Board 8 > Freedom, Liberty, Ron Paul - The Topic [no wars] [no income tax] [no TSA]

(+) Yeah! (+)

We have a shortage of people who are qualified to be engineers and an excess of people who are qualified to be fry cooks, yes.

However, we may very well have more engineers than are necessary due to current consumer demand, and fewer fry cooks than are necessary.

Would you suggest that the job with the biggest shortage in America is CEOs? Or Major League Baseball players?

Using shortage in the way you are using it, there can never be a shortage in a free market system, which is what America for the most part is. Because the amount supplied by a free market is always the exact amount demanded. The price of things will adjust until demand matches supply.

When we say shortage, what we generally mean is there are fewer people qualified for a position than the market demands.* And in that sense, yes, we have a shortage of engineers. There's a reason why it's so easy for CS majors to find jobs right now, and so hard for most recent college grads.

*I'm aware this definition isn't very good at all, because demand is a function of price, but I think you should get what I am aiming at here without requiring a more precise definition.

The tell-tale sign of a shortage is that it is easy for qualified people to find high-paying work in that field. This is true for technology now, it is also true for doctors. Not for most fields.

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When we say shortage, what we generally mean is there are fewer people qualified for a position than the market demands.* And in that sense, yes, we have a shortage of engineers. There's a reason why it's so easy for CS majors to find jobs right now, and so hard for most recent college grads.

Well, I was just using engineers and fry cooks as a hypothetical example.

You brought up the example of a highly paid person getting laid off and therefore it wouldn't be beneficial to take a minimum wage job. My point is, generally, if a highly paid person is in a field where there is also a lack of qualified applicants, they will find a new job rather quickly.

But you cannot deny that in this current economy, there are a lot of "overqualified" people who are getting laid off and cannot find anything other than minimum wage jobs, so they stay unemployed (or go to grad school).

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There is a shortage of CS engineers. I dunno about other engineering specialties, but there is one in CS.

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_foolmo_
'nice comma splice' - TomNook7

You brought up the example of a highly paid person getting laid off and therefore it wouldn't be beneficial to take a minimum wage job. My point is, generally, if a highly paid person is in a field where there is also a lack of qualified applicants, they will find a new job rather quickly.


The thing is that highly qualified jobs often have long hiring processes. For example, to join a big law firm out of law school, the timeline is that you interview with them at the beginning of your 2nd year of law school, you work for them the summer after your 2nd year of law school, you take the bar exam the July after your 3rd and final year of law school, the bar exam results come out around November of that year, and you finally start working in your full time job the next January. That's a full 29 months after you initially interviewed with them.

Not the best example, because I'm sure the hiring process for current attorneys is much shorter, because they don't have 2 more years of law school to finish, but it may still be pretty long. It's in society's interest to make sure highly skilled people are not shaken out of their professions by a gap between jobs.


But you cannot deny that in this current economy, there are a lot of "overqualified" people who are getting laid off and cannot find anything other than minimum wage jobs, so they stay unemployed (or go to grad school).

True, the job market is horrible right now. But I don't think it's a problem that they nonetheless choose not to work in minimum wage jobs. Where's the problem exactly with that choice? Having these people work minimum wage jobs isn't going to fix things, because there is only so much minimum wage work to be done in the country.

If the situation were like Spain, where employers don't hire anyone because the government's laws and regulations make it unprofitable to hire all but the most highly qualified people- because you have to give any employee a raft of benefits and you essentially cannot fire them- that would be different.

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From: SmartMuffin | #050
However, we may very well have more engineers than are necessary due to current consumer demand

Nope.

and fewer fry cooks than are necessary

Probably true. In the current entitlement framework, in many cases it's actually worse to work a minimum wage job than to be unemployed. So even though the unemployment rate is insane, and theoretically these people could just take these supposedly open fry cook positions, they choose not to, creating a worst-case scenario where no one wants to do the crappy jobs, but no one can do the good jobs, so no one works.

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_foolmo_
'nice comma splice' - TomNook7

A big reason McDonald's is always hiring is not that there is a shortage, but that people don't work at MCD for very long. People work a few months and move on.

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but that people don't work at MCD for very long

... which then creates a shortage...

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No, it just means we have a revolving pool of workers. There's no more shortage than there is a shortage of say, 8th graders, because they all leave at the end of the school year.

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A real shortage in fast food workers is easily remedied, also. MCD will simply raise their wages. Shortage solved. A shortage in computer engineering isn't so easy, because while tech companies can raise salaries, it will still take years for people to develop the skills that qualifies them for those jobs.

