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by pjc50
38 days ago
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.. and the consumers get cheaper goods. This debate is as old as Adam Smith, or older. I think the examples he used were centered around textiles? Everyone was afraid of the new job-destroying looms. > This destroyed jobs by the millions. And here we are. US unemployment has been about 5% for a while. If you look back on the graph: https://www.bls.gov/charts/employment-situation/civilian-une... , there are two big outliers. One is the business cycle disaster of 2008, which blew up the property market. One is COVID. Unemployment is basically a managed number. It can't go too far below 4% before inflation kicks in, which everyone absolutely hates, so interest rates are raised to reduce investment and consumption and thereby increase unemployment and reduce wage pressure. All of this is orthodox economics. |
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Anyone who has studied and actually used statistics beyond toy exercises understands how these single variable statements are 100% misplaced. I won't go into the details because it might be pointless and I have to get work done. The main point is that grabbing this magical single variable 5% unemployment number to explain 50 years of deindustrialization is, well, nonsensical.
It's like the old example about the fallacy of averages being applied to the entire sample: A billionaire and a minimum wage worker walk into a room. Someone comments that the average net worth in that room is half a billion dollars.
Right.