My simple proposal for the first thing Elizabeth Warren’s outfit should do. Run adds saying always ask who is paying anyone who gives you financial advice. In particular ask if you buy the thing the adviser is pushing do they get any money from the deal. Tell people if there is a commission or equivalent involved not to trust any advice they get, it won’t necessarily be in their best interest. Give people guidelines on what are warning flags on what is likley to good to be true, and tell them to be very careful around such deals. (If they want to throw their money away its their business). On mortgages give rough rules about how much house you can afford for a given income, and tell people to be suspicious if someone says they can have more. Tell them if they are looking at an adjustable, to ask the max payment possible, and does that meet the guidelines.
In essence tell people that paranoia about things financial is a good thing, everyone is really out to get your money!!
Beginner’s question: I was reading Krugman’s long article on how the Euro allowed weak countries to borrow on the same easy terms as strong countries — leading to the usual (e.g., Irish) bankers lending excess monies to people who can’t pay back. The usual cure — if a country has its own currency — is to devalue in order to pay back in cheaper currency and encourage export growth (I think). Somehow the equivalent of this — if you don’t have your own currency — is supposed to be to cut wages.
How does cutting wages help pay back your country’s debts?
This is a big hangup to me as a big prolabor guy. I’m thinking America (not Europe) can get going again by paying people more — 15% of income having shifted from the bottom 90% who would definintely spend it to the top 3%, mostly top 1%, who wont spend it and have nothing healthy to invest it in given lack of demand in a recession (not to mention lack of demand from people who should have gotten the income in the first place!). I don’t like the idea of cutting European wages either.
My eldest is finishing his senior year at college. I went to a college finance seminar last night and learned a lot. But what stuck in my mind was the presenters closing line before the Q&A:
” At $20,000 to $40,000 a year college is not a place for a voyage of self discovery.”
I thought that very apt considering the costs of college these days. And I will have two in college for at least 1 year at the same time…
My MLK comment — same old screed with MLK in front and back:
MLK got his people on the up escalator just in time for it to start going down for everyone. Today, after the “big” Democratic increase of a couple of years ago, the buying power of the federal minimum wage is $3/hr below what it was in 1968! — double the average income later. The median wage has only grown 25% since 1968 while average income doubled — from $12.50/hr (adjusted) to all of $15/hr for the middle wage American.
Didn’t happen in Europe where they have something called “social democracy” — A.K.A., “socialism” in this economically ignorant badland. The economic components of social democracy — MANDATORY SECTOR-WIDE LABOR AGREEMENTS, free health and education — were instituted by very anti-communist, very conservative, very Roman Catholic German politicians (think Conrad Adenauer) after WWII to MODERATE labor demands so Germany’s just post fascist industrialists could invest more in rebuilding.
The same sector-wide agreements that prevent the race to the top for labor turn out to prevent the RACE TO THE BOTTOM (the American way) for labor — why Wal-Mart recently closed 88 big boxes in Germany; because it could not compete paying the SAME wages and benefits as honest competitors.
Sector-wide labor agreements are the proven formula to restored economic AND political power for the majority — practiced over most of the better paying first-world and even in the second and third-worlds (Argentina and Indonesia). Rebalancing America’s labor market is the ticket to solving 90% of our other social problems. MLK would understand that today.
“Agriculture was not good for anything other than beer and wine.”
And that’s as good as it gets. Why waste oats, rye, barley and corn on feeding people and animals? They’re fattening to people and when used as feed for animals the cost is greater than the return. Bourbon, scotch and vodka, on the other hand, serve man well during these trying times.
ddrew2u, Excellent point. There is good reason that Germany is the economic power house that it is. Proof positive that there is nothing inconsistent about combining capitalism and social democracy.
My simple proposal for the first thing Elizabeth Warren’s outfit should do. Run adds saying always ask who is paying anyone who gives you financial advice. In particular ask if you buy the thing the adviser is pushing do they get any money from the deal. Tell people if there is a commission or equivalent involved not to trust any advice they get, it won’t necessarily be in their best interest. Give people guidelines on what are warning flags on what is likley to good to be true, and tell them to be very careful around such deals. (If they want to throw their money away its their business). On mortgages give rough rules about how much house you can afford for a given income, and tell people to be suspicious if someone says they can have more. Tell them if they are looking at an adjustable, to ask the max payment possible, and does that meet the guidelines.
