We know that those older than us 16-27 year olds have been sold a lie and forced to work meaninglessly for diminishing wages at the coercion to starve and freeze on the streets, with zero tangible democracy be it in the workplace or the ballot box. And of course all of those pointless emissions of commuting in grid lock to a pointless energy intensive office building that acts as a liquid asset on a company's portfolio to borrow money against and wash abroad for tax evasion. And that's with the fossil fueled climate and biodiversity collapse in the background.
Gary's Economics explains this very well. Everyone's assets such as housing are flowing upwards to the richest and investment institutions/land bankers/vulture funds who can afford to own substantial market share and borrow against their assets' worth to buy more houses or businesses or hide said borrowed money abroad.
@@Nyghl0 1796 France. The minority class lost a lot of head units. It probably has to happen again if the new president does not help anyone except the rich with tax cuts for corporations and capital gains. Extending the middle class tax cuts does not help anyone as it will not increase money we already have.
Free market economy always leads to monopolies. If we have a competition, someone is going to win. The one who wins many times in a row becomes a monopoly which is "too big to fail". " Return on size" (I'm not sure, how to name it properly in English) but a bigger company has lower marginal expenses per unit or production.
Maybe that indicates the requirement to adjust the metric to better reflect what you are really aiming for. For example, GDP will always grow due to inflation. It has to be adjusted for inflation to reflect real GDP. One could have a look at private vs government generated GDP to see what % is actually made up by real consumers and the taxpayers' reinvestments. Then GDP per capita to see if the economy improved on a per person basis or only the population increased with the same productivity. I have this at my workplace too. Managers have their KPI targets. Some of them can be cheated and we all do, with their knowledge. They would not adjust the metric to make more sense and profit for the company. They keep it as it is.
@@prolarka GDP adjusted for inflation is usually called Real GDP. Adjusting for population size is not as compelling as it may seem. For one, that wealth could be concentrated to a small group of people, making the measure essentially pointless. There's plenty other adjustments you can make to GDP but again, what useful information you get out of it is up to debate. The reason why GDP is used so much is because it's simple to understand and simple to measure relative to other things.
GDP is a priority for governments because it is linked to the credibility of debt repayment. The erroneous belief that we might repay national debt is based on assumed GDP growth. That's why governments of all types sacrifice individual prosperity, even of their voters, in exchange for raw GDP growth. If faith in GDP growth is critically undermined, the bonds will crash and their ability to borrow will vanish. These are debt based governments.
Another thing is that GDP is basically a bad thing. It's basically the amount of load/burden an economy has to bear to sustain itself. Although, it is proxy for a good thing(wealth). You actually want to have relatively low GDP and high material wealth and self sufficiency.
That's not true, for one a redistribution of wealth is not going to slow the economy in fact it would boost the economy through marginal propensity to consume and velocity of money. The issue is their doners and friends would take less.
@@Alex-cw3rz It's the Production and Investments sides of the GDP that would suffer on the short term, If the rise of expected consumption would warrant a rise of investment and consequently production, that effect would happen on the long term.
The UK immigrates people just for a very minor GDP growth but productivity is down and wages are down and therefore ability to pay tax is down, it is suicide.
@@AAhmou how would it suffer, there would be a productivity boost from people earning more, coupled with a larger consumer base to buy products and if the mechanism to reduce inequality was tax that would increase investment as investment is pre tax. I.e. investment is tax free, the higher the tax the higher the encouragement to invest is and visa versa.
Wages used to be connected to PROFITS. But today companies are financed by "investments" consisting of the people's debt given to the rich, that makes up new companies cash flows. No need to make any profit anymore, i.e. produce more value than one consumes.
People who have to work 14 hours a day cannot work as hard as those who work only 7 hours a day. After visiting Spain and seeing the quality of life there with a minimal amount of work argues against hard work.
@@mrmeldrew693 snap, theres no insentive to do much more overtime when it suddenly loses another 20 percent in value, suddenly each extra hour is worth less than a regular hour despite overtime rates.
Everyone knows this which is why all me and my coworkers get really depressed by our inability to buy homes or property. We know that the only way to profit is to get assets.
That really isn't true. Pretty much every person in finance understands that a rising tide raises all boats. It's only the morbidly rich that want to rule the world.
One of the richest and with some of the highest economical and social inequality of the so called „developed“ countries. The „trickle-down“ idea is basically evil.
@@bjorntorlarssonit isn't the most unequal place (not even close) and there are aspects of trickle down which have made its way into Sweden's economics
@@emrebennett7572 It is not? Have a look at the statistics. Have a look at the streets. Sweden certainly is extremely unequal. Denying reality won't help you deal with it.
If you pay someone to dig a hole, you increase GDP. If you pay someone to fill that hole, you increase GDP again. Repeat several times. That's how current inflated GDP works.
Most economists work for large organisations on large salaries and are not paid to look after the collateral damage caused by such policies as Quantative Easing. This has been immense but unpublicised.
@@jontalbot1 He is right. Most so called economists get paid by banks and financial institutions profiting off the printing of money, bailouts, "stimulus", market manipulation and other scams that defrauds the (private sector) working class of the fruits of its labor. Others are sitting in academia getting grants to publish bs theories that provide containment for the status quo. The notion of some wise man sitting in an ivory tower at a central bank printing money (counterfeiting) and setting interest rates (price fixing) and doing bailouts of its cronies is absurd. What part of that is Capitalism?
@@jontalbot1 I worked in the financial market for years, alongside economists, big business types and shareholders etc. He is correct. With the exception of perhaps council based organisations, ect most economists report to business models that do not consider the average person to be of consequence. The individual might have good intentions, buy the systems priorities are very different.
Quantative easing is stealth tax on poor people by devaluing their savings and income via printing money to give to rich people. It's a trick rich people can play because stupid people think they can manipulate the market.
I'd rather have debates about consumer baskets. Let's say, we would have a site, where the visitor can choose what to include in the consumer basket then check the graphs. This is not that hard to have implemented on the ONS' website.
@@prolarka it would help if they simple used metrology properly and kept a consistent measure. The basket nonsense is literally padding the stats at every available opportunity.
@@scoobydoobers23 Why not? Check - Real Gross Domestic Product: Real Estate and Rental and Leasing (53) in the United States Consumption spending on housing services (averaging roughly 12-13% of GDP), which includes gross rents and utilities paid by renters, as well as owners’ imputed rents and utility payments.
