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1/ To add a little texture to @NickHanauer's thread, it's important to recognize that there's a good reason why orthodox economists (& economic cosplayers) so vehemently oppose a $15 min wage:
The min wage is a wedge that threatens to undermine all of orthodox economic theory.
2/ Orthodox economics is grounded in two fundamental models: a systems model that describes the market as a closed equilibrium system, and a behavioral model that describes humans as rational, self-interested utility-maximizers. The modern min wage debate undermines both models.
3/ The assertion that a min wage kills jobs is so central to orthodox economics that it is often used as the textbook example of the Supply/Demand curve. Raise the cost of labor and businesses will buy less of it. It's literally Econ 101!
4/ Econ 101 insists that markets automatically set an efficient "equilibrium price" for labor & everything else. Mess with this price and bad things happen. Yet decades of empirical research has persuaded a majority of economists that this just isn't
5/ How can this be? Well, either the market is not a closed equilibrium system in which if you raise the price of labor employers automatically purchase less of it... OR the market is not automatically setting an efficient and fair equilibrium wage. Or maybe both. #FAIL
The min wage is a wedge that threatens to undermine all of orthodox economic theory.
1/4 Most people, especially academic economists, think that the controversy over the minimum wage is a contest over facts. It's not. It's a contest over power, status, and wealth. It is just like the contest over racial and gender justice.
— Nick Hanauer (@NickHanauer) January 17, 2021
2/ Orthodox economics is grounded in two fundamental models: a systems model that describes the market as a closed equilibrium system, and a behavioral model that describes humans as rational, self-interested utility-maximizers. The modern min wage debate undermines both models.
3/ The assertion that a min wage kills jobs is so central to orthodox economics that it is often used as the textbook example of the Supply/Demand curve. Raise the cost of labor and businesses will buy less of it. It's literally Econ 101!
4/ Econ 101 insists that markets automatically set an efficient "equilibrium price" for labor & everything else. Mess with this price and bad things happen. Yet decades of empirical research has persuaded a majority of economists that this just isn't
5/ How can this be? Well, either the market is not a closed equilibrium system in which if you raise the price of labor employers automatically purchase less of it... OR the market is not automatically setting an efficient and fair equilibrium wage. Or maybe both. #FAIL
November Jobs Report Thread
There is both good news and bad news buried in the report.
Most often, too much attention is paid to the headline month on month numbers.
1)
2) In year over year terms, total nonfarm payrolls did not increase for the first time since the pandemic. Generally, this is a negative.
3) Under the hood, most of the decline was in the government sector so it makes more sense to look at private payrolls in this context.
4) Private payroll growth continues to increase but the gains are clearly slowing down - this is to be expected.
5) The troubling part of the report was the labor force participation rate which remains stubbornly low.
As @R_Perli highlighted, if the LFPR does not increase back to pre-COVID levels, we're going to struggle with weaker trend potential growth.
https://t.co/zw7fCZ2gfY
There is both good news and bad news buried in the report.
Most often, too much attention is paid to the headline month on month numbers.
1)
2) In year over year terms, total nonfarm payrolls did not increase for the first time since the pandemic. Generally, this is a negative.
3) Under the hood, most of the decline was in the government sector so it makes more sense to look at private payrolls in this context.
4) Private payroll growth continues to increase but the gains are clearly slowing down - this is to be expected.
5) The troubling part of the report was the labor force participation rate which remains stubbornly low.
As @R_Perli highlighted, if the LFPR does not increase back to pre-COVID levels, we're going to struggle with weaker trend potential growth.
https://t.co/zw7fCZ2gfY
The worst part of the employment report is the stall in the labor force participation rate (-0.2% today and about 2% lower than pre-#COVID19).
— Roberto Perli (@R_Perli) December 4, 2020
The longer participation stays depressed, the harder it will be to bring those workers back, and the lower potential growth will be. pic.twitter.com/7u966oxBME
One of the hardest problems post-pandemic will be how to revive so-called "left behind" places.
