game doesn't mean that everyone must benefit. It only opens the possibility that the total sum can go up, but that can still be because every time one player gets 10 points another player loses 3.
"zero sum game"
As others allude to, natural resources are zero sum, they are a finite resource, once they are gone, they are gone.
So if an imperial power is mining resources from a 'colony', that 'colony' is being stripped of economic potential with very little to show for it.
They do not both gain economically, like some allude to when maybe it is two countries sharing manufactured goods.
Many people don't realise. America has been exporting inflation around the world while China has been exporting deflation through cheaper goods. China is the main reason for World's prosperity.
And China was able to scale up the mass manufacturing of cheap goods because rich western companies dumped their money into China to capitalize that manufacturing. It's all interrelated
Euro dollar system just printed that money out of thin air. It's the Chinese products which are providing value backing to that printed money
When you boil it all down, the economy mostly is about ownership and use of resources, and those are naturally limited. So if we're talking about doing well in terms of having greater claims to the world's resources, then it essentially is zero sum.
The primary sector is only a very small part of the economy though. Prices for raw materials are low because it's easy to mine etc vast quantities nowadays and there is a lot of competition in global commodities. Most minerals are found in a LOT of places all over the world.
Land. Total value of it is about 25 trillion in the US alone I believe. If I'm not wrong, globally stock markets are around 100 trillion (and that will include a lot of assets in the form of land).
25 trillion is just 1 year worth of GDP. With interest rates of 5%, that's only further evidence for my point.
Edit: as an exercise, consider the land value of a typical office, and compare to the annual income of the part of the company based there, and the personal income of the employees who work there.
>The economy is not a zero sum game.
Most parts of the global economy are. If you're selling cars for example, there's a fixed amount of drivers on the road you can sell cars to, so if you're VW, you're now competing with cheaper cars from Asia for those same drivers.
You can't create new drivers out of thin air to expand the market demand for cars. Once the market is saturated, without having any moat, you enter in a race to the bottom.
And that's what Germany's economy is discovering right now and why Europe's share of global GDP has been declining for the past 20 years.
If other countries are doing better, they will want to buy status symbols as well. This is how Germany profited from China developing in the first place. As long as markets continue to develop, chances will continue to appear.
Also, we shouldn't care about Europe's share of global GDP. We should care about how the poor people in our countries are doing. Like I said, we should maintain or improve our quality of life. Producing cars is just a means to an end.
You need money to take care.of the poor in your country. Where do you think that money comes from?
I think what you're really getting at is that the more efficient a market it, the closer to the Pareto frontier it is, and things become competitive instead of cooperative there.
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This is exactly where manufacturers like SAIC, BYD, and Dongfeng are winning. Building cheaper cars than were previously available and selling them in countries where "premium" brands like BMW, Toyota, Ford, Fiat, Volvo, GM, etc... don't try very hard to compete.
Head to any country without a domestic auto industry to protect and see what new cars people are importing. Sure there will be some rich people buying the brands you recognize, but call an UberX and they're going to show up in a Chinese brand you've never heard of. Or some zombie brand like MG.
Except when you charge sky high taxes you can't lower your prices to have access to that wider market, can you?
Downvotes without comment are pathetic. Step up and make an argument. It's real, it's happening and Europe needs to wake up.
Because of the travle game(1) I learned that it was/is common for the leader of the former French colony to send hundreds of thousands in bribes to the president of France...
(1) Travle posted here on hn months ago, but unfortunately a Webapp that downloads so I can't give you a url
You are correct but it’s also more complex than that since competitive can mean many things. Currently the vast majority of government income for European countries is income tax, and income tax is usually more profitable when the market is actually competitive. Which means you need small local businesses and local production.
Having completely optimised and global logistics and value chains isn’t necessarily good for wages. We can tax the wealthy and fortunes more than we do, and we probably should, but within the current systems it wouldn’t change that much.
So in some sense many European countries are better prepared for economic downturns than the US even though European countries don’t have a lot of major corporations which don’t produce anything locally.
Obviously it’s even more complex than this. Part of what is bringing down the economies in France and Italy is workers rights. Being able to retire at 60 is great, but it was also something that was obtained when people didn’t live as long and have as few children. Though Greece seems to have managed ok without having new public management plunder their country.
>Being able to retire at 60 is great, but it was also something that was obtained when people didn’t live as long and have as few children.
Short aside this reminds me of:
In the US, my Boss's neighbor is an 85 year old woman who retired 42 years ago. And still gets a paycheck twice a month (with CoL increases) and full health insurance. She became a municipal clerk when she turned 18, worked 25 years to get a full pension, then retired at 43. The optimism (maybe pessimism?) people had back in the day was wild. I nearly fell out of my chair when he told me this.
It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need.
Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life? Billionaires and corporations certainly aren't gonna pay for it out if their profits, so the working class has to. But if the working class has no more high paying wages anymore due to stagnating growth , then your welfare budget also goes bye-bye.
You can't just vote yourself more welfare and higher public sector salaries and pensions out of thin air without an economic growth to back that up. I mean, you technically can, but it doesn't end well as was proven every single time this was tried.
Well paying job just mean that the primary distribution mechanism of wealth is through having a job, rather than only creating only jobs that are necessary. That's grossly inefficient. I rather pay people to stay at home rather than gunk up our industries with make-work, or worse actively making things worse.
Innovation is important sure, but also efficient use of resources, including cramping down on negative externalities. That increases welfare and quality of life, ideally with no need to spend an extra dollar.
Stop thinking in terms of dollars. Think in terms of stuff - that's the actual wealth. You can move dollars around with or without jobs, but somebody has to make the stuff. Someone has to grow the food. Otherwise, you have dollars but not food, and you can't eat dollars.
So the thing about jobs is, we really need jobs that actually produce stuff. We don't just need jobs, we need somebody to create the wealth. First it has to exist, then we can worry about how it gets distributed.
So if you have a bunch of people who are not necessary, then the best thing to do is not to let them starve (which is also immoral), nor to give them pointless jobs (which is soul-destroying), but to find something useful for them to do.
We have had the capacity to produce more stuff than we can consume for almost a century now. Take cars for example. We could easily produce one for every man woman and child. If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it.
This isn’t a production problem, it is a social problem.
>If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it.
Its because the person making the car doesn't want to make one for someone who isn't making something of equal value in return. It makes them a sucker for being the one to make the car.
You cannot legislate, policy change, indoctrinate, or force your way around this. It's why all attempts to do so always have failed. Every single time. Always.
The only way to create actual value is to put in actual work.
We can't afford to make a car for every single person. It's catastrophic to our urban fabric.
That's some idealistic stuff that's not gonna happen. The real world doesn't work like that.
Yeah it's ineficient but it's the one we got right now. You're not gonna change it with your comments and beliefs. Meanwhile rent is due next month and you need to pay up by using these "ineficient" mechanisms set in place by powers higher than you.
Idealistic? So what? I am just pointing out the contradiction of people's thought. I perfectly know well it's not how things should work but how it works right now, but if people believed silly things I am going to point it out.
You are welcome to point out flaws in my thinking.
> Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life
I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. Falling behind the US doesn't mean there is absolutely nothing. I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness.
>I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU.
I never said that. Please follow HN rules and reply to the strongest interpretation of one's argument, not the weakest.
The EU economy was at the same level as the US economy 15-20 years ago., now it's only half the US. The EU missed out on all the major technological innovations in that time and therefore missed out on a lot of income for welfare while welfare expenses only grew due to ageing population and increasing cost of living.
>Falling behind the US doesn't mean there is absolutely nothing.
No, it means less money for welfare. Especially with an ever increasing ageing population. If you want to take care of all of those people at a high quality of life, it's gonna cost you, and we don't have that kind of money anymore.
So you either get Europeans to accept slowly sliding into poverty due to declining welfare and rising CoL, OR, you need to bring in more money to the state somehow. Previously it was done in Europe via slavery and theft through colonialism, but since that conveyor belt of free money is gone and what's left to bring in more money is innovation in highly profitable high-growth industries where EU is almost absent. No, ASML, Airbus and some struggling German mittlestand companies can't support a whole continent like they did in the 1980's.
>I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness.
They would be fine, if those losses would come out of the pockets of tax dodging corporations, but they're not, they're being eaten up by the working class and the taxpayer who still expects the same welfare quality like in the good ol' days when the EU economy was as strong as the US.
Do you you see how this level of welfare is unsustainable without matching economic growth?
You said
> Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life
Without presumes with none, and you're saying it like it's true.
> The EU economy was at the same level as the US economy 15-20 years ago., now it's only half the US. The EU missed out on all the major technological innovations in that time
Really, all major technological innovations? Why is the leading music streaming provider Swedish (Spotify)? Leading and most advanced airplane manufacturer European (Airbus)? Why are there so many fintechs which are a decade ahead of US counterparts (Revolut, Monzo, MyPOS, SumUp, Bunq, Qonto) and why is finance-related tech so much ahead - you can pay contactless pretty much anywhere in most of the EU and UK, you can accept card payments with your phone and just an app, all banks have to have an API with Oauth to be able to aggregate accounts and whatever? Also I'd like to add advancements in nuclear fusion. Also I haven't experienced healthcare in the US, but from what I've seen it doesn't look like there's anything even close to the seamlessness of Doctolib in France.
The EU is indeed falling behind, IMO mostly due to lack of capital, risk/gambling averseness, and the much smaller individual markets. But to say it has missed all innovations, or that it has no innovation is simply untrue. We need more of them, we need to invest into more of them, because there's a lot of potential that needs to be nurtured and grow.
> Really, all major technological innovations?
Here is the data: https://www.voronoiapp.com/markets/-US-vs-European-Stock-Mar...
If Europe is so innovative, why is US to EU stock market cap ratio is on a consistent upward swing by since mid 2000's?
Innovation means stock market growth? So no innovation happens at any university for instance? Or private companies? And the stock of e.g. United Healthcare Group going up doesn't mean that any innovation happened whatsoever.
Why do so many people, especially on HN, confuse market cap or GDP growth for innovation? Surely, especially here, people can realise that innovation can come in different forms, and some do not move the needle of a stock market or won't show up in GDP graphs. Is CERN not innovative because it's not a public company whose stock is growing?
> Why do so many people, especially on HN, confuse market cap or GDP growth for innovation?
It's not confusion. It's rather an acknowledgement to the reality that to fund a generous welfare state, one needs taxes. To tax, you first need a dynamic private sector economy. Taxing public sector is like shifting money from the left pocket to the right pocket.
GDP or stock market caps are just a proxy for the size of the private economy. Europe has lagged on both. Maybe there is something else which would indicate that European private sector is growing fine and dandy. I am not aware of it. Are you?
CERN innovation is awesome but it will need to be translated into private sector economic activity in order for the society to benefit from it; either directly via products and services, or indirectly via taxation and welfare programs based on that.
The innovation that happens at university level in the EU is mostly a means to get a degree. Most university research leads to nothing but a piece of paper that no one will read. Certainly when someone picks a bachelor, masters or PhD, it's not done out of the wish to later start a company around it.
>Without presumes with none
Only if you want to be a sticker and take things literally while deliberately ignoring the context to score a cheap shot gothca, then sure, it then means without.
> Leading and most advanced airplane manufacturer European (Airbus)?
Because of government intervention, and moat of a highly regulated and expensive to enter industry that keeps new players out. Why is SpaceX ahead of EU aerospace companies?
>Why is the leading music streaming provider Swedish (Spotify)?
Spotify wasn't even profitable until recently and only made it where it is today, due to to massive capital investments form the US, not from EU investors.
>Why are there so many fintechs which are a decade ahead of US counterparts
Are they also ahead in earnings/profits too? Because you fund welfare with taxes on profits and on wages. You can't tax innovations that bring you no money.
That's where While you keep blabbering on about Airbus, Monzo and Spotify , have a look at the top 100 companies in the world by market cap and see how many are from the EU and how many from the US and that's case closed. AIrbus, Spotify, etc are the rare exceptions, not the norm for Europe.
> Why is SpaceX ahead of EU aerospace companies?
“A system of non-competition clauses enforced by the European Space Agency’s (ESA) workforce suppliers is allegedly trapping aerospace professionals who work at ESA’s facilities across Europe in a professional dead-end street” [1].
Europe is absolutely riddled with this crap, and it tends to come top down from the EU.
https://arstechnica.com/space/2024/12/esa-workers-face-a-maz...
Well, not many viable orbitial launch sectors in continental Europe - that by itself is already a blocker. :P And arguably USA was also quite lucky to end up with SpaceX, given how many traditionalists in the industry were so full of "this can't be done!". :P
I didn’t read that whole comment but wow, you must be delusional. If you think that European companies in the last 20 years hold a candle to American companies in the last 20 years delusional.
> If you think that European companies in the last 20 years hold a candle to American companies in the last 20 years delusional.
I gave concrete examples of European companies being significantly better than American ones.
> I mean, you technically can, but it doesn't end well as was proven every single time this was tried.
Arguably, Japan has been doing this for two or three generations now. Despite a crazy debt, quality of life in Japan is still pretty great.
There's a saying in economics:
"There are four types of economies: developed, developing, Argentina, and Japan."
One must be very careful drawing conclusions for other societies based on Japan as a sole example. I somewhat agree that Japan illustrates that massive infrastructure investment, combined with diligence in maintaining functioning societal systems, does in fact yield a high quality of life that appears sustainable even if the metrics of economic growth look terrible. That's because GDP as a measure of "quality of life" is a shitty indicator IMO, but that's a whole 'nother rabbit hole to go down...
Japan is a monoculture that acts almost like one big family. Economic rules and values kinda go out the window similar to the way they do when you are selling your brother your old car or repairing your grandmother's sink.
Everyone who has been to Japan in the last 20 years or so could argue about the quality of life. Japan is not quite "shiny" and people are not rich.
> It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need.
If the US took the entire medicare/medicaid budget and split it evenly per person it would be left with more money than the UK spends on healthcare.
Its not just how much you spend, its how much you waste.
Quality of life also doesn't cost money.
Road infrastructure in the United States might as well be a form of digging holes and then refilling it back up again. Grossly inefficient when we could invest the infrastructure money into world class public transit.
I think you fail to grasp just how big the US is. Driving from Chicago to Minneapolis is ~430 miles/ 6.5 hours depending on weather and traffic. Every 10 miles or so there is an exit and usually some small town. Every 50 to 100 miles a bigger town.
As I recall, after the Chicago suburbs you hit Rockford, Janesville, Madison, Baraboo, Tomah, Eau Claire, Menominee, and Hudson before you get to the St Paul collar communities.
So 9 stops on on a single track running between two major cities, with only 1600 more miles to Seattle. And while the distance between stops increase, the population greatly decreases as you head west.
Now road construction could be better. Because while Illinois has 300k lane-miles of road, it seems like they only have 200k of asphalt and 100k under construction at any given point in time.
I think you fail to grasp just how big the US is. Driving from Chicago to Minneapolis is ~430 miles/ 6.5 hours depending on weather and traffic. Every 10 miles or so there is an exit and usually some small town. Every 50 to 100 miles a bigger town.
Why do people trot this out every time? Driving or traveling across the US isn't particularly relevant to most people's life experience. Ok, I'll bite.
Yes, the United States is big, but some areas are more dense than other and would need good heavy investment in public transit infrastructure. For example, the north eastern corridor would in particular benefit from investment in true high speed rail.
There's also the need for investment in freight infrastructure, especially if we want to take off more trucks off the road. This is a safety benefit too. Less vehicles on the roads just mean less people risking their neck.
Now let's talk more local public transit.
Atlanta for example, really need to expand heavy rail. Traffic there is one of the worst in the country. MARTA at time outpaces cars, even with all the stops they have to make. Rather, a lot of time is eaten up just waiting for the train. A more frequent schedule would help here, but Georgia would need to actually contribute funding to make this possible. If they extend it more into the surburb, I would have less of an incentive to move. As now, I am considering moving because of how frequent I commute into Atlanta.
We talk about long distance travel because it's the only thing that makes sense. None of the cities parent listed outside maybe Chicago are walkable. You WILL need a car at all those destinations. So why wouldn't I drive my own car? It's a requirement to own one in the Midwest (I live there). I'd love rail but it just doesn't make sense as none of our cities are walkable and the bus routes are either once an hour at best or non existent. If you put a rail line from Chicago to Madison to Twin Cities, I highly doubt it would get any use because all of these people already own cars and would get there faster and more conveniently.
making a city walkable would be a great idea though, considering walking as a form of public transport literally has a cost of zero for the user.
Also, having a walkable city has massive health and societal benefits.
That's great but it's not going to happen for a generation or two even if people wanted it. This isn't SimCity, we can't just rip everything up and start over. The fight to make cities walkable will take sustained efforts for the next 100 years.
Without leaving town, I can drive nearly 200km on any given weekend to visit friends. It is common for me to go 50km.
With the suburb architecture of many US cities, local rail is nearly irrelevant outside the city center
> I can drive nearly 200km on any given weekend to visit friends
In a typical vehicle that's about 50kg of CO2. 100kg if it doesn't include the return leg.
Not having a dig at you, but this is a big part of our problem. We believe that because we can do something, we are entitled to do it. Not only that, but we've structured our society in such a way that it's actually necessary for people to do these harmful things just to get by like commuting distances that would have been considered absurd 100 years ago. They are still absurd.
I called it the suburb architecture, but you're right it is also the absurd architecture!
It may not have seemed that way in the 1950s, but it hasn't scaled well.
The laws of physics disagree with you. In what reality does driving 124 miles necessitate the creation of 110 pounds of CO2?
This reality. A typical car produces 250grams of CO2 per kilometre.
Edit: https://www.epa.gov/greenvehicles/greenhouse-gas-emissions-t...
Public transit falls apart when you realize that less traffic on the roads makes driving a car that much more desirable.
Public transit is also more desirable the less it is used, having several seats to yourself in rush hour would make way more people want to use it.
Scandinavia is sparser than USA and as large as the larger populated states, still has asphalted roads and public stuff even up north.
This is a bit misleading as those countries tend to have the vast majority of the population crowded into a handful of cities that are fairly close together and then a vast untamed wilderness where close to nobody lives. It's easy(ish) to have rail between Oslo and Bergen, less practical to extend that rail to Oldervik.
American exceptionalism at its finest.
I have had this niggling feeling for a long time that money (and capitalism) gets increasingly more divorced from reality, particularly as money is printed and these astronomic speculative stock market valuations are created based on some optimistic future scenario.
This is not some pearl clutching moralistic argument, but a practical observation based on:
- Transfer of ownership is not necessarily possible. You can't buy a technologically sensitive company because of regulations. Even if you can buy a foreign firm, transferring the talent, operational base etc. might not be possible. A CEO can't sell off his share of stocks even if they're worth billions because the loss of investor confidence.
- Physical limitations on quantities of goods. There is a finite supply of real estate. If everybody in the world wanted a new car suddenly (and had money for it), car prices would go through the roof, and only a small fraction would actually get it.
Imo capitalism is not flawed in the way that it is incapable of handling these situations, but it is very flawed in that money is an increasingly poor proxy for the abstract concept of value.
This flawed nature of capitalism has been long since endemic (and dare I say integral) to the system, much more value has existed on paper than in reality (see banks), but I think there might be a breaking point at which the system might collapse and hyperinflation would set in.
It is precisely because individuals suck so much at correctly perceiving the allocation of value that free market economies ("capitalism") completely blow centrally planned ones ("socialism") out of the water.
So the fact that you think money is divorced from reality is a very normal, mundane misconception.
All "capitalist" economies have very large amounts of central planning for them to function (not to mention state subsidies and other protections from failing to make money), and use taxation and the national debt for that. Socialism plans centrally to the same extent that capitalist economies do, but also has the state owning the infrastructure that the economy relies upon. So it doesn't need to tax for that purpose. Socialism in that sense has never actually been practiced historically though, in the same way as there has never been "capitalism" in the sense of no central planning or regulation. Luckily.
"capitalists" have many central planners each planning the same thing but coming up with different results. Then we reward the ones who are right. Socialism features one planner - they may have helpers, but just one. If one planner gets it wrong in capitalism you can go with a different one.
Capitalists as in capitalist governments centrally organising commercial legislation and regulations, subsidies, tariffs, standards, etc.
Money is obviously a poor proxy for value.
A bottle of water might be the same price as a litre of petrol, but the value is vastly different.
We don't pay for the value. We pay for the cost of acquisition (e.g. pumping the oil out of the ground).
cost of acquisition sets a floor on price. Value sets a ceiling on the price. Supply/demand sets the price you pay. (in economics we further talk about curves - there many oil wells and some costs more to run than others, there are also many buyers and some value oil more. Similar for water where it is often free from a nearby faucet but people will pay a lot of it in bottle form anyway.
You're taking my argument in the direction I never intended, then taking the dicothomy to the extreme, and then claiming victory unsupported by evidence.
- I never wanted to contrast 'capitalism' and 'communism' or whatever. I merely wanted to point out that the fundamental absurdity of capitalism requiring infinite growth in a finite system has been resolved by having the growth of wealth coming from speculation on future unrealized value. Since I (or anyone else) can't predict the future, it might happen that things do not come to pass as they were expected and that future value might not be realized. Money is divorced from reality, it derives its value from the collective trust and belief by the people participating in the system that it can be exchanged for goods and services. In a system of rational and impartial actors, that belief is backed by chiefly existence of said goods (which is the real size of the economic pie) and less by the speculation of future potential that might or or might not happen. So in summary my argument is not between communism or capitalism, but a captialism that is backed by real world value and one that is backed by future speculation. Even if the former can create less economic growth, we can be certain that growth is real.
- Central planning works. Great public works certainly are dreamt up and funded by governments yet they contribute enormously to the wealth of nations and enable a lot of value to be created. The moon landing was centrally planned and executed by a country whose per capita wealth was on par with modern day Poland, yet is considered the greatest achivement in history.
- There are no real 'centrally planned' or 'free market' economies, as all countries employ both concepts to some degree. But if we were to make a argument, we could say that the US belongs to the 'free market' camp and China belongs the 'centrally planned' camp. Both countries are doing extremely well, this very discussion is about finding which one is actually doing better.
Though it has very much decreased in recent years due to rampant inflation. My real wage has decreased since increases have been lower than inflation. For unemployed and low earners it is even worse.
You forgot to mention that this quality of life is bought with debt and deficits that have been running for the last 30 years.
Look at what's happening in France for proof that this is just not sustainable. The US has a massive advantage tough,their currency is the global currency accepted and needed everywhere that is backed by the US army. Much less so the Euro.
The cost of all these social programs has to come from somewhere and currently the majority of these costs are shouldered by the middle class that is being squeezed to the max and speaking as someone from the middle class, I can assure you that having a couple of extra weeks of holiday and more job safety (if you are into that sort of thing) is not worth 55% to 65% of my gross income.
Even universal healthcare is crumbling now.
At some point the EU will need to get it's productivity up and become competitive once again or all this quality of life will have to go as it won't be financially possible to continue on this path.
Quality of life is the result of economic prosperity.
If the economy falls behind then quality of life will follow at some point. In fact quality of life is already not so great and decreasing.
>If the economy falls behind then quality of life will follow at some point.
If only Europeans would accept this truth and wake up that something has to change yesterday.
What's happening to Greece is just the mining canary for what's gonna happen in much of the rest of EU later, if there's no preventive change of course.
Only partially true though. A rising tide can lift all ships. The EU can benefit from advancements in the US invests in because of our wealth. This goes the other way as well, even thought he EU isn't putting out as much, they are putting out something and that benefits the US. So long as they don't fall so far behind that it isn't worth trying to bring them up - but this is unlikely, I'm not even sure how this could happen.
No it's not "partially" true.
Noone claims that people in the third world enjoy great quality of life, for instance. You can't benefit from the advancements of others if you cannot afford them...
> I'm not even sure how this could happen.
It can always happen but it is gradual and takes time. Places like India or China were once the richest areas of the world, only to fall behind and become among the poorest later on because they stagnated while others progressed.
That is why it is partially true. There are many other factors as to great quality of life. If you have all those other factors as well then a rising tide can life your boat too. Some third world countries have seen this over the years, and others are seeing it now. Some have seen it and then something (often a coup) reverted them to bad quality of life.
As a US citizen, I look with envy on the quality of life in many EU countries.
As has I’ve heard said, the best place to make money is the US and the best place to spend money is the EU. If you believe this is the case as I do, the next step is to figure out how to lifestyle arbitrage. Make US wages while living in the EU.
I’m older with bit more freedom than when I just started out, but this is exactly what I’m doing. My plan is to eventually quasi retire to the house I’m currently renovating.
I love living in the US and visiting the EU. For me, that seems to be the very best arrangement. Early on, I was infatuated with the perceived better quality of life in the EU, but I see now that I could not easily create something comparable to what I enjoy in the US unless I was an elite member of EU society. My guess is that this is true for the majority of US residents on HN.
You can look closer, if you want. The EU is cheaper and cheaper for the American tourists.
And please make sure to visit some of the Eastern European countries, like Romania or Bulgaria too. They are part of the EU as well.
The EU could be a powerful neutral third block, focused on providing the best for its citizens, but for that they would have to keep up economically. The EU is currently a massive laggard, worse than China in a lot of metrics, yet having dalliances with some levels of Chinese authoritarianism. Not to mention the current unsustainable state of its welfare state.
Which country? This matters a lot. I doubt you are in Greece, or Italy, or Portugal.
Did you know on GBP PPP Warsaw and Budapest are now better places to live than Madrid, Lisbon and many other Mediterranean cities?
It’s crazy. Perhaps Berlin and Copenhagen are still ok, but even France is on a completely unsustainable path that will explode in the next 10-20 years.
Where does this notion come from? Many Europeans cannot even afford proper AC in summer and heating in winter.
Of course they can afford it, its just a cultural difference.
> Many Europeans cannot even afford proper AC in summer and heating in winter.
Basically nobody lacks heating in winter, that one is made up. The thing people lack is AC and its just because people aren't used to it so they don't see it as a need.
Edit: Saying this is like saying people can't afford shelter in USA, it is true and there are many homeless but it describes a tiny fraction.
Many Europeans have a mild climate where the few days AC is really better than no AC isn't enough to be worth it. Particularly if you stick to western Europe when you mean Europe, (eastern Europe has a harsher climate but also still coming out from soviet days and so doesn't have the wealth needed to put AC everywhere though some are getting close)
> The thing people lack is AC and its just because people aren't used to it so they don't see it as a need.
I suspect it's just that Europe is mostly north of the US and AC is more luxury than necessity. Places in the US like Seattle, which is still south of much of Europe, only recently rose above 50% AC prevalence. It's become much more popular as the climate as grown warmer.
And a lot of people in the northern US also don’t have AC. It just wasn’t necessary until somewhat recently. Had little to do with affordability.
> Many Europeans cannot even afford proper AC in summer and heating in winter.
A lot of people don't need AC, and heating is a non-issue almost everywhere.
We haven't needed this for the most time. I'm not spending on AC for a few days per year where it's really hot while it's really not most of of the year.
Besides: I'd rather put sedum/green stuff on our flat roof, which also helps insulate a little bit in winter but really really helps in summer.
Depends on whether you're talking about Europe the continent or eg the EU, though "many" if of course a vague enough claim to be technically true for any corner of the world.
But relateedly, US household energy expenditure is enormous compared to other countries and a lot of it is burning fossil fuels to run AC. There's a big money vs ethics tradeoff going the wrong way for emissions, more so from being a huge oil producer.
> burning fossil fuels to run AC
I'm interested in the numbers behind this. The location and timing of most air conditioning needs correlates strongly with the availability of PV. At this point I would have guessed that heating is strongly reliant on fossil fuels (and will be for many years to come) and air conditioning will be much greener.
It’s not ideal because peak temperatures are in the late afternoon, when the sun is lower in the sky. And continues into early evening.
Speaking of notions coming from highly dubious places....
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Declining/Aging Population becomes the issue. Solutions will probably come from Biology/Nature.
Human Quality of life seems to flip the natural "evolutionary script" wrt to population growth. Shrinking population = shrinking landlords/bankers/labor/traders/military/scientists etc
In nature, where there is environmental instability/resource scarcity you see a Quantity over Quality reproductive survival strategy (which is similar to what we see poorer regions of the world) that fuels population growth.
On the flip side, where there is resource abundance and stability there is growth in population. But we don't see that happening in the richer/higher developed regions with humans.
Its like advanced human society/culture has worked out how to override biology.
We currently work around falling population(and the shrinking factors of production) with tech/automation, financial/military arm twisting and immigration which gives rise its own social and cultural instability.
Nature has found other population models though. Ants(Eusocial insects) have solved their population/survival issues by have a single Baby factory. There are theories that the Haplodiploidy it produces makes ant societies function smoother. While Meerkats have collective breeding model which is similar to what certain Feminists talk about when they say Make Kin not Babies.
It will take a couple generations of futzing about in unnecessary directions before we solve these issues. So patience with the people who don't know what they are doing is key.
I tend to agree to a certain extent. From my observation it seems that a certain amount of suffering in life creates strong motivation for overcoming it. If you just have a very happy life you don't have that strong motivation to change things.
>If you just have a very happy life you don't have that strong motivation to change things.
Or you see no way out, feel defeated and see that positive change is impossible or futile. It cuts both ways. Inaction doesn't always mean a rosy life.
While I fully understand and agree with you, there is an alternative take. Namely, given that cloud provider offerings are mostly incompatible, what you call "cloud-native" could as well be called "vendor lock-in".
The CNCF approach basically says, instead of just running your software in a traditional way, you run it in containers which run in the cloud, mostly managed by k8s which is the most popular even though not the simplest container orchestration platform. So what makes them truly "cloud native" vs "AWS/GCP/Azure-native" is that you can run them on any cloud, even private.
The “populists” request that their tax dollars go to citizens rather than foreigners and the elites respond with musings about the reproductive strategies employed by ants.
This quality of life can disappear in a matter of seconds. EU is still not actively working on protecting itself from the Russian threat. The moment Russia attacks which is going to happen since this is what the fascist Russian dictatorship wants, we could kiss our quality of life goodbye.
The reason for that is that we have offloaded defense to americans and have century of accumulated capital (legacy of colonialism) to spend. How long do you think it's going to last? Even Brussels is getting concerned and that's telling.
Even within EU there is a clear correlation between economy and quality of life between countries. While yes more social policy improves quality of life, it can't compensate if the economy difference is too high.
>The EU is number one in quality of life
I feel like this is only the case for a very narrow demographic - the young, bicycle-riding, sex-having mid-20s college grad still trying to figure out their calling in life while living frugally without a care.
It really sucks being 40 and still earning like 57k EUR or whatever.
> It really sucks being 40 and still earning like 57k EUR or whatever.
Why? If that's enough money for the quality of life you want for the cost of living you have, what does the number matter?
>It really sucks being 40 and still earning like 57k EUR or whatever.
Is this a joke?
60k in France means you earn more than 92% of the population.
60k in Italy means you earn more than 96% of the population.
60k in Germany means you earn more than 80% of the population.
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Without challenging the veracity of your statements (which sound implausible if you narrow it down to working age population not in education and working a full-time permanent job), so what?
There is no rule that life should only suck for a minority of people and that most people are happy. It may well be that the 90% of people earning <60k EUR live generally miserable lives, and for the top 10%, "the EU is number one" and they post about it on Hacker News.
This is assuming nation-state conquests are out of the picture.
Given European demographics and the changing political landscape, it's hard to imagine that the quality of life in Europe can remain as it was through the 1990-2010's. Additionally, many European cities are essentially museums, riding on what was built centuries ago, with little innovation. If you don't believe this, just go to a German city that was completely destroyed during the war.
I'd imagine that Europe is at or near the peak in terms of its quality of life.
At least some of the European lifestyle has been due to peace on the Continent. Up until now peace in Europe has been funded by US taxpayers. The situation in Georgia and in Ukraine is what you get when European affairs are left to Europeans. Without the US providing military aid to Ukraine, Ukraine would have fallen and you'd have Putin banging on your back door.
Additionally, the EU's inability to supply Ukraine with basic military equipment such as artillery shells is indicative of how Europe is devoid of industrial capacity and couldn't rally in its own defense if it had to.
>The situation in Georgia and in Ukraine is what you get when European affairs are left to Europeans.
What are you smoking?
>Additionally, the EU's inability to supply Ukraine with basic military equipment such as artillery shells is indicative of how Europe is devoid of industrial capacity and couldn't rally in its own defense if it had to.
https://www.president.pl/storage/image/core_files/2024/11/12...
To your country's credit Poland is punching above its weight relative to the rest of the deadbeats but I wasn't talking about tanks. However, you've sent 240 T-72 Soviet era tanks to Ukraine and ~12 Leopard tanks.
I was talking basic equipment like: 155mm artillery shells. In that case, unfortunately, the facts are not on your side.
The majority of 155mm shells that are sent to Ukraine come from the US. The US has increased production of 155mm shells 6x this year alone. The same is true for body armor and small arms. Europe cannot ramp production in almost any category.
Then there's this. https://www.statista.com/statistics/1364467/ukraine-weapon-d...
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Enjoy it while it lasts, your social programs are a gift from the US historically subsidizing your defense.
This always went both ways with the EU providing a market. When the US stops to provide defense, watch and see the EU reaction, starting with all things digital.
As India and China both produce solid middle classes demanding American products, this will matter less and less. We're already seeing this on the West Coast of America (what I know) where Asian and Indian cultures are gaining more and more influence.
It will not matter less and less because China can and will satisfy that demand themselves without relying on American products. So far the US exports about half as much to China compared to the exports to the EU (2022). And it will likely export less to China in the future.
India is not even close to replacing the huge European middle class and even if it were it has proven to be a highly unreliable partner. And so far the US exports to India are not even 15% of what is exported to the EU (2022).
The EU middle class comprises around 280 million people. Almost as many as the whole US population. And it is culturally and politically aligned with the US to a large extent. It‘s a huge market to loose.
Nobody would drop 15-20% of their exports to try to save 5% of their defense budget all while loosing influence and power.
The US is also a market for EU products.
To reverse roles in your argument: Imagine if the US put sanctions on EU companies because EU militaries aren't doing enough to help the US fight cartels in Mexico. Seem reasonable?
PPP is an increasingly irrelevant notion in a globalized, digital, and immigration-friendly world. An iPhone or a Toyota Corolla costs the same in the US as it does in China. There is no remarkable arbitrage with real estate either - you're paying for the location and everything that comes with it. There is no secret city where the rent is low, there are plenty of well-paying jobs, you enjoy freedom of speech and can be reasonably sure the milk isn't tainted with melamine (tangent: due to strict US immigration policies and corporate RTO, the Bay Area comes close).
PPP suffers from the same problem that "basket of goods" CPI suffers from in that it doesn't account for differences in quality:
- of course a car costs more today than it did in 1980, it's a far better car
- of course a loaf of bread costs more in California than it does in India - I have certain guarantees about the pesticide levels in the wheat, the accuracy of the labeling, and my ability to seek damages from the legal system in case I chip my tooth on a stone, that I don't have in India
At best, PPP tells you something about the differences in cost of labor. But labor isn't everything you buy.
> An iPhone or a Toyota Corolla costs the same in the US as it does in China.
A maxed out iPhone costs RMB 13999 in China, which is about USD 1925. The same iPhone costs USD 1599 in the US. In Brazil it costs the equivalent of USD 2565. PPP is still very much relevant.
That's the opposite of how PPP usually works. Purchasing Power Parity means that although you earn much less in China, things also cost less, so your cost of living and relative wealth are the same.
So PPP usually is a boost to the poorer countries. The post you're responding to claims that this is less and less relevant because the things they want to buy are global in nature. The fact that these things cost more actually reinforces that point.
You often are better off in poorer countries anyway even if some goods cost more. My coworkers in India have servants that clean their house every day - I make more $$ than them by a bit but I could not afford that and so I personally have to spend a few hours in cleaning every week and my house isn't as clean (because I'm spending less time cleaning)
Are the servants better off?
Better off than no job. But it will be interesting seeing culture shock of a few generations in some countries that seem to be improving fast and thus the servants kids can get better jobs. I hope it works out that way anyway.
Each country has their own misleading way of calculating PPP. Some probably include the iPhone price.
PPP is useless misleading nonsense.
Shouldn't it cost less in China?
Why?
How often are you buying iPhones and Toyota Corollas? PPP conversion rates are based on what people actually spend their money on. Easily tradeable goods, like iPhones and cars, make up only one component of GDP.
Sure, but my contention is that even the small things are of worse quality in the so-called "high purchasing power" countries, which is the main reason why they are cheaper. There is no actual arbitrage or difference in "purchasing power", just that the market is optimized to serve a different price-quality point.
The main reason they are cheaper is that labor costs are lower. The barista at your local cafe is making 50x what a barista who does the exact same thing would make in Nairobi. That doesn't mean your coffee tastes better.
PPP matters on an individual level, but not at all on a national level. GDP at market exchange rates is what actually matters in terms of what a country can accomplish on the world stage.
And even on an individual level, PPP struggles with accuracy, because things are only ever roughly equivalent. There's a reason why so many individual people are trying to move from China and India to the US and EU, despite all the personal financial disadvantages of doing so.
> because things are only ever roughly equivalent.
This is what people seem to misunderstand about PPP. PPP applies for daily/internal market goods. The cost of milk, eggs, clothing, etc. Which is definitely important. On a more macro scale it also compares a VW Vento in Mexico with a VW Jetta in the US...two particularly different cars with ~6000usd gap in price.
In other words, it compares basic goods for living; fudges some basic "luxury" goods, and pretends that that's representative of lifestyles. It ignores (in Mexico, for example) the fact that consumer electronics are ~20-40% more expensive (if available at all), access to truly equivalent basic luxuries (a VW Jetta for a VW Jetta) is still slightly more expensive, access to equivalent security/infrastructure/business guarantees nigh impossible to receive, and just the vast gulf of wealth inequality that exists, etc.
Wrong. People move from China to India despite the higher prices in America precisely because the increase in wages is more than enough to offset the higher prices.
True, my comment was ignoring the fact that America's per-capita GDP is higher even after controlling for PPP. People can move for a lot of reasons. Having a much more transparent and predictable justice system is also one of them. For instance, my money would go a lot further in Russia, but then I'd have to live in Russia.
But the point stands that market-exchange GDP matters more when it comes to comparing the relative strength of countries, rather than individuals, since it endows the government with greater purchasing strength. An era of trade wars might test this theory, but the ramifications of absolute isolationism would be far more complex than that.
>For instance, my money would go a lot further in Russia, but then I'd have to live in Russia.
It's important to point that if you were moving into Russia as an expat, you've already avoided much of the opportunity costs of building your career there first and instead going in having "made it" in another country.
If you are starting out in China or Russia, it's much harder relatively to climb to a similar position within those countries than in USA. Alot of expats might like how much their money goes in China with good CoL, but I'd be suprised if they were to send their children through the conventional route of the Gaokao and ultracompetitive Chinaese University Admissions and labour market. Getting into the Ivy or Berekely or a State Flagship and then FAANG is cakewalk in contrast.
>People move from China to India despite the higher prices in America
?
> PPP matters on an individual level, but not at all on a national level. GDP at market exchange rates is what actually matters in terms of what a country can accomplish on the world stage.
That's demonstrably false cause the global super-powers (i.e. the US, Russia and China, maybe India, too) mostly depend on their internal markets only when it comes to their war industry and to paying their soldiers. When it comes to that PPP is a lot closer to the truth on the ground.
If we're talking military only, then you have to look at defense budgets, not GDP. The US defense budget is still much bigger than China's and Russia's combined, even after controlling for PPP.
By "what a country can accomplish on the world stage", I meant a more holistic view of what a country can do, such as investing, R&D, exploration, etc. (and also military).
I've spent a lot of time in a lot of different countries/cities with wildly different economics and I have a very different view of things.
PPP in the real world is a bit of a fraud, at least in the way people commonly use it. A lot of things you compare between two countries are in fact very different in reality. You might actually end up paying a lot more in nominal dollars for a lot of things in countries which are supposedly "cheap" to get not even the same quality. I find that the cost to maintain the same quality of life between different countries ends up being much more similar between countries than the statistics would have you believe.
I'm in a relatively poor country at the moment. On paper meat costs a fraction of what it does in the US, but what you get at the local market tastes absolutely terrible, uneatable to my spoiled western standards. I think they literally feed the animals trash. To get quality meat you need to go to specialty stores in the rich neighborhoods that caters to the country's elite. There it's actually about 10% more than what I pay at a US supermarket and it still is not as good. The same thing goes for housing, household goods, clothes, etc. In many countries you pay a huge premium for goods imported from the west, and the selection is often quite limited.
This has been my experience everywhere in the world. Excluding a few cities where you pay a premium just on the basis of the local job market, you more or less get what you pay for no matter where you go. The differences that don't fit into spreadsheets are quite significant and almost fully account for the pricing differences from location to location.
This is the common expat mistake. Your cost of living can grow very high, if you try to replicate your old lifestyle in a country that doesn't support it. With the same approach, you can also find that living in the US is 2x to 3x more expensive than in Western Europe. (I personally settled for 2x by making some compromises.)
No, not really. I specifically use meat as an example because you can buy a chicken pretty much everywhere in the world. To be clear, there are SOME things everywhere that are exceptional and cheap. Here for example I can hire a cook, two maids, and a driver for next to nothing even paying well above average wages, but having a dishwasher or air conditioning is an unthinkable luxury and even a vacuum is quite rare. Then there are a million little things you can't change at any price; you can't drink water from the tap even in my sparkling luxury apartment on the poshest block of the nicest city, and if I ever needed serious medical care I'd be on the first plane back to the US. There are tradeoffs everywhere but when you factor everything in including the overall quality of life in the city itself, prices are quite similar everywhere around the world...as you'd expect, since that's how markets work.
My point is that the cost of things is more similar than people think, not what you should or should not buy as an individual, and that these adjusted PPP numbers do not make for valid comparisons. 99% of the time when PPP is used in the popular press someone is trying to bend the numbers to distort the real economic situation to try to further whatever narrative they're pushing. You will never see these people making the argument that Alabama is poised to overtake New York economically because on the average salary you can afford a larger apartment in Mobile than in Manhattan. To me these arguments sound equally ridiculous.
There has certainly been huge GDP growth in China but their specific claims about GDP can't be attempted to be believed. Their numbers have never been independently verified and most of the raw data is treated as a state secret. There is reason to suspect that some of what they're reporting is just made up. Party officials are evaluated based on meeting certain economic targets so there's a lot of incentive at the lower levels to falsify data. The same thing happened in the USSR before it collapsed (I'm not suggesting that China will collapse any time soon, just pointing out that this is a common pattern in single-party authoritarian governments). External estimates based on resource utilization indicate that real GDP might be significantly lower.
PPP is only useful for measuring regional purchasing power within a country. As a metric for comparing the relative strength of global economies it is irrelevant.
Just the opposite. PPP is less useful when comparing intra-country than inter-country. It's only relevant because there are barriers to trade, especially in services.
this is economist-brained and about the same as using CPI as the only measure of inflation.
They are models.
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>And I expect that Asia is going to start developing some serious military muscle on the back of that because they have access to the history books and have a pretty good view into how Western leadership thinks.
The history books say Western countries abandoned conquest many decades ago. The leaders who initiated colonialism are long dead. Nowadays all we have are handwavey analogies to colonialism when someone wants to be provocative.
Countries aren't people: https://www.youtube.com/watch?v=AXz0kbMKPu0
I think generic metric metrics like GDP PPP have to be put into context. When I was in China I was shocked by how much stuff there was. Not even nice things, but stuff to the point most westerners would consider cluttered.
Rent was also super cheap.
On the other hand iPhones were pretty expensive. Enchiladas were super expensive too.
These aggregated stats have to guess what you’ll buy and base their estimate off of that. Your actual financial situation will be very dependent on what you need to buy.
https://mishtalk.com/economics/purchasing-power-parity-silli...
GDP PPP is meaningless for both geopolitical power and what it means for the average citizen.
The average citizen in EU is much better than the one in China/India despite what the PPP numbers suggest as GDP per captaincy matters more.
China and Russia resort to bartering due to US sanctions because GDP matters, and not GDP PPP [1].
PPP should be used to compare only similar countries like USA/Canada/UK or those in EU. Or countries in SEA.
[1] https://www.intellinews.com/china-russia-to-reintroduce-bart...
> The average citizen in EU is much better than the one in China/India despite what the PPP numbers suggest as GDP per captaincy matters more.
I mean, the PPP numbers say the average citizen in the EU is way better off thant he average in India or China, so eh?
No they don't. By PPP, China comes out #1.
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
Per capita of course. We're talking about living standards here.
PPP is closer in some ways, but it's not the best... It tends to be biased against strong currencies. The USD has been extremely strong since the pandemic.
PPP is a measure of how easy it is to afford home servants (I.e. the amount of income inequality near the low end).
Who cares? I'd rather be #1 in disposable income for my people personally: https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
Europe is willingly self sabotaging their industry and energy production, in the name of some completely irrational environmentalist ideology that states that saving the planet is achieved by making Europe poorer while allowing China, India and a few others to pollute without any restrictions.
So yeah, we are getting poorer by the day and on the brink of a major economic crisis. Just look at what is happening in Germany.
European auto makers are failing because they can't make EVs that the market wants. And the market doesn't want their ICE vehicles either. They over-focused on very expensive high end EV vehicles. That's why they are hurting, it's not because it's EVs.
European ICE vehicles are losing out in China because people there don't want to buy any more gas vehicles, at least most people are getting there. VWAG is losing marketshare in every segment that I see. It's not green power that is killing them, it's not many good cheap vehicles that are killing them - gas or EV.
making a cheap EV (like the trabant/VW beetle for EV's) would be great.
Gas prices in europe are no joke, and considering we are basically in a hybrid war with one of the biggest oil producers for europe, getting rid of energy dependence would be great for europe, and having cheap EV's would be key to that.
So we are in agreement that cheap EVS would make sense for invigorating car sales in Europe. So why don't they do it? I think it's because they conclude they can't make any money if they make cheap EVS cuz the labor, batteries, components are too expensive or something for the lower profit per car world of cheaper vehicles.
American car companies have gotten addicted to selling huge more expensive cars as a way to keep profits up.
I still think the real goal is achieving energy indepedence, so that Europe does not have to import fosil fules from some very questionable and problematic countries.
Currently this also simulatenously gives those contries more money, so they can be even bigger pain in the ass in the future.
The sooner this flow can stop, the better.
On a per capita and historic basis the emissions of developing countries are dwarfed orders of magnitude by Europe and Western countries. Not to talk about all the land conquered by the same countries.
Are you interested in “saving the planet” or in making sure every country gets to pollute the same per capita on a historical basis?
“Find some way to present the data so the bigger number is actually worse”
PPP is cope.
When I hear "America’s economy is soaring," I can’t help but think it probably just means the rich are getting richer.
Don’t get me wrong—I’m not a communist. But it’s clear to me, especially when you look at how the middle class is struggling worldwide, that capitalism in its current form isn’t sustainable.
What we need is some kind of “Capitalism 2.0” or “Capitalism++”.
It makes no sense that someone with 300 billion dollars pays less (or even nothing) than a person that makes 100k per year. And this happens on ALL countries.
EDIT for those downvoting: just watch this video: https://www.youtube.com/watch?v=QPKKQnijnsM and then tell me why I am wrong.
Covid and the subsequent recovery was and is definitely K shaped. Someone with a house and assets has crushed it. Those without have only fallen further behind.
You nailed it. This was the case across all developed economies, a direct result of money printing.
You did especially well if you had assets bought with borrowed money since your gains were leveraged and your loan principal inflated away.
Exactly. And I'll brag and be frank at the same time. I couldn't afford to buy my house today in the US. I have no idea how new people afford to move into my neighborhood. But since I bought it at the end of the GFC and refied to 3% at some point, I have that house and now a house in Europe that I paid cash for that I'm in the process of renovating. That one bit of leverage I was able to grab onto in 2011 led to big changes over 10-15 years. I don't see that same opportunity for a lot of young people now, and that's a problem.
COVID only made it worst, as companies took advantage of COVID to inflate prices.
Yes, COVID made it even worst. But this has been happening since before COVID.
Yes, I would say COVID accelerated what was already happening.
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"Losing 30 trillion" is a very entitled view on decreasing real estate prices. Those 600 million people making 1000 CNY/month or less (and probaly another 300 million making a bit more) will be happy for a respite in being priced out of everywhere. This literally increases their purchasing power.
> Those 600 million people making 1000 CNY/month or less (and probaly another 300 million making a bit more) will be happy for a respite in being priced out of everywhere
Those 600 million cannot afford to buy real estate even at the crashed price.
The going rate for a 2bhk in a tier 2/3 is still $100-300k, which is still unaffordable given that median urban household income is $6k and median rural household income is $3k.
And this is the crux of the problem in China - all this "overproduction" isn't necessarily due to some grand strategy, it's due to a lack of consumers because salaries are too low.
What's this conspiracy of the US and Europe to destroy developing large economies world wide? If your plan is take over your neighbors, say you'll wipe out democracies and kill people and it's your destiny to win, then eventually the US & Europe will do something.
Russia literally talks about taking over the countries around them, bites off pieces and then subverts the countries that are left. That was all before the first piece of Ukraine was taken, Crimea.
NK - goal to destroy SK, has a big army and nukes. Worth trying to stop them.
China - Chains says the mere existence of Taiwan is worth destroying them. Also taking over the south china sea on the stupid dashed line that says they own the ocean down there. Dictatorships can't stand a functional democracy right next door.
India - if they don't plan to destroy the countries around them and take them over, then good on them. The US has been basically ignoring the fact that India is on a slow road to make their Muslim and other non-hindi citizens fail in every way in their society.
India said FU to the world and has been happy buying a lot of Russian oil that's under embargo. No one attacked them. The world isn't so simple as "western countries destroy all large growing competitors".
Two if not three of these examples are very much related to civil wars or civil-war-like dynamics. If anything, yes, I agree that the world usually isn't so simple to unconditionally take any single side.
Well Bangladesh is already killing and destroying Hindu citizens now where the coup was orchestrated with US blessing.
GDP PPP is based on assumptions that - 1) People indifferent countries have the same basket of goods - probably not true for someone living in US vs Chine vs India 2) Accurate pricing data is available (which is not true for big categories like real estate in India and China - a large part of the price is under the table and unaccounted)
The US dollar is the world's reserve currency So countries keep huge stores of dollars in their reserves because they need it for trade Then what happens is the US starts the money printer to pay for US government services This inflates the dollar and means that everyone who holds the dollar has lost value
Including Americans who are paid for their labour with dollars and do not own assets
So wealthy Americans/companies see an influx of money, asset prices rise and every other country gets poorer relative to the USA
I would argue the opposite. If you compare US dollar to every other currency the value of their currency has decreased a lot compares to US dollar. This would be a plus to hold US dollar as their own currency has depreciated and holding more dollars has helped them reduce their losses. But it has one down side is that if you hold too much US dollar the country exposes itself to US monetary policy.
not sure there is a country on earth that you could save your money in the national currency and not watch inflation rip away the value of your earnings. The purchasing power of USD has declined 95% over the past century.
Prettiest horse in the glue factory
Your expectation is that the money hidden under your couch should never go down in value?
And you are upset that the world doesn't work that way?
> Your expectation is that the money hidden under your couch should never go down in value?
Why should it go down? If there were a fixed or slowly growing monetary base (i.e. slower than productivity), the dollar would appreciate and this would be a good thing as we would all benefit from the gains of productivity and living in a prosperous society.
I never bought the idea that we need to inflate our monetary base and have inflation. It seems too convenient as the government uses it as a backdoor form of taxation. And every few decades it gets out of control. The argument pro moderate inflation never rang true to me. The biggest one is "people wouldn't spend money if they knew everything will get cheaper", which is on its face wrong because the hottest selling goods in this economy are quickly depreciating. This year's iPhone or car model depreciates very quickly but somehow people keep buying it and the world doesn't fall apart.
You ask why should it go down? My understanding is we tried other banking policy during the great depression and it didn't work out so well. When the economy collapses and the government lacks gold backed dollars to do counter cyclical spending because there's not enough gold reserves it doesn't go well.
So my response would be because great depressions are not desirable.
But what I really don't understand is the outrage that the money under the couch should go down- when assets like treasury inflation protected securities are available. (Yes they are not always available at profitable rates- though they currently are- and I don't think the people complaining about inflation are whining when stocks or Treasuries or bank accounts are paying more than inflation.)
> When the economy collapses and the government lacks gold backed dollars to do counter cyclical spending because there's not enough gold reserves it doesn't go well.
Probably shouldn't be using this logic when the dollar is no longer tied to gold or any other physical asset though. There's a world of difference between a dollar based on gold and a dollar based on confidence in the US government.
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They were describing the 1930s situation, when the dollar was backed by gold & it didn't go well
And I was saying that the dollar is no longer backed by gold, or tied to any other limited resource, so why would we assume that the same scarcity-driven dynamics are still in play?
The fact that a certain policy doesn't work during the great depression doesn't mean that it doesn't work all the time.
> Why should it go down?
Because the people on earth have created value through work and so the money supply needs to increase to represent the additional value that has been created through that work. If you cut a tree down and, through work, turn it into a table — then you created value where there was none before.
So the money supply must increase to represent human endeavour. That’s effectively what central bank interest rate rates are.
In a perfect world, we’d have an exact balance between work/value and money creation. Unfortunately, it’s not a perfect world.
As others have noted, deflation is problematic because people hoard money with the expectation that the value of the money will be more tomorrow. This reduces the activity in the economy. So a balance between money supply and endeavour is a reasonable solution. It doesn’t make money appear to be rare.
Money is ultimately a 'claim check on society', in Buffet's words. Unspent, uninvested money is a deferred claim. Why should the value of a deferred claim go up, if you haven't invested it in some productive use? Why should you be able to defer a claim in perpetuity, and expect to exchange it for exactly the same amount of goods and services at any point in the future?
Because its a claim. A claim is not less valid if you don't claim it. That kind of defeats the purpose of a claim. You contributed to society and you have a right to something in return.
This argument assumes there is a fixed amount of wealth in the world and you're taking some share that would otherwise go to someone else.
At the time the claim is created (you're paid your salary, you have a liquidity event, ...) you can exchange it for some quantity of goods and services roughly proportional to (the market's appraisal of) the social value you've contributed. If you stash that claim under your mattress, should it be equal to the _exact same_ quantity of goods and services 10 years in the future? 100 years?
If instead you stored the value you created (the lumber you fell and milled, the clothes you manufactured, the messages your software conveyed, the student you educated, ...) under your mattress for 10-100 years we would not expect them to have exactly the same utility they did at deposit
Money should be a _more_ efficient store of value than anything we might exchange it for, but I don't think it's clear that it should be a perfect store of value. If you want to maintain a claim on a fixed quantity of goods and services, you should have to contribute to the investments required to maintain the productive capacity to deliver those goods and services.
A monetary policy targeting stable, low, but positive inflation balances savers' need for a risk-free store of value with the social need for continued investment and consumption.
> A monetary policy targeting stable, low, but positive inflation balances savers' need for a risk-free store of value with the social need for continued investment and consumption.
I think both these purposes are served with zero or deflation. As a saver, I don't like my dollars being depreciated and people on fixed income also don't like that. And as someone who wants to promote investments, a lower deflation rate reduces my minimum expected return since it doesn't have to clear some inflation hurdle rate. And for consumption, like I mentioned in my original post, the hottest selling items are rapidly depreciating, so I don't think it would negatively effect consumption. So the only one the inflationary system works for are the politicians that use money printing as a backdoor form of taxation
Deflation means that I can make money (or more precisely, value) simply by leaving what I have in cash. That doesn't promote investment; it promotes hoarding.
That's the same as investment. If a part of society's resources aren't directed towards consumption, they are directed towards enabling future consumption. It's a tautology in economics that savings equals investment.
Saving it under a mattress is not investment, as "investment" is normally understood. It's just savings.
It's the same thing in economics. It causes the government to print more money to make up for the money missing from circulation, which will be invested. If the government doesn't do that, it increases the value of all other money in circulation.
But that’s under some weird, incorrect model of how money works. Presumably if we go down this route any further you’ll start talking about IS/LM and the money multiplier. All models are wrong, but there’s a better model that involves capital constraints and the Basel accords.
In any case, one of the major failings of modern macro is to assume you can think your way around the implications of economic actions. You have no way of knowing the consequences of stashing money under a mattress unless you actually do it, and even then there’s no guarantee the effect will be the same across different economies and in different eras. The world is just too complex for that.
Are you calling the entire field of economics a pseudoscience?
A lot of the field of macroeconomics, yes. Have you ever sat down and read that stuff?
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What you're arguing for is deflation, which has a long-standard track record of either slowly or quickly destroying entire economies.
care to cite some examples of deflation quickly destroying an economy? there are many such examples for inflation. Argentina, Germany, Zimbabwe, Greece
there is deflation that comes from shrinking of the monetary base and there is deflation that arises out of productivity gains
often the "deflation" observed in bad economies is a symptom rather than the cause E.g. there were a few months of official deflation in the US following the global financial crisis, but this followed from the crash rather than caused it.
Japan in the 90s 00s -- didn't destroy it but weakened it in a very major way
Yes, hyper-inflation is highly destructive, but deflation creates a negative cycle that is very difficult to get out of.
It should go down because population levels aren’t static and deflationary pressures drive people insane.
There is a huge difference between "this cash in my hand should never go down in value" (which nobody including the GP is arguing for) and "$1 today has the purchase power of $0.05 a century ago is good, or at the very least the natural state of things" (which you may or may not be arguing, but is how I understood it).
The impact of inflation compounds. I won't bother looking up if that 5 cent claim is correct but I did quickly look up average inflation rate, and the average inflation rate from 1941 to 2017 is 3.5 percent per year. Which would mean the value of the currency would halve every 20 years, but that's just how compound interest works, it's not particularly remarkable or surprising.
Nobody complains when compound interest makes their stocks or bonds go up, I don't know why someone would suggest compound interest in inflation rates is some sort of awful social issue.
I would expect less feudal outcomes in a world that calls itself free. Capital income does not reflect economic performance, its just a inheritable privilege.
Are you upset about seeing those unfortunate suckers, that dont have this privilege maybe coming to your country? Upset, that the world does work this way?
This is just the modern version of the parable of the talents.
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My hot take: currency is not meant to be held, it's meant to be spent. I know, I know: "store of value" is one of its definitions, but it's OK to have short-term and long-term stores of value. Money velocity is a healthy thing for the economy. Hoarding wealth isn't, and besides, everyone with significant wealth is already storing most of it in assets anyway. There's really no reason to want a particular currency to retain its value over 100 years; 1% to 2% inflation is quite healthy. It doesn't rip away the value of your earnings as long as salaries keep up with inflation -- which they don't, but that's the real problem.
1-2% inflation is "healthy" is a trope that nobody really justifies. Perhaps its true, and it is often repeated as gospel. the "2% inflation target" was derived just from the comments of economist Roger Douglas in New Zealand who thought that sounded about right.
We welcome and celebrate deflation in technological goods (cars, electronics), apparel but are constantly warned about the dangers of deflation and why "some" inflation is good.
What is the argument for why 1-2% _deflation_ in housing, education, and healthcare would be bad?
Does nobody really justify it? The argument for inflation is pretty simple I think. It encourages everyone to do something with their money now, invest or spend.
I think that is a valid argument and makes some sense. have to toss the hot potato. The argument for the trade offs are pretty simple I think. It encourages more concentration of wealth in assets and increases the amount of malinvestment.
The question is to what degree. I am saying there's no analytical argument for 2%.
I think most people would agree that 10% or 50% inflation would be bad. But why is 2% better than 1% or 0%?. Why is 1% better than -1%? it depends on the time horizon. higher inflation today will cause more economic activity, higher inflation in the long run encourages debt and misallocation of resources.
Inflation generally encourages economic activity (spend your money before it depreciates) while deflation discourages it (save your money because it will appreciate)
Lower prices are seen as positive for as long as they stimulate higher overall consumption. If prices fall but consumption does not rise, then most economists see that as a problem.
Your main point is the well-established modern consensus among economists, and nicely put. But what makes you think salaries don't keep up with inflation? In the postwar US, they absolutely have kept up over the long term. There are ups and downs depending on the strength of the labor market, and they don't always react instantly to short-term bursts of inflation (as in 2021-22), but over the long term they are steadily up even in the "great stagnation" period of the past 50 years:
https://fred.stlouisfed.org/series/MEPAINUSA672N (individual) https://fred.stlouisfed.org/series/MEHOINUSA672N (household)
Economics is a weird kind of physics that only requires some critical mass of people to believe or act like they believe and then it’s true, so arguing against the 2% ideal for inflation is a bit like debating gravity. From most people’s perspective it just is and understanding much less changing it is an impossible dream.
Whether salaries track inflation is also irrelevant as long as there are markets (like housing/education) that you are basically required to enter, and which have different dynamics. Would it matter if wages and inflation were in lock step if the toilet paper market was wildly out of control? Could people work around this issue by wisely waiting for a better time to use the toilet?
My first point was not that economics as a discipline is infallible, just that this was the opposite of a “hot take.”
Regarding some costs (especially housing) growing faster than the overall rate of inflation: of course they do, just as some grow more slowly or even deflate. The index here is computed based on the average amount people spend on these different categories (the consumer price index), so the need to spend a large share on housing (or toilet paper) *is already included* in the inflation measure.