I went to Mozambique 2 months ago. I had the curiosity to see a country with low GDP and low HDI. What I saw is something that didn't actually surprise me because I had been thinking and researching about it: I saw nobody starving and nobody asking me for money (except for a couple of people in the capital). It is a country where 80% of people work in agriculture, but they do not look like they have nothing. They have a modest life but there is a lot of community in rural areas. They have problems, of course, but not first world problems. One thing important to note is that a lot of the economy is not accounted in the calculations for GDP, or even HDI. That is because there is a lot of black market, and a lot of transaccions are non-monetary. This is common in rural areas, where there is a sense of community and strong family ties.
Same in Thailand and any country that still has lots of rural communities and family farms. Much easier and happier life with less useless “stuff”. They even tend to have multiple big SUVs but very little furniture 😅
Since inflation has not been calculated consistently for about 30 years, real median income has in fact not remained static since 1980, but has actually gone down substantially.
@@chazcmeekins83 Check out Shadow Stats for example. That most western countries, including the United States, have substantialy modified the way that inflation is calculated in comparison to how it was done in for example the 1980's and prior is a well known fact.
Makes perfect sense. If you're trying to weave a credible narrative, reach a predetermined conclusion to 'prove' a point and the existing methodology doesn't do that then the only alternative is to change the methodology to one that does.
I would like to point out that since the 1980’s there has been the GDP and the real economy in America. The country’s heartland was deindustrialized while the economy was financialized. Now the situation in the economy has deteriorated to the point where life expectancy has dropped due to an increase in deaths of despair, while homelessness has skyrocketed to 700,000 people. That’s a fair sized city in the US.
As a Swede, I see the same thing.. It’s frustrating but the rich a in complete control, and they are looking at the slave/master society USA and want to rule here too by sucking up all the wealth and oppressing poor people through tax cuts and demolished well fare. All marketed as *freedom of choice*, when everyone knows it means freedom for landlords and corporations to lower quality, exploit workers and increase prices and give CEO 10 million in bonus. That’s the *freedom* they talk of. We are speedrunning to become a dystopian nightmare here
@@roccociccone597 Those people complaining about quality of life in the West should probably go for a long holiday in the Congo to mine Coltan by manual labour for a couple years, for 5 dollars a day. I'm sure it will give them a whole new appreciation for their comforts.
People need to get their heads out of the sand. A country where the population is struggling to make ends meet is called a THIRD WORLD COUNTRY, regardless of GDP. Also GDP PPP is a more accurate measure of a country's wealth. If the average population of a country earns $100,000 a year, but a loaf of bread costs $90,000, that country is poor.
Yes but its all relative. It's only a failure if you are on one side of the equation. If you are on the other side it's a win. Why would they change things and risk that ? That's the question people need to ask
its not a fsilure at all its working exactly as intended. Economy is to life like a battery is to a circuit. One can increase or decrease the capacitance of said power system to induce different behaviours in the general populace. Again like a battery. So if theres too many people and you want to reduce the amount, the least cruel way (maybe) is to reduce capacitance for human behaviour by chocking the economy. Because we need money for every task/behaviour (other than just sitting there) this reduces the birth rate (people cant afford kids) therefore solving the over population problem. Proven by the following statistic. Drop in the amount of kids people between 20 - 34. Half of all women age 30 are now childless, compared to 18% in 1949. Its fallen off a cliff.
It's working just as intended for those at the top. That's why, when somebody tries to change things, those at the top basically threaten to destroy everything
I am 23 and make $23 an hour at my job which is about $49,000, or $40,000 a year after federal income taxes. One might think that's a decent amount but that's if I don't take any time off during the year, so working 40 hours a week every week. Guess what the median house price is in the state of Washington? It's $600,000. After taxes that's 15x my annual income. In the city I live in, median house prices are $710,000 right now. That's 18x my annual income. The only way I can afford a 30 year mortgage is if mortgage interest rates hit 0%... and even then the monthly mortgage payment alone would be $1700-$2000 a month. So that's not even accounting for the cost of utilities, fuel, phone, internet, and food. This is why it's impossible to launch for young people around my age.
50,000k times 40yr is about 2M. You have enougfe Money for A house and more, it only take you 20 years worth of wage for you to achieve something that last you 60 years, theres still value, you be fine. Now go and work no one gets payed if they do nothing and time is money.
Correct. See his slide on income growth based on company positions. Also the stock market has added massive wealth , but 1/2 the population owns no stock
a good reason to buy a house is to speculate - the real worth of that house is about $100,000 - and building a prefabricated house is not more complicated than assembling an Ikea dinner table - some of the sears homes are still standing
GDP doesnt account for wealth, it accounts for the volume of money circulating in an economy. It is a terrible indicator for economic reality. If a forest fire reduces a whole state to the gound: GDP increases, despite people and the area being devasted. Emergency crews were paid, insurances paid out, residents paid hotels and hire construction crews, retail store bought new merchandise, etc... the money went somewhere, somebody got richer, and its not you.
The more I learn about our economic system the more I hate it. We need to start over as a society this isn’t working, it’s completely detached from reality.
Give poor people money they spend it. My landlord owns hundreds of properties and has just increased rents across their estate by around 23%. A stroke of a pen, no extra work and with wear and tear unaddressed you are getting less for your money too. In fact they have taken six hours of work per month and simply said 'that's now mine', totally unearned. That can only come out of currently disposable income and therefore out of the local or national economy (+ Amazon, Ebay etc). The GDP will suffer from the multiplier effect, but the basic outgoing is the same. Why is Rent Inflation not seen with the same dismay as CPI/RPI? The 'wealth creators' just extract money from those that cannot buy and have funds to add more to their collection and thus drive up prices as they compete with private individuals, the inflation will only drive more renters. Ad infinitum.
@@Jontyfarmer What are you blathering on about? What costs? I've been here for years. And I have been in 'the real world' - whatever you think that is - a long time. If they own it outright, they have had £120,000 in almost pure profit. If buy to let the mortgage has been paid for the period. If the beginning rent satisfied their costs /loans etc then every rise in rent is pure gouging.
All by design. The wealthy only buy from luxury brands, high priced realestate and other premium offerings, so I have no idea how that is supposed to trickle down. They also have much of their money in the stock market, and the governments won't allow a much needed correction. It pays to be rich. 🤓
Very thorough analysis, albeit very slow paced. I appreciate you mentioning alternatives to GDP, my favourite is Purchase Power Parity. Also I learned a new thing from your video, a great idea mentioning diminishing returns on advanced economies in regards to their GDP. And finally, as an economist, I started studying economics since high school so I definitely do love economics, but I sadly agree this domain teaches selfish ways but that's again sadly how competition works, people (companies) have to keep an edge and maximise, while again people (companies) have to minimise, the balance has been off since decades as your video beautifully explained. (Marketing is the only inherently "unjust" economical domain) Greetings from Morocco.
