
People and jobs? Or wealth? The government has to decide which to prioritise - ivarv
https://www.taxresearch.org.uk/Blog/2020/05/05/people-and-jobs-or-wealth-the-government-has-to-decide-which-to-prioritise-and-there-is-only-one-right-answer/
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roenxi
This debate is harder than usual because nobody knows what is happening right
now, therefore nobody can claim to know why. How many people are suffering,
and what of? What is the supply chain about to do? What are the long term
effects? Nobody knows. We're in uncharted territory. Problems can't be solved
if nobody knows what they are and why they are happening.

The policies that are implemented in this environment will not be thought out.
Until this crisis ends it will be an ugly free-for-all to find out who has
political power at the moment and can implement all their long-standing
agendas with no special regard for current circumstances apart from some
extraordinarily big handouts.

~~~
atypicbiped
Policies aren’t being “thought out” in the eyes of the status quo of the old
system. There’s potentially a great deal of thinking to be done, towards
something new. Ugly free-for-all or not, was what was beautiful?

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renewiltord
The UK has triple lock pensions. Knew it was time to quit the UK when that
happened. Took a while but I managed it.

Pensioners everywhere are powerful. You'll never sacrifice them. They'll eat
the young whenever they get a chance. Your only hope is to get in as close to
the ground floor and then eat as many young yourself.

~~~
NotSammyHagar
If the govt pays pensions (or social security here in the us), they can just
print money in the event of an emergency like now. That makes sense. The
problem in the us is that we stubbornly refuse to set aside enough money (I
mean warring political parties find it advantageous to put off taxing and
blaming the other side till later).

~~~
Retric
US social security is fine as a pension program. It’s disability payments that
became a problem. Because high income earners don’t pay for SS, it’s
politically very tempting to use that money to pay for vaguely related social
programs which then grew over time.

~~~
nickff
Social security is also being used to subsidize government borrowing (by
increasing apparent demand for low interest rate bonds), which makes those
vaguely related social programs appear cheaper.

~~~
lotsofpulp
What should be done with social security funds instead? I’ve never heard
anyone provide a better option.

~~~
nickff
Social security could be run more like the large sovereign wealth funds,
CalPERS, or as (possibly restricted) private savings accounts. The account
statements make Social Security appear to be a private account system, even
though it's not true.

I doubt any of these alternatives are politically viable, and I am not sure
they are all necessarily better, just suggesting that there are alternatives.

~~~
makomk
Funds like CalPERS typically have a good chunk of their money invested in real
estate. They are the landlords this article is calling for us to sacrifice,
along with endowments for charities and universities and probably a whole
bunch of other pensions (maybe including personal pensions).

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mydongle
There's a reason why it used to be that only landowners could vote. The
powerful typically owned land and they knew if non-landowners could vote, they
would outvote the landowners.

When the right to vote became available to everyone/most people, the
landowners shifted to using their wealth in order to influence
government/politics in their favor. This has worked out well for them, since
as a general rule people either are too naive or politically apathetic to come
together to outvote the landowners. Despite being grounded into dust by them,
the common person still feel that they have much to lose by going against
them. This reminds me of a fictional gambling game from an anime I've watched
called E Card.

"The game is starts with each player holding five cards, four of which are
Citizens and the last being either a Slave or an Emperor. Who holds which card
is decided beforehand, and is played like that for three turns before
switching. The game lasts for a total of twelve turns, meaning each side gets
to play Emperor twice. The players choose one card from their hand (Emperor
side lays first) and place them face-down on the table. They are then flipped
over to reveal the winner of the match.

The three card types are Citizen, Emperor and Slave.

The Citizen card represents the common man, and cannot defeat the Emperor who
sits at the top. It can, however, defeat the Slave, who resides at the very
bottom of the system. Two citizen against each other results in a tie.

The Emperor represents the one at the top of society. This card can defeat the
citizen, but will lose to the Slave.

The Slave is presented as the one at the very bottom of society. Seeing as how
it has nothing to lose, it can overthrow the Emperor in one last attempt at
revenge. This card will lose to a Citizen, but will win against the Emperor
card."

My thought is that we have a large population of people who have been fooled
into thinking they are the Citizen, when they are little more than Slaves.
They believe that they are different, more than Slaves. So they have something
to lose. Thus they can never go against the Emperor, and in fact, play their
role as the Citizen in keeping down the actual Slaves who could do something
about that Emperor if they actually got together.

Now do I think people will wake up and realize they are the Slave? Probably
not, but there's a non-zero chance, depending on how the government decides to
act during this crisis. Most likely though, the Citizens are going to be given
some scraps, just enough that they have something to lose and keeps them under
the illusion that they are more than a Slave.

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mark_l_watson
I am in the USA, but similar situation.

I believe that if, big if!!, the public would cooperate, that a plan like Hong
Kong’s makes a lot of sense. Sure businesses are less profitable and some will
not survive, but it would get things restarted quickly.

Trouble in the USA is a lack of patriotism: people are into their own selfish
thing and they feel put upon and don’t do what is right for both public health
and starting up the economy again.

It seems to be mostly young people in my town who act irresponsibly and will
thus likely ruin the economy for a long time.

A long term failed economy is full-stop the fault of people unwilling to be
decent human beings and do what needs to be done, and, of course, the fault of
our federal government leadership which has so far been poor.

We are just getting started with changing health practices and public
interactions and we are just getting started understanding what the long term
economic consequences will be. There is no quick fix here.

But for sure, we need less selfish and entitled behavior, and protect people
who need extra protection, and be willing to pay a little more to businesses
and totally cooperate with more distancing in public places and businesses and
of course apply maximum social shaming pressure on people who are so
incredibly selfish as to not wear masks when appropriate. It is like some
people have no sense of shame.