That’s not a hot take it’s literally the agreed upon monetary policy of the planet.
Only on HN would a bunch of self righteous engineers argue with you about how you are wrong based on some localized wish fulfillment of how a perfect system works in their head.
Is that with or without interest on holding the USD?
modern version of printing money is Quantitative Easing, but the US is in the opposite, Quantitative Tightening mode since 2022. Federal Reserve is essentially taking money out of circulation for the last two years.
To the contrary the M2 supply [0] indicates that the Fed's QT policy has barely taken any money out of circulation.
On a log scale (you can select this on your graph) we're basically moving on the same trend line as we have been since 1960. Covid caused a big jump but the years of stagnation since then mean we're back to normal.
Close, but inflation also makes Americans poorer. Global asset holders (US included) are just fine as the dollar cost simply rises against the asset. Holders of dollars will lose value. Holders of dollar denominated debt (mortgages) are winners.
The US Government does gain a lot of wealth doing this, but it doesn't necessarily trickle down to Americans or American companies.
> but it doesn't necessarily trickle down to Americans or American companies.
It absolutely does go to american companies—that's the entire point of the privatization movement america's been experiencing the last forty years. It's much more difficult to articulate how this reaches americans and builds actual wealth, though, and certain industries benefit more highly from being basically a private form of government (the defense industry, finance, airlines, critical tech companies, etc) than others.
If americans want to reap any windfalls from their "economy" (whatever americans even think that is—as best I can tell it functions in political discourse essentially the same way the Pontifex Maximus performing an augury functioned in ancient Rome) they're going to have to start demanding more concrete things than "jobs" and "stock performance" and "real estate markets".
How about less H1Bs massuh or is dat too much ta ask of da rich boss families?
> everyone who holds the dollar has lost value
right, but it makes it easier for the US gov to pay its dollar denominated debts to foreign holders; the huge advantage of being able to borrow in your own currency!
The incoming president wants to end the trade deficit, which is the same as ending world reserve currency status.
i think of it as prices of good inflating, not the dollar itself.
Theres literally 0 difference
GDP is a measure of the marketisation of society.
If I go visit my grandma over the weekend, my activities do not register on GDP. If I hire a care assistant for $800 per day to do so, that's $800 to national GDP. The encroachment of the market into society correlates with record levels of mental and physical health crisis. US life expectancy has declined over the past three years, even as 'the economy' has surged ahead. The measures are wrong - and we all know it - apart from the financial press it seems
I was thinking the same thing the other day. Like how much of the US GDP is tied to their suburb-living car-dependent lifestyle. What percentage of the GDP is all that infrastructure (sewage, heating, power plants, power transmission, car production, road maintenance)?
Sure that create jobs, especially lower-skilled jobs which are important for society. But at the same time they didn't really need to exist. It feels like much like defense spending, it create jobs, but it doesn't create value.
> much of the US GDP is tied to their suburb-living car-dependent lifestyle. [...] , but it doesn't create value.
The "value" is for the citizens that prefer suburbs style living.
People who prefer dense city living with mass-transportation and walkable errands like European cities or downtown NYC/Chicago are missing the fact that there's another group of people (possibly the majority) that actually prefer the suburbs. Yes, I know it seems illogical.
But don't suburbs have the dependency on cars, and those ugly "stroads", and the "parking lot deserts", and "soulless cookie-cutter housing", etc, etc?!? Yes, all of that is true and detractors can keep piling on more derogatory labels but it still doesn't change the fact that many people really like the suburbs. A lot of USA college kids living in dorms in the middle of a "walkable city" have aspirations of buying a nice house out in the suburbs and hope they can land a high-paying job so they can afford that dream. Why do so many of these young people who have actual experience of living in the city want to get away from that and live in the suburbs?
> People who prefer dense city living with mass-transportation and walkable errands like European cities or downtown NYC/Chicago are missing the fact that there's another group of people (possibly the majority) that actually prefer the suburbs. Yes, I know it seems illogical.
Of course. There are also people who enjoy walkable pedestrian and bike friendly places with lots of small local businesses to patronize.
That doesn't require living in a "big dirty city", it really just means making actual towns with dense downtown centers where people can work, live, shop, and dine.
Based on my experience with real estate prices, where townhomes near such thriving downtown developments can cost easily double of one in a suburban neighborhood a 15 minute drive away, the demand for that kind of living currently exceeds supply in many places.
The answer isn't to remove all suburbia and replace it with dense walkability, the answer is to stop preventing the dense walkable development with strict single-family-detached zoning laws, parking minimums, etc. and let the supply of such places increase to meet demand. Nobody will come take your suburban house away from you, they just want to have as much freedom in choosing what they want as you get to choose what you want.
And those that do prefer to live in big cities are just advocating for making those places better. The US has a lot of places that are definitely "city" but are still also car-dependent or at least not as friendly to walking, cycling, and mass transit as they should be. We can improve those without changing your suburban life one bit.
it's and/and. Suburbanites impose their values on the city (free parking, highways, vote against bikelanes, ...). I don't care if they'd be in their suburbs and just live there. go live in the burbs, be happy, but don't degrade my neighborhood with your cars.
we really can have our cake and eat it, nice cities for the people who prefer them, suburbs for the others, so much room.
Absolutely this. Every time someone suggests dense urban living or asking for people to pay for their car-dependent life, suburbanites come out of the woodwork and scream and holler that their rights are being taken away. As if the majority of the country isn't suburban sprawl catering to car dependent life. We only have a handful of dense, walkable cities with public transit in the entire country. Suburbanites have plenty of places to choose from, literally anywhere else outside of NYC, Chicago, SF, and Boston.
As a New Yorker, I'm totally fine with people choosing a suburban life. Do you, I don't care. But don't kill congestion pricing and think you're entitled to drive into the densest part of the United States and park for free in my neighborhood just because. Don't block funding for public transit for 40 years and then complain you need your car because the train is scary to you the two times a year you use it.
congestion pricing in manhattan is the best example. unreal this got shot down by intervention from the governor.
Do non-residents get to vote in your city elections? If not, how are suburbanites imposing their values on your city?
I recall the state of Indiana was banning dedicated bus lanes. Many of the impositions come from the county and state level.
The political strategy in Ontario was to force amalgamate the cities with the suburbs so that the suburbs could politicaly dominate the cities.
Gross stuff.
You can see at the voting district maps the city of Ottawa for example will 100% vote for a different candidate that all the distant suburbs attached to their municipality and the suburb candidate wins.
My city (Seattle) is part of a large county that includes suburbs. My city is also part of a state with a mix of many types of areas. Legislation and budgets happen at all three levels, and because the city is a primary economic engine of the state, others have an interest in dictating what happens in the city.
When your state or county mandates free parking or any of the other complaints the parent poster had, let me know.
Province of Ontario literally just passed a bill (212) to rip up already-installed bike lanes in City of Toronto at an estimated taxpayer cost of ~$50MCAD, despite opposition from city residents AND city officials, which is unheard of because municipal infrastructure is outside the scope of the province.
Sounds like the city will appeal and win then.
yeah luckily seattle (and other cities like tacoma etc) aren't like that.
seattle is always a poster child for this stuff but it really isn't that bad for the upper middle class (anyone with a software job).
it's probably tougher now. but i started my career in seattle proper 10y ago and 2020 was a giant boon. low interest rates, 3k sqft house outside seattle (but still easily drivable to it thanks to reverse commute) for sub-$600k (went under asking) and sub-3% (-> inflation proof)..what a way to spend that salary the 2010s gave me to save up and enjoy the remote career I'd long established.
preparation meets opportunity isn't gonna stop being true even in a "bad" economy.
There’s drain effect where as the city gets defunded, people with money and an interest in civic engagement move to the suburbs, and start voting accordingly.
Having kids is a pivotal moment. Suddenly that rich urban life looks like danger for your little ones.
I was an urban kid and we stayed in the city when we had kids, so my kids got to go to a school where the janitor had to arrive early and remove the needles and broken beer bottles from the playground.
Yes, city life is objectively worse for families in most regards.
That's not the fault of the suburbs.
Nope, it's not. But urban hellscapes happen somehow.
I grew up in my city when it was smaller, safer, and more economically varied. Now the middle has hollowed out and we're headed toward Manhattan, where hedge fund managers step over the homeless to get to their penthouse.
It pains me to think that this is inevitable. I don't begrudge anyone moving out of the city. I personally cannot stand the thought of getting in a car to do absolutely anything, but I know lots of people who live that way and are happy.
my city has consolidated with the burbs. so anything that benefits the core areas gets no traction because it doesn't immediately benefit the burbs. vice versa, other cities haven't consolidated, and they do have better city amenities.
Those people are your fellow city dwellers then, and deserve to be heard just as much as people in the urban core.
they're not my fellow city dwellers. they've turned their back on city life, live 15-30miles away, rarely if ever visit. it's just an administrative, historical quirk that they have a claim on the city and local politics. other cities have different administrative boundaries, that hug the city proper much closer. Those cities have much better urban amenities (traffic calming, light rail, bikelanes, ...) than mine, because they don't have people who loathe city life have a voice in city matters.
Suburbs efficiently filter out poor people. To live in suburbs, you have to sustain a particular burn rate. You (or your parents) also have to have had enough money to get and keep paying the mortgage.
College kids hope to make it big, or at least big enough to afford a pampered expensive living among other such people. It's not an unreasonable hope to have. Some of course dream to live in a penthouse on top of a skyscraper, but that's much less realistic.
(Of course there are poor suburban areas with rundown houses and clunker cars, but it's not where the college kids aspire to go.)
Dense walkable cities are few in the US; they predate the advent of the car, and accepted a lot of immigrants when Ellis Island was still open for "the wretched refuse" [1]. After WWII, a lot of better-off families moved to suburbs, but the worse-off had to stay.
It does not help that some cities, in a misguided attempt to not trample on the rights of the destitute, or maybe out of incompetence, don't keep their streets clean, and even don't enforce the law. The authorities of San Francisco are, of course, way ahead of the pack; what they have done to their once-beautiful city tarnishes the reputation of cities as the form of living.
(Disclaimer: I live in NYC, take subway and/or buses every day, walk for my grocery shopping, don't own a car, etc, and love it. Politically not left-wing though.)
The people advocating to replace suburban homes in the Bay Area with multiplexes, low rises, etc., do seem to want to ‘come take your suburban house away’?
It’s been mentioned many times on HN in regards to Palo Alto, Atherton, Cupertino, etc… and often times not for altruistic motives either.
If zoning allows a multiplex to be built on your lot, and you decide to sell it because the market values redeveloping it more than you value staying, then I think that's your decision.
In the big picture, if you want single-family suburbs to continue to exist and be affordable it makes sense to allow at least some places to become dense. The more people who want density and can choose it, the less competition there will be for farther-out suburban houses.
Homeowners in the Bay Area can predict the second and third order consequences of a zoning change?
And predict the actual ulterior motives of anyone advocating for such a change before it occurs?
They’re not automatons that can be fooled so easily.
If redevelopment is the assumed outcome of the zoning change, then that means the single-family suburb is existing in spite of market demands, held back only by such zoning laws preventing denser development.
I don't know the specific situation there, and I'm not saying that shouldn't ever exist, but it's worth considering why we are using zoning to preserve artificial anti-density in a place that has grown to demand higher housing density, and what the effects are of doing so on a widespread basis.
The immediate first order consequence would be higher housing prices, which seems to be the case across the US, with the cost of housing increasing much more rapidly than overall inflation or wages.
How does this relate to the fact that there are people want to ‘come take your suburban house away’? Who do indeed have such motives?
Could you be a bit clearer about what you're talking about here? This is like a vague hint, and I can't tell what you're actually trying to say.
I think it’s very clear and spelled out?
So I absolutely deplore the "what's your point?" attempt to try to pretend that somebody you disagree with didn't actually have a point. In fact, I downvote it when I see it - if the point was clear, and someone asks "what's your point?", I downvote.
I'm not doing that. I really can't tell. Who are these people who want to ‘come take your suburban house away’, and how do they attempt to do so?
You seem to be referring to specific people in the Bay Area. I'm not in the Bay Area, and I don't really know the politics there as it relates to real estate. So, who specifically wants this, and what are they doing?
How does your opinion on what is to be ‘deplored’, or not, outweigh my opinion?
So this seems like a non sequitor…?
If you believe I, or anyone else, is making false pretenses one way or the other, on any subject, then list out the arguments for the case directly.
I am not accusing you of false pretenses. I am asking for the specifics of what you are talking about. You won't answer (or at least, so far you haven't).
I will ask one more time: What, specifically, are you talking about?
Indeed, many people prefer living in the suburbs, but a big reason for this is the hidden subsidies the US provides for suburban development.
When housing units are close together (town-homes, multi-unit buildings) the cost of infrastructure (sewer, water, roads, sidewalks, etc.) are shared by more units, and thus by more taxpayers. If the houses are farther apart, the cost per unit goes up.
So its fine if you want to live in the suburbs, be we should have an honest accounting of the costs so suburban households are paying the full price of their spacious lifestyle.
See this StrongTowns post about this issue: https://www.strongtowns.org/journal/2023/7/6/stop-subsidizin...
Many suburbs are accounting for this in other ways already, by foisting ownership of that local infrastructure onto the HOA instead of handling them centrally through taxes or direct billing.
I'm grateful that I was able to afford a home for my family. I am the sole provider and it costs half my income per month to live in a townhouse in the suburbs an hour away from a major city. It's hard enough as is.
The trouble is that if suburbs weren't subsidized, there would be little reason to live there, seeing its residents move further out into more rural areas. The cities are willing to subsidize them as it is net beneficial to the city to have people who won't live in the city proper to still be nearby, improving economic activity in the "downtown" with access to more workers and consumers.
This comes up a lot but infrastructure is not the expensive part of government. It's schools, criminal justice, and other labor intensive services. All of which are more expensive per capita in cities than suburbs.
> People who prefer dense city living with mass-transportation and walkable errands like European cities or downtown NYC/Chicago are missing the fact that there's another group of people (possibly the majority) that actually prefer the suburbs. Yes, I know it seems illogical.
That’s because American cities do their best to make themselves as car-dependent and unpleasant in downtown areas as possible. Of course American college kids want to move out to the suburbs, because American downtowns are not nice places to live. Offer people the choice to live in nice central walkable neighbourhoods like in Europe and they tend to take it.
How much of this preference is genuine, versus just taught or forced?
I live in Brussels and every time I welcome new American friends here and show them around, their mind is blown that it’s even possible to live in a city center at an affordable rate within walking distance to groceries, restaurants and activities.
Ditto Dublin. Incredibly walkable, with light rail and light tram services as well as a very mature (albeit expensive) taxi infrastructure and rentable bicycles for last-mile stuff.
Even in the very heart of the city centre you have full sized German discount supermarkets like Aldi/Lidl, or Asian/E.European foodmarekts. A far cry from the food deserts and bodega pricing endemic in American cities.
Even in the midst of a generational defining housing crisis, in what most people in Ireland would deem unfathomable HCOL, you can buy a 2 bed apartment around 70-80m2 in the CBD for less than €500,000.
https://www.daft.ie/property-for-sale/ireland/apartments?loc...
This is in the middle of the Silicon Docks for example, @ 90m2 with dedicated parking space underground, and a concierge service open 7 days a week. 10 minutes walk to Meta/Google/AirBnB/LinkedIn HQ.
https://www.daft.ie/for-sale/apartment-13-hill-of-down-spenc...
Taught or forced? That’s ridiculous.
My kids like to play in our yard. I do woodwork as a hobby. My neighbors spend summer by their pool. I like my privacy. I like quiet and space. I like strong community.
I spent 15 years apartment living all over the world, and couldn’t be happier moving to the suburbs.
Suburbs and detached houses are available in Europe as well, often with good public transport access (although there are plenty where you need a bicycle to get to a train station).
It is just apartments are much cheaper and you can often not have a car if you live in an apartment.
>It is just apartments are much cheaper
Where? Appartements in downtown Munich cost as much as in San Jose but salaries are one third of that.
I said suburbs in Europe, not downtown. Downtown is unaffordable EVERYWHERE in the world, even in 3rd world countries.
Suburbs are cheap where? On what salary? Munich suburbs are equally unaffordable to buy something on a Munich wage, unless you're talking about buying in the boonies where you need to drive everywhere but that's no longer the suburbs but a whole different city/village, or you're a high roller at a FAANG, but that excludes 95% of working class people.
My ex originally is from there and I used to work there and my colleagues from the Texas office had more purchasing power at local real-estate than their counterparts from the Munich office.
you said Munich. Go look at Berlin.
It seems like it might be taught. I live in a Chicago neighborhood and have all of these things (a yard with a garden, space for woodworking, neighbors with pools, privacy, quiet space, strong community).
Not everyone who lives in a city is in a highrise downtown, most aren't. Not everyone that lives in a city is in an apartment. You wouldn't know that by reading this thread. The two options seem to be a large house in the suburbs or a highrise downtown.
All of these things have magnitudes. Have you ever built a cedar strip canoe, or are you making wooden spoons?
It would cost double what I pay for me to live with 1/4 of the space in a city.
I made a pretty intentional decision about what I wanted, and actually have far more space than where I grew up. I was actually taught to live on less, but have gone in the far opposite direction.
I live in Chicago. I have 350sqft garage and a partially-finished conditioned 280sqft attic room that functions as a studio space. I have more "workshop" space than most of my friends in the suburbs who mostly just treat their garages as a storage space with a little workbench in the corner. My home is over a century old, although the garage is only 25 years old.
Now, can suburban homes offer you MORE space? Absolutely! And if I had the kind of hobbies that merited that additional space I'd probably want to live there. However, as someone who grew up in the suburbs, has friends in the suburbs, etc - the number of friends I have who actually use that space for enjoyment and not junk storage is literally just 1 guy who has a sweet CNC and metal working space in his garage and basement. Everyone else has a garage used for cars + storage and a basement rumpus room with maybe a tiny 8x8 workshop somewhere near the mechanicals (HVAC and Water heater)
Perhaps I’m simply not normal, and hence frustrated that someone suggested my desires are forced or taught.
I do tend to be the one neighbor out in the yard the most by an order of magnitude.
I also have a 60 acre rural property because even a quarter acre in the suburbs doesn’t give me enough space to play.
The thing is in the United States there's an abundance of properties and communities available that give you lots of personal living and working space. In fact, it's pretty much the default. The frustration is that there's a shrinking pool of available higher-density living spaces that are all astronomically priced because of high demand and low supply, and any attempt to grow this pool of higher density space is met with stiff opposition.
==Have you ever built a cedar strip canoe, or are you making wooden spoons==
No, I haven't built a cedar strip canoe (nice flex), but I do have the room in my 2.5 car garage if I wanted to. Partly because we only need one car in the city for a 4-person family (which is also part of the "cost" calculation). I could also use my basement, if I was inclined.
==It would cost double what I pay for me to live with 1/4 of the space in a city.==
This is impossible to say without knowing how much you pay and how much space you have.
It’s likely linked to my non-trivial ADHD that I need the space to work on whatever thing I go into a rabbit hole on any given year. Even in the suburbs I’ve had the fire department called; I probably would’ve been arrested had I been in a townhouse.
I moved from Brooklyn NYC to NJ suburbs and my 15 year mortgage on 4 bed 2 bath decent yard was about the same as a 1 bed 1 bath 3rd floor walk up that was pretty snug once you had two people and two cats.
I agree. I wouldn't move to city center no matter how affordable or cheap it was. Living in an apartment block severely limits the way I can spend my free time compared to an actual house with a yard.
So get a house with a yard in Europe and get the best of both worlds. You know this exists here, too?
Or just come visit a bit and be another name on the list of Americans who had their mind blown.
> Or just come visit a bit and be another name on the list of Americans who had their mind blown.
I’m not American (but live here), and have lived in Europe and traveled most of it.
This HN hivemind if believing there is one type of person and one type of lifestyle is absolute lazy nonsense. I’m guessing you already know why I don’t need to drive a large pickup truck too?
I was talking about city centers. Good luck finding a house with a yard from city center of a major European city, for a price that you can afford without being a millionaire.
Just like in America, living in a proper house in Europe does usually mean moving further away from city center into suburbs. The main difference is that those suburbs do have better public transportation.
Is housing Brussels city center actually affordable like you claim? Why do I feel like you're living in a bubble?
I have friends who left Brussels city and moved out to avoid the high housing CoL, crime and drunk/homeless/junkies.
I feel like you're overselling it.
European cities have suburbs as well. In fact most people live in them, not in the city center. They are just VERY different from US ones.
Mostly 4-6 story tall buildings clustered around a major transportation hub like a metro or train station (which also hosts shops, restaurants and groceries), with row-homes or single-home detached houses farther away.
>European cities have suburbs as well. In fact most people live in them, not in the city center.
You happen to have a source for this? This is definitely not the case in many place I lived.
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I live at the heart of Brussels, 2BR, 1250 eur a month. It’s not the cheapest of the city but it’s also not the most expensive; in fact the most expensive side of the city is one of its suburbs.
And living in the suburbs here doesn’t mean you have to use your car to buy milk, unlike the US. Stuff is still walking distance there.
Cost of life is average. Belgium is actually pretty great for that. It’s just the weather that’s shit.
>I live at the heart of Brussels, 2BR, 1250 eur a month
Current market price or grandfathered contract?
Wow, center of Brussels for 1250 EUR is a steal.
Maybe the high housing CoL is a change in recent years compared to the time period before that?
Indeed. Look at the most expensive places to live in the Bay Area - it’s not the urban centers, it’s the suburbs.
Americans like space. They like big houses. They like not hearing their neighbors. They like to live on a street that is quiet.
Even the ones that don’t like driving are willing to do it as a trade off for all those things.
Most of the young people I knew in SF who lived there in their 20’s - about 90% moved to the suburbs when they got older. Being close to bars or restaurants doesn’t matter much for most older people. What matters is low crime, space and good schools. They can drive to the city if they need to.
> Look at the most expensive places to live in the Bay Area - it’s not the urban centers, it’s the suburbs.
A small plot of land in a desirable location is $4M in Palo Alto.
Sure the mansions in Pacific Heights are more, but they are mansions.
Compare like for like.
> A small plot of land in a desirable location is $4M in Palo Alto.
Also, my comparison spoke of price per sq.m. Is there a better way to compare housing costs in different locations?
Are you talking about like-for-like? Or Pac Heights with a view of the Bay? Or a view of the city?
Are you talking about land only? Or land and house?
If you look at the most expensive sales in SF or the Peninsula, they aren't all that different - just shy of $50M.
Regardless, my comment was more directed to middle to upper-middle class housing, not the $20M mansions in SF or 1,000 acres estates in the Peninsula.
Compare a large single family home in SF to a large, single family home in Peninsula.
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What proportion of DINKs versus Families live in the suburbs vs the cities?
The simple answer relates to raising kids - both in terms of safety/enrichment and in terms of basic things like school catchment areas, distance to young peoples amenities, and distance to the average friends house based on school catchment.
You're watching people respond to price pressures and calling it their unforced preferences. This is like saying "obviously people prefer to be childless", or, possibly soon, "apparently people prefer to eat only rice and beans". The outcome arises from a coordination failure that individual actors cannot resolve just by making best-responses within a market.
Except there's not really a choice right?
Family homes in city centers (in the US) are either very expensive or bad neighborhoods
Family homes in the best suburbs are also very expensive, even after being subsidize by the broader tax base. There are lots of places to live in cities that aren't the "city center" just like there are types of family homes that aren't single-family-homes.
This line about suburbs being subsidized is a lie that keeps getting repeated. If I live in a suburb and commute downtown to work my income counts towards the city GDP and tax base but I would be receiving government services from the suburbs. This isn’t a subsidy it’s providing people the services they need where they live instead of where they work.
> my income counts towards the city GDP and tax base
You pay taxes were you work instead of were you live? That is very unusual, typically you pay income taxes where you live. I don't see how paying taxes were you work could even work, what pays for your school or roads if all the money goes to another area?
> typically you pay income taxes where you live
Some bigger US cities have a city income tax which is applied regardless of where you live.
I had family living in NJ and working in NYC. They paid NYC income taxes, NY income taxes, NJ income taxes, and federal income taxes.
You had me until NY State taxes were included. As I understand, only NY City taxes are required if you work in the City, but live in New Jersey.
> Some bigger US cities have a city income tax
https://www.tax.ny.gov/pit/file/nonresidents.htm
> If you are a New York State nonresident you must file Form IT-203, Nonresident and Part-Year Resident Income Tax Return, if you meet any of the following conditions:
> . You are a nonresident with New York source income and your New York adjusted gross income Federal amount column (Form IT-203, line 31) exceeds your New York standard deduction.
IANAL, this isn't tax advice, I'm going by what I'm reading and what I was told by people who lived and worked there, but looking at this if you have an income made from working a job in the state of NY and ended up with more than $21k of income you need to file for NY state income taxes.
There are a number of cities with income taxes. Detroit, Baltimore, Columbus, Cleveland, Louisville, Toledo, and many more. Of those I bothered looking in to, they apply if you work in that city regardless of wherever you live.
==Some bigger US cities have a city income tax==
The vast majority do not.
It isn't about where you live or work, it is about the cost of providing services. When homes are farther apart, the infrastructure is physically more spread out. This creates higher costs to build and (especially) maintain roads, electricity, water, sewage, etc.
I am going off of the study described here [0]. I'm happy to view anything you have to provide which proves it is a lie.
[0] https://www.strongtowns.org/journal/2023/7/6/stop-subsidizin...
It isn't illogical. Americans move to suburbs because there aren't enough affordable cities. Then they complain about the cost of gas, energy, housing and taxes which are inherently worse with lower density.
Suburbs aren't for standard of living, but affordability. You take the most available labour, the most available construction, and connect it with the most available transportation and you get suburbs. All without the need for much effective planning, organization or innovation.
But eventually someone else does those things. And then suburbs are expensive in comparison.
Suburbs are for standard of living, for me.
I want more space, both in my home and in my yard, than I can get in the city. I want a 2+ car garage where I can build and drive a go-kart with my kids, fix my own car and have a little workshop to do woodworking.
I want a garden that isn't blanketed by city air, and room for some fruit trees. I want room for a fire pit, and enough trees that I don't have line of sight into my neighbors windows.
I don't want a farm. I don't need country living. Somewhere between 0.25 and 0.5 acres is about right for what I want to do, and that means the suburbs.
I live in a Cologne, Germany right now. I have lived in Sao Paulo in the past. Big cities with lots to offer. I know big cities and their conveniences, and they're fine. But for the life I want to live, suburbs offer a better standard of living.
That is the thing many young people don’t see until they have a kid and realize how much more difficult urban living is with kids unless you have a lot of money. Cities eat your time when you have kids.
Seems like you would spend an inordinate amount of time chaperoning kids around. Unless of course you can afford a driver.
That is still affordability. When cities are expensive you get more for you money in a suburb. A hobby room, home office or cooking space. But the cost of suburbs are inherently expensive. So when cities are affordable you get more for your money in a city. Because you get some space but also better access to things like offices, makerspaces or restaurants.
I don't want to rant to much, but most people don't like woodworking. They even less like doing woodworking on their own. It is something they conclude they should do because they can and don't have many alternatives. I'm sure it is covered somewhere online.
The first point is reasonable enough, but the point still stands you can't find the same size house in the city for the suburb price. Most cities simply don't have more than a handful of spacious houses with big yards.
Your second point is invalid, as you're arguing against his assumptions. It's only possible to argue againt someone's logic, arguing someones assuptions is the same as calling names. I like woodwork and have alternatives.
You don't need the same space. That is the point. Yes, if I lived in a suburb I would also want more space because everything else would be harder to do.
I'm not arguing against their assumption. I said most, that isn't them. This is exactly why I didn't want to elaborate, so I won't.
what if I want the same space? that's the assumption
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A post explaining the reasoning behind a personal preference for living in the suburbs almost made you throw up?
Your close-mindedness of the opinions that others are allowed to have makes me almost want to throw up.
The person you are responding to isn’t displaying a lack of empathy for people that can’t afford to live in the suburbs. They are explaining the very real and understandable reasoning behind a behind their preference.
That’s not selfish and privileged. That’s a preference.
Look, I understand that the fringe groups you might associate yourself with throw around the word “privilege” as an insult at anyone that does something not inline with the group’s thinking, but it’s just not the insult that you think it is outside of those fringe groups.
Just wanted to mention that what the OP is asking for is completely achievable in a great urban city.
I live in an ideal mixed-use walkable neighborhood with a 2.5 car garage (that only holds one electric car). Not every house has that nor should it, but we can certainly build those features for those who want them and maintain walkability and good transit practices alongside mixed use.
The problem with the suburbs isn’t the existence of the single family home, the problem is the zoning and design of the homes.
> Man, this almost made me throw up because your post reaks of selfishness and privilege. Anyways, I hope you're at least aware of your extreme privilege.
This doesn’t convince anyone of anything and it doesn’t help us with building better transit and walkable neighborhoods. When you tell someone that what they want is “extreme privilege” and “selfish” you turn them away from the conversation. Instead we should focus on showing them how their lifestyle isn’t actually incompatible with good urban planning and good transit, because it’s not.
The future of American cities isn’t NYC, which I love and adore. We won’t have the density for that and skyscrapers and that level of density have their own problems too. Instead, we should look at mid-sized European cities and towns as a better model. We may have more single family homes and cars, but we can still build at the appropriate level of density and build different types of dwellings to meet people where they are in their life. Today it’s illegal to build an apartment building, coffee shop, restaurant, or small grocery store in the suburban neighborhood and we can’t build small, affordable units for folks either. This creates pricing imbalances and other issues.
Why does everything devolve into a silly argument about privilege. It's boring.
If that rather benign comment makes you almost throw up...
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A house with a big yard in the suburbs is the epitome of “standard of living” as far as I’m concerned. I’d take that over a walkable city block any day (personal choice, of course, I’ve lived in both).
Yeah, I live in a rural area and cities make my skin crawl. I'll take my quiet space with lots of room for my kids to play, explore, and to garden and grow food. Where I know everyone and we all have each others backs. Where the vegetation is natural, and there's plenty of bugs and birds, amphibians and mammals. Clean air and clean water. Surrounded by miles and miles of forests.
So many of the things people love about cities are the things I want to get away from, and would sacrifice a huge amount of income to do so.
The suburbs offer people a little taste of that magic and it's no suprise people want that.
You don't have to ban cities to get all that though, there are such areas all over Europe as well just that people prefer the density more until they have kids, and then they move further out to get a house with a yard and need a car.
I've lived in a rural area for 20 years, and I still miss the city
I've lived in both and prefer the suburb. Inner city has all sorts of issues, from very little space, smokers puffing away as you try to enter/exit buildings, endless harmful noise & smells.
Actually I prefer rural over either of these..> there's another group of people (possibly the majority) that actually prefer the suburbs
With regard to the United States, you’re not even close. 80% of the US population live in cities. [0]
[0] https://pac.org/impact/rural-americans-vs-urban-americans#:~....
>With regard to the United States, you’re not even close. 80% of the US population live in cities. [0]
For purposes of this discussion thread, we're just using "living in the cities" as shorthand for "high-density living with convenient mass-transit and walkable amenities". E.g. downtowns or multi-family housing near the city center where people can walk to the grocery store.
The majority of USA citizens do not live in that arrangement. Instead, most Americans live in areas that depend on cars.
The web page you're citing is using "cities" as shorthand for "downtowns + suburbs i.e. metroplexes" - vs - "rural farms".
Have you ever been to the US? Sure, 80% live in cities but the majority of that number are suburban cities. LA, DFW, Miami...all cities with large populations but all requiring a car.
> According to the Census Bureau, 80% of the U.S. population lives in urban areas. The remaining 20% lives in areas classified as rural. *There isn’t a specific category for suburban areas*
Sounds like the suburbs are counted as urban wrt the census.
That statistic is defined as “urban” vs “rural”. By that definition, all American suburbs are counted as cities/urban areas. So the statistic doesn’t disprove their assertion.
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Defense spending is necessary, if you want to keep your globalised markets and reasonable level of international security. Europe is now experiencing what happens if drop the "useless" defense spending too low.
I agree with you. I will go even further by saying that the EU being caught with it's pants down is by design.
Everybody rushed to join NATO and decided since the US was there as a backstop, they no longer needed to invest in their own defense.
It's a little bit like what happened in 2008 with the too big too fail banks and the bailout. If someone else is always there to pick up the slack, then what is the point of changing the status quo.
The EU countries were happy about this because they are broke. The US was happy to keep it's status as the global cop of the world making sure everybody stays in line. This line of thinking worked since the fall of the USSR but the rise of China, India and the global south is changing the world order as we speak.
> the EU being caught with it's pants down is by design
Being by design means they weren't really "caught" with their pants down (in the classical "caught exactly at the wrong time") as much as they chose to always wear just underwear expecting the US to punch anyone who laughs in the face. The EU chose to "purchase" protection from the US, paid via various means. Mainly providing credibility for whatever US needs done, and make the difference between "righteous" and "callous".
What they discover now is that either the US can be said was caught with the pants down unable to properly project power and provide that purchased security, or maybe the EU was caught with the pants down because they were unable to pay (less likely). Regardless, this is like realizing your service provider is no longer reliable, you'll look inside or elsewhere. At the very least you no longer look at that provider as trustworthy, and stop building anything relying on their services.
The cost of this will be spread all around but effectively it gave China, who has no issues thrusting ahead even without someone to clean up their image, an even bigger boost. It even gave Russia a boost, if you could have believed anything in the world can still do that. But a couple of decades of weak leadership on both sides of the Atlantic conspired to achieve just that... a US desperately scrambling to stumble China after realizing that the go-to for all their problems (the "war for freedom") is hard to pull off this time, and an EU that realized that outsourcing critical safety and security aspects is a bad idea long term.
My pessimistic 2c are that the next rounds of leaders will make it worse, on one side by not understanding that the "war for freedom" is hard to pull off this time, on the other side by thinking that outsourcing to someone else will definitely make it better.
Everybody except Eastern EU countries closest to Russia. It's not just NATO, but also knowledge that they won't be attacked first which has resulted in low defense spending in Western Europe.
> won't be attacked first
that isn't really the issue
the issue is that, at least for a long time, they where too naive believing Russia never would go as far as attacking NATO member or economical partners
was that dump, yes, but that was a _very_ wide spread believe
and while I have seen that mindset a lot I haven't really seen any one not worrying because there are other countries in between. I mean maybe such people do exist, further west then I live.
Like in general until recently, even after the annexation of the Crimea, there commonly was the consensus that the time of offensive wars between European countries (including eastern EU and Russia) is over because it makes so little sense (economically, power wise) that none one would be dump enough to do that. But no one calculated in a autocrat with Napoleonic complex, or should be say soviet union complex. And if told the pleasant truth, with facts, people did what they always do with unpleasant truths: Try to ignore them.
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Local conflicts get used by the USA as proxy wars?
Corrupt politicians going against the interests of their own nation to appease USA?
Can you be clearer?
Sewage, heating, and power plants are included in GDP figures. Government spending is a GDP subheading. And such things certainly create value. I derive significant value every day from my warm, insulated, suburban bathroom.
Furthermore, your assertion that the defense industry doesn’t provide value is questionable. Until you can convince the various state governments of the world to unite in a global superstate, defense spending is a necessary deterrent to invasion and exploitation by other states, so it is, in fact, valuable.
And while I agree that suburbs aren’t the ideal form of urban organization, they aren’t actually the cause of all the social ills that you imagine them to be. Depression and addiction are driven by loneliness, and loneliness is almost as high in urban societies as suburban ones. Obesity may be slightly aggravated by car dependence, but it is still historically high and a major problem in the walking/public transport countries of Europe.
So no, the demon of suburban car dependence does not provide the explanation for all ills.
I haven't phrased it very well, I meant to say _american_ style suburbs are very... wasteful on resources, land and capital. European cities have suburbs as well, they are just usually 4-6 store tall buildings close to metro stations with row-houses and detached houses a bit farther out.
Detached houses are not the main means of living for most people in Europe, but if you want one you can still get one, it just costs more than an apartment (especially in colder countries).
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> Obesity may be slightly aggravated by car dependence, but it is still historically high and a major problem in the walking/public transport countries of Europe.
I’d like to learn more about this. That hasn’t been my personal experience at all. Looking at the national level is challenging, as urban and suburban and income levels must be a strong factor.
> It feels like much like defense spending, it create jobs, but it doesn't create value.
This is the safest period in human history by a huge margin. It may not feel that way given the ultra connected, headline consuming nature of most people these days. But it is true.
Global trade has lifted more people out of poverty than anything else, and that was first enabled by maritime trade which was implicitly secured by the US Navy post WW2. The Internet is the second coming of that, the invention of which was a result of US military spending.
You may think that US defense spending is too high, or take other faults with the US military industrial complex. But to say that it provides no value is uninformed.
> This is the safest period in human history by a huge margin.
There has been almost ten times more victims of conflict in 2023 as in 2005. [1]
And, as you said, we are now a bit more aware of those deaths (although I suspect a large amount occurred in conflicts that don't make western news headlines.)
The number of victims might pale against WWII, of course - but we're slowly arriving at time where WWII is not only "last century", but a "century ago".
I don't think anyone compared the figures of the Vietnam War of the 1960s to the US civil war of 1860s. Or did they ?
Anyway, in the average life span of an average human being with a normal memory, this is more likely to be one of the _worst_ period.
[1] https://ourworldindata.org/grapher/deaths-in-armed-conflicts...
As someone who lives in the hegemon, I’m doing pretty well and would rather not test hegemonic stability theory the hard way
> There has been almost ten times more victims of conflict in 2023 as in 2005.
You're talking about an 18 year period...do you know how long human history is?
> average life span of an average human being with a normal memory
I think you entirely missed the point of my comment, which is this: it feels more dangerous. But it isn't.
In this case we actually agree, but we draw completely different conclusions.
You're absolutely right that 18-20 years is a small period compared to human history, and that the average person has a lower risk of dying in a conflict than, say a century ago.
However, I argue that 20 years is _huge_ in terms of human _life_. Consider that the median age of the world population is 30 years old ! To most of the people, the way the world was 50 years ago or 100 years ago is as much "abstract" as what the world was 1000 years ago.
However, they remember the 2000s or 2010s. They were there ! And they saw more people fleeing wars or coming back in bodybags recently when they did in their youth. You might consider that only a "feeling" ; but I would think twice before dismissing it as irrelevant, because "it's only a feeling".
I argue that "local" inflexions in the long stream of history still matter. They can ripple in the long run.
It certainly provides value—mostly the internationally wealthy. Certainly not to the people footing the bill, who are largely restricted from accessing the windfalls of these profits.
I would like you to explain why you think the creation of infrastructure involves low-skill jobs.
hmm what could have happened in the last 3-4 years that would impact US life expectancy? also a huge part of that decline is preventable death due to drug overdose.
That doesn't really matter if all you're doing is measuring the relative change in GDP though, and the amount of activity that doesn't register on GDP isn't increasing.
In other words, if you assume non-GDP activity is constant, then GDP does genuinely and accurately reflect economic growth.
Indeed, this is one reason why economists recommend GDP as a useful measure of growth in a country year-over-year, but not for comparing different countries' GDP directly -- the ratio of activity not counted as GDP may be quite different between countries.
Now, if you think that a massive social transformation is underway of non-GDP-registering activities to GDP-registering activities -- e.g. people used to care for their grandmas, now all those people have gotten jobs to pay for care assistants to do it instead -- then yes GDP will show "false growth" in productivity.
But that really doesn't seem to be a major factor. We really are seeing massive amounts of innovation in the economy that improve people's lives. Economists don't just look at GDP -- they look at lots of measures that all tell the same story. Productivity really is going up. GDP growth may not be 100.00% accurate, but it is mostly.
> Now, if you think that a massive social transformation is underway of non-GDP-registering activities to GDP-registering activities -- e.g. people used to care for their grandmas, now all those people have gotten jobs to pay for care assistants to do it instead -- then yes GDP will show "false growth" in productivity. But that really doesn't seem to be a major factor.
But isn't that the issue?
Before: one working-age person in the household worked part time, or did not work at all. She (it was usually a she) could get the kids off to school, pick them up after school, check in on grandma, do the shopping, cook a simple meal.
Now: the working-age person goes to work, perhaps because the family fell apart, perhaps because other rising costs (e.g. health care) forced it. Before and after school care is paid for. Someone is paid to check in on grandma. Walmart+ or Amazon occasionally delivers heat-and-eat meals.
GDP went way up! Amazon contractor has a job delivering boxes. Someone is paid to check in on Grandma, and someone else to watch the kids. Someone works in the factory making heat-and-eat meals.
But are we really better off? Is it better to staff out the kid- and Grandma-watching and to heat up a dinner in the microwave? I'm not sure anyone knows the answer to that question, but I'm certainly not sure that "we really are seeing massive amounts of innovation in the economy that improve people's lives."
I've got two young kids in full-time daycare. Our daycare is crazy expensive. We tried the route of one parent stay home to be a caregiver this year. In the end, our kids weren't continuing on the same trajectory as what they were when they were in daycare. One child continued on part-time at the daycare doing a two day a week schedule and was noticeably falling behind his peers in his education and socializing. Not for a lack of us trying, my wife was very active in trying to be with both kids. But two very young children can be quite demanding. And in the end our house was messier (kids tearing everything apart all day long versus just a few hours), we still had pretty much the same diet, my wife was more tired and frustrated at the end of the day, etc.
My wife is back to having a wage, and both kids are back to full-time daycare. They both really enjoy school. And comparing them to their peers who stay at home, they're usually way ahead when it comes to counting and numbers, vocabulary, spelling, reasoning, and social skills. Which I mean makes sense, they're around people who got degrees in education with professionally thought-out lesson plans every day.
Sure, if you're measuring since 1850 or 1900.
But has this changed massively over the past 30 or 40 years? Not really.
Frozen dinners have been around since longer than most of us have been alive. Working couples in the 1980's were figuring out what they'd do with grandma. Nursing homes have been around for a looong time. Mail-order delivery of boxes has been a thing since the end of the 1800's -- there were Sears warehouses long before Amazon warehouses.
That's all I'm saying. However, employees genuinely are much more productive than they were in the 1980's, thanks to e-mail and cell phones and the Internet and collaborative online document editing and so much more. You can get things done in an hour that used to take you 2 weeks of back-and-forth.
The productivity growth is real. It's not an illusion based on what GDP doesn't capture.
> Before: one working-age person in the household worked part time, or did not work at all.
The GP's point matters quite a lot, because the ratio of GDP to non-GDP value is going up. Terms like "financialization" or "commodification" describe a process that makes things visible and measurable. I think this is also what the book Seeing Like A State meant by "legibility".
And the whole reason it's a bad thing is that the human values that can't be converted to a measurable, tradeable commodity are often thrown away, because they're invisible to the commodification process.
You can assume what you want if it makes you feel better, but assuming that I am both seeing Grandma at 2PM and working for wages at 2PM is going to disappoint someone.
One of the ways we seem to be absolutely destroying the social fabric for younger people is by eliminating ("privatizing") every last public space and time in which they're allowed to exist without driving there and paying a fee for a structured transactional recreation. We have privatized the commons in an analogous way to the Enclosure Movement in industrializing Great Britain.
> We really are seeing massive amounts of innovation in the economy that improve people's lives
Name some?
The issues people care most about atm seem to be getting worse (housing prices, cost of living, etc)
Cell phones are getting better. There are lots of websites on the internet. Batteries are getting better. Cars are getting better.
It is very common to focus on some large things that are bad and think that is the big picture without considering how much all the little things really add up to.
I don't really care a lot about any of those. I'm a lot more interested in relationships with people, the state of the environment, and general happiness. A better cell phone has never made more than the most marginal difference in my happiness.
All cell phones in my price range now have buggy firmware: this did not used to be the case. Good websites are much harder to find than they were in 2014. Cars are bigger and scarier and more numerous than ever before.
There are things that are better, but "batteries" is the only one from your list that I agree with.
I just picked up a $200 oneplus just for work accounts. It's completely fine. No lag. No issues. Zero bugs so far. 10 years ago were using what? Android 4 and iOS 6?
Are better cell phones making everyone's life better? I am doing nothing on my current smartphone that I didn't do on my first. I'm not even sure if I'm charging it less often. I guess the camera is a little better.
> I guess the camera is a little better.
Like many of the other items on the list, it’s a change that few people actually asked for and it’s more in the name of surveillance capitalism than consumer preferences or consumer choice.
Sure, social media can con children into thinking they need this. And after it’s normalized then adults might point it out as an improvement, but in the end it’s part of why the “improved” phone takes more hours of labor to pay for and the consumer has fewer options than ever with an illusion of more choice.
Oh, definitely. I just wanted to list the one improvement I have actually used, even if I didn't actually need it.
Incremental improvements I don’t think counts as the innovation you were hinting at.
Especially not when both phone manufacturers and car manufacturers are engaging in more and more rent seeking behavior
what good is it if you have a ton of gadgets and iphones all over the place but no place to live? I'd take a home with a bed over all the gadgets in the world, if i could only choose 1.
it's a fact that the housing standard of living has gone down for the last 26 years. See this graph: Nominal gpd per capita / case shiller housing index. and you'll see it's down 34% over the last 26 years!
>Cars are getting better.
And expensive that , at least in Europe, nobody is buying them anymore so the industry is going through layoffs.
It's a problem in the US as well. New cars are basically too expensive for most people to afford.
And it's no longer even legal to make basic cars without luxury toys like built in screens. Oh I'm sorry, I mean ""essential safety features"", that we managed to get on fine without only a few years ago.
True, we did get along fine without them, but at the cost of injury, death, and property damage. "Backover crashes" cause hundreds of deaths in the US each year.
https://www.nhtsa.gov/sites/nhtsa.gov/files/documents/13237-...
Add the backup camera to the improved restraints, the collision warning system, the blind-spot monitor . . . and soon you're talking about some real money.
One can argue about whether this is good or bad, but they're not really luxury toys.
"Hundreds" in a country with hundreds of millions of people is inconsequential. The vast majority of people never backed over anybody because they used tricks called looking around and situational awareness. Techno gadgets meant to solve non-problems are toys in my books.
They are certainly luxuries, given that we were willing to drive without them.
I guess a house is a luxury too? The caveman lived without one.
Bit of a weak ooga-booga comment.
No, humans are not cavemen, as cavemen lived thousands of years ago and had a different lifestyle than modern humans. The term "caveman" is a stock character that became popular in the early 20th century.
It’s also very common to be delusional.
But not us, of course. That couldn’t happen to us. It’s those other people.
Feels more and more like it's the best of times and the worst of times...
Things feel off,but you have (mostly well-off) people talking about how great things are going to be and are. I suspect a lot of this correlates to the stock market.
For the median millenial atleast, whatever you were taught growing up is just the wrong guide to understanding the world today.
I think social media by its very nature, has to be understood inverted. A high number of posts about how great things are suggests otherwise. Comparisons with Europe have gone exponential that tells you more about how the posters feel than anything else...
As I complete my travels through Argentina and a layover in Lima I realize that differences between poor and rich are much less stark in my opinion in the US and these LatAm countries where the percentage of population living below the local poverty line is 3 to 5 times higher than that of the USA
So whatever you feel - it’s all relative
People don't realize that being broke poor in the US is a luxury life in most developing countries.
I'm not from the US but I saw some video of of how some homeless people live in the US, and it's a lifestyle most of the developing world would kill for: dumpster dive for freshly made pizza or quality supermarket produce that's still good just not legal to be sold anymore, all free of charge. If you have a medical issue, go to the ER and get top quality healthcare. Dumpster dive for perfectly usable clothes, computers, etc. That's a luxury life for 80% of the planet.
> That's a luxury life for 80% of the planet.
Not anymore, maybe 20 years ago but many nations developed a lot since then.
Yeah they have, but being broke poor in those developing nations sucks much more than in the US. Their development is mostly reflected in the lifestyle of middle and upper class not of the poor. You have no idea how good the poor in the US have it compared to large parts of the world.
You said luxury life, that is different than saying the poor in USA are better off than the poor in for example China. American poor don't live as well as luxury life in China.
Why use China? I’d rather be poor in the US than rich in DRC, Sudan, Yemen, Libya, eritrea, Somalia, Bangladesh, Pakistan, Afghanistan, Syria, Haiti, etc etc
Using the second largest economy which has many mega cities you can tour on Google earth and plenty of millionaires and billionaires isn’t really the right comparison. Like using Japan or Germany.
You said 80% of the planet, China + first world nations is much more than 20% of the planets population. If you said 50% it would have been different.
Did he say 80%? That’s definitely pretty high. China by itself is already about 20% of the world population.
The part I quoted was: "That's a luxury life for 80% of the planet."
So yeah he said that.
Well, 71% of the world’s surface is ocean and about 10% is desert. So that’s over 81% of the planet. I think we can now both agree that you are completely wrong and I am completely right.
If you marry your fitness trainer, GDP goes down :)
There are some good talks of Mariana Mazzucato about it (and questioning of what we consider value in economy) [1]
Enormous amounts of valuable activity is not captured in GDP and never has been. This makes it dangerous to take two GDP numbers from different polities (or even GDP PPP) and compare them to compare their wealth.
However, change in GDP can tell you something broader about a society. It is a compounding value, which means only a trivial amount of GDP change can be explained by moving some of a society's value into or out of the GDP measure. Over a century, the compounding effect eclipses the non-measured component.
So if two societies, over the long term, have different GDP growth numbers, one of those societies will end up rich and the other end up poor.
Slow down GDP growth even a little and you will impoverish your grandchildren. They will have to choose between becoming doctors in their poor society, or emigrating and waiting tables in the rich society.
Perhaps growth rates in GDP PPP would be even better for comparing between countries?
For example in the case of Ireland people might be misled if they looked only at nomial GDP growth…
Growth is only valuable in the long-term, and in a long-term analysis PPP (which I generally find very hard to reason about) is going to wash out, just as the fraction of the economy measured by GDP washes out. The non-linear function dominates.
Year-to-year, the difference between 2.5% and 5% doesn't matter, which is how people convince themselves to downplay growth. But they are two radically different worlds for your grandkids.
Huh? Why wouldn’t that matter?
A 250 basis point difference in growth rate is enormous for pretty much every industry in the US.
That’s hundreds of billions of dollars extra circulating in tne economy.
The problem is that countries who don't want to compete on the marketisation of everything will lose out eventually.
In your example of elderly care, an extended family in Italy may care for their own grandmother (and they'd probably live longer). But the market in Italy isn't so bouyont so the younger generation can't get high paying jobs and move out even if they wanted to.
The high spending and marketisation in the US skews the game for everyone whether they like it or not.
(no moral judgements here, just observations)
You highlight and try and predict the eventual problems of non-marketisation but you don't seem and try and do the same to the eventual problems of marketisation.
These things are difficult to predict, but already for example we notice some problems with ultra-marketisation in the UK where house prices are now 10-12x average annual salary (it used to average 6-8x for the last two decades), and all the social strife this is causing in society. For example it can eventually lead to mass violent protests against migrants or electing extreme political parties.
Another example is that it has seriously degraded public services, since nurses can barely survive on their salary there is huge shortage of medical employees leading to huge waiting list for medical, even critical, operations.
Not disagreeing with your central points - but average UK salary is now £35k and the average house price is £289k - therefore house prices are currently 8.25 times the average salary.
Regional variations will make this far worse in many popular and coastal towns - but the average is 8.25 times in 2024.
Yes you are right, I think I was referring to London, not UK (although 8.25 ratio for the UK is pretty bad given that it was around 4-5 not that long ago).
Average London salary: £44,000 Average London House: £531,000
There are many other UK-wide statistics pointing out to the jump in housing unaffordability (including rent) over the last 5 years.
Even if house prices is slightly more sane outside metropolitan, one needs to factor in how difficult it is to find jobs outside metropolitan areas, so the quantity of jobs outside expensive metropolitan areas need to be factored in, not just the average salary.
Totally agree - I live in a small (coastal) town where a there are very few jobs outside of service roles - and they are highly seasonal. Average salary for peole that work in the town must be around £20-25k and even cheap houses here are £200k - but often far far higher.
London is wild - I was lucky to buy a flat (£142k) when I was still young (2006) - which would have been 4.7 time my salary (though I bought with my wife). Even then, and with two good salaries, staying on in London with 2 kids wasn't really an option for us.
And as you say, this is replicated up and down the country in other major cities - people are just priced out or trapped in renting. No idea what my kids will do.
If there would be a market for better urban zoning (instead of the mandatory bribing "attempts" of various officials) housing could be built much much more efficiently.
(It's a tragedy that most housing constructions are basically suburb expansions or "terraced properties" or these few sad few storey things. There's no vision at all.)
Interesting that you call this a problem of marketization and not of the governments callous immigration policy and the racism/nationalism of the average brit.
If people can't afford a house then they can easily look to other markets, they just don't want to because they feel entitled to "their county". The largest culprit after mass immigration is the unwarranted fear of bodily harm from living "poor countries"
"If people can't afford a house then they can easily look to other markets, they just don't want to because they feel entitled to "their county"."
Your comment is seriously detached from reality. If your whole life, job etc is located in one area, then moving far away for cheaper housing often isn't easy. It's especially hard for someone with a family.
UK and most other Western countries have high housing prices mostly because houses have become speculative assets for rich investors.
We have high housing prices because we stopped building housing.
How it it racist to conclude that reducing immigration inflows and thus housing demand would reduce the cost of housing?
Worth noting it's not a linear relationship - 100k immigrants do not take 50k or whatever homes that would have gone to people already there. That's because immigrants also create building companies and incentives for existing ones to build more houses, and because immigrants disproportionately work in construction and thus provide workforce to build more.
The UK experienced this when Brexit caused many Eastern Europeans to go home, and even more not to come; there's now a big construction workforce shortage and housebuilding is being held up.
Cost of housing is rising in places where there's barely any immigration. (Yes, in places where there are more influx of people with money to a place - migrants from abroad, migrants from the next town, or in some lucky places we even have birth rate above death rate - demand [in the economic sense] will go up even more.)
But most of the price increase (ie. actual demand, meaning potential buyers with enough money) is because over the last few decades houses got much better (triple glazed windows, heat and noise insulation, safety standards increased, HVAC for the whole house not just 1 sad split unit, oh and houses got bigger, so all in all we put in more material, more stuff and so on), and service costs got higher (in part due to the Baumol effect) and availability of credit increased with the price (banks love to give bigger loans when it's backed with a relatively safe liquid asset), so buyers can and do pay these enormous amounts.
And then there's the supply side. "Cities" are horribly mismanaged. Most development happens in suburbs. (Because it's easy.) Productivity of the construction industry is so ridiculously low that people are in complete and utter denial even about the prospect of building things. Housing? Rail? Nuclear power plants? (They have given up, they just want to preserve the status quo apparently.)
It's good that our cities are not burning down regularly anymore, but this forced stasis is still bad. It's good that we don't have monarchs or urban planners who randomly reshape half of our cities every generation without fair compensation.
At the same time it's still very bad that we ourselves don't reshape our cities to adapt to each generation!
[dead]
About the "nursing shortage" in the UK: The solution is simple, pay fair salaries from the NHS. This would probably required higher taxes to better fund the NHS, but good luck with that in the current UK political environment. Instead, the UK has decided to pay poor nursing salaries and import cheap labour from poor countries. Is this a win? I doubt it.
> The problem is that countries who don't want to compete on the marketisation of everything will lose out eventually.
It goes both ways though, when shit hits the fan if your economy is based on airbnb and food delivery you're fucked.
Look at Russia, half the GDP of Germany but twice the steel production, 4 times the wheat production, 1st producer of fertilizer, huge amount of gas, &c. They had roughly the same military budget as Germany in 2020, yet the german army virtually doesn't exist.
It depends if you think our current mass productivism/consumerism practices are a bubble or the end game of humanity, history seems to prove that it goes in cycle of good and bad times. Poor countries would probably even fare better than most in case of major events, the bigger they are the harder they fall.
Germany is much richer than Russia because their economy adds much more value to raw inputs. Their industry produces much more refined, valuable goods. For example, before the idiotic invasion of Ukraine, Germany imported huge amounts of Russian gas, that was used by industry to created refined, valuable goods.
Also, it is weird that you chose to comment about the German military. First, due to WW2 era agreements, they are severely limited in how they can deploy their military. Japan is similar. Also, Germany spent 50B EUR last year on their military, and that is set to rise by another 10-20B EUR this year with some extra, one-off spending. These are not small numbers!
The problem of marketisation is that it's a shredder for human values. The economic machine doesn't care what the constituent parts are, as long as they move correctly.
My ideal world we would pay a reasonable wage to people to take care of their own children and the eldarly relatives. These are real valuable and nessasry jobs that end up being an economic drag on those that can least afford it. So instead of paying a stranger to help grandma do household chores make meals and drive her to her medical appointment why not pay her granddaughter to take care of her instead taking a second job to pay for the assured living facility? Why have both parent work two job and pay for all day daycare when dad can stay at home clean house and watch the kids? We fear population colapse as younger generation put off or decides not to have kids and yet child care cost so much that they cant aford to have kids instead pay people to be parents and nurture and raise children.
> and they'd probably live longer
> skews the game
Very good point because in my country elder care is free. Daily visits by an assistant is on the municipality. We're not a leader in GDP, but we take care of our citizens, whether they be sick or old.
That is not the point GP was making. The assistant you mention is still paid by the municipality, so they show up in GDP numbers just as much as if you paid them yourself.
What doesn't show up in GDP numbers are cultures where people take their elderly relatives into their own homes and care for them themselves. Same as hiring someone to look after your kids, or taking them to day care, shows up in GDP; while having their grandparents or other family care for the kids while you're off to work does not.
Except the municipality is not run for a profit, and can benefit from economies of scale, so the difference in GDP contribution for the same event could be an order of magnitude lower.
I can't believe you're actually arguing these semantics when one person has to pay 800 dollars for an assistant and the other person gets it for free.
One person's elderly parents never have to worry about being assisted, while the other can only do so if they can afford it. And you're arguing GDP semantics? There is something seriously wrong and sick with this.
Quit the grandstanding, this conversation is about the GDP and what does or doesn't count towards it. There's nothing wrong with somebody just be cause they kept track of that context instead of getting lost on a tangent.
GDP semantics matter enormously for policy decisions because GDP is the easiest metric to use when making those decisions. But it's a metric and highly biased towards measurable values instead of less fungible ones.
Municipality spending is part of GDP
But without the profit motive and the need to turn a profit for a few layers of middlemen, the impact on GDP will be much smaller than in the US.
There's a reason why healthcare expenditure per capita in the US is multiple times higher than any other OECD country, and why health insurance companies are some of the biggest public ones.
And if you borrow that money is even better because they just created the money for you to add to the GDP, and now it will have lots of sweet service fees and interest in top of that.
And on a side note because US dollars are the reserve currency and only created in one country they can go shopping around hovering up every asset and resource.
Consider this scenario. Dollar holds value for the next 1 year. FED prints dollar. It gives them to BlackRocks of the world. And these vehicles go shopping around the world in emerging markets buying up ownership. Similar to Cantillon effect, others and emerging market are left holding the bag.
Here’s How America Really Runs Britain | Aaron Bastani meets Angus Hanton
> FED prints dollar. It gives them to BlackRocks of the world.
I was just highlighting a scenario of cantillon effect on the back of reserve currency status. But such a convergence of factors is possible, don't you think? Or atleast it could play out in this manner.
The US produces a lot of things others want to buy, including stability and security, and that is why non Americans want USD and hence others give Americans purchasing power.
They are not given a choice mate, the US has shown itself quite willing to unilaterally dispose of any government it feels to not be doing exactly what they want. And is on record to at least plan to kill it's own citizens to justify such actions.
The narrative that we all have peace because of the US is well and truly broken, the propoganda can't cover the smell, it stinks to bad.
I’m sure China/Russia/Israel/India/Saudi Arabia/Iran/North Korea/Pakistan/etc are all doing exactly what the US wants.
The US is so effective that it can force a country that it embargoes (Iran) to sell oil in USD to a country with its own currency (India).
https://www.economist.com/finance-and-economics/2024/10/17/i...
And the US allows articles to be written about China and Saudi Arabia considering buying and selling oil in Yuan, ostensibly to provide cover for the fact that the US is actually forcing both China to buy in USD and Saudi Arabia to sell in USD.
https://www.wsj.com/articles/saudi-arabia-considers-acceptin...
It couldn’t possibly be that Iran trusts USD to have a more reliable purchasing power than an Indian Rupee, or that Saudi Arabia would rather bet on stability from USD rather than the Yuan.
The other important stuff is due to petrodollars and US controlled swift system, there is no real price discovery in the world economic system.
Trade balance shows US doesn't produce that much others wants to buy while others produce a lot of things US wants to buy. You almost never see "Made in USA" outside of USA, except some agricultural products like almonds from California.
Look at the biggest software tech stocks. They generate enormous amounts from exports. Same for pharma. Same for AMD, and most of their final product is manuf in Taiwan, Malaysia, and Korea. Made in X will most often be seen on clothing and cheap consumer goods. Those are low value products, produced in poorer countries. Even the iPhone is mostly assembled in China, but where do most of the profits land? With Apple.
Trade balance isn’t going to show a lot of what the US offers, which is not readily convertible to a numeric figure.
Changes in currency exchange rates are the best way I know of to get a pulse on what the collective population of the world thinks about what the US offers.
Things like choosing to do business in the US because they overall trust the courts, or investing in US companies because they overall trust the management and SEC oversight. Or even just investing in US land because they trust the internal stability and lack of external threats.