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Bernanke: We will take action if necessary.

Oh yes, bring it on, QE3. Another trillion dollars equals $3,000 dollars in the pocket of every American. Only this time, can we give the money to individuals instead of banks? That's the kind of stimulus we can believe in.

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And he's great with technology too!

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_foolmo_
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What on earth........well, I suppose Mitt doesn't really care about that issue, so he was just pandering.

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It won't. Inflation is a shell game, it can't either create or destroy wealth.

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It's like a shell game except every year all the stones under the shells are sent to Israel

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_foolmo_
'To be foolmo'd is to be better opinion'd.' - Blairville

It is pretty funny how bullish investors are now cheering for signs the economy is doing badly, like more unemployment and lower housing prices, so that the Fed is more likely to give us QE3.

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http://www.economicpolicyjournal.com/2012/04/my-fed-speech-details.html?spref=fb

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Chicago school of economics = Free market ideas backed up by math.

You should look into it.

And the reason the Austrian school isn't taken seriously is simple: it lacks math. A theory of physics without math would similarly be laughed out of the room.

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It is true that the Chicago school probably bears much of the blame for the 2008 crash. But it was also responsible for the incredible success we enjoyed from 1980 to 2007.

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I've explained to you a number of times why economics and physics aren't at all comparable. The fact that you refuse to listen isn't really my problem anymore.

Anyway, the point isn't that they disagree with the Austrian school. It's that many of them don't even know what it is. Fortunately, as the article points out, Ron Paul is changing that.

The Chicago school is Friedman, right? It's basically kinda sorta free-market economics. That's pretty much what we already have.

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Yes, Friedman is probably the most important person in the Chicago school. And it's been the dominant economic school since Reagan, actually- Keynesianism was out of vogue for a long time until the past few years.

I'm saying that it's not surprising that these economists haven't heard of Austrian theory because it is a joke theory that is not economics in the modern sense of the word. And it's a joke theory because it doesn't rely on math. I suspect this speaker did not tell them that, or they would have lost all interest immediately or thought it was some kind of joke.

We can agree to differ though! You and many others probably don't want economics to be a science.

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Though the policies implemented by our politicians usually are not what is recommended by any school of economics. The big push for a freer market in the past 30 years has had a lot of success with tax cuts, and very little with anything else that makes a market freer.

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It's not about what I want. Economics is NOT science by any reasonable definition.

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Economics is about people. You can't use math with people. Well you can, but it won't work. There's a reason there are still jobs on Wall Street. You can't program a computer to do economics, or else we would have AIs running Wall Street by now. You need people to do it, because only people understand it.

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_foolmo_
'To be foolmo'd is to be better opinion'd.' - Blairville

The mathematical and empirical study of something.

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We do have AIs running Wall Street now. And we still need people just as we need people in physics, chemistry, computer science, etc.

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Scientists research the world to better understand how it works. The rules they come up with are facts, there is no ambiguity. Given a certain set of axioms, a theory is either valid or invalid. The only arguments are about the fundamental axioms, which is why you need people.

Economics definitely CAN be scientific if you want it to be, but is that the best option? It's just like cooking. Cooking can be scientific. A computer can spit out a bunch of theoretically perfect recipes, but they wouldn't be the best, would they? It's because just having a set of axioms that everything else is derived from is not enough. There is a dynamic and personal human aspect to it. That's why it's more of an art. Given a certain set of axioms, you CAN validly disagree on a theory.

But really the fundamental question is this: If you had to choose between a physics supported by math that works 50% of the time or a physics not supported by math that works 95% of the time, which would you choose?

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_foolmo_
'To be foolmo'd is to be better opinion'd.' - Blairville

It's a bad question, because there couldn't be a physics not supported by math that works 95% of the time. As a science, economics is probably around where physics was in the 16th century- because it is based on people, who are hard to model mathematically.

If random guessing works 50% of the time, then modern economics (think Chicago school) works perhaps 60% of the time. Lord Keynes's theory worked perhaps 55% of the time. Austrian economics is probably pretty close to random guessing. Of course, in the stock market, if you play with even a 1% advantage, you'll become very rich very fast.

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Of course, in the stock market, if you play with even a 1% advantage, you'll become very rich very fast.

So why doesn't every Chicago school economist make millions in the stock market?

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Because no one can attain even a 1% advantage in the stock market (beyond the natural advantage you get for being willing to take on risk), or at least we can't prove that anyone can. There's actually been a lot of attempts to disprove the efficient market hypothesis by proving that someone has better than a 0% advantage, and it still hasn't been demonstrated. Of course, that they have no advantage also hasn't been demonstrated.