I find it quite amusing that economists use all sorts of ways to track economical growth and welfare, but no one seems to talk about the real problem, cause it's god damn inconvenient to say "capitalism is no longer fit for purpose". Capitalism worked based on one single truth, you produce something, you get paid for what you produce. Therefore as an individual how much money you made was tied into how much work you put in. This is no longer true, and this is the reason behind the wealth gap, and it's going to keep getting worse until something has to give. Putting in simpler terms. Person makes 1 clay pot for company, company sells clay pot, person gets paid wages corresponding to part of the sale of the clay pot. Company buys new fancy machine. Person can now make 10 clay pots, company sells 10 clay pots, person still gets the same wage, wage is now partially detached from production. Company gets the profits of the 9 clay pots. Wealth funnels up. Each new piece of automation and production efficiency repeats this loop. Efficiency in productivity funnels wealth up, not down. That's the fundamental truth of our economical system, and unless that changes and we start redistributing wealth from the top, the problem will only get worse. 0:020:02
I'm ok with the guy who started the business to sell clay pots 🍯 making more and more. However scams like inflation which is a fancy name for counterfeiting and stealing money from the above 2 groups (workers and businesses) is where the real fraud lies. Big banking cartels corrupt and control govts to funnel the 💵 money of others their way. They do not produce any useful products which people buy voluntarily. Rather they force their wealth stealing scams upon the nation and milk the surplus of others.
You are at the doorstep of something bigger. Continue your journey in education and you might learn more flaws in capitalism and why it is cyclic failing.
For example, we have 40h workweek since Ford times for almost a century. Somehow 40h/week was enough then, and it is still required now on a more automated technological society. In th current system this will hold on in the future: You will work as much as possible otherwise econony "collapses" according to some economists. This is because in our current system, every single tech advancement converts into proffit. Not necessarily in reduction in work hours. So workers get paid the bare minimal to survive and coorporations can get away with proping margins higher and higher
Economics failed about the time economists started looking at numbers going up instead of the value the economy brought to the people. The issue with the GDP measurement is that its not reflective of a growing economy, its reflective of growing debt, growing inflation and declining currency value. We are buying less stuff that costs progressively more and we are doing it by borrowing money we don't have and may never have if our jobs disappear. This is why the GDP is going up.
The problem with GDP I think is best explained in this joke. The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit. They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit. Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can't help but feel like we both just ate shit for nothing." "That's not true", responded the second economist. "We increased the GDP by $200!"
To expand on this GDP primarily measures the flow of money in the economy and not the productivity of it. As such there are times were a stag-net or falling GDP could be acceptable. If productively increases such that goods are made cheaper and eliminate inefficiency(such as the above joke where financial not much changes) then you could end up in a case where the amount of goods and services are increasing but their cost is decreasing causing the flow of money to decrease resulting in a declining GDP even though the overall material wealth of people is increasing. Sadly though as is more common with GDP the cause of stagnet or decrease is due to market correction as unproductive sectors collapse due to their inefficiency and take with them all the investment, jobs, and etc. Causing other industries to further contract. The flow of money is why ART is one of the most common and easily exploited tax write offs. Get a painter on the cheap to make some paintings. Put them up for auction and buy them yourself, or get a friend to buy them, for an insainly high price. You have now established the value of painting so you donate to a Museum and get tax write off for the amount. That's why terrible paintings go for so much, it's rich people flexing and moving money around to flex their bank accounts. Can also use this same tactic to get loans as you put down these supposedly high priced paintings as collateral for a loan.
exactly captilaism ultimatly ends up in a similar place as communism, but with one private entity running the show rather than the state. as buisnesses grow, the bigger take over the smaller on and on until ultimately every buisness is owned by 1 buisness, the ultimate monopoly, and everyone has no alternative to it, just as with communism. theres a new aristocracy only these ones aren't wearing top hats.
When looking at the median salary, you must remember to include companies' expenses for employee health insurance, which have increased sharply in the same period.
In theory that increase should be absorbed by the inflation. In practice, there is a good chance that CPI fails to reflect the real impact of healthcare spending on the consumer basket.
@@nickk8045, Gary's economics fails to take into the consideration of an aging population and low fertility rates that came from more cultural changes such as the Sexual Revolution. If you have an aging population, then you will have a strained welfare economy and everything becomes more expensive for young people in terms of taxes and you will need to sell off assets to make up for the shortfall.
I’m surprised you didn’t mention globalisation, which coincides with the same period. Factories moved overseas and workers lost their well paid jobs. Now they have to work in hospitality or the gig economy for much less.
@@DanivirAmadeus several examples, the tipping culture is out of control in the US, social media, the internet is unusable without an adblocker. Monetisation can lead to perverse and exploitative practices e.g. climate damage, the US food industry, healthcare. One prime example, I work as a doctor and the amount of people coming in seeking a diagnosis of Adhd and wanting amphetamines after being influenced by social media marketing when they have nothing wrong with them is sickening.
@@edjones3410 I think we might be using different definitions of monetisation. People want to be paid for the services they provide, I can't see if any other way. The problem as I see it is keeping businesses accountable and not letting them get away with providing bad service. That much about the Internet and adblock is true, it's terrible. I don't blame advertisers for trying to milk people though, everyone is doing what's in their best interest. Yeah, a lot of people think they have ADHD or are neurodivergent due to social media (and probably also a desire to stand out and be unique). I think that's only going to get worse. It's strange though how doctors can diagnose you over the phone with depression or anxiety and give you a prescription for SSRIs in minutes but with ADHD or other psychiatric disorders it could be months or years before you receive any treatment... I wouldn't mind prescription drugs or - all drugs for that matter - being monetised and not simply held behind the "compassion" of the healthcare industry
Isn’t a major reason why wages are stagnating due to the increasing contribution to productivity from computers, AI and industrial automation? This divergence between wages and profits is only going to accelerate unless governments intervene.