~~~
matthewdgreen
People in America don’t exactly lack patriotism. They’re quite capable of
making sacrifices in the name of their country or their community if need be.
It’s just that many were led to believe that they were being forced into
something for no reason. This was an active effort. There wasn’t just a lack
of leadership, there was leadership in the direction of sabotaging a
coordinated response.

~~~
mark_l_watson
You may not agree with my comments, but I agree with yours: federal leadership
was so bad that I have to wonder if it were on purpose.

But, that doesn’t exempt people from blame if they don’t do their part.

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jackcosgrove
Since the late 70s consumption growth has outpaced productivity growth. The
gap was plugged with debt. You cannot roll that debt over forever, even if you
are Jerome Powell.

The older people who hector young graduates about paying back their student
loans are precisely the people who voted for deficits _with no intention of
ever paying off the debt_.

~~~
cannabis_sam
> Since the late 70s consumption growth has outpaced productivity growth.

Really? It seems more like companies been capturing more of the productivity
gains since the 70s, and paying it to shareholders...

~~~
jackcosgrove
Total US debt to GDP was stable at around 150% until 1980 when it began to
rise, topping out at 400% in 2009 and settling around 360% since then. This
debt increase partially masked both slowing GDP growth due to demographics at
the national level, and slowing productivity growth at the individual level.

Regardless of the internal cause of slowing productivity growth, it did slow
and maintaining the same debt to GDP ratio as before 1980 would have required
accepting a standard of living that rose more slowly than it did. (GDP growth
slowdown due to demographics washes out on a per capita basis.)

It seems the most likely cause for the 1970s productivity slowdown was the oil
shocks and the most likely cause for the 2000s productivity slowdown is the
falling marginal return on research expenditures.

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save_ferris
This is a such an epic situation that I'm sure we'll be talking about for the
rest of our lives.

Pick two or three groups to save: workers, landlords, bankers, or businesses?
Not everyone can be saved, and the political positioning of these classes
makes this battle all the more impactful. This author chooses to sacrifice the
banks and the landlords, and makes a pretty good case for why.

The wrong answer could spell the end of capitalism, at least as we understand
it today. Maybe "wrong" isn't the correct word here, I don't know. I've never
seen such huge decisions laid bare like this before.

~~~
joeraut
> This is a such an epic situation that I'm sure we'll be talking about for
> the rest of our lives.

The word "epic" is overused a lot - but not here. It's chilling to think about
how historically significant each passing day is going to be.

------
skybrian
There are a lot of empty hotels, and it seems like prices will need to go
down. Who is going to live there?

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jhwang5
What is this guy smoking? He presents a false dichotomy of saving "labor" vs
"assets". Look, if assets depreciate, it affects balance sheets of everyone,
including corporates, and induce a balance sheet recession which reduces
reinvestment into the economy. Everyone's fked then, too. It's all connected.

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ivarv
Submission statement:

 _" Richard Murphy lays out the case for whose interests need to be sacrificed
for the economy to have any hope of surviving under the conditions being
imposed on businesses to keep workers and customers safe. Unfortunately, his
well-reasoned recommendation, that landlords, banks, and pensioners need to
take hits to save jobs and businesses, is not likely to find support in
official circles. But Murphy’s argument, in essence, is that these groups are
toast under any scenario, and they can’t be allowed to weigh down the
productive sectors of the economy."_

(summary courtesy [https://www.nakedcapitalism.com/2020/05/people-and-jobs-
or-w...](https://www.nakedcapitalism.com/2020/05/people-and-jobs-or-wealth-
the-government-has-to-decide-which-to-prioritise-and-there-is-only-one-right-
answer.html))

------
claudeganon
The idea that landlords should be bailed out in any fashion seems folly to the
extreme and I’m glad to see it argued against here. Collecting rents from
people without the capital to own housing, in addition to increases in land
value, is about as textbook an example of parasitism as one could imagine. Let
them all take a bath and keep people housed.

~~~
innocentoldguy
You do realize that many property owners would be rendered homeless if we did
as you’re suggesting, right? Why should the owners lose everything they have
so that their renters don’t (at least in the short term, until the property
gets foreclosed on and everyone is homeless)?

~~~
claudeganon
It’s a pretty simple calculus. The damage caused by kicking everyone out of
their homes far exceeds the landlords losing out, from both an individual and
public health perspective.

~~~
jackcosgrove
> The _political_ damage caused

Renters outnumber landlords. Easy peasy.

