mech1234

Try not to confuse the Federal Reserve (the Fed) with the Federal Government.

1. Below is a summary of evidence that UBI reduces employment. The reductions of working hours are substantial, even in studies widely spun as "no change". Below that is also HN debate about it.

https://www.chrisstucchio.com/blog/2019/basic_income_reduces...

https://news.ycombinator.com/item?id=22493537

2. Assuming that the equilibrium point remains at the same price level is difficult. It requires assumptions about the elasticity of demand and the elasticity of supply. Generally, if UBI has disincentivized work, you would expect less work, less supply, and a higher equilibrium price.

3. Under a constant money supply, increased velocity of money does create inflation. This is fairly standard economic theory. Increased hoarding is definitively a decrease in the velocity of money.

4. Fair enough, but it requires you to trust the politicians to pass a tax that impacts only the extremely wealthy. This is not guaranteed or even likely.

Reserve requirements are typically made more stringent while the economy is doing well. The history of these changes by the Fed is available at the link below.

https://www.federalreserve.gov/monetarypolicy/reservereq.htm...

Take note that your state of residence may or may not have done the same.

Your argument can be extended infinitely. It's pretty easy to understand that Tesla (and any other assembly plants that fit in this window) is simply getting special treatment here.

The factory that makes hydraulic fluid for Tesla's presses that stamp out car parts is also part of the transportation supply chain, As is the oil refinery that supplies feedstock to the hydraulic oil vendor.

It is not delaying the inevitable. There will be many profitable restaurant businesses who find their business lacking liquid cash over the next few months. Being thrown a credit lifeline means that they can make it through this period of time and come out on the other side as a profitable business again. Paying down the debt is a common business practice that people do all the time.

Throwing out a credit lifeline can be a practice that benefits everyone in times of crisis.

Spreading the problem out over a long period of time keeps the company in business. It's a no-brainer good idea for the SBA to do this. Not sure what you would prefer instead.

Typically, For every dollar a bank "keeps" in your bank account, they are allowed to loan out some fraction of the dollar. Let's say that this is usually 90 cents. The amount of cash your bank actually has on-hand is 10 cents. This process is known as fractional reserve banking. Now, with 0 reserve requirement, the bank can lend out the whole dollar.

Fractional reserve banking has produced a tremendous amount of wealth for the world over recent centuries. It encourages assets to be used in a productive manner rather than hoarded, which is essentially wasteful.

Typically, the loans get paid off to the bank over time, and the bank originates new loans to continue to make a profit. Currently, there are two systemic risks:

1. If borrowers begin to default, the bank still must cover its expenses. Under stressful circumstances, they would normally not be allowed to draw down their reserve to meet their expenses. This change allows this. Once the economy recovers, the reserve requirements will be reimposed.

2. It encourages banks to continue issuing new credit to borrowers. This keeps economic activity flowing and prevents a situation where borrowers have nowhere to turn to find money to keep their business afloat until profitable times return.

There is a large risk of inflation under UBI. You cannot make an honest argument about UBI without accepting this risk.

1. On the margin, UBI reduces employment and production. This contributes to inflation.

2. On the margin, UBI increases consumption of consumer staples. This contributes to inflation.

3. On the margin, UBI increases the velocity of money. This contributes to inflation.

4. Under most assumptions, UBI increases government spending. Either taxes will rise, increasing the real cost of goods and services, or the money supply will increase, contributing to inflation.

UBI advocates should not dismiss these effects outright but should argue that they are small in comparison to the benefits of UBI. The lack of proper consideration of these arguments (and other arguments) by UBI advocates is pretty dang spooky.

The zero reserve requirements are intended to prevent the problems caused by a potential bank run. Once the economy is running smoothly again, reserve requirements will be made more stringent again. It seems likely that the Fed is more well informed of how quickly lending is drying up than most people are, and their injection of ~$1.5 trillion must have been prudent.

QE was the bullet the Fed still had in 2008, and it is the bullet the Fed still has in 2020. It seems that QE worked better than the negative interest rates Europe used.

Bokeh is both a feature and a bug. I kinda figure if cameras never had bokeh we would never miss it.