> Changes in currency exchange rates are the best way I know of to get a pulse on what the collective population of the world thinks about what the US offers.
No it isn't, many non-American companies trades in US dollars without anything ever having to do with the USA. The world doesn't change what currency it trades in that easily, people will stick with the dollar until USA screws up majorly, like every previous world currency did.
A French bank was fined $9 billion by the United States because it routed Iran-France trade payments through US banks in dollars, violating American law (despite the trade being legal internationally), demonstrating the power of the US dollar as the global reserve currency.
When Will De-Dollarization Happen? Explained by Kishore Mahbubani
The world trades in many currencies, in varying amounts. Supply and demand of currencies is always in flux.
The continued strength of the USD is just a vote of confidence in the buying power of the USD in the future.
> The continued strength of the USD is just a vote of confidence in the buying power of the USD in the future.
Right, but that buying power comes from buying Chinese goods, so a European likes USD since China accepts it and you can buy stuff from them with it. Nobody buys American so that isn't a factor.
If China stopped accepting USD the demand for the currency would drop like a rock, since it is the main exporter in the world.
And why does China want USD? At the end of the day, demand is demand. One or multiple people want to use USD, and why would people want to use a specific currency? Because they trust it to get them something else they want in the future.
China has yuan, Europe has Euro, why can’t they trade that? Clearly, they don’t want each other’s currency, and the best option for both appears to be USD.
(Assuming the premise is true, I don’t know how eurozone countries pay China).
> And why does China want USD?
China isn't a free market, the government does strange things for reasons other than maximizing their own wealth. That completely screws over your analysis, companies go to where there is the most profits but undemocratic governments do not.
It is perfectly possible that China does this to weaken the US production industry making it more dependent on Chinese exports since it lets US buy Chinese goods with printed dollars instead of having to deliver anything in return. Then by suddenly ending this agreement it would devastate the US who is now unable to get those goods while China is left with the whole production pie.
> I don’t know how eurozone countries pay China
Europe exports to US and buy China, they are on average trade neutral since USA buys their stuff and they buy Chinese stuff. USA is the source of money and China is the source of goods.
That’s a little too conspiratorial for me, I prefer simpler explanations in the absence of other evidence.
It isn't like China is buying a lot of American stuff, but China hoarding USD makes everyone want USD at least. I'm not sure why they do it, your guess is as good as mine, but at least the world isn't getting USD to buy American stuff, they do it to buy Chinese stuff.
US is the very reason why there is instability around the world. US touts security for itself as reason while causing insecurity for other nations, (either through military adventurism or social engineered coups) so that they can't rise.
That's like saying the government is the biggest source of instability since they are sole entity performing the most violence.
Saying the US is preventing other countries from rising in the same thread where people are complaining about US industrial decline is paradoxical, it's precisely those industries were given to developing countries to foster their rise, what the neoliberals underestimated was how that convergence would lead to resurgence of palingentic ultranationalism that is why the world is so unstable today.
US is happy if a country becomes its vassal state just like G7, EU and Japan. US likes if other countries don't have independent thought or freewill.
There is nothing largesse about US in this "those industries were given to developing countries to foster their rise". If it wanted to help others, it would have helped Africa the most. I can't believe the amount of brainwashing people have undergone.
How the U.S. Uses Wars to Fuel Perpetual Consumption｜Yanis Varoufakis
Except Africa has in fact received billions in aid. Building factories & infrastructure like the BRI was all tried in the 60s, it never worked out due to failures of ISI development and weak governments and instuitions.
We've had 40 years of learning hard mistakes, if you believe the Western System is exploitative then the logical conclusion would be that isolation from that system would provide better outcomes, when in reality those that did stagnated. Domestic consumption markets are far too weak initially to drive growth, it's only through the focus on export surplus capacity to sell to open foreign markets that one can provide the impetus for growth.
But that's only possible so in as far the West or really the USA willingly chooses to open it's markets and let it's industries and blue-collar workers decline. From a global perspective, with the assumption that these developing markets would open their markets eventually would have been optimal in providing a path for everyone to develop. Except in reality, many of these countries especially now in the 2020s never intended to open their markets, they're perpetuating the massive trade imbalance with their neomercantalism. Which Varoufakis himself btw points out in The Global Minotaur as unsustainable.
Can you really say the USA is the oppressor in this instance or the victim in maintaining that massive trade deficit? If America decides to go protectionist (which is happening with Trump), the entire damn system collapses and the pathways for development will be closed for future nations.
It's not a question of whether China is building infrastructure or cheap cars for developing nations, it's whether they will be willing to let their industries be gouged by future upstarts. And with economic nationalism, the answer will always be no. And that goes for most of the "global south" for that matter. A zero-sum world for a zero-sum worldview. Compared to that, I would argue that America's attempt at positive-sum world was alot more charitable.
Why is Yellen crying loud about "overcapacity" in China then? According to market principles, overcapacity is good and people will get cheaper goods. Maybe US has overcapacity of WMDs.
It's also a measure of price level. If I pay $100 for a doctor's visit that's $100 to GDP. If it costs $1000 that's $1000 to GDP.
If it "costs" $1000 but that's just to get $100 from insurers who only pay 10% and I only have to pay 10% too? Still $1000 to GDP - I think.
That's incorrect, it's explicitly adjusted for inflation/change in price level, although of course this adjustment isn't perfect.
It's adjusted for CPI, which is probably a flawed measurement of price level, due to things like hedonic adjustments.
GDP is C + G + ... and the C is personal consumption, so I guess if you pay 100 USD that's what gets added, and the premiums (and whatever your employer pays for you)
Taking a loan for $1000, buying something for $1000, paying back $100 and then declaring bankruptcy also increases GDP by $1000. The intention is to measure the total value of services exchanged, which is $1000 in both cases.
Yes. GDP tries to measure "production", it's just easier to add up various types of spending, investment, etc. But if the service has been consumed then it was - by definition - produced, or in this case the service was rendered, I guess.
That's why bubbles are a problem because they represent a misallocation of real resources. (Especially when they're debt fueled. And crucially so when it's private debt like the typical mortgage.)
But that's why the fiscal multiplier is above one, because public debt is usually cough spent on things that increase productivity, growth, or at least has a positive ROI (eg. regularly screening the mythical token at-risk individuals likely prevents enough very expensive private+public spending, and people will spend that money on things like education or mayhaps even just allows them to have more productive years), etc.
If a $1000 service was provided but not paid for, that's $1000 to GDP, and it was an expense for the person providing it instead of the person receiving it. It's as if you paid $100 to the hospital and the hospital paid $900 to itself. I think. Probably depends on the measurement methodology.
> If I go visit my grandma over the weekend, my activities do not register on GDP.
Yes they do. How do you visit her? What do you do while you're together? Eat some food? There's almost no way your visit doesn't register on GDP.
In reality, economic growth makes peoples lives better in simple, concrete ways. Ironically, we've started to question this only because we've become so rich due to so much growth that we're no longer dealing with "simple" problems (hunger, cold, etc).
> What do you do while you're together? Eat some food? There's almost no way your visit doesn't register on GDP.
People typically eat food even when they don't visit someone as well, the total amount remains the same. It is really common to just cook food and eat together, your life doesn't get better if you go out to eat eating your parents home cooking doesn't register on the GDP.
Financial press knows it too, they just don’t care. They gotta fill their pages with something, right?
> If I go visit my grandma over the weekend, my activities do not register on GDP.
How do you mean? There are travel expenses and you were also doing that instead of consuming. Saving shows up in the numbers so I'm really not following what you mean here.
If you pay someone to clean their room or watch their kids, that becomes part of GDP, whereas if they simply do it out of love or social obligation, that isnt part of GDP.
Savings isn't part of GDP.
There are no travel expenses, if grandma lives in a walking distance (or a couple of bus stops away, not that uncommon in Europe). She is also fine watching her grandkids from time to time, to everyone’s delight.
I also like the example where if you break someone’s window and they fix it for $300, that’s at least an extra $300 in GDP.
But they would have spent the 300 on something else
The point is that someone who spent 300$ to be in the exact same situation as they were before but the gdp seemingly is doing well. So they could have had a window and a sofa but only have a window in the example. So the gdp is increased but the people are not better of.
This example also cuts into personal efficiency going up. Not needing a car or burning gas because of a badly insulated house is negative for the gdp but good for the wealth of individuals.
No, many people save their money.
The best example is:
I give you $10,000 to eat a pile of shit.
You give me $10,000 to eat a pile of shit.
What's the result?
Two shit-eating grins and $20,000 added to the GDP.
if you hired care assistant then you have time for some other activities like work which is more profitable than cost of care assistant thus economy has more goods. Life expectancy lowers when young people die, most often in work accidents which is related to low unemployment.
You're completely missing the problem. The care assistant, being a fungible and commoditized service provider, can never provide the kinds of illiquid unmeasurable goods that are generated by long-term and durable relationships.
My wife had a good job. She made the median household income in the area on her salary alone (my salary was still better, but that's beside the point).
When we had our second kid, the hustle wasn't worth it. Two kids in daycare took 90% of her take home pay. It was costing us more for her to work than to stay home with the kids.
Also, kids need their parents. An infant being away from their mom for that long is unhealthy for the infant
It's a choice, economy is about choices and math (staying at home cost < cost of kindergarten) is the tool. (in EU you may prefer to go to work because additional income is that time is added to retirement, even if money is low it has some value).
> An infant being away from their mom for that long is unhealthy for the infant
Your argument hinges on my work being more profitable than a care assistants. While that's maybe true, the difference showing in GDP is not the difference of profitability or "value" in our work. What if I'm a care assistant myself? Imagine two care assistants and two scenarios:
1. They are working from Monday to Saturday. They can't take Saturday off, so they hire a care assistant to take care of their grandma on Saturdays, they happen to hire each other.
2. They are working from Monday to Friday. They take care of their own grandma over the weekends.
Scenario 1 adds more to the national GDP.
yes, there are people who can benefit from their own skills. GDP measures what is taxable rather than peoples wealth or well-being.
Any metric that most directly relates to military spending ability seems the most pertinent these days. But of course GDP doesn’t relate to quality of life—I don’t think anyone suggested it did but of course many think it should.
The marketing dollars spent by the care assistant service is additional GDP.
Using GDP to measure the health or rank of a company is like rating writers by the number of words they produce.
Are you implying that GDP has only been measured for the last 3 years? Because I think it has been much longer, over a period where physical health has improved greatly.
This is a good point, but at the same time GDP correlates with many metrics of national wellbeing. The USA isn’t the destination of choice for migrants for no razón
> US life expectancy has declined over the past three years
Do you have a source for this ?
There was a big dip in 2021, but it has started rising again, and it's possible it might rendezvous again with the old trend. This means parent-poster might be technically correct in the sense of "between T to T+3 it decreased", but I would not jump straight to blaming the the longer-term background horribleness of US health insurance for it.
It's far more likely to be that teensy-weensy COVID-19 pandemic, both in terms of direct damage and also reduced care for everything else.
https://www.politico.com/news/2024/03/21/cdc-us-life-expecta...
Covid and opioid deaths. Opioids are bad. To quote the lancet “Opioid overdose mortality rates are alarmingly high, but measures based on death counts alone do not fully capture the impact of this crisis as they do not account for the young age at which most opioid-related deaths occur…” (https://www.thelancet.com/journals/lanam/article/PIIS2667-19...)
The particular article found opioid deaths lowered life expectancy by 0.67 years, which is a crazy number.
Drug overdose deaths finally seem to be trending down in 2024, but they are still elevated and awful.
> Opioids are bad.
Years of life aren't the most important thing. Opiods might reduce life expectancy but increase the averge quality of life of those living in a given year.
For those using them according to prescriptions maybe, sure. But the opioid crisis isn't an opioid crisis because people are using them according to what their doc told them. It's a crisis because they are abused.
Quick googling shows that WHO/World Bank at least.
Are you saying that the US has gotten poorer even though GDP has risen?
Are you saying that you visiting your grandma one weekend is the same as someone washing, feeding and walking her every day?
This is the worst possible interpretation of the comment. No and No.
Seriously, just looking at the examples of "stagnated and failing economies" like Japan should be a give away that this measure is total BS.
In Germany a life saving brain surgery creates 5K USD of economic activity and the same surgery creates 500K USD of economic activity in the USA.
True story, a YouTuber I'm following recently had her mother operated in Germany and then again in the USA and she made a video about the experience and the numbers: https://www.youtube.com/watch?v=G-p1nP6hH6U
This obsession with GDP isn't healthy, among other obsessions like the "Number of gigantic companies" which is supposed to show that you are falling back in technology if you don't have extremely large companies by market capitalization metric.
It worries me because it's BS and BS can last just till a point. What happens if at one point in the future people start demanding benefiting from all that riches and success? I'm worried because I don't believe in(goodness of?) revolutions and the situation makes me anxious that the west with the US in particular is headed to some kind of revolution. They had one with the last election I guess but the revolutionaries appear to be pushing for the extreme version of the same thing which eventually might collapse with another revolution with the opposite thing like what UK ended up getting as a Labour landslide after Libertarian landslide.
> I'm worried because I don't believe in(goodness of?) revolutions
That's strange, revolutions have been the some of the most acute moments that improved things for the world population and brought rights to the common people. I'd definitely not want to live through one because it sucks for those during it, but it's great for those that come after.
> I'd definitely not want to live through one because it sucks for those during it, but it's great for those that come after.
Well, sometimes… Sometimes it ends up in a brutal dictatorship until the next revolution, which may or may not end up improving things.
Sometimes revolutions are also stolen. Often people agree that the current thing needs to go down but don’t agree on what should follow and you end up with things like leftists destroying the elites only to end up in theocratic dictatorship.
That’s probably survivorship bias. The Nobel Prize in Economics for 2024 was awarded for research that has demonstrated that the single most influential factor in the wealth of a nation is the stability of its institutions. Frequent civil wars, coups, and revolutions in certain regions of the world have left them further and further behind.
So I think in general, revolutions are high risk high reward gambles. The rare ones that work out and align with the needs of the population make important strides for humanity, but most revolutions fail or are corrupted and end up a net negative for the society.
I'm yet to see a revolution that improves anything. They certainly destroy a lot and change who's the elite though.
Any benefit, IMHO, comes purely from starting over. Any revolution benefit can be achieved through debt purge, elevating those in precarious state and break any fast feedback loops that led us to that point.
> Any revolution benefit can be achieved through debt purge, elevating those in precarious state and break any fast feedback loops that led us to that point.
Breaking things is very difficult. The status quo would not be the status quo unless a significant part of the people in power wanted it. This means that there is always a significant resistance to overcome, which requires very strong incentives, which historically tends to be despair or starvation. In other words, revolutions.
Yeah, it’s unfortunate. The same thing with wars. You know what? Revolutions are just civil wars anyway.
> I'm yet to see a revolution that improves anything
> Any benefit, IMHO, comes purely from starting over
So you do see how it improves something :)
As for examples, read a bit of history, they are not hard to find.
Yeah that’s like improving the overcrowding issues in prisons by reducing the standard for capital punishment.
I should read some history books of that, surely.
No, it's not like that. In any case go through this list and tell me you cannot find a single beneficial one: https://en.wikipedia.org/wiki/List_of_revolutions_and_rebell...
Here, I'll leave you one: https://en.wikipedia.org/wiki/Carnation_Revolution
I don't even think you're wrong in your dislike of revolutions, like I said, I was clear in saying I don't want to live through one, but the extreme view that nothing good every happened is simply, blind.
Fair enough, the correct wording should be something like "revolutions are not worth their cost" as some good does come from revolutions. I'm sure many will argue that the its worth the cost but thats much more subjective.
I agree with this latest comment of yours, and I think I know where you're coming from as counterpositioning to some things one reads online. It's definitely muddy, even the one I linked you was very complex during the following months, but was on the whole good - in my opinion. My parents and grandparents lived through it and would choose to go through it again as many many others.
How about the Chinese Cultural Revolution?
The American revolution has changed the world hugely. The French revolution carried on from there etc. It is very much better for most people (not the aristocracy).
> The French revolution carried on from there etc. It is very much better for most people (not the aristocracy).
That's a common misconception, but the first three (original, 1830, 1848) French revolutions were failures. They paved the way for future improvements, and established important precedents like human rights and equality... but materially for the average person little changes because of the revolutions. The revolution with the biggest impact in France was undoubtedly the Industrial one, which brought social and economic mobility on a large scale.
Revolutions definitely change things, not necessarily for the better though(depending on what you expect from the revolution). You can have change without a revolution, like with the Brits and Magna Carta.
If for you democratic elections are a form of revolution than how, in gods name, Magna Carta isn't? Fucking wars were waged for Magna Carta. Just historical illiteracy rearing its ugly head again.
I think you should try to present an argument instead of throwing a tantrum and calling people things.
I did present an argument. My argument is that wars were fought to enact Magna Carta(historical fact) and thus if we consider, as you do, that January 6th was a revolution there is no imaginable reason, at least I can't think of one (and you refuse to share yours), to think that there was no revolution that brought about Magna Carta.
Saying "fucking" isn't throwing a tantrum. Nor is pointing out something as an example of historical illiteracy calling somebody names.
Now that we are on the same page can you present your arguments on how what happened on January 6th is a revolution and how Magna Carta was not brought about by a revolution?
The Reign of Terror was executing practically any politically active person they could get their hands on (and their families), not just aristocrats. It didn't end until Robespierre was foolish enough to order the execution of one of France's most popular revolutionary politicians (Danton).
When actual peasants revolted, as in the Vendee, the result was what some call a genocide. Against the peasants. By the French Republic.
France continued to see revolutions, "reactions", and Napoleon because the Revolution did not make things better. It was quite some time before that happened for most people.
Oddly you get revolutions without debt purges. Haiti is probably the worst example of this: they were literally forced to pay for their freedom by France.
100% agreed, especially when you print money the GDP is evaluated in, there's no ceiling! What can be bought for money and in what quality, that's a different story... Purchasing Power of Money is what really matters. It's still good in some European countries, but with the current policies, EU has set itself up for times of poverty.
In Germany a life saving brain surgery creates 5K USD of economic activity and the same surgery creates 500K USD of economic activity in the USA.
It doesn’t because the insurer doesn’t pay $500k.
Not to mention that if something costs $10k in the US that costs $5k in Europe, that $5k that doesn’t get spent on something else (which would also increase GDP)
Okay how much do they pay? Is it closer to 5K or 500K?
Closer to $5k.
US in-patient costs are about double that of the European average.
An ICU bed that is $1,000 per day in Europe, is around $2,000 in the US.
But the hospital will have a charge master price of $10,000 per day.
Insurance company negotiate agreed charges that are often 80-90% lower.
That’s the number that contributes to GDP.
Yes that's the average spent per citizen which doesn't say that the brain surgery will cost just the double of EU. Many Americans apparently don't seek medical help if they feel like they can wait it out, hesitate when call an ambulance etc. Which is not a thing in Europe, its not something you give it a consideration from financial standpoint. If you are poor and you twisted your ankle, you call ambulance. If you have a rash that bothers you and you are poor and unemployed you still go to the dermatologist. If you are rich, you can seek private care(yes, many countries do have private hospitals where you can get an expensive care if you like to have hotel-like room etc).
Anyway, that's another topic and you are right that for the GDP purposes the spent per capita is a good metric. Which is still on the point, the same service costs at least twice as much resulting in useless numbers if you are trying to use GDP as a productivity metric(or anything humane, in fact).
We see a similar thing in Turkey for example when you use PPP(which is supposed to be an improvement). Turkey's PPP is quite high now, meaning that the Turkish lira is strong and on average Turks are supposed to be slightly richer than neighboring EU country Bulgaria. In reality, Turks are miserable because some basic stuff is taxed to extremes and the market is captured by a few groups and to achieve a Bulgarian lifestyle in Turkey you actually have to pay 2X or 3X.
Maybe we just should stop looking and these stats for a proxy to other stuff altogether. They don't work, just use whatever you are looking directly.
Revolutions are neither good nor bad, they just are.
It's what you do after that matters. If you keep on repeating the same mistake and never change the systems that led to the political instability in the first place, then you are bound to have the same results.
I agree. I'm not a fan of revolutions because the process itself is quite damaging - no matter what comes after it. I can definitely enjoy a good revolution if I'm not at the receiving end of it though.
> What happens if at one point in the future people start demanding benefiting from all that riches and success?
With any luck, what will happen is that future people will benefit from all those riches and success.
The problem is that those riches and success is just on paper. They are projections and IOUs.
It's like the property market, if everyone has so much money the number of people who can live in Malibu doesn't actually go up. Just the prices of homes in Malibu go up.
No matter what the numbers in the bank account says, the number of people who can get the good stuff will be limited to the actual infrastructure and actual production output. If Americans get even richer, it will simply mean that more millionaires will room share in SV.
EU and Japan, largely cited as economical failure, happen to provide just as good or even better living conditions to their citizens because their infrastructure and actual production output is as good or better than the US.
> No matter what the numbers in the bank account says, the number of people who can get the good stuff will be limited to the actual infrastructure and actual production output.
Only if you define "the good stuff" as "the best stuff." If you define "the good stuff" relative to a subsistence farming or hunter-gatherer lifestyle, the median person today in a developed country is arguably richer than the richest person in town 50 years ago, the richest person in the country 100 years ago, and the richest person on the planet 500 years ago.
What would make a median person today, working 8 hours a day, 5 days a week, richer than the richest person in the country 100 years ago?
Let's pretend that we don't have a time machine and stick with comparing what we have today.
Translation: I don't want 'the good stuff', I want 'better stuff than other people.' You're not arguing for quality of life, you're arguing for privilege.
I don't argue any of these stuff
This is nonsense, you could buy a nice car and a home 50 years while working at the post office. Because we have faster computers and smartphones does not make us wealthier.
that plus, the CPI is completely messed up.
Housing accounts for easily half of people's spending these days, especially the younger generation.
So, here's how you calculate standard of living: Nominal GDP per capita / Case shiller housing index.
Chart this and you'll see that we peaked in 1998 and have been in decline ever since then. We're actually down about 34% since that peak.
How's that related to the magnificent 7 and then SpaceX/StarLink and the AI revolution (which is nearly virtually only happening in the US: even if there are a few models in France, China, etc. it's a US game)?
I don't think you realize what's going on in the EU (failing into a third world continent at an alarming rate) or in China (where "little" cities of 30 million inhabitants are all about tech and feeling like you live in the future: not that everything is rosy in China).
EU carmakers are all in big trouble while Chinese EVs and Tesla are soaring. The EU has nothing to answer the mag 7, let alone SpaceX (the ESA was already way behind NASA).
That the US is growing at a faster rate than most other nation and continents is a fact and it's got nothing to do whether you or a care assistant goes to visit your grandma.
You’ve got an overly rosy view of what’s happening in the US and underestimating Europe. AI is big in the tech world, but it’s hardly moving the needle on the overall economy. Every 1% GDP growth roughly requires the equivalent of adding a new Google sized company every year, or as actually happens a more widespread increase.
Just as an example, Tesla’s 2024 Q1 deliveries where below 2023’s Q1 deliveries hardly a sign of rapid growth. https://www.statista.com/statistics/502208/tesla-quarterly-v...
SpaceX is facing the limits of how much people want to send into orbit. Plenty of growth in the next few years, but Starlink is only generating ~6 billion a year in revenue and not much else really wants to put that much stuff into orbit. Worse, Starlink is facing ever increasing competition from cheaper ground based providers especially cellular internet, so that business may start to shrink.
Tesla is suffering from Chinese EV competition, but the German car brands are suffering much worse. Just look at this UX disaster:
https://x.com/teslaxander/status/1864202319925035083
Is it any wonder that the German car industry is imploding?
I also don't share your pessimism about Starlink. Right now it's unclear what the killer application for Starlink will be, but it's awesome technology and even if it's only used in very remote areas it will still be worth it. When you only invest in technology that is immediately valuable you lose out on the technological revolutions that take a while to play out. Imagine having the capability of building something like Starlink but not doing it because the bean counters don't see the point.
I’d hardly call BMW’s current sales numbers “imploding” or “suffering”. They’re even doing quite well inside China.
VW saw a 12% increase in sales in 2023, the’re currently #2 globally behind Toyota.
But that’s not really the narrative people have about European car companies. (Ed: Not that the nominal nationality of a company with global manufacturing and significant international ownership is telling the whole story.)
> LONDON/FRANKFURT, Nov 6 (Reuters) - BMW (BMWG.DE) on Wednesday reported a 61% drop in its third-quarter profit, missing analyst expectations because of slumping China sales and brake problems and sending its shares to their lowest level in more than 2-1/2 years.
> In October, the German automaker reported that its third-quarter sales in China had fallen by a third.
> Rival German automakers Volkswagen and Mercedes-Benz are also struggling with falling sales in China caused by a weak economy and intense competition.
https://www.reuters.com/business/autos-transportation/bmw-re...
> "I don't like talking about the competition so much but I drive the Xiaomi – we flew one from Shanghai to Chicago and I've been driving it for six month now and I don't want to give it up", Ford CEO Jim Farley
Chinese cars are getting better every year and nobody can match them on price. That's the real story here. The narrative is shifting because more and more people realize that the EU doesn't have an answer except for tariffs and other protectionist measures.
>the EU doesn't have an answer except for tariffs and other protectionist measures.
You can't have an answer if you're competing with a labor force that's working 9-9-6 while your labor force is working 35h weeks on paper (much less in practice), gets 40 vacation days per year, get paid sick leave whenever they don't feel like coming to work, and highly paid underperformers are unable to be fired due to unions.
German workers could afford that cushy lifestyle when their auto industry was the most cutting edge and valuable in the world, but once it's not anymore, they'll have to accept a new reality of more work for less pay if they want to have jobs or an industry.
Hours worked translate into annual pay for workers, but productivity and hourly wages determine how competitive a company is.
Fast food is filled with part time employees because those companies benefit from doing so, it’s one way to keep their costs down.
Employee productivity is a flawed metric in most large companies, which are filled with dead weight cashing good paychecks but they're profitable because they monopolized certain markets or sectors which means they can afford all that inefficiency. The knives and chopping block come out the moment profits drop, and that time is neigh for a lot of German companies.
It’s unusually difficult to be dead weight on an assembly line. There’s definitely more and less effective employees inside of auto companies, but when you can directly measure productivity people can only slack so much.
Rather than competition the larger story is companies trying to managing the EV transition. It’s inherently difficult when most buyers are still choosing ICE but EV’s need huge R&D investments and are generally unprofitable. We just entered the territory where sales aren’t small enough to simply absorb per unit losses as irrelevant.
>It’s unusually difficult to be dead weight on an assembly line
I never said the dead weight is on the assembly line, because it's never there, it's in the offices and board rooms. VW for example is full of useless employee swinging their nutsacks (German expression for doing nothing) and cashing in near six figure wages and being unfireable. Meanwhile the workers on the assembly lines will have to loose their jobs.
Chinese companies are full of such dead weight. Their success depends on the factory floor and massive investments not an efficient bureaucracy.
Well yeah, a bumper on a car being bolted by a German worker is not gonna be held on better than if it were bolted by a Chinese worker. Germans can't compete with Chinese on a assembly lines. The advantage western manufacturing used to have to compensate for expensive labor was automation but guess what, China also has automation now in factories now. So what's gonna be VWs answer?
> So what’s gonna be VW’s answer?
As crazy as it sounds if you know anything about the industry, better management and increasing wages in China.
Chinese firms are generally extremely dysfunctional internally. That didn’t matter when they paid people a small fraction of western wages, but significant wage growth for years adds up. Continue ~9%/year wage growth and things would be at near parity in a little over a decade.
Obviously, that’s no guarantee but rapidly developing countries eventually develop. Things are about to get really interesting.
Meanwhile China is still BMW’s largest market, well ahead of US sales.
It’s a little early to say they can’t compete rather than this being a brander situation as overall Chinese customer demand is down and they’re a luxury brand. So sure, profits are down significantly but it’s still a very profitable company.
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One thing this article doesn't touch on is the soaring government debt, which is now really quite big: 120%, and IIRC if you add municipal debt, it's more like 140%. That is high. It also seems like much of the recent growth has been fueled by this debt.
It's unclear how this is going to unwind. America can afford, apparently, to run their deficit hot, but not forever and without limit. So at some point they have to start cutting expenditure and paying that debt off. What happens then? Or will they somehow default on it? Or, will they manage to deflate it via growth. But it is a bit of a sword of Damocles hanging over the economy, like ZIRP over VC successes of the 2010s.
The crazy thing is just how much the debt increases in living memory. Under Clinton, it was as low as 60%, which is considered a really low level.
My theory is that other countries' trade is so closely tied to the US Dollar that when the Federal Reserve prints money it's not just diluting the US Dollar but all currencies. The US is effectively taxing the world, to pay for its own spending.
As evidence that the US Dollar plays a large enough role for this to be the case, half of the banks bailed out in the TARP program were foreign to the US (https://www.europeaninstitute.org/index.php/ei-blog/106-augu...) and trading is US Dollars.
> My theory is that other countries' trade is so closely tied to the US Dollar that when the Federal Reserve prints money it's not just diluting the US Dollar but all currencies. The US is effectively taxing the world, to pay for its own spending.
Yes.
The BRICs economic group has been trying to launch their own currency for a while now. This is one of the reasons for it. Trump has threatened to impose 100% tax on them and on anyone else who ever tries.
https://www.msn.com/en-us/money/markets/trump-threatens-100-...
https://www.bloomberg.com/news/articles/2024-12-02/south-afr...
> BRICs economic group has been trying to launch their own currency
It's only been Russia (and to a certain extent China).
India and Brazil have both vetoed any attempt at a "BRICS Currency".
Brazil's president Lula certainly wants this. He's been pushing for it for years now. I see it in the news every other day. I suppose it's possible that he's just the fall guy for the machinations of China and Russia. Who knows.
I'm ambivalent about it. Having our own currency is good, even better if it's not backed by USD, best of all if it's backed by precious metals like gold. On the other hand, I hate Lula and everything he represents so much I actually want him to piss Trump off to the point he sanctions the entire Latin American continent until Lula and his fellow communist dictator friends drop to their knees and beg for mercy.
You do know that we used to have currencies backed by gold, and it was so awful that it caused the great depression right?
The USD to gold exchange guarantee ended in the early 70s, long after the great depression. And there have been many economic meltdowns since then. The two are not related.
When the economy is backed by something real, credit generally keeps up with the broader economy. It can't expand beyond reserves of real resources. Now that the money is not backed by anything, credit can expand infinitely. Credit generates most of the inflation which is a direct and ever increasing tax on the poor. It has been going on for half a century and shows no sign of stopping. The best part is even the mere attempt to stop it will cause a meltdown since the economy is addicted to credit.
We had metal standards way after the great depression, till 1971. Bretton Woods system made USD an international reserve currency, but its convertibility to gold was guaranteed. In 1971 US gov decided to not guarantee that anymore, because it gave a ridiculous advantage to US. Germany was rhe first county to left Bretton Woods, France sent a battleship to collect gold in exchange for US dollar reserves etc.. and the system collapsed. It's called Nixon shock I think.
So, leaving the international system helped the European economies greatly then. It makes sense some other countries are having the same idea now.
We had currencies backed by gold for hundreds of years before the great depression without anything equivalent happening. The great depression happened soon after US momentary creation was handed over to the private Federal Reserve.
The Panic of 1837 (followed by a five year depression) would like a word. And the panic of 1873 (four year depression), the depression of 1882, the panic of 1893, and the panic of 1907.
> The great depression happened soon after US momentary creation was handed over to the private Federal Reserve
Correlation =/= Causation.
The Great Depression was caused by American overproduction and a lack of domestic buyers who could afford to purchase American goods (sound familiar?). This was back when America was still functionally a developing country.
BRICS will never introduce their own currency anyway, so any threats by Trump are moot. Can you imagine India and China actually agreeing on a new currency structure? Lol, it's a total fantasy.
I can certainly imagine China creating their own and making the others use it. I can also imagine Brazil trying, though I can't imagine it succeeding.
Brazil has gone through numerous currencies. They have all gone to zero due to hyperinflation. One of the top Brazil stories on HN is about the way the government conned the population into believing that this time it was going to be different. We are also about to launch our very own central bank digital currency.
It's a little more complicated than that. US inflation is actually good for emerging economies which borrow in dollars, because it eases their debt burden.
US inflation is even better for the US economy which borrow in todays dollars and repays in future diluted dollars which it earns in dollars.
Foreign entites tend to earn in foreign currency, although not always and which is why China for example recyles a lot of the US dollars they recieve back into US government bonds. However the whole thing opens foreign governments and entities up to the risk that the relative inflation rates will affect the currencies (which it does).
It seems like other people also buy into this. Eg. Trump.
I also think that the USD is currently under attack as the reserve currency and running these deficits is a way to protect its position.
We will see in a couple of years how things play out.
> So at some point they have to start cutting expenditure and paying that debt off.
They don't have to cut expenditures at all. Since the Fed controls rates, they can manage the debt by adjusting interest rates. There's nothing preventing them from driving interest rates below 0% and being paid to accept money. And the Fed can buy T-Bonds at below market rates and slowly destroy excess money in the economy in a controlled fashion.
Something to keep in mind is that US government debt is integral to the economy. It's a stable way for entities hold US dollars as cash, and it's the only mechanism for them to hold large sums of US dollars in cash.
It's fine (and expected) for US government debt to continue to increase forever, it's just a number in a spreadsheet. The only real risk is the potential for a default. But even then, if you have $4 trillion dollars, what are you going to do with it instead of buying t-bonds? Exchange it for Euros and risk the impacts of currency fluctuation? And what will the buyers do with those dollars? At some point, someone is going to want to bank those dollars in savings, and that means buying t-bonds (directly, or indirectly), and the risk of default merely becomes a factor in an equation for the holder.
You can do all this at an accounting level. But ultimately US government is buying things with debt, ie paying for goods and services from third parties with an IOU, and can only do it if people think they are getting a good deal.
The way you get shafted with debt is inflation. Barely a few years ago bond yields were around 0. If you lent money to the government then, you're already very behind because of inflation - you're not getting any interest, and by the time you are repaid, the money is worth far less than before.
Furthermore, the Fed can't really let interest rates diverge too much from inflation, since the mismatch drives inflation further. That's why the rates are around 4% now, even as the economy is slowing. They have to be up to contain inflation.
So then, as the election was playing out, you could see bond yields fluctuating in line with inflation expectation. Whenever Trump said something that sounded inflationary, like tarrifs, bond yields jumped up. That's not the Fed doing it, that's lenders demanding more interest from the US govt.
Now I agree the US can get away with this more than other places. They aren't far off Italian levels now, and that would be considered teetering around crisis levels. But it's fantasy to conclude the US can keep magicking money every year with no consequence.
The US administration of the next four years has no intention of making a principal payment on the debt. They borrowed $7 trillion before, they can do it again. If a country dumps their US treasury bonds, the administration will impose tariffs on them.
I think it's interesting to compare other countries. 120 years ago the UK was the most powerful empire in history. Now 36% of UK children live in poverty, and 43% of single parent families and families with three or more children live in poverty. Over 40% of UK families from Asia/Caribbean live in deep, persistent poverty.
Many in the US are really close to that, and describe it as a "poor economy". They may have an iPhone, but they can't afford it.
Government debt only becomes a problem when it becomes a problem to pay it. We're nowhere near that point in the US.
As long has the US has military supremacy it won’t unwind because the military backs the dollar. As soon as that is gone then it’s all one big free fall.
US debt has been this high before.
You lend someone money based on whether you think they can pay you back. People still buy US debt because the US is good with its promises.
It’s the same reason the US dollar is the reserve currency… the US govt knows how to keep it reasonably stable and has decades of success at it.
Does the US use this to their advantage? Sure. But it doesn’t matter… you just need to be better than the next guy. Just observe the 100 year history of many countries: their institutions 100 years ago are much different from today. No one likes uncertainty.
the last time debt was this high was WW2, after it millions of working age men came back contributing to the economy. today the opposite is true, millions of people are exiting the workforce to retire, draining resources like Social Security. It's not sustainable, but US can tap into immigration policy to kick the ball down the road for decades
I find this part funny to because in Canada we want to have it both ways. We endlessly compare ourselves to the USA and wring our hands about whether our taxes are too high or our productivity isn't good enough, because we can't match what the USA has, but at the same time we also wring our hands about deficit and debt and are incredibly hawkish compared to everyone else.
You can't have it both ways!
Somehow it is never raised that the USA is doing absolutely incredible amounts of deficit spending that Canada dares not match, not even under this relatively more inclined to deficit spend current government.
Never raised that maybe some of their good metrics stems from the incredible amounts of deficit spending that is verboten.
US will unwind like all declining empires in history have. The rich will move their wealth out of the currency while the currency is debased via inflation (the debt will be "monetized" in contemptory econspeak). It's already happening.
Government debt doesn’t matter. It’s literally fake.
the largest expediture of the US government now is fake interest payments on fake debt then? or we pay that with fake money fake Americans pay with fake taxes? :)
Yes, it’s literally fake. Japan issues government bonds and instructs the central bank to purchase them and uses that to fund its spending. It has been doing that for decades. Any other country could do the same thing.
I like Vinod Khosla's take (on Twitter):
Stop measuring GDP and instead measure the total income of the bottom 50% of the population and optimize policy for that. Additions and exits from this group can also be tracked. We get what we measure. Will this raise income inequality?That's just Rawls's Original Position but restated poorly.
That would make a great sci-fi story: somebody wakes up with amnesia within a John Rawls thought experiment. I'm not smart enough to write it, but I'm giving the idea away for free.
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It's not just income. Corporate America has turned "prey upon the poor" into a science. Nobody really cares about protecting the poor from that sort of thing. So they'll have to deal with BS like, say, getting paid via a debit card, whose bank charges fees for nearly anything. Then there are the astronomical credit card rates/fees. There are no limits on credit card APRs.
Even government has been highly optimized for the ultra-weathly and tries to fuck over the poor. The poor get audited at a rate orders of magnitude higher than people who make $1M+/year, despite audits on the poor rarely recovering much in the way of unpaid taxes, but audits on the wealthy tend to make the IRS giant piles of cash, because rich people love to cheat on their taxes.
Then there's court fees. Get arrested, you're suddenly on the hook for a bunch of expenses. If you don't pay them - jail.
Further: look at the ease with which you can get hundreds of thousands of dollars in tax writeoffs for owning a bizjet.
Compare and contrast to the hoops a single mother has to go through every 6-12 months to keep "re-certifying" their children as qualifying for about ~$25 in monthly benefits for food for said kid. The appointments are only 9-5, M-F. Which means you have to take a day off from work; that means you lose at least $100 in income, which is a huge amount of money for a single mother working a minimum wage job.
The appointments are typically at state offices nowhere near major metropolitan cities or public transit, which means you need a car, or to take a taxi, or get a friend to drive you.
Apparently we need to be really concerned about single mothers just giving away their kids and still taking advantage of WIC at the tune of...$25/month?
Then there's all the administrative busywork generated by legislators who demand it so "taxpayers aren't ripped off."
Meanwhile, that bizjet sure does make a lot of weekend trips to Vail and the Bahamas in the winter...
The "prey upon the poor" is just as bad, if not worse, in Brazil. Growing up there you don't really realize, but after living abroad for a while it is painfully obvious.
Just a small example, stores that sell anything >30 USD don't put the real price of goods when they advertise them. They always put "<h5>x12</h5> <h1>{REAL_PRICE/12}</h1>" (show the price of the installment, while putting how many installments really small)
I had a data scientist friend who worked at a bank optimizing how much credit he could give out to people (while staying legal with the regulations). Like his goal was to get people to get more credit (usually credit card). My Bank app constantly bombard me with notifications about taking loans and getting credit cards.
This friend was not the most moral person I ever met and even him was disgusted after a few years working there, he was making a ton of money but he left anyway.
The mostly state owned largest bank (Banco do Brasil) did a "Black Friday" last week.
A bank. State owned. Doing Black Friday. In Brazil.
Plus all the raffles / lottery stuff that's just normal business. I agree with 100% preying is on another level.
My parents had mid/severe problem with lotteries, they kept saying god was going to make them win the lottery so they could pay off their debts and fix the car.
I remember when I found out that some months they were spending around 20% of their income on lotteries.
I would have thought Khosla to be quite intelligent, but then he says this:
> additions and exits from this group can also be tracked. We get what we measure. Will this raise income inequality?
I'm not that smart but I'm pretty sure that X = Y here, and X - Y = 0.
Yes? It sounds like it is the churn rate he wants to measure. Which could be used as a proxy og social mobility.
Reminds me of the Sacha Baron Cohen bit where he suggested to Bernie Sanders that we move the 99% into the 1%.
I think a generous reading is Khosla was referring to capital rather than people, which is something similar to Gini coefficient. Very generous.
On the other hand, maybe people like that, who for no reason aside from their massive personal fortune have a huge megaphone, deserve less generosity and should give everything they write a sniff test first. Idk.
This the guy that illegally keeps fencing off public beach?
I would say this is a pretty good example of an ad hominem attack.
https://en.m.wikipedia.org/wiki/Ad_hominem
If the standard is that someone has to be unimpeachable before they can suggest a well-being metric than no one can.
I disagree. When one demonstrates contempt for the public we should be inclined to pay less attention to their opinions on public welfare.
No this is an example of pointing out hypocrisy. He says that others should do what he is not willing to do. If he were to practice what he preached, the bottom 50% of income earners would have access to his beach.
The messenger doesn't need to stand by his message
Two things can be true: The message is good, and the messenger is also hypocritical.
Technically, there was no ad hominem fallacy. RcouF1uZ4gsC just argued that Khosla is a hypocrite.
Agreed, but under a charitable interpretation.
Under a less charitable one, RcouF1uZ4gsC was discrediting the message by using the messenger's ``ethos''.
If we did this fifty years ago, we’d be having this discussion by snail mail.
Email was invented gratis by government and university employees who were largely paid by the public. Email worked fantastically for decades before the private sector monetized it with spam and CTAs to drive more interactions.
No, we might be having this discussion on mars instead of iPhones.
None of our elites care about: a) 99% of us living a meaningful life b) technologically moving humanity forward (supports bullet a)
Install elites that care about those and then you can use any measure you want, any system you want, etc. Instead we’ve replaced god with money. Only an upgrade for the 1%.
And so what if we did, if it meant Americans were better off economically?
I can tell you I am no happier now that I have email than I was back in the snail mail days. In fact, if anything it's a negative.
And so what if we did, if it meant Americans were better off economically?
Tech is the problem. The internet is global (or perhaps two or three regions), and winner takes all - so global value creation is being experienced everywhere, but being monetised in the US stock market.
Take tech out of the equation and the US is pretty much on par with EU, and China and India are just burning the coal for everyone else.
Tech is not a 'problem'. It has replaced Finance in the pecking order of power relationships. Since US controls it , it can exert control everywhere where its tech goes. China shielded itself from it early on.
> Tech [...] has replaced Finance in the pecking order of power relationships
Not at all obvious to me. Is there any particular measurable thing you're referring to, or is this just your personal feeling?
Follow the money. Which companies are better at vacuuming money from all over the world into their countries of origin and exporting the rules, norms and regulations that everyone else -including domestic competition - has to play by. Is HSBC/JP Morgan more effective at this than Google/Apple?
As far as I see, tech has destroyed the “legacy media” almost completely. Only the older generation pays any attention to it: all the young people get their news from TikTok and podcasts; even the older generation has gotten brain rot from falling into Facebook/Youtube attention algorithm hell. And that is just one part of it.
Look all around you and tech is everywhere, from apps to hail cabs to get groceries. Our lives are now so fully immersed and our decisions dictated by tech companies its fucking insane. That is a lot of power.
Finance people used to run the world economies, but nowadays finance and banks are heavily dependent on the tech ecosystem to function. Tech can even do finance without much capital (hence fintech) but not vice versa. That's why tech companies can command huge margins from finance institutions
> Tech is the problem. The internet is global (or perhaps two or three regions), and winner takes all - so global value creation is being experienced everywhere, but being monetised in the US stock market.
I don't really understand what you mean. While their reach is global, it's largely American companies that are creating the tech value, no?
They're creating "value" the same way the British Empire did for China around 1800. It's almost 1:1 the same dynamic. Bad decision-making of individuals is exploited to make them act against the best interests of their country and ultimately themselves, causing money to flow outwards in exchange for virtually nothing, which is then used to import things of actual value from the hapless victims. A modern twist on this is also using that money to buy up anything of value in the victim country and renting it back to its citizens, taking the exploitation to a whole other level.
China was wise to this trick already, which is why they've shielded themselves from the very beginning. Most countries haven't learned the lesson yet, but slowly the EU is waking up as well and pushing back.
This argument falls apart when it comes to explaining the $1.4Trn market which is just IT/tech services, the providers of most of which are offshore even when the tech developed is American. By your logic the massive IT Services/Consulting industry that is driving India's economy is actually bad for the country and that it should go back to being a cluster of low-tech poor third-world villages.
Please do explain how any of that follows from what I said. It's perfectly fine to export a limited resource like labor as long as you're trading for something of equal value.
Besides, you think India is doing great? China - now boasting an economy more than twice that of India's - absolutely lapped them despite India having a head-start in the 1950s. So if I was to respond to your bad-faith argument, that response would be that India should've adopted the Chinese model, not go back to "being a cluster of low-tech poor third-world villages". But all this is only weakly related to the point I was making with many other factors at play, so I don't even want to put that forward as a rebuke. We're completely off the rails here.
Do you not know that the Chinese model came at a massive cost of human rights abuses, and that it was only possible in a well-endowed and homogeneous society like China?
India has more ethnic, cultural and societal diversity within itself than the entirety of Europe, full with as much sectionalism and conflicts as one can imagine. It has only managed to remain a single nation with a lot, a LOT of compromises. Study deeper into the dynamics and you'll find the notion of "why don't they just emulate China?" to be as ridiculous as it gets.
P.S. I'm sorry for that unnecessary last sentence in my previous comment that (understandably) gave you the image that I'm being bad-faith or abrasive.
By this logic, US should wisen up and go protectionist/isolationist against China (ban TikTok, tariffs on cheap products to make them on par with US goods with better environmental and labor regulations) and EU (no more subsidizing their GDP by defending global trade).
No it doesn't follow. I have absolutely no clue where you're getting that from.
The point was that exporting low-margin high-labor goods and importing high-margin low-labor goods with addictive properties and possibly even negative value is a bad deal for your economy. Especially if the latter could be trivially provided domestically, but isn't due to existing network effects, or shouldn't exist at all (in the case of addictive substances).
You're arguing against the import of very low margin labor-intensive physical goods. How did you get there? I have no idea.
> You're arguing against the import of very low margin labor-intensive physical goods
No. I am arguing against the import of low margin labor-intensive physical using forced labor and resulting in actual harms
1. Actually harmful products being let in ([1, 2])
2. Decimation of local labor through unfair practices [3]
3. Actual slavery (forced labor) [4]
[1] https://www.businessinsider.com/temu-children-clothes-contai...
[2] https://www.lemonde.fr/en/international/article/2024/08/14/s...
[3] https://itif.org/publications/2022/11/21/how-to-mitigate-the...
[4] https://www.hrw.org/news/2024/02/01/china-carmakers-implicat...
Excellent analysis, would absolutely read more. Have you any more juice along these lines? Yourself, or others. Thanks.
If you go to a poor country, you'll find poor/slave workers and a few rich elites. The workers will slave for something like $10/day for the benefit of the rich boss. The rich boss will then collect the profit and go buy an LV bag for $10,000. Essentially worth 3 years of slave labor. Ironically, for most of the part, made by the same slave labor. The transfer of real value is complete.
But, uusshh, don't disturb the free market. That is until you start making high tech and quality vehicles and then we need to invent new words for such a free market.
If excel makes billions in Asia, and provides more value than it takes (otherwise why bother buying it?) who is benefitting more of it?
The companies it empowers or Microsoft's (global at the end of the day) shareholders?
Both are being empowered. Check out the concepts of "consumer surplus" and "producer surplus". If there's no surplus for either the producer or the consumer, typically there is just no transaction.
This is non-mainstream marxist-influenced economics we are talking about here, only certain activities are regarded as having "value" alongside with a zero-sum view of the economy.
>China and India are just burning the coal for everyone else.
The actual effect of this is far less than you think. While it's true there's some amount of "exporting" of emissions from rich countries to china/india, the effect is small. Consumption based emissions (ie. accounting for imports) for US is only 11% higher than territorial emissions. Meanwhile the difference for China is also 11% (in the opposite direction, of course).
The US has the highest disposable income per capital out of the whole world:
https://en.m.wikipedia.org/wiki/Disposable_household_and_per...
For all the workers are living paycheck to paycheck, they are sitting on a gigantic monetizable pile of money.
Consider this: the most popular languages in YouTube videos are English and Spanish. And did you ever notice how most videos, when they talk about units, talk about Dollars, Miles, Inches, Pounds and Degrees Fahrenheit? That is why...
To be a wealthy YouTuber seems to mean catering to people in North America (the US specifically).
Disposable income is the money people have after taxes.
You can have 10000 dollars of monthly disposable income and be well above the global average. You can have 9999 dollar rent with only a single dollar left. A single basic peanut butter and jelly sandwich could cost 100 dollars. Your disposable income is still massively above the average. Your discretionary income would be very low, though.
> English and Spanish
Part of the causality is the other way around: The largest language communities attract the most monetization. Europe being compartmented into 24+ languages is one reason that it’s harder to monetize.
See, that occurred to me, but the Units thing makes me think it is not as big as you would think.
Most of the English speaking world runs partly or fully on Metric.
...and there are many Australian YouTubers who talk about prices in US Dollars.
Once you notice this, it is hard to ignore the per capita disposable income argument. The disparity is wild when you run the numbers.
I don’t know. For example, I see a lot of US citizens complaining that the price of the Apple Vision Pro is ridiculous and unaffordable for what it is, or similar about the Mac memory and storage upgrade pricing. Or even for streaming subscription prices. If you were right, those prices shouldn’t be a big deal.
As for the currency unit, everyone knows what a USD is worth, much less than AUD or CAD or GBP or whatever. The reasons to use USD are the same as for language choice.
You jumped the shark on the Apple pricing argument. People will always complain about prices no matter how rich they are. That is a character trait for many.
I am amenable to your second talking point. I still think my perspective is a useful model to consider. Not "right" in any absolute sense.
I think it was in the book "Cypherpunks" (the one with Julian Assange, Jacob Appelbaum, Andy Müller-Maguhn and Jérémie Zimmermann) where one of them said something about the last few decades with the move to total dependence on digital technologies in so many ways, and it being the largest transfer of power in the history of the species.
If someone has the exact quote, I'd welcome it...
Anyway, the idea stuck with me. Anyone who wants to reject the point will have an easy time as it's such a broad claim, but I think it's worthy of reflecting on, and perilous to ignore.
There's a lot of ink splattered about technology these days, of course, but it's still rare enough that the larger picture of what's going on historically in terms of power structures is seriously reflected on.
all industries today are 'tech'. It's silly to continue this 1970s classification of everything.
Google should be reclassified under the equivalent of Dewey Decimal system publishers and magazine printers.
Netflix is a movie producer.
Adobe is an art supplies producer
Few companies today: apple, microsoft, etc qualify as tech.
Can you expand on this? What do you mean by "monetized in the US stock market"?
I think the parent poster means that tech companies such as Apple, Nvidia and others are traded in US stock exchanges..
I second that. In addition, most of those companies use a portion of their revenue to buy back their shares, pushing their price up. So, the value created worldwide ends up growing the US stock market.
Ths stock market is not considered in GDP. So by that measure it does not directly impact "economic growth." I can see an indirect relation that says that US investors (primarily through pensions and 401Ks) are the primary benefactors of a growing US stock market which then translates to more investment and opportunity of US citizens, but that is a pretty long trail to account for our economic path right now.
And then even more specifically - at least in terms of local problems - that pushes up the value of compensation for a lot of people in the SF Bay Area which inflates the cost of land there.
Staying out of whether or not the concentration is a problem at the national/international level, is there any realistic alternative short of massive protectionism a la China to force home-grown tech companies in other parts of the world?
The US has a massive advantage of being the largest economy, having a vast single market, issuing the world's reserve currency, and having unique hubs like the Bay Area attracting the best and brightest. It would be hard to replicate its success elsewhere without having some of the above prerequisites.
>being the largest economy, having a vast single market
America is NOT the largest market the EU is MUCH BIGGER. And it is not "America" that commercialises technology, but a small portion of California called The Valley.
According to this the US GDP is 1.5 times bigger than the entire EU:
https://statisticstimes.com/economy/united-states-vs-eu-econ...
I'm not GP, but they probably meant "realized" (not "monetized")
I guess I still don't understand though. Is the claim that tech innovation in the rest of the world is being turned into money in the US only? If so, why is that happening?
The claim here is that the tech innovation is occurring in the US. It adds value globally, but most of the profits from that value are being realized in the US b/c the innovation is by US companies.
There’s no natural law that says technical innovation must occur in NA, but due to contingent historical conditions, it is occurring here. Thus, the gains are being realized in the US stock market b/c it’s the one capitalizing the winners.
>It adds value globally, but most of the profits from that value are being realized in the US
this is contradictory. profits are added value. if value is added globally, there are extra profits (likely as cost savings by other industries adopting tech)
I see, thank-you for clarifying.
US cultural dominance for one thing, then success begets success - lots of VC money in the US because the US is rich which gets invested which returns even more and makes it richer.
US businesses more likely to work with US suppliers, US customers more likely to buy from US businesses, then those dominant domestic positions can be used to expand globally far easier than say a Spanish firm can expand into the US.
They’re generalising to say the world uses Apple, Google, Microsoft, Zoom, Cisco, Tesla, and so on… US tech stocks. We use them and they gain revenue and profit.
Of course there are many successful tech co’s outside the US but (and I haven’t looked) I imagine the US tech stocks must overshadow every other countries tech sector.
From a stock market perspective, if you look at a graph of Vanguard FTSE All World ex US ETF (ticker VEU), it looks like normal growth, but looks vastly different from say Vanguard Total Stock market (ticket VTI) which shows phenomenal growth. This is because VTI includes US tech stocks and VEU doesn't. Take out the tech stocks and maybe VTI would look like VEU.
To be clear VTI is only US stocks and VEU is everything else. It is confusing because "Vanguard Total Stock Market" contains only United States equities.
>The internet is global (or perhaps two or three regions), and winner takes all - so global value creation is being experienced everywhere, but being monetised in the US stock market.
This argument could be made for many industries. E.g. Boeing and Airbus together control almost 100% of the global passenger jet market. "Passenger jet value creation is being experienced everywhere, but being monetized in the US and EU stock market."
If you remove non-industrial and financial activity from US GDP, the economic picture is bleak. US and G7 have been steadily deindustrializing while BRICS have been doing the opposite.
US GDP is misleading in the sense that it increasingly includes a large portion of economic activity that isn't actually producing tangible wealth.
That’s not how a global economy works (comparative advantage etc).
An analogy would be that if you remove employment activity from my household finances then our economic picture is bleak.
Comparative advantage only works without trade barriers, and when the USA has something people want to import cheaper than elsewhere. The USA doesn’t have competitive exports. The USA is the largest net importer. By an order of magnitude. The USA is deeply in debt in both nominal financial terms and in real trade terms.
What's the USA's comparative advantage? Nukes and dollars. Demand for dollars and rent seeking via the post WWII global financial system. But G7 is no longer the only game in town. They have become the consumers while the rest of the world has become the producers.
Moreover, the leadership in China is fully aware of the macroeconomic situation and USA leadership doesn’t even appear to know how tariffs work.
You have just described the US top comparative advantage. There is no economy in the world that allows you to create a company, open a bank account and start trading. The UK come close but doesn't completely match the US.
The US is the global engine of the world because it has accepted to be very negative on NIIP. (https://en.wikipedia.org/wiki/Net_international_investment_p...) China or the BRICS or Russia do not offer an alternative and not because of lack of technical capabilities; they just don't want to do it.
China can replace the US dollar "hegemony" in a few years. They keyword is can because they don't want to do it.
It seems to me that NIIP is very related to high US stock prices. Everyone, including Americans, wants to invest in the US. Americans own American assets, and so do foreigners, but Americans don't want to buy foreign assets. Hence the high prices of American stocks, and the NIIP thing.
>The USA doesn’t have competitive exports.
The US exports almost as much as China: https://www.cia.gov/the-world-factbook/field/exports/country...
And the US exports from China and tens of other countries through corporations
But as an average European I realistically have all I need and most of my needs are either food/commodities or non-industrial services.
But is it sustainable?
If cultured meat and EVs take off like they're expected to, it won't just be the US/EU having to retool their economies.
What's more sustainable than buying little to nothing but food and petrol once a week.
>Take tech out of the equation and the US is pretty much on par with EU
Disagree. It's not just the nature of the technology itself but the whole ecosystem -- including VC and education -- in Sillicon Valley that develops cutting edge computer tech, plus generally looser business regulation in the US and a culture of greater optimism nationally, especially relative to EU.
Certainly having a unified market (not just in regulation, government, and currency but also linguistically) has helped too especially given the network/winner-take-all effects of tech you mention. Yes the nature of technology is part of it. But it's not everything. It's a whole gestalt.
I mean, consider where we are right now, who set it up, who hangs out there, etc.
The article discusses this and disagrees. Even in the same sectors and with the top 7 companies removed, sectors in the US have higher P/E ratios due to higher projected growth rates.
The article quotes Draghi as saying “If we exclude the tech sector, EU productivity growth over the past 20 years would be broadly at par with the US,” so I think it agrees.
Oh! My edit didn't go through. I had tried to change "the article" to "the article at https://on.ft.com/41jw5ZY".
How is that a "problem"? What is preventing other countries from building tech winners? The USA isn't launching missiles to destroy the next foreign Nvidia or Meta competitor.
You could just as well ask what is preventing every other state in the US from building tech winners.
What is preventing every other state in the US from building tech winners? The majority of large tech companies are headquartered in CA and there are a few others in WA, TX, NY, and ID. There used to be quite a few in MA and even FL was in the running for a while. What caused them to fall behind within a few decades, while other states never really got started? Some are hopelessly handicapped by horrible geography or low population density but others like CT or IL would appear to have all the necessary ingredients.
CT and IL are both high tax liability states with cold weather and not many attractive geographic features.
That doesn't really explain anything. CA is also a high tax state. CT has similar climate and geography to MA, which was once a technology leader but later fell behind. There must be other, more important differentiating factors.
California has a Mediterranean climate with world class outdoor features and the freshest foods. They also ban all non competes, and have a solid history of pumping out valuable tech companies. They can afford to have taxes others can’t.
Connecticut also lacks a big city with a big airport.
Nothing, but having the world’s largest free trade and migrations zone means that it’s not economically efficient. Centralising industries produces large benefits in efficiency and hiring. We only don’t see it as much on a global scale because of trade and migration restrictions.
I don't know about missiles, but there's no lack of sanctions.
Which sanctions?
China is prevented from buying advanced EUV lithography, advanced Nvidia chips and as of monday RAM memories made with American tech.
And what's preventing China from building their own EUV lithography? They can do whatever they want internally regardless of US sanctions. It seems like they're not trying very hard, or are wasting resources on unproductive initiatives.
There's only a single company ASML that does, so this is a global technological challenge.
Sure, I'm aware of that but so what? US sanctions can't prevent China from building their own EUV lithography independent of ASML. Why are they still so backwards?
Not sure what are you trying to get to.
Of course they are also investing in their lithography equipment, but still, it's an insanely complex set of tools and know-how required that's backed by countless patents and well kept secrets.
Without being glib... It is hard. And they will be able to do so relatively soon because though it is hard there is now an immense need to do so.
Only because China is threatening to take over the country producing those chips and seizing territory in the South China Sea in violation of international law.
If China played nice with America.. there's no problem.
I don't think it's a problem. What's preventing other countries from building something similar to the US tech companies is a combination of regulation and culture.
Is that so? What's the best American drone company again? Consumer ones, not the MQ-9 Reaper type.
Toys? Not a priority. RCAT is the best American drone company. I won't disagree communists can produce efficiently, but that comes with a culture that guns down their own like the protesters in Tiananmen square.
>China and India are just burning the coal for everyone else.
India has 19 nuclear reactors it is planning to complete by 2030. 7 under construction now to be completed by 2026.
..which is still a ridiculously smaller number than what it should be aiming for.
There are 65 nuclear reactors planned to be built by 2030 across the world. One third of that by one country isn’t a small number.
Most of the rest are in China so the statement I was responding to is doubly meaningless.
Just to throw in another opinion, one that I think will be guaranteed to annoy the majority of commenters so far: This piece argues that the US isn't doing that well economically in absolute or historical terms, but only looks like that way because the popular point of comparison, Europe, is doing even worse:
https://thenextrecession.wordpress.com/2024/12/04/us-economy...
Isn't that the general understanding? As I understand it, everyone was expecting the world to fall into a recession on the heels of the COVID situation and everything that came with that. Which much of the rest of the world effectively has (or at least close to it), as expected. The surprise is that the US is still doing okay.
But Japan is also doing not great, right?
I've never known more homeless people before in my life in America, seems like its only the rich getting richer and the poor getting poorer and less healthy.
>seems like its only the rich getting richer and the poor getting poorer and less healthy.
At least in the past decade, the opposite has been happening.