No. These only increase total production. Distribution is the problem. It doesn't matter what people do in society nowadays because most jobs are automated anyway. With proper distribution you could even pay half of them to open and close holes on the street and we would all be a lot better off because this would generate a surge in demand. There is a lack of demand and thus a lack of production (there are plenty of production factors to surge but no increase is required unfortunately), this is because we are a rent seeking capitalist model. Whereas in industrial capitalism there is the potential for everyone to get richer, this is not the case in rentier capitalism. In financial capitalism the production stagnates eventually, most western countries are already there, and afterwards the only way of making money is by stealing from the poor because it becomes effectively a zero sum game.
@ I agree distribution is essential to fixing the problem of wage stagnation but this will take major government intervention like UBI or something similar. My point was that technology is causing wage stagnation and this holds true. Many politicians don’t even seem to understand this.
Automation increases productivity but the benefits go to the owners. The stagnant wages are due to trade imbalance with China. The graph drastically shows the effects on wages immediately after opening trade with China. Globalism is coming to an end and hopefully America's labor market will rebound.
Two friends walk around the forest and see some shit. "Hey i dare to you to eat that shit for 100$" says one, and the one took on the challenge. After a couple of minutes, they see another shit. Now the other gave the same challenge to the former and not wanting to back down, the first agreed. After a while says the second friend laughing" I think we ate shit for nothing" "Nah" said the first, "we increased GDP by 200$"
Not really. GDP depends on if these two guys have a contract or not. Ifit is two neighbor gifting each other it is not counting as GDP. In other conclusion I would approve that GDP likes to divide families from each other to make companies offer more worthy
The rich do get richer, but so does everyone else. The average person today has access to goods and services that even the wealthiest couldn’t dream of decades ago.
I’d love to hear your reasoning instead of just a 'no.' Go ahead, prove me wrong. It's an objective fact that the average person today is richer than at any other point in history.
I have, which is why I understand the data. If poverty is declining, which it is, then that clearly indicates the poor are getting richer. Rising living standards are undeniable, and you can argue otherwise, but the facts are clear. The average person today has access to many innovations, one of which is cutting-edge technology like high-speed internet, smartphones, computers, and TVs-luxuries that were once unimaginable for even the wealthiest people. So, how have the poor become poorer? What’s your explanation?
All these issues stem from an economy grappling with uncertainties, including housing problems, foreclosures, global fluctuations, and the aftermath of the pandemic, leading to instability. Rising inflation, sluggish growth, and trade disruptions demand urgent attention from all sectors to restore stability and stimulate growth.
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Social democracy is only life support for capitalism. Far better than what we have now, but not sustainable forever. You still have exploitation on an imperialist scale. Taking it to some form of socialism, syndicalism, communism or anarchism would greatly improve the priorities of society.
@GalacticNovaOverlord Communism is never going to be workable in reality. The mistake is assuming that capitalism is the only other possible system that can work,
@@GalacticNovaOverlord I'd like a better system, but one that doesn't implode or go authoritarian. Something like libertarian socialism, or anarchism, yeah.
@@coolbanana165 Agreed, though a caveat to your first part is that to solve the global issues that we face today, a global government is inevitable if humanity isn't to decay.
Predicting inflation starting to rise again this quarter while leading indicators showing economy slowing (not to mention governm*nt figures pumped up for the election). Global economy very weak which affects US. Fed dropping rates 0.50 shows they're VERY worried about financial downturn/crisis. interest rates coming down are also an indication banks are LESS willing to loan money into existence. The question here is where is the inflation going to come from in the near term? Consumers are mostly tapped out which is 70% of US economy (consumption). Yes inflation very likely to return but not before it continues to come down... Inflation can be a concern, but remember, certain assets like stocks and Crypto’s acts as a hedge. Long & short-term trading is generally safer, allowing investors to weather market volatility. I have managed to grow a nest egg of around 3.2 B'tc to a decent 27B'tc in the space of a few months... I'm especially grateful to Francine Duguay, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.
One thing I know for certain is crypto is here to stay, the only thing that leaves is the people who don't manage their risk. Manage that, or the market will manage it for you. With the right strategies you will survive.
Thank you for sharing your experience. She’s helped grow my reserve, despite inflation, from $87k to $246k as of today…..Her insights and daily siignals are worth following.
Yeah it's almost like the workers producing all the value don't get paid the full value of their labor. Someone should write a book about this 150 years ago. :V
Value isn’t just about labor; it’s also about innovation, risk, and investment. Without those, there wouldn’t even be jobs for workers in the first place.
6:58 almost 7 minutes in before you said it. If over a given time span you have 1% growth in GDP but 2% growth in population, then your GDP per head is going DOWN
@@csuporj but the more you spend on groceries, the less you have to spend on housing etc. .. If you are saying inflation is underestimated , I would agree. Here in the uk the goveranment now insist on using CPI rather than PRI, and suprise surprise, CPI just happens to be lower. Because CPI dose not include housing costs. However you look at it, the spending power of the average wage has done nothing but FALL since the early 2000s
Yes. It's like that island with 10 families. 1 has 10.000 while the other 9 have 1.000 $ per year. GDP 19.000 average income 1.900 per year. The problem is you need to exclude the outliers in your computation.
Forget all those goofy happiness index stats. At this point just use housing cost H as a misery index to replace GDP, or 1/H as the GDP replacement. It seems to be the dominant factor at this point, though you could use 1/(H+C+E) where H is housing cost per capita, C is healthcare cost, and E is education cost.
GDP per capita (of the private sector working class) tells the real story. By private sector, I mean those producing real goods and services in the economy that people voluntarily purchase. Not those sitting in banking and other such jobs that rely on the central bank money printing, bailout, market manipulating and other scams. That is not just unproductive work, that is destructive work.
@@geocam2 Hmm we pay out of our wages weather we use it or not And any product we us or consume that the government deems a high health risk like: Cigarettes 16.5% of the retail price plus £6.69 on a packet of 20 , You buy a 1 litre bottle of 40% ABV vodka (spirit). The Alcohol Duty you pay is worked out at: 1 litre of vodka. 40% (the ABV) of 1 litre = 0.4 litres of pure alcohol. 0.4 litres of pure alcohol x £31.64 = £12.65 duty to pay and fuel (the duty 52.95p per litre for both petrol and diesel, while VAT at 20% is then charged on both the product price and the duty rate) so we pay tax on being taxed???
@@Loundsify Median gross annual earnings for full-time employees were £37,430 in April 2024, compared with £35,004 in April 2023, an increase of 6.9%. this information can be found here ( www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2024)
@@Loundsifyit’s not, also average is not the best metric for income, most sources will use the median income. It’s definitely not 38k for the uk, but also probably not as far off as you would think.