If you think the median american had more disposable income in 1940 than today, you are hilariously uninformed.

https://fred.stlouisfed.org/series/DSPIC96 (only goes back to ~1960, and the I think this is mean, not median, but also a huge enough trend that it is impossible to deny).

What mechanism other than litigation and the consumer protection bureau do you think should enforce against false advertising? How much resources should be expended to fight it? Do you have an alternative to propose, or do you prefer instead to attack a known-to-be-imperfect system?

There's only 3 confirmed cases of the virus in Ohio. UD is being very proactive here.

I think punishing or firing the employees is appropriate. It is often, but not always, also appropriate for those employees to have criminal punishments imposed on them.

I suppose you think that current norms for these punishments are too lax. It's not easy to tell what you actually believe though. If you want to tease out your own actual beliefs on this, look up some advertising fraud cases and find one that was punished too loosely, and find one that was punished too severely.

Don't those unlimited plans state that data may be throttled, etc? Unless you cite a specific example it's pretty tough to argue against.

To argue against your theoretical case: If there is a data plan that advertises unlimited data without giving any fine print describing the throttling behavior, or other strange details after high data usage, then yes, they should be able to have false advertising claims pressed against them successfully.

Advertising fraud is already illegal. The situations where case law dictates what is illegal are varied and nuanced. As a side note, there are many categories of claims that fall in neither "provably true" nor "provably untrue", and enforcing upon these claims is tricky.

You can google for "advertising fraud precedent" "advertising fraud case law" and "advertising fraud case studies" for more information.

In matters of life and death, being careful is important. Taleb and others have a lot to say about tail risk, and coronavirus looks like a large tail risk to me. If I were a resident or planned an urgent visit in a Seattle nursing home I'd spend a good bit of money on PPE.

The lottery ticket analogy does not work well. I'm reminded instead of the scenes in the Chernobyl mini-series where individuals are sent into unknown dangers- dangers that are impossible to see, difficult to understand, and require conscious thought and effort to avoid. Resources are scarce and authority figures do not have sufficient information to keep everyone as safe as they should. Whether you survive or not comes down to both luck (whether your place and duties precluded you from any other option) and ignorance (whether you picked up a chunk of radioactive graphite with your bare hand). Using PPE is an effort to counteract your ignorance.

You are claiming that the masks are useless. They are not. They have some effectiveness, and that effectiveness is limited. This is well-understood. Aerosol-based transmission is well-understood. Claiming that there are "gotchas" does not change the fact that wearing a mask reduces your risk.

You are doing the very thing that I pointed out as incorrect: removing nuance.

A more honest expression of your position would be "the limited effectiveness of the masks and their limited supply means that it is reasonable for the masks to be reserved for those who need them most." The honest debate around this position regards how much supply there is, how much individual liberty should dictate demand, and other such factors. The latter half of your post comes around to this, even though the first half is incorrect.

The most interesting bit of misinformation that I've seen develop is the claim that N95 masks do not help when you are in public, despite the fact that they factually do help. The chain of events:

1. Concerns arise that respirator inventories will be depleted, leaving few or none available for medical personel. Media outlets spread this news.

2a. Thorough and factual news outlets spread the news that respirators have some effectiveness but are not a silver bullet. They may be used among other preventative measures. They talk about the differences between levels of effectiveness of dust masks and respirators.

2b. Sloppy outlets, and the ones more interested in helping the greater good (preventing hording), start lying, claiming that the dust masks do not work and respirators do not work. They often conflate the two. They go to the effort to shame hoarders and praise other people who practice washing and sanitizing hands, not touching your face, etc.

It's been fun and terrifying to watch. News outlets do not have an interest in giving a nuanced message. They are willing to lie if they think it helps. It's a good case study of when you should explicitly not trust a claim made by the media.

Meanwhile, I have a stack of 20 N95 respirators I bought for woodworking a year ago that I've been offering to friends and family. I've had no takers yet.

Trump runs huge deficits during boom times. He'll probably run even huger deficits during bust times.

