It's certainly good for the shareholders to have more money in the market, I'm not sure about the others. I know I'd much rather have a solid 6-7% interest return than a flaky market return.
>generally impoverished people would rather have lower rates on the debt that they have.
Generally impoverished people aren't granted lower rates because of the credit system. They typically pay usury rates. Only people with existing assets / collateral get low rates.
>They'd also rather have jobs, which again comes with more investment.
Generally impoverished people have shit jobs, that's why they are generally impoverished. Also, investment leads to automation and offshoring which actually lowers jobs.
>They'd also like to have a higher quality of life, again which comes with more investment in capital/production/real output.
If investment in capital/production/real output helps impoverished people, it's very little. It generally helps already wealthy people.
You're looking at stuff from a textbook macroeconomic position. In the realistic / microeconomic world, things aren't as you are portraying them.
1. If you get higher interest rate returns, how do you think that is being paid for if poor people aren't getting higher rates?
2. Unexpectedly lower interest rates increase employer competition in the labor market, raising wages. This is well studied.
3. The quality of life of a poor person in the US is unimaginably better than that of someone ranked relatively the same 100 years ago. That is due to investment.
Denying those massive quality life improvements is absurd, although increasingly popular in our out-of-touch political climate.
>1. If you get higher interest rate returns, how do you think that is being paid for if poor people aren't getting higher rates?
Loans to business, home loans, etc. Education loans really weren't a big thing because education used to be subsidized. Also, poor people aren't the only source of ROI on loans. They're quite lucrative though because they seldom are able to pay the principal and are an endless source of interest payments.
2. Unexpectedly lower interest rates increase employer competition in the labor market, raising wages. This is well studied.
Yet wages have been largely stagnant for 40 years, how do you account for that? Got links?
3. The quality of life of a poor person in the US is unimaginably better than that of someone ranked relatively the same 100 years ago.
I'm interested in how you are measuring this. Got any links? How about the quality of life from someone 40 years ago before neoliberalism?
>Denying those massive quality life improvements is absurd
Which quality of life improvements are you referring to? Are you being intentionally vague? I mean we can buy cheap plastic crap from China, but that's at the expense of US manufacturing jobs, isn't it? Food certainly isn't cheaper. Healthcare and housing isn't either. So yes, if you believe buying cheap disposable stuff from overseas is a massive quality of life improvement, then ok. Take a stroll down middle America and tell me how good they have it. I know lots of towns with boarded up main streets because all the manufacturing went overseas. That's where the investment went.
Again, you're quoting macroeconomic theory when microeconomic conditions on the ground subvert any gains in macroeconomic theory.
How does investment drive up wages when labor investment is say 90% overseas or automation?
Not going to keep responding to someone who is skeptical of the claim that life for the average person is better in 2019 than it was in 1919. Our starting points are so off that I don't think we could have a productive conversation.
I'd be interested though. While you say priors are off, I'd be very interested in quantifying how off if the two of you wouldn't mind indulging a fool's curiosity.
Like I've met people who could actually give a convincing argument that cars haven't necessarily been the unambiguous tradeoff many believe them to be throw knock on effects in infrastructure and planning.
However, there is also the qualitative look at things as well. Numbers in absolute magnitude we're lower back then, so maybe there's something psychological at work with the larger numbers. There was also a smaller population, lower hanging fruit, the attraction of some level of unknown.
The thing I find most interesting in these disengagements is that they always occur right before people come to terms with "oh, I have to actually lay out my priors." Which is generally, in my experience, where the root of every fundamental misunderstanding is to be found.
So the absolute general term "people were better off in 2019 than they were in 1919, and this was because of investment," is what I was arguing against. It really depends on how you quantify it and what metrics you use.
For example, farmers with land in 1919 could at least live off it and make a living and feed a family off say 40 acres. Many farmers had their own land and would subsequently start losing it in the 1920s-today due to increase efficiency of farming which requires more land to make the same amount of money. I would argue farmers certainly were better off in 1919 than today, at least in terms of net income.
Now, today, that same family doesn't own land, is probably living in an apartment working for a company that is looking for ways to be more efficient through automation and outsourcing. It's very possible they are struggling to feed their family off a single income, so they have to have dual income. It's very possible one or both lose their job for an extended period of time due to market fluctuation. It's very possible they lose their apartment. I would argue that if that family had 40 acres in 1919, they wouldn't be as dependent on someone else for their livelihood, if nothing else, and could at least feed themselves. Any ability to feed themselves today if all that happened would be due to government programs, not market investment.
Generally when people say "people are better off now ...", they are talking about technology. For example indoor plumbing and electric. Everyone has it now and it's relatively cheap. Back then it was a luxury. So as far as that goes, I would say people have it better today than in 1919. Perhaps not the average poor person on Skid Row who doesn't benefit from indoor plumbing or electricity. I would argue that indoor plumbing and electricity was more government spending / investment than market investment though.
Computers weren't a thing back then, so that doesn't really apply. Again back to agricultural efficiency, computers harmed the average/poor farmer and only helped the large land owners.
Also keep in mind a lot of people were farmers in 1919.
Why would lower rates lead to increased competition for labor? Or higher wages?
Increased wages follow increases in productivity. I can see lower rates spurring businesses to invest in equipment that would increase productivity, but the experience over the past decade has been quite the opposite: productivity growth has slowed despite historically low rates.
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