Post-industrial towns, run-down suburbs, coastal communities - these places were already struggling before the crisis and have fared worst in the last year.
What should we do?
Today, @ukonward sets out the beginning of a plan to repair our social fabric. It follows our extensive research over the last year, expertly chaired by @jamesosh, and funded by @jrf_uk, @Shelter and @peoplesbiz.
https://t.co/d3T5uPwG9N
Before I get into recommendations, some findings from previous Onward research.
In 2018, we found 71% of people believe "community has declined in my lifetime"
In 2019, we found 65% would rather live in “a society that focuses on giving people more security” vs 35% for freedom
This was the basis for our identification of 'Workington Man' as the archetypal swing voter in 2019, and led us to predict (correctly) that large numbers of Red Wall seats could fall. A key driver was a desire for security, belonging and pride in place.
There is also a key regional dimension to this. We also tested people's affinity with the UK's direction of travel, across both cultural and economic dimensions - revealing the extraordinary spread below: London vs. the Rest.
https://t.co/HrorW4xaLp
Post-industrial towns, run-down suburbs, coastal communities - these places were already struggling before the crisis and have fared worst in the last year.
What should we do?
Today, @ukonward sets out the beginning of a plan to repair our social fabric. It follows our extensive research over the last year, expertly chaired by @jamesosh, and funded by @jrf_uk, @Shelter and @peoplesbiz.
https://t.co/d3T5uPwG9N
Before I get into recommendations, some findings from previous Onward research.
In 2018, we found 71% of people believe "community has declined in my lifetime"
In 2019, we found 65% would rather live in “a society that focuses on giving people more security” vs 35% for freedom
This was the basis for our identification of 'Workington Man' as the archetypal swing voter in 2019, and led us to predict (correctly) that large numbers of Red Wall seats could fall. A key driver was a desire for security, belonging and pride in place.
There is also a key regional dimension to this. We also tested people's affinity with the UK's direction of travel, across both cultural and economic dimensions - revealing the extraordinary spread below: London vs. the Rest.
https://t.co/HrorW4xaLp
China's Ultra-High Voltage Lines - Thread
1/14
China is building the world's most advanced UHV grid right now.
UHV lines are good for carrying power over long distances. The high voltage level reduces line loss. But they are very expensive to build.
China's UHVDC Network now:
2/14
In the rest of the world, UHV lines have generally been used sparingly. Submarine power cables (e.g. connecting UK to mainland Europe) and some huge hydropower projects in Quebec are some notable exceptions.
China is building UHV lines on a scale never seen before.
3/14
So why is China different? Geography plays a huge role. China's load centers are in the coastal East and South, while the best wind, solar, and hydro resources are in the North, Northwest, and Southwest. Power (esp. RE) is being generated far from where it's needed most.
4/14
In the past, poor regional interconnectivity has been a big contributor to low offtake levels of renewable energy. Of course a glut of coal power also played a role. Curtailment has improved in recent yrs tho. I discussed regional grids before:
5/14
UHV lines provide a inter-region backbone to transport power hundreds or thousands of km across the country. The UHVDC lines are used for the longest distances, while UHVAC lines are used for shorter distances, often within the same regional grid.
China's UHVAC lines now:
1/14
China is building the world's most advanced UHV grid right now.
UHV lines are good for carrying power over long distances. The high voltage level reduces line loss. But they are very expensive to build.
China's UHVDC Network now:
2/14
In the rest of the world, UHV lines have generally been used sparingly. Submarine power cables (e.g. connecting UK to mainland Europe) and some huge hydropower projects in Quebec are some notable exceptions.
China is building UHV lines on a scale never seen before.
3/14
So why is China different? Geography plays a huge role. China's load centers are in the coastal East and South, while the best wind, solar, and hydro resources are in the North, Northwest, and Southwest. Power (esp. RE) is being generated far from where it's needed most.