>[...] Even after taxes and transfers, the average real income of households like his grew by 110% from 1990 to 2019, according to the Congressional Budget Office (CBO). But most of that growth took place early in the time period: in 2019 he was probably doing worse than his equivalent in 2007, before the global financial crisis.
>By contrast incomes in the lowest 20% of households, in which the fast-food worker resides, surged in the tight labour market of the late-2010s. By 2019 she was enjoying after-tax-and-transfer household income 25% higher than those like her in 2007, in part thanks to “Obamacare”. Even over the full period since 1990, the bottom quintile’s after-tax-and-transfer income growth was 77%, the same as for the highest quintile—thus, excluding the highest-earning 1% from the top 20% would show the poor enjoying faster income growth than the upper-middle-class. [...]
https://www.economist.com/special-report/2024/10/14/is-highe...
Percentages are not enough to get a full picture. If I make 100k a year, the person making 50k will need to see a 2x increase in their percentage gain to see the same amount gained in currency. I would take a small bump of a large number over a large bump of a small number any day. And the reality is that the disparity is much higher when you’re talking about the bottom 20 and top 20, and just gets exponentially worse from there.
Here’s a nice visual to put that into context (spoiler alert, while the bottom has seen gains, they’re laughable in the overall context and are not rising at the rate the top is seeing)
https://www.visualcapitalist.com/wealth-distribution-in-amer...
The homeless is just more visible than it used to be.
https://www.statista.com/statistics/555795/estimated-number-...
the chart shows an absolute surge? Are you we looking at the same chart? also, if we are thinking from first principles here... there's no way to actually count that... Maybe you can give a sample area, and go around counting that specific area? and just do that for every major city? still pretty shaky data at best... so in this case i think anecdotal evidence is better evidence. There is obviously WAY, WAY, WAY more homeless, and they are WAY, WAY, WAY more cracked out.
From my perspective all that chart shows is that it’s been pervasive issue for at least the last 2 decades. I don’t think that homelessness is any more or less visible now than it has been, at least in my lifetime.
It's certainly more visible in west coast cities where the homeless are moving to get services(and less winter).
from your source above:
>New Hampshire saw the highest increase in the number of homeless people.
Makes me wonder about the ratio to empty hotel rooms and the homelessness cost to society (opportunity loss, reinstatement, relocation, maintenance, health)
That really depends where you go. Many places you will see zero homeless. Other places you can't throw a dirty syringe without hitting a homeless person.
Unnecessary demonization of the unhoused as only drug addicts. Have some empathy.
Many places simply ship their unhoused elsewhere (I'm Canadian and I remember reading about Calgary paying for one-way bus tickets to Vancouver). In other places, the winters are literally unsurvivable outside.
At least where I live:
https://gazette.com/opinion/editorials/editorial-substance-a...
> Boulder County’s July 2024 Point in Time survey found nearly 40% of those interviewed said they abused “substances.” Another 30% said alcohol was their drug of choice.
And I wonder what percent of people didn't want to admit to abusing substances. And what percent of people viewed themselves as "using" substances, and not "abusing" them?
It's still unnecessary. You are lucky if you have not experienced addiction.
Besides, I think it's stretching to just add the 40% alcohol substance abusers to the 30% and say "well that's 70% -- a majority". My father, as an example, is a high-functioning alcoholic. He's held C-Suite positions for the last 30 years of his life all while going through vodka like it was going out of style.
But that's all to say it's still unnecessary. These are people and they are struggling with substance abuse. Like I said, have some empathy.
I agree they're struggling with addiction. That doesn't change the fact that they're addicted.
Unnecessary demonization of substance-affectionate and social-safety-rebellious. Have some empathy
And I know zero homeless people. Anecdotal observations are meaningless with respect to a multi-trillion dollar economy with hundreds of millions of participants.
What are you talking about?
Anecdotal evidence alone is worthless, but paired with statistical evidence it isn't. And we have that evidence.
Also: you "not knowing" a homeless person is itself anecdotal and not only that: it is actually worse than the evidence you attacked.
The critiqued evidence is about how many of X a person sees. That isn't perfect, as it depends and how observant that person is and how much they go out (and where). Your counter of "not knowing" is by magnitudes worse, since on top of the previous flaws your number now also depends on how sociable you are towards homeless people (given the sentiment displayed I guess: not at all).
So not only is your criticism wrong, you are actually at fault of the very method you critizised — only to a much higher degree.
> What are you talking about?
I'm talking about how an individual experience is irrelevant when talking about the entire US economy.
> Anecdotal evidence alone is worthless, but paired with statistical evidence it isn't. And we have that evidence.
I guess? But only because you've paired something worthless with something that isn't and then focused only on the portion that isn't worthless.
> Also: you "not knowing" a homeless person is itself anecdotal and not only that: it is actually worse than the evidence you attacked.
Whoosh.
> The critiqued evidence is about how many of X a person sees. That isn't perfect, as it depends and how observant that person is and how much they go out (and where). Your counter of "not knowing" is by magnitudes worse, since on top of the previous flaws your number now also depends on how sociable you are towards homeless people (given the sentiment displayed I guess: not at all).
Again, whoosh.
> So not only is your criticism wrong, you are actually at fault of the very method you critizised — only to a much higher degree.
Whoosh!
Would have been considerably more favorable for you not to respond, you didn't add any new thought here.
Note that on this site we like to write comments that other people can take something away from, ideally something of substance. So if you feel the emotions taking over consider asking yourself if the comment is adding something that is worth to read for people who aren't the person you're arguing against. If the answer is "No", not posting is the better option.
Think about considering online discussions on this site not as a fight, but as a shared search for the truth. As such I am happy if you can prove me wrong, because I can learn something new then. But for that you have to go beyond "whooshing" arguments away, it doesn't work in a shared search of truth and it certainly doesn't work in a debate.
> Would have been considerably more favorable for you not to respond, you didn't add any new thought here.
You could have applied this to your original comment IMO
> Note that on this site we like to write comments that other people can take something away from, ideally something of substance. So if you feel the emotions taking over consider asking yourself if the comment is adding something that is worth to read for people who aren't the person you're arguing against. If the answer is "No", not posting is the better option.
See above
> Think about considering online discussions on this site not as a fight, but as a shared search for the truth. As such I am happy if you can prove me wrong, because I can learn something new then. But for that you have to go beyond "whooshing" arguments away, it doesn't work in a shared search of truth and it certainly doesn't work in a debate.
Following up your first unsolicited and completely misguided lecture with a second long-winded, condescending comment just validates that "proving you wrong" is a terrible waste of my time, which is the feeling I indicated with my previous comment and is another thing you completely failed to grasp.
> You could have applied this to your original comment IMO
You made a point about anecdotal evidence and introduced a new thought in your original comment. I responded with two lines of thought.
1. Questioning the value of anecdotal evidence doesn't work well when there is actual data on the subject of said evidence. And the statistics display a rise during the last years.
2. Questioning the value of anecdotal evidence by using worse anecdotal evidence is not a good strategy.
Thar was nothing against you (I don't know you, I just enjoy discussing truthfully). This was a disagreement on the topic of homelessness and your apparent questioning of it. So as a truthful response you could've either clarified your position and told me how I am wrong or admitted you got it wrong yourself. But you did neither of those things.
As you correctly recognized, my second comment ignored the child-like sentiment on display as well as I could and instead adressed that you didn't talk about either of the ideas at hand — the debate equivalent of sticking your fingers into your ears and going "La-La-La". What you failed to recognize is that this second comment wasn't really written for you, but for the bystanders.
The waste of time aspect is entirely on you, as you could have told me how I am wrong and give us your take on US homelessness statistics or explained how you not knowing a single homeless person is actually better evidence than the other person observing more over the past years, or whatnot. Or you could have simply said: "My bad, I took a wrong turn there, but I still believe homelessness didn't rise because [SOURCE]".
Instead you decided to make this meta and I explained why that kind of meta doesn't add value here, nothing more. You took us here.
Also: If I were you, I would probably not have seen this as a waste of time, every debate exchange that puts you into a bad spot is a valuable lesson. But that would require to admit to yourself why you went meta.
These articles also gloss over the US market is 400m English speakers with one set of legislation, more or less. Europe is 20+ languages and 20+ sets of legislation. That’s a colossal advantage. And any clicks and mortar business gets the benefit of absurdly cheap shipping costs compared to Europe.
There are counterexamples in Asia though like South Korea, Taiwan etc. that have massively outperformed Europe over recent decades despite not having those advantages.
Having said that, not sure the SK model is something to emulate given the social problems it seems to have caused
In growth, yes but GDP per capita in South Korea is still 3/4s of France.
That’s an important point, people always compare growth as if growing from the bottom is as hard as growing from (close to) the top. People love to do this with India and china.
That's true - the counter-counterexample is Singapore where GDP/capita shot straight past western European countries and just kept going. They do have the significant advantage of being English speaking though
Singapore also has the advantage of being a significant financial hub. But that only works when being small, it doesn’t scale to something like the EU.
Business law is a state issue in the U.S. The reason that the U.S. has one set of legislation (more or less) is that 50 states (well, 49) have voluntarily adopted the Uniform Commercial Code. There is absolutely nothing stopping Europe from doing the same or similar except lack of political will.
Which state hasn't? I thought all states have adopted it with their own variations / changes.
Wikipedia [0] says Louisiana hasn't adopted all of the UCC articles.
Louisiana. I guess it's difficult to reconcile parts of it with the Code Napoleon. All other states have English common law as the basis of their legal systems.
Turns out political will is a hell of a lot easier in a single country like the US, than 27 like the EU. Especially when the US has fucntionally one language, and the EU has who-knows how many.
We also have the “dormant commerce clause” as a key protection. Europe doesn’t have anything like that AFAIK
It’s mentioned in the article and the referenced document from Mario Draghi a few months ago on the plan for EU reforms.
India alone has 20+ languages within itself. It manages perfectly well as a unified economic entity.
I like 'click and mortar business'. Much better then 'bits and atoms'.
This is false. The EU I more harmonised that the US in terms l trade rules.
When younger, i often thought about moving to the US because it offered so many amazing and creative places to work. Most of these places seem to have gone completely or are in a somewhat unhealthy state (hollywood, video games). Boring tech companies took over and often times they stared with just a website - for gods sake- this is so lame! I‘m so happy i didnt go back then- I think it would have depressed me to experience this first hand but who knows.
What do you mean by "unhealthy state"?
Hollywood (the location) has always been skeazy/decrepit location (at least, after the 60s). Hollywood (the idea) is still going fine...other places have just developed their own media output too. One thing getting stronger doesn't mean the other is now sick, unless your only mental model is "defeatism". If anything, the US not being the only media producer in the world has made it easier for smaller/more indie/more culturally significant media to thrive in the US again.
As to Video Games, I don't even know how to tackle that. The US and Japan still dominate the video game market and have since the 80s (with the US solely dominating it before). And the American-led Independent/art games scene has been in it's golden age for about a decade now.
It's impossible to defend/explain something without a comparison point; but just your vague abstract comments are falsifiable on their face.
I took "unhealthy state" to mean a toxic work culture, with long hours and low pay. If you work as a low level actor/writer, you have to audition all the time and are about to get replaced by AI.
That’s because there are many many more people who want to be actors/writers than there is demand for those jobs.
This is the market telling you to pick a different career.
I think you are debating whereas OP was just sharing a memory.
I'm not debating, I'm explaining the inaccuracies of their perspective.
OP was just giving their opinions and telling their memories ("when i was younger")
People can remember incorrectly or wrongly, and things can change. You don't have to explain the inaccuracies all the time. Sometimes its okay to tell a story or a moment from memory and be wrong or incorrect.
It would be like correcting your grandfather who told stories of walking up hill both ways in 4ft of snow. "But grampa, this area has _never_ received 4ft of snow." That's not the point, per se.
Or at least my $0.02.
They were telling the story in a retrospective manner as a reflection of today's issues. They said the video games and movie industries were "sickly" today. I addressed how that is wrong; not their memories.
You're either creating some non-existent argument out of bad faith, or have no idea what you're saying.
I said „unhealthy“- not sickly. You can be 100% fit and have an unhealthy lifestyle at the same time. The constant race to market dominance can easily divert you from producing creativ output but as a creative you always have to strike a balance. Working as an engineer at google or facebook, paypal, airbnb just seems incredibly boring to me. This is probably my core point.
> I said „unhealthy“- not sickly.
Sickly (being in ill-health) and unhealthy are essentially synonymous in this case. But sure, replace one for the other in your head, if you prefer. There's no point being pedantic about it.
> You can be 100% fit and have an unhealthy lifestyle at the same time.
Then it's not an unhealthy lifestyle, it's just one you find unappealing.
> The constant race to market dominance can easily divert you from producing creativ output but as a creative you always have to strike a balance.
And yet, I gave you two very obvious counter-examples of how the exact opposite is happening, specifically for American culture/life.
> Working as an engineer at google or facebook, paypal, airbnb just seems incredibly boring to me. This is probably my core point.
Cool, no one is asking or begging of you to move to the US. I don't live there nor care. However, the claims you made around that are still fundamentally inaccurate/warped.
To simplify the flaw in your logic, it is like if I said "I don't want to live in Germany because it has a larger percentage of Nazis than ever in history" and you responded "well no, that's obviously not true" and my response was then "Nazis are boring, that's my core point".
I think you are being unhealthily combative in this whole exchange. Not every person wants to have every utterance fact checked and checked for logic errors.
OP is trying to make a subjective point with his terminology. The words may be synonymous but words also carry subtext and other associations. They don't want counter examples. They don't want anyone to ask or beg them to move to the US. Who cares if the claims they made were inaccurate or warped? They are not teaching a class or writing a book but speaking off the cuff about memories. Logic is not the most important thing in the world, sometimes compassion and just listening to a story being told without pointing out every oddity is just how society works.
Not interested in disussing the inaccuracies of your perception of my supposedly inaccurate and entirely subjective perspective. Just want to point out i said „nazis are boring“ right a way.
The US still is absolutely an amazing place to do creative work. Most of the fun innovative stuff is done in small companies, startups, and academia. Big organizations find it hard to not stifle creativity with bureaucracy- so they’ve taken to just buying the creative work once it’s out there.
Same here, I've even lived in the States for a while. For me, Europe is the place to be. While we might not have as many opportunities as our counterparts in the States, life is generally pretty great over here for the average Joe. They have more money, but we have more free time for ourselves. Since life is short, time is more valuable. At least for me.
The US is still definitely one of the top places for creative work. China might be coming up fast on that due to the sheer vertical manufacturing capability they possess.
I'm thinking a lot lately about which country would be best for my future, and somehow US is never there. Maybe for me without family yes, but otherwise I see it like there, I would be one illness away from bankrupcy, one crazy kid with a gun away from family tragedy, one <what if> away from <unsolvable problems>. Sure, being in top 10% is cool, but will my kids be also so lucky? And the middle class in the US already thinks they are struggling (hence the last vote) - as someone said numbers can't feed you. But, hey, I'm maybe too old ;)
The thing about the US is that it's very unevenly distributed. So it depends on what you'd be doing and how much money you'd be making / already have.
If you have a professional-class job the US is often the best place in the world to be for illness. You'll have a fairly high salary (especially comparing globally) and an insurance plan with an out of pocket max that is probably 10-15k per year (or much less, for most tech employers). If REALLY concerned with illness, filter for places with good supplemental long-term disability insurance and live in a state that has some of their own like CA.
The US spends A LOT on healthcare per-capita. So your access to doctors / specialists / hospitals in major US metros is generally excellent and rarely has the sort of waits that you see in a lot of countries that spend less on healthcare.
The problem with US healthcare is that it's usually either (a) fucking great for you or (b) fucking terrible for you. Very non-uniform.
> The thing about the US is that it's very unevenly distributed. So it depends on what you'd be doing and how much money you'd be making / already have.
The Veil of Ignorance, anyone? Even invented by an American.
People here need to consider the state of a society without spending 80% of the bytes on the what-if of being a 135+ IQ individual with a passion that coincides with the work tasks of amazingly successful megacorporations based on the West Coast. At least when we’re supposed to be talking in the abstract.
>The Veil of Ignorance, anyone? Even invented by an American.
As long as we're talking about the veil of ignorance, let's also consider the "veil of birth country ignorance". What if you were born in Africa?
From that perspective, one of the most altruistic things a developed country can do, arguably, is increase its rate of immigration from developing countries.
Of course, if you do that, your average citizen gets poorer ;-)
That’s not exactly the only condition. You also have to not frick with other countries. Like e.g. France’s Neocolonialism.
There are other examples.
The tipping point is much closer to the median than that.
A lot of US cities and burbs like Dallas, Phoenix, Atlanta, are full of people who aren't super-genius-tech-bro-200k+ but aren't one illness away from catastrophe. Working boring-ass office jobs with decent - not spectacular, but with solid pros-and-cons even compared to Canada next door - benefits.
I live in flyover country and people like their Healthcare here just fine and you don't need 6fig salary
I only hear that from people on Medicare and Medicaid, and certain areas if they’re covered by the VA. Maybe ACA plans if they’re low income.
I definitely don’t hear that from the middle. I definitely don’t hear that from travel nurses or truck drivers. No one has ever said that about COBRA.
And this isn’t getting into average wait times for specialist appointments (though other countries deal with this too.)
This is the kind of comment written by someone who only knows a country from its headlines. The US, as a resident, skews wildly from the popular narrative in many ways much of the time -- regardless who is in charge.
> The US, as a resident, skews wildly from the popular narrative in many ways much of the time
Much of the time, thats it, you named it. To me the worst case scenario (I work in IT, so I often think in the worst case scenarios) in few relatively common situations, _seems_ to be much worse in the US.
Common, like being ill, visiting hospital, going to school, being stopped by the police.... (headlines again).
Anywhere in the world, you might be "one <what if> away from <unsolvable problems>." That's not a US-specific thing. The US is better at some things and worse at others. Obviously we all make these choices on different merits, but IMO don't live in fear.
Being in the group of people who has a choice of countries to live in _and_ being in the top 10% in the US puts you in the top 0.1 to 1% globally. Enjoy it while you can!
> And the middle class in the US already thinks they are struggling
Middle class financial issues in the US are age related. College debt, cost of raising children, buying a home combined with low entry wages put young people in a hole it takes 10-30 years to crawl out of. But when they do they quickly accumulate wealth. There are also a lot of people who choose to not save. That is a choice you don't have to make.
Not to mention that A LOT of millenials are about to inherit a ton of money from the Baby Boomers. The Boomers are just lasting longer because of advances in health care, all of whom are on Medicare which is government funded health insurance. In fact, about 40% of Americans on are federal healthcare between Medicare and Medicaid.
I think GenX will mostly be the beneficiary of the inheritance boom.
How much of that wealth is tied up in home equity? Unless people want to move into their dead parents houses you have millions of millennials trying to sell their dead parents houses to each other, but no one can afford to buy them, and the values drop.
Either that or private equity firms buying all the nursing homes siphon off the wealth transfer as the boomers wither away.
> How much of that wealth is tied up in home equity?
Home equity is often the first real wealth American families accrue.
Most of the time, by the time a parent dies, the children all have homes already.
> private equity firms buying all the nursing homes siphon off the wealth transfer as the boomers wither away
The defense for this are living wills and trusts that transfer wealth from the elder and shift the burden to public insurance (Medicare). Most of the senior care world is grifting off of government money.
"hence the last vote".
You are implying that logic fits the results. It doesn't.
The American stock market is soaring ahead of its rivals.
Stock markets are just an indicator of how surplus value is distributed to shareholders, not a picture of actual economic health.
GDP (per capita) is not the same thing as the stock market, even if they're often roughly correlated.
Not a single word about shale oil and gas revolution, that started around 15 years ago? The US now has the one of the cheapest energy on earth, and probably the cheapest among the countries that matter. Pour all that cheap gas and oil onto an economy that was already a leader and you get lots of impressive growth.
That's the gist of it, especially since the "IT revoluion" (for lack of a better word) seems to have cooled off in the early 2010-ish, i.e. exactly when the shale revolution started doing its thing (and, no, I don't count the recent AI hype as being worthy of getting called as "revolutionary"). That shale revolution has also come with big opportunity costs reductions, because the US didn't have to geo-strategically care about the Middle East and the oil there all that much, at least not as much as to send real feet on the ground there, with all the associated costs.
With that said, there's also the danger of the US following on Britain's steps from the 1980s up until the 2000s, i.e. to rely on this shale/oil bonanza and not care about (internal) structural reforms that are in dire need of being enacted. At some point the shale money will not be there anymore (the shale gas will have run out, the world's car-fleet turns to electric en masse etc), and if the Americans don't carry out the necessary reforms sooner rather than later then that future "no more shale-gas money" moment will come at a very, very bad time for them. I said it's similar to Britain's situation because things started going downhill there as soon as the North Sea oil&gas money started thinning out.
They did bring up energy -- "The US may have been less affected by the war in Ukraine than Europe, owing to its abundant domestic energy supplies"
It's not brought up because this is not the source of the growth whatsoever. It has only served to keep our gasoline and methane costs low compared to the rest of the world. That's nice for people but does not create massive economic growth in the 21st century of the kind being discussed. That is all coming from the tech sector. If you want to talk energy to power the server farms, the growth in energy is happening with renewables which are and far cheaper than any fossil fuels.
> That's nice for people but does not create massive economic growth in the 21st century of the kind being discussed. That is all coming from the tech sector.
Do you have the stats that back that up?
Can't we consider the cost of energy as a general tax on the economy? If all economic output is N% cheaper in the US, we'd expect compounding effects.
The price of a kilowatt hour of electricity is not determined by the cheapest power plant operating when you buy it, but by the most expensive. You buy the marginal kilowatt. And solar+wind continues to be a relatively small fraction of the US energy market. The DoE did a report when Biden took office in 2021 and the progressive wave was in full swing:
https://www.energy.gov/fecm/articles/economic-and-national-s...
>Eliminating [fracking]... a ripple effect of severe consequences to the Nation's economy, environment, and geopolitical standing.
Making energy cheaper and the dollar stronger helps all businesses which depend on energy or imports, particularly manufacturing, and US manufacturing output currently exceeds the UK, France, Germany, Italy and Spain combined. And all over the thread you'll find people arguing over nominal GDP versus PPP, but what's not in doubt is that the balance of nominal GDP versus PPP is related to the strength of the dollar. Imports are vital to US industry — we thrive on buying less processed inputs from cheaper countries and producing high-value outputs. All of this is affected by the US oil and gas industry.
All industrial sectors requires energy, and the prices here in the EU are obscene compared to the USA.
Renewables are actually making it worse. We now have the "problem" that renewables cause spikes and saturation of the grid, and instead of causing low prices, the energy companies penalizes their customers. Claims it's due to renewables driving up grid maintenance costs because it was not built to handle the amount.
After all, energy produced _must_ be used or it will inevitably cause damage somewhere. For instance, you can't leave solar panels in the sun while they are not connected. If you don't use the energy, it will be turned into heat.
It's getting to the point where you actually are penalized for having rooftop solar. Most solar installations in the EU doesn't have a home battery, so either you have to give back surplus energy (electricity providers in some countries will actually charge you for this), or you can disconnect your solar if you overproduce but that will slowly damage your installation. Even if you don't plan to give back any energy, you still have to notify your provider that you have rooftop solar, if you don't it's a breach of contract, and if you do, they will charge you an extra maintenance cost.
It's funny because the government are pushing rooftop solar, but the energy providers are quietly telling their customers to fuck off with it.
But still even though the grid is absolutely full of cheap energy, and you should in theory pay very little, you still have to pay double or triple what those in the USA would ever pay.
Renewables are great, but also a shitshow because while we're building solar and wind installations, we're not building nearly enough grid storage.
During the peak of Brazil’s Military Rule and the Economic Miracle in the early 1970s, one of the General-Presidents, Emílio Médici, made a strikingly honest remark:
“The economy is thriving, but the people are not.”
I knew that if I clicked into this thread, I'd learn about how this was actually bad news.
Between the self-hating Americans and the smug Europeans, there were a lot of people who just had to voice their displeasure.
Krugman pointed out [1] that 10% of US GDP is in tech counties and Manhattan, with 4.4% of employment.
I wonder if productivity growth is mostly there too?
[1] https://bsky.app/profile/pkrugman.bsky.social/post/3lcii6zna...
It's also the distorted ability to rack up ungodly amounts of debt without facing the normal consequences of doing that. The US economy is booming, but it's borrowing from two decades from now to fuel the moment. When their debt gets unmanageable, the world's economy will enter a depression, IMO.
Maybe, but low interest rates have been over for two years and so far, so good.
Also, not exactly borrowing from the future (this is impossible without a time machine). More like borrowing from others based on expectations about future income.
Thomas Sowell says that equality of opportunity leads to inequality of outcome. And this is the main difference between America and the rest of the world. The articles cites innovation-growth v cost-cutting as sources of increased productivity, and this parallels this dichotomy.
People interested in equality of outcome and a level playing field have to compete on cost. There's a social stigma against sticking out and achieving more, lest you become unequal, and the governments are well aware of that.
Meanwhile, innovation literally desires to reward disproportionately he who comes up with the new product. The entire purpose of the American economic system is to produce inequality.
This, combined with America's relative freedom from prejudice, is an unstoppable juggernaut. It is absolutely insane how easy it is in the United States to be handed money with limited liability to go and do whatever you want with it. This is a true blessing, and we see it not just in venture capital, but in the plethora of small businesses, as well as the plethora of credit (for better or worse).
Yes, there are problems, but I think history will show that this model is ultimately more sustainable. While true that America's productivity growth has only really taken off over the last century or so, even before then, it represented a formidable economic player.
>This, combined with America's relative freedom from prejudice, is an unstoppable juggernaut. It is absolutely insane how easy it is in the United States to be handed money with limited liability to go and do whatever you want with it. This is a true blessing, and we see it not just in venture capital, but in the plethora of small businesses, as well as the plethora of credit (for better or worse).
I was with you until then. America was build on prejudice and inequality as much as any other country has been and suffers from it today. That translates to how the last half of that paragraph doesn't apply to a significant amount of American's who struggle to access the resources they need to survive let alone innovate and thrive..
As the child of non-white immigrants to this country... I simply disagree. We faced more discrimination in the country my parents left than we did here. My father was unable to be employed due to his skin color and social status in his native country, and became successful mid-level exec here in America, was given a mortgage, etc.
Capital is available for people here without reference to social standing.
Is it perfect? Of course not. I literally said that.
However, if you want capital and aren't whatever platonic ideal your country has decided you ought to be to access that, America is literally your best bet.
> That translates to how the last half of that paragraph doesn't apply to a significant amount of American's who struggle to access the resources they need to survive let alone innovate and thrive..
I'm not going to claim every american is able to thrive, because obviously that's not the case. But even the poor American is able to access credit, which is what my entire post was about. You are changing the goal posts a lot.
>We faced more discrimination in the country my parents left than we did here.
Correct.
In most of the non-immigrant parts of the world there is discrimination that pales in comparison to what is supposed to be there in America. Most native born Americans have no clue how good they have it, despite things being as bad as it is.
I was actually talking about class differences not race.
>Capital is available for people here without reference to social standing.
Social standing relative to color of skin sure, but not economic class.
You are coming from a place of economic privilege and are ignoring how many suffer to access things like capital, housing, healthcare and other needs based on their economic starting point.
The American view you can raise yourself from lower to middle class with hard work and effort is less true today than ever.
America was the number one economy while having state enforced segregation.
> the improvement was largely down to reconstruction efforts partly funded by the US via the Marshall Plan
Most of the improvement was in Germany, which received far less MP money than Britain and France.
Postwar prosperity correlates with the level of free markets. Germany embraced free markets up until 1970, Britain and France did not.
East Germany did better than its peers in the Soviet block, and West Germany did better than its peers outside of it.
People love to point at policy, because it's a thing we can control, but the most important factors are often cultural issues we both don't control, and don't entirely understand.
Saying Germany embraced the free market is not correct. Germany under Erhard had a social market economy (even during the "Wirtschaftswunder*, the economic miracle). While some free market principles were followed (price liberation, free trade) and it was certainly more market liberal than France at the time, it still came with substantial protection (universal healthcare, strong labor protections and unions, anti monopoly regulations etc.)
The situation back then was decidedly _not_ what the term "free market" (of the libertarian variety) would imply today.
Nobody claimed it was a 100% free market. But it was quite a bit more free than the other MP recipients. And the results showed.
Definitely, just wanted to make sure that no one who's passing by your comment thinks that post-war Germany had some gung ho modern definition style free market.
I assume you’re referring to West Germany? Can such comparisons even be drawn for only half of an otherwise largely occupied nation?
They served as bases to spread the American culture through music and cinema and later with the industry through the coal and steel community, to create a single and unified market
The US did not want to create competition, but to break monopolies and to create a unified market for its industrial complex
The remnants of that goal are visible today with Big Tech
My dad was part of the occupation of postwar Germany.
The bases were there to protect Germany against the Soviets.
I remember once on the autobahn around 1970, and a fighter came by hedgehopping at high speed. He was a few feet off the ground, and looked like just under Mach 1. The citizens didn't particularly like the noise and disruption, but they understood the need for the Air Force to train hard.
I also remember touring East Berlin (yes, East Berlin) in 1969. Going through Checkpoint Charlie and seeing the Wall is plenty convincing of the need for the US military being there.
France, on the other hand, didn't much care for the US military bases and wound up pushing them out.
BTW, the US Military was pretty thorough in making sure US personnel and military families behaved like guests in Germany, as they were invited guests. Ever since the Berlin Airlift, the US was friends with Germany.
The Americanization of Germany came later. I recall visiting a shopping mall in Germany in the 2000's, and you could not tell you were in Germany rather than in any suburb in America. Shopping malls did not exist there in 1970.
>BTW, the US Military was pretty thorough in making sure US personnel and military families behaved like guests in Germany, as they were invited guests. Ever since the Berlin Airlift, the US was friends with Germany.
All the more sad that the chief component of Japanese animosity towards Japan-stationed US forces are sexual crimes, particularly in Okinawa where the Marines especially don't seem to know how to keep their dicks in their pants. There have been at least two incidents just this year if I recall, and that's just of the ones we know.
I really can't blame the locals wanting Americans to get the fuck out, security be damned.
That is indeed sad. Such crimes against the locals should be severely punished.
I found out many years later that if I had committed a crime like shoplifting in Germany, my father would have been cashiered. The military took their guest status very seriously. An officer who could not control his family was not fit to be an officer.
Not saying that is good, but you really have to analyze something like that in terms of rates, not anecdotes. Everywhere you put people there are going to be incidents.
I don't blame locals for feeling however they feel. It's their country.
>anecdotes
Just so we're clear, I'm talking about cold hard data and the rate is "too many".
https://www.military.com/daily-news/2024/09/10/okinawa-gover...
https://theintercept.com/2021/10/03/okinawa-sexual-crimes-us...
https://www.theguardian.com/world/2014/feb/09/sexual-assault...
Hey! soapland and the banana-show are a great time!
Not at all surprised that despite your years of railing against socialism your dad was in the military. A true free market would provide for its own defense, not steal from taxpayers.
The US places its military worldwide out of its own interest, not to protect anyone. That's a very rose colored glasses interpretation of the past and the present you have there.
It's the opinion of my father who was in the early occupation, and later was doing military planning work with generals and such - all focused on repelling possible Soviet invasion scenarios.
Protecting Germany's sovereignty also protected America's interests. They were aligned.
Germany (like France could and did) could have expelled the US military any time they wanted to.
> Germany (like France could and did) could have expelled the US military any time they wanted to.
No, not legally. (And also not in reality)
1955 were the treaties, conventions, protocols and schedules of the Bonn-Paris Conventions, the Pariser Verträge in German. The treaty terminating the occupation of (West) Germany was the revised “Convention on Relations between the Three Powers and the Federal Republic of Germany”, in German often short „Deutschlandvertrag“. The three powers in article 2 of that convention explicitly reserved the rights for Berlin and Germany as a whole and relevant for this the right to station armed forces in Germany (article 2, articles 4 and 5).
https://www.bgbl.de/xaver/bgbl/start.xav#__bgbl__%2F%2F*%5B%... (PDF)
The 1955 conventions were a package deal. Part of it was the “Convention on the Presence of Foreign Forces in the Federal Republic of Germany”, which further assured the Three Allied Powers right to station forces in Germany, although limited to what was already there.
https://www.auswaertiges-amt.de/resource/blob/248488/1f12562...
Both conventions were only to be terminated by all signatory states or by a future German reunification agreement and peace treaty. That was in effect the “Treaty on the Final Settlement with respect to Germany“ of 1990, the 2+4-treaty, in which the allied powers, including the Soviet Union, terminated their rights. Hence final settlement.
Germany after the war was an occupied country, split up into various zones by their opponents in the war. There is no fundamental difference in the way the US or the SU setup their bases there. Sovereignty implies they had a say in whether or not the US army is stationed there, which I think is a ridiculous claim. Thus, as there was no sovereignty, there was no sovereignty to protect.
See my other reply, with receipts.
That in 1955 Germany had a realistic way of saying, we're a sovereign country and don't want US troops on our soil?
But that in the end has nothing to do with my original response, which was "the US sets up its bases out of its own self interest". Even if those interests align, it doesn't mean it's there to honor German wishes. If those interests had not aligned, the US would've still stayed there, this is as clear as the header of this page being orange.
After 1955, the Germans could have asked the US to leave. The Germans weren't stupid, though. They had very good reason to want the US military there. I've already covered it in this thread.
Recall I've lived through that, and my father was pretty involved in it in the military bases there. I've had German friends, and been in their homes, and interacted with them.
They were not "occupied" against their will.
My comment was not about Germany, but about the US. It was "they do it out of their own interest". If you think Germany had the possibility in 1955 to claim sovereignty and ask the US troops to leave, I will respectfully disagree. The troops would stay because they were there out of their own self interest, whatever Germany wanted is immaterial.
> I will respectfully disagree
You haven't presented any evidence whatsoever for your conclusion. I've presented first hand, second hand, and documentary evidence for my case.
P.S. My dad also spent time stationed in France. He said the French made it very clear they wanted the USAF out. He said it was quite a contrast with Germany.
I was there, and my father told me is not evidence, it's an anegdote. I live in Germany now and when people back home ask me what it's like I say I don't know because I only live in a small part of it. You have very simplistic views of complex situations which those involving tens of millions of people surely are.
I can only repeat, I wrote "The US places its military worldwide out of its own interest, not to protect anyone". Whatever Germany wanted there does not make any difference.
Also again, the best I can do is respectfully disagree about the idea Germany asking the US to leave, and the US respecting its sovereignty. That West Germany was sovereign since 1955 is only part of the story, East Germany became sovereign in 1954, but it would be difficult to argue it meant anything of value (because it didn't).
Germany could not have expelled the US military. Germany lost the war and was taken over by the US, they no longer had a say.
France made sure to avoid an US occupation government and rebuilt its own independent military. It could make a choice.
> they no longer had a say
"Sovereignty of the Federal Republic of Germany was granted on May 5, 1955, by the formal end of the military occupation of its territory"
https://en.wikipedia.org/wiki/Legal_status_of_Germany
When I lived near Luke AFB in the early 70's, Luke was training Luftwaffe pilots to fly F-104 Starfighters. I used to ride my bike onto the base and go to the flight line, and watch those lawn darts take off. They'd get halfway down the runway and light the afterburners! Freakin' awesome. Oh I wanted to be a pilot soo bad.
An F-104 was little more than a pilot strapped to a monster of a jet engine.
Meanwhile in the real world, when Washington DC talked Bonn listened. Still applies today to some level.
Edit: Public opinion can also be shaped, not least after the trauma of the Nazi period and in the midst of the Cold War. Actual influence behind the scene is usually not made known to public, and the influence of the US over Germany has been overwhelming.
I lived in Germany from 68-71. The Germans wanted us there, because they were afraid of a Soviet invasion. Wanting the US military there is quite different from the US forcing themselves on them.
Not once living there did I ever get the impression that the Germans felt the US presence was forced on them. They appreciated that the US was there to keep the Red Army at bay.
Of course, sometimes they'd complain about the Americans having bad manners, usually justifiably, and sometimes they'd envy the wealth of the Americans. I even attended a German elementary school for a while, and nobody bullied me because I was an American. I was even invited by other students to their homes to play.
The US bases were of mutual benefit to the Germans and the Americans.
Perhaps there was an aggressive imperialistic authoritarian empire next door that had split germany in two and run their half into the ground economically? No, it must be that America is bad and this country had no agency as you said
This is childish. I never made value judgements and just pointed out that the reality is not what's sold to the public in official stories (and that holds true everywhere).
Evidence, please. I've provided mine, and my father was "behind the scene". What's yours?
P.S. my father went from:
1. bombing Germany in WW2
2. being part of the military occupation in the early 1950s.
3. being part of NATO planning headquarters in Wiesbaden in 68-71. This was not an occupying force
Post more ahistorical propaganda!
It can be both.
That manchester capitalism with different decorations rhetoric does not hold up to scrutiny. In particular when you hold it against current examples of economic colonialism like the chines lend & own campaign in Africa .
Without an army or control over territory, it cannot reach the level of colonization. African countries often default on their debts.
The army is provided by the local dictator or by playing different ethnic groups against one another.Britain never had enough soldiers to conquer India , but india had. Same for Russia .
Make no mistake, the US is a fantastic business. It makes a lot of money, and some people get fantastically rich while others toil for life and hover at the poverty line.
With a vastly higher percentage of its citizens in jail than any other developed country, much higher crime and violence than developed countries and many other very bad indicators it is, however, not a good country. It does not provide for or look after its citizens in the ways other developed countries do, and does not appear to be a healthy society.
> It does not provide for or look after its citizens in the ways other developed countries do
It's worth asking why.
> NATO nations have cut back on troops and military hardware since the Cold War. But Europe has cut far deeper than the US. Defense budgets have become a pot that could be raided to fund more pressing priorities, such as treating and caring for aging populations. As a result, much of Europe’s military has become, in the view of some US defense experts, a “Potemkin army” that is ill-prepared to wage and win a prolonged war.
>It's worth asking why.
Because taking care of people is not profitable. Why are people still looking for the answer when it's obvious?
If we take a look at the % of US forces stationed in Europe, and assume all of them are there only out of the goodness of the US' heart to protect Europeans, and subtract them from total US military costs, it isn't even a drop in the bucket. It's less money than the Pentagon doesn't know what happens to.
https://www.defense.gov/News/Releases/Release/article/307805...
(This only covers the running costs; even an unfair assumption that the US would need less F-35s and troops if they weren't deployed in Europe, it would still be a drop in the bucket compared to the $916 billion yearly budget).
That’s not a sensible analysis, given how NATO works. It isn’t even difficult to see how misguided that thinking is because you could simply recall the mounting hundreds of billions we’ve lately been sending to two non-NATO nations.
> It isn’t even difficult to see how misguided that thinking is because you could simply recall the mounting hundreds of billions we’ve lately been sending to two non-NATO nations.
Which the US is doing only to protect European country and wouldn't have done it if it were anywhere else? Strongly doubt it. Also it's important to clarify, the US isn't sending "hundreds of billions" to e.g. Ukraine. It's sending material worth that much, which them it replaces (and sometimes it would have had to anyways, in the care of expiring ordinance or obsolete stuff) by paying American companies.
There's 365 million Americans vs. Europeans countries none have more then about 85 million.
No US state has more than 40 million people...
State is not a country and European countries are not states...their federal governments handle their healthcare and etc.
That's my point the US's federal government would be handling free healthcare directly or indirectly thru the states. As well the amount of money Americans would have in their pockets would be a lot less and that's not after over 300 years are what we are use to. Recent election shows the majority does not want change in many regards.
Recent elections show that capital interests are able to spend unlimited amounts of money buying political influence to prevent a pro-working-class candidate from ever touching any true levers of power.
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The DAX reached this year a new record of over 20000. Is Germany doing good right now? On the news reports they even have to mention that it’s how the investors predict the future market, because everybody here know the economy is shit atm.
If I’m not mistaken most of the growth in the capital market comes from the continuing money „printing“ right?
DAX companies make 90% of the money outside of Germany. Thinking the DAX reflects the german economy is uninformed at best.
This has been the case for decades now.
The US economy is much more dynamic than Europe's and the US government is actually more willing to intervene (and can afford it because of US dollar).
In Europe it is austerity and general less support for economy-boosting policies.
There are a lot of perspectives. Eg. that the US due to it geopolitical situation hasn't seen any real adverse events in the past century. Ie. privileged on the risk side.
As other people also mention: The US' growth seems to be debt driven, which will also have to halt at some point.
However, it would not seem like it is US dynanisism that is the reason for the current success of the country - especially taken into account that it is a small subset (eg. the magnificent 7) and very high valuations that drive the current success.
All in all, my personal view is that there is significant risk in the US market currently - thus also high returns. But I do think that it is safer to harbour some money outside of the US.
Personally, I am happy to have US stocks in my portfolio, I am also happy not to live there.
So the US economy is built on debt
All economies are built on debt... It's basically how money works...
No that is not how money works, it is one way money can work but it isn't how money works. Many economies are debt free, because there is no reason to go into debt to have money.
Money is debt. Green (or whatever color) slips of paper aren't intrinsically valuable. They're a promise to redeem them for things that are, same as an IOU.
I take your point that not every economy is run by a government that owes 110% of GDP. But Japan and China are, and France and the UK are at 99%, so that doesn't seem to be the whole secret of America's success.
Money is debt. Even gold-backed money. Possessing money is the same as lending your time, labor, or assets to everyone else. To be repaid this debt you issued, you can in turn demand time, labor, or assets from someone else.
@ Jensson: As the others have said.. You might mean something else with your statement, but you cannot escape that the very definition of money is owed debt: A bank note is in essence an IOU: "This represents value you can redeem later". You may have some idea you want to communicate about avoiding 'having a lot of debt' or owing more than you are worth, but money in human history has always been a mechanism of debt in its very nature. It represents being owed something else of value.
Isn't it better to have an economy based on debt than something people actually want or need? E.g. if we had a currency based on land, housing prices would soar even more than they already are at.
> Many economies are debt free, because there is no reason to go into debt to have money.
Is this intentionally facetious? There is NO reason to go into debt? Should we just return to the gold standard then?
There are also downsides to it. One of the benefits of debt is to have more liquidity. If nobody owed anybody anything, but at the same time it was very difficult to trade with anybody, you would have a very inflexible situation that might not really be preferable. Like if I'm sitting with goods you want, and you sit with goods I want, but we have no way to swap them, then we are both worse off.
The gold standard is not perfect but it's definitely better than what we have now. My ideal pick would be using the price of a basket of common commodities (wood, iron, wheat); pay the bank for storing your goods and don't let state actors & friends steal your money with inflation.
I don't think BTC is the solution (it's unbacked) but wtfhappenedin1971.com has some good reading material.
it only works for US Dollar because USA can pay back its debts by printing more money. other economies actually have to work for it.
Europe has massive debts, too, and growing. But this is a downward spiral.
Edit:
Average government debt-to-GDP ratio in the EU was around 60% from 2000 to 2008. It is 88% now and worse in many major countries. No lie here...
> Europe has massive debts, too, and growing
This is a lie, take Sweden's debt for example it has been going down the past 20 years. Most of Europe doesn't see increasing debt, USA is an outlier.
https://tradingeconomics.com/sweden/government-debt-to-gdp#:...
Sweden is an outlier. US debt to GDP is 110%. France and the UK 99%. Italy 138%. Greece 203%. Japan 263%. China depends on who you believe, but probably somewhere around 100%.
US economy is soaring because the old guard (Europe) passed peak and all the new guard (Japan, Korea, Taiwan, China, BRICS) didn't quite live up to the hype once they reached near wealth parity.
Where would you rather invest today - US or a demographically stagnant, highly regulated Europe? US or rapidly shrinking countries with risk-averse cultures like Japan and Korea? How about China where they might expropriate you / throw you in jail? Or Taiwan which is under the cloud of Chinese invasion?
Etc.
Cleanest dirty shirt and all that.
Said in another way: The US is the last standing haven for the robber barrons of the world. Once the US falls there will be nowhere left for them to go.
If we just fast forward the video tape we see where this is going. Maybe thats why Elon is so eager to get to Mars.
The US is the last place standing that doesn't look at all innovators & leaders as robber barons. Some are, sure.
But if you want economic growth, someone needs to take risk. Capital formation, investment, founding companies. This is what leads to hiring and jobs.
Look at ossified cultures in EU, UK, and even Japan where stringent hiring/firing laws, shrinking populations and dire economic growth mean it's great to already be 40/50+ years old protected worker. Unfortunately it also means youth can't find jobs, and where they can they are under more tenuous contractual agreements than their older cohort has. Plus an increasing share of the taxes the youth pay will be to fund the generous retirement of their elders who outnumber them.
And again before some US Doomers chime in, take a global perspective. Go look up some rich world unemployment stats. The US right now has some of the lowest unemployment both historically and when compared against all the current global rates.
It is frankly absurd to make a case with only one line mentioning
> owing to its abundant domestic energy supplies,
Energy is wealth. In so far as I can tell we have better data, going back further, and being more strongly correlated to outcomes of interests, than the data we have on monetary systems. I have my doubt the FT will ever dare to entertain that position.
Energy has an enormous cascading effect. But it pops up directly as well. ChatGPT could not run at 5x the base energy costs and no suppliers able to scale to more demand.
If you're looking to explain the US upward trends always include their shale output in your graph as well. You'll find you rarely need more explanations.
It has been blessed by their resources, an enormous size granting a low population density, and a functioning liberal state to use those well.
The rest is pandering and ideological pleas for less tax and less regulations.
And i mean... if you're going to pander, you're going to pander to the people with the cheapest energy.
Because America has the right mix of ingredients of greed, capital, culture, know-how, regulations, etc to thrive in the age of IT and finance.
Those who replicate the formula may not have the ingredients and those who do have the ingredients use different formulas.
I've given the strength of the US economy a lot of thought recently and it comes down to 8 main reasons. The two obvious ones are:
- Liberal labour and corporate laws
- abundance of resources (fossil fuels + fertile soil)
The other 6:
- Low housing prices due to vast land reserves and cheap construction. leaves more capital available to invest into the stock and bond markets
- An excellent system of highways. reduces transportation costs for companies and allows for high labour market flexibility (+ high willingness of Americans to commute large distances)
- Coherent labour market that spans roughly 330M people
- A nation wide well established 401k system that funnels a lot of the retirement savings into US stocks and bonds - incl. venture capital.
- higher affinity for risk taking. Americans are in large parts descendants of risk taking expats
- Large maritime borders and only two (friendly) neighboring countries
I would say that those are solid reasons historically, but I would say that stocks/401k/IRA have spun out of control and driven P/E ratios to stupid levels that are unsustainable. Also, housing prices are no longer affordable for the majority. For example, many people I know bought homes in 2019-2022 and they are now stuck. They could sell and make money, but then they’d be buying roughly an equivalent house to the one they’re in due to rising costs. They could rent, but rents have become extortionate.
Good as far as it goes. But employees don't get paid in productivity, we get wages.
I guess compared to most of Europe, which is getting poorer? I think the coming decades will now be dominated by the growth of the Indian economy, who will probably be the biggest beneficiary of the worldwide de-investment in China.
These opinion pieces are so tiring. Talking points:
- The sanctions induced energy crisis exists, but is not the reason.
- The lazy Europeans are the problem.
- We need more tech.
- Trump will ruin everything.
All of this is false. There is no mention of the dollar status as the reserve currency, which enables the reckless U.S. deficit spending while shielding it from the consequences.
There is no mention of German industries, which had been productive, closing or moving abroad after the Nord Stream sabotage by one of Germany's "allies".
There is no mention that tech is overvalued and not a panacea. Russia does have Yandex as a Google replacement and it does not help. China has Baidu. So tech in the U.S. has been inflated by printing money, which the EU and China cannot do.
I expect more from a European newspaper than just telling Europeans to work harder.
>There is no mention of the dollar status as the reserve currency, which enables the reckless U.S. deficit spending while shielding it from the consequences.
This isn’t a given. People around the world like to use USD because they trust USD to buy the things they want in the future.
Oh boy, you should pick up a history book.
Care to provide any examples? If the US were to fall into disarray, the demand for USD would fall. People are free to choose GBP, Euro, Yen, Yuan, but apparently a lot of people choose USD.
Bretton woods et Al. The usd was historically designed to be the reserve currency with support of major economies.
This was terminated with Bretton woods, but things have the tendency to not move so fast.
But it is definitely not just a happy coincident that the usd is the reserve currency.
That ended in 1971, I think that’s plenty of time to move past it. The bigger factors are US military supremacy and the US producing extremely valuable economic goods and general stability in the US judicial and political system. All of these leads to trusting the USD more than other currencies.
We can continue on to the petrodollar system (hence we I wrote et al.).
There are many reasons why the USD dollars is currently the de-facto reserve currency of the world. But it is much more nuanced than the merits of the dollar as a reserve currency that you initially indicated (That it isn't given and that people like to use it).
Investopedia agrees with what I wrote. People use USD because they want to. No one is stopping petroleum sellers from accepting other currencies, but the petroleum sellers believe USD will buy them what they want (more than other currencies).
https://www.investopedia.com/terms/p/petrodollars.asp
> Petrodollars are crude oil export revenues denominated in U.S. dollars (USD). The term became widely used in the mid-1970s when soaring oil prices generated large trade and account surpluses for oil-exporting countries.
>Then, as now, oil sales and the resulting current account surpluses were denominated in dollars because the U.S. dollar was—and remains—by far the most widely used currency.
>The U.S. dollar's global popularity doesn't depend on the goodwill of oil exporters. It's based on the U.S.'s status as the world's largest economy and goods importer, with deep, liquid capital markets backed by the rule of law and military power.
And then again, historical events usually drive current status quo.
My initial comment was a recommendation on understanding the current state of the USD as the reserve currency given historical events.
There is a good chance that these things will chance.
But the history take time to unfold. And changing the worlds reserve currency does not happen over night - especially not 10-20 years ago when cash transactions were much more predominant.
But let's continue this talk in 10-20 years and see if the USD is still the reserve currency. And if it is, if we can attribute that to some obscene political moves, like adding 100% tarifs to economies trying to exercise their free choice of currency.
For some reason I can’t help but think of the analogies of our current situation to the last years of the Soviet Union, when on paper it looked like a juggernaut albeit with decrepit leaders, but the numbers were lies, more lies and statistics. The elites were filthy rich but the situation on the ground was unraveling - basic services were starting to fail (analogies to Private Equity ruining everything in America from clinics to plumbing). And then you have Gorbachev who recognized the situation and attempted a “perestroika” (analogous to Trump and his reformist policies including DOGE) but that led to the final collapse. The analogies are just too many, even the failure in Afghanistan.
Perhaps you're onto something regarding the "vibesession"... right now, if I had to call a plumber, I would feel immense dread. I would undoubtedly be fleeced with no recourse and still receive substandard work. What's the difference between this and the socialists where you figured you'd get crap service for "free"?
I think I'd pay a premium to ensure the company I'm dealing with is not run by private equity. Is there a way to see that as a common citizen in the US?
My two cents: the U.S. owes much of its economic strength to its robust legal framework. It provides a system where complex business disputes can be handled and enforced effectively, creating trust and predictability for investors and entrepreneurs. This institutional strength is often overlooked but is critical for fostering innovation and long-term economic growth. Incidentally, recent Nobel laureates in economic sciences have focused on the role of institutions in shaping economic outcomes, underscoring how pivotal they are to success.
One thing that I believe is overlooked is that two party system helps in the sense that both party knows they are here in the long run, and while both party talks extreme economic plans, they just don't go forward with anything, just some tariff here and there. In lot of other countries you don't know how extreme the ruling party would be in next few decades.
> the U.S. owes much of its economic strength to its robust legal framework
Pretty much. This is the mainstream institutionalist view which won AJR a Nobel Prize.
This is also the reason why China began the Guiding Case Project with Stanford Law before it got shut down due to Xi 2's crackdown.
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Doesn't the EU also have a robust legal framework?
There is EU law, which is enacted across all EU members. But there is no such thing as a EU legal framework, neither is there a fiscal one if we are focusing on business.
A debt dispute could be resolved in less than 4 months or dragged for close to a decade depending on which EU state you have a business.
Same goes for fiscal law. Some countries have had pretty much the same rates and taxation arrangements for decades. Some countries change their fiscal load on businesses as much as twice in one year. Both cases are technically 'the EU'.
I would have thought so. But on the other hand, it seems to me like there is a lot more appreciation on the part of EU for laws to be enforced more in spirit than in letter. That might not be a good legal environment for businesses.
Yes, and it is generally hostile towards wealth generators. And then they wonder why nearly every economic metric has been stagnant for decades at this point...
Pointing to EU law/regilations is just platitudes people keep repeating online.
Biggest barriers to business in the EU is risk averse Investors and Banking sector, lack of significant VC funding players, and Government spending strangled by Austerity policies.
The US spends a lot of money to make even more money.
> Pointing to EU law/regilations is just platitudes people keep repeating online.
I disagree, for the reason mentioned below.
> Biggest barriers to business in the EU is risk averse Investors and Banking sector, lack of significant VC funding players, and Government spending strangled by Austerity policies.
Some of it is cultural I'm sure, but when your reward is capped it's logical to limit risk. Your list of issues are indicators of a risk-averse mindset.
Regarding the comment above: If most of the return from your risky venture is going to be taken from you by the government, why take the risk?
> The US spends a lot of money to make even more money.
Yep. It's like the stock market vs. bonds. The ride is bumpy but more lucrative over the long run.
> If most of the return from your risky venture is going to be taken from you by the government, why take the risk?
Again, not true. High taxation is mostly (unfairly so) on payroll salaries not profits or capital gains.
Most investors are conservative, risk averse, and remain vastly concentrated on Real Estate, which yields very high profits on an inflated market.
Most businesses get very poor credit conditions from the Banking Sector and most Business are SMEs focusing mostly on traditional B2B B2C services with low margins.
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The US owes its "economic strength" to the ability to print $2T/yr in perpetuity and buy stuff with that money. Once that tap ceases to function (which eventually it will, though not anytime soon), the US is going to be fucked beyond any recognition.
That's irrational and alarmist. Any time I hear someone talk about "printing money" I figure I am hearing from someone who doesn't have a great grasp of finance. For those that are interested, the supply of US currency or purchasing power of the government is not controlled by printing.
A steelman of this argument is the USA has too much debt and can't keep issuing this much. Maybe true. But the world holds that debt and it's denominated in USD. Also, just the simple wealth of US households grows a lot faster than the debt so its still pretty clear that if the US wanted to pay all its debts it easily could. (https://fred.stlouisfed.org/series/BOGZ1FL192090005Q) We could be heading for inflation like in the late 70's early 80's. Not good but you don't have to doomsday prep.
We're heading into 1940s inflation, not 1970s. 1970s inflation was lending driven. 1940s inflation was fiscally driven, like it is today.
Even if you are correct, it might be worth mentioning that the US is the top military power, which adds strength to the equation.
Some folks from Afghanistan and Yemen must have died laughing after reading that sentence.
I long for a US-like entrepreneurial attitude here in the UK. Business people here think that they are playing zero sum games. Everyone looks to the govt for funding and direction.
I am reflecting on Deepmind. This company saw the AI revolution before anyone else. London based. They did an amazing job. Sold to Google. The problem is that long term the growth and money now goes back to the US. Maybe the UK is just too small to produce world leading companies.
The UK already has world-leading companies (as do many smaller countries), but it's very very hard to produce planet-scale wide-appeal consumer companies dur to market size. Even if it does happen, the temptation to appeal more and more to the US market is irresistable.
I'm sure it's not nothing, but to what extent does it matter that Alphabet is headquartered in the US? Deepmind seems to still be based in Kings Cross - and London benefits.
It's thanks to innovative business models, of course!
Increasing you investment efficiency with FTX. Reducing farmer idle time with Deere. Sharing your otherwise unused car with Uber. Revolutionising office productivity with technology, like those beer taps that WeWork had. Spending less time on your savings with Yotta. Not reading long emails with AI.
I wonder how high productivity actually turns out if you remove every scam that inflated GDP or earnings numbers.
Also, ask the poor how satisfied they are with the GDP.
Or ask farmers about the DRM technology that locks them out of their tools ...
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Yes, I agree. However the "economy bad" thing was blamed on Biden for signing another stimulus bill which created worse inflation. In reality both Biden and Trump are to blame, but the thinking among the lower class is that Biden made inflation worse.
It is clear why they voted for Trump. They didn't like the way things were going and Kamala said she wouldn't change anything from Biden. Why would you vote for the status quo if you don't like the status quo?
Is America's economy soaring ahead of it's rivals as this article is about or does something need to be drastically changed by voting a bull into a China shop?
As I said before, if you look at charts of public sentiment on the economy by political party, democratic leaning voters will see a slightly better economy when a democrat is in the oval office, but republican voters swing wildly from one extreme to the other completely matching election day, not even inauguration. They can complain about "the statistics aren't showing the truth" all they want but the data objectively shows that what they mean by "the economy isn't good" is "my team isn't in the oval office"
I'm never able to get to the "so what?" with these. Productivity growth sounds nice, but then it mentions that there's more inequality, higher cost of living, and more workers struggle in the US than other developed countries. How do I reconcile this?
They make a point that eventually the other countries' economies would shrink and won't be able to afford those benefits, but also the US doesn't have those benefits even now.
Anyone can elucidate me?
> How do I reconcile this?
I'm curious why you care that some people have more money than you do? If you want mo' moolah:
1. upgrade your job skills
2. minimize spending (like get a roommate, eschew restaurant food, buy a used car)
3. invest the money you save
If you really want to make big money:
1. start your own business
I thought the question was "why should I care about productivity if it doesn't necessarily make my life better?". The article didn't really make the case that average workers were benefiting from this.
The Law of Supply and Demand means that worker total compensation tends to track their productivity.
Yet, if you look at real wages over time, they're stagnating in pretty much every developed country. Productivity has gone up consistently while wages lag far behind. Where is all that value going to? Because it isn't certainly being left on the table.
> Productivity has gone up consistently while wages lag far behind.
This isn't true for the US. The chart that purports to show this is misleading. Essentially, there are problems with the usual chart: the two lines are indexed to different inflation measures, and the wages line excludes certain highly compensated occupations which have been experiencing significant earnings growth (probably because these occupations are where the productivity growth is happening).
Edit: Actually, even more issues. https://x.com/AwayBerk/status/1483564925213683719
Some of those charts tracked wages rather than total employee compensation. The latter was quite a bit more.
Yes, exactly.
> if you look at real wages over time, they're stagnating in pretty much every developed country.
If you look at real incomes over time, they've been stagnant since the dawn of time; or at least as far back as we have kept track.
There was once wage growth because wages started from zero. It wasn't that many years ago that people didn't sell labor, only things. As we have transitioned into a labor economy, wages started to become a larger portion of one's income. To the point that nowadays more or less 100% of the average person's income is from wages.
So, with incomes and wages now being effectively equivalent, there is no room for wages to grow further. To do that now, incomes would also need to rise, and that has never happened.
This doesn't make any sense to me. Wages have steadily raised at the same rate of productivity between the end of WWII and the 1970s. People started selling their labor centuries before that.
It started to some degree centuries before, but it was a slow road to see people fully embrace the new world of selling time. Selling things remained the norm for a long time after the first worker started working for wages. However, by the 1970s, nearly everyone was working for wages. The rate of self-employment has remained effectively stagnant since then. This period marks, for all intents and purposes, the limit of human labor productivity.
Productivity has continued to rise since, but on the back of automation, not as a result of humans becoming even more productive laborers.
The extra value goes to the government. Dealing with the huge mass of government sucks up a lot of value, not including the heavy taxes.
Take a look at the size of government over time. Where do you think the money comes from to pay for that?
Like your family with your dad’s military job?
Where do you think the money comes from to pay for the military?
It really doesn't, that's a crazy reach to make.
The LoS&D is always in play. In this case, entrepreneurs are always looking for a higher margin business. The effect of this is to lower those margins.
Nothing "crazy" about it.
The "unintended side effects" of government policies are nearly always the result of ignoring the LoS&D or pretending it doesn't exist.
The amount of things the "law" of supply and demand predicts is literally zero.
You obey it yourself. Have you ever bought anything that was on sale? Have you ever negotiated a price?
A "law" that predicts nothing? Yeah, pretty sure I obey it exactly.
Supply and demand is a framework you can use to write your hypothesis in. It's not a law that predicts things.
The reason collectivism fails every time is because they believe that the LoS&D does not exist.
Would you say that construction is way more productive today in USA than 40 years ago? It seems like stuff are more expensive and less productive at the same time today.
If you've ever tried to build a house in the US, you'll find out where the money goes. I have, and there's good reason why I am not in the construction business.
Oh, and check this out:
https://www.seattletimes.com/business/developer-martin-selig...
That's gotta hurt!
So you agree USA has problems? That is the point, the source of that inequality doesn't matter the inequality is still hurting you. There are seemingly less such problems in Europe.
Of course the USA has problems. I've pointed out several.
But inequality is not a problem. People wanting to make it big come to the USA. That's why the USA has the biggest, most successful, companies that drive the US gdp forward.
Inequality is only a problem for people who are envious.
Inequality is big problem. If you have a certain percentage of people with way more money than others, they skew markets to cater to them. You see this in real estate where new builds are mostly towards the higher end. You see this with cars where manufacturers are cutting the lower end models. You see it in health care where the only available options are the expensive ones.
