Comments by "seneca983" (@seneca983) on "Unlearning Economics" channel.

"That light from the sun will reach the earth whether you install a solar panel or not. The energy has already been added to the Earth's system and will end up as heat one way or another." That's not quite correct. The idea is that a less dark colored object would reflect a higher percentage of the incoming light back into space. So there is a difference from the change in albedo, it's just completely minuscule compared to the radiative effect from greenhouse emissions and can be ignored.
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@socialistcatdad I'd also think a consumer co-op would be better than a worker co-op. The interests of the workers and passengers don't always align and the workers might try to hinder reforms aiming to benefit the consumers if it's seen to threaten some of the workers. Technically, co-ops are also private though they do differ from the more common joint-stock form company.
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@christophertstone No, that's not the presumption. The idea is that a less dark colored object would reflect more of the light back into space. (Not that it matters much because that effect for the size of areas that solar panes cover is minuscule.)
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@ ""black" does not refer to colour" Black bodies are actually black by their color except when they're hot enough to visibly glow.
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@mihailmilev9909 In a consumer co-op the idea is that the consumers are the members. Typically the benefit of membership comes (at least partially) in a form that's essentially a discount on prices relative to non-member customers. And the members obviously vote for who runs the co-op. Typically workers can be members as well (and might get special perks like bigger discounts) but are likely to be far outnumbered by non-worker members. A mix would probably have to be something where e.g. workers get more voting power per person so they're not dwarfed by other members, but I don't know of any examples so I'm not sure. Matters of Degree might know more.
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I'm pretty sure that at least land taxes are widely supported among economists whether left or right. Not sure about the general public.
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37:00 "They find that when facing lower demand or recessions, worker co-ops are much less likely to fire employees, instead opting to reduce wages across the board. Co-ops therefore protect the employment of their members while capitalist firms are happy to shed them to remain profitable." Shouldn't we consider that capitalist firms can also be prevented from lowering wages across the board by employment contracts, collective agreements, or labor laws? They may choose firing over wage cuts simply because they're prevented from choosing the latter option.
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@patrickwright8552 I don't know how big the difference is but ultimately it doesn't matter very much. Even if the solar panel absorbed 100% of radiation that lands on it and the surface below it would've reflected 100%, that still is a much smaller effect than the radiative effect from greenhouse emissions.
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Worker co-op or consumer co-op?
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@Dong_Harvey I think you misunderstand. I'm not saying Myhrvold's argument about solar panels makes sense. It doesn't, because the heat due to absorption is quite small compared to the radiative effect of greenhouse emissions. I was only saying that Myhrvold's point isn't wrong for the specific reason OP mentioned.
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@emylily8266 "It is in fact a very valuable protection for employees" But it should be noted that not becoming unemployed can, depending on situation, have more value for at least some employees. At any rate, I mainly wanted to point out that this particular disadvantage of capitalist firms relative to co-ops might not be an inherent feature of that type of structure for the firm but rather artificially imposed on it. Whatever one's policy preferences might be, that aspect (if true) should be considered when comparing conventional firms and co-ops.
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"Then again, looking back at it, we never read any of the actual important thinkers in economics." But I don't think you need to anyway. You become an important thinker by coming up with novel ideas and the first presentation of a novel idea is unlikely to be the best. Subsequent formulations of the same ideas, e.g. in textbooks, are probably clearer than e.g. Smith's original writings.
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@talideon I don't agree. In a consumer co-op most of the members would not be workers so workers would only have a small percentage of votes (assuming it's a regular consumer co-op and not something like Matters of Degree described above).
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@emylily8266 "Problem is..." Problem for what?
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@emylily8266 My original comment only said that (perhaps) capitalist businesses are simply not allowed wage cuts over firing. I did not (yet) offer any policy prescriptions.
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Remember that high yields usually imply high risk. Diversify.
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@LeDoctorBones ""black" does not refer to colour" But black-bodies are actually black by their color unless they're hot enough to visibly glow.
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@forstudentpower How would a mix work? In a consumer co-op workers can surely also be members but in practice "normal" consumer members would far outnumber them. I don't see how a mix would differ from a consumer co-op.
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Piketty's r > g doesn't (necessarily) imply increasing inequality. Capitalists' wealth won't increase at a rate of r unless they don't consume any of their capital income (only their labor income if they have any). Surely the point of having capital income is the ability to consume it, either now or in the future. Even if we lived in a world of incredibly thrifty capitalists, the implications don't seem so dire. That would imply a continuously growing capital stock (even relative to incomes). Due to the law of diminishing returns, a growing capital stock would mean a shrinking marginal return on capital and therefore an r that goes down until it falls below g.