The 60%, 55%, etc. figures aren't for the stock market, but for economic questions in general. Remember, you compete against others in the stock market, so if they know what you know, you have no advantage.

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Also, I suspect it would be very easy for any of the economists at the Fed to make a ton of money in the stock market right now, based on legal insider trading. Not that that shows the merit of their economics work. But I wouldn't be too surprised if a few years down the line we started seeing former Federal Reserve economists on the rich lists.

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The 60%, 55%, etc. figures aren't for the stock market, but for economic questions in general. Remember, you compete against others in the stock market, so if they know what you know, you have no advantage.

Being able to predict the general market direction would still make you millions.

If you could correctly time the market, even with no shorting, if you just put all your money in an S&P index fund during months when it went up, and all your money in a regular savings account during months when it went down, you'd be amazingly wealthy and have ridiculous returns.

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Being able to predict the general market direction would still make you millions.

If you could correctly time the market, even with no shorting, if you just put all your money in an S&P index fund during months when it went up, and all your money in a regular savings account during months when it went down, you'd be amazingly wealthy and have ridiculous returns.

Yeah, but other people still know what you know, even for general market movements. It's not like there's a group of professors with a secret theory that they've not published. Wall Street is well aware of what all the leading economic theories predict.

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Yeah, but other people still know what you know

And if they disagree?

By your theory, all Chicago school economists should be fantastically wealthy, all Keynesian should be doing pretty good, and all Austrians should be doing horribly and losing their shirts.

Remind me who predicted the housing bubble again?

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And if they disagree?


Of course people can disagree, but the disagreements tend to happen in a free market in the areas where people do not know the answer, so an advantage is really hard to come by.

By your theory, all Chicago school economists should be fantastically wealthy, all Keynesian should be doing pretty good, and all Austrians should be doing horribly and losing their shirts.

Remind me who predicted the housing bubble again?

Yes, that seems accurate. Probably 99% of Wall Street subscribes to those two or similar theories. There's a reason why there are no major banks that employ Austrian theory.

Also, predicting a bubble doesn't mean much by itself. If you predict a bubble every year, for example, you're guaranteed to hit eventually.

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There's a reason why there are no major banks that employ Austrian theory.

Austrian theory is that fractional reserve banking should be illegal because it screws people out of their money.

That's like saying "there's a reason that no Navy Seals are pacifists"

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So Austrian theory isn't profitable then, and that's why banks don't employ it. Unless you mean that it produces profits by not screwing other people out of their money. But that is the same as getting them more money at your expense. Which is getting them, other players in the free marketplace, an advantage. Which is precisely the meaning of playing with a disadvantage.

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So Austrian theory isn't profitable then, and that's why banks don't employ it.

Well, that's like saying that NOT stealing your neighbors stuff isn't profitable. Technically correct, but missing the point entirely.

In any case, it's entirely possible that the Austrians will eventually be vindicated. If enough banks were to go belly up as to bankrupt the FDIC, we'd get hyperinflation, which would be just as bad for everyone as simply allowing the banks to go ahead and fail.

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From: red sox 777 | #078
It's a bad question, because there couldn't be a physics not supported by math that works 95% of the time.

Why not?

Physics is just a finite set of theories, right? Theories can be described perfectly in words and symbols, so they are just strings (sets of characters, like a sentence or formula), right? So just enumerate every single possible set of theories (I can explain to you how this is done in detail), and theoretically, ONE of those sets will be our current modern quantum physics, MINUS the basic axioms that makes it work mathematically. So if we just randomly picked one of those sets and it happened to be this particular set, we would have a physics that works 95% of the time but isn't supported by math.

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_foolmo_
'Oh please, if foolmo made that analogy you'd think it was picture perfect' - Biolizard28

Well, that's like saying that NOT stealing your neighbors stuff isn't profitable. Technically correct, but missing the point entirely.

That sounds an awful lot like a moral argument. The same argument the Communists use for why the government should redistribute wealth.

In any case, it's entirely possible that the Austrians will eventually be vindicated. If enough banks were to go belly up as to bankrupt the FDIC, we'd get hyperinflation, which would be just as bad for everyone as simply allowing the banks to go ahead and fail.

Maybe, but other economic theories could also see this coming. And if you've been holding gold instead of stocks for a few decades, remember, your position is a lot worse right now.