This works well for companies because they can get higher margins. This works well for the people with money but other people are being left out. And with increasing inequality the number of people left out goes up.
Basically we are creating a world designed for the top x percent of people. And they are creating laws that favor themselves.
You cannot make it big in the auto business by targeting the 1%. Ferrari has never been a big company, and often teetered on bankruptcy.
The big money is targeting where the customers are - the middle class. That's why VW got so big. Why Ford and GM and Chrysler made so much money. Selling cars to the middle class. Tesla has also moved down market for the same reason.
How's Rolls Royce, Bentley, and Jaguar doing? Case closed.
> Inequality is only a problem for people who are envious.
Or when you have to pass by homeless tent cities in your downtown. Or when you are the victim of crime because the kid pulling a gun on you is envious because their family is poor and you're rich.
Extreme inequality brings social strife in multiple layers, if you're individualistic you might not care for it but for a society it fosters resentment and erosion of social cohesion.
But I don't think you care about that in general.
> Extreme inequality brings social strife in multiple layers
This is the conventional wisdom, but I can't think of a revolt in a free market country.
> But I don't think you care about that in general.
My reading of history is that free markets bring the greatest prosperity to the greatest number of people. No other economic system comes close.
Cutting other people down to size because you're envious just makes things worse. It produces economic stagnation, and the demand for "equity" is endless and endlessly makes things worse.
It doesn't end well.
Be careful what you wish for.
Keep in mind that the most prosperous companies are in America and bring that prosperity to Americans and are the envy of the world.
> I can't think of a revolt in a free market country.
Lmao
Healthcare using regulations to block competition and line their pockets is a big source to that inequality, being forced to pay into that isn't envy.
But I get your point, inequality isn't a problem in itself, but seeing your money go to rich people for no good reason does feel very bad even if the problem is the corruption and not the inequality.
Healthcare problems are nearly all caused by heavy government involvement in every facet of it.
> seeing your money go to rich people for no good reason
Anyone can buy stocks and get their share. For example, NVDA. If you'd bought some, you'd have made quite a lot of bank, and made your friends unhappy with you because of the money you unfairly made for no good reason.
I know many ordinary schlubs who became multimillionaires by simply buying NVDA, MSFT, AMZN, AAPL, etc.
Income inequality is strong predictor of unhappiness in a population.
You ask why I care about income inequality? It's because I want more happiness in my community.
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What if you conduct a survey that asks you to rate your happiness level from 0 to 10.
How would you know that your 6 is equivalent to the other guy's 8? Nobody knows. It's impossible.
There are also cultural differences to what "happiness" even means.
Any study about happiness is likely to be bogus.
There is actually an annual UN World Happiness Report and there have been various pushes to OKR/KPI Gross National Happiness (see Bhutan for example).
Then it seems any study about any emotion or subjective interpretation is also bogus.
> If you really want to make big money: 1. start your own business
I'm pretty sure that in my case that would be a fast way to lose a lot of money, but YYMV, I guess.
> I'm pretty sure that in my case that would be a fast way to lose a lot of money
80% of people who start a business lose money on it. Hence, making a lot of money on a business is quite unusual, not the norm.
Not sure I understand how you're reconciliating it? Maybe I'm missing the link you are making with caring or not about other people being richer than oneself, how is that relevant here?
What I'm asking is more, what conclusion should I take from the article?
Isn't caring about inequality mean complaining about people having more money than oneself?
Sometimes it's just about inequality. Believe it or not, a lot of us don't like to see those around us go without.
You're free to help others as much as you like. Those who do have my respect. Those who want to tear down others do not.
I agree. Though I would just add that I don't consider removing unfair advantages to be tearing others down.
Life is not fair and cannot be made fair. However, living in the US means the opportunity for you is there. It's up to you.
The issue is when others money means high costs for you, such as in healthcare or education or construction. A lot of stuff is really expensive in USA due to the high wages/profits and those workers not being any more productive, that directly hurts your quality of life unless you got an equivalent raise.
You mentioned healthcare, education, and construction. Those three all have very heavy government interference and regulation. It's unrealistic to blame those high prices on the free market.
Consider, on the other hand, the software industry. Essentially zero regulation. Yet the software, very high quality software, tends to be free!!!
Why is it that the most regulated, subsidized, and interfered with industries are the most expensive, while the least regulated, unsubsidized, free market industries are the most productive with the lowest prices?
> It's unrealistic to blame those high prices on the free market.
I didn't blame the free market, we talked about inequality nobody mentioned free market. That inequality is partially fueled by the unfree regulatory capture, things would be more equal if some regulations were removed.
Musk's wealth did not come about through regulatory capture. Neither did Amazon's, Microsoft's, Google's, etc.
No, it mean complaining about people having too much and people having too little. It might sound strange for you, but lots of people discuss economics/politics for a greater social good, not their own personal interest.
> It might sound strange for you
Wow, you sure misunderstand me. Free markets result in the greater good. Socialism does not. Hence, I prefer free markets.
I think you got hung up on that specific. The bigger issue is that the US has a higher cost of living, and more workers struggle compared to other developed countries.
This is why I find the article confusing. At first, it paints a picture of the US as incredibly productive, which should mean that the average citizen's quality of life, and maybe even up to the 99th percentile, would be better than in other developed countries. But then it claims that the average quality of life in the US is actually worse (as in struggling workers and high cost of living).
So, I’m left wondering... Why do we care so much about the country’s productivity if it doesn’t improve the average person’s life? In fact, if it’s making things worse for the majority, what’s the point?
The only way I can make sense of this is by looking at the distribution of gains. The graph that would explain this would have extreme outliers at the very top, where all the productivity gains are concentrated. This isn’t just inequality in the typical sense of some people having more than others. It’s an extreme form of inequality where almost all the benefits go to the tail end, leaving the majority worse off despite the country’s overall productivity.
At least, that’s the only explanation that makes sense to me. But at the same time, I don't just believe this, that's why I'm failing to reconcile the contradiction in the article. What's the conclusion you take from the article?
P.S.: I don’t mind other people being richer than me as long as it’s mutually beneficial, or if their wealth has no impact on me, good or bad. Most people likely feel the same. The problem arises when someone’s wealth comes at the expense of others. For example, Kings and Emperors in the past were resented because their wealth and power actively held others back and were built off the labor of the masses. On the other hand, I don’t mind someone like Bill Gates being wealthy because his success indirectly benefited me, I have a comfortable job in part because of the industry he helped create.
One of America’s biggest rivals is in fact the EU and a unified Eurasian continent. But luckily the ties connecting this continent literally blew up, the price of energy in Western Europe skyrocketed and it sent Germany (and thus the whole EU) into a recession. Even better, these “allies” are being forced to fund their own demise.
You’re right. If I were European I’d be wondering why we don’t team up with Russia in our own alliance and leave NATO to the Anglos.
An undemocratic despot nation? Keep up the great ideas.
why does this article conflate the existence of AI startups with strong economic growth for the last four years? it is almost like there is another factor at play ....
America is a de facto keynesian state while the European Union is pushin austerity since 2008
Being poor is really terrible in the US, being rich is really great. Everybody learns this from day 1 and get reminded of it almost daily.
There are downsides to such a society but it creates a strong incentive to get rich, or at least to never become poor, and thus more economic activity.
> Globally, the top R&D spenders are increasingly concentrated in software and computer services
I always find these sorts of statements strange because most software is not intended to be software but rather something else. For example, Adobe's suite should be classified under 'art supplies' or 'video production'. While true that it's software, in my mind, it's like classifying a car builder as a metal fabricator.
The truth is software and computers are pervasive today. There's rarely any software (other than development tools) that are truly aimed at computers themselves. Almost all software today is used for other industries and ought to be classified under that.
Under this taxonomy, I think things would seem much more diverse.
> Adobe's suite should be classified under 'art supplies' or 'video production'... Under this taxonomy, I think things would seem much more diverse.
Will someone who has shopped at Blick for 20 years be able to develop a Photoshop plugin? It would be a stretch.
Most people who shop at Blick don't make their own canvas, clay. Many of them wouldn't know how. They could learn and some do, but many never will. Likewise they could learn to write software but most won't.
It's clearly not just software etiher though
Software is a tool, so it should have some count toward that economy. Same as any other tool is a hammer part of real estate or iron?
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The results of the last election tell a much different story. If the economy was soaring for the average person then I don’t think control of the government would have changed or at least not as dramatically.
The St Louis fed has a plot of units of housing over the last 25 years. Since 2008 we're short about 15 million units of housing. Which is how everyone that works for a living is getting squeezed. Rents and mortgages have sucked up all the disposable income.
https://www.pewresearch.org/politics/2024/01/25/views-of-the...
Views of how the economy is doing are also highly correlated with political party and where you get your news. I’m not sure where the casual relationship begins but it could be where you get your news determines how you think the economy is doing and where you get your news is from political voices you agree with
The economy can be soaring and the average person still struggling... Alot of the economy has been more and more centralized. Stocks and real estate might be at all time highs, but thats not liquid to the average joe.
The economy was but one of many issues that help decide the election.
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Does anyone know of a more accurate economic measurement of growth rather than GDP?
Building bombs a la Russia and paying a lot for healthcare is great for GDP but are those money well spent to grow the economy?
Simple answer. The US don’t fear high debts like for instance Germany does.
Germany can't print the world reserve currency. They did for a bit towards the end of WW2 though but that time is passed.
Germany suffers from bad leadership in industry and government above all else. The lack of investment is downstream of that. And I guess upstream is their conservative mindset on how and who to appoint as leaders. Lots of nepotism and corruption and not a lot of competence.
It is basically soaring because there's a drive to pull things from China. That is posting lots of economic activity for sure.
Others in contrast aren't in that race to cordon off from China.
The headline is about America's rivals but then talks mainly about EU and other G7 economies.
Do Americans consider Europeans their rivals? Occasional competitors sure, but rivals?
Rival in the same way two American football teams are rivals maybe.
The Economist is a British magazine, originally marketed at devotees of classical liberalism, which was also called economism at the time. Its readership is largely British, and therefore seeks comparisons between the British economy, European economies and the US economies, because they are seen as peers of the UK.
This is Financial Times, not the Economist, but is also British.
We have a strange situation in the UK where GDP is going up (thanks to immigration) but GDP per person is actually going down (thanks to immigration).
What turns commenters so smarmy and grumpy when the topic is historical? So many comments are uncurious swipes telling each other to read a book.
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America is so prosperous that there's armed guards in grocery stores here in Seattle.
> Why America's economy is soaring ahead of its rivals
Because young people are not taxed to pay for retired people vacations. And because there is less of a credential obsession for most jobs.
So you get people starting to work younger: they create value earlier instead of being a pure weight on the system.
They're taxed less so they keep more of their money so they're established (house, business etc.) earlier and can spawn a new generation earlier.
Most of the socialized states have become gerontocracies where most of the GDP is funneled from the young actives to the retirees. Be it from socialized healthcare (old people use the majority of it), cushy retirement benefits or the simple fact they own most property and can rent it and lobby to keep prices high.
In France, median retirees have enjoyed better revenues than median working people for multiple years already. What was created so old people who can't work would not be destitute has become a life goal because it's "when you can start to enjoy things". 50 years ago, we had 3 active people paying for 1 retiree. Now those 3 people? We only got 1.7 active people paying for each of them.
Either the current working generation decides to stop the cycle and sacrifice themselves by continuing to pay for baby boomers and they forego their own "end of life vacation" so their rare grand children can benefit from their own work. Or the country is a third world economy next century.
It’s called having world’s reserve currency plus leader in tech platforms and AI.
Different regions play complementary roles in the global economy. The oversimplified description is that the US drives innovation and risk-taking, Europe prioritizes social welfare and sustainability and Asia powers manufacturing. Forcing everyone to compete in the US-style growth race would be disastrous - imagine the burnouts, resource drain and market instability if every country tried to be Silicon Valley. Plus, many Europeans simply don't share the "get rich quick" mentality - they value work-life balance and social security more. Whether we're being pushed into this growth-obsessed game is another debate. Ideally, regions should focus on their strengths while maintaining independence. Europe can keep its social model while smartly adopting tech, Asia can focus on sustainable industry, and the US can lead in innovation. It's like an ecosystem - diversity makes it stronger. The goal shouldn't be for everyone to play the same exhausting game, but to maintain different approaches that complement each other.
Your model works when every player provides something of value.
What does Europe's self indulgent attitude bring to the international table?
A few luxury brands and a well preserved history and culture that is nice for tourism. Lots of high value human capital if only they could truly unlock it and allow it to thrive.
Today's Europe is just milking what it can as it continues its decades long crisis of identity and pessimism. Demographics are destiny and it's extremely problematic for Europe's future. There's no real leadership and it's one large admin state that can only agree to fund people's lives today at the cost of tomorrows lives using whatever assets it has left from its golden age before the wars. It's no wonder no one is having kids as they know the future is bleak. Just let the admin state manage my life and take it easy and not worry too much and fade away into the future until it's all gone...slowly and then all at once.
The jungle produces strong creatures and much of the leading world is much more full of jungle animals than the zoo animals the people of the European continent have become generation over generation.
Because people have been liberated from the quagmire of handicrafts
2.8% GDP (and labour productivity) growth doesn’t look that impressive when budget deficit is at 6.4%. A large portion of US GDP is domestic consumption.
If you look at the "American economy" as "corporate growth and wealth", then yeah, it's doing great. Best in the world.
But if you look at it as "the economic wellbeing of the country's citizens", then it's average at best.
The second measure is the one that matters. Enough with the debunked trickle down economics bullshit.
the funny thing to me about the "Well, I'm not doing good in this economy" anecdata rebuttals to the reportedly good US economy is that..people have always lived paycheck to paycheck in the US economy. Eliminating that shouldn't be the benchmark for "good." Literally everyone can't be a winner all the time.
Meanwhile US infrastructure is crumbling down.
Some day we'll have so much digital money we can buy whatever we want! Too bad there won't be any trees left...
That's an excellent summary of the economic state of the world. This excerpt is depressing...
The challenge for other advanced economies is not just replicating America’s dynamism. It is to do so while retaining their cherished social safeguards.
For all its economic power, the US has the largest income inequality in the G7, coupled with the lowest life expectancy and the highest housing costs, according to the OECD. Market competition is limited and millions of workers endure unstable employment conditions.
> cheap Chinese plastic junk will continue to eat the world
That's a thing of the past. Check the consumer electronics produced today in China. Mobile devices, EVs, infrastructure, newer products are simply incredible, and I'd argue ahead of western technology on many fronts. Cheap plastic stuff now gets produced in other less developed countries.
This is a fact that most in the US refuse to confront.
China has mastered making high quality goods at scale.
It does not matter how they got there, the fact is they did, and there are some pretty staggering military implications that are not really being discussed.
If you look at most of the “Europoor! Americans have so much more money!” articles, you’ll notice two things coming out of them — most understate the importance of quality of life and avoiding rapid Chinese growth of the past decade despite its own problems. It’s like a weird “no, no, ignore everything around you, we are literally the best despite everything!”.
I genuinely don’t know how I feel about this. I love parts of America. Half of my family lives there. But also, I have no inclination to move. Although I could make about 30% more, I have no idea how it would improve my life other than just more money in the bank. Unless I wanted to start a company, then yeah, probably bigger market and lax laws is advantageous… but other than that, it would be a huge downgrade from life perspective.
Yes.
The difference between today and a half century ago is that today you either win first prize, or wind up dead. That stinks.
It stinks because companies that come in first are seldom worse at extracting value from customers than they are at providing value to customers, and therefore tend to be mediocrities.
And it stinks because such companies are seldom worse at extracting value from rank-and-file employees than they are at providing value to employees.
The world is better when there are societies that can afford to sacrifice a little competitiveness for a good quality of life. If that's over, it's a shame.
That's the repeat of Japan story. "Cheap Japanese junk" was a motto in 1950-60s.
A quick skim of Amazon for literally any product would prove this comment entirely wrong.
Do they produce quality goods now? Sure. But it's also still where most of your just barely above garbage quality goods come from.
Because that's what buyers want - cheap garbage.
I expressed myself poorly. I implied that the plastic goods would be okay if they weren't cheaply made. I grew up in an era where stores sold furniture made of wood and steel. That was like... less than one human generation ago. So what I actually meant is: the plastic goods inherently are cheap garbage.
Textiles seem to have heavily moved toward Vietnam, Bangladesh, etc, but I don't see a lot of cheap plastic toys and so on produced outside the PRC.
Very much this. One of the best accounts of this progression I’ve read is the “AI Superpowers..” book by Kai-Fu Lee. China held the “Knock-off/cheap copycat” moniker in the 90s, 00s, and early 1Xs, but the tides are shifting in terms of the quality of goods they produced. They’ve also taken a page from American business and begun outsourcing “cheap labor” to other third-world nations, in addition to playing loan-shark to the likes of Africa… You have to hand it to the way the Chinese have gained their footing in “capitalism” since the 1980s.
> endure unstable employment conditions
It's also correspondingly easier to get another job. In Europe, making it hard to fire people means it becomes equivalently harder to get a job in the first place.
Yep, and crucially, getting a first job from which you can build a career is relatively (to the US) hard in places like Germany because companies are super risk averse.
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While it sounds great to add some zero-sum game to it, it is not entirely precise.
> For all its economic power, the US has the largest income inequality in the G7.
Had the job market been a zero-sum game like you propose, then the income inequality would not have been so dire in the US.
But said income would've been much lower - like in Europe.
Europe "solved" inequality by effectively limiting the upper range. Meanwhile the lower tier is just as low (or lower) than in the US.
People would still rather emigrate to the poorest state of the USA than Bulgaria or Romania.
> People would still rather emigrate to the poorest state of the USA than Bulgaria or Romania.
Reducing this to employment mobility displays a lack of knowledge of history.
Why is it "dire"? Who is harmed by someone else having more money?
BTW, all attempts at income equality have ended in miserable failure, some of them with millions of dead people.
Please dive into the literature on inequality. You will discover that inequality in itself is problematic.
Having read literature on it, I still struggle to understand how most of the problems attributed to income inequality aren't really problems of poverty.
An example is that inequality usually materializes in higher asset prices: people with proportionately more money tends to buy assets, driving up the price.
Now, the less well of people cannot afford housing anymore and are priced out.
Ingerently this not because housing is expensive, but solely because of income inequality.
You can insist it is because of poverty. But making both groups 10 times as well off would make no difference. The less we'll off people would still struggle to access housing.
You can also say that poverty is a total consequence of income inequality.
Now come and tell me again how inequality makes the world a better place.
Edit: I take, as you have read the literature, that you perfectly know that the same is the case of capital and produce from that capital in general. And so you are perfectly enlightened now to understand that poverty is inequality.
People with substantial multiples of wealth largely do not buy the same class of assets that those with a fraction of theirs do.
Someone who earns $1000/month and someone who earns $10 million/month are not competing for the same housing. Their effect on each other is minimal compared to those with very similar incomes who are competing for the same housing.
The only exception to this would be if there isn't enough housing for everyone, but the outcome would be identical (someone not getting housing) regardless of the level of inequality.
The idea that poverty is inequality makes little sense. Poverty is lacking a basic standard of living. If everyone has everyone they could want and their neighbor discovers an antimatter reserve under them catapulting them to unheard of levels of wealth, nothing materially changes for everyone else.
Similarly if everyone has perfectly equal income and wealth and still doesn't have enough to eat, they're all in poverty, regardless of the lack of inequality.
Seems like you didn't read that literature after all.
You definitely would Understand that ownership also comes in the form of owning rentals, mortgages, and not just owner occupied housing. That ownership is stock and shares with increasing valuations where you require increasing yields - requirements that makes the produce of the companies more expensive to support these valuations - inflation without a basis for salary inflation (as that would make the incomes more equal, which you explicitly forbade).
If half the population (your naighbor in you analogy) amassed significant wealth, it most certainly would materially change your wealth and make you poor - their money would gravitate to equity, yours and your kids equity. Literally making your poor.
> it most certainly would materially change your wealth and make you poor - their money would gravitate to equity, yours and your kids equity. Literally making your poor.
That sounds like the "wealth is a fixed pie" theory, where for one person to have more, another must have less.
The proof that is false comes from the history of the US. In the 19th century, it was populated by poor immigrants with nothing more than a suitcase. The US turned into a global superpower. How do you explain that with the fixed pie theory?
> That sounds like the "wealth is a fixed pie" theory, where for one person to have more, another must have less.
Dare to elaborate?
And absolutely not. If anything, on the contrary, I say that equality is a way to make the pie bigger.
> I say that equality is a way to make the pie bigger.
Your idea has been tried, literally tens of thousands of times. The pie got smaller.
Just in the US alone, 20,000 communes have been formed (they're not illegal). They all failed. Even the diehard communists can't stand living in a commune and sharing equally.
What idea?
I never proposed any system to obtain equality, merely pointed out that equality as a quality in itself is worth striving for.
A lot of people would argue that the American-style capitalism way is the way to obtain equality and I would not oppose that
It sounds like what I missed it isn't worth reading.
Arguing poverty is essentially a relative measure of wealth or somehow other's wealth, even unexploited or unused wealth, somehow makes everyone poor with the sudden knowledge that it exists?
I am interested in economics here, not philosophy.
The books that touches exactly that ideas are amongst other
* "Capital in the Twenty-First Century" - Thomas Piketty
* "The Spirit Level" - Wilkinson & Pickett
* "The Price of Inequality" - Joseph Stiglitz
However, at this point I wouldn't be surprised if none of these authors ring a bell.
But is seems like you are perfectly able to articulate the ideas - just not to internalize them. Yet.
How is Cuba doing with all that equality?
Maybe read: "Free To Choose" - Milton Friedman ?
I never proposed any single way to achieve equality.
Even Friedman also agrees with the ideas that I propose: Friedman believes in a basic safety net that ensures that you have basic necessities.
The key as that your secured income is big enough that you can pay for a roof, food and clothes.
My point is that this alone puts a upper bound to the amount of inequality you can have.
I've read about societies where everyone is equal. They're all hellscapes.
Presumably this means 'attempts to eradicate income inequality' because otherwise the paragraph sounds like nonsense from some libertarian think tank. Every nation on earth makes some attempt to lessen inequality. But pick any ill that exists in society - crime, prejudice, traffic accidents, noise pollution - and try to completely eradicate it, and chances are it will cause misery.
> American FA*NG 'enshittification' and cheap Chinese plastic junk
Another POV is that the services and software that does the design, marketing, logistics, testing, certification and etc of the plastic junk is more valuable than the plastic junk, and all that stuff is made in the US. It’s still labor, sometimes it’s even bespoke one off software labor which might as well be manufacturing, the thing that it is not is factories. I don’t know why factories above all else are glorified. There is lots of labor in services.
What I was driving at there is that we have seen a general shift (probably due to market consolidation, monopolisation, etc) away from quality and customer satisfaction. The plastic goods are just one tangible artefact.
Is it because corporate profits are put ahead of the living standards of the masses? I bet it's that.
And yet, mysteriously, somehow, as a European, I am pretty glad not to be a US citizen right now. I earn more than enough to live while working only 36 hours per week and my government is not run by lunatics.
I'm glad for you and vehemently disagree.
Taxation is ridiculously high, public service has abysmal quality so I need to pay for private care to get healthcare in time and crime runs rampant on the streets. Albeit it's still not as bad as the US.
Our politicians are completely deranged.
The only thing keeping me in EU is the fact that taxes in the US is still pretty high tax / high cost of living, too many people are woke and crime is too high. Landscapes, history, culture and food in Europe are also unbeatable.
> my government is not run by lunatics
Oh my sweet summer child
Australia has gone backwards in the last 3 years - I think we sit around 20th in the world now.
It's kind of crazy that with so many opinions on economics, no one ever mentions the most obvious things.
When elite papers say the "economy is doing well," what they usually mean is "the GDP is going up way higher than other places." What exactly is a GDP? It's literally the total sum of money SPENT by government, consumers, and businesses combined (this is the textbook definition, and how it's calculated).
When prices of stuff go up by 25% because there's a shortage of labor, or shortage of material, or shortage of infrastructural efficiency, by definition the GDP goes up 25%. There isn't any increase in life quality, nor any increase in the amount of stuff produced. This is why people feel like the economy is complete shit, while all the numbers point to the economy is doing well, and all the institutions that rely on these data (think tanks, policymakers, journalists) are baffled why people don't feel the same.
In contrast, in places that produce things very cheaply, if the export goes down, its GDP numbers will go down by definition. This in turn causes an overflow of goods internally, and prices paid by internal consumers even lower, therefore decreasing the GDP numbers even more. This is the opposite of the above scenario, where people are getting better things for cheaper, and their lives are improving without any increase in total compensation. All the while the numbers are telling a different story.
I think GDP might have been one of the biggest red herrings for policymakers. It's distorting their view of what's going well and what isn't.
Housing and rent say otherwise
Why does America still have anything that resembles an economy??
Two word answer: reserve currency
I realize we must reason in terms of states, but the real players make moves that states will go iut of their way to avoid recognizing. We MUST move beyond states and into mayor holders of capital as primary entities of meaning in this world. The state's peak was sometime between 1995 and 2005.
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Oh boy, here we go again. It's like the pre-2008 financial crisis all over again.
Growth is nice, but one look at the debt charts (public debt, credit card debt, car debt, mortgages, student loans, ...) and the trends in defaults and you know what's coming. Add the upcoming tariff plans and the gutting of financial regulations and consumer protection in the mix and you start asking yourself: in 10 years time, will we talk about the financial crisis of 2025 or 2026?
There are only a few factors driving this and they are very hard for Europe to solve: - the Bay Area an industrial cluster not comparable to anything we had before due to the scalability and the capital requirements of the products - the US market, the most powerful consumer market in history allowing massive economies of scale at companies, companies can work with a much higher productivity level - capital markets that can finance the most outlandish ideas - better demographics - less crisis and russian intervention (Brexit, Syrian war, Ukraine war are all part of Russias attacks) - bureacracy and regulations are totally overvalued as a factor, definitely something we should solve, but the EU would not be a tech leader without GDPR
Because they could care less about anything else.
Is "Americas's economy" soaring or "Americas top .1%s economy" soaring?
Because as someone not from the US it often looks a lot (a very big lot) like that in recent year most economical growth exclusively went to a very small minority of US citizens but not the US as a whole.
Like wasn't people economically struggling while the Democrats claiming everything is fine 'cause look economy is growing one of the more believable reasons of people not voting for Democrats (!= voting for Trump)???
Yeah. The US economy isn’t doing well overall, and it would be worse if the US Dollar weren’t the global reserve. The thing you mention with money going to the top is exactly what one should expect in inflationary monetary policies and large amounts of government spending. It’s also what one should expect in a representative democracy. Money goes first to the banking cartel and the. To those who are politically and/or financially well connected. Period. They enrich themselves and the rest of us pay $6 for a carton of eggs.
And yet, exit polls said ~67% thought the economy was in bad shape.
I tend to agree with the objective data showing economic strength here. I think a big cross section of the country was just struck by nothing less than a mania.
Let them eat cake.
because of uncontrolled money printing, duh.
is it? x'D
I see the economic conspiracy theorists are on a field day here...
Us Europeans are more 'detached' from the economy than people are in the USA. We basically coast along. We don't live on credit, but debit, and most people have zero investments outside their house. We're content and risk adverse and don't care much for the stock market (even though many people's pensions are tied to it).
In places where higher education is cheap, or even sometimes free (like Sweden), there's less pressure to perform after graduation. It's quite common to study some field, but after graduation you go do something completely unrelated. A degree is just a means to an end, something to put on your CV to get an edge over those that does not have a degree. Those who study for the purpose of using their knowledge to create a successful business are very few.
And when it comes to starting a business, the EU market is rarely the target, instead the focus is the domestic and much smaller market.
It's also difficult to start a company that targets a larger market from the get go, because it means you need to advertise in multiple countries, target different languages, set up offices and contacts, and all of that costs money that startups do not have.
The EU single market is largely a myth from the perspective of wanting to start a successful company that can compete internationally. It's not any easier now than it was before the EU existed.
The EU is still a collection of different countries, with different languages, and the people in one country doesn't really care about what happens across their border or which new and up-and-coming company they have to offer.
EU citizens like American companies, because we here about them on the news constantly, but we are completely oblivious to companies from our European neighbors.
> The EU single market is largely a myth from the perspective of wanting to start a successful company that can compete internationally. It's not any easier now than it was before the EU existed.
That's not exactly true. The single market has been a great thing for companies producing physical products. That's also what was in mind of the people who designed the single market. They wanted to unify standards for physical stuff. Because back then, there were no digital services to speak of. "Analog" services were naturally limited in their scaling capability so they weren't in focus, but mankind had back then just learned to scale up physical production, and the single market for physical goods has largely worked out great to shape global standards and stay competitive in the area of anything that's traded and touchable.
What's been created is a bad fit for digital products and services, unfortunately. The legal frameworks covering purely digital services are far less unified than the standards for physical goods. And digital services are way more reliant on localization than physical stuff is. No amount of EU single market legislation will ever be able to eliminate the language barriers, much less other cultural barriers that are often hindering digital services successful in one EU country from being adopted in neighboring EU countries.
Therefore, for those digital services that benefit greatly from network effects, it'll be hard for European variants to ever beat their US counterparts on the domestic turfs, and virtually impossible on the global market. However, not all digital services are dependent on network effects, so there are good reasons to continue trying to make the EU single market more applicable to digital services and to foster domestic offerings whereever possible, even if that strategy will probably never lead to the next Facebook or Instagram or Amazon to be built by a EU company.
Read up https://www.eu-inc.org
the fact there is no EU single market for services is why I was not concerned on a long term basis for the UK economy as a result of leaving the EU
the UK is a service based economy, all growth from the next century is going to come from services, not by increasing cheese exports or trying to compete with the Chinese on battery production
almost all UK startups branch out to the US before they try the continent
no single market legislation is ever going to change this
>all growth from the next century is going to come from services
Why do I feel like many workers in the service industries are gonna be unemployed or working for pennies in the future following this hype leading to labor oversupply of service workers, while the likes of tradesmen will be making more money? There was even a south park episode about this.
The UK is already heavily fractured between the rich service based City of London and the rest of the country being relatively poor by comparison, especially the areas that suffered industrialization and haven't recovered and need constant subsidies from London.
Min-maxing a society like that doesn't usually end well but usually in some dystopian way, like rich workers needing to driver everywhere to avoid the masses of unemployed homeless people on drugs roaming the streets.
Not everyone can be a hot-shot banker or AI engineer, we should have career paths that can fit every level of skill and intelligence.
Simple way to eliminate language barriers is to introduce English as main language of schooling, thus making all next generation bilingual. It's done by middle and upper classes anyway so idk why commoners are intentionally left in the dust by the System.
Let's face it: our culture (all across the EU), is American, anyway. It's stupid to pretend otherwise.
> idk why commoners are intentionally left in the dust by the System.
There's extreme wealth inequalities between EU countries (we're talking about one order of magnitude in the extreme cases), language barriers are the main things holding back the demographic crisis that would come from mass economic immigration within the EU.
> Let's face it: our culture (all across the EU), is American, anyway. It's stupid to pretend otherwise.
EU is a big place (and so is the US). Perhaps you've mainly visited major urban centers of both and so don't see the rather unique cultures both hold.
>There's extreme wealth inequalities between EU countries (we're talking about one order of magnitude in the extreme cases), language barriers are the main things holding back the demographic crisis that would come from mass economic immigration within the EU.
But that was the whole point of EU's existence: to make it easy for people to move countries. Do you claim that removing extra point of friction will make things somehow worse?
> Do you claim that removing extra point of friction will make things somehow worse?
Yes, did you not read my comment?
The peripheries of the EU (Portugal, Spain, Southern Italy, Greece, Bulgaria, etc) already see massive youth immigration and brain drain to the richer areas of the EU.
Make the majority of EU citizens fluent in English, and you can imagine how that would quickly massively increase this issue and destroy local economies and create massive political issues.
If that was true, it means whole idea of EU was wrong and people should have been forced to stay in their countries? How about building a wall huh?
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Part of their identity is shockingly low TFR (Total Fertility Rate).
In Japan, it's 1.26 live births/woman. In Singapore, it's an astounding 1.04. Both are worse than Europe (1.46) and the US (1.66).
That’s super unfortunate and I’m well aware, but it’s a separate issue.
I don't see how it can be separated from the culture as a whole. After all, what causes such differences, if not differences in cultures?
Since this inverse correlation with birth rates and GDP is observed everywhere in the world, I'm certain we're not speaking of a cultural issue.
It's not a terribly good correlation; there's a lot of variance that could well be cultural. Unless you think it's explained by genetics?
> Let's face it: our culture (all across the EU), is American, anyway.
No, it isn't. At most you could say that a part of our culture is American, but even amongst each other, EU countries differ quite a bit in terms of culture.
> At most you could say that a part of our culture is American
Don't forget that American culture mostly comes from Europe. The influence goes both ways.
I hate that you are right regarding the cultural aspect. I wish we were better at preserving our respective identities. That's why I like going to small movie theatres; they tend to play local films. And you do stumble on gems from time to time.
> introduce English as main language of schooling
Good idea - wrong language. English would make EU less European. German would be a better choice, or French or <inset an actual EU language>. Not that I believe in the idea.
English was European before the EU existed and will still be after it is gone
the EU tries very hard to conflate itself with "Europe", but it is not Europe
it is a political entity that happens to be based in Europe, and one that does not even represent a majority of the European population
it does not get to decide what is and what is not European
English is still the most widely spoken foreign language in the EU. And with UK out, it would be an almost neutral choice for a common language.
English is the language spoken by the broadest base of people in the EU, and since Brexit lacks the kind of partisan status that e.g. French or German would have.
Ireland beg to differ.
There are 5mn people in Ireland, English is now effectively a neutral language in the EU.
After Brexit, English is as neutral of a national language for the EU as Esperanto but starts with 10,000x better adoption.
Well it should be English or Mandarin Chinese depending on which superpower they want to hitch their wagon to and trade the most with
I would even go as far as to say that whichever superpower language they pick should also be used additionally for legal contracts and government work
How many people in the EU speak English, and how many speak Mandarin??
At least in the wealthier western European countries, English is already a mandatory subject from a young age. It of course varies by country, but for example Danes are learning English by age 10, followed by German/French/Spanish by age 13.
English is taught in Norway from the the first year at school at age five or six.
> The EU single market is largely a myth from the perspective of wanting to start a successful company that can compete internationally. It's not any easier now than it was before the EU existed.
[citation needed] because I think this is extremely false.
It is easy to underestimate the pain caused by having all the pre-euro currencies and pre-EU tax laws (yes there was the Schengen zone and EEC, but the EU uniformity helps a lot) and pre-EU borders.
Source: me, who is a middle-aged American founding a tech startup in the EU and visited Europe many times before the EU existed.
I think it is getting better year after year, in small steps. For example, B2B taxation within the EU (by use of the reverse-charge mechanism) has become quite easy in recent years. Of course, depending on the product, diverse local rules may apply.
I think you're both correct.
EU Single market is a massive improvement, but it's not yet really single market like in the States (although there can be a bit of legislation/tax barriers between states there as well, depending on your location and line of work).
Also, it's hard to understate just how open the US is. For me, an European living in the EU, it's as easy, or easier (larger wallets, single language) to sell (digital/online products/services) to Americans. For digital goods, might as well skip the EU.
> [citation needed]
Of the top of my head.
Uber, has to do all sorts of gymnastics to make rides work across different EU countries. And still they are routinely asked to stop serving in a country for some reason or another.
Amazon. It took them years to launch across EU, they went country by country and didn’t launch across EU at once.
They're most likely talking about digital.
Look at Netflix, a different catalog in every country.
They said it was currently worse than it used to be before the EU. That is not true.
Netflix engaging in complicated IP rights negotiations does not mean the existence of the European Union is pointless.
The current EU laws (especially tax laws) aren't helpful for businesses. If you want to do business in every EU country you basically have to register a business in each of them.
Sure, you can sell goods for €10.000 - €20.000 to another EU country without much trouble, beyond that you need to setup a business in each country, sometimes you even need employees or at least an office in a country to be able to do so. I worked for a company that shipped to a number of EU countries, from an EU country. It has taken them 15 years to expand from shipping to three countries to nine. Every time they want to enter a "new market" it is years of planning and insane fees or doing business in a supposed "single market".
The current situation is better than before the EU, but it's by no means good. Certainly no where as good as a Nebraska company wanting to sell their product in New Mexico. EU business will never grow to the size of American companies if they cannot bootstrap themself in a true single EU market. An American business immediately have a potential customer base of 350 million consumer, an EU business have at most 80 million if they start in Germany and will have to add an insane bureaucracy if they want to expand.
EDIT: My information is out of date: In 2021 a solution was introduced where you can pay your VAT locally, and the tax authority in your own country will handle the transfer of VAT to the other EU countries.
There are still some taxes (e.g. taxes on tobacco or alcohol) you may need to handle for each country, and to do some you may need to be a registered business.
This is just straight up not true. You need a legal body in a country if you want to hire someone on payroll there, you most definitely do not need one just to sell your goods and services, that's the entire point of the single market. It sounds like you've misunderstood a second hand recollection of someone else's struggles?
> You need a legal body in a country if you want to hire someone on payroll there
Even this is not strictly true. One can often just register a foreign company with the local tax agency for a direct hire. The most frequent scenario is that a foreign hire comes through their own legal entity, as a hired contractor. Now, the sad part of that statement is that often a hire comes as a hired contractor not because of cross-border taxation, but because of tax management reasons. In some EU countries, high value employees cost three euros in taxes for every two euros paid after taxes. A lot of people prefer to set up a corporation that allows them to better manage that majority of their income that goes to the tax office.
That's not employing someone in a different country though, that's contracting. And it's the same arrangement you can use to hire someone in the US from the EU.
> One can often just register a foreign company with the local tax agency for a direct hire.
This is the non-contracting employment part of GPs comment. I don’t think it’s frequently used, but it is possible.
> If you want to do business in every EU country you basically have to register a business in each of them.
This is false. Some types of business that are more heavily regulated do require you to set up a local branch.
Really? Most companies I know have just a single representative or billing endpoint in the EU.
The EU is not a federal state (yet) so the problem of having a EU wide company that could operate in all the member states is who gets the money and what do they do with it.
If I live in Portugal but my customers are mostly located in Ireland, what share does Portugal get of the corporate taxes? What share gets Ireland? What about the other countries? What if my country of residence changes in the meantime?
This seems incongruous:
> most people have zero investments outside their house.
> stock market (even though many people's pensions are tied to it)
While the underlying mechanics are similar (pension funds), the average European (at least in my corner of the EU) is completely unaware. They know some (government-mandated) amount is withheld and paid out to the government (which then routes it to appropriate mix of pension funds), and that's it.
While you can be aware of the details (and make your own pension fund choice), most people are blisfully unaware.
> The EU single market is largely a myth from the perspective of wanting to start a successful company that can compete internationally. It's not any easier now than it was before the EU existed.
This is simply not true. There is freedom of movement for workers which means it's easy to recruit top talent across the continent. Remote work is also much simplified. There's no friction moving goods and company assets across borders. The regulatory environment is significantly unified under the EU so there are few regulatory risks for companies growing outside their country within the region. Every EU company also has access to the entire continent's consumer base – 450 million residents, which is 50% more than the US.
This benefits many EU tech companies – Spotify, Revolut, Klarna, Bolt Mobility, Wise, N26, and so on and on and on.
> EU citizens like American companies
As an EU citizen, I don't bank with an American company, I don't drive an American car, I don't shop in American grocery stores nor is importing many American foods allowed on safety grounds, I don't buy American fuel, my private health insurance isn't American, and so on and forth. I only buy American tech where there isn't a more competitive Chinese alternative. I'm not against the US in any way, shape or form. I just don't think we think about the US in the EU as much as you think.
You are right in the sense that the European way of life is very different from the US way of life and we don't care that much for the economy. Yet Europe is still home to some of the largest stock markets in the world including LSE, Euronext, FSE, SIX Swiss, etc. We just don't value it as highly as other aspects in life – there is a strong sentiment of rejection of the rat race, growth of shareholder value at all costs, and other such American things in Europe.
Perhaps it would benefit you to first examine the evidence on the ground, and then re-evaluate if your belief in American values (which I respect – totally great values in many cases) blinds you to European culture around capitalism. Europe is quite socialist, after all. Naturally, less effort will be spent on capital, more on society.
> There is freedom of movement for workers which means it's easy to recruit top talent across the continent.
It might be possible, but it’s not easy and is rarely done outside a few select countries, such as Switzerland. I’ve received offers from recruiters in Poland and Germany, but most of them seem to be trying to cut labor costs since hiring a foreign worker is often cheaper than employing a domestic one. However, when factoring in cost-of-living adjustments, these opportunities aren’t very appealing. The same principle applies in reverse; for instance, a German wouldn’t move to Lithuania for work because the wages there are significantly lower.
> Remote work is also much simplified.
If I’m employed in Lithuania and want to work remotely in Germany, I can only do so for less than 50% of the calendar year. Otherwise, I’d need to be employed in Germany. As far as I know, this restriction doesn’t apply in the United States.
> The regulatory environment is significantly unified under the EU so there are few regulatory risks for companies growing outside their country within the region.
The same applies to the United States, which is the point of comparison for the EU in this case. Additionally, this is highly dependent on the industry you’re targeting, as the requirements can vary significantly for certain products.
> Every EU company also has access to the entire continent's consumer base – 450 million residents, which is 50% more than the US.
In theory, Germans will buy German products, and Poles will buy Polish products. This used to be true for digital services too, such as contracting, until companies started cutting costs by looking for cheaper labor in Eastern Europe.
I’ve worked all over Europe in the games industry as did some of my long-term friends. Relocating for employment is a broader discussion but from a regulatory perspective, it just involves driving a car. No visas, no national insurance registration, no right to work worries, etc.
Yes, salaries vary but not much in companies hiring at the global level.
The point of comparison was not the US, but pre-EU Europe as the claim in the comment I responded to was that the single market is a myth. It is not.
I don’t think Germans buy German, Poles buy Polish, etc. Many Europeans drive German cars and many play Polish games like Cyberpunk 2077, French games like Dishonored and what Ubisoft makes. Many use Scandinavian banks and so on.
Regarding employment, you are right that it is still not effortless, but you can often be employed in one EU country and live in another. This used to be called being a frontier worker I believe. With remote work, that label isn’t used anymore. But yes, living in Lithuania you’d want to be employed in Germany probably in your situation. Before Brexit, I lived in England and was employed in Italy — no problem aside from getting a taxpayer ID of sorts in Italy which was a minor hassle (mostly slow process).
I really didn’t face much of the issues people present in this thread while moving around in the last few decades. Nor have my friends. One year they work in Oslo, the other in Lisbon, then in Warsaw. Some start their own companies to contract all over Europe as supplier agreements are relatively easy from a tax perspective. I think this whole moving around Europe concern is something solved by filling out some forms for 8 hours every year and maybe paying a local accountant sometimes to sort out taxes.
> I’ve worked all over Europe in the games industry as did some of my long-term friends. Relocating for employment is a broader discussion but from a regulatory perspective, it just involves driving a car.
This simplifies the entire process. For fields like software, it is easier. For other fields - not so much.
> Yes, salaries vary but not much in companies hiring at the global level.
For Western Europe this might be true. But if you take into account Eastern Europe and Central (or Southern) Europe, this is entirely off the mark. Until very recently a Software Engineer in Lithuania could have expected to earn anywhere from 35 000 to 50 000 Eur while the same salaries in Western Europe would be double that. For other fields the difference is even more noticeable.
> but you can often be employed in one EU country and live in another
This isn't true. Most companies don't want to deal with cross-border taxes. If you live in Lithuania and work in Germany for more than half the calendar year, you (need to) start paying taxes in Germany. This either means you'll be employed in Germany (by a parent/child company that is listed there) or you won't work there.
> But yes, living in Lithuania you’d want to be employed in Germany probably in your situation.
This is no longer the case. Germany is not an attractive country anymore. It would only make sense to emigrate to the United States, if strictly speaking about salary. There are far less opportunities in Germany and not so many interesting projects to work on.
> I don’t think Germans buy German, Poles buy Polish, etc. Many Europeans drive German cars and many play Polish games like Cyberpunk 2077, French games like Dishonored and what Ubisoft makes. Many use Scandinavian banks and so on.
You are looking at consumer products (cars, games) but in industry they will buy local. It is very difficult to get into such markets, unlike the United States. There is a label of 'quality' attached to German engineering (even though most of their engineering is outsourced nowadays).
I don't want to get into a lengthy discussion on a case-by-case basis because experiences will differ based on the field you work in. The core issue is that it isn't as seamless an experience as in the United States and it is rarely done in practice. Unfortunately, I do not see any changes in this regard because of the difference in wealth across countries in the EU, a huge issue that wasn't dealt with.
Just to clarify — hiring on a global level means an employer is competing in the global market, offering a global rate for a role.
There is an ex-Uber engineer on YouTube who has a video breaking down SWE salaries by local, regional, global and probably more levels. If you can compete at a global level (companies around the world want to hire you), the employers have no chance to get an expert like you if they don’t pay the global rate, even in Poland (for games). If you only compete in the local market, then the local economy becomes relevant and you get salary differences between East/South and West EU.
By working in Germany I meant living in LT and being employed in DE. I only have an example of living in the UK and being employed in IT in my experience, but it wasn’t difficult. I just had to pay my primary taxes (against salary) there.
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Mostly agree, but this is not entirely correct:
> Every EU company also has access to the entire continent's consumer base – 450 million residents, which is 50% more than the US. This benefits many EU tech companies – Spotify, Revolut, Klarna, Bolt Mobility, Wise, N26, and so on and on and on.
Here are two examples:
Spotify, a Swedish company, had to go country-by-country to cover the EU because each country has separate regulatory bodies (eg GEMA in Germany,ZAMP in Croatia, etc...). It was in the US a lot earlier than in some EU countries.
Klarna is still not available in my country (Croatia). The banking union is not there yet and Croatia is too small a market (understandably). So, by mere fact of being in the EU, Klarna does not cover the entire EU.
>Remote work is also much simplified.
No it isn't. Or more exactly, not my experience. Nobody hires remote workers in Austria for example due to labor and tax laws discouragin this.
If by simplified remote work you mean B-2-B contract from rich countries hiring cheaper labor in Poland, Bulgaria, etc then sure.
This is absolutely not true. Moving across Europe is significantly harder than in US. On top of that companies hiring across Europe need to go B2B or EoR. The countries are absolutely not harmonised in terms of regulations, labor law or employing people.
I am sorry but you absolutely have no clue what you are talking about.
Moving across Europe may be harder than moving across the US. But moving across Europe (at least the EU) today is much easier than it was 40 years ago, pre-EU.
The bureaucracy can be a nightmare. Ironically one of the best country to move to pre-brexit was the UK. I did that without a lawyer. My other moves across EU needed a lawyer to sort out the local applications and required months ahead bookings. I also had all sort of stupid issues which prolonged one immigration situation for 3 years. I complained to the EU the host country was in violation of EU rules and they came back after 2 years saying it was my problem and that the host country was free to do whatever.
The EU is an absolute joke and a bureaucrauts' dream, no wonder our economy shrunk to half the USA's in the last 10 years.
It is much easier now but that is not what was sold to the people of the EU.
We were told you could easily move to another country. The fact is that in some case you can and in others you cant.
So on that front, the promise of freedom of movement is if not broken one not reality either.
I agree, it's definitely much easier than it was. But when comparing EU to USA and asking 'why', I think it's extremely important to remember how much less of a single market Europe is than the US/China.
Yes, that was the claim I responded to as well. Non-EU vs EU.
> Yet Europe is still home to some of the largest stock markets in the world including LSE, Euronext, FSE, SIX Swiss, etc.
Total valuation of LSE Euronext is laughable compared to NYSE or Nasdaq. (5,7 vs 30 + 16 trillion USD). Not to mention that largest European company is producing scarfs and handbags vs Nvidia, Apple or Amazon. It is XIX century vs XXI century comparing EU to US.
I thought the largest European company is making a miracle drug that is making fat Americans less fat?
Not for long. There are a lot of similar drugs, some already on the market and others in the pipeline. Recent clinical trials have shown that Eli Lilly's Zepbound (tirzepatide) is superior to Novo Nordisk's Wegovy (semaglutide).
https://investor.lilly.com/news-releases/news-release-detail...
IIRC novo nordisk is worth more than the rest of the danish gdp combined
Novo Nordisk also makes cheaper insulin which probably keeps Eli Lilly in check in free markets.
Come to think of it, Airbus is a similar example of European competition with the US that keeps the unfettered capitalist competitor in check. Boeing stands to lose something if there is a competitor waiting to eat their market share. Of course, the US is a bit protectionist so free market rules don’t always apply there. But they do in many other parts of the world.
> This is simply not true. There is freedom of movement for workers which means it's easy to recruit top talent across the continent. Remote work is also much simplified. There's no friction moving goods and company assets across borders.
There is absolute friction for people to even move across the borders. I moved to Sweden a few years ago and it took 8 months before I was fully part of the system. Now I am looking to move to Norway, and it's going to be the same ordeal.
There are countries where you can just show up with your bags and start living there but it doesn't apply to all of them.
So good luck recruiting talent, when the talent has to jump through hoops to get an ID card or open a bank account or even rent an apartment.
> The regulatory environment is significantly unified under the EU so there are few regulatory risks for companies growing outside their country within the region. Every EU company also has access to the entire continent's consumer base – 450 million residents, which is 50% more than the US.
It's not about regulatory risk but about overheads. The rules for selling cross border are vague and opaque and you need a PHD just to make sure that you comply with all the regulations or a good lawyer.
Yes, in theory you can reach 450M customers, in practice much less so.
> I just don't think we think about the US in the EU as much as you think.
Maybe you don't but I can assure you that our leaders think of the US for the simple reason that the EU is not in position of strength at the moment.
Case and point, the EU leadership is scrambling to avoid Trump starting a trade war with the EU while also trying to placate China who is also starting to show it's strength.
If we were in a position of strength, things would be different but the EU simply does not have the muscle to put up a fight.
The EU has stopped investing it's its armies and can barely help Ukraine. It has some tech companies but an order of magnitude less than the US. It is currently losing the space race against the US and China and it obliterated it's industrial base.
All of this is going to come back to haunt us at some point and not in a good way.
> Spotify, Revolut, Klarna, Bolt Mobility, Wise, N26,
You have to realize that most of the businesses you mentioned are completely dependent on American infrastructure. Where do you think that Klarna et al are deploying their applications? On Hetzner? No on AWS or GCP or Azure.
How do you get access to those applications? Through the app store or Google play which both belong to American companies.
Who is driving the innovation in AI , self driving cars, robotics? No the EU.
> You are right in the sense that the European way of life is very different from the US way of life and we don't care that much for the economy. Yet Europe is still home to some of the largest stock markets in the world including LSE, Euronext, FSE, SIX Swiss, etc. We just don't value it as highly as other aspects in life – there is a strong sentiment of rejection of the rat race, growth of shareholder value at all costs, and other such American things in Europe.
You don't care about the economy until your government services start shutting down because the economy is in the dumpster due to 20 years of under-investments and over taxation.
If productivity does not go up, if people don't care as you said then the outcome is stagnation and a decline of quality of life.
The services you rely on are paid for by the taxes raised on the companies of Europe. Who is going to fund the European lifestyle when companies decide to leave the EU taking their profits and taxes elsewhere because the EU is smothering them with rules and regulations?
Welcome to Norway! I hope you like bureaucracy :)
The business I mentioned depend on American infra which depends on Chinese components that run, often, open source code written by Americans, Europeans, Russians, and many others. It’s a globalised world. But your claim was that EU has an environment that can’t sustain or cultivate new successful businesses. Evidence suggests that is not the case.
Countries with a strong social safety net are not experiencing the stagnation in quality of life you describe. Once again, look at the evidence. There are various quality of life indices.
Sorry but chasing money at every opportunity does not lead to better outcomes. This is very evident in capitalist western countries now with record inequality, private capital dictating politics, CEO and other shootings in the streets, healthcare poverty and so on. I’m not against capitalism as many EU welfare states are still fundamentally capitalist, but I’m just saying the quality of life claim doesn’t stand up to scrutiny.
Yeah, you need an accountant and a lawyer to do business across the single market if you don’t want to learn the local laws. I don’t think you wouldn’t in the US though. Compare and contrast CA consumer and corporate laws to TX laws. They are quite different. You would benefit from a lawyer. They aren’t that expensive in the EU compared to running a business though — I currently retain a lawyer for €2.5k per year. So about €200 per month. This is from a private corporate law firm in Eastern Europe. They prepare 4-5 documents every year for statutory needs for that price and do an excellent job. If your business has at least 5 employees or meaningful investment (VC, angel, etc), this becomes a negligible cost. You are totally right that dealing with bureaucracy in the EU is a total headache, as I believe it is in Cali and so on. But I claim that this headache can be removed with a minor expense and therefore it is not a meaningful obstacle.
> The EU single market is largely a myth from the perspective of wanting to start a successful company that can compete internationally. It's not any easier now than it was before the EU existed.
Everything I've heard from small UK businesses post-Brexit says that the EU single market is actually pretty useful.
> The EU is still a collection of different countries, with different languages, and the people in one country doesn't really care about what happens across their border or which new and up-and-coming company they have to offer.
14 million EU citizens who live (as of 2020) in a EU country other than their own beg to differ. I'm one of them and know about the plentiful of rights that I enjoy as a EU citizen to live in another country. There are dozens and dozens of cities that attract students and workers from all EU countries.
Regarding the single market, well the Brits are learning the hard way how easy the flow of goods and wares was when they were still part of it.
> It's not any easier now than it was before the EU existed.
Perhaps you don't remember how it was before the EU existed. Compare a Polish company doing business with France before Poland joined the EU vs today.
"The EU single market is largely a myth"
People in the UK might disagree now.
The Leave campaign was significantly duplicitous about post-Brexis access to the Single Market; they've always known it's a real thing or they wouldn't have had to lie about it.
> We don't live on credit, but debit, and most people have zero investments outside their house. We're content and risk adverse and don't care much for the stock market (even though many people's pensions are tied to it).
This is a contradiction. We all have pensions, and in many cases multiple pensions, up to three or more in Sweden.
All the points you listed apply to India as well, with its multilingual states and conservative scarcity-driven mindset. Yet entrepreneurship is growing here at rates never witnessed before.
Indians don't coast like Euros. Average standard of living is much lower in India which motivates them to do things to raise it.
Maybe, but then standard of living in India was always poor - in fact, much poorer before than it is now. Yet it is only now that entrepreneurship is at a peak never seen before in the country.
The EU and Globalism is a mechanism for corporations/companies to get constant cheaper labor. The other implications are not important for the parties that make these decisions.
> Us Europeans are more 'detached' from the economy than people are in the USA.
I think you're referring to "finance" or something. As to why we americans mostly speak in economic terms relating to the stock market—I honestly think we're just a really dumb people incapable of expressing our needs.
not much to say except that i agree very much with it in general
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This is so true. I’m a software engineer in Berlin, and I’m from Sri Lanka. It amazes me how many young people are still pursuing bachelor’s or master’s degrees in business management or related fields instead of specializing in STEM fields, where they’d have a better chance of securing a high-paying job and making a meaningful impact. It seems like everyone wants to work for big four audit firms, but they often end up doing poorly paid internships in companies unrelated to their higher studies field.
As you mentioned, the EU single market is just another bureaucratic monster. If you want to expand your business to other countries, you’ll need to apply for passporting. Then, if you ever want to provide services related to local taxes, you’ll have to have a physical office registered in the respective country. Each country also has its own nationalistic preferences regarding which services and products they use. For example, the French tend to prefer French companies over any other company that provides the same product, or even a better version from another European country.
In essence, the EU is simply a massive tax burden on European citizens, benefiting only a handful of countries within the continent.
I think EU simplifies things a lot and accelerates the economy.
I'm from a small country. Almost whatever business you do, you usually start thinking export really fast. One thing to say about EU is what they say about Africa. It's not one, there are different places in there. If you've been in one, then that might not apply somewhere else.
I don't think EU countries have that many domestic businesses anymore. Companies operate in multiple countries and have supply chains crossing borders. People can freely just go and work wherever they want just like that. EU has removed so much friction and middlemen.
Maybe German and French people could learn English a bit better and it would be smoother for business. And taxation of work could be harmonized and simplified so it'd be easier to buy labor (and not just products or services) from anywhere. That's a hard problem though because of the different societies and services and thus different taxation.
What would you improve?
> In essence, the EU is simply a massive tax burden on European citizens, benefiting only a handful of countries within the continent.
The tax burden is absolutely not "massive", either in relative or absolute terms. Money going to underdeveloped parts of the EU is by design. Helping them helps everyone. It creates a huge internal market and companies and people benefit, even from net contributing countries. There sure are issues to solve, but in pure monetary terms, the EU is a no brainer, just look at the UK.
> Money going to underdeveloped parts of the EU is by design. Helping them helps everyone.
That is your take on it. But is it true? How does a French/German person benefit from the money from their taxes being sent to another country when their own economies are in the dumpster?
> It creates a huge internal market and companies and people benefit, even from net contributing countries.
Maybe for big companies. I don't think a plumber in Spain cares that they can sell their services to someone in Latvia.
> There sure are issues to solve, but in pure monetary terms, the EU is a no brainer.
Then why is it that we are having this conversation?
If the EU is a no brainer, we should be swimming in cash, shouldn't we?
Even the most ardent supporters of the EU have finally admitted the truth (such as Mario Draghi), the EU is falling behind on many fronts including but not limited to AI, EVs, economic output, industrial output, defense spending and so on...
> Just look at the UK
That's a bit disingenuous. There are many countries in Asia or elsewhere that are doing just fine without being part of a union such as the EU.
What about Germany currently? What about Greece after 2008? What about France which had a 10%++ unemployment rate for the majority of the 2010s?
The UK is not doing well at the moment, that is a given, but let's not pretend that the countries in the EU are doing any better either.
At least the UK has a functioning government whereas France is in a deadlock and will soon go through it's 4th prime minister/government of the year.
> How does a French/German person benefit from the money from their taxes being sent to another country when their own economies are in the dumpster?
Both France and Germany are above EU average GDP PPP, how is this equivalent to a dumpster?
> If the EU is a no brainer, we should be swimming in cash, shouldn't we?
How did you reach that conclusion?
> How does a French/German person benefit from the money from their taxes being sent to another country when their own economies are in the dumpster?
I benefit when I can use a Latvian bank that does not take an arm and a leg for basic services, and when I can get decent and cheap goods from all over Europe. I benefit when I can go and work in another country with different opportunities. People who complain about the EU and inflation have no clue how it was before the single market.
> If the EU is a no brainer, we should be swimming in cash, shouldn't we?
Well, firstly by most standards we are. The problem is inequality and the way wealth is distributed, not the lack of it.
> Even the most ardent supporters of the EU have finally admitted the truth (such as Mario Draghi), the EU is falling behind on many fronts including but not limited to AI, EVs, economic output, industrial output, defense spending and so on...
This is true, but none of this is the EU’s fault. It does not control the industrial policies of the member-states. And how would any of these member-states fare in an ideal timeline where the EU does not exist? Would having 27 different currencies, 27 different tariffs systems, 27 completely different tax structures with controls at each border help with developing any of this?
> That's a bit disingenuous. There are many countries in Asia or elsewhere that are doing just fine without being part of a union such as the EU.
I never said it would not be fine outside the EU, I am just saying that it would be measurably worse. That other countries in other circumstances do better or worse is neither here nor there. The UK provides data on a single country being inside and outside in a short time span. All the complications it is going through is something it did not have to do when it was in the EU, and any other country would have to deal with the same issues.
> What about Germany currently? What about Greece after 2008? What about France which had a 10%++ unemployment rate for the majority of the 2010s?
You are cherry picking. All these except (in part) Greece are the consequences of national politics. You cannot say that the EU is to blame for every single bad outcome in the last 30 years while saying nothing about the successes. It’s just dishonest.
> The UK is not doing well at the moment, that is a given, but let's not pretend that the countries in the EU are doing any better either.
The UK is doing spectacularly badly. I sincerely hope that it’s getting better but let’s not fool ourselves: I cannot name a French prime minister or president that was as bad as May, Johnson, Truss, or Sunak (I could name a couple of Camerons though, so it’s certainly not all good). Good luck to Starmer and I hope everyone will get better, but in the meantime it was the opposite of smooth and painless, and the UK is still not where it would have been.
> At least the UK has a functioning government whereas France is in a deadlock and will soon go through it's 4th prime minister/government of the year.
None of these governments were as inept as Truss was and the reason why there is some instability currently is that the parliament is more representative of the people. I’ll take that any day instead of a party having an absolute majority with 37% of the vote.
> I benefit when I can use a Latvian bank that does not take an arm and a leg for basic services, and when I can get decent and cheap goods from all over Europe. I benefit when I can go and work in another country with different opportunities. People who complain about the EU and inflation have no clue how it was before the single market.
So first off, there are many countries where moving is not just a walk in the park within the EU. There are some countries where you can just show up with your bags but it's definitely not all of them.
Then about the cheap goods/services part, how does it benefit someone from France when a company from eastern Europe can undercut them and send a team to do job at a 30% discount compared to the normal price?