In essence tell people that paranoia about things financial is a good thing, everyone is really out to get your money!!
Nick Rowe and the Sandwichman have been having a lively discussion of “Partial vs General equilibrium lumps of labour” over at Worthwhile Canadian Initiative.
Beginner’s question:
I was reading Krugman’s long article on how the Euro allowed weak countries to borrow on the same easy terms as strong countries — leading to the usual (e.g., Irish) bankers lending excess monies to people who can’t pay back. The usual cure — if a country has its own currency — is to devalue in order to pay back in cheaper currency and encourage export growth (I think). Somehow the equivalent of this — if you don’t have your own currency — is supposed to be to cut wages.
How does cutting wages help pay back your country’s debts?
This is a big hangup to me as a big prolabor guy. I’m thinking America (not Europe) can get going again by paying people more — 15% of income having shifted from the bottom 90% who would definintely spend it to the top 3%, mostly top 1%, who wont spend it and have nothing healthy to invest it in given lack of demand in a recession (not to mention lack of demand from people who should have gotten the income in the first place!). I don’t like the idea of cutting European wages either.
My eldest is finishing his senior year at college. I went to a college finance seminar last night and learned a lot. But what stuck in my mind was the presenters closing line before the Q&A:
” At $20,000 to $40,000 a year college is not a place for a voyage of self discovery.”
I thought that very apt considering the costs of college these days. And I will have two in college for at least 1 year at the same time…
ilsm,
The invention of agriculture led to civilization and to the luxeries we live in today.
BUt other than that it wasn’t good for anything but beer and wine….
Islam will change
Ho hum…just finished that. 🙂
When Gandhi was asked how he felt about western civilization he replied what civilization?
Civility and civilizations are a matter of perspective.
Man is slave possessions.
Strives desperately to accumulate, and should be better served by having a beer!
Which is first levening bread or brewing beer?
Fermenting honey?
Making cheese to store excess milk?
buff,
Best wishes!!!
My first son was accepted at my Alma Mater.
We went to orientation in June. I ran in to a professor I had when I was there.
He suggested I would be better off sending #1 son to community college for 2 years, see if he could get in the big bucks place then.
Son went freshman to big bucks place anyway. Is now PhD!!
Every decision is a wager.
My MLK comment — same old screed with MLK in front and back:
MLK got his people on the up escalator just in time for it to start going down for everyone.
Today, after the “big” Democratic increase of a couple of years ago, the buying power of the federal minimum wage is $3/hr below what it was in 1968! — double the average income later. The median wage has only grown 25% since 1968 while average income doubled — from $12.50/hr (adjusted) to all of $15/hr for the middle wage American.
Didn’t happen in Europe where they have something called “social democracy” — A.K.A., “socialism” in this economically ignorant badland. The economic components of social democracy — MANDATORY SECTOR-WIDE LABOR AGREEMENTS, free health and education — were instituted by very anti-communist, very conservative, very Roman Catholic German politicians (think Conrad Adenauer) after WWII to MODERATE labor demands so Germany’s just post fascist industrialists could invest more in rebuilding.
The same sector-wide agreements that prevent the race to the top for labor turn out to prevent the RACE TO THE BOTTOM (the American way) for labor — why Wal-Mart recently closed 88 big boxes in Germany; because it could not compete paying the SAME wages and benefits as honest competitors.
Sector-wide labor agreements are the proven formula to restored economic AND political power for the majority — practiced over most of the better paying first-world and even in the second and third-worlds (Argentina and Indonesia). Rebalancing America’s labor market is the ticket to solving 90% of our other social problems. MLK would understand that today.
“Agriculture was not good for anything other than beer and wine.”
And that’s as good as it gets. Why waste oats, rye, barley and corn on feeding people and animals? They’re fattening to people and when used as feed for animals the cost is greater than the return. Bourbon, scotch and vodka, on the other hand, serve man well during these trying times.
ddrew2u,
Excellent point. There is good reason that Germany is the economic power house that it is. Proof positive that there is nothing inconsistent about combining capitalism and social democracy.