It is probably a pretty easy explanation to this. Inflation, inflation is systematically under-reported because there is an incentive to do so. The state do so because the books looks better that way saying you have inflation of 2% but reality have 5% means you have 3% margin in spending. Companies owning assets, will have their assets go up in value according to the true inflation They pass along true inflation to the paying customer. While when doing the book keeping they count with reported inflation, that too looks better for the share holders. The workers however, well when the time come for a wage hike, then it is the reported inflation that is used. If you are a worker and want to keep up, the only way is to frequently change jobs.
As religion began to decline Economics took over as the exploitation model of choice of the elite. Economics is the 'science' of how to exploit the poor without causing a revolt.
Good content. More people should talk about this. I think best analysis comes with comparing median salary after tax and prices and local social or environment factors. Numbeo collects alot of data about prices and some quality indicators . Good tool to look up which places has good quality of life, some is extremely striking when you include housing (rent or mortgage) or not.
@@karolnowosad9765 2 - Expensive upfront costs that come with them 3 - Too much environmental red tape despite not having the green infrastructure to put such regulations in the first place. 4 - NIMBYism - why invest when local pressure groups have so much power stopping nationally significant infrastructure projects.
One problem with GDP is that the economy isn't actually growing if it's not above inflation, in other words, the US ecenomy is not really bigger now then in the 80s...
There is No point replacing GDP or GNI with another index that’s more complicated to calculate, harder to compare across economies and doesn’t have long time series when the other index have a correlation close to 0,99 with GDP. Such are most of those alternatives mentioned.
Some things don't make sense. Like to calculate human development, we measure access to healthcare but not individual's actual health. If I am healthy, i will not need diabetes medicine so even though I don't access to diabetes medication, I am living good. On the other hand, if a town has half people with diabetes and good access. The GDP will be higher and human development index will also be higher. But people will be unhappy.
@@parulkumar8606 you are wrong, in Human Development Index, the only data used to calculate "Health" is Life Expectancy, which is a measurement of a lot of mortality and fertility data, The longer the average person in your country lives, the HDI will be higher
Very interesting presentation. I can see why people don’t like the inequality of high-low earners but I’m not convinced that is the reason for low growth in low earners wages. It would be interesting to look at the impact of open economies and accessibility of global labour (not just immigration but also outsourcing) on wage growth for the lowest quartile. I suspect that is what is going on. Ie for a decade or two the west benefitted from importing cheap goods and services from Asia but now those countries and others are catching up (and even overtaking) in education and infrastructure allowing them to compete for higher wages in the now international labour market. And it doesn’t take a full catch up to have an impact because population sizes in Asia are so large that you just need a fraction coming out with PhDs and other technical qualifications, plus English speaking and that’s potent competition. In addition, if a lot of those well educated and now more wealthy non-westerners want to migrate to the west they will bid up property prices. For example, Canada with all its land has still seen a steep rise in property prices in part because construction can’t keep pace with immigration. Hard to see what policy can do about this other than try to make sure the population is as well educated and skilled as possible and potentially limit the speed at which immigration takes place so infrastructure and construction can keep pace.
In that last 20 years , taxes and government spending have gone up massively to try equalise the economy and its just made 95 percent of people poorer. governments use government spending to boost gdp by overspending on big corporate contracts to give the lowest amount possible to the taxpayer aswell.
Here is the problem with measuring "GDP". Let's say you double your production in goods to 2X, but there is still only 1x of currencies in the economy, then you doubled your production but in number gains, it suddenly looks absolutely horrible. Thus, the currency completely fails as a measuring tool. It looks as if the economy is doing well, just because asset prices are inflated into oblivion. However, as for goods and services, it stays flat. Real economy stays flat. There is no economic growth, hasn't been in decades. The GDP growth is just "growth" of numbers. It's terrible for measuring economic output.
Real Wage growth is adjusted to inflation, the problem is, the real inflation are not prices going up, but the amount of currency in the economy. Since central banks began their policies of quantitative easing printing trillions of dollars, inequality has risen, since poor people have almost all their wealth in dollars, while rich people have assets that are ajusted to inflation. Inequality numbers began to grow when gold standard was abolished in 1971, and the fact that US outperfoms other economies is because they export inflation through its dollar hegemony.
@@otavioguimaraes5798 Adjusted for CPI (Consumer price inflation). CPI measures the inflation of daily goods. These are directly dependend on the wages, aka the purchasing power of wages. It's not the actual inflation. Othwerwise it would include the housing and stock markets. So whatever numbers there are, don't adjust them for inflation cause that number is more useless than before.
Public debt measured in gdp. Politicians moved themself into a corner with incompetence, they want to keep inflate the currency to cover their mess ups and impossibble promises, they need more gdp growth to be able to spend more debt. Hidden taxing everyone with inflation more and more.
Remember when working hard to get real results was so easy? Not since productivity was decoupled from wages back in the mid 70s. At first, early shocks, such as high inflation combined with rapid job losses due to de-industrialisation and the rise of the financial services sector back in the 80s could be absorbed by an economy that was much less debt ridden and more asset rich. So it could invest in stronger social programs to, at least partially, compensate for entire communities suddenly becoming unemployed, along with the purchasing power of wages left over still being much stronger than today. The situation is very different over 40 years later, with massively debt burdened economies no longer able to invest in ongoing social programs to hold things together, along with most of the money making assets having long since been sold of to foreign interests, resulting in increasing levels of austerity being imposed on the masses. This, along with real wages no longer making ends meet due to significantly higher than CPI/RPI (whichever looks better for public relations) inflation affecting necessities such as food, energy and housing, coupled with the now massively wide gap between stagnant wages and productivity gains, resulting in the cost of everything crisis today. So it's no wonder that more and more people are feeling that national GDP is that of Governments and big business, not theirs.
Please do me a favor and find someone actually advocating for trickle down economics as you call it. Trickle down economics is the term that critics have used to blame Republican policies it has never once been used by a serious politician or economist to describe an economic model.
It doesn't help that these days people also buy tech and cars worth insane money. In the past there was far less to spend money on, eating out was even a once in a year event but now people spend a months wages on a bag/weekend away or on a car payment.
@@gerhard7323 Is it? Or are the richest people constantly changing the rules, while they instill the myth that capitalism will protect competition into the others. It is all about myth building. And when the masses believe it, the system works -- for the richest.