You see the good side of the single market without acknowledging that it has also been used to create unfair competition between the different countries due to the difference in social contributions and lower wages.
That is exactly what has happened with globalization and while there are some clear winners, we can say that a part of the middle class was sacrificed in order to reduce the costs of production of goods and services.
The same is happening now in Europe.
> Well, firstly by most standards we are. The problem is inequality and the way wealth is distributed, not the lack of it.
You cannot be serious. Many countries such as Greece, Italia, France, and now Germany are all in bad shapes. If the situation was good, we wouldn't be having this conversation.
The GDP of Greece is still 30% lower than what it was in 2008? How's that for doing well?
Also what does wealth inequality have to do with the under investment that the EU has done for the last 30 years? Has wealth inequality stifled productivity or stopped the EU from developing it's own Cloud or stopped the EU from investing the EVs?
> This is true, but none of this is the EU’s fault. It does not control the industrial policies of the member-states. And how would any of these member-states fare in an ideal timeline where the EU does not exist? Would having 27 different currencies, 27 different tariffs systems, 27 completely different tax structures with controls at each border help with developing any of this?
A currency is a tool that is linked to industrial outputs and therefore can affect the economy of a country.
When the Euro was introduced it forced Germany into a devaluation of it's currency since the euro was weaker than the Mark. That in turn made Germany into the power house of Europe whereas in France, it made goods more expensive and increased the labor costs which means that most of the industrial capacity of France left and went overseas and unemployment started rising.
The euro's problem is that it is not adapted to the countries with weaker economies who could do a devaluation if they did not have it in order to boost their exports.
Secondly, you mention 27 different tax structures which is exactly what Marco Draghi is highlighting in his report. If he is talking about it, that surely means that these problems still exist.
For the last 30 years, the EU has been sold to the people of Europe as the Messiah.
It will produce economic growth they said, it will make things better for everyone they said and so on and so forth. From my little corner of the world, we can see that these promises have not been fulfilled and far from it.
If the EU was meant to protect us, it has failed. The EU can't even help Ukraine properly. What kind of deterrent is that?
If it was meant to create economic growth, look at what is happening now, sandwiched in a trade war between the US and China with no way to respond to either one of them as we depend on China for our stuff and we depend on the US for all our tech.
America innovates, Europe regulates and China copies.
> You are cherry picking. All these except (in part) Greece are the consequences of national politics. You cannot say that the EU is to blame for every single bad outcome in the last 30 years while saying nothing about the successes. It’s just dishonest.
Ok,let me get this straight, you are saying that all the problems that these countries are having is not because of the EU and also saying that if only the UK had stayed it would have not any of these problems (low growth, low productivity and so on...).
Yet, the countries within the EU are having many problem, so how is being in the EU supposed to help with these problems?
You can't just absolve the EU from all it's failures while only claiming the successes.
I bet you that if a country is doing well within the EU, you would probably tell me that it is because of the EU. When it's doing badly, it's not the EU's fault.
Heads you win, tails I lose, right?
> The UK is doing spectacularly badly. I sincerely hope that it’s getting better but let’s not fool ourselves: I cannot name a French prime minister or president that was as bad as May, Johnson, Truss, or Sunak (I could name a couple of Camerons though, so it’s certainly not all good). Good luck to Starmer and I hope everyone will get better, but in the meantime it was the opposite of smooth and painless, and the UK is still not where it would have been.
Macron has added 1000 billion euros of debt in 7 years and his government had a shortfall of 60B euros this year. Instead of being honest he instructed his finance minister to hide the truth. Once fired, his minister decided to leave France in a hurry and moved to Switzerland in order to avoid having to answer difficult questions.
Now that the truth is out, he decided to spearhead a budget to tax the middle class even more while protecting his rich friends.
If think, if you look hard enough, you will see that he is as bad as any of the ones you mentioned in your comment.
> A currency is a tool that is linked to industrial outputs and therefore can affect the economy of a country.
The EU is not the Eurozone, you are conflating two concepts.
> When the Euro was introduced it forced Germany into a devaluation of it's currency since the euro was weaker than the Mark. That in turn made Germany into the power house of Europe whereas in France, it made goods more expensive and increased the labor costs which means that most of the industrial capacity of France left and went overseas and unemployment started rising.
Everywhere the Euro is introduced sees a spike in prices from corporations taking advantage of it, again you are conflating the Eurozone with the EU, they are different things.
> The euro's problem is that it is not adapted to the countries with weaker economies who could do a devaluation if they did not have it in order to boost their exports.
Completely agree, the ECB's monetary policy is not ideal when there are so many different economies under it.
> Secondly, you mention 27 different tax structures which is exactly what Marco Draghi is highlighting in his report. If he is talking about it, that surely means that these problems still exist.
Yes, the problem exists, exactly because the EU is first and foremost an economic union, not a federation, allowing countries to maintain their sovereignty including set their own tax policies is the only way it can exist right now. There's no appetite to create a EU Federation in its member-states, while that doesn't exist there will be many issues with the EU.
It doesn't mean that without the EU the countries would be faring better, you are jumping into conclusions from a non-logical standpoint, conflating that the EU isn't perfect for everyone doesn't mean it's not good for everyone, separate these concepts in your head.
> For the last 30 years, the EU has been sold to the people of Europe as the Messiah.
No, the EU has been sold as a bloc that makes Europe stronger than if it didn't exist, I'd invite you to describe exactly how you think its member-states could be faring better by themselves outside of the EU agreements. Let me know how 27 small states could be doing better on their own rather than in an unified trading bloc with common regulations to reduce friction in trading.
> It will produce economic growth they said, it will make things better for everyone they said and so on and so forth. From my little corner of the world, we can see that these promises have not been fulfilled and far from it.
It did, the problem is that we live in a world where the EU exists so you can't see how Europe would be without it. Again you are conflating the EU having issues with the non-existence of the EU being better, those are very different things...
> If the EU was meant to protect us, it has failed. The EU can't even help Ukraine properly. What kind of deterrent is that?
The EU was not a defence alliance, it's slowly growing into taking defence as part of its mandate. Again, since it's not a federation there was no appetite to create a common EU defence force, each member-state kept its sovereignty in defence matters. With the war in Ukraine there is a new appetite to push the EU into those matters, it takes time to enact changes across 27 different countries with their own cultures... You are just too eager and cannot comprehend that it seems.
> If it was meant to create economic growth, look at what is happening now, sandwiched in a trade war between the US and China with no way to respond to either one of them as we depend on China for our stuff and we depend on the US for all our tech.
> America innovates, Europe regulates and China copies.
America has 350+ million consumers in its market, with no language barriers, and as varied as each state is in the USA it's really much more homogeneous than the differences between Denmark and Greece, or Poland and France, etc. You can't expect the same in the EU, which again is not a federation.
Still, Sweden as an EU member is above the USA in rankings of innovation, the EU can foster that since Sweden can trade freely with all its members and other member-states can learn from the innovative ones.
Stop trying to dismantle the EU because there are issues, the spirit of it has always been to acknowledge those failures and work together to build it stronger, you are exactly the type of person who will undermine that tenet instead of helping it.
If you don't like it, move away from it, go to the USA.
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It really is an eternal September.
> In essence, the EU is simply a massive tax burden on European citizens, benefiting only a handful of countries within the continent
Ummm... The EU budget and workforce is smaller than that of a big European city, let alone a country. If you look at the numbers, the actual EU machinery is very small for what is basically a government institution.
"rivals"?!
But is the majority of the population thriving?
It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck.
A handful of companies are thriving, but barely any of its employees.
US Federal Reserve studies indicate that the percentage of US households with no excess income after necessary expenses (as distinct from "ordinary expenses" as a term of art) is on the order of 10-15%. This definition roughly matches most people's intuition of what "living paycheck-to-paycheck" means. That isn't nothing but it implies 85-90% of Americans are not actually living paycheck-to-paycheck.
There is another 25-30% of households that spend all of their income on ordinary expenses beyond necessary expenses. This includes things like car payments on a new BMW or a mortgage on a big house; "ordinary" is determined by expense category, not expense necessity, so a lot of spending on luxury goods is classified as "ordinary". By implication, there is effectively no ceiling to ordinary expenses.
By contrast, the median US household has >$12,000/year in excess income after all ordinary expenses. Technically these households could have expanded their lifestyle to consume that income, but in many cases they are spending it on things that are not classified as "ordinary" and therefore not saving it. The categories of "non-ordinary" expenses (which have a sensible objective criteria) are almost entirely obvious lifestyle flex things, so not particularly controversial.
The implications of these statistics are pretty wild. The median household can easily accumulate a million dollars in inflation-adjusted net worth, not including their house, over a 40 year career. And they can do it without being particularly thrifty, since ordinary expenses covers a lot of luxury spending.
Americans have very high incomes, both in theory and practice, they just would rather spend it than save it.
IMO a major deficiency in this calculation is children. Raising children costs money, and families without enough income may not feel that they can afford to raise children, and they may therefore not have children. This means that their income looks better than it really ought to, and it also reduces the birth rate. And, while the US’s birth rate is not catastrophically low, it is below replacement. This may have some negative long-term consequences for the economy.
Americans are largely solving this problem by not having children, or only trying to have children when it’s financially easy but medically difficult.
Automation may actually be the answer to a declining birth rate, and we might stabilize at a much lower world wide population as a result (say 4 rather than 8 billion). People will complain less about Waymo stealing jobs when there are no uber drivers left, but we really aren’t there yet, we still have a surplus of labor.
(not a reply to seanmcdirmid) I couldn't reply directly to 'ayewo's post, so I reply here: I'm not sure where you are finding birthrates are climbing elsewhere. The forecast for most of the planet is birth decline over the next 50 and 100 years. Africa will mainly still contribute to population growth, but a lot of other areas/countries are headed for net decline in population, with the results hitting us in 50 and 100 years. It is not necessarily all bad, if we cope with it in relevant ways - a "solution" that was based on populations steadily forever climbing wouldn't be sustainable anyway, for many reasons.
Unemployment is low, labor force participation is high. We do not currently have an excess of labor, and a good deal of the reason that we had inflation was that there was no pool of waiting labor to soak up money injected into the economy during covid -- so instead that money bid up prices.
We have uber drivers complaining about too many people driving for uber in my area, so I don't think waymo would be welcome. We still have people who are unemployed or underemployed, for whatever reason, and automation pushes have huge resistance (e.g. dock workers in America don't want automation to hit ports like they have in China).
You are never not going to have some people who are unemployed. Don't mistake that for the idea that the economy is demand-constrained. It's clearly not right now, and automation of Uber workers would certainly make someone unhappy, but it would also very clearly lead to economic growth and vastly more people being better off than worse off.
Your opening sentence was well articulated.
But I’m not so sure about your second sentence. How does a situation where world wide population drops to 4 billion come about?
Even if US birth rates are declining, birth rates are climbing elsewhere so I’m struggling to see how in aggregate, the world population declines to half of what it is today.
> birth rates are climbing elsewhere
Where are birth rates climbing? Narnia?
Africa
Not enough to compensate for everywhere else plus even there most countries are tapering off.
[citation needed]
Every source I've looked at shows a drop in fertility.
Birth rate is a somewhat ambiguous term. Does it mean number of births? Or does it mean number of births per person?
You're talking about fertility rate, which is number of births per person. That's decreasing everywhere.
ayewo may have been talking about number of births. That is increasing in Africa, but even with Africa, is still decreasing in total worldwide:
https://ourworldindata.org/grapher/annual-number-of-births-b...
I'm pretty sure birth rate is universally seen as a second order thing rather than a first order thing.
What are you referring to by "birth rate"? Are you referring to the general society-wide system of babies being born? Or are you referring to a specific metric relating to how many babies are born?
From definitions I find online, first order vs second order refers to systems. So if you're applying those adjectives to a specific metric, I'm not sure that's correct.
I don't think we can say that people "universally" agree about what metric the term "birth rate" should refer to, because different people in this thread are using the term to refer to different metrics. However, I do think that generally the term "birth rate" refers to the number of babies born per year (or other unit of time), and the term "fertility rate" refers to the number of babies born per woman. Fertility rate is actually somewhat more complicated than that, because it takes into account the different fertility rates for women of different ages, and then sums those together, to simulate how many children a woman would have who passes through all the different ages.
Not climbing coming down, but still high
not op but i think the climate catastrophe will curb population extensively. on the one hand by simply killing a lot of people directly (mostly war, famine and displacement), on the other hand by reducing birth rates (i.e. people not wanting to have children when there's not hope for the future).
One interesting thing about birthrates that I think most people haven't really looked at is the data segregated by age groups.
In most countries with falling birthrates (save some exceptions like Japan) a huge part of this decrease is in the 15-25 age group. There is usually also a decline in the 25-29 but there's an increase or the same rates as we've had historically on the 30+ range.
What this mean is basically that we've eradicated teen pregnancy, and that's definitely something desirable in a developed society.
A sustainable population - not increasing just staying the same - requires each and every single female have more than 2 children on average.
Starting in your 30s, especially later 30s makes this extremely difficult. It takes months of perfectly hitting ovulation windows to get pregnant, and then you generally want at least ~9 months between children, so you're looking at ~2 years per child, all while fertility starts to rapidly decline as you head into your 40s.
The long and short is that a sustainable population is going to require the majority to start having children in their 20s. That figure going down has nothing to do with teen pregnancy.
> It takes months of perfectly hitting ovulation windows to get pregnant
30% of couples who don’t use birth control and who have regular sex get pregnant within one month.
60% get pregnant within three months.
80% get pregnant within six months.
As a peer alluded to, that's going to be for some ideal demographic in their twenties (probably early), hitting ovulation perfectly. Age changes things dramatically:
"Women younger than 30 have about a 20 percent chance of getting pregnant naturally each month. By age 40, the chance of pregnancy is about five percent each month." [1]
Things like IVF do not dramatically change the odds either. They're better of course, but it's far from guaranteed - it's still just a rather expensive roll of the dice.
Then on top of all of this, having children later greatly increases the chances of miscarriage, developmental issues (like Down syndrome) and so on.
Life's brutal here - you're in a race against time, yet the later you start the longer it takes, and the harder it becomes.
N=1 anecdata here, but... My wife and I got pregnant -- both times -- during the first month of trying. We were mid-30s, myself being 3 years older than she is, and my wife was old enough at the time of conception to have had a "geriatric uterus" and our first pregnancy, spontaneous fraternal twins, was considered "high-risk" out of the gate because of her age.
> Things like IVF do not dramatically change the odds either. They're better of course, but it's far from guaranteed - it's still just a rather expensive roll of the dice.
Sadly, literally all of our peers who were trying and having kids in the same demographic as us, +/- a few years, struggled hard and most needed fertility treatments. At least 2-3 of them were never able to conceive, despite the expensive and time-consuming treatments. It's brutal.
I will also add, I have a number of friends who are >= 10 years younger than I am and many of them also struggled with miscarriages in their late 20s while trying to start families.
~33% of pregnancies result in miscarriage. Most women who have tried to have kids have had one, sometimes even more.
What is the age of those couples?
No, if there is also a decline between the ages of 20-29 then the implication is not that we've eradicated teen pregnancy. It's that people are not having as many kids. When you have kids in your 20s you can have more than if you start in your 30s
>implication is not that we've eradicated teen pregnancy.
>a huge part of this decrease is in the 15-25
It is.
15-18 is only a fraction of 15-25...
I am all for preventing teen pregnancy, but the data sounds more like young people can't afford having children so they are waiting longer.
They couldn't "back then" either, I would argue.
"back then" a family could live on a single income.
This was largely for relatively privileged people. Most families the mother worked as a teacher, nurse, domestic, secretary, nanny, etc.
Common misconception. Poverty levels were far higher. In 1950 half the global population lived in abject poverty. Today, it's less than 10%.
They had to. Outside a few vocations, women weren’t allowed to work.
And now they have to work because a single income is no longer enough. Yay for progress.
Some people could. There was also a lot more abject poverty.
Working a minimum wage could buy a starter home "back then". It now can hardly pay rent, and starter homes essentially no longer exist, even if someone wanted one.
It's not just that young people can't afford to have babies is that women in the 20-29 range are either studying or entering the work force.
These are extremely important years for career building.
It's more about the fact that young women are choose to build their education and career (like men do) rather than have children.
Most children were born from parents in their 20s though… I don’t know you spin this when one age group stays the same and all others drop.
the thing is, this is happening across any remotely wealthy or developed country, and in that sense the US is actually the ninth highest birthrate in the OECD and well above the average. The only OECD country with fertility rates above 2 is Israel, and that's mostly because the ultra-Orthodox have really high birth rates.
But the birth rate is on par with the rivals it’s being compared to in this article/thread.
Children just aren’t that expensive.
Most of the significant expenses people describe are optional. It is more rational to match your spending to what you can afford with howevermany kids than it is to match the number of kids you have to an arbitrary lifestyle.
They aren't in 'traditional' households where at least one parent stays at home. Without that daycare/nanny and other costs can become very significant. It's also not just daytime stuff. Babies need to feed every 2-3 hours, including at night, and each feeding session can be quite lengthy. That doesn't synergize so well with getting a full night's rest to go join the rat race the next day.
>That doesn't synergize so well with getting a full night's rest to go join the rat race the next day.
I feel this in my bones as I read this while rocking my infant who won't sleep for the last 2 hours.
I think this varies wildly depending on where you live. Where I live (Melbourne), just the cost of suitable housing (a/ near a school, b/ close to most jobs, and c/ with space for 1+ children) is so high that it makes it difficult for a lot of couples to even consider children.
https://www.abc.net.au/news/2024-06-04/why-australians-arent...
But it wasn't cheap "back then" either. I've spent 1 hour one way riding 2 buses to school (same as my parents to work). We had 62 m^2 (670 sq. ft.) of house for 2 parents + 3 children.
It's just now we suddenly consider that too bad. Back then it was normal, just like everyone else.
I don’t know where you were born and how old you are, but that situation was defiantly not usual when i was a child (born 1983 in Israel). If anything I think I’d need a startup-liquidity-event level windfall to be able to afford housing as spacious as my parents bought in the 80s (housing costs increased way more than wages).
It may have been when my parents were born though (mid 1940s, one in what is now Israel and the other in what was then the Soviet Union).
But your parents didn't live in Israel 2019. Israel 1983 was more like today's Venezuela or Argentina. If you move today to a place comparable to Israel in 1983, you'll be able to afford even more space than your parents.
Not sure why 2019 specifically, it's 2024. I think you also underestimate 1980s Israel - although there was a stock-market crash in 1983, it was not otherwise that poor- maybe more like today's Portugal or Greece than Venezuela.
But anyway my parents were 1983 Israelis, they didn't come with future-Israel purchasing power - so they were able to afford their housing on the income of the time :) Other kids in my class had ± similar housing. Some were poor and had worse housing, but not 5 people in a 62m flat level of poverty- for that to be common you had to go back another couple decades (e.g. my mother's childhood experience in the 40s-50s was more like that, might have been common up to the 60s).
> Not sure why 2019 specifically, it's 2024.
Because in 2019 real estate was not only expensive by itself, but also all the future growth was added to a price.
Today in 2024 you can buy very cheap in some places (north, for example).
> there was a stock-market crash in 1983
Not just stock-market. By the time of the crash, Likud laid waste to the whole economy to undermine "the left".
what is space for a child? In previous decades it was acceptable for kids to share rooms via bunk beds.
Kids can share a room but that still means an extra room, which has a cost. Plus kids come with stuff like clothing, toys, school supplies, etc.
I never had my own room. Up until age of 14 I slept on bunk bed sharing a room with my brother and my parents, so it doesn't always mean a separate room.
If you don't own a home you have to rent and they simply won't and can't legally rent you too small an apartment or one with insufficient bedrooms.
In practice having 2 or 3 kids is going to mean going from studio/1 br to 2/3 br and double or triple housing costs.
That seems draconian. Is that a US federal/US state/other country law?
Same in Germany. There are minimum requirements on the living area for children.
State by state but the same most places. Even if the law would let you are you going to raise a family in your 350 sq studio?
Eurostat [0] would have you believe that you want 3 rooms for a family of 2 adults and 1 child. That's fine as an aspirational goal, but I feel that parents with a toddler living in a signle-room flat is good enough, especially for the baby.
[0]: https://ec.europa.eu/eurostat/statistics-explained/index.php...
This. Every time I hear parents in SF Bay Area complain that kids are too expensive, I ask them what are they spending -- turns out they consider stuff like private school a necessity. The bar of "normal" is raised significantly, that's it.
Who takes care of the kids while the parents work?
> This includes things like car payments on a new BMW or a mortgage on a big house
This also includes car payments on a used honda, and a mortgage on a small condo no? Why the exaggeration?
Because they were using those examples to illustrate the difference between necessary and ordinary expenses?
Doubtful. What metric determines between a "big house" or a "necessary house"?
$400000 will buy you 3 bedrooms in some areas and not even an EPA-condemned quarter acre in some others.
You're arguing the counter, but all you did was prove their point that these expenses can be classified according to a situation.
I do not believe this Federal Reserve study can classify such things. It either has a metric which is so incorrect as to be worthless or a biased human judging a dataset so small as to be worthless.
There are families which cram 3 generations and a dozen people into a few hundred square feet. There are people in Hong Kong living in spaces smaller than most American kitchens. By those metrics are we ALL in excessive lodging?
Is it excessive to be in a 1600 square foot house whose mortgage is lower than rent for a 500 square foot studio because you bought when interest rates were far lower?
The Federal Reserve study classifies non-ordinary expenses with households by comparing against median data for a region. For example, having a massive house means the square footage is significantly above median for the region and classifies it as a non-ordinary expense. As far as I know, it doesn't look at interest rates on individual mortgages because I don't believe they have that data accessible. It is a pretty sophisticated multi-dimensional approach they look at household income levels, regional economic conditions, household composition, rural vs urban, local cost of living, etc. It accounts for whatever the team of economic phds who designed it could think of with the data they have available.
The point is that the Fed isn't classifying those things. "Ordinary" includes all primary mortgages, whether for a modest home or a luxury pad. It includes all personal car payments, whether for a shared Honda or a Maserati.
Also by the Fed: 4 in 10 Americans lack enough money to cover a $400 emergency expense:
https://fortune.com/2023/05/23/inflation-economy-consumer-fi...
Question EF3. Suppose that you have an emergency expense that costs $400. Based on your current financial situation, how would you pay for this expense?
Response Percent
Put it on my credit card and pay it off in full at the next statement 37
Put it on my credit card and pay it off over time 16
With the money currently in my checking/savings account or with cash 45
Using money from a bank loan or line of credit 3
By borrowing from a friend or family member 10
Using a payday loan, deposit advance, or overdraft 2
By selling something 7
I wouldn't be able to pay for the expense right now 13
Note: Number of unweighted respondents 11,400
from https://www.federalreserve.gov/publications/files/2023-suppl...
Hard to interpret this. It either shows that 55% do not have enough money to pay the expense, or that 82% may well have the money but 37% would prefer to pay it off after their next paycheck anyway.
I've seen people interpret "would use a credit card" as a sign something is wrong but for me it just means I like getting cashback.
Though to me it looks pretty dire - having to sell something, borrow from family/friends, etc. for 400 bucks is pretty terrible.
No, it's 35%. Credit card usage is fine if you can pay off the card.
The ones that can pay immediately, ok. But paying it over time for $400 is pretty much a sign of hardship.
What about the 45% who would just pay it off with cash/savings?
That question allowed respondents to select multiple. EF2 and EF7 give a very clear picture of the average person’s financial situation.
This puts at 35% those for whom $400 would be a hardship (don't have the money on hand). Still a significant amount.
Those numbers cannot be percentages, they add up to 133.
Perhaps because 4 in 10 Americans are bad with money. As jandrewrogers stated, Americans are not good savers. (I believe this is a big contributor to our trade deficit as well.)
To be honest, you don't really want people saving too much in a healthy economy. You want them spending.
But then where would the investment come from?
> There is another 25-30% of households that spend all of their income on ordinary expenses beyond necessary expenses.
> This includes things like car payments on a new BMW or a mortgage
So you're not accounting at all for how much of your income goes toward e.g. interest on the loan vs. the principal? Isn't that kinda important?
Also, do car loans for cheaper cars somehow not fall in this picture? Why do you portray people as buying new BMWs when all cars in general have gotten so expensive?
If 10-15% of American families live from paycheck to paycheck, it means pretty much everyone knows someone who’s struggling.
Another aspect of these numbers is how much of the ordinary expenses are not luxury items but things like a car (because public transport is terrible), childcare (because people need to work to pay for it and the car that’s needed to shuttle kids around) and some healthcare (because public healthcare is nonexistent).
Americans pay a lot of money for things other developed countries would say is a basic human right.
"If 10-15% of American families live from paycheck to paycheck, it means pretty much everyone knows someone who’s struggling"
Not really. Most social groups are fairly homogeneous. Even those that view themselves as knowing a wide swat of people from all sorts of live are unaware that beyond some superficial diversity they tend to have unconsciously selected for commonality of outlook and context.
I learned this at a young age when due to circumstance I elected to do my back then obligatory military service year before going to university as opposed to all my friends that first finished their studies and then (mostly) opted for the 'conscientious objector' route and spend 24 months in civil service.
Going into the army without a degree you get to spend a lot of time with many people that can't read or write, could not finish high-school, never had opened a book or seen any of the films or heard the music your mates loved. Often violence and making baffling poor health and safety decisions were a very frequent occurrence.
What I'm saying is that unless forced by circumstances beyond your control, your circle of acquaintance is probably less a cross cut of society than you imagine.
That’s a very good point. Some people will know nobody who’s struggling while others will know many. Opening eyes and ears to the suffering of others is a deliberate choice.
The problem that I see is that a million in net worth isn't enough to have a good retirement anymore now that rent is $2-3k a month in most major cities.
There's a large amount of area to retire to outside of most major cities.
Save in America, retire elsewhere
How do you get healthcare though? Medicare is tied to staying here.
Healthcare in many other parts of the world isn't as big of a burden as it is in the US.
This is what I’m trying to figure out. Medicare is kind of an advantage, but your out of pocket medical expenses in Thailand aren’t that bad unless you get cancer or something, then you just relocate back? American basic healthcare prices are just really messed up, so your insurance doesn’t really pay off until something serious happens.
I don't know about Thailand, but in France you can apply to join their healthcare system after 3 months. In the meantime you must have private insurance but it's a fraction of what it is here.
Spain is similar. I don’t understand how they are allowing retirees to just move there, but I have friends doing it. I’m not counting on it being that way when I retire since it sounds to good to be true (so it eventually probably won’t be true).
So the people who built the kind of society and economy where you can't live near your family in retirement - are they good stewards of the country? Astute leaders that we should unquestioningly praise? Because judging by the downvotes here it looks like they convinced the masses of this.
Our society and economy are built collectively, not by just a few leaders.
And this collective just happens to collectively think alike, right?
Ah yes, let's burden some third world nation with an entire class of people who produce no value, and raise the costs of housing and goods for everyone around them.
I'm not saying it's not smart, it's just not very savory, and isn't a great solution for the longer term.
What do you mean? They literally bring in money for free. It’s the best type of value.
Retirees don't earn income, so don't pay income tax. Increased demand for housing raises prices for everyone including natives. And typically, retirees require healthcare services well above the population average.
Retirees absolutely pay income tax. Withdrawing from a traditional IRA/401k generates ordinary income at the current federal tax rate. And any capital gains is taxed (albeit at a lower rate) when sold. It's a fraction of what they likely paid during their career, but it is not nothing.
Depending on the country of retiring, this could have majority tax implications. It's a big reason why people choose to retire in certain states: additional income tax on retirement income is possible, depending on the state.
Even if not zero, retirees' income is much lower than working people on average, and that income is taxed at lower rates. Further, tax paid to the US doesn't help the retirement country.
If they're residing in the other country, they're supposed to be paying income taxes to that country, in addition to taxes to the US. The taxes to the US will probably be canceled out by the tax exemption they can claim for the taxes paid locally though, but they still have to file in the US unless they renounce their US citizenship.
Very few people pay income taxes to a foreign government that they reside in unless they are actively working and collecting a paycheck. A passive income stream such as collecting social security or a pension is very rarely taxed. Even things like collecting rent as a landlord back in the home country or earning interest on a savings account there, are also very rarely taxed.
Then they're cheating on their taxes, and that government should probably look into how that person can afford to stay there with zero income. A lot of countries have tax treaties with the US to cover this sort of thing.
> Retirees don't earn income, so don't pay income tax.
The government can and often does find other ways to tax people.
> Increased demand for housing raises prices for everyone including natives.
While true locally, at a national level immigration is typically small compared to native populations. It is a manageable problem.
> And typically, retirees require healthcare services well above the population average.
In other words, they will be forced to put money into the local economy. They’re paying out of pocket, not on public assistance.
Comparatively wealthy foreigners that spend a lot of money on the local economy is any government’s wet dream. It’s a significant boost to their tax base and soft political power. I plan on retiring in a country like Thailand because as long as you don’t criticize the king, you’ll be treated like one.
Thailand is an amazing country and dollars/euros/pounds go a long way. But there are also a ton of Westerners who either ran out of money (or never had any) who live like leeches and even some who "begpack." Plenty more who just barely get by as a language instructor or such.
I'm not claiming there are no productive or welcome foreign retirees -- there are many. But I was responding to "xenospn"'s comment that they bring in money for free, which is absolutely not universally true.
How can you legally stay in Thailand with no retirement or work visa?
I don't remember the details (I had a work visa and retirement is still 2 decades away at least) but to get a retirement visa (valid for one year) you need proof of sufficient funds and health insurance.
A lot of people do visa runs every 3 months. And there’s also the DTV, which is relatively easy to get and lets you stay half the year.
Counterpoint: all they do is consume, pay sales tax, and quite possibly fly home for healthcare.
Yes, some do. But others don't, and your earlier assertion "they bring in money for free" is certainly not universally true.
There's a reason most countries offer no such thing as a retirement visa, except certain low income countries where overcharging clueless foreigners is the best way to get ahead in life. It's because old people are a burden on the medical system and a class of people who'll pay 5x the average for housing prices locals out. Whoever is renting out housing is probably living comfortably thousands of kilometers away.
[flagged]
Remittances and tourism are not the topic at hand here. It's the local economic effects of a swath of retirees permanently relocating to a poorer location.
> Why does this topic cause the dunning kruger effect to go into full stream among an ostensibly "intelligent" group of people?
If you're smarter than the policy makers of countries who look at the economic drain of taking in disabled old people and say "nope", then maybe you should be calling up their presidents and demanding to be in charge of their economic policy? You're clearly the smartest one in the world. :)
>certain low income countries where overcharging clueless foreigners is the best way to get ahead in life.
This is basically a snide way of saying that "yes, retiring to a country with low cost of living is often a mutually beneficial transaction, for both the retiree and the country in question"
* As demand for medical services grows, the price goes up, incentivizing more people to get medical training
* As demand for housing grows, build more housing
* Gradually expand issuance of retirement visas, so supply can grow in response to demand
It's not a snide way of saying it. I'm saying it only benefits a small portion of truly poor countries where people have absolutely nothing.
There's a reason countries push retirees out, barring the ones who are incredibly rich, once they develop into a middle economy. It's because a typical retiree making a low six figures or less becomes literal dead weight. Locals can make more money than them while actually doing a job.
Thailand is pushing foreign non-workers out because they're developed to the point that they don't need or want those people. Decades ago, Thailand was incredibly poor. One retiree could splurge a bit of cash and pay the wages of dozens of people. That era is gone. Now it's just people acting like they own the place and driving up prices of property that locals are now competing for.
And yes, they could incentivize more people to become doctors for foreigners. But not everyone wants to grow up to be a servant and literally wiping the bums of an elite class of elderly colonists. Some prefer to work in other fields.
And yes, they could build new houses. Your home country could build new houses too. Retire at home and just build a new house there instead of going to a "cheaper" country. If it's too expensive at home, just get more money and build more.
And no, the won't expand issuance of visas because they need to take care of their own elderly.
>Thailand is pushing foreign non-workers out because they're developed to the point that they don't need or want those people. Decades ago, Thailand was incredibly poor. One retiree could splurge a bit of cash and pay the wages of dozens of people. That era is gone. Now it's just people acting like they own the place and driving up prices of property that locals are now competing for.
Hm, I wonder if letting retirees in was helpful for Thailand in escaping poverty? The retirees didn't seem to ruin the Thai economy, as your 'burden' theory appears to predict.
>And yes, they could incentivize more people to become doctors for foreigners. But not everyone wants to grow up to be a servant and literally wiping the bums of an elite class of elderly colonists. Some prefer to work in other fields.
There's a lot of immigration from the developing world to the developed work for medical careers, e.g. NHS workers in the UK. If your people are immigrating to work in medicine anyway, maybe it's better for them to stay home so you can tax them and collect the revenue?
You're going rather heavy on narrative vibes such as "wiping the bums of an elite class of elderly colonists", and rather light on the agency of people in the developing world to make economic decisions for themselves.
If demand for medical services rises, salaries will also rise. If no one steps in to fill those roles, salaries will rise further, to the point where medical services become expensive. And retirees will go to a different country, where people want to work in medicine. Capitalism works!
SE Asia as a whole has been improving, including countries that never participated in the retiree scheme. Thailand has been relatively stable and hasn't been invaded by foreign powers and is a big hub of manufacturing. It'd be more surprising if they didn't grow these past 20 years.
The snide "hmmmm" doesn't contradict anything I've said. Only incredibly poor countries do it. Whenever they have a functional economy, they drop it. And plenty of countries went directly from poor to rich without taking in retirees. See: Singapore, Korea, China, Taiwan. If anything, countries that take in retirees seem to lag compared to those who don't.
And decisions of government officials taking a cut of money from visa approvals for retirees really doesn't have anything to do with the agency of the people. There's a reason countries get rid of these policies: locals don't like it. No need to continue to assert that forcing yourself on unwilling people is good because their rents go up.
>Whenever they have a functional economy, they drop it.
Based on my research, there are a few countries which tightened their retirement visa requirements, but getting rid of it outright is actually quite uncommon. You talk as though this is a common thing. Can you name 5 countries that outright eliminated their retirement visa program? (Not just "considering it", actually eliminated it)
Why would they tighten it up? It's supposed to be great for the economy. It wouldn't make sense to do that if it's good, would it?
And there's virtually no country that doesn't let people with absolutely massive amounts of money buy their way in. 50 people a year buying top floor apartments in the middle of town in cash affects things far less than 150000 people a year happily paying quadruple what locals would pay to rent a normal apartment.
So is your argument that there's no "affordability crisis" in the US?
Oh, it's pretty tough to be in your 20s in the US compared to other times. But we are comparing with other countries, and most have the very same pressures as the US, but with lower salaries.
I look at my home country, Spain, where salaries are far lower than in the US for most jobs, and housing costs are ballooning. People might not have huge student loans and very high healthcare bills, but taxes climb really fast when you go past minimum wage. You have people demonstrating because, in their 30s, they still cannot live independently. Pensioners helping their kids, because they get checks a bit over 2000 a month, which are much better than what the recent college graduates are making. If you compare median salary to median rent, or median condo price, the US is still more affordable.
For all the stresses we have in the US, there are few countries that aren't facing very similar situation.
Well my question was not about US vs other places. It was more about is there or is there not an affordability crisis.
How do you measure whether there's a crisis without resorting to feelings?
I think you can study statistics and surveys about this. For example, is the number of people reporting that essentials (rent, food, gas) are unaffordable? Are mortgage defaults rising? Is credit card debt rising? And for all of these, which people are affected?
The "affordability crisis" is mostly that recent college grads can't afford the lifestyle they are accustomed to in the location they desire with a job they want to work at.
As has been stated repeatedly in this topic, the median US household has more disposable income than the median in any other country. That doesn't sound like there is a national crisis to me.
My sampling bias is of college grads living dirt poor, had been, have been, will be. Recent friend was praying her car would not break down because she could hardly afford gas, let alone to do any kind of repairs. Sampling bias is a bitch. Do you have numbers otherwise that it is really just lifestyle outpacing income for college grads? Perhaps the outcomes of college grads are skewed, devil is in the details. The experience of college grads is pretty certainly washed away when looking at medians of much larger populations.
The National Association of Colleges and Employers survey puts the average new grad salary at $68,000/year (https://www.naceweb.org/docs/default-source/default-document...)
That’s ~$7000 more than the median earnings of the overall population (https://www.bls.gov/news.release/wkyeng.t01.htm).
There will be college grads struggling and non grads thriving, but on average a person just out of college is doing at least as well as the general population income wise and can expect their incomes to rise with time.
> ...average new grad salary...
> That’s ~$7000 more than the median earnings...
You shouldn't be comparing an average to a median. You should be using either the average earnings, or the median new grad salary.
My bet is that your friend can't really afford a car but is well off enough to try, and instead of taking transit is making a bad budgeting choice. If she ditched the car, fixed her lifestyle so she was using transit or a bicycle or her feet, she would probably be fine. She's just probably signed up for things that are too far apart from each other to do that, and that will be an uncomfortable transition.
> My bet is that your friend can't really afford a car but is well off enough to try
It's an old beat up car with 150k miles that was given to them.
She goes to Western North Carolina University. There are no buses, there are no sidewalks, every road is essentially a divided highway. It's not a lifestyle choice where they are living 50 miles away from where they work. Even then, the car was used to go to Hurricane Helene Relief volunteering, otherwise it's for groceries, and to take them to trail heads to hike.
Even then, I'm speaking to the point that they have NO extra money. The lifestyle of burning $30/month in gas is not the point nor the issue.
> My bet is that your friend can't really afford a car but is well off enough to try
Second reaction - jeez - what a garbage assumption to make. Paraphrasing you: "oh, they must just spend too much to have any money. Bad life choices." Garbage assumption dude, you so missed the mark - you would be ashamed if you knew the person in question here.
Further, they are not the only person I know in that situation - and if it were just due to excess of spending money; I would have not raised it as an example of "my sampling bias".
It's very bad practice to assume and then contradict someone else's lived experience based on that assumption. It's a great way to be wrong, way wrong (and sometimes not even know it). Your bet is bad. I'm sure there are plenty of examples out of the millions of people that we are talking about, where it would be right. In this case, nope - just ignorant and wrong.
> Recent friend was praying her car would not break down because she could hardly afford gas, let alone to do any kind of repairs.
She has a car to worry about though. That’s more than I ever had.
Same, but you're only proving the point that our sampling bias is of people being poor when graduating from college. Were you picturing a nice car that is driven around a lot? She was driving from Western NC to volunteer for manual labor in hurricane relief. Otherwise doesn't drive except for groceries and to go to trail heads (which are close by). Like, this is not a pissing match. The person just had no extra money for anything. Just another broke college student.
Lol, no, I had in mind a $250 Citroën 2CV that was falling apart to the extend that a second similar car was bought to cannibalize parts from. Which is what people around me had at the time.
It’s not a pissing match. Not trying to take away from their experience. I just feels it’s weird that US people always say gas and cars are so expensive when relatively, gas is incredibly cheap in the USA (not sure about cars, but given how many there are, they should be cheaper too).
Perhaps you should sit down with your friend and see if she can budget her expenses better?
Yeah, not the issue. The issue is she has no extra money. This person is both frugal and broke.
The idea that I get talking to people from other developed countries is that they don't have near the difference in quality of life that America does. College grads have desired locations because life in, for example, the deep South is pretty grim.
It's only grim in comparison. I remember the story of a remote mexican tribe, that lived poorly, but happily as they didn't know they are poor. Once they got connected to civilization, they saw that others have such a nice things like sneaker shoes, and their lives changed, everyone agreed it made them unhappy.
I've traveled the world a lot, including the US South. They are VERY rich out there, but think they are poor, that's it.
one important distinction in the US is that we have a requirement to get insurance for nearly everything (car, house, etc.) and these are some of the fastest ballooning costs; and homeowner insurance in the US is actually not separately included in CPI. https://archive.ph/cvorJ
The US is a large, diverse population across a large land area. Major variation is to be expected.
But there is also that famous stat that income in Mississippi is on par with Britain or France.
https://www.forbes.com/sites/timworstall/2016/03/07/still-tr...
https://www.nationalreview.com/corner/its-great-to-live-in-t...
I agree with deepsun that the comparison factor is huge here:
https://www.optimallyirrational.com/p/the-aim-of-maximising-...
Then why did the median household just decide an election largely based on economic anxiety?
Is it because all the fear mongering about $5 eggs (They are $3 at my grocery, btw) was overblown?
Because many of the folks here are probably high-earning engineers w/o grounding to the everyday experience. I grew up poor and have many friends who barely scrape by. My friends' anecdotal experience is no different than the anecdotal experience posted by GP about "BMWs" -- BMWs arent that common in real america.
> BMWs arent that common in real america.
can you clarify where "real america" is? are places like Spartanburg, SC or Tuscaloosa, AL "real america" because you can commonly find BMWs and Mercedes in these areas.
>> can you clarify where "real america" is? are places like Spartanburg, SC or Tuscaloosa, AL "real america" because you can commonly find BMWs and Mercedes in these areas.
Sure, and for all of us driving around and near Atherton or any other wealth enclave even in a normal city, all these cars will seem common. And especially common to engineers with multi-million dollar RSU portfolios who hang around the homes of other engineers with multi-million dollar RSU portfolios. It might even make us think everything is OK.
Half the country earns below the median wage. (yes, its a joke but true)
Tons of people live on fixed incomes like social security. One big medical co-pay destroys your entire budget for the year. My mom got a $2000 balance bill under her medicare provider for cataract removal. If I wasnt her backstop, this would have wiped out a year of savings.
Not everyone is a SWE, in fact most people have normal jobs with normal incomes. Yes, incomes are going up, but only median incomes. Not everyone's income is going up.
Seeing BMWs should not be a handwave that everyone is doing well. We really should have empathy for the troubles a fraction of our neighbors are going thru. In a country with a large enough population, fractions are a huge number of people.
It's not about location, but socioeconomic class. Most people live in bubbles. How many people do you know who earn less than $51k per year? Because it turns out that's the majority of Americans. [1]
Similarly, how many households do you know with combined income of less than $62k? Because that is also the majority.
You're not going to find these people in BMWs or big houses, well not without life destroying debt at least. People being completely aloof of these data (or headlines like this one) are how you get November 5th.
[1] - https://en.m.wikipedia.org/wiki/Income_in_the_United_States
BMWs aren't that common anywhere in the US - if they were, they'd stop being a status symbol.
That said, they're also not uncommon - a quick look at registration data suggests ~8% of cars "on the road" are BMWs, though of course just because a car legally could be on the road doesn't mean it's being driven with any regularity (I had a co-worker years back whose pastime was buying old BMWs and fixing them up; apparently they could be had relatively inexpensively at the time, as servicing was pricey).
Which is why all this pedantry misses the point: there's nothing terribly special about BMW; total cost of ownership is probably higher than domestic brands, but you could just as well pad out your ordinary expenses with a Ford or GM payment; a new Suburban or nicer pickup can soak up just as much excess cash as that X3.
Then again, Real Americans drive increasingly old used cars.
They explicitly don’t import or make entry level BMW and Mercedes in the American market to keep it a status symbol, but you’ll see lots of 1 and 2 series BMWs in Europe and even Asia. In the USA, 3 series is entry level.
I see tons of X1s, A classes, and GLAs in the Bay Area. I think the main reason certain models don’t get imported is because of size preferences. The Yaris (aka the Mazda 2) is no longer sold here but the Mazda 3 still sells.
Relatedly, MB didn’t import the EQC into the US. Yet the GLC is the best-selling Mercedes in America. I just learned that they cancelled the EQC due to disappointing sales and will be introducing an electric GLC to the US.
I guess its relative to what the voters experienced or assumed they experienced before the 4 years vs what they were experiencing in the current election cycle. So if you are used to $3 eggs then a $5 egg would be potentially anxiety inducing. It wouldnt matter if the actual cost of eggs is $1 as the fair price in other countries.
I went through this in Switzerland until I discovered that imported eggs from France were a lot cheaper than domestic eggs.
People know they are anxious, afraid, and confused.
It’s easy to point fingers at something (anything, really) and have it stick when the actual cause - including bad health habits, unmet social needs, a constant barrage of BS on the media, and no meaningful plan or hope to actually resolve any of this - seems unapproachable/unresolvable.
It’s actually relatively simple.
Because when inflation got under control, prices didn’t go down. They just stopped going up so fast.
We’re at the tail end of the most significant period of inflation in the US since the 1970’s. While incomes are growing slowly and unemployment is low, the pain of inflation is still being felt.
Until real incomes grow significantly, people are going to feel worse off than before the period of inflation.
> Then why did the median household just decide an election largely based on economic anxiety?
Because the median voter is largely uninformed and irrational.
> Is it because all the fear mongering about $5 eggs (They are $3 at my grocery, btw) was overblown?
It is overblown in that most Americans can comfortably afford essentials and more compared to their peers and most of history. That doesn't mean they aren't any less annoyed about the current economy, which is what drives votes.
> Because the median voter is largely uninformed and irrational.
Is this only true when they make decisions you don't agree with or also when they elect politicians you like?
The median human is largely uninformed and irrational, so it's universally true regardless of a specific election outcome.
>Then why did the median household just decide an election largely based on economic anxiety?
Mosty because of marketing and social medias.
When you are targeted 24h/d by ads on what shit you should buy or subscribe to and you feel you couldn't afford 10% of it while your social medias feed seems to show a lot of people enjoying them, you feel like cost of living is way too high.
>Then why did the median household just decide an election largely based on economic anxiety?
anxiety because their standard of living went down from before the high inflation from the economic so-called stimulus, and election because they trust Trump to grow the economy by removing obstacles to growth. The US economy is more dynamic than the European economy because of less regulation and bureaucracy. As one example, companies are more willing to hire workers for a speculative new project if they don't have to pay extensive wages to lay people off if the project fails. American workers are used to it and are willing to take good jobs when they are offered, and it just makes the economy go faster, "ahead of its rivals".
The same electorate who caused one of the most common searches on election day to be "Did Biden drop out?"?
That informed electorate?
The American economy keeps on chugging despite critics, but that doesn't mean the critics don't have a point.
Costs of living (read: gas and eggs) are high, many would argue "unaffordable" even though most will still pay up. This means that: No, there is no "affordability crisis" in the literal sense. But there is an "unhappiness crisis", as in people aren't happy about how much money they have to spend. That crisis, the "unhappiness crisis" fueled Trump's upset landslide victory this election.
The Affordability Camel's back isn't broken, yet, but the camel is declaring quite angrily that the point is very close.
I'm not sure gas and eggs is the problem here. When people say cost of living, most of it is just rent or mortgage. To this end, I'm not sure if either party would be willing to do anything, as it primarily benefits the property-owning (older) class, which is the main part of the electorate.
And the politicians themselves tend to be property owners. Their donors, even more so.
>I'm not sure gas and eggs is the problem here. When people say cost of living, most of it is just rent or mortgage.
Rent/mortgage is just one part of the cost of living[1].
Even if you have a place to stay and sleep, you still need to clothe, bathe, and transport yourself and eat and drink to live. Cost of living is literally what it costs to live.
[1]: https://www.investopedia.com/terms/c/cost-of-living.asp
My point was that people would be just fine if it's only the food and gas going up since nominal wages are also increasing, and you have some degree of choice to eat cheaper things. The part that tends to break it is the increases in housing costs.
I think you completely missed my original point to begin with.
People can still afford cost of living, the American economy just chuggling along despite criticism is proof of that. The question is whether people are happy about spending the money they need to spend, the answer to which is a resounding NO as evidenced by the chief motivator behind Trump's victory.
Cost of living is still affordable (there is no "affordability crisis"), but it's too high for anyone to be happy with (there is an "unhappiness crisis").
Also, the people complained loudly and clearly that price of gas and eggs are their chief concerns. Housing is also expensive, but housing is usually a one-time lump and/or a fixed ongoing expense compared to food and gas which are ongoing small and variable expenses that quickly add up.
> people complained loudly and clearly that price of gas and eggs are their chief concerns
This is probably an artifact of how the media works.
People are concerned about prices but only some people are concerned about housing prices. The people who already own a house like high housing prices. Meanwhile everybody has to eat.
The media tries to maximize viewership so when they run the pricing story they're talking about high food prices (which everybody hates) instead of high housing prices (which only the people paying them hate but the people getting the money like). Which in turn causes people to be more concerned about food prices than housing prices because that's what the media is always talking about, even if the housing prices are what's taking the biggest chunk out of their wallet.
I think it's a pedantic distinction. Affording something always implied some level of comfort: you wouldn't say you can afford the car if you are paying most of your spare income on it, even if you can pay for it technically. Spending 50% of your income on rent may be feasible for many, but to the extent that people are unhappy with it, it is unaffordable.
if eggs = food, it's crazy to me that a single cooked chicken breast at Whole Foods is $17 (yes, I get that whole foods is expensive). Ok fine, a cup of flavored black beans at a Korean supermarket in Koreatown Los Angeles is $8. A similar amount of spiced cuttlefish is $8. A package of 12 gyeongdan is $8. All of these would have been under $4, probably under $3 just 2 years ago.
I think you’re misreading the price on those chicken breasts. At the Whole Foods at 3rd and Fairfax, grilled chicken breast is $16.99/lb [1]—which I believe is the price for any food from the hot bar. A typical chicken breast is 1/3lb to 1/2lb before cooking, so you’re really looking at roughly $5.50 per cooked chicken breast.
Uncooked organic chicken breast is $10/lb [2] at the same store. Non-organic is $7/lb [3]. Since Mary’s air-cools their chicken instead of dunking it in frozen water, you’re not paying for an ounce of ice with each pound of chicken.
[1]: https://www.wholefoodsmarket.com/product/whole-foods-market-...
[2]: https://www.wholefoodsmarket.com/product/meat-organic-bonele...
[3]: https://www.wholefoodsmarket.com/product/marys-free-range-bo...
Whole Foods is the definition of ‘crazy expensive’. As for the other prices, I don’t know.
>All of these would have been [less than half the price] just 2 years ago.
Here in Toronto, I can't think of a single food item that has done anything nearly that absurd price-wise. Eggs and dry pasta are currently at or approaching double what they were pre-pandemic (i.e. ~5 years) and that's the biggest increase I can think of over that time period. (Milk is up a bit over 50% when there isn't a sale; sugar perhaps 60%; ketchup perhaps 30%.) A lot of these increases noticeably started in 2021.
On the other hand, there are definitely things I can still get (at least sometimes) at the same prices I remember from years ago. And I've been improving my budgeting habits across this period of time, so my actual spend has been remarkably stable.
What you describe in LA is unfathomable. I'm accustomed to being taken aback by how cheap meat apparently is (was) in the US. Has the situation reversed?
Here in Nevada, a can of beans or fruit is roughly $1.
Costco has full chickens for 5 dollars.
My and my friends kids have a) need us to co-sign leases; b) been scammed of thousands of dollars thru fake rental things; c) can't afford a house any time for decades; d) can barely afford health insurance; e) have to borrow money when their used cars need expensive parts replaced.
Generally agree with your point, but not sure I'd call 312 EV and a 1.6% margin a "landslide".
By modern standards it's huge. Everyone runs data-driven campaigns now, which is to say that they basically ignore all but the swing states, and Trump won all of the swing states.
Which is the same reason that for a Republican a 1.6% popular vote margin is massive. California isn't even close to a swing state so a Republican could flip 2M more votes there over what Trump got in 2016 and still lose the state, even though that by itself would increase their national popular vote margin by more than 2%. Trump got 1.5M more votes in California in 2024 than in 2016 and still lost the state by more than 3M votes. So Republican candidates for President ignore the entire West Coast and the Northeast -- huge population areas -- because losing there by 48 to 52 gains them nothing over losing by 30 to 70.
Democrats do the same thing in Texas and most of the South, but the blue states are bluer than the red states are red, so Republicans come into the median Presidential election with a deficit in the national popular vote and often lose the popular vote even when they win the electoral college, e.g. when Trump won in 2016 he lost the popular vote by more than 2%.
Democrats often fancy the idea of switching from the electoral college to a national popular vote thinking they would win more often, but it would really just change how both parties campaign. Republicans would start campaigning in blue states and vice versa but the safe blue states have more prospective votes for Republicans to flip. And under the existing system, any national popular vote win for a Republican is a landslide.
The better argument that people don't really like Trump that much is that he won so big mainly because the Democrats picked a weak candidate to run against him and they should have had an actual primary and picked someone better.
Eggs and Gas are cheap right now! Why do we let these conservative politicans gaslight us and tell us white is black and freedom is slavery?
Are retirement savings considered ordinary expenses? If not, that could be a huge gap in this understanding.
The criteria that makes a category of life expense "ordinary" (IIRC) is that the majority of households spend income on it, so it includes things like taxes, healthcare, and mobile phones. Typical American life as revealed by actual expenditure patterns, and BLS breaks each category down by income decile.
I can't find precise data on retirement outflows and there are many possible ways to account for it (e.g. is Social Security contribution considered saving for retirement?) but what I can find seems to indicate that the majority of Americans do save for retirement, which would suggest it is an ordinary expense.
The only category of "non-ordinary" that I recall being surprising was eating out at restaurants. I should know better, almost no one ate out at restaurants when and where I grew up, but my perspective has clearly been skewed over time by my own lifestyle.
Any reasonable argument should classify retirement savings as an ordinary expense, since those savings come out of your income stream and become inaccessible until retirement age unless you either pay hefty penalties or qualify for very specific exceptions.
Does this also account for things like Healthcare costs?
Comment was deleted :(
Yes
Only some healthcare costs, sometimes, for some people, in some situations.
The vast majority of households don’t have significant uncovered medical expenses.
There’s major issues that become rounding errors on these kinds of statistics. ~0.5% of the US population is incarcerated or homeless. It’s a lot of people and a major issue, but the US population is huge.
Yeah, no.
"But millions of Americans who owe far more than $500 may not benefit — 1 in 4 U.S. adults with health care debt owe more than $5,000, according to a KFF poll conducted for this project; 1 in 8 owe more than $10,000."
https://www.npr.org/sections/health-shots/2022/06/16/1104969...
And this is likely to be a severe undercount. Given that 1 in 4 Americans can't even afford treatment and so they just go untreated rather than take on the debt.
https://www.usnews.com/news/health-news/articles/2024-11-21/...
You’re presumably misreading that, under 1/3 of Americans have any medical debt and of people with medical debt 75% owe less than 5,000$.
Which means under 1/12th of Americans have more than 5,000$ in medical debt and 1/24th owe more than 10k.
That seems like a huge issue, but only 387,721 Americans declared bankruptcy in 2022. The discrepancy is people who get a moderate medical bill often just don’t pay it for years. Until they’re forced to pay, or the statute of limitations runs out and it goes away.
You’re switching units with that quote. It says 1 in 4 adults _with_ health care debt, not 1 in 4 adults of the whole population.
How many Americans have health care debt?
Yes, you're correct. The NPR article does state that it is 1 in 4 adults with debt owe more than 5k.
The article also states:
"Health care debt in the U.S. now affects more than 100 million people, according to a nationwide KFF poll conducted for this project. The toll has been especially high on Black communities: Fifty-six percent of Black adults owe money for a medical or dental bill, compared with 37% of white adults."
The US has a population of ~335 million people. If 100 million people have medical debt, that would be 1 in 3 people. And the census date seems to back that to a point.
https://www.census.gov/library/stories/2021/04/who-had-medic...
The problem with all of these stats are that the definition of debt can change which can swing the number fairly widely. The KFF poll that is referenced by NPR mentions the debt is framed as either actual debt or other forms of debt such as "debt that patients accrue is hidden as credit card balances, loans from family, or payment plans to hospitals and other medical providers." Which means that if this form of debt is the metric that makes sense (I think it does given that the above are all forms of debt), then the percentage of adults is really not 1 in 4, but 1 in 3, which is even more disturbing.
>this form of debt
Taking such an expansive view of debt and things become largely meaningless. You end up defining some billionaires as being in medical debt. Here’s an analysis that ignores debt under 250$ as trivial.
https://www.healthsystemtracker.org/brief/the-burden-of-medi...
“This analysis shows that 20 million people (nearly 1 in 12 adults) owe medical debt. The SIPP survey suggests people in the United States owe at least $220 billion in medical debt. Approximately 14 million people (6% of adults) in the U.S. owe over $1,000 in medical debt and about 3 million people (1% of adults) owe medical debt of more than $10,000.”
But of course that’s a biased survey. ~88 billion of debt that shows up on people’s credit reports suggesting the actual numbers are likely significantly below that estimate.
Or people crushed by student loans, rent and high costs of living could with a salary of say 100k end up living paycheck to paycheck more or less.
That happens but they are presenting a statistical picture
Why would we assume that "people across the economy reduce spending" == "people across the economy will have more money"? Don't at least some (I would say many) of the people in the economy make income from this unnecessary spending?
How about the same statistics but for working age population
Paycheck to paycheck means what it says on the tin that these households consume as much as they earn. Its unlikely that necessary per the government actually captures all that is truly necessary let alone what folks consider necessary to live a reasonable life much of which is certainly either uncaptured or classified as ordinary.
Redefining pay check to paycheck to a definition literally nobody but yourself uses and then concluding few fit this definition isn't useful.
I'd be careful with statistics like this.
Who defines what car is "necessary" (or is no car necessary in car-centric America?) vs "ordinary"?
A car is not a luxury in America, but a necessity, due to the way US cities are constructed and low availability of public transport.
... And is $1 million enough to retire on?
Practically what probably matters is "how many years do you have to work to take care of your basic needs after you retire, and how does this change if you (a) have medical problems (b) want kids (c) [add your other variants of ordinary life choices people should be able to make]"
Almost certainly, yes. Many people live on far less than that and retirees have their income augmented by a government pension (i.e. Social Security) which is quite generous by global standards. This is all eminently achievable by the average American living an average life with kids and whatnot, many do. Making better than average life choices provides a lot of insurance against bad luck over the long run.
An under-appreciated point that extends far beyond the financial is that Americans have an anomalously high amount of optionality in life.
** ... And is $1 million enough to retire on?**
More than enough. The vast majority retire on less and have comfortable retirements.
Despite the narrative, Social Security pays out quite a lot and isn’t going insolvent any time soon. The average payout ($1,900) is more than double that of Canada ($850).
A retired couple would have almost $4000/month in monthly income.
Add on top a paid off home, Medicare eligibility, and Social Security, most people retire with a few hundred thousand, which is very comfortable in most of the US.
Are you assuming great health? Or rapid death?
Nursing home care runs $8k/mo or more per person. And low-end ones can be sketchy... you hear horror stories.
That $4k/mo won't be enough as you head into your 80s or 90s. Also consider inflation over 3 or 4 decades.
Do you feel an $8k/month private nursing home a luxury?
What I’ve noticed is what Americans consider “bare minimum” is pretty luxurious.
“I’m not even middle class” means buying a single family home in the most expensive coastal cities, multiple international (Mexico and Canada don’t count) per year, a couple SUVs less than 5 years old, lots of toys, plus $5M when they retire at 55.
Of course most people can’t afford that. That’s upper class in the US.
”Also consider inflation per 3 or 4 decades.”
Social Security has COLA (Cost of Living Adjustments). It tracks with inflation over time.
The big problem is transportation. Many retired people can no longer safely drive. That means that if they don't live someplace with solid public transportation then their quality of life drops. Unfortunately, all of the places in America with decent public transportation are expensive.
If only there were a service that people who are too old to drive could use to buy a ride where they need to go.
Man, there’s a startup idea right there.
Can you provide some links?
Searches understandably are finding more 'ordinary/necessary' expenses for business than for families
America blows past the rest of the developed world on disposable income per capita and it’s not even close: https://en.m.wikipedia.org/wiki/Disposable_household_and_per...
And before someone chimes in “that’s because of the billionaires throwing off the average!” Look at the median disposable income chart. America is still at the top.
The median American is far wealthier than the median European person, even after accounting for things Americans normally complain about like healthcare, education costs, and retirement contributions.
This results in some crazy stats, like the fact the median Mississippi resident has more disposable income than the average UK resident (and that includes financial hub London). And again, this is AFTER accounting for healthcare, education, etc costs.
The median income on that page is the median disposable household income, divided by the square root of household size. Because American households are large for developed countries, measures like that overestimate the income of the median American relative to the median European.
There is an easy sanity check: Swiss GDP per capita is higher than in the US, both in absolute terms and in PPP terms. Their Gini coefficient is lower, meaning that the income distribution is more equal than in the US. If a comparison shows that the average/median disposable income is substantially higher in the US than in Switzerland, it is measuring something weird.
I think you may have that backwards, if trying to disentangle the individual from the household, a larger household would make the median income per person lower not larger.
Also, I’d imagine Swiss housing costs could easily account for the difference in disposable income.
I’m totally open to the idea the economists at the OECD are dumb and put out bad numbers, but I’d argue GDP per capita (GDP being a flawed measure to begin with due to only including consumption incl. government spending) is a far worse measure of on the ground reality than something that accounts for actual household income and expenses.
Housing costs are paid from disposable income under the OECD definitions.
Larger households lead to larger reported incomes, because the total household income is divided by the square root of household size. If income is $50k/person and household size is 2, the reported income is $71k/person. If household size increases to 3, reported income increases to $87k/person.
On the average, Americans move out of their parents' home in their mid-20s. Swiss people typically do it a couple of years earlier. When people in their 20s live with their parents, it often indicates the lack of affordable housing. But if you combine this with normalizing household incomes by dividing by the square root of household size, higher housing costs lead to higher reported disposable incomes.