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@cklinger500 "As a result, this initiates a demand for that currency." But even if this is the case, isn't it still true that the level of taxation (as long as it's meaningfully above zero) doesn't affect the rate of inflation much? To me, it seems clear that the rate of inflation is basically determined by monetary policy.
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@cklinger500 "It is also true that when taxes is increased, people have less money to spend, and as a result demand decreases." But I think this argument is flawed for the following reason. If we assume constant government spending collecting more taxes will lead to less government borrowing. So the government is taking more money from the public through taxation but an equal about less through borrowing so there shouldn't be much net effect. If we instead assume more taxation leads to more government spending the conclusion still shouldn't change. In that case, the government is taking more money from the public through taxation but returning more money to the public through spending so again, I see no reason for much net effect. "the fact that interest rates around the world have been super low near zero for like 13 years and there still is yet to be any meaningful inflation" At least I personally could respond that low inflation should result in low interest rates through the Fisher effect. At any rate, it would seem very strange if the monetary policy couldn't increase inflation if it's loose enough. What would happen if the central bank would announce that they're going to expand their QE program by, say, 5% each month until the inflation target is reached. Either the inflation target will be reached or soon the central bank and the government is earning so much money through seigniorage that there's no need for taxation anymore. Of course, the latter scenario is too good to be true so the inflation target should be reached far before that point. "which is what is supposed to happen according to neoclassical economics" Which neoclassical model or argument are you talking about here? Can you give a reference because this sounds rather strange to me. Also, I thought the neoclassical school was mostly about micro, not macro. (Disclaimer: I'm not an economist. I'm just a layman interested in the subject.)
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@trollamos "As to monetary policy, looking at a graph of inflation VS rate convinced there's no real relation there." How does that convince you there's no relation? Below there's a link to a graph of US inflation vs. fed funds rate and there seems to be a strong correlation. What would you expect the graph to look like if there was a relation? https://en.wikipedia.org/wiki/Federal_funds_rate#/media/File:Inflation_compared_to_federal_funds_rate.jpg
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@cklinger500 "Government borrowing isn’t actually a necessity today since the US dollar is a free floating currency. [...] One of my points from before is that taxes do not “pay for” government spending. This is because under this framework, there is no inception point of money." But neither of those points makes sense. That the currency is free floating or "there is no inception point of money" (whatever that means) doesn't mean that spending needn't be funded somehow. The goverment needs either income (which is usually mostly taxes) and/or it needs to borrow (usually by bond issuance). Note that this is again the thing that UE considered weird about MMT (except you're going a bit further in saying that it's not just taxes that are unneeded for spending but borrowing as well). "When people buy bonds, they are pretty much getting a savings account (something with interest returns and also a maturity date), so if anything these bonds are increasing the amount of money that the general public has." It doesn't really. First, the various definitions of money, M0, M1, M2, etc. don't include bonds. Maybe you think some alternative definition would be better but bonds are rather different from at least M1 money. You can't pay groceries with bonds. Also, bonds have a market value which can fluctuate when interest rates fluctuate, possibly by a lot if it's a very long maturity bond. Also, some bonds (TIPS) are indexed to inflation. "QE is just the replacing of securities to reserves in the banking system. It is a misconception that QE is just when the government mass prints a smack ton of money." But there isn't really much difference assuming that "smack ton" would be given to the government to spend. Either the Fed could (electronically) print X dollars for the government to spend or the government could borrow X dollars for that spending via bonds and the Fed just buys those bonds off from the market. The end result is pretty much the same so there's no difference. "What I meant my neoclassical is just mainstream economics. The neoclassical argument I was referring to is the argument that lowering interest rates leads to more people borrowing. As a result of more people borrowing, that will lead more people to spend, and if the interest rate is too low, the economy will be become overheated and lead to inflation." I don't think there's quite this kind of mainstream consensus. Do you consider e.g. Milton Friedman to have been mainstream or heterodox? He remarked that low interest rates are usually not a sign that the monetary policy is loose but rather that it has been tight. Both the low interest rates and low inflation are the result of tight monetary policy.