4/14
In the past, poor regional interconnectivity has been a big contributor to low offtake levels of renewable energy. Of course a glut of coal power also played a role. Curtailment has improved in recent yrs tho. I discussed regional grids before:
China Power Sector For Dummies- Part 1: Grids and Dispatch - Getting Smarter
— David F. (@pretentiouswhat) August 18, 2020
1/10
First, Chinese doesn't have a national grid, at least not in the way that small countries do. There are 6 regional grids (N, NE, NW, E, C, S). State Grid runs 5 of them and Southern Grid runs 1.
5/14
UHV lines provide a inter-region backbone to transport power hundreds or thousands of km across the country. The UHVDC lines are used for the longest distances, while UHVAC lines are used for shorter distances, often within the same regional grid.
China's UHVAC lines now:
It's always been detached, and it's always made the real economy worse.
[THREAD] 1/10
What is profit? It's excess labor.
You and your coworkers make a chair. Your boss sells that chair for more than he pays for the production of that chair and pockets the extra money.
So he pays you less than what he should and calls the unpaid labor he took "profit." 2/10
Well, the stock market adds a layer to that.
So now, when you work, it isn't just your boss that is siphoning off your excess labor but it is also all the shareholders.
There's a whole class of people who now rely on you to produce those chairs without fair compensation. 3/10
And in order to support these people, you and your coworkers need to up your productivity. More hours etc.
But Wall Street demands endless growth in order to keep the game going, so that's not enough.
So as your productivity increases, your relative wages suffer. 4/10
Not because the goods don't have value or because your labor is worth less. Often it's actually worth more because you've had to become incredibly productive in order to keep your job.
No, your wages suffer because there are so many people who need to profit from your work. 5/10
[THREAD] 1/10
I know people think this is fun but -- why do we have a stock market? So productive firms can raise capital to do useful things. Detaching stock price from fundamental value (Gamestop is now worth almost as much as Best Buy) makes the markets serve the real economy worse.
— Josh Barro (@jbarro) January 27, 2021
What is profit? It's excess labor.
You and your coworkers make a chair. Your boss sells that chair for more than he pays for the production of that chair and pockets the extra money.
So he pays you less than what he should and calls the unpaid labor he took "profit." 2/10
Well, the stock market adds a layer to that.
So now, when you work, it isn't just your boss that is siphoning off your excess labor but it is also all the shareholders.
There's a whole class of people who now rely on you to produce those chairs without fair compensation. 3/10
And in order to support these people, you and your coworkers need to up your productivity. More hours etc.
But Wall Street demands endless growth in order to keep the game going, so that's not enough.
So as your productivity increases, your relative wages suffer. 4/10
Not because the goods don't have value or because your labor is worth less. Often it's actually worth more because you've had to become incredibly productive in order to keep your job.
No, your wages suffer because there are so many people who need to profit from your work. 5/10
Long rant: This @WSJ article bemoaning the decline of price theory is really worth highlighting. The economic theories and so called "laws of economics" that the WSJ consistently and religiously defends, are the source of their authority, power and privilege.
So called economic "theories" like "you get paid exactly what you are worth" and "markets are perfectly efficient" and "when wages rise, jobs fall" and "raising taxes on the rich kills jobs and growth" and "increasing justice decreases economic efficiency" and...
"Government intervention in markets always creates more harm than good" and "any regulation that constrains corporations kills growth and productivity", etc etc are effectively a protection racket for the rich. It is a set of internally consistent and mathematized conjectures...
That are all demonstrably nonsense. But getting people to accept these "theories" as laws of nature and immutable, timeless truths is the most effective way our current economic elites have found to maintain and enhance the status of the powerful and persuade the weak and poor...
to shut the fuck up and accept their lot in life. Now, FINALLY, some economists- are actually beginning to look at the real world evidence to determine whether these propositions actually describe anything real here on planet earth. Let me save you some time. The answer is NO.