International comparisons are difficult, because pretty much every way to do them is wrong in some sense. But in general, it's better to collect data that is consistently wrong in the same way than to try to correct the issues you encounter. If your data is consistently wrong, you can at least make reasonable comparisons between a country today and the same country 10 or 20 years ago.
Subsidized services such as education and healthcare are tricky. You could try to calculate the subsidies based on the actual costs of providing the services, or as the difference between the nominal price and the subsidized price. These can lead to very different amounts, and it's not always possible to use the same approach with every service.
If the degree of subsidies varies between countries, you could try to normalize the situation by either adding the subsidies to disposable incomes or subtracting the costs the individual has to pay. In a country where the services are more expensive to produce (and maybe also less efficient), the former leads to higher and the latter lower disposable incomes relative to other countries.
Retirement contributions are another tricky question. Voluntary savings are often included in disposable income, while mandatory pension contributions often count as taxes. But you can't always tell the difference between voluntary retirement savings and other savings. But if you then count retirement income based on voluntary contributions as disposable income, you have to be careful to avoid counting the same income twice.
> larger household would make the median income per person lower not larger.
Depends whether the household is larger due to children, or due to more adults, no?
That is, if a bunch of single adults pair up into households, income divided by household size will go up.
> When taxes and mandatory contributions are subtracted from household income, the result is called net or disposable household income
I don’t understand why Americans always have such a fetish about bragging about their disposable income. Once you allocate for payments into the welfare state, the difference becomes a lot smaller.
And that’s not even mentioning the stark difference in quality of life, beyond “quality of life” graphs. Those graphs don’t account for having to wait 25+ minutes for the store to unlock steaks or vitamins from a security case. Or for mass tent camps in cities. Or Mmss drug deaths. Uncertainty of potable water. Access to and education on safe sex, abortion, etc. Walkability of cities.
Whenever I meet Americans traveling Europe, they virtually always rave about how much better life seems over here.
Maybe we bring it up because non-Americans (and low income Americans with a lot of free time, i.e. young people) do nothing but describe America as a hellscape online, and it's hard data that demonstrates the benefit of our economic system instead of just debating about a wildly inaccurate caricature.
You don't probably meet many Americans raving about the quality of life in rural Romania, and they may not be so enthralled with the European lifestyle once they saw their paycheck and the living situation it would provide.
> and it's hard data that demonstrates the benefit of our economic system instead of just debating about a wildly inaccurate caricature.
https://www.axios.com/2024/08/11/retail-theft-cvs-walgreens-...
Literally locking up $9 worth of fruit juice.
As far as non-walkability goes, just watch the top three videos of the YouTube channel Not Just Bikes: https://youtube.com/@notjustbikes
As far as tent camps / drug streets go, I can post videos from San Francisco, Philadelphia, LA, Oakwood, etc. but you’ll bring up it’s “only a Pacific problem”, despite Californian (together with New England) cities often being brought up as the examples for well done cities that compare well to “European”-style cities.
So much for “wildly inaccurate caricature”.
The article you link is hardly a slam dunk; it contains, for example, this:
> Yes, but: There is some debate about how deep the problem is and if retailers are using theft as a scapegoat for other challenges.
Things being locked up are very regional. Long Beach: seems like 50% of all things are locked up. Santa Barbara: hardly anything locked up.
It just blows my mind that anything below, say, $75 is locked up at all.
I don’t think I’ve ever seen food items locked up in Europe, aside from genuine Parmesan, Iberico or expensive alcohol, and even then not consistently. Usually even the lower priced non-food stuff (think a $50 space heater) isn’t locked up.
Don’t get me wrong, we have smash and dash thieves here too, but usually they go for jewelry stores, fashion stores or Apple / electronic stores.
Thieves go for things that are easy to fence. For a while Tide-brand laundry detergent was famously easy to fence in some cities[1], so places had to lock up Tide.
[edit]
Teenagers who shoplift also go for things that are embarrassing or illegal for them to buy (condoms and alcohol respectively). So those are likely to be locked up as well.
1: My understanding is that drug-dealers &c. would accept payment in Tide and then sell that to organized crime, that would wholesale it to mom+pop corner stores.
Thank you for all the context so far!
That Tide factoid is darkly humorous. The selling it back to stores part makes me think of The Wire, Omar stealing a heroin shipment from Prop Joe and then selling it back to him: https://youtu.be/-q2LWHZ6O_M
In America’s defense, I’ll say that certain things are done much better than Europe.
There’s is certainly a better awareness/acceptance that growth = good. The entrepreneurial spirit also runs much stronger in your culture.
National (well, global) security is taken much more seriously, which I feel like is a facet of American federalization and thus unity. You won’t see a combined (and certainly not unified) European army for at least another few decades, everything thinks their own interests, independence and pride are too important.
I’ve lived my entire life in America (over 40 years) and I’ve never seen any food item “locked up”. I think that would be an indication that you are in a shitty area. Similar to the pictures I’ve seen of Burger King employees working behind bulletproof glass.
>So much for “wildly inaccurate caricature”.
You're flaunting your ignorance (or naivety) of America for all to see, though.
Most stores, even in internet-stereotype "hellscapes" like San Francisco, don't lock up bottles of fruit juice among other sundries. Anyone who actually lives here would know that, like me.
>As far as tent camps / drug streets go
Only a problem in the real megalopolises like the cities you just named. The vast majority of cities (and there are countless many in this literally vast country) are generally fine (some level of crime and homelessness will always exist as a matter of nature). Again, anyone living here would know that.
Internet memes are fun, but if you're going to passionately argue about something you would be wise to actually do your homework first.
> Literally locking up $9 worth of fruit juice.
Yes, in a high crime area. It's article-worthy because it's an anomaly. The only thing locked up in stores in my area is drugs.
> As far as non-walkability goes, just watch the top three videos of the YouTube channel Not Just Bikes: https://youtube.com/@notjustbikes
lol ok, am I supposed to take this as an unbiased source?
> As far as tent camps / drug streets go, I can post videos from San Francisco, Philadelphia, LA, Oakwood, etc. but you’ll bring up it’s “only a Pacific problem”, despite Californian (together with New England) cities often being brought up as the examples for well done cities that compare well to “European”-style cities.
See above. You continue to cherry pick examples that no one is denying exist and pretend they are ubiquitous.
Maybe I should go take some videos of homeless in central London or Paris and claim that's representative of the entire EU?
> So much for “wildly inaccurate caricature”.
Thanks for proving my point.
> do nothing but describe America as a hellscape online
To be fair, the largest news network in the US spends a lot of time doing the exact same thing
> You don't probably meet many Americans raving about the quality of life in rural Romania
Actually you probably do, but such raving is about as valuable as residents of NYC raving about the quality of life in upstate New York -- it's a case of stated preferences vs. revealed preferences.
It's the gofundmes of people with cancer that paints the negative picture to me, not the young americans.
I’m googling at it seems that this locked up steak thing is coming from a single Walmart in Florida
Fear not, Europe has isolated incidents too
https://www.mirror.co.uk/news/uk-news/tesco-locking-steaks-a...
I mean I live in America and I have never experienced a store needing to unlock steaks or vitamins from a security case, seen a mass tent camp, or lived near many drug deaths. Our water is top quality, I took sex ed in high school (back in late 90s/early 2000s), and my wife and I walk or bike almost every day in our neighborhood. We don't live anywhere rich or fancy either, quite the opposite. Just a normal city of around 200,000 people in a lower population state.
Could you name a similar-sized city that has the same qualities as yours?*
I’d love to learn, because I’ve mostly gotten the impression that the smaller an American city is, paradoxically the less walkable/bikable it gets due to lack of public transit, sidewalks, bike lanes etc.
*or your own city, but I understand the hesitation on geolocating yourself
I never said it was walkable per se, in the sense that is commonly used to mean everything you need in life is a few blocks away :) I'm not sure the large appeal with that anyways.
I work from home so no commute, but my wife does drive to work. However the grocery stores are less than a mile away and her work is a 5 minute drive (the nice thing about small cities / towns is that if you have to drive, it usually isn't very far).
That said, we do indeed walk or bike almost every day for exercise and to get outside. Myself I only use the car once or twice a week really when we go to stores or out to eat. But even if I lived in a "walkable" city I'd probably do that anyways because we'd want to try something new.
Hey feel free to stay in Europe, seriously we don’t care what you think of the way we live. If Europe was so awesome my parents would have stayed there, but thankfully they moved here for a more prosperous future for their kids.
> my parents would have stayed there, but thankfully they moved here for a more prosperous future for their kids.
Social mobility in the US has dropped from 90% to 50%, so good luck with the coin flip.
You keep making statements from things you've read online about the US, but you've never lived here as far as I can tell. I've lived in Europe, and it's not for me. The difference is I'm not shitting on Europe. In my firsthand experience, some (not all) Europeans have a superiority complex towards the US. To those and you, get over yourselves.
“europe” is not awesome. case in point - whatever shithole your parents lived at forced to leave and come to US of all places :)
but many _parts_ of europe are really, really nice :)
You know, it's possible for both Europe and the US to be really, really nice - to different people. But some people need to feel superior. I have lived in both places, and I prefer the US.
I may be wrong but I don't think it is about "superiority" ... I think Europeans look at how US workers (VAST majority of them) are treated by their employers and go "who in their RIGHT MIND would live like this - regardless of what the 'income/compensation' for that might be. America has an entirely different way of life. I have been "best man" at 5 weddings and have christened 11 kids. I hardly see any of them. Everyone is "busy" running around, work work work, then errands etc etc... in most of Europe this would be unheard of, there is higher value placed on social aspects of life. Hence the myriad of studies and stories and... about general loneliness in America (these studies often include people that are married and have children).
Another personal example - my sister is highly educated, has two PhD and I consider her the smartest person I know. Years ago we were discussing something and I mentioned that one of my dear friends is seeing a psychiatrist. My sister scoffed... And I was taken aback to say the least. How can someone that smart and that educated dismiss someone who is basically a Doctor and spent years educating themselves in this field. After talking through it I realized that if you have robust social life, myriad of friends, different friends to talk to about different things (as well as family) you just might not need a psychiatrist to talk to... Just an entirely different kind of life/existence...
It doesn't matter how many sunny stats people throw around the reality is visible on the ground. Homelessness has soared over the last 10 years and is at record breaking highs. Utility disconnections for non-payment have gone up significantly in the last decade as well. Even clean healthy tap water is unavailable to hundreds of millions of Americans and that's only counting the heavy metals, not PFAS.
People are struggling in ways their parents and grandparents never had to, and they often feel they are unable to obtain the same standard of living. Healthcare spending has gone way up too as prices keep going up at a rate above inflation and more people having been getting sicker.
There's a very real reason for the disconnect between the "soaring economy" and how the majority are feeling about it.
>hundreds of millions of Americans
Given that only two hundred million Americans would be more than half, I’d need to see some data that the majority of the US doesn’t have access to clean drinking water.
Are there parts that don’t or even a disturbingly high percentage, I could believe, but the majority of Americans not having clean drinking water is a high claim
Here's one: https://abcnews.go.com/US/tap-water-millions-americans-erin-...
For lead alone there's a lot of variation in how many homes are impacted. The white house recently said 10 million are connected to lead service lines (https://www.whitehouse.gov/briefing-room/statements-releases...)
>Once you allocate for payments into the welfare state, the difference becomes a lot smaller.
Yep, I think this stat adjusts for welfare payments: https://ourworldindata.org/grapher/daily-median-income?tab=t...
>And that’s not even mentioning the stark difference in quality of life, beyond “quality of life” graphs. Those graphs don’t account for having to wait 25+ minutes for the store to unlock steaks or vitamins from a security case. Or for mass tent camps in cities. Or Mmss drug deaths. Uncertainty of potable water. Access to and education on safe sex, abortion, etc. Walkability of cities.
As an American in an unremarkable medium-sized city, this sounds like a caricature based on unrepresentative viral anecdotes.
* I've never had to wait long for something to be unlocked. Most things are not locked. Maybe a bit more stuff is locked up post-BLM.
* I can't recall ever seeing a tent camp in my current city. I can't recall ever seeing more than, say, 10 homeless tents in the same place. Big camps probably exist somewhere, but not where I see them.
* I don't know anyone addicted to drugs, but that probably says more about my social network than anything.
* I've never lived somewhere without potable water. If you offered me $1000 to find you some non-potable tap water, I wouldn't know where to go. Flint maybe? Googling suggests that Flint's water was fixed years ago. EDIT: I did find this map; my guess would be that a violation is not equivalent to the water being 'non-potable': https://hdpulse.nimhd.nih.gov/data-portal/physical/map?age=0...
* Was taught about safe sex as a teen.
* In my 30s, I still have no driver's license (should really get one some time). Walkability is acceptable, could be better depending on the area.
>Whenever I meet Americans traveling Europe, they virtually always rave about how much better life seems over here.
There might be a selection effect, where Americans traveling in Europe tend to be dissatisfied. Europe did not seem notably better when I visited, but my visit was not extensive.
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OECD disposable income per capita numbers already account for the benefits of the European welfare state vs. self funded ones in the US.
> over the dominant anecdotal narrative
> updating priors is hard
[Upthread commenter edited his comment removing some stuff]
It’s trivial to find complaints on the epidemic of security cases in American stores, and especially the fact that there’s not enough personnel in stores leading to long waiting times.
In a similar vein, are you really going to claim with a straight face that America isn’t extremely car-centric anymore?
> As someone who actually moved there, I can tell you the numbers are also anecdotally felt on the ground if you go outside of wealthy tourist capitals.
Then you should travel more. I got these remarks even in smaller Croatian towns. I live in The Netherlands myself, and I’ve heard similar things said in mid-sized cities in Ireland, Spain, Portugal, Gdansk, Poland, Denmark, Sweden Bulgaria, hell even in Italy in a place like Naples.
And if you’re gonna claim that wasn’t small town / countryside enough, do you really think quality of life is going to be higher in a hick town in Mississippi rather than a countryside town in Portugal?
Not to mention the sliver of vacation days Americans have.
Money isn’t life.
> Not to mention the sliver of vacation days Americans have.
You are generalizing here for sure. I get almost 5 weeks vacation, 2 weeks sick, 11 holidays, and occasional personal and administrative leave. These also roll over. The people making 45k at my job get the same leave as the hire paid people.
That's because there's much more that Americans have to pay out of their disposable income, especially college (their own debt or their kids), and medical care.
Half your comment reads like chatgpt generated it. What's the point?
> The median household can easily accumulate a million dollars in inflation-adjusted net worth, not including their house, over a 40 year career.
That sounds like barely enough to retire on.
It's not that great, no, but look at how much people can save in other countries: The idea of saving a million dollars outside of your home in Spain is basically fantasy. Much higher taxes, much lower salaries, and no savings vehicles that allow for strong deferred taxation: The max for the 401k equivalent is 1000 a year! So the vast majority of workers are saving basically nothing that isn't their home, and will rely on social security. Not that they would be happy to save... the wealth tax in large parts of Spain starts after $500k, and you pay yearly. 1 to 2% of wealth starting that early makes retiring early basically impossible: 4% is not a safe withdrawal rate anymore.
So it's not a matter of everyone in the US having it easy, but how hard a road most people have now elsewhere.
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Most people in Western nations receive far higher pension payments than we do in the US. Hence the American need to hoard wealth for old age.
For reference elder care facility in CA Metro Area is like $20k/MO and in MA suburb is like $11k/mo.
At $15k/mo you can get like 65 months of service.
Not counting income from savings or SSI
$20K/MO sounds exaggerated. A quick Google gives me
Palo Alto was deemed the seventh most expensive location for assisted living in California, according to a new study by Mirador, a platform that helps people research nationwide assisted living locations.
The average yearly cost of assisted living in Palo Alto is $91,177, compared to the state average of $63,927, according to the study.
Source: From https://www.paloaltoonline.com/seniors/2024/10/04/study-reve....
I think the issue with elder care is about the balance of workers vs retirees, which is an problem (or will be a problem) in most developed countries.
That’s pretty damning if life expectancy after retirement is another 15-20 years.
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Don't know why this is grey. You will reach a point where you can't hold down a steady job anymore. Age comes for us all and the "old people" working as Walmart greeters are younger than you're probably imagining.
Being old is expensive. You don't necessarily realize how many things you do that save money rely on being at least somewhat youthful and able bodied. And 1 million sounds like a lot but that is going to be in 2070 dollars and has to last you between 10 to 40 years.
I don't agree being old is really more expensive that being young. Why would it be?
You could live on a 10% yield indefinitely.
Healthcare. Difficulty DIY’ng more and more things, including eventually transportation.
I think you forget that a lot of those things are heavily discounted for people with senior citizen cards. Healthcare and public transportation get cheaper when you get older. (The bus is free here for people over 60). Even utility bills get cheaper with a seniors card.
I think you have a vision of old people as unhealthy and inactive, I can't think of any DIY that I do now that I would not be able to do well into my 80's.
I think the major thing is that you don't necessarily get to choose what happens to you as you age. My Fil is in his early 60s and can't walk across the room without becoming winded thanks to his heart getting messed up. My mother, also early 60s has through no fault of her own completely shot knees and her standing is limited to walking between places to sit.
Their respective spouses are doing great though so they're legitimately carrying the team.
> households with no excess income after necessary expenses (as distinct from "ordinary expenses" as a term of art) is on the order of 10-15%.
Any chance to translate to plain english? The keywords "neccesary" and "ordinary" indicate rhetorical bullshit is afoot.
A $700/mth new-ish car is quite ordinary for many Americans, but they probably only "need" something about half that price.
A Netflix subscription is ordinary but not necessary.
Ok I understand it's possible to use these terms as if they have meaning to some demographic somewhere, but what is the point of using them without actually referring to the necessary figures to figure out what they actually mean to the rest of us?
Also: fuck me, if americans have a 700/month car payment on average most americans you're likely to interact with on a daily basis will be deep under the poverty line. Like, the actual poverty line of "struggling to survive", not the bullshit metric used to cut people off from welfare.
It’s quite common in the middle class and below in the US to spend every extra dollar you make as your income rises. This means, despite getting promotions or raises, your a savings rate remains zero (or negative).
One primary way to increase spending is a vehicle upgrade.
Most vehicles sold are used vehicles. But if you consider only the new vehicles, the average monthly payment for new vehicles is about $740/mth.
> US Federal Reserve studies indicate that the percentage of US households with no excess income after necessary expenses (as distinct from "ordinary expenses" as a term of art) is on the order of 10-15%. This definition roughly matches most people's intuition of what "living paycheck-to-paycheck" means. That isn't nothing but it implies 85-90% of Americans are not actually living paycheck-to-paycheck.
There is absolutely no way I believe those numbers unless they have defined necessary expenses to be unreasonably narrow.
The good thing about well sourced data across millions of sample points that are prepared by professionals over decades of collection is that one should believe that data over anyone’s uninformed beliefs based on no carefully measured data over even a single person.
That's all well and good, so where's the link to the studies and the studies' parameters? It's not like I'm denying well presented findings. In absence of those, I can hold skepticism about the claims.
My definition of paycheck to paycheck would be that if you lost your source of income you would not be able to afford living (housing, food, healthcare, insurance, etc.) within a certain window of time. The data can be easily manipulated depending on what you consider essential. I would be surprised if findings by the Federal Reserve include healthcare as a necessity or essential. It's easy to say it's not an essential if a family or individual never had it.
> within a certain window of time.
that's a big caveat.
Most people are not able to live without a source of income through working. And this _should_ be the norm - most people _should_ be working in their adult lifetime.
It should not be possible to live indefinitely without having to produce output that somebody in society needs (and thus is paying you to do so). The welfare state is to prevent the negative outcomes of someone in destitute, by preventing (or trying to prevent) crime, etc. It isn't there so that one can live free.
It's not a big caveat. How else would you define paycheck to paycheck? I'm talking about days, weeks, or low single digit months. A window of time is not indefinite.
The point of measuring people living from paycheck to paycheck is to measure their ability to have financial security. You are financially unsecure if you cannot pay for essentials for days, weeks, or a month off of savings. Many people in the U.S. are completely unable to save up for more than that. That's literally the point of talking about people living paycheck to paycheck. And usually, people only refer to being able to pay for food and housing. It rarely accounts for saving for retirement, health care, home/renter/car insurance, etc., all things that should be considered essential for living but are typically not in these studies.
Strangely, it appears nobody has linked the data or the studies.
> But is the majority of the population thriving?
Looking at the numbers: low unemployment, strong consumer spending, average income increasing at a rate higher than inflation, I'd say the majority is doing better than most years. They might not feel that way though, and we've been in a continuous vibes-cession since COVID.
>Looking at the numbers
I'm reminded of this excerpt from 1984:
But actually, he thought as he re-adjusted the Ministry of Plenty's figures, it was not even forgery. It was merely the substitution of one piece of nonsense for another. Most of the material that you were dealing with had no connexion with anything in the real world, not even the kind of connexion that is contained in a direct lie. Statistics were just as much a fantasy in their original version as in their rectified version. A great deal of the time you were expected to make them up out of your head. For example, the Ministry of Plenty's forecast had estimated the output of boots for the quarter at 145 million pairs. The actual output was given as sixty-two millions. Winston, however, in rewriting the forecast, marked the figure down to fifty-seven millions, so as to allow for the usual claim that the quota had been overfulfilled. In any case, sixty-two millions was no nearer the truth than fifty-seven millions, or than 145 millions. Very likely no boots had been produced at all. Likelier still, nobody knew how many had been produced, much less cared. All one knew was that every quarter astronomical numbers of boots were produced on paper, while perhaps half the population of Oceania went barefoot. And so it was with every class of recorded fact, great or small. Everything faded away into a shadow-world in which, finally, even the date of the year had become uncertain.
---
Of course, I'm sure none of that would ever apply to our numbers, only to those of our opponents.
What are the actual numbers you think are fantasy? Most of the time when I see someone claiming economic statistics are fake, it's a misunderstanding or lack of context. For instance, people will say the US unemployment rate is fake because it doesn't include people who have given up on looking for work... but the U-4 unemployment metric, published by the Bureau of Labor Statistics alongside the main U-3 metric, does include these people.
I think the jobs numbers are somewhat fake. There are so many evergreen postings and stuff like outright fake postings.
Usually “jobs numbers” refer to actual hires, so would not be affected by fake job postings.
No, those are typically estimates. For awhile now, they’ve had to be retroactively cut [https://amp.cnn.com/cnn/2024/08/21/economy/bls-jobs-revision...]
“Jobs numbers” refers to both the initial reports and the later revisions.
That's not usually the ones reported on in the media. The media loves to talk about job openings and unfilled postings.
Edit: why disagree?
> Edit: why disagree?
Because it is hilariously wrong. You have been operating under the false understanding, for who knows how long, that the media are talking about job postings when they are talking about jobs numbers.
There are some that talk about jobs filled, others are talking about unfilled postings. I guess you can laugh at your hilariously wrong assumption while reading this article.
https://www.cnn.com/2024/10/29/economy/us-job-openings-jolts...
That article is about job postings. You are demonstrating the same confusion again.
Lol OK buddy
For one, look at the evolution of the number of submissions in the threads who is hiring/wants to be hired.
While it's a local biaised, as a Swiss resident, I feel the same about the evolution of the IT job market here.
I've been using this for years as a signal of how the market's doing. Visualized well on https://www.hnhiringtrends.com/
Many thanks, I was thinking to build something similar and try to predict stock market macro movement.
Typically, right now I am relatively bearish but I feel I am 3-6m too early.
Trend is downward for both hiring and seeker, which I would interpret as employers are hesitant to invest in IT due to current US politic unknowns, typically, the tarifs and actual impacts on economy.
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I think you may have a point.
Nobody wants to believe they’re living in a peak, and it is hard to predicate. People claiming economic downturns are near are a dime a dozen.
That said, there are possible indicators. Yes, unemployment is low, but what form is employment taking? Is it generally trending toward fulfillment, growth and/or rewarding or is it trending toward mundane, unfulfilling and/or unrewarding?
Is everyone benefitting from the official economic growth? Or are the gains statistically lopsided?
Let’s take a common mentioned stat about wage growth. Yes since 2020 wages finally raised. But if you look at it overall since 1970[0], it still behind productivity gains. Wages are not keeping up with overall productivity growth and people are still going to notice that in some form. Everyone talks about since 2020, but that misses the broader story. (As an aside, I suspect by the end of 2025 wages will significantly stagnant again. Growth won’t continue on the best take of the current trajectory)
Then there’s inflation. Regardless of cause, an entire generation+ of people have never experienced such rapid prices rising, particularly with groceries. People aren’t going to forget this, no matter what the official line is. This also eats away at wage growth which as noted above, has not kept paced with productivity gains.
The official sources though say everything is great, or heading toward it. Maybe, especially if you’re seeing the benefits, but if you’re locked out of the majority of gains, what if any you do get will feel meaningless. This shouldn’t be discounted.
It is entirely possible that wealth inequality combined with the world political climate is starting to show more cracks in the system and this might be peak. We may be seeing the warning signs of a big changes, whether it manifests itself as mostly political or economic is anyways guess I suppose
[0]: https://www.cnbc.com/2022/07/19/heres-how-labor-dynamism-aff...
> All one knew was that every quarter astronomical numbers of boots were produced on paper, while perhaps half the population of Oceania went barefoot.
In the theme of the day: "Your coverage has been denied, due to [insert nonsense]", while profiteering from record profits in the billions.
Immense economical value has been "produced", benefiting no-one but the very few.
From the New-York Times [1]:
The company’s profits rose on his watch, jumping to more than $16 billion last year from $12 billion in 2021. But amid the growth, the company and its parent also attracted scrutiny from lawmakers and regulators who accused them of systematically refusing to authorize health care procedures and treatments.
What would make you think the economy was doing well?
In my case, it'd be growing numbers of people being easily able to afford housing and medical care, with most people putting more of their money into savings. Right now we have soaring numbers of homeless people and record amounts of household debt so I don't think we're doing very well.
Actually I think this could be distilled to a simpler metric. The economy is doing well when the net wealth (not including tax advantaged accounts) of individuals and families is positive and growing in real dollars.
Because if you are able put money into savings or investments then you probably have the other stuff you listed.
If your net worth is tied up in your home (house rich, cash poor), you can't put that money into savings or investments. My house is "worth" 2X what I paid for it 11 years ago, awesome. It's not helping to pay the increase in taxes, homeowners insurance, groceries, that have gone up, up & up.
That's fair, excluding primary residence makes sense just like retirement accounts.
> The economy is doing well when the net wealth (not including tax advantaged accounts) of individuals and families is positive and growing in real dollars.
Tricky to account for differences in consumer culture, no? Because the number of people who consume all they earn, no matter how much that is, is not staying equal over time or location.
I wouldn't account for it at all both because I think it will shake out in the aggregate but also because if people are spending all their money immediately I think it signals low confidence in their future economic situation.
One good indicator could be how much worse it’s doing in a year after the likely trade war.
We don't live inside a 1984 society. The closest to that currently would be North Korea. Brave New World was always more apt for modern western societies. But any such comparison is flawed, since those are just the writings of one author about a fictional dystopia were things were taken to the logical extreme for whatever critique the author is making.
HN in particular has a deflated view of the economy because our sector was going through such a big bubble from 2014 on, which got even bigger for a brief window around the pandemic. We in particular had a long way to fall back to reality, so our personal economic outlook is worse than it's been for a while, even if the rest of the economy is looking up.
Hn has a highly inflated view of the economy because we only see the top of the economic pie. I shop at cheap ethnic stores because I grew up with that food and the prices that poor people see are two to three times what they were 5 years ago. Telling this to someone who buys premium organic free range eggs is like trying to explain to a fish that a flood doesn't benefit everyone.
It’s funny you mention eggs because I live in one of the highest cost of living areas in the country with legally mandated cage free eggs and Trader Joes has them for $2.99 a dozen when people keep complaining about $6+ a dozen in the rest of the country (which is what I’d pay if I wanted the premium organic free range shit). When a famously expensive grocery store for yuppies has cheap eggs in Southern California, I figure the OP is right in their word choice: it’s a vibe-cession.
I also shop mostly at ethnic grocery stores (Superking, Ranch 99, H mart, etc) and IMO the problem isn’t inflation but general consolidation across many industries. I’m always shocked when I travel to less populated regions (even in California) and see their grocery availability, usually dominated by a single major chain like Albertsons or a local one like Publix. SoCal has competitive prices for groceries despite the high cost of living because there are so many people (and immigrants) to support many competitors, none of whom have real pricing power. My grocery budget hasn’t gone up significantly in the last five years despite switching to Costco for my meat rather than the cheaper halaal butcher.
Eggs are always more expensive at the ethnic stores here but cheap at TJs because they use it as a competitive loss leader. A lot of the country can’t support such competition so there’s zero incentive for suppliers to drive down costs.
It's not a vibe-session when the bottom 50% see inflation that five times the headline rate. It's class warfare and somehow the party of the people is the one defending it.
In the fight between labor and capital, the favored class is right there on the label of the economic system. Class warfare is a built-in feature of capitalism - no mainstream American political party is going to repudiate capitalism; the DSA is far from the mainstream and this is exactly its main bone of contention with center/center-right liberals. There hasn't been an unabashedly pro-labor major political party in the US anymore since Bill Clinton's "Third way".
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TJs is famously cheap, not expensive.
Not where I come from. I grew up in the area, not far from the first Trader Joes and down the street from the second, and it’s always been considered an upscale store because it had so many cheaper competitors a few miles away. It was founded to supply the wealthy neighborhoods of Pasadena and South Pasadena.
I think you are kind of both right. When TJ’S started they intentionally wouldn’t sell things like milk and eggs because they couldn’t compete with big chains. The niche they were after were “over educated and under paid”.
So they were famously cheap for things that poor and blue collar families weren’t looking for anyway. UMC goods on a LMC budget, really.
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TJs is not cheap.
Eggs are such a red herring. I pay $6 for eggs. You know how much I’d save with eggs at half price? A whopping $12 a month. Meanwhile my rent goes up by 10x that a year and thats with rent control. Everyone gets all bent out of shape about the price of gas and the price of food but that could realistically double and you’d only be out another what $200 a month or so. No its the rent that is the squeeze for most people not the eggs being $6 and the gas being $5. But of course that is the headlines and not the focus on the lack of housing supply due to restrictive zoning.
>Meanwhile my rent goes up by 10x that a year and thats with rent control.
You mean 10%? 10x is just not believable.
No, like the montly rate might go up by $120 a month or more each year which is 10x $12.
but there are 12 months in a year so eggs outweigh rent here
$120 a month >>> $12.
Loved the fish analogy
The interest rate is hurting everyone who can't buy houses with cash. High interest rates have also helped crash the real estate market, so even if you just own a home, you've taken a bath since the high interest policy has been implemented.
To be fair, the real estate market in the US has always been super distorted (mostly due to the existence and availability of the 30-year fixed-rate mortgage itself), and encourages people to do stupid things. People should not consider their primary residence to be an investment; in truth it should be an expense and a liability. But the expectation here (fueled by market-distorting policy) is that home values always go up, and that homeowners can expect to sell their house in some amount of years at a profit.
As houses get older, their value should decrease. Even large-scale renovations often should not push the value up quite as much as one would hope. Certainly the value of land can go up, based on housing/zoning policy, coupled with supply and demand in a particular area.
At any rate, most things are temporary. Interest rates are headed downward again, and the Fed expects to make more cuts. Presumably we won't get back down to zero, but that's probably a good thing.
Also let's consider history: interest rates are still objectively not all that high right now. They're on par with or lower than what rates were in much of the 90s, and even some of the 00s. It's only the 10s that saw zero rates. And hell, go back to the 80s and prior, and the current rate situation looks delightfully low.
> High interest rates have also helped crash the real estate market, so even if you just own a home, you've taken a bath since the high interest policy has been implemented.
A note on this: so what? What matters is the cost of comparable housing. If my house has lost 25% of its value, it stands to reason that similar houses in similarly-desirable locations will have lost a similar amount, and still be affordable for me if I wanted to sell my house and move.
But again we run into the problems caused by the 30-year fixed-rate mortgage! Anyone who has bought a house with a mortgage recently enough, at a price high enough, might be in a situation where they can't move because they won't be able to sell their current house at a high enough price in order to pay off their mortgage (and still have enough of a down payment for their next house). This is a problem we've created for ourselves, and it's super annoying.
> in truth it should be an expense and a liability
I have to raise an eyebrow when someone says "truth" and/or "should", as if there's a hidden One True Way. I do think that David Ricardo's theory of rent holds.
> As houses get older, their value should decrease.
"Value should decrease" is doing a lot of lifting in oversimplifying, if not positioning itself counter to, reality. eg My area is growing by ~10k a year across 3 adjacent municipalities. Population growth (migration+births) contributes to a growing area in a way that's self-reinforcing (availability). So depreciation is often outpaced on that basis which has nothing to do with specific characteristics of structure.
Houses also have a multidimensional value. Proximity to specific locations (subjectively vary in value), safety, amenities, maintenance costs, etc all contribute. Home from 1950? https://www.zillow.com/homedetails/1826-3rd-St-N-Fargo-ND-58...
What about the multimillion dollar homes on cliffs? https://www.theguardian.com/us-news/2024/feb/14/dana-point-l... - with less than 2 mil, you can rehabilitate these places with some demo and rebuild.
How does this affect the calculations? Well, it doesn't seem to hurt as much as some might imagine. People are resilient and optimistic, long term, and happy to own the roof over their head in the short term to give themselves agency. These value motivate people to buy what's available and prices do not fall as if they exist in a vacuum.
> I have to raise an eyebrow when someone says "truth" and/or "should", as if there's a hidden One True Way.
I'm not the OP, but I notice that it's very strange that the other major expensive durable good the typical American household will own [0] is a steeply depreciating asset.
I also notice that "housing as both shelter and investment" is not universal policy. Japan does things totally differently and has historically done well by it.
[0] That is, the automobile.
House values do decrease over time. It’s the land value that increases. For example my house has decreased $100k in value since I bought it (many years ago) but the land has increased around $700k in the same time.
Weird. All of my property doubled on structure value in the last 5 years. Acreage value has barely blipped up.
A well-maintained structure will also increase in value because the cost of material to replace it increases over time. It should track inflation pretty closely, but that's not always the case.
It also sounds like you're basing your statement on your tax assessment, which implies that your tax assessor has correctly allocated the value increase to the appropriate category. That has not been the case very frequently in my personal experience.
Nah, I'm basing it on market value of comparable properties in the area. I am deeply grateful that nothing's been re-assessed yet.
So you're comparing the price of developed housing to farmland? That's not what people mean when comparing the price of land to improvements.
No, I'm not doing that either. I watch lot prices pretty closely in the same areas I own property. Lot pricing (acreage) in this market didn't move much during or since the pandemic. Meanwhile 1000sq ft single family homes built in the 60s and in desperate need of restoration are currently selling in the 180k-250k range, whereas pre-pandemic I could buy as many as I could handle for less than a hundred grand a pop. Meanwhile the cost of a quarter acre building lot has nudged upwards maybe 10%. I'm guessing something about this strikes you as weird, thus the assumption that I don't know what I'm about? I don't have a cogent explanation to offer you for the vagaries of local real estate prices, I'm just reporting the facts on the ground.
...and yet, the currently "high" interest rates are lower than the average in the 2000's (2000-2009), 1990's, 1980's (much, much lower) and 1970's.
There is a proclivity to wash over a lot of the difficulties, constraints, and "norms" of earlier generations and making the current economic times seem so much worse. Things like living with multiple roommates (2-4) in your 20's is MUCH rarer today, as is sharing a bedroom with a sibling. Vacationing frugally at a nearby lake, not some international expedition. Packing a box lunch. I agree that by many measures, times are tough, but also, the base expectation level has definitely increased dramatically.
Real wages (adjusted for inflation) have fallen since November 2020.
https://www.statista.com/chart/32428/inflation-and-wage-grow...
But choose 2019 or 2021 as the base and wages have kept pace with or exceeded inflation:
https://www.brookings.edu/articles/has-pay-kept-up-with-infl...
This rise since 2021 can be easily seen in the graph in the article I posted also, but the catch is that the increases have been relatively flat where they can been found, and that increase followed a lowering in real wages. Whichever way the data is looked at since 2020, it isn't very reassuring to the general public that wages have essentially stayed flat with inflation, when US productivity growth has been going up. I was actually surprised about the article I referenced in the comment above. The figure I'd read of previously was that real wages had cumulatively increased around 2% since 2020, which the Brookings article seems to reference. 2% real increases in wages is strikingly low considering US productivity growth. It was the figure I was originally looking up.
If you only want to see what you want to see, it's easy to find evidence. On the other hand, look at the commonly posted wages vs productivity graphs (productivity goes up pretty much unbroken, but wages flatline since roughly mid-70s), or compare the 'US is #1!!' GDP per capita numbers against the *median* income numbers. Bit of a difference when you remove Musk, Gates, Bezos et al income from the comparison.
Why would you expect wages to track productivity in an environment where automation increasingly drives productivity gains and the means of automation are provided by employers?
The time when a large portion of low wage workers were unemployed due to a pandemic? Probably not a great data point to use as your baseline.
You can take your pick of any point since the pandemic. Wage growth has essentially stayed flat with inflation, whether that be a slight increase or decrease. Much of the nominal wage growth with white collar workers would have been tied to promotions, which inflation has eaten the real gains of. It is no wonder that many people have a poor view of their place in the economy and it is certainly not just "vibes", like it was arrogantly written off as by many.
You realize what you said contradicts the data that has been posted repeatedly in this topic?
Real wage growth surged post-pandemic, especially for lower-income workers.
Most economists have explained the vibes as: People blame inflation for increased prices but credit their own industriousness for wage gains, and are angry they don't get to basically double dip.
"Real" is a misnomer. Interest expenses aren't included in the CPI adjustment for real wage growth. Decreases in used/new vehicle prices wouldn't necessarily offset increases in food prices for someone taking public transit.
For a worker with credit card debt, or one who already struggles to afford public transit, the real wage growth is illusory.
Way to down vote my comment without posting that data you refer to. Nominal wages surged post-pandemic in Q2 2020, but cooled off after then. Someone already replied to my comment with a Brooking institute article which confirms the figures I had previously heard, in that real wages have only increased 2% annualized since 2019.
I didn't downvote anything, and I didn't re-post data because I assumed you already had it as a participant in this discussion.
A 2% annualized increase in real wages is excellent? Compare it to real wage increases elsewhere and you'll see that "only" is not the correct modifier to use.
What is so excellent? That is the cumulative increase.
Real median earnings since Q4 2019 are only around 3% higher:
https://fred.stlouisfed.org/series/LES1252881600Q
Real median household income is still lower than 2019:
Sorry, I assumed this statement you made was correct: "real wages have only increased 2% annualized since 2019."
A 3% increase over 5 years is not bad at all. Go look at historical data or data from other places if you would like more information.
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Meanwhile the real cost of housing is still increasing. It is a bipolar world: the haves and the have nots. If you own land: the economy is great. If you don't own land: you're screwed. Whatever metrics that say wealth inequality is down are lying. It's a polarized world of haves and have nots and people are pissed off.
Wow, talk about a deceptive article. It’s so completely shady the writer surely did this on purpose to fool people like you.
Here’s [1] the wage graph from BLS during that time period, same source as the author. See that incredible, record setting spike at precisely the month in question, never seen before or after? Gee, what do you suppose did that?
The US had just poured 2 trillion into wages for free for pandemic recovery.
This is why you shouldn’t fill your head with nonsense from such crappy sources. Liars will lead you into your own echo chamber. Read proper economic journalists until you learn enough not to believe stuff like that article.
>Here’s [1] the wage graph from BLS during that time period, same source as the author. See that incredible, record setting spike at precisely the month in question, never seen before or after? Gee, what do you suppose did that?
Given how arrogant you are, it is ironic that you're the one that interpreted the graph incorrectly. They didn't reference the spike "precisely the month in question". The figure they referenced at the start of the graph was Q4 2020. The spike in the FRED graph was in Q2. Perhaps you should think before you type next time, so you don't paint yourself the fool you claim others to be.
If they had referenced the spike in Q2, the decrease would have been >5%. If you want to start casting stones, you better be sure you're right.
Read the graph. The nov, q4 value in the graph is 376, is part of the Covid spike, and no other points in all of history that are not part of that spike are as high as the q4 value.
Zoom in if you cannot read it. A spike is not a single month. It’s a spike with an upside and downside. You think the effects of a free few trillion poured into people’s hands only affected an infinitesimal width spike?
So no, I did not interpret this graph incorrectly, and the poster chose a point from an artificial spike to mislead.
Perhaps if you aggregated inflation, which is a lagging variable, it will turn out he chose precisely the quarter that made his point better than any other quarter, in which case he really went the extra mile to provide misleading claims.
If you’re going to attempt to discredit a correct argument, at least evaluate it correctly.
>See that incredible, record setting spike at precisely the month in question
>If you’re going to attempt to discredit a correct argument, at least evaluate it correctly.
Sure, it is part of the downward slope of a multi-quarter spike, but that is not what you said. What you are doing now is attempting to re-frame prior inaccurate wording to claim that you were accurate all along. That first quote is what you said in your first comment. Q4 was the second quarter of decline following the spike. You said the spike was at "precisely the month in question", which it certainly was not. Q4 2020 was half a year after the peak of the spike. That hardly qualifies for even a very generous interpretation of the word "precise".
>Perhaps if you aggregated inflation, which is a lagging variable, it will turn out he chose precisely the quarter that made his point better than any other quarter, in which case he really went the extra mile to provide misleading claims.
Not only is this reaching, but you've just demonstrated that you don't understand what the graph you said was misleading refers to. Real wages does account for aggregate inflation.
> Sure, it is part of the downward slope of a multi-quarter spike, but that is not what you said.
That you confuse the word spike to mean only the tip is odd. The downward part of a spike is part of a spike, and the cause and use of this anomaly is not in question. Choosing an outlier high point as a basis to make general claims will always lead to misrepresentations.
Is a railroad spike only the tip? Is a volleyball spike only the highest (or lowest) part? Is a signal spike the zero width instant of maximum value?
I cannot think of a use of the word spike that means the tip and not the entirety. Looking at online dictionaries I cannot find the use you claim. I do find many definitions and examples including both the upside and downside. So I’m quite correct claiming the author choose the spike, and obtains the expected poorly reasoned claims as a result.
> Not only is this reaching, but you've just demonstrated that you don't understand what the graph you said was misleading refers to. Real wages does account for aggregate inflation.
If you dig through my posts, you’ll see I taught mathematical grad econ at a top 50 university. What you misread, then try to use Econ 101, is simply incorrect. As your other comprehension showed, you ignored the precise word “lagging” that I wrote, because real wages at a given date do not include inflation from the future.
Please read and think. You’re so bent on trying to argue you don’t read what I wrote, and instead argue your misreadings.
Let me simplify: it’s well known inflation as a result of cash transfer causes lagging inflation (pretty much all schools of economics agree on this, from Keynesian, neo, Austrians, Friedman, all the flavors of monetarists, pretty much everyone). Hence the precise Econ term lagging variable. Other ones are that wage growth usually lags inflation. This is all basic economics. It’s why I precisely put the word “lagging” in that sentence. It means future inflation above. Most definitely not a part of that spike.
Here, there was an economic shock causing the govt to expand the money supply without expanding production. This money, handed out in large part as cash, adds to real wages at that moment. This will lead to inflation, but that is not part of those real wages. Later, inflation will devalue money, making real wages decrease. Then later again, historically wages gain back purchasing power as people get salary increases. This is done (alert, another term so read carefully) because wages are called a “sticky variable” in Econ. Wages are easy to ratchet up but not down, due to psychology of humans. Wages are hard to move freely like many other variables. Ideally from a math model side, if wages were not sticky, then as the shock passed, prices could fall, and all values return to baseline. But people don’t see that, so it’s easier to ratchet up wages, which ratchets up prices, locking in inflation.
So to maximize the type of nonsense this post spreads, you can always fiddle with the chunks in these troughs to make things look much worse than they are.
So next time please learn the difference between aggregate inflation (current) and the phrase lagging variable. And don’t put claims into my writing so you can argue straw men.
I’m done. You’re trying to correct something that is simply your odd usage of a word.
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Looking at the numbers the interest rate is almost 7% making most things very unaffordable for people who can't buy things like houses and cars with cash. Until that number dramatically goes down, regular people will suffer.
This view is always super weird to me; aside from ~2008-2020, the current interest rates should still be considered pretty reasonable. And remember that rates were also on their way up pre-pandemic, but got slammed back down to 0% once the pandemic hit. (I mention this bit to counter the belief among many that our current rate situation is solely due to poor management of pandemic response.)
And -- this is certainly a bit of a gamble -- but I know people who have taken on higher rate mortgages now with the expectation they'll be able to refinance within a few years at a lower rate. That's certainly more expensive even in the meantime than having a lower-rate loan to start, and there's always the risk that rates don't actually come down, but it's an option for many (admittedly not all).
If lower interest rates are not coming then how can the low rates of the oughts be framed as anything other than generational theft?
Maybe. the 15% interest rates in the 80s made a lot of working class families a shitload of money due to the magic of compound interest.
You obviously didn't live through it, or you wouldn't be spouting such offensive, naive nonsense. How many working class families do you know that can afford to buy economically significant amounts of T-bills, as opposed to, you know, eating, or paying for car repairs, or kid's back to school supplies. When is the last time you saw a bank paying anywhere close to the prime rate on savings accounts, which is all a working class family typically has access to. (as opposed to pocketing the difference as profit, thank you very much)
All of the online banks pay pretty close to 4 week T-bill rates, maybe 1% off. Chase/etc are only worth keeping a small amount in, everything else should be transferred to Ally/Marcus/Fidelity Cash Management/Vanguard/etc.
I absolutely did live through it. I also watched my grandfather who had a 7th grade education double his money twice through the insanely technical investment strategy of...wait for it...driving down to the bank to renew CDs. I'd entertain an explanation of what's either offensive or naive about that.
It's because people look back in time with rose tinted glasses.
They imagine the amount of money they have today, but at yester-decade's interest rate.
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Inflation wasn't caused by the low interest rate and raising the interest rate didn't fix inflation.
> strong consumer spending
I’d like to see that plotted against average consumer debt
https://fred.stlouisfed.org/series/CCLACBW027SBOG
The trend is basically back to where it would be if you just extrapolated 2019.
You can even see the origin of the "vibe-session" here, things got pretty good for a lot of people in the money shower of the pandemic stimulus combined with low "stay at home" spending. Its the return to normal that has people spun with "the economy sucks".
>The trend is basically back to where it would be if you just extrapolated 2019
So crap going crappier, with a short reversal for a couple of years.
https://fred.stlouisfed.org/series/CDSP
slightly below pre-pandemic levels, and significantly below 2005-2008 levels.
It's always fun to see a graph like this and realize that (aside from the pandemic), that the last time people were significantly better off by this metric was 30 years ago, while many of us were children, or not even born yet. And yet everyone is complaining that things are so bad, and that this is a new phenomenon.
Well, let's go:
> low unemployment
In an economy where you can easily deliver packages or drive uber, there will always be close to zero unemployment. This number stopped making sense a few years ago.
> strong consumer spending
In a high inflation environment, one has to consume "strongly" just to maintain the same standards of living.
> average income increasing at a rate higher than inflation
If you underreport inflation, then the average income will increase faster. But even if not, average is not what you and I receive, and it is determined by some people making lots of money while others have stagnating salaries.
> majority is doing better than most years
You cannot prove this from the above points. Average income doesn't mean that the majority is doing better. Something called inequality will not allow that to happen.
> They might not feel that way though
That is pop psychology at its worst. Nobody cares about feelings, you just need to look at the numbers in a critical way.
> In a high inflation environment, one has to consume "strongly" just to maintain the same standards of living.
Strong disagree: you can't spend what you don't have (or can't borrow), so spending is a vital signal.
There's a natural experiment that just happened that refutes your argument: after Covid, most of the world had high inflation (with some actual recessions), but the US did better than everyone else, with stronger American consumer spending helping the recovery (leading to more jobs to service the strong demand). Your argument falls apart when you consider why UK or French consumers consume as "strongly" to maintain their lifestyles.
> If you underreport inflation, then the average income will increase faster.
There's no one way to calculate inflation (since this depends on how you choose your 'basket'). But like I said, based on vibes, everything is awful.
> you can't spend what you don't have
Yes you can, just borrow more [1]:
[1] https://washingtonstatestandard.com/2024/08/26/us-credit-car...
> Your argument falls apart when you consider why UK or French consumers consume as "strongly" to maintain their lifestyles
They don't have access to cheap credit as the US consumer has, and being smarter than Americans they refrain from going into more debt.
> There's no one way to calculate inflation
Yes, there is, it is just different for lower income earners. Economists just don't want to measure the impact on people who have to spend large part of their salaries on rents, health care, cars, all things with prices that increase higher than official inflation.
> Yes you can, just borrow more
Did you purposely leave out my parenthetical to use it as a dunk? Borrowers are not dumb (and the amount of debt is also a useful signal on economic health by the way, and right now it's not terrible; definitely not in recession territory)
> Yes, there is, it is just different for lower income earners
Well, don't leave me hanging - what's the one way to calculate inflation then? Which specific mix of goods and services (and locations) should be used as a national benchmark in THE inflation equation?
> Borrowers are not dumb
I don't disagree with your overall point, but I do think pre-2008-crash mortgage lending could be a counterexample. Certainly there were a lot of shenanigans going on, but ultimately borrowers made the -- IMO dumb -- choice to stretch themselves far too thin, and buy bigger and more expensive houses than they truly could afford.
Perhaps everyone today has learned from history, though. (But I wouldn't bet on it.)
Touche. I meant to say "lenders" - but they too were pretty dumb with sub-prime mortgages in 2008
Any given borrower, on their own, is unlikely to be dumb.
The market can be irrational far longer than they can be solvent, however, and not being ‘dumb’ can make that worse.
Pre’08, you had to be dumb as a borrower in 90% of markets, or you’d be flat out unable to buy anything. As to if continuing to buy in those conditions was dumb or not, is mostly something that can only be judged retroactively.
Sure, you can borrow more, but that doesn't seem to be what's happening, at least not contrary to long-term trends. Credit card debt is going up[0], but at a rate that looks exactly like (or perhaps slightly lower than) what it would be if you just extrapolated from 2019 and ignored the pandemic (and recent data in the last year shows that growth in that number may be slowing a little). Debt servicing as a percent of disposable income looks pretty good too[1]; much lower than the absurdity that was the 00s, and on par with or better than pre-pandemic 10s. You have to go back to the early 90s to get much better than that, but if you keep going back, it gets much worse.
Certainly these are just two metrics among many that people could look at, but if we're talking about consumer spending being strong, it does not appear to be because people are borrowing more today than long-established trends would expect. (I do think it's concerning that consumer debt has more or less only gone up over time, but that's a separate discussion.)
> when you consider why UK or French consumers consume as "strongly" to maintain their lifestyles.
French consumers definitely don't maintain their lifestyle.
> In an economy where you can easily deliver packages or drive uber, there will always be close to zero unemployment. This number stopped making sense a few years ago.
Part time employment is roughly where it was in absolute numbers (not even per capita) in 2009. https://fred.stlouisfed.org/series/LNS12600000
> In a high inflation environment, one has to consume "strongly" just to maintain the same standards of living.
You're wrong here too. Here's a chart that's inflation-adjusted: https://fred.stlouisfed.org/series/PCEC96
> If you underreport inflation
Ah I see... your entire worldview is predicated on just assuming different facts than what your interlocutors are. Feel free to substantiate this rather fundamental claim.
> That is pop psychology at its worst. Nobody cares about feelings, you just need to look at the numbers in a critical way.
"Look at the numbers in a critical way" is an interesting framing of "make shit up."
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wat
People seemed to vote on how they felt not what these numbers said. So the vibes seem more valid than the stats at least on their real world impact in many ways.
Continuing to yell at people about the numbers doesn't seem to be an effective strategy, maybe try a different approach?
I suppose those voters don't have to wait for too long: the economy is going to start doing great for them again at noon on January 20, 2025.
You are not wrong. By February 2025, 90% of Republicans will start believing that the economy is thriving.
https://www.nytimes.com/2024/01/23/briefing/economy-inflatio...
If this belief is strong enough, they would act on it. The fact that they act means the economy starts rolling, and produce the type of thriving that they come to believe! Ala, a self-fulfilling prophesy.
Therefore, it's important to find out why people believe things, despite being contrary to empirical evidence.
Family needs to make $107,700 a year to own a home.
Apartment in a moderate-cost area is about $70,000-$100,000/year.
Median salary in the US is $59,300
What considered poverty level in the US for: 1 person: $15,060 2 people: $20,440 3 people: $25,820 4 people: $31,200
According to recent data from the U.S. Census Bureau, around 50% of Americans make $70,000 or more annually.
That means about 50% of the US can not afford a place to live.
I'm misinterpreting something here:
"Apartment in a moderate-cost area is about $70,000-$100,000/year."
Are we saying apartment rental is between 5 and 8 thousand dollars a month? What is the definition of this moderate cost area??
This is to own an apartment or condo. What your mortgage is a month is going to be different for everyone depending on what they put down.
Right. I was born in Europe and am still struggling with North American cultural assumption that "place to live" == "own property".
Back to the original post I think there are several statistics that apply to different geographical areas or demographics in the same post, leading us to conclusion that half the continent is out on the street, and demonstrating risk of back of the napkin calculations on policy decisions, even if we assume good will and honest effort :-/
To be clear, the parent poster is not using these terms as a native American would either.
He's arguing below that about 50% of the US population is homeless, which is not even close to accurate.
This isn't a "North American cultural assumption", I'm pretty sure most Americans would take that to mean rent too.
You have to understand unlike in Europe. We have no safety net. Most peoples whole savings is their home. So owning your home is a big part of having something to retire on and pay bills.
Actually, very common in some European countries as well.
In the Netherlands, you aren’t taxed on your primary residence, but all other wealth has an approximately 2% annual wealth tax. This makes it challenging to accumulate wealth through any means other than a primary residence, which was many of my coworkers’ primary way of saving.
Granted, they also have mandatory pensions, which can give you a good income in retirement, but that’s different than wealth accumulation
Oh I've lived in Canada for 25 years now and I see that around me... It just isn't something I've embraced though. There's a almost religious faith that houses can only go up, and I've lived through enough interesting times and places not to believe it for a moment (as has anybody over 60 on Canada as well).
> We have no safety net
Bullshit. American unemployment pays consdeirably more than UK unemployment. Throw on food stamps and housing assisitance on there, and the US might still be below the more generous European countries, but you definitely have a safety net.
> unlike in Europe... So owning your home is a big part of having something to retire on and pay bills
So what, like the UK? And Ireland? And argaubly all of Europe east of Germany and in Scandinaivia, all places where home ownership is comparable or greater than the US?
Unemployment is different in every state and is pretty short. I know in NJ its only for 26 weeks. Plus this isn't used for retirement. Have you ever tried getting food stamps or housing. Lets just say its not very easy. Also its setup so that as soon as you start getting a little ahead its taken away. So you end up right back where you started.
New Jersey unemployment is 60% of your weekly earnings to a max of $713.
UK unemployment (called Jobseeker's Allowance) is up to £90.50/week. $115.30 in dollars.
It is not the same, but these are proxy numbers, because rental costs will increase along with owning costs.
Median house price is 347k. I find it hard to believe a mortgage on that is 60k a year.
$374k at say 7% interest with average property taxes and insurance will be around $4.2k/month. not quite $60k/year but not too far off…
I think your number is a bit high. Looking at a few calculators, even if I push the property tax & insurance numbers quite a bit higher than I think is credible, I can't get the numbers past $3800/mo or so. More reasonable seems to be around $3400/mo. So that's $40k-$46k/yr, well below that overinflated $70k-$100k figure quoted upthread.
Also your math is off: even at your $4200/mo estimate, that's $50,400/yr, nowhere near your "not too far off" $60k. And that puts it at 30%-50% below the $70k-$100k range, which makes that range laughably inaccurate.
4.2k * 12 months = 50.4k -- so 20k under the bottom of the large range previously posted (70k-100k/yr)
Current 30 year rates about 6.5% which would mean about $2150 assuming about 10% down payment and 340k mortgage over 30 years.
That would mean you are paying $2k a month in tax and insurance?!
Downtown SF or NYC.
> Apartment in a moderate-cost area is about $70,000-$100,000/year.
That doesn't even pass a minimum-effort sniff test. I live in one of the most expensive cities in the country, and I'm in your quoted range for a 4-bedroom condo.
My sibling lives in a more affordable, but desirable, area and spends a little less than half of what I spend a year, for a single-family home with a good-sized yard that's more than twice the size of my condo. (And they bought last year when interest rates were high.)
Your own stats don't even make sense. You claim it costs $70k-$100k/yr for housing, but that to afford a home, a family needs to make $107k/yr? That doesn't make sense. If housing costs that much, that family needs to make north of $200k/yr to afford it.
Where are you getting this information?
You’re forgetting lots of people rent. Lots of people can’t afford to own, and almost all of them rent. The other factor is dual, or even 3+ incomes in families living together.
lots of people that can afford to buy many houses rent because it makes very little financial sense (for those who understand slightly-above-basic-math) to own a house in the US
I wish more people in the US believed that, it'd make my retirement planning so much easier. Incidentally if that statement were even vaguely accurate private equity would most likely not find residential real estate an attractive investment, which they most certainly do. All of my real estate has doubled in value over the last 5 years and through the magic of depreciation I'm on track to get back more in taxes over a 20 year span than the original purchase price of my investment property. Home ownership: shit makes perfect sense to me.
I think GP was talking about owning a primary residence, not owning investment properties.
(I still don't agree with GP's thinking or math, but I don't think you're arguing against what they actually said.)
I'm talking about owning both primary residence and investment property, both are great.
That thinking is very location-dependent. Cities and counties across the US vary wildly on the ratio of cost-to-rent to cost-to-own, and that number is sometimes less than and sometimes greater than 1, depending on where you are.
A big problem with renting is the capriciousness of the rental market in many places, which you can't solve with "basic math". That plus the availability of the 30-year fixed-rate mortgage in the US means that rental costs can be much more unpredictable than buying. Some people will -- very reasonably -- pay a bit more for peace of mind. And that's before we get into the topic of no-fault evictions, and how that can wreck a family's housing situation, sometimes with not too much notice.
Renter protections in the US are not great compared to in many other places, and that can make renting unpredictable and more "costly" in other ways.
It's not always about making financial sense, though. And if you stay there after it's paid off, I suspect the calculations look different.
> Median salary in the US is $59,300
> around 50% of Americans make $70,000 or more annually.
Wait a second. "50% of Americans making X or more" means X is the median. Does that imply a ton of people are working more than one job?
Sometimes the discrepancy can be due to non salaried workers (e.g. contractors, business owners) earning more than the median salary.
That's not a measure of an economy though. Housing and especially dense affordable housing isn't widely built in the US and the supply is artificially constrained, usually by NIMBY politics.
you're right, it's a measure of access to life's necessities. the point of the comment is that access to life's necessities isn't tied to the economy.
> That means about 50% of the US can not afford a place to live.
So 50% of the US are homeless?
They are either overspending or under non-standard living arrangements: roommates, living with relatives, living in cars, etc.
They are a couple of paychecks away from being broke, and a health condition away from being homeless.
Or they inherited a home and can barely afford insurance, taxes, or upkeep on it. So they could afford to live there but couldn’t afford to buy it.
Barely is not can't. You either can or you can't. If you can't, you get kicked out of your home and they auction it off to pay for the taxes.
It happens. It's disgusting when it does. It IS a problem.
But it's not happening to half the country. That's nonsense. And when you say nonsense, it keeps others from taking the problem seriously.
In some form or fashion yes. Theres a reason why there are so many homeless tent camps everywhere. These people are not choosing to be homeless. They just can't afford a place. But remember a lot of them still have jobs. At Walmart, Amazon Warehouses, etc.
> In some form or fashion yes
Can you clarify? Because I'd find it hard to believe that half of Americans are literally homeless. It might make more sense if you're referring to home-owners.
“Half of Americans are facing housing insecurity” is probably closer to the intent but I don’t know if that’s actually true.
Pretty sure half the US isn't living in tents. I feel like I'd notice that, especially living in a city with a larger-than-average homeless population.
I agree that homelessness is a problem, but you appear to be arguing in bad faith. If 50% of the US actually "can't afford housing", we'd have $170M people living in tents, and that is demonstrably not the case.
I would believe a claim that states that a large portion (maybe 50%, maybe more, maybe less) of the country are facing financial insecurity that makes them feel like their housing situation is precarious. But that wasn't the claim put forth upthread.
What we can't see is the amount of people that are living with roommates and in toxic situations they'd love to exit but are unable to due to a lack of housing options and a lack of money.
170 million people living in tents? Wow.
> Apartment in a moderate-cost area is about $70,000-$100,000/year.
No way that's correct.
Taken from ChatGPT that took it from Fed stats.
Last timeI asked ChatGPT for something:
- it invented numbers (they were erroneous) - it told me that given the nature of LLMs he cannot name his sources nor give me a link to it.
This make your statement quite unlikely. Can you link us to the stats directly?
Those numbers are much less than you said.
Not sure if I would call all of those moderately priced areas, either. Some of those at least are the most expensive in the country.
Ok?
Median age of first time home buyers is now 38, up from 35 last year.