@@gerhard7323 Is it? Or are the richest people constantly changing the rules, while they instill the myth that capitalism will protect competition into the others. It is all about myth building. And when the masses believe it, the system works -- for the richest.
This is not a failure of economics, nor a failure of 'gdp'. It's actually how the [capitalist] system is intended to function; this is in other words, success. Wage is simply the minimum price of working capital. The more efficient the market becomes--the more you can make for cheaper--the cheaper will be the price a factory or other producer will have to pay it's **working capital** . That is people, who's jobs is dependent to produce the product. Once you reach the automation stage, you can get away with people altogether, and use only machines for maximum efficiency. The actual problem is capitalism, and the ever-growing technological automation of our world, which (to some degree) eliminates the 'working capital' in question. When those forces collide with our factors for quality of life, you get this issue. The solution would be to change our economic system. Automation could do wonders for humanity if we didn't channel it into the most greedy systems known to man...
Imagine an economy where everything is made by robots. So, people does not work. GDP is high. Wages are low. I don't think there is any kind of a failure in indicators. If a worker in 18th century produced one swork and earned 20$ per hour, now he is producing 100 swords per day receiving 25$.
You'd have to compare how much 1 more dollar in tax expands the economy vs how much 1 more dollar in disposable income for the taxed individual expands the economy. Ultimately, it's about the aggregate demand multiplier effect. It's not easy to calcualte, as the impact of the marginal dollar depends on the marginal propensity to consume of the individual. Imagine a 100 dollar tax increase for everyone. Imagine a person making 2000 dollars a month. This means the new tax cut their income by 5%. Now imagine someone making 20000 dollars a month. This means the new tax cut their income by only 0.5%. The tax collected on the average person may be too much, whilst the tax collected on the richer person may be too little. In short: if you tax the hell out of me while I can barely make ends meet, the taxing will likely have a recessive effect. The matter is more nuanced though, as one cannot simply suggest to re-engineer the taxation system to make it fairer. Taxation is just one of many costs. If the aggregate supply is still in control of a few companies, the expected benefits will be extremely reduced
Not only does the growth of GDP not help the average person, but it actually harms him. If his rent goes up that increases GDP. With a stagnant salary that is really bad.
At the end of the day, GDP is merely a measure of how much value goes into transactions. It has nothing to do with living standards, only how much money is spent
It is almost as if statistics and clinging to the target numers alone (or worse obeing obsessed with the graphs moves compared to expetced target) is not sound... Trickle down economics is a joke. If I get 1000 GDP a month i will use it all every month. If I get 10 000 GBP per month I will save a lot meaning buying assets not to use them just to invest my surplus money. The main "asset" is housing, maybe half of the wolds assets?
Do some of these failures explain why young people are choosing to work less? ruclips.net/video/MltCI2IzxuE/видео.html
We know that those older than us 16-27 year olds have been sold a lie and forced to work meaninglessly for diminishing wages at the coercion to starve and freeze on the streets, with zero tangible democracy be it in the workplace or the ballot box. And of course all of those pointless emissions of commuting in grid lock to a pointless energy intensive office building that acts as a liquid asset on a company's portfolio to borrow money against and wash abroad for tax evasion. And that's with the fossil fueled climate and biodiversity collapse in the background.
Gary's Economics explains this very well. Everyone's assets such as housing are flowing upwards to the richest and investment institutions/land bankers/vulture funds who can afford to own substantial market share and borrow against their assets' worth to buy more houses or businesses or hide said borrowed money abroad.
@@toyotaprius79 a rent-based economy: land and capital monopolised by a minority class, rented by the majority class. A kind of neo-feudalism.
@@Nyghl0 1796 France. The minority class lost a lot of head units. It probably has to happen again if the new president does not help anyone except the rich with tax cuts for corporations and capital gains. Extending the middle class tax cuts does not help anyone as it will not increase money we already have.
Free market economy always leads to monopolies. If we have a competition, someone is going to win. The one who wins many times in a row becomes a monopoly which is "too big to fail". " Return on size" (I'm not sure, how to name it properly in English) but a bigger company has lower marginal expenses per unit or production.
Goodhart's Law: When a metric becomes a target, it ceases to be a good measure.
Maybe that indicates the requirement to adjust the metric to better reflect what you are really aiming for.
For example, GDP will always grow due to inflation. It has to be adjusted for inflation to reflect real GDP. One could have a look at private vs government generated GDP to see what % is actually made up by real consumers and the taxpayers' reinvestments. Then GDP per capita to see if the economy improved on a per person basis or only the population increased with the same productivity.
I have this at my workplace too. Managers have their KPI targets. Some of them can be cheated and we all do, with their knowledge. They would not adjust the metric to make more sense and profit for the company. They keep it as it is.
And metrics quickly become targets
That's an excellent law that explains a lot, also in other fields👍
It’s not a failure of economics rather a failure of bourgeois economics. Anyone who reads Marx understands exactly what’s going on
@@prolarka GDP adjusted for inflation is usually called Real GDP. Adjusting for population size is not as compelling as it may seem. For one, that wealth could be concentrated to a small group of people, making the measure essentially pointless. There's plenty other adjustments you can make to GDP but again, what useful information you get out of it is up to debate. The reason why GDP is used so much is because it's simple to understand and simple to measure relative to other things.
GDP is a priority for governments because it is linked to the credibility of debt repayment. The erroneous belief that we might repay national debt is based on assumed GDP growth. That's why governments of all types sacrifice individual prosperity, even of their voters, in exchange for raw GDP growth. If faith in GDP growth is critically undermined, the bonds will crash and their ability to borrow will vanish. These are debt based governments.
Another thing is that GDP is basically a bad thing. It's basically the amount of load/burden an economy has to bear to sustain itself. Although, it is proxy for a good thing(wealth).
You actually want to have relatively low GDP and high material wealth and self sufficiency.
That's not true, for one a redistribution of wealth is not going to slow the economy in fact it would boost the economy through marginal propensity to consume and velocity of money. The issue is their doners and friends would take less.
@@Alex-cw3rz It's the Production and Investments sides of the GDP that would suffer on the short term, If the rise of expected consumption would warrant a rise of investment and consequently production, that effect would happen on the long term.
The UK immigrates people just for a very minor GDP growth but productivity is down and wages are down and therefore ability to pay tax is down, it is suicide.
@@AAhmou how would it suffer, there would be a productivity boost from people earning more, coupled with a larger consumer base to buy products and if the mechanism to reduce inequality was tax that would increase investment as investment is pre tax. I.e. investment is tax free, the higher the tax the higher the encouragement to invest is and visa versa.