Physics is just a finite set of theories, right? Theories can be described perfectly in words and symbols, so they are just strings (sets of characters, like a sentence or formula), right? So just enumerate every single possible set of theories (I can explain to you how this is done in detail), and theoretically, ONE of those sets will be our current modern quantum physics, MINUS the basic axioms that makes it work mathematically. So if we just randomly picked one of those sets and it happened to be this particular set, we would have a physics that works 95% of the time but isn't supported by math.

But that set of theories probably wouldn't work, because the axioms that make it work mathematically could be the same ones that make it work empirically. Or, you'd be left with the empty set.

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The real problem with the lack of math is that it allows the theory to make blanket prescriptions like "buy gold all the time" or "cut taxes all the time." You can say that that's not what the theory says, but to the extent that people deviate from that, they have to use their own judgments, since there's no math to provide guidance. But then, if they're using their own judgments, then the theory is not adding any value.

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That sounds an awful lot like a moral argument.

Of course it is. Are you even paying attention here?

The same argument the Communists use for why the government should redistribute wealth.

And they make the wrong one. What's your point, that moral arguments are wrong because there are two sides to them? It's a moral argument to say that murder is wrong. That argument doesn't become invalid because murderers disagree, does it?

Maybe, but other economic theories could also see this coming. And if you've been holding gold instead of stocks for a few decades, remember, your position is a lot worse right now.

Because the fed has artificially propped up stocks. In any case, Austrian theory does not favor gold as an investment. Under Austrian theory, gold should do nothing at all but retain its purchase power. It is a medium of exchange that cannot be manipulated, and nothing more.

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And they make the wrong one. What's your point, that moral arguments are wrong because there are two sides to them? It's a moral argument to say that murder is wrong. That argument doesn't become invalid because murderers disagree, does it?

I think you're making the exact same argument as the Communists. Where's the difference? I don't see a second side here.

Because the fed has artificially propped up stocks. In any case, Austrian theory does not favor gold as an investment. Under Austrian theory, gold should do nothing at all but retain its purchase power. It is a medium of exchange that cannot be manipulated, and nothing more

Well, that's the thing about the market, you can be right, emphatically right, while the market is emphatically wrong, but until the market admits that you are right, you are still wrong.

Also, the Fed hasn't been propping up stocks for decades. Just the past few years. And QE helps gold more than stocks, because gold is as pure an inflation play as any.

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I think you're making the exact same argument as the Communists. Where's the difference? I don't see a second side here.

How is "everyone should be left to conduct free and fair trade without the threat of violence" the same argument as "violence should be used to make sure everyone has the same amount of stuff"?

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How is "everyone should be left to conduct free and fair trade without the threat of violence" the same argument as "violence should be used to make sure everyone has the same amount of stuff"?

You just said that fractional reserve banking should be banned by force because it is immoral. So that some people would get more stuff, and other people would get less stuff. I don't see the difference.

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From: red sox 777 | #091
The real problem with the lack of math is that it allows the theory to make blanket prescriptions like "buy gold all the time" or "cut taxes all the time." You can say that that's not what the theory says, but to the extent that people deviate from that, they have to use their own judgments, since there's no math to provide guidance. But then, if they're using their own judgments, then the theory is not adding any value.

True, but it's not like following a certain school of economics is legally binding or anything. It IS a personal thing, and personal judgments do have influence. Every president has a different way of handling economics. So it makes even more sense to use Austrian economics as a guide, which is natural and flexible enough to accommodate personal judgments, instead of using something rigid and math-based as a guide and trying to apply personal judgments there and breaking the entire system.

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_foolmo_
'nice comma splice' - TomNook7

Well, the point is that Austrian economics isn't really adding anything of value to your personal judgments. Those judgments could still be great or horrible or anywhere in between. With a math-based theory of economics, it tells your something your personal judgments didn't already tell you. You don't have to listen to it 100%, or even at all. But it gives you more information to work with.

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It's still a set of rules. Or if you prefer, a set of opinions. You can still choose to follow it closely or not at all like any other theory of economics.

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You just said that fractional reserve banking should be banned by force because it is immoral. So that some people would get more stuff, and other people would get less stuff. I don't see the difference.

The only reason people engage in fractional reserve banking is because the government guarantees the banks deposits. It's not "fractional reserve banking" that should be banned necessarily, it's taking someone's property by force (taxes) which should be banned, which would eventually LEAD to a disappearance of fractional reserve banking, or, at the very least, a great reduction of it.

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I fail to see why this isn't a legitimate point. It you believe you are entitled to something, why not cut out the middle man? Why is it okay to ask the government to rob people and give it to you? Why not rob people yourself?

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