Ok, but what's the longer-term trend? Those two number don't mean much alone.
10 yrs ago it was 31
It's also a number approaching an asymptote, it can't grow exponentially, or even linearly, so increasing 20% is a big increase.
f.y.i. All stats come from the Fed and were dug up by chatgpt. Also all prices are median, not averages.
Can you provide the question you asked ChatGPT? Because the number is wildly inaccurate. I own a home and I pay less than $15,000 a year. Tax and maintenance. In a high cost of living area.
HN love to look down on ChatGPT, yet are willing to hide behind it when it’s convenient.
"how much does a family need to make to own an apartment in the united states"
> Family needs to make $107,700 a year to own a home.
I don't see how that computes. The internet suggests that, on the high end, a family will spend around $10,000 on home repairs, maintenance, and insurance, which is in line with my experience. So almost $100,000 in yearly property taxes for a typical family home? Not a chance.
I suspect you are thinking of buying a home rather than owning a home, but homes are bought with wealth, not income, so an income figure here doesn't make much sense if that is, in fact, what you are thinking of. If that is not what you are thinking of, I, for one, don't understand what you are trying to say. This figure doesn't seem to have any applicability.
I think you're being overly pedantic in your concern for the difference between "buy" and "own".
Most people in the US will say they own their home even if they have a significant mortgage against it. You can be upset that people are not using the word correctly, but that's kinda pointless.
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If you keep posting unsubstantive and/or flamebait comments, we're going to have to ban you. We asked you this just recently (https://news.ycombinator.com/item?id=41604621), and you've unfortunately continued to break the site guidelines.
> but homes are bought with wealth, not income
What do you mean by this? In the US, over 60% of people have a mortgage [1], which almost always means it's coming from some percentage of their income. When you get a home loan, the banks only real concern is your credit score and income. Anecdotal, but I don't know a single person that doesn't have their monthly mortgage scaled to their income, since I don't know a single person under 60 without a mortgage that's coming from their income.
[1] https://www.investopedia.com/percent-homeowners-have-mortgag....
> In the US, over 60% of people have a mortgage [1]
A mortgage is the rental of wealth. It is independent of the home. But, even if we want to conflate them for the sake of discussion, it is still dependent on many variables that does not round to a single number. The rent on a $20,000 mortgage is quite different to the rent on a $200,000 mortgage. Two buyers buying identical homes for identical prices, but who come with different amounts of wealth, will have very different rental payments. A single number is meaningless, even if we assume 100% of people are paying mortgage rent.
But, as you point out, ~40% of the people don't have a mortgage, and therefore have no such cost to begin with. The idea that they also need $107K doesn't make any sense.
"Assume a spherical cow..."
They're presumably saying that's the income needed to service the mortgage (where what most people call the mortgage payment includes escrows for insurance and property taxes, on top of the literally mortgage principal and interest components).
That still feels like a fair over-estimated amount to me, but I think that's what they were getting at. (It could also be a figure of the amount needed to qualify for a mortgage on a place with some amount of downpayment.)
It could be an overestimate, it could be an underestimate, or for a specific family buying a specific home it may be spot on. It is kind of like saying that it costs $5,000 to build a software application. That statement is true, but meaningless.
> low unemployment
I feel that this is pretty well established as a misleading metric https://www.investopedia.com/financial-edge/0609/what-the-un...
> strong consumer spending
how does this track against consumer debt?
> average income increasing at a rate higher than inflation
but has it caught up? https://www.bankrate.com/banking/federal-reserve/wage-to-inf...
> I'd say the majority is doing better than most years
most years being the past 2 or 3? because I feel like we were all doing a lot better before 2020
>I feel that this is pretty well established as a misleading metric https://www.investopedia.com/financial-edge/0609/what-the-un...
I fail to see how it's "misleading". U3 doesn't include people who don't want a job. That seems... fine? If you don't want a job, and don't have a job, why should you be factored into the health of the labor market? Isn't it more misleading to lump people who want a job but can't find a job, with people who don't want a job and aren't working?
>but has it caught up? https://www.bankrate.com/banking/federal-reserve/wage-to-inf...
The linked article says:
>Source: Bankrate's Wage To Inflation Index using the Department of Labor's employment cost index (ECI) and consumer price index (CPI)
Using BLS's weekly wage data adjusted by CPI gets the opposite conclusion, so my guess is that there's something funky going on with the employment cost index. For one, it includes benefits, so if health insurance costs go down, then "average income" (as computed by bankrate's index) will go down, even if your take-home is the same. At best, the only thing you can conclude from that is "employers' spending on employees is rising slower than inflation", which is slightly different than "employees' incomes are rising slower than inflation".
Well the facts don't care about your feelings. A lot of people seem to want to feel bad about the economy and are searching high and low for reasons to feel that way.
Most of it comes down to politics:
https://www.fisherinvestments.com/en-us/insights/market-comm...
is your buying power the same as it was in 2020? did your wages increase since then to match what it was in 2020? because I know mine didn't and I've not heard of anyone, or seen any data, that says otherwise.
100k in 2020 is 120k today https://www.usinflationcalculator.com/
do I need to spell it out for you? you are delusional if you think there is not concrete evidence that everyone's making less and spending more
My wages have increased 30% since 2020, exceeding the 22% inflation I got from that calculator.
The data shows that far more people are in my situation than in your situation. Do I need to spell it out for you? People are acting like they are doing better in the numbers, responding on polls that they are doing better, but they all think everyone else is doing bad or the economy in general is doing bad.
Can you imagine how bad it would be if our actual economy did as poorly as the rest of the world? We went through a mismanaged global pandemic, and came out smelling roses when it comes to the US's economy. We are in a fantastic position for world domination. China and Europe shat the bed. India is up and coming and may be an economic rival, but they are not there yet.
If you think this economy is bad, try going back to 2008. To 1992.
So please, yes, spell it out for me. The facts do not care about your feelings, no matter how strongly you have your feelings, or who told you to have the feelings and to feel helpless.
> My wages have increased 30% since 2020, exceeding the 22% inflation I got from that calculator.
I don't believe you
nobody gets a 30% adjustment without taking a new job or a promotion, and if you did that then it defeats the point of this discussion
> how does this track against consumer debt?
It tracks pretty much as one would expect had the pandemic not happened, following a well-established longer-term trend: https://fred.stlouisfed.org/series/CCLACBW027SBOG
> I feel like we were all doing a lot better before 2020
There we go again, going by "feelings" rather than the data.
> There we go again, going by "feelings" rather than the data.
do you want to discuss the point or just be a snarky troll about it?
> but has it caught up?
Which year is your baseline, and why?
> But is the majority of the population thriving?
It's important to understand that the stock market is a leading indicator.
Everyone doesn't immediately get laid off when the stock market tanks. Everyone doesn't immediately get a raise when the stock market is roaring.
A lot of people are just now experiencing the stock market mini-crash of 2022, when the pandemic helicopter money dried up. In two years a lot of people are going to be experiencing the investments that are being made in the market right now. Most of them are going to wrongly ascribe those good times to the person holding high political office even though that person had nothing to do with it. This won't be the first time it has happened.
> the stock market is a leading indicator
I don't think so. It is probably loosely correlated with the economy at best.
The stock market can soar in times of cutbacks which hurt non-asset owners but which benefit profit margins. The stock market can boom on liquidity surges that do not translate into economic investments. The stock market can crash while the overall economy does fine(wasn't 2000 basically this, with the economy not really suffering until after 9/11?).
Honestly nowadays industry seems to be just about maximizing stock value through hype and CEOs are basically hired just for that. Like all stocks are meme stocks now, profits be damned because you can always do some accounting maneuver, and as long as stock goes up you're all getting your bonus.
I wonder if my impression that this has increased a lot in the last decades is correct, and what would be the impact of this on the whole "stock market as indicator of economy" thing.
The good health of the market is ultimately meaningless if there are no mechanisms in place for redistribution.
Historically it's been done through wages, but those have been de facto frozen since the 1970s.
I think financial education is a major problem. People need to be taught about investing. I'm talking long term investing, not day trading, crypto, etc. Start early, invest regularly. This is the simplest way for a normal person to build wealth within their lifetime. Wage increases aren't going to get you there.
Why have everyone buy a share of some companies and rely on that risky gamble to insure their future? The markets were never meant to be a way to redistribute wealth, but to sell risk away, to anyone willing to take them.
Using markets as the primary way to redistribute wealth seems convoluted at best, and yet another perversion of their original purpose.
Do you feel the same way about index funds over individual stocks?
This is such a great, succinct insight. I've heard various pieces of it, but you put it all together, thank you.
Now I wonder, are there historical exceptions to this general rule? Also, does the "lead time" grow and shrink substantially?
> does the "lead time" grow and shrink substantially?
it changes based on other people's guesses in their participation in the stock market. Aka, it's chaotic.
The "mini-crash" is already a non-event for any medium or long term investor. Anyone who invested since the beginning of 2021 is still up 50%. I'm assuming VTSAX or similar index fund. It's not even a blip.
Asset prices are extremely high. When politicians or business journalists say “the economy is doing well” they mean asset prices. The stock market is high on a number of metrics, which is great if you own a bunch of equities. Housing prices are soaring, which is great if you own real estate.
Food, housing, energy, healthcare, education. Real wage growth and job security measured against the prices and durations of those things. That’s what matters to people who don’t own significant real assets, those are the things that can get extremely bad (someone tries to murder the CEO of United Healthcare on the street bad) without showing up in the numbers you see in the press.
Simon Kuznets himself, the inventor of GDP as a metric sternly cautioned policymakers about treating it as a summary statistic.
> Food, housing, energy, healthcare, education. Real wage growth and job security measured against the prices and durations of those things. That’s what matters to people who don’t own significant real assets, those are the things that can get extremely bad (someone tries to murder the CEO of United Healthcare on the street bad) without showing up in the numbers you see in the press.
You're correct that they do matter and can get bad, but are not bad currently as regularly reported in the press.
Lower income households in the US did better than everyone else by these metrics coming out of COVID.
Kindly show your work.
We need to differentiate living paycheck to paycheck out of necessity vs. choice. It might be surprising but there are a lot of people who choose to do so because why save when you could die tomorrow.
Or they get caught up living a lifestyle that they feel like they need to give the appearance of success!
This is an under appreciated problem with inequality.
Ideally, others success should be net-positive/neutral for others.
In practice, inequality has these perverse impacts at least:
(Wealth is a spectrum. “Rich” and “non-rich” below stand in for any significant relative difference.)
1. The non-rich often put unrealistic pressure on themselves to keep up with wealthier lifestyles.
But beyond that self-inflicted wound:
2. The rich can afford outsized amounts of critical or survival type services and assets. Like land. Fresh vegetables. This imbalance raises the cost of meeting basic needs.
3. Markets respond to more rich by creating higher end services and products. Some have subjective value (fashion), some are luxuries (massages are beneficial, but not critical for most), but many are practical.
For instance, computing hardware, internet access options, expensive healthcare interventions, medications, private transport growth relative to public transport, etc.
4. And the rich also perversely put unrealistic social and employer pressures on the lifestyles of the non-rich. I.e. dress and personal technology shibboleths, etc.
—-
It is worth pointing out that the large role of real estate as a passive wealth compounder, tracking up with the product of increased overall economy and inequality growth, is perverse enough.
But the common arrangement of property taxes that tax both land (the limited and exclusionary asset) and its development (the non-exclusionary asset we should not be disincentivizing in any way), adds another perversity to land economics.
When a problem compounds already, it doesn’t need any more perverse incentives!
If property taxes were replaced by just land taxes (renormalized to be revenue neutral) it would:
1. increase the return on development, and
2. increase the costs of holding (absolutely or relatively) undeveloped land!
Which would both increase development (i.e. housing, multi-housing) and increase supply of (relatively) unused land.
This would be a net win for those who are impacted or concerned about inequality, but also those with a libertarian or capitalist viewpoint. As it removes a wealth tax. (Which isn’t just a double tax, but an unlimited repetitive tax on the same already taxed/unrealized non-exclusionary wealth!)
Whether rich or poor, improving one’s property with already taxed capital or self-supplied labor, would not perversely raise one’s taxes.
As if those are the only two choices. And as if those choices are ones that most individuals can independently make.
my employees have no problem doordashing Chipotle or tim Horton or Starbucks.
It's 5 mins of driving. It's also not having any financial sense.
Is that why you hired them? What other disdain do you have for them?
Judge much?
It's more like, how save when you need the money right now.
Not the OP but I don't think that is who they are talking about. People who don't have money to save obviously are going have trouble saving it.
There is a certain subset of people, though, that do make money and actively choose to not save it. Kind of a perpetual "YOLO" attitude.
I don't think the OP was judging.
How do you know? Have you walked in their shoes?
I mean, I don't have access to anyone's internal brain-state other than my own, obviously, but I have had at least one coworker outright tell me that this was their mentality. This coworker made roughly the same yuppie engineer salary I did, and didn't have any familial responsibility, and flatout told me that he didn't have much interest in saving money, he likes to spend it and live for the now.
Granted, I think that this is mostly a product of the fact that he was pretty young (22 at the time), and I haven't really talked to him in 11 years, so it's very likely that he doesn't do this anymore.
I'm not saying these people don't exist, just that judging is usually unfair.
> a good chunk of the population live paycheck to paycheck.
Is that not true in other economies? Was that not true at some (mythical?) point in the past? What number, specifically, would you like to see before you're willing to declare "The Economy is Good"?
Basically the point you made is an example of the Economics of Vibes. It's non-falsifiable and allows you to justify any position you want. We're about to start a global trade war, it seems, based on those vibes.
In point of fact household savings rate as a proportion of household income is not particularly low right now. In fact it had a huge spike during the pandemic (lots of assistance and nothing to buy, same thing that caused the inflation burp).
Family needs to make $107,700 a year to own a home.
Apartment in a moderate-cost area is about $70,000-$100,000/year.
Median salary in the US is $59,300
What considered poverty level in the US for: 1 person: $15,060 2 people: $20,440 3 people: $25,820 4 people: $31,200
According to recent data from the U.S. Census Bureau, around 50% of Americans make $70,000 or more annually.
That means about 50% of the US can not afford a place to live.
The average apartment in a moderate-cost area is 5833 per month? Where is that number coming from?
The average rent for an apartment in the United States is between $1,559 and $1,748 per month, depending on the source (google AI). This would be $21000 per year in rent.
I wouldn't consider $5,833 a moderate cost rent. ($70k / 12) 3 bedrooms inside the loop in Houston is ~$2,100 / month. https://www.apartments.com/vintage-at-18th-street-houston-tx...
> That means about 50% of the US can not afford a place to live.
No, at best the conclusion is that 50% of the US can not afford to own a home. But not owning a home != homelessness. Renting still exist. Roommates still exist. There's a house in my neighborhood that has 3 (El Salvadorian, I believe) families living inside of it, and they are contributing 3x income to make it work (this depends on zoning laws though).
> at best the conclusion is that 50% of the US can not afford to own a home.
More particularly, 50% of the single person households in the US. This does not apply to a couple unless they are aiming for the Leave it to Beaver dream of a stay-at-home wife.
>moderate-cost area
The problem is that moderate cost area is of now has a lot better quality of life, with plenty of things in short driving distances, compared to what it was back when housing was "affordable".
You can go browse Zillow across US and find ~100k houses, which even at higher interest rates are affordable on a $60k household salary. Of course the quality of life is going to be much worse than what you normally know, but it would be similar to what your grandparents had when they bought the house.
A house in a nice part of Chicagoland walking distance from a train stop will run you 300-350k.
> Apartment in a moderate-cost area is about $70,000-$100,000/year.
... in what sane world is that a "moderate-cost area"? $70k/yr is well over $5k/month, and looking right now at the prices in my metropolitan area, you have to pretty much get a combo of 3 bedroom, luxury, and city-center to get something that expensive. And even then, I'd consider this metropolitan area to be high cost, just not obscene cost like SF or NY.
Renting a 2b2b in the middle of Manhattan probably costs 100k a year, but that is very far from a "moderate-cost area".
> That means about 50% of the US can not afford a place to live.
And yet, they do. I don't think your numbers lead to your conclusion.
Being single and wanting to own your own home is going to be the closest situation to your conclusion. 50% of those folks being unable to achieve that dream sounds plausible.
The median rent is $1621. One bedroom and studio apartments will be on the lower end, and a $60K salary is likely to be sufficient.
For everyone who wants to obtain housing for themselves and a significant other, they have $120K to work with. Now the house looks achievable.
Comment was deleted :(
More of the economy is thriving than ever before.
>50% of the population has enough cash savings for three months of expenses
The median amount of cash in bank account is $8k
The median US household networth is $193k.
Further, the wage increases in recent years have happened mostly at the lower end of the income scale, not at the top!
When polled, the US population is very happy about their own economic situation, yet still believes that we are in some sort of terrible economic downturn.
IMHO, the reason for this disconnect is housing. We haven't built enough, it's made people very unhappy, and restrictive zoning prevents fixing it. The housing theory of everything could even extend to the current political situation in South Korea...
Some of the population is definitely thriving.
Although, does that reflect in higher quality of life? Some statistics say no. The best quality of life is where there is good access to quality healthcare, education, clean air and water, culture, and low crime. When taking into account all the above, somewhat surprisingly, Austria and Switzerland come as top places to live. https://en.wikipedia.org/wiki/City_quality_of_life_indices
The most recent report ranking country quality of life has US at #3
https://www.forbes.com/sites/laurabegleybloom/2024/09/10/new...
And the US is massive and diverse, with many states larger than those other countries. If you look at quality of life across US states, it’s likely the best states (think New Hampshire versus Mississippi) would outrank all those countries, since the average across all states ranked #3.
You're misreading that. The survey ranks USA as #3 overall, but #22 on quality of life. The overall ranking is mainly thanks to the agility (#1), power (#1), entrepreneurship (#2) and cultural influence (#3). The other categories aren't that good: https://www.usnews.com/news/best-countries/united-states
I know plenty of people making $250K/yr or more who are living paycheck to paycheck.
At that point, it's not really the company that's the problem...
The living paycheck to paycheck stat is meaningless. It generates headlines, because bad news wins, but if you dig in, even the surveys that ask about this reveal that a large percentage of people living paycheck to paycheck are very financially secure, both objectively, and according to their own assessment. I don't have time right now, but I'd encourage anyone reading this to go find the actual source for this stat and read their full report. Last time I looked, it was freely available.
Many of those people living paycheck to paycheck have a budget where they're saving or investing a significant amount of their money, and accordingly, money feels tight. This is the financially sound way to avoid lifestyle creep, but it doesn't mean you're in a precarious position. Or alternatively, they're paying for really expensive, but optional things like private schooling and expensive cars or vacations.
Obviously some people are struggling, but this paycheck-to-paycheck stat is not an accurate way to quantify that. It's best IMO to look at objective metrics like the poverty rate, or people's objective financial picture (available via surveys.)
> Many of those people living paycheck to paycheck have a budget where they're saving or investing a significant amount of their money
I don't think that's the common understanding of what "living paycheck to paycheck" means.
The most common one is saying that someone is paycheck to paycheck but they're also funding their 401(k) up to company match, etc.
It's usually just the inverse of saying most people don't have ready cash savings laying around; because there's no need to when you have credit every which way all the time.
Much better to look at the debt load on people and how that changes over time. Someone who makes $5k a month and spends $3k on debt service and lives off $2k is going to feel much different from someone who makes the same $5k, lives on $2k, and spends $3k on candles or whatever (since they can stop buying candles anytime but you can't easily stop paying down debt).
When I hear "living paycheck to paycheck" I think it means your recurring expenses (rent, utilities, food, etc.) consume all your income every month and you have nothing left to save. No savings. No investments. No 401K. If you don't get your next paycheck you can't pay the rent.
That's what it's supposed to mean, but because so many people don't report it that way the resulting data is meaningless.
What you think and what each individual reply to the survey indended are bound to be wildly different.
Sure. But it would be strange to assume _most_ think of it any other way.
I think your definition is completely reasonable, but it's not how people answer the question (again, based on reading the report, which has a lot more detail.)
> It's usually just the inverse of saying most people don't have ready cash savings laying around; because there's no need to when you have credit every which way all the time
This is quite a precarious situation to me. People should not need nor be encouraged to rely on debt to live life, especially month to month.
The default mode should be working people make enough to, if budgeted moderately well, can pay for everything plus save money away post tax[0]
Anything less and you’re only growing systemic issues over time
[0]: including tax exempt savings like 401Ks is ill-reflective of people’s ability to save money aside for emergencies and unexpected costs
What planet are you on? Paycheck to paycheck means there's (nearly) nothing left at the end of every month.
Clearly you're not in that situation, and likely have never been anywhere near it with that privileged view of the world.
Many people in the States are living on the edge; i.e. paycheck to paycheck, not, "oh, well, I'll just dip into my equities if the need arises".
That's exactly the point he's making. That exact slight of hand underpins all those "huge percent of population living paycheck to paycheck" headlines.
I love seeing this in those periodic ragebait articles about how a family earning 400k+ is "paycheck to paycheck" after maxing out their retirement accounts, paying for private schools and vacations, mortgage on a $2m house, car notes on two newer luxury cars, etc. etc.
"After long term saving and paying for my indulgent lifestyle, I just don't have anything left at the end of the month!"
> periodic ragebait articles
Somewhat offtopic, but I call these articles "parading the idiot". Where a newspaper or other media outlet runs an article interviewing a person where the subject is clearly out of step with everyone else in their assumptions.
See also articles where a property investor complains about how hard they are doing financially because they have to sell one of their eighteen investment properties.
I find it pretty egregious that someone who is saving/investing a chunk of every paycheck could be considered to be "living paycheck-to-paycheck." I feel like the most obvious definition most of us would assume is that nearly 100% of your paycheck gets spent on goods and services, and/or bills and debts, before your next paycheck.
The Federal Reserve has pretty detailed studies on this that take a nuanced view of spending behavior. Households with no excess income after necessary expenses are in the 10-15% range. The methodology is designed to exclude the diverse scenarios under which having no apparent excess income is an artifact of lifestyle rather than an economic reality.
>living paycheck to paycheck have a budget where they're saving or investing a significant amount of their money
How can you be "paycheck to paycheck" if you have a massive savings pile? Are you dumping it all into 25 year treasuries?
This is literally me. I live paycheck to paycheck but also have a six figure sum of money I can tap into if needed.
How I got here is living way below my means in my twenties, saving up tons of money, and nowadays living at my means while still maxing retirement. I also have almost all that saved money invested, which just grows the pot as it sits. I also have zero debt besides a 3% mortgage.
So basically I spend all of every paycheck, after retirement has been deducted, but if I lost my job I could maintain my current life with zero income for a few years before running dry.
That is not living paycheck to paycheck by any reasonable definition. If you could stop contributing to savings/retirement/investments and suddenly have a ton of additional disposable income, then it's not that.
>That is not living paycheck to paycheck by any reasonable definition
Well then now we know that the media will happily use unreasonable definitions to bolster stats for click bait stories and headlines.
People assume paycheck to paycheck means "Spending each paycheck entirely on absolute necessities to live" but the survey definition is "Do you save any money from your take home pay every pay period".
This is how you get people at every income level reporting they live paycheck to paycheck.
I think you really underestimate how much people spend on stuff that is a non-necessity. People at every income level fall prey to the “if I’ve got extra money in my account, guess that means I can spend it”. There are, 100%, people living paycheck to paycheck that make 200k because they’ve made some terrible life choices and have outrageous debt to service, essentially.
I know several people who spend 100% of their income, saving none of it. Not because they have poor saving habits but because they've already saved more than they'll likely ever need for a comfortable retirement.
At which point, it actually kind of makes sense to blow your entire income on lifestyle.
That’s still not paycheck to paycheck. If you’re spending income on non necessities you could cut back and be just fine.
An aside, if you’re spending 100% of your income on just lifestyle stuff… you don’t to work at all if your retirement covers it.
That's not living paycheck to paycheck. The implication of living paycheck to paycheck is that you're a few missed paychecks away from homelessness.
where is this implication from? to me living paycheck to paycheck means you are living THE LIFE to the fullest. no “savings” or any BS like that. you make $50k a month, spend it all - wait for next paycheck. paycheck to paycheck
In the context of economics and poverty, paycheck to paycheck is defined as having no ability to save because necessary spending is consuming the entire paycheck.
Necessary spending is food, utilities, clothes, rent. But not eating out, fancy housing is a nice neighborhood, designer clothes, etc.
If you can tap into a six figure sum of money then you're not living paycheck to paycheck.
> Many of those people living paycheck to paycheck have a budget where they're saving or investing a significant amount of their money, and accordingly, money feels tight.
I don’t understand. Isn’t everybody living paycheck-to-paycheck then?
> I know plenty of people making $250K/yr or more who are living paycheck to paycheck.
How?..
Stupid spending. (Or at least "unrestrained spending".)
These are not people I know, but some of what's in this article "rhymes with" things I see high-income, high-spending associates doing: https://www.cnbc.com/2018/03/06/budget-breakdown-of-a-couple...
From that article: "As Dogen puts it, they’re effectively “scraping by,” in part because they’re still living “paycheck-to-paycheck,” despite their generous salaries."
That's right: they're each making $250K/yr, and living paycheck-to-paycheck as they describe it.
Maybe you know too many people who make $250k/year.
Live in one of the handful of world class cites, 250k goes fast.
Yes, of course, but that’s if you are eating out frequently, have a recent model year car payment, have a pretty loose leisure budget (or lack of), live in above average cost of housing, etc. Raising your spending to you means doesn’t make you living paycheck to paycheck. One can live in SF for less than 100k.
Here come the "its an individual's problem not a systemic problem" anecdotes. But when you look at all the data....its a systemic problem.
They're not saying that it's not a systemic problem, they're just saying it's not a company problem.
Housing being too expensive is not a company problem for example.
Noah Smith recently wrote a good blog post on some of the nuances here:
https://www.noahpinion.blog/p/paycheck-to-paycheck-and-five-...
There are too many people living in poverty in the US, or 1-step removed from it, but much less than are commonly believed.
Something I wonder, along these lines, is whether we're measuring the right thing. For instance, does "thriving" depend on things like life expectancy, infant mortality, maternal mortality, quality of health care, pollution, crime, incarceration, traffic deaths, and so forth? The way I think about it, "economics" is supposed to study the quality of life, not just a few isolated numbers that happen to be in units of dollars.
Do any of our "rivals" have entire regions with the levels of poverty seen in places like Mississippi, southern Ohio, or northern Michigan? I grew up in an area with patches of poverty like that.
Things are not bad in Mississippi: https://www.nationalreview.com/corner/its-great-to-live-in-t...
Indeed, this is exactly what I'm talking about, an article cherry picking one number. I haven't been to Mississippi, but I've been to other areas of deep poverty in the US. I don't think there are regions of France with poverty like that.
Are we measuring the right thing?
The article addresses this directly, arguing the point that the social safety net has a cost which is what is curtailing the economy in some respect:
For all its economic power, the US has the largest income inequality in the G7, coupled with the lowest life expectancy and the highest housing costs, according to the OECD. Market competition is limited and millions of workers endure unstable employment conditions.
Europe’s social safety net needs to be paid for, warned Christine Lagarde, president of the European Central Bank, in a speech in November. Boosting competitiveness is necessary for long-term prosperity, she argued: “Failure to do so could jeopardise our ability to generate the wealth needed to sustain our economic and social model.”
> But is the majority of the population thriving?
Objectively? Yes. People are living better than before the pandemic.
However, incessant propaganda works. Fox News and AM talk radio convinced people that the prices went up by like 10x and the country is on the brink of collapse.
I dunno, doesn’t feel like we ever saw the ass-end of that “bullwhip effect” does it?
If America isn't doing well, what does that make the rest of the world? An absolute metric isn't going to be objective, but from a financial and jobs perspective America certainly has it alot better. Which is what the article is about.
You're working harder perhaps, but many in other places have straight up no jobs or millions applying just for the most basic jobs. Many of those people would kill to get into America.
There's a lot of debate over the true state of the economy, but it seems that, one way or another, pessimism abounds.
Consider, the top voted comment on an article about how good the economy is a disagreement.
I wonder how many of the negative effects of an actual bad economy can also be caused by widespread pessimism? Is it better to have a bad economy filled with happy optimists, or a good economy filled with unhappy pessimists?
It’s tied to politics. If your team isn’t in power was just voted out then the economy sucks or is teetering on the brink of disaster. However, if your team is in power or just voted in then things are looking great or will turn around soon.
I just look at things like this and worry. https://www.multpl.com/shiller-pe
> It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck.
By every metric, the economy is strong.
A large portion of the households living "paycheck to paycheck" are either doing so by choice or don't understand what the term means and are ignoring things like retirement savings when they make that statement.
Article: "For all its economic power, the US has the largest income inequality in the G7, coupled with the lowest life expectancy and the highest housing costs, according to the OECD. Market competition is limited and millions of workers endure unstable employment conditions."
That's pretty stark. But the U.S. outperformance on GDP growth and productivity growth is very real over the last 5-15 years especialy and has been documented in numerous stories like this. The looming questions seem to be
1. can Europe maintain its social benefits and living standards with such anemic growth (that is, is the goal of more humane and equal society compatible with a robust economy)
2. can the U.S. preserve its competitiveness and overall GDP performance if it imposes more regulations/taxes designed to reduce income disparities, provide more social services, etc.
3. Can the US endure at all when the current path feels unsustainable for most of its citizens?
Millions voting with their feet don't think that.
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> 1. can Europe maintain its social benefits and living standards with such anemic growth (that is, is the goal of more humane and equal society compatible with a robust economy)
This is already being answered by reports like the one in the FT
> 2. can the U.S. preserve its competitiveness and overall GDP performance if it imposes more regulations/taxes designed to reduce income disparities, provide more social services, etc.
No, because it will turn the US into a country like all the ones mentioned in question 1
> But is the majority of the population thriving?
This is a good point. Aggregate GDP is definitely not the right measure for this, and even GDP per capita adjusted for inflation and PPP does not account for economic inequality.
Median household income adjusted for inflation and PPP would probably be the least bad option if we had to choose a single statistic:
https://worldpopulationreview.com/country-rankings/median-in...
Based on what I’m seeing on YT from financial influencers, people are burning cash by purchasing cars they can’t afford
From what I see on the road it’s pickup trucks they can’t afford.
Article from a couple of days ago on the "most Americans are living paycheck-to-paycheck" myth: https://www.noahpinion.blog/p/paycheck-to-paycheck-and-five-...
It’s funny because right after Trump was elected there was an ft article about all the metrics that showed that poor people were doing worse in real terms. One ft author uses one index to prove one point another uses others to prove another point. I’ve noticed that divide in particular between ft standard sub (40/mo) and ft premium (80/mo)
How much must I pay to not get consistently bullshat?
>How much must I pay to not get consistently bullshat?
You can't because you aren't the customer of news, you are the product.
That's true of course and an important part why everything is so polarized. Without getting too political I don't believe the current direction is sustainable and that the start of the down spiralling already has happened.
>But is the majority of the population thriving?
Which country is that true of?
This is a common trope, but it's wrong. Americans' hourly wages and the disposable income is far higher in the median than that of people in the EU.
If you could live in any country, but you don't get to pick who you are or where you live in that country, which country would you pick?
the living "paycheck to paycheck" claim isn't quite true, this article does a good job breaking it down: https://www.noahpinion.blog/p/paycheck-to-paycheck-and-five-...
The metrics they use to measure this appear to show productivity growth when it’s just an inflation bubble.
A handful of companies (Microsoft Google Amazon Meta) will end up taking all the gains from the AI revolution as well. Capital wins because they don’t have to work as hard or worry about risks or access to talent. The playing field is tilted deeply against all entrepreneurs and really anyone lacking capital. I say this as a pro capitalism person. Something will need to change to give everyone enough influence and power.
Everyone I know is doing well and looking forward to the next 4 years. Just look at the stock market, which anyone can invest in. I started back when I was making $4 an hour, now doing very well.
Not everyone can invest in the stock market… at least not in a way that is helpful. Sure, I might be able to put $20/mo in if I’m working poor and over a few years it will double if I’m lucky.
$4/he starting wage makes you around my parents age (50+) so I’m guessing you easily earn six figures now since you hang out on HN. The crowd here does not represent poor people very well (which is fine!) but you can’t extrapolate your experience to everyone. Yea the stock market is great, but it says nothing about the single mom working two jobs to put food on the table with no energy left to tinker with ETFs.
If anything it's easier now than ever to invest in stocks. Online trades, no commissions, and fractional shares. When I started I had to pay a broker to do the trades. And still against those odds somehow it worked.
> It is very misleading (at best) to say the economy is strong when a good chunk of the population live paycheck to paycheck.
This is oft repeated by politicians (including Bernie Sanders recently), but I've seen some good arguments why this can be a misleading claim. Ex. https://www.noahpinion.blog/p/paycheck-to-paycheck-and-five-...
The population is not the economy.
I also dislike this narrative that if your economy isn't as good as the US then you're failing. And, well, that's exactly where the US wants your economy
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> Anecdote of shitty AI company raising a fuckton of money
> Mention of GDP with no other metrics
> No mention of inflation
> No mention of QE
> No mention of interest rates
This is propaganda. When your central banks control the world's reserve currency it's pretty easy to make sure that the line goes up every year. The British Empire didn't have their wealth because of their superior system, they got it from imperialism.
Before you downvote please just reflect on what I'm saying a little bit. Do the changes you see on the ground reflect this narrative of economic growth? I see a little bit locally, mostly from the CHIPS act and infrastructure acts, but it doesn't correlate with an improvement in QOL and certainly infrastructure projects are not unique to American capitalism.
This is corporate propaganda. A corporate take on America based on stories that are atypical. The US is a country where the stock market is soaring while more and more people are not paid a living wage, are homeless and cannot obtain fundamental health care. FT is a written for and read by those fewer and fewer people who benefit benefit from this situation. As tech people we are often the beneficiaries of the ever growing disparity between the haves and have-nots, so we do not want hear or think about where this road leads us. Not a good place folks.
America has given free reign to Corporations with United vs FEC. The preamble to the constitution now reads "We the Corporations of the United States".
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What does ‘soaring’ mean? Are economies ‘rivals’ to each other? Are we in a race? Where is the finish-line?
Thank god for this instructiveness of this headline for remediating the apparent deficency of the economics classes I took in university and in business school. /s
The business press makes me want to gag sometimes, and trims our mindset to keep us plebes in an unnecessarily competitive mindset with respect to each other. Who do you think benefits from this narrative? What are FT’s interests here? Subscriber revenue? Ad revenue? What are the interests of those stakeholders?
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The US is a great place to make a lot of money if you're lucky and successful, but a terrible place to retire.
Terrible place to be poor more like. Being poor is not enviable in any country, but you're better supported in some countries compared to others. Obviously this comes at a cost for the economy as a whole. At some point you need to think about what kind of society you want to live in.
I wouldn't necessarily make the assumption that welfare support "costs" the economy as a whole.
It's really expensive to support homeless population since they use up critical important resources such as emergency care, compared to just giving them a home. They may recover faster and become a productive member of society again.
For sure, it costs real dollars in a national budget, but it isn't necessarily a bad thing for the economy.
If you give people free food, free housing, and free medical care, who needs to work?
Nobody needs to work in USA either, but people do it anyway since the free stuff isn't comfortable enough. Its the same in Europe, people don't view the free stuff as good enough for them so they work to get more.
The free stuff isn't high living, but it's enough for quite a few. The poverty rate stopped declining when LBJ's welfare state went into effect.
>Nobody needs to work in USA either
But then who's gonna be the delivery man who delivers your post/packages? Who's gonna be your teachers in school? Who's gonna be the baker making your food? Who's gonna be the builder and plumber building the shelter you live in? Who's gonna be the doctor healing you? If nobody needs to work.
They don't need to, they work anyway since we are still living in a capitalist nation where working pays off, that goes for both Europe and USA, you get supported by the state so you don't starve if you don't work but people still prefer working over not working thanks to the extra benefits you get.
Communist nations force people to work, there is no need for that in capitalist nations, people work for the extra rewards.
>They don't need to
Yeah they do. I live in a socialist European country and if you refuse to work you'll end up on the streets and only live off charity of others or starve/freeze to death.
You won't get any state welfare if you're decaled medically fit to work and refuse to take work that get sent to you by the unemployment agency, like for example working in a warehouse or in an Amazon fulfilment center. Nobody would willfully take those shit jobs if they wouldn't have to work.
Yeah, there's some people who made a lifestyle out of gaming the system who choose not to work and still get welfare but that's a minority.
> You won't get any state welfare if you're decaled medically fit to work and refuse to take work that get sent to you by the unemployment agency
That depends on the country, but in the USA you get food stamps regardless of anything else so you wont starve. Then you can live on public lands in a tent or so, many do that in California.
So the US has more socialism than some EU countries?
If you give the bare minimum for survival, people still want to work to improve their living conditions.
Virtually no one wants to live on the bare minimum, no idea why you tend to create this rather absurd straw man...
> Virtually no one wants to live on the bare minimum
Many people prefer that to working.
The Seattle Times wrote an article decades ago where they interviewed a woman on welfare. They asked her what she'd do if her welfare was taken away. She replied "get a job".
They asked a couple of guys in a car with fishing equipment why they lived on welfare instead of getting a job. They replied that on welfare, they get to fish all day and enjoyed it.
I also knew a fellow for years who was on and off unemployment. He said he'd work at a job long enough to qualify for unemployment, then he'd f'up and get laid off. He'd then live off of unemployment, and would fail the requierd job interviews (amazing!). When that ran out, he'd have no trouble finding a job.
A friend of mine ran a nursery. He tried to hire a couple people who said they wanted the job, but would wait until their unemployment ran out before taking it. They were quite open about it.
Not that "absurd" at all.
> Many people prefer that to working.
Hence why I said "virtually", having a few anecdotes from interviews or from someone you knew doesn't cover it. Of course there will be people who choose to live on welfare, the vast majority would rather not. It's a small price to pay to have welfare programs saving countless lives from falling deeper into the hole of abject poverty... We just view this very differently, you prefer the "stick" approach, punish people who you deem unworthy because of their lack of motivation to work; while me on the other hand prefer the "carrot" where I think it's an okay price to pay to have some people choosing to not to work while society can protect people caught in bad times from falling away from the margins.
It's still absurd the straw man you created, please provide me data covering the whole population and we can discuss it, while it's based on these anecdotes you just being guided by your feelings and ideology.
If I can personally run across such people, friends of mine run across them, the reporter has no trouble finding them, then it isn't rare.
> punish people
It's not about punishing people or whacking them with a stick. It's about paying people to fail.
There's also nothing wrong with you, me, or anybody else freely helping those who you, me, or others deem to be in need.
Making people work is an assumption that work in itself is valuable, or at worse, mostly valuable. This isn't necessarily the case for jobs, and some jobs are probably actually detrimental to the well being of our society.
If you're willing to pay someone to do a job for you, then you have implicitly deemed it to be valuable.
I honestly think this idea just needs to die. So many people I know don't even bothering applying for welfare because they think they won't get it.
In reality, most US states are insanely generous.
I recall once my mom had to help a friend's dad who was uninsured and dying of prostate cancer simply apply for benefits. He didn't think the state would pay for it and had just resigned himself to death. My goodness, how silly... Instead, he applied and it was paid for.
I myself have fallen into this trap. When I was laid off, I was going to pay COBRA, instead of just biting the bullet and applying for medicaid. There's almost always a free government provided option if you need it. Literally people don't even bother.
How so? Healthcare? FIRE seems much more attainable in the US
Housing and healthcare costs are insane. When you're older, you need a lot more healthcare (and you won't have that nice insurance plan you had at your big company job when you were working), and housing keeps getting more expensive, which is a problem if you're on a fixed income. You could move to much cheaper locales (i.e. rural areas), but those are "healthcare deserts" where there's no competent doctors left and hospitals are all closing left and right, plus when you're infirm how exactly do you drive yourself? Living in a walkable city (or any city really) is much more doable when you're older for these practical reasons (less need to drive, healthcare providers close by), but then you can't afford the housing there.
> "healthcare deserts"
Well, in Germany health care is affordable in terms of cost. However, while 20 years ago you just went to a doctor when you were sick, these days you will wait hours and hours even at your family physician's crowded waiting room. You need a specialist? 6 months if it's something serious like a cardiologist. If you're on private health insurance, alright, only 3 months.
I don't know if this is specific to Germany, or similar in all of Europe.
But that is a change many people notice that I speak with.
The waiting is similar in the U.S., only the cost is wildly different. Actually, it sounds like you can see a family doctor the same day in Germany? That would make it better in Germany.
In the U.S. I can see a midlevel the same day by paying $200 for an annual membership in a mass-affluent pseudoconcierge practice plus $800ish for the appointment+labs, the $800 may be partly or entirely covered by insurance depending on how the conversation goes with the "provider". I have to wait several months if I want to see a real doctor outside of an emergency room. 6 months is about right for seeing a specialist with a preexisting relationship, might need a little more lead time for an initial consultation.
Why do you have to wait several months? That has not been my experience at all.
IDK this is my experience over the past few years with 10+ appointments with two specialists and three PCPs in the SFBA; my understanding is that it is typical in this area and becoming typical in other regions of the U.S. as well.
In the US before Obamacare I could make an appointment with a specialist on the same week. Now it takes more than six months. Three different specialties that I know of and the only three I tried. Apparently we're catching up with Europe.
This is literally not true if you live close to any urban center. Plenty of specialists available in any city. The US healthcare system is broken in many, many ways but "obamacare made me wait 6 months" is not one of them.
This is Albuquerque, which is a three hour drive. There used to be a couple of these specialists in a closer, smaller city, just two hours away. They have all gone. Along with more than half of the rural general practitioners in the surrounding 100 miles. One closed his practice entirely after completely failing to find a replacement. I recently went to an appointment with a specialist in Albuquerque that took me six months to get ... and spoke only with a nurse. No doctors are available even after that long. This was after six months of waiting while in pain and bleeding out of my ass daily.
Shortly before Obamacare I went to the same variety of specialist in that closer city. I called on a Monday and was in to see him on Thursday morning. Now, the three closest clinics to me have no doctors at all between them, just nurse practitioners and physician assistants. If your condition isn't on their short script you get an appointment in six months with a different nurse, or directions to the emergency room. I'm not claiming this is the general experience, but my experience has vastly enshittified.
The specialist nurse that took me six months to see? He ordered a test and scheduled me to come back and discuss it with him in another six months. Maybe I'll get another five minutes of his time then.
While that does absolutely suck, and I’ sorry you find yourself in that situation, it’s not a consequence of Obamacare. It’s just that the time you remember when things were better happens to be before Obamacare.
As another commenter said, there’s been an exodus of specialists from rural areas. This is a global phenomenon, not limited to the US.
It sounds like you live in a rural area. In those places, the providers are drying up as the doctors get old and retire, and there's no one to replace them. This has nothing to do with Obamacare; it's like this in many places, including here in Japan. They actually offer more money here for people to work in the medical field in rural areas, but people would rather get paid less to live in Tokyo, because no one with an education wants to live in rural areas these days if they don't have to.
Basically, if you want really good healthcare, you need to live in or near a very large city. (Albuquerque is not a very large city.)
Another thing that's probably changed in the US is larger healthcare companies taking over doctors' practices and enshittifying them to increase profits. Doctors are happy to sell because they're getting close to retirement, and/or tired of dealing with all the administrative hassle on top of actually being a doctor and caring for patients. I've read about this type of thing greatly affecting veterinary care in the US too.
Americans are discovering that giving universal healthcare access to everyone means those who already had access, now have to wait longer to make room for everyone else. That's how it works.
No they aren't. Americans are finding out that when you abuse medical workers by calling them "essential workers" who have to continue working during a pandemic while hundreds of thousands of patients berate you for saying things like "you should get vaccinated" or "don't eat an anti-parasite medication for horses" and overwork them and pay them shit, they quit in droves.
They are then finding out that for profit businesses have no interest in re-hiring all the workers they had before the pandemic, because they didn't lose as much business as they saved money in salary, so everyone is just running a skeleton crew that they overwork.
Meanwhile the data I find for emergency room visits are that there's barely been any increase in percentage of the population that visited an emergency room since 1997.
Companies are spending less on services and letting us just suffer because we don't have better options and YET AGAIN dumb Americans for some reason blame the government for completely independent companies making self serving choices?!
Also in the US before Obamacare many people couldn't afford to see a specialist at all. Trade-offs.
I do not have this problem where I live in the US. Perhaps the issue is that specialists don't want to live where you are?
Depends upon how much older you mean - at 65 in the U.S. you get Medicare which is not that bad.
Housing in US is in fact one of the cheapest... everywhere, measured as price per square foot as percentage of income. Several times cheaper than in many countries and at least somewhat cheaper than almost every single one, rich or poor, democratic or authoritarian.
It's just that "normal" housing in the US is what's only attainable to the very rich and only because they inherited it, in most of Europe let's say: even 1% won't be able to buy an equivalent of median new US single family house, in EU - that 1% probably owns a similar or somewhat better house but simply because they bought or built it generations before.
Got a source for this? I'm only finding sources that vehemently disagree, and say the only countries worse for this are Portugal and Canada. Everywhere in the world is better.
That's probably because what you are googling is a ratio of price of average house to average income... Which only means that American houses are much much bigger and thus more pricey, because Americans have many times more disposable income per family than just about any nation in the world.
But if you compare the price of the SAME sized house to the average income, the situation is opposite. U.S. is the 3rd best after Oman and Saudi Arabia. It's just that Americans are not satisfied with houses even twice the size of what people in many rich countries are happy with.
https://www.numbeo.com/property-investment/rankings_by_count...
American houses are large and unaffordable. The usual term for a situation like that is inefficiency.
Price per square foot is not a very useful metric, because neither utility nor construction costs scale directly with the size of a house. A 3000 square foot house is not 2x as good as a 1500 square foot house, and it should not cost 2x as much to build. Roughly speaking, walls are expensive, while making the rooms larger is cheap. And bedrooms are cheap, while bathrooms are expensive.
I'd love to see your source. It's curious how can one manipulate numbers so badly to arrive to this sort of result.
Healthcare is just a word until you get into your sixties, then it is a lifestyle
> How so? Healthcare? FIRE seems much more attainable in the US
Much easier in Europe, go work in Switzerland or some high paying country then go retire in a low cost area with healthcare.
If it's so easy why isn't everyone in Europe doing this life hack?
Could it be that moving to a place with high salaries means that job market is more competitive with higher bar to entry, with more stress, and CoL and housing is proportionally higher so once you factor in housing, healthcare, childcare expenses etc you realize that unless you scored some FANG job that pays orders of magnitude more than the local median, you're more or less at the same wealth point as in the lower CoL locations?
Feels like the solution is to find the place when you can earn more than the median there and not just blindly move to the most expensive places in the world hoping that will make you rich.
> If it's so easy why isn't everyone in Europe doing this life hack?
Language barriers, mostly. USA doesn't have those, that is the biggest difference I'd say, language barriers is such a massive hindrance to movement even if you are legally allowed to.
Even if the work language is English you still have to live with all the signs etc being in a language you don't understand, and learning a new language is a massive undertaking.
However if you don't care about that then it is really simple. And lots of people are doing just that, people spending a few years working in a high wage place isn't uncommon at all.
also the massive difference between cultures is a thing aswell.
Not to mention people tend to not move asmuch in europe compared to the US, and people like to stay close to their community and families in my experience.
I live in the Netherlands and the combination of low pay (compared to US), higher taxes, and housing expenses make this difficult.
If you save & invest for retirement, you'll be fine.
And have no major health issues/accidents, and be quite lucky, and start with a lot of money in the first place, and be born in the right place in the country.
My understanding is US healthcare is actually has the best outcomes, however Americans are sicker and those without insurance are obviously worse off.
For example, drug addiction and sugar consumption is not the result of the health care system.
The opioid crisis is a direct result of our health care system.
America was populated by millions of immigrants, nearly all of them poor with little more than a suitcase.
Welfare and social programs did not make them successful. Opportunity did.
Even Elon Musk arrived with just a suitcase. He stayed in hostels because of lack of money.
You have a point!
It's instructive to see what's happening in Britain right now where many people dare not take jobs or even join training schemes to improve their prospects - because they will lose their benefits. To quote from the Spectator: "A Channel 4 (TV) program Britain’s Benefits Scandal hears from some of those affected – people who are often missing from the debate. We have 3.2 million trapped in a system in which they are given a decent payout – some I spoke to said about £1,300 a month, some significantly more – but who want to get back to work."
https://www.spectator.co.uk/article/the-sickness-benefit-tra...
The same thing can happen in the US- People may be able to get a job, but it will then prevent them from receiving any aid that may still be needed.
I know two (educated and hard-working) people in my immediate circle who intentionally keep their income below $30k/year so they qualify for state healthcare programs that they couldn’t otherwise afford unless they were making upwards of $150k.
So we have accountants and scientists who need back surgery intentionally working part-time barista hours.
As a programmer I’m all for gaming the system by knowing and navigating the rules, but the situation is comical.
Elon Musk, whose father owned but a humble emerald mine, and was driven to school in a Rolls Royce? Or another, poor Elon Musk?
Since you know so much about this, how much did funding did Elon's father give him to start his businesses?
Funding doesn't matter as much as mindset.
If you know you can always go live with your rich family, then the cost of failure is pretty close to 0, so you can repeatedly take big risks until one of them pays off.
Worst case? You end up a trust-fund brat.
Musk started out with a suitcase. He then got a dirty job cleaning machinery. A job anyone could do.
Maybe you need to read it coming directly from Elon's dad then? [0][1]
[0] https://futurism.com/elon-musk-dad-emerald-mine
[1] https://www.the-sun.com/news/7911051/elon-musks-dad-errol-em...
Getting money for living expenses as you study is the life of the average middle class student in USA, he didn't say it funded Musks ventures. The emerald mine made them rich compared to other Africans, but that doesn't say much compared to the average American.
Would there be any ventures if Errol didn't fund Elon's trip to the USA? That's the point, without the emerald mining funding there would be no Elon in the USA, no Elon taking risks in ventures, etc. It can't be looked at in a vacuum of "he didn't get direct money for his ventures", it was only possible for Elon to start ventures because of the emerald mines.
I know several people who emigrated to the US with a suitcase and became millionaires. None of them had a family emerald mine, or any family wealth at all.
If you live in the USA already, why didn't you start SpaceX? Millions of immigrants come to the USA. Why didn't anyone else start SpaceX?
Anecdotal, but… I'd be willing to put the time and effort in to start a company, but I would not be willing to lose my home or fail to provide for my wife & three children in the process as neither my wife nor I have any family capable of taking us in.
You're risk averse. That's fine - but it does not justify being envious of those who do take risks. Musk bet everything he had on Tesla, and at one point was within hours of personal bankruptcy as well as Tesla's.
FWIW, I'm not necessarily envious of Musk, et al.
With that being said, I'm not sure personal bankruptcy is a particularly meaningful risk when the individual in question can enjoy substantial riches by sheepishly(?) returning home to the care of their parent(s).
Granted, neither you nor I know if this is an option for Musk, but given that his mother speaks quite fondly of her son in public, it seems reasonable enough to me to believe that it is.
What I'm trying to say here is: Musk's risks are not mine. Would personal bankruptcy result in both he and his offspring living in poverty?
Celebrating someone for having taken a risk while omitting what exactly was on the line for them is a debate tactic built on a false equivalency which can be used as a cudgel to beat opponents down in arguments if its foundational trick goes unnoticed.
>> He jumped from the building and survived! Why can't you jump from the building too?
> The fire department erected a life net for him beforehand. All I have is sidewalk.
People go bankrupt all the time in the US. That doesn't mean they starve to death.
> Would personal bankruptcy result in both he and his offspring living in poverty?
Musk did spend time in the US with no money. He got a job. It was a dirty job cleaning industrial machinery. A job anyone with a willingness to work could get.
Instead of doing all this guessing and assuming and making up things about Musk, why not read an actual biography of him? The one I read is by Vance:
https://www.amazon.com/Elon-Musk-SpaceX-Fantastic-Future/dp/...
It costs $1.32. No excuses!
> If you live in the USA already, why didn't you start SpaceX? Millions of immigrants come to the USA. Why didn't anyone else start SpaceX?
I don't live in the USA.
Because very few people has US$100 million of initial capital investment.
Why didn't you start SpaceX? As far as I know you're an aeronautical engineer, so why didn't you do something bigger than the D languge?
The same answer might apply to anyone else who you ask that question.
> why didn't you start SpaceX?
It took $100M to start SpaceX. The argument works better if you start with one of the more modest earlier efforts.
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I'd invite you to give a counterpoint to what I posted, this type of post is not really in line with the guidelines of HN. You're a dad, act like an adult, please.
You’re a bitter conspiracy theorist, inviting nothing but ridicule.
Again, act like an adult and within the guidelines of this forum.
I invite you to read them again in case you missed/forgot: https://news.ycombinator.com/newsguidelines.html
As you noticed by your flagged comment, it doesn't matter what you think of me (I really don't care) but it matters how you behave here. It's ironic because this pathetic behaviour seems much more enticing to ridicule than someone sharing opinions :) don't be pathetic.
Well done taking the high road, Marx.
Thank you!
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The only one provoking a war in Europe is Putin.
And the Germans destroyed their energy sector themselves.
Are you under the illusion that nuclear would have helped, or are you complaining they didn't keep burning coal?
The issue is not only the nuclear, but that Germany made "all-in" on cheap Russian gas despite all the signals that it was a move with several risks: you shouldn't voluntarily put yourself at the mercy of an autocratic nation militarly stronger than you.
The fact that the politicians responsible for this are now in a way or another on the payroll of Russia tells me that this was the plan all along.
>Are you under the illusion that nuclear would have helped
I am.
Yeah, there's no illusion here at all.
Look at France, its electricity cost per KWh, and its carbon intensity per KWh generated. In recent years, all are much, much better than Germany's. (And their carbon intensity numbers have probably been consistently better since like the 1990s.)
It's almost as if making your economy that requires a lot of electricity dependent on electricity generation methods that require fuels supplied by potentially-hostile foreign countries is a bad, bad idea.
to be fair, this energy dependence was created in a time when the soviet block collapsed, and has worked for many many countries that where part of that block except for russia and belarus.
Economic integration has finally put the lid on the enourmous destruction of nationalism for the past 60 years.
The mistake which was made by (mostly) american and european economists was convincing everyone that applying shock therapy to the socialist economy and liberalising it in that way was the best way forward. This resulted in the rise of putin and the aversion of the russian goverment to the "west".
This energy dependency was happening during a time when Russia was invading both Georgia(2008) and Ukraine(2014), right after murdering countless Chechens.
Yep.
In my personal experience, the general sentiment of Germans has been shockingly anti fission-power. Fukushima stoked the fears that power that sentiment, and helped lead them to their current totally predictable economic plummet.
What happens when you shut down all your fission power plants, but don't have solar, wind, hydro, or geothermal power ready, and have no way of building enough storage to handle the intermittency of solar and wind? Well, you import petrochemicals from potentially-hostile foreign countries and burn them.
I am under no “illusion” that prematurely phasing out a large percentage of a nations power generation , will reduce the amount of power generation available…
The big issue was German governments who decided to replace nuclear with imported Russian gas rather than more renewables.
So you do agree with me that if Germany hadn’t dismantled their nuclear industry, Germany wouldn’t be in this mess?
And to forestall the "No, I believe that Germany's failure was to not build enough renewables" reply...
It's my understanding that even if one were to direct the entire world's energy storage production capacity solely to producing energy storage for the nation of Germany, it would be insufficient to produce enough energy storage to meet the needs of Germany's energy requirements, given any even vaguely-plausible buildout of "renewable" power generation facilities.
Germany doesn't have enough of the geology and geography required to have much "always on" "renewable" power, so it MUST primarily rely on intermittent sources... which means that they in order to make up the shortfalls, they need to have enough storage (which I understand to be currently impossible), reliable rampable power (like nuclear or petrochemical), or some combination of the two. There's just no real alternative.
Well, I guess there IS something of an alternative. Industry that requires reasonably-priced electricity can flee the country, reducing Germany's overall energy requirements. (Though, surely nowhere near enough to make much of a dent in the electricity costs.)
No, the claim about energy storage is not true.
Today's global battery production capacity is something like 2.6 TWh/year.
Germany uses an average of 58 GW of electricity (averaged over a year). So this capacity would be enough to store 45 hours of their electricity use.
This would not, by itself, be enough to level Germany's demand. But using batteries alone would be foolish. They are not suited for long term storage. The better solution would be electrolysis to make hydrogen to complement the batteries. In that case, this amount of batteries would be more than enough to get to 100% renewables for their grid. Germany has huge salt formations that can store hydrogen extremely cheaply. Electrolyser production would have had to have been stepped up, I will admit.
But 100% is overkill, since even sticking with their existing nuclear plants would not have gotten them off fossil fuels -- nowhere close. Nor would any plausible nuclear buildout. Judging by how that went elsewhere in Europe it would have been an utter fiasco. The alternative to compare against would have been a continued buildout of renewables at a higher rate. Fossil fuels would still have been used, but at a lower rate, and the shock from Russia would have been proportionally less.
> This would not, by itself, be enough to level Germany's demand.
This is exactly what I said. There's not enough industrial-grade energy storage capacity in the world to even out the intermittency of "renewable" energy. You currently must supplement it with "always on" power generation.
> The better solution would be electrolysis to make hydrogen...
It's my understanding that roughly zero of the industrial-scale hydrogen production operations use electrolysis. They process _natural gas_, and _coal_ to get hydrogen. From <https://www.energy.gov/eere/fuelcells/hydrogen-production-na...>:
> Today, 95% of the hydrogen produced in the United States is made by natural gas reforming in large central plants.
While it is true that we can work with hydrogen and can burn it for power, hydrogen will not save us. It's notoriously difficult to contain, meaning that it leaks out of containers and piping at the drop of a hat. It is the second least dense known substance in the universe, meaning that its energy density per cubic meter is dreadfully low. It's also energy-intensive to produce and store. The way all industrial-scale hydrogen production works means that the process to produce hydrogen produces more CO2 than if we just burned the petrochemicals used to feed the process. [0][1]
The energy consumption of electrolysis doesn't matter at all if we have more electricity available than we know what to do with... but that's very definitely not the world we live in right now.
> ...even sticking with their existing nuclear plants would not have gotten them off fossil fuels...
Right. The thing to do is to build more fission plants and "renewable" generators in tandem. Fission plants are ultimately a stopgap until we have enough storage and solar/wind/hydro/etc. to meet our current and future energy demands. But, like, even if we start honestly and eagerly working on this in earnest... today, we're absolutely not going to get there globally within our lifetimes. We're sure as hell never going to get there if we shut down existing fission plants and backfill by burning coal and natural gas.
[0] Search this <https://www.aiche-cep.com/cepmagazine/march_2021/MobilePaged...> for the phrase "Natural gas is currently the main feedstock for hydrogen processes, accounting for 75% of annual global production", and read the next couple of paragraphs.
[1] And search this <https://www.cell.com/joule/fulltext/S2542-4351(22)00416-0> for the phrase "More than 95% of global hydrogen production is currently based on fossil gas and coal with no carbon abatement."
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Wowwwww. This is the most blatant white supremacist rhetoric I have seen on HN.
when you control the measuring stick (USA dollar)
you'll always be the tallest of them all
Keeping stock market healthy is good for all
You are so lucky to be born in the USA:
- Easy to do business - Great economy, high salaries, and funding - English native speaker, so you can speak with everyone and everyone can speak with you
The EU is in a deep hole, with socialism and green communism next.
I swear, I’ve been hearing that since 2010. That and big Chinese collapse. It’s like the US just wants everyone else to fail just because they don’t share the same attitude towards life. It’s been almost 15 years. That’s a lot of time!
I’m mostly annoyed by the recent “Canada should just become an American state” talks, otherwise I would ignore such takes. Apologies for that.
> Canada should just become an American state
Canada is a really interesting take that I ctrl-f'd hoping I'd find a discussion on. It was doing a great job keeping pace with the US but seems to have really stagnated since the last 8 years or so.
Trudeau has been PM for the last 9 of those 8 years. Do you think his policies are at least partly responsible?
I actually don't think much would've changed. Our core problems - low birthrate, and extreme dependence on RE wouldn't be affected one way or another. Things will probably get worse before it gets better, and it looks like we have to be more strategic when it comes to partnerships. Being a service industry with very low manufacturing doesn't help either. Decent amount of natural resources, but not enough people, nor cultural (yes, it's hard to find workers for the mines for good reasons, despite its high pays, and I'm very familiar with the issue due to relationships with people who are in the industry) and political willingness to go full-China style on them either.
We could try to push for innovation, but brain drain is real, because if you want money, it's really not that hard to find a job across the border especially if you're talented. And 10x market down there, so what's the point.
I think one of the bigger issues is in ‘08, when the government protected real estate mostly from the crash, real estate has siphoned too much investment from productive ventures
The EU is not in a hole. The US is just doing very well.
My experience as a expat in London is that new things aren’t really being built in Europe today, and that fact is greenwashed over to keep the people here from recognizing how miserable the infrastructure and housing are compared to modern North American counterparts.
All these statements about the "booming economy" are triggering for a lot of people because this "economy" they're talking about is just an abstract notion that has absolutely nothing to do with people's financial situation.
I don't know if we need a different term entirely to make this distinction.
Crafted by Rajat
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