Comment by pc_edwin | Hacker News Reader

Comment by pc_edwin | Hacker News Reader

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> attacking me doesn't help your argument

Wasn't my intention, I was trying explain how answering yes or no would be a tacid admission to the claims smuggled in your question. I don't even think its intentional.

> It seems like you want to suggest solutions that are 500,000 times harder

I agree but the alternative is even worse in my opinion. Yes it will work in the short term but check always comes due and it comes with a vengeance when you mess with reality.

This was the main messahe in all my previous posts. Re-organising society in such a way has massive unintended consequences.

Just like the human body, societies are very resilient but at some point it breaks and we are the breaking point. All it will take is a few more straws.

P.S.

> economists consider inflation to be good and healthy

I'm not an expert either but from what I understand, macro-economics is basically astrology for intellectuals but worse. There are different schools (keynesian, austrian, MMT, marxist etc) and the Keynesians won the roll of the dice. IMO very silly.

The entire premise is wrong. Both inflation and deflation are good or bad depending on the context. Its was never meant to wielded handful of people selected by a guy who won a popularity contest.

Idk if you've seen the world of warcraft movie (Warcraft), there is a type of magic in the movie called fell. Its offers a lot power at great cost. Thats artificial inflation/deflation (easing/tightening).

In the movie, you see the villain (Gul'dan) wielding fell by extracting the life force of people, thats exactly what happens when Jeremy (Fed chair) increases/decreases the rates or when a trillion dollars gets printed.

> I agree but the alternative is even worse in my opinion

You think raising the minimum wage is harder than trying to completely change how the government spends money and getting to zero inflation?

TLDR:

It will be exponentially easier to pass (even federally) than any prescriptions I've suggested.

That said, my point was the consequence of such a law would be much worse than doing nothing.

Long Version:

If we did nothing, inflation will effectively bring the current minimum wage down to zero given enough time.

Whereas if we set a federal minimum wage of $25/hr (current inflation adjusted), it will have disastrous downstream consequences.

I've touched on this in my OP. You are dictating by fiat that every human must have a minimum economic value of X.

You'll be de-facto robbing a huge chunk of the population of an honest life with dignity and prohibiting any types/classes of businesses that rely on unskilled/low value labor.

Also if you study history you realise its exactly these types of laws that create black markets and racketeering. Similar to lets say cannabis, you cant just wish the demand away..

It gets even worse, when you do this by industry like the California law. The state basically becomes the kingmaker. Its just a bunch of euphemisms for basically putting their thumb on the scale against large fast food chains.

> Whereas if we set a federal minimum wage of $25/hr (current inflation adjusted), it will have disastrous downstream consequences

You seem very certain of this.

You simply don't care that many other countries around the world have done it for decades with good outcomes?

For some unexplained reason, the US (which you yourself said is the richest country on earth) is different and the results will be disastrous in the US while they are not elsewhere?

I honestly think you're not seeing the big picture. If minimum wage goes up and gets pegged to inflation, low-income earners will simply take home a bigger portion of the enormous wealth that is created in the US. The richest class will take home less. That is precisely what happens in at least 20 other developed countries around the world, with excellent results. There are very few wildly rich people, and there are very few wildly poor people. Mostly everyone is in the middle.

The US could do exactly the same thing with exactly the same results, you just don't want to, because you're happy for a class of people to exist that barely survive to serve you.

I touched on this in one (or more lol) of my tangents.

Where is this good outcome you speak off? All these western nations are staring down a barrel with the exception of tax/banking havens and nations with a commodity to population asymmetry.

> If minimum gets pegged to inflation, low-income earners will simply take home a bigger portion

The entire economy runs on the margin. Traders get to experience this visually with the orderbook where you have bids/asks and the resulting liquidity/depth.

When you have a minimum wage pegged to an inflation "adjusted" rate, you're opening a Pandora's box of positive feedback loops resulting in the creative destruction of the economy.

This is not just a prediction, its exactly happened to these "20 other countries" including the US (to an extend). These countries use to be industrial powerhouses that accumulated immense wealth during their imperial past, look at them now.

P.S.

Just read your last two paragraphs, don't you see how it reads like a bedtime story?

Energy cannot be created not destroyed. When you dictate every human must have a minimum economic value of X, what do you think happens to the denominator X is measured in?

What do you think happens to an entire subset of low margin businesses that rely on unskilled labour.

What do you think happens to the banks and businesses that invested, loaned or leased land to those low margin businesses.

What do you think happens the streets/towns/cities those businesses to used to exist in?

Moreover, what do you think happens to your country when your adversaries or other countries start eating your lunch.

Again not a guess or prediction, this is whats been happening of more than half a century now and you want to deal with the consequences by doubling down.

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