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@cklinger500 "The way spending is “funded” in the US federal gov is when the Fed changes numbers in bank accounts, creating new money after Congress appropriates the money." That's not the case. Spending is handled from Treasury General Account (at the New York Fed). When the government pays someone their account balance is increased and the balance in the TGA reduced so no new (base) money is created. Similarly, the balance in the TGA is increased when receipts from e.g. taxes and bond emissions come in. In those cases the balance in the payer's account goes down so again the amount of (base) money doesn't change. If the Fed just increased the balance in the TGA without any corresponding payment from elsewhere that would increase the supply of base money. It would effectively be a type of QE. Theoretically, monetary policy could be handled that way but currently Fed is banned from doing that. They implement their monetary policy by buying securities, usually government bonds on the secondary market. "It is illogical to assume taxes or selling bonds fund the federal government because without money being created, there would be nobody being able to pay taxes." Taxes could still be paid as long as there's money in circulation. Even if no new base money were created anymore taxes could still be paid using the money in circulation (though not creating money anymore would be bad monetary policy and would likely harm the economy). "The gov selling bonds is completely necessary under a fixed exchange rate b/c it would restrict the currency that the gov doesn’t create." That makes no sense. Inflows into the TGA need to at least match the outflows or else the balance would eventually go to zero. Most of the inflows are taxes and borrowing (through bonds). Those are needed to fund spending (assuming no increased money creation by just increasing the balance in the TGA). "but you can convert treasury bonds into US dollars" A lot of things can be converted into US dollars. Stocks can very easily be converted into US dollars but we don't call that money or say that a company issuing new stock is expanding the money supply. Bonds are similar. The Fed buying bonds at the very least expands the supply of base money. I would also say that it does more expand the money supply because bonds are not included in the definion of "money". "I do not understand what this and the rest of your response to what I said about QE has to do with QE?" I mean, the main effect of QE is that it increases the supply of base money. That the Fed puts this money into circulation by buying bonds is secondary. "I considered this the mainstream consensus because it is what I learned in school [...] I wouldn’t consider those specific remarks by Milton Friedman mainstream because of this." Fair enough, but at least my perception is that the acceptance isn't as wide as you say, and this way several economists (e.g. Scott Sumner) who would at least broadly be classified as neoclassical wouldn't be "mainstream" on this issue. FWIW, I don't accept that description either though I'd think I don't stray all that far from economics mainstream.
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@cklinger500 "Scott Pelly: is that tax money that the fed is spending?" Note that he's asking how the Fed (i.e. the Federal Reserve) spends money, not how the Treasury spends money. "This proves that when the fed gov spends..." No, it doesn't. He was talking about how the central bank a.k.a. the Fed spends money. "my point was that by logical necessity, the gov must spend first, and then tax and “borrow.”" It's not a logical necessity as long as there currency in circulation. That can be used to pay for bonds or to pay taxes. "Or below zero, the federal deficit is the balance if my understanding is correct." But that's not correct. A deficit means that expenditures exceed income. The difference is covered mostly by borrowing (through bonds). The inflow from borrowing keeps the TGA from being depleted. That's still a deficit because the borrowing doesn't count as income. "I would consider stock a form of money." Well, then you're pretty radically departing away from how almost everyone defines "money". Do you consider real estate a form of money? It too can usually be converted to cash (albeit with some effort and delay). "I wouldn’t say that a company issuing new stock is expanding the money supply for the reason that the money is already existent somewhere in the private sector(no net financial assets are created)" I don't think this makes sense. When investors pay for the new stock with money that money also still exists even afterwards in the company's bank account. (I don't consider stock a form of money but I wanted to comment anyway.) "issuance of treasury bonds with interest rates above zero implies more money in the private sector that can be used to buy groceries eventually" Issuance of bonds with interest doesn't imply more money. "This is misleading because if you consolidate the Fed’s and the treasury’s balance sheets into a single balance sheet, then QE does not actually expand that balance sheet." The balance sheet is expanded. Both the assets and liabilities (when base money is considered liabilities for the Fed).
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@emylily8266 "for why we don't allow those types of wage cuts by privately owned corporations in the first place?" If it's a problem for that (as I asked) then should that policy be discontinued?
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One reason I'm skeptical of rent control is that it's not clear to me how is it compatible with efficiently rationing access to housing. If there's a high-demand area where more people would want to live than there's actually room for then something will inevitably limit access to housing in that location. Without rent control, price becomes the limiting factor. It's efficient at least in the sense that then people living in that area will presumably be the ones who (at least implicitly) think they will benefit the most from living there in dollar/euro/pound/whatever terms. This may seem unfair because it's not only a function of how much different people like that area but also of how much they have money. But is there a better way to limit access? If rent control forces the price of housing below such point them some other factor(s) must (also) limit the access to housing. It might be time spent queueing for an apartment, luck, connections, or the ability to seem like a good prospective tenant to a landlord (or simply actually paying above allowed rent by some illegal means). None of these seem a better rationing method than price. I've heard stories of people queueing for a home to rent in Stockholm for more than a decade.
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Privatization can at least possibly work. Japan Railways was privatized in 1987 and seems to work well.
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