Wages used to be connected to production, not now. Hence, people don't see the point in working hard anymore.
Wages used to be connected to PROFITS. But today companies are financed by "investments" consisting of the people's debt given to the rich, that makes up new companies cash flows. No need to make any profit anymore, i.e. produce more value than one consumes.
Getting to the 40% income tax bracket seems like a punishment to me.
I put extra into pension AVCs to keep it out of the government's hands.
People who have to work 14 hours a day cannot work as hard as those who work only 7 hours a day. After visiting Spain and seeing the quality of life there with a minimal amount of work argues against hard work.
@@mrmeldrew693 snap, theres no insentive to do much more overtime when it suddenly loses another 20 percent in value, suddenly each extra hour is worth less than a regular hour despite overtime rates.
@@ngauruhoezodiac3143go to Spain then lmao
Feature, not a bug. The only way to puff up Wall Street profits is to lower the standard of living of the average worker.
Everyone knows this which is why all me and my coworkers get really depressed by our inability to buy homes or property.
We know that the only way to profit is to get assets.
Ok ranjeet but you are indian so your opinion doesnt count
That really isn't true. Pretty much every person in finance understands that a rising tide raises all boats. It's only the morbidly rich that want to rule the world.
This is incorrect in many ways but I can sympathize if you are having a hard time
One of the richest and with some of the highest economical and social inequality of the so called „developed“ countries. The „trickle-down“ idea is basically evil.
They're pissing on us and telling us it's trickle down
Sweden has the world's most inequal society.
There's no trickling down going on here since the 1950s.
@@bjorntorlarssonit isn't the most unequal place (not even close) and there are aspects of trickle down which have made its way into Sweden's economics
It's a good thing then that "trickle-down economics" doesn't exist and one is the biggest strawmen in economics.
@@emrebennett7572 It is not? Have a look at the statistics. Have a look at the streets. Sweden certainly is extremely unequal.
Denying reality won't help you deal with it.
If you pay someone to dig a hole, you increase GDP. If you pay someone to fill that hole, you increase GDP again. Repeat several times. That's how current inflated GDP works.
That's why the government collects taxes, so that your work have to create value.
Most economists work for large organisations on large salaries and are not paid to look after the collateral damage caused by such policies as Quantative Easing. This has been immense but unpublicised.
Actually the opposite is true but never mind. You know FA about economics so just stick with your opinions
Yep, bernanke, geithner etc went to work for the same firms that profited from the bailouts paid for by the people.
@@jontalbot1
He is right.
Most so called economists get paid by banks and financial institutions profiting off the printing of money, bailouts, "stimulus", market manipulation and other scams that defrauds the (private sector) working class of the fruits of its labor.
Others are sitting in academia getting grants to publish bs theories that provide containment for the status quo.
The notion of some wise man sitting in an ivory tower at a central bank printing money (counterfeiting) and setting interest rates (price fixing) and doing bailouts of its cronies is absurd.
What part of that is Capitalism?
@@jontalbot1 I worked in the financial market for years, alongside economists, big business types and shareholders etc. He is correct. With the exception of perhaps council based organisations, ect most economists report to business models that do not consider the average person to be of consequence. The individual might have good intentions, buy the systems priorities are very different.
Quantative easing is stealth tax on poor people by devaluing their savings and income via printing money to give to rich people. It's a trick rich people can play because stupid people think they can manipulate the market.
GDP in this country includes the rent you would pay if you didn’t own your own house. It isn’t worth the paper it’s written on.
I'd rather have debates about consumer baskets.
Let's say, we would have a site, where the visitor can choose what to include in the consumer basket then check the graphs. This is not that hard to have implemented on the ONS' website.
That is incorrect. You are thinking about inflation.
@@prolarka it would help if they simple used metrology properly and kept a consistent measure. The basket nonsense is literally padding the stats at every available opportunity.
@@scoobydoobers23 they are called imputed tents , look it up .
@@scoobydoobers23 Why not? Check - Real Gross Domestic Product: Real Estate and Rental and Leasing (53) in the United States
Consumption spending on housing services (averaging roughly 12-13% of GDP), which includes gross rents and utilities paid by renters, as well as owners’ imputed rents and utility payments.
I went to Mozambique 2 months ago. I had the curiosity to see a country with low GDP and low HDI. What I saw is something that didn't actually surprise me because I had been thinking and researching about it: I saw nobody starving and nobody asking me for money (except for a couple of people in the capital).
It is a country where 80% of people work in agriculture, but they do not look like they have nothing. They have a modest life but there is a lot of community in rural areas. They have problems, of course, but not first world problems.
One thing important to note is that a lot of the economy is not accounted in the calculations for GDP, or even HDI. That is because there is a lot of black market, and a lot of transaccions are non-monetary. This is common in rural areas, where there is a sense of community and strong family ties.
Yes you are right. neighborhood trading doesnt use a contract to count it into nationalism
Same in Thailand and any country that still has lots of rural communities and family farms. Much easier and happier life with less useless “stuff”. They even tend to have multiple big SUVs but very little furniture 😅
Since inflation has not been calculated consistently for about 30 years, real median income has in fact not remained static since 1980, but has actually gone down substantially.
Source on this information?
@@chazcmeekins83 Check out Shadow Stats for example. That most western countries, including the United States, have substantialy modified the way that inflation is calculated in comparison to how it was done in for example the 1980's and prior is a well known fact.
Makes perfect sense.
If you're trying to weave a credible narrative, reach a predetermined conclusion to 'prove' a point and the existing methodology doesn't do that then the only alternative is to change the methodology to one that does.
💯
The thumbnail graph is missing 2 lines:
Executive compensation
Shareholder returns
I would like to point out that since the 1980’s there has been the GDP and the real economy in America. The country’s heartland was deindustrialized while the economy was financialized.
Now the situation in the economy has deteriorated to the point where life expectancy has dropped due to an increase in deaths of despair, while homelessness has skyrocketed to 700,000 people. That’s a fair sized city in the US.
That's also likely a severe undercount of homelessness too.
Worse, I see a lot of specialists accusing on how Europe is failing compared to the US, because they want the same to happen here
As a Swede, I see the same thing.. It’s frustrating but the rich a in complete control, and they are looking at the slave/master society USA and want to rule here too by sucking up all the wealth and oppressing poor people through tax cuts and demolished well fare. All marketed as *freedom of choice*, when everyone knows it means freedom for landlords and corporations to lower quality, exploit workers and increase prices and give CEO 10 million in bonus. That’s the *freedom* they talk of.