I really don't understand the appeal of dutch ovens for most home cooks. How is it better than a cheap roasting pan?

ie. https://www.amazon.com/Granite-Ware-18-Inch-Covered-Roaster/...

I understand that you can bury a dutch oven in a pile of coals, but I figure hardly nobody is doing that.

A race to the bottom seems like it is a pretty good thing in this case.

People are reasonably well-informed of the difference between the different levels of seating. To pretend otherwise is to claim ignorance of how many up-sell screens every airline tries to push in front of you during ticket purchase. Seating information is built-in to the ticket purchase process, and there are also third-party websites available just for the purpose of telling you about seating.

"Premium economy" tickets still cost less than the cheapest tickets did in the past.

Air travel got way cheaper and more popular over the last two or three decades. Some of this is deregulation and technological innovation enabling lower fuel costs. Much more of this is because customers almost always choose the lowest cost airfare over all other choices. This is a constant pressure to reduce cost and features of the flight and reflects what the average coach customer actually wants. It is nothing to be mad about. Airlines are a low-margin industry, which in my mind trends towards nonexploitative.

If you look at proportions of revenue and costs, the premium seats of an airplane subsidize the cheap seats. And they get to the destination maybe 5 minutes earlier if they disembark first.

In Economics, secular essentially refers to long-term trends regardless of boom-and-bust business cycles. The focus is on the long term. In the context of economics it has nothing to do with religiousness.

A secular trend is a variable that evidences a consistent pattern within a given period of time. It is a statistical tendency that can be easily identified and it is not subject to seasonal or cyclical effects. (https://www.myaccountingcourse.com/accounting-dictionary/sec...)

Interest rates have been on a secular decline over the course of the last century. Different economists have described this via various terms- "savings glut" is the one I like the most (even though I don't like Krugman). Right now there is so much saved cash out there looking to be lent out that any project looking for financing can find it for cheap.

The Fed does not keep interest rates low in a vacuum. There is an auction system that determines real rates. If the Fed is not able to sell all their bonds at the target rate, they have to adjust.

In the long run, I think we will see:

1. (at risk of calling this bull market a "new normal") P/E ratios for stock will continue to climb in a secular fashion. Low returns from the alternative investment of bonds will dictate high P/E ratios.

2. Debt financing will remain cheap. Low interest rates signal cash that is desperate to find a place to park it.

3. Government debt will remain popular and affordable. This is a win for Keynesians.

4. Secular low interest rates are an indicator of a stable and mature economy, which is good. The bad part is that they signal a world where obvious available capital investment projects are missing- we seem to have picked the low hanging fruit.

5. Next recession the U.S. will hit the zero lower bound, and we will see lots of QE and/or nominal negative interest rates through some institutional mechanism.

6. Increasing government deficits look better when interest rates are low.

7. Speculative: Deficit spending can increase indefinitely if real interest rates are below 0 (aka nominal rates are below inflation). To put it in other terms: Any deficit spending is free money up until the point that it causes inflation to rise about the nominal interest rate.

In terms of investment risk and returns:

The more honest approach is to admit that shifting your investments will make you marginally less diversified and exposed to marginally greater idiosyncratic risk, but to weigh the tradeoffs and to do it anyway. The tradeoffs include the possibility that the remaining investors who do not choose to starve the industry have greater investment upside by being able to buy at a less competitive/lower price.

I strongly urge all people who wish to be informed citizens to consume news sources from diverse sources. Selection bias of what events get covered is a huge source of political spin, and using diverse sources is the only way to eliminate selection bias.

Consider any statement with morally-significant wording to be the spin, and whatever is left over to be the facts on the ground worth considering. The vast majority of the time, reliable news sources get the facts on the ground right and, and only introduce spin with the moral phrasings and choosing what to omit. This is still true if the source is from the evil other party, and only starts disintegrating once you really get to the fringes.

My old boss, before he retired a year ago, was heavily invested in G.E. stock throughout his career at the recommendation of his Edward Jones financial advisor. I am pretty sad about his financial situation.

Proper response to this:

https://www.ft.com/content/01fc06b8-fb6e-3e36-acb0-a1f8b47a7...

It remains true that high debt ratios hamper growth.