Why do people often vote against their own interests?
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GasBandit
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Every economist I've linked and/or quoted, plus others I haven't, say you're wrong. Can you find me some who say you're right?
C
Chibibar
Every economist I've linked and/or quoted, plus others I haven't, say you're wrong. Can you find me some who say you're right?[/QUOTE]
I believe GB is right.
http://en.wikipedia.org/wiki/Gross_domestic_product
The basic formula for GDP
GDP = private consumption + gross investment + government spending + (exports − imports), or
GDP = C + Inv + G + \left ( eX - iM \right )
right now firing people would increase Gross investment. http://en.wikipedia.org/wiki/Investment#Economics basically (really basic for a guy like me who has only little economic course requirement) that profit is "up" since investment to profit is higher with lower work force.
Also government spending is higher (bail out) while private consumption is lower it "semi" lowers it BUT the other two area (gross investment and government spending) increase a whole lot. So GDP would be higher (in GB defense illusion of 5% higher)
---------- Post added at 11:35 AM ---------- Previous post was at 11:24 AM ----------
here is an interesting read on U.S. debt and China's owning most of it (good percentage)
http://www.nypost.com/p/news/opinion/opedcolumnists/china_debt_bomb_onc23nzJdiQR7gTLkrwSpL
Not productivity... they're 2 different things...
Like i said, what GB said is possible, but the opposite is just as possible too, he's just overemphasising the possible outcome he likes.
Everything else was me trying to explain that he's got some terms mixed up.
GasBandit
Staff member
Not productivity... they're 2 different things...
Like i said, what GB said is possible, but the opposite is just as possible too, he's just overemphasising the possible outcome he likes.
Everything else was me trying to explain that he's got some terms mixed up.[/QUOTE]
You can argue that GDP isn't a true measure of actual productivity. That's a valid assertion. What I was saying (along with multiple economists), is that the increase in productivity as represented by the GDP (which is what the left is trumpeting here as a sign of recovery) is illusory because of the reduction in indolent employment.
Productivity means they're making more stuff, with or without an increase in profit (you can easily have a decrease depending on your strategy), and i have no idea what definition of it you're using that it relies on how many people are in the firm in the way you think. Either you're confusing it with profit (which is "income - costs" and would go up if there are less people to pay) or they're using a very weird way to calculate the GDP over there.
GasBandit
Staff member
Pretty much this.
C
Chibibar
Pretty much this.[/QUOTE]
It is a pretty weird formula if you are just looking at productivity (at least from what we talk about it so far) but the GDP is what I post above.
Now li3n, you are right about if I produce 400 units @2$ a unit that cost me 800$, but if I fire 50% of my people and STILL produce the same amount 400 unit @1$ (half the cost of labor for simplicity) then my cost is 400$. in your term, productivity didn't increase, but for some economist it "did" for some weird reason since it cost half as much and thus more profit (sold at the same price lets say 5$) so it is 2000$ - 800$ = 1200$ profit (well for simplicity) vs 2000 - 400 = 1600$ profit.
I am guessing they are using profit as part of productivity. I gotta find that formula.
edit: ahhh... (I love wiki but there are other site with more reliable but it give some basic truth sometimes)
http://en.wikipedia.org/wiki/Productivity
Productivity DOES include labor per unit. So if you fire all your "dead beats" and still produce the same, then productivity DOES go up
But labour per employee should be about the people actually doing the producing instead of the bosses secretary and stuff... unless they're taking goods produced by the whole economy over # of ppl employed overall, which only works if they include services somehow...
Assuming your assertion is right, the GDP increased because of other factors too: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm so it's not as "fake" as you make it out to be.
Still, as everyone says, we're not out of the woods yet (or in my case at all, we always do stuff backward here, we started the recession while everyone else was starting the recovery) and stuff could still go back down, but that doesn't mean we're not in recovery right now.
And getting rid of people that where slower or whatever and still maintaining the same overall productivity (not even increasing it) is a real thing and they even pay people to do that.
Assuming your assertion is right, the GDP increased because of other factors too: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm so it's not as "fake" as you make it out to be.
Still, as everyone says, we're not out of the woods yet (or in my case at all, we always do stuff backward here, we started the recession while everyone else was starting the recovery) and stuff could still go back down, but that doesn't mean we're not in recovery right now.
That's per unit of input, which can be different things (like the number of hours spent or the resources used etc.)
And getting rid of people that where slower or whatever and still maintaining the same overall productivity (not even increasing it) is a real thing and they even pay people to do that.
GDP doesn't include the bosses secretary work either.
If I paid you as a private employer to move one piece of paper from one side of your desk to another all day, that wouldn't count towards GDP. If I was the government and I paid you to do the exact same thing, it would count towards GDP.
It's one of the reasons during a stimulus period that GDP doesn't really indicate how well an economy is doing.
C
Chibibar
GDP doesn't include the bosses secretary work either.
If I paid you as a private employer to move one piece of paper from one side of your desk to another all day, that wouldn't count towards GDP. If I was the government and I paid you to do the exact same thing, it would count towards GDP.
It's one of the reasons during a stimulus period that GDP doesn't really indicate how well an economy is doing.[/QUOTE]
cause that is part of the government spending right? (at least part of that formula)
GDP doesn't include the bosses secretary work either.
If I paid you as a private employer to move one piece of paper from one side of your desk to another all day, that wouldn't count towards GDP. If I was the government and I paid you to do the exact same thing, it would count towards GDP.
It's one of the reasons during a stimulus period that GDP doesn't really indicate how well an economy is doing.[/QUOTE]
cause that is part of the government spending right? (at least part of that formula)[/QUOTE]
That's the G in CIGX
GDP doesn't include the bosses secretary work either.
If I paid you as a private employer to move one piece of paper from one side of your desk to another all day, that wouldn't count towards GDP. If I was the government and I paid you to do the exact same thing, it would count towards GDP.
It's one of the reasons during a stimulus period that GDP doesn't really indicate how well an economy is doing.[/QUOTE]
But none of those things impact the economy in a negative way... or inflate the GDP artificially.
No actual indicator is a perfect mirror of the actual state of the economy, but as long as it's close enough it's fine.
The recovery being or not sustainable isn't something that's really tied to the GDP anyhow.
But let's go back to the original thing, consumer spending is also up GB (see link in last post), and i doubt that people started firing family members...
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