Hilarious. The WSJ editorial page bemoans the waning influence of The neoliberal priesthood, and hence their own. https://t.co/pQT8Dstg8I
— Nick Hanauer (@NickHanauer) January 28, 2021
So called economic "theories" like "you get paid exactly what you are worth" and "markets are perfectly efficient" and "when wages rise, jobs fall" and "raising taxes on the rich kills jobs and growth" and "increasing justice decreases economic efficiency" and...
"Government intervention in markets always creates more harm than good" and "any regulation that constrains corporations kills growth and productivity", etc etc are effectively a protection racket for the rich. It is a set of internally consistent and mathematized conjectures...
That are all demonstrably nonsense. But getting people to accept these "theories" as laws of nature and immutable, timeless truths is the most effective way our current economic elites have found to maintain and enhance the status of the powerful and persuade the weak and poor...
to shut the fuck up and accept their lot in life. Now, FINALLY, some economists- are actually beginning to look at the real world evidence to determine whether these propositions actually describe anything real here on planet earth. Let me save you some time. The answer is NO.
Interesting thread, but I don't think ecosocialists or degrowthers are arguing that if German socialists had come to power the world would be green by now. Socialism is not automatically green. Eco-socialism is what it says - a green version of socialism - to be tested /1
The historical counterfactual also in not totally convincing. So let's assume Germany and Europe went socialist. The world economy would have evolved exactly the same way it did? 🤔 I doubt it, this is too deterministic. Examples: /2
We do not know if the transition from coal to oil would have taken place when it took place, the way it did. From Timothy Mitchell we know that oil was a fix for capitalism to bypass the labour strikes of coal workers. One would think that socialists would treat workers better /3
We also do not know if socialist governments would strong arm the Middle East the way capitalists did, starting wars to secure cheap oil, and setting up puppet governments. One would want to think that Rosa Luxembourg would not go down that path..../4
We also do not know if they would have continued colonial unequal exchange, extracting raw materials as cheap as possible from the rest of the world. Without cheap oil and cheap materials, it is anyone's guess if GDP and CO2 would be where it is now. /5
You get the impression from the eco-socialists and degrowthers that humanity wouldn\u2019t face the threat of climate change or biodiversity loss if it weren\u2019t for capitalism (or rather, if it weren\u2019t for capitalist modernity).
— Leigh Phillips (@Leigh_Phillips) February 2, 2021
But I see no evidence to suggest this is the case.
The historical counterfactual also in not totally convincing. So let's assume Germany and Europe went socialist. The world economy would have evolved exactly the same way it did? 🤔 I doubt it, this is too deterministic. Examples: /2
We do not know if the transition from coal to oil would have taken place when it took place, the way it did. From Timothy Mitchell we know that oil was a fix for capitalism to bypass the labour strikes of coal workers. One would think that socialists would treat workers better /3
We also do not know if socialist governments would strong arm the Middle East the way capitalists did, starting wars to secure cheap oil, and setting up puppet governments. One would want to think that Rosa Luxembourg would not go down that path..../4
We also do not know if they would have continued colonial unequal exchange, extracting raw materials as cheap as possible from the rest of the world. Without cheap oil and cheap materials, it is anyone's guess if GDP and CO2 would be where it is now. /5
I wrote about the exceptional opportunity in US NatGas about a week ago, and things are moving quickly...
Let’s do an update and go through some exciting developments. In short, the picture for NatGas continues to improve from all angles.
A thread.
Let’s do an update and go through some exciting developments. In short, the picture for NatGas continues to improve from all angles.
A thread.
Time for a thread about US NatGas and why it will surprise to the upside...
— BVDDY (@BvddyCorleone) October 22, 2020
There\u2019s an exceptional opportunity setting up in the energy space, in particular for US NatGas and related equities.
I\u2019ll explain the setup in this thread and also reveal my top pick. \U0001f920