We are speedrunning to become a dystopian nightmare here
Quality of life >>>>>>>>>> any bs number that people obsess over. Who gives a shit about GDP when your life sucks
@@roccociccone597 Those people complaining about quality of life in the West should probably go for a long holiday in the Congo to mine Coltan by manual labour for a couple years, for 5 dollars a day. I'm sure it will give them a whole new appreciation for their comforts.
People need to get their heads out of the sand. A country where the population is struggling to make ends meet is called a THIRD WORLD COUNTRY, regardless of GDP. Also GDP PPP is a more accurate measure of a country's wealth. If the average population of a country earns $100,000 a year, but a loaf of bread costs $90,000, that country is poor.
that's why a London cab driver spent half the year in China
What a fair and honest view on economics itself. This is one of the best economics channel in YB.
It’s not a failure of economics as a discipline: it’s the failure of an economic model
Yes but its all relative. It's only a failure if you are on one side of the equation. If you are on the other side it's a win. Why would they change things and risk that ? That's the question people need to ask
its not a fsilure at all its working exactly as intended.
Economy is to life like a battery is to a circuit.
One can increase or decrease the capacitance of said power system to induce different behaviours in the general populace.
Again like a battery.
So if theres too many people and you want to reduce the amount, the least cruel way (maybe) is to reduce capacitance for human behaviour by chocking the economy.
Because we need money for every task/behaviour (other than just sitting there) this reduces the birth rate (people cant afford kids) therefore solving the over population problem.
Proven by the following statistic.
Drop in the amount of kids people between 20 - 34.
Half of all women age 30 are now childless, compared to 18% in 1949.
Its fallen off a cliff.
@@aieverythingsfine You don’t know what economics is do you?
@@Razmatazuk You don’t know what economics is do you?
@@jontalbot1 i do you dont, now shhhh bot
It's working just as intended for those at the top. That's why, when somebody tries to change things, those at the top basically threaten to destroy everything
IMO what is happening is employers increase pay enough for workers pay to keep up with their basic costs but not enough to enjoy productivity growth.
I am 23 and make $23 an hour at my job which is about $49,000, or $40,000 a year after federal income taxes. One might think that's a decent amount but that's if I don't take any time off during the year, so working 40 hours a week every week. Guess what the median house price is in the state of Washington? It's $600,000. After taxes that's 15x my annual income. In the city I live in, median house prices are $710,000 right now. That's 18x my annual income. The only way I can afford a 30 year mortgage is if mortgage interest rates hit 0%... and even then the monthly mortgage payment alone would be $1700-$2000 a month. So that's not even accounting for the cost of utilities, fuel, phone, internet, and food. This is why it's impossible to launch for young people around my age.
50,000k times 40yr is about 2M. You have enougfe
Money for A house and more, it only take you 20 years worth of wage for you to achieve something that last you 60 years, theres still value, you be fine. Now go and work no one gets payed if they do nothing and time is money.
@@gsst6389 Sure. 20-25 years of saving every penny. That'll work out. lol
Correct. See his slide on income growth based on company positions. Also the stock market has added massive wealth , but 1/2 the population owns no stock
a good reason to buy a house is to speculate - the real worth of that house is about $100,000 - and building a prefabricated house is not more complicated than assembling an Ikea dinner table - some of the sears homes are still standing
GDP doesnt account for wealth, it accounts for the volume of money circulating in an economy. It is a terrible indicator for economic reality.
If a forest fire reduces a whole state to the gound: GDP increases, despite people and the area being devasted. Emergency crews were paid, insurances paid out, residents paid hotels and hire construction crews, retail store bought new merchandise, etc... the money went somewhere, somebody got richer, and its not you.
This is what happens when politicians are taken over by corporations, because they know that they won't face any consequences of their actions.
I am not fat.... it is carbon capture..... so not losing weight to save the environment...
That's what he said
"I'm not fat, I'm just absorbing carbon" 😂😂😂 what a laugh m8
Yo mawma so big she should be given a Nobel prize in ecology
Very true
@@SigFigNewton The bank of sweden will have to invent that one.
The more I learn about our economic system the more I hate it.
We need to start over as a society this isn’t working, it’s completely detached from reality.
Read charles huggs smith, it will clear your mind
Its easy to say that, but what are you willing to sacrifice to achieve that?
@@wtfbros5110 I already don't have much. What more can I sacrifice?
Give poor people money they spend it. My landlord owns hundreds of properties and has just increased rents across their estate by around 23%. A stroke of a pen, no extra work and with wear and tear unaddressed you are getting less for your money too. In fact they have taken six hours of work per month and simply said 'that's now mine', totally unearned. That can only come out of currently disposable income and therefore out of the local or national economy (+ Amazon, Ebay etc). The GDP will suffer from the multiplier effect, but the basic outgoing is the same.
Why is Rent Inflation not seen with the same dismay as CPI/RPI? The 'wealth creators' just extract money from those that cannot buy and have funds to add more to their collection and thus drive up prices as they compete with private individuals, the inflation will only drive more renters. Ad infinitum.
is he jewish? do you know the history of the world wars?
Your landlords costs will have increased, it’s being passed on to you. Welcome to the real world
@@Jontyfarmer What are you blathering on about? What costs? I've been here for years. And I have been in 'the real world' - whatever you think that is - a long time. If they own it outright, they have had £120,000 in almost pure profit. If buy to let the mortgage has been paid for the period. If the beginning rent satisfied their costs /loans etc then every rise in rent is pure gouging.
why did you asume he was jewish
You can always choose to rent something cheaper. People do choose how much they're willing to pay
All by design. The wealthy only buy from luxury brands, high priced realestate and other premium offerings, so I have no idea how that is supposed to trickle down.
They also have much of their money in the stock market, and the governments won't allow a much needed correction.
It pays to be rich. 🤓
"It pays to be rich."
And it's expensive to be poor.
I really enjoy your videos. They're always very well researched and very well articulated. Thanks for continuing to post.
Very thorough analysis, albeit very slow paced.
I appreciate you mentioning alternatives to GDP, my favourite is Purchase Power Parity.
Also I learned a new thing from your video, a great idea mentioning diminishing returns on advanced economies in regards to their GDP.
And finally, as an economist, I started studying economics since high school so I definitely do love economics, but I sadly agree this domain teaches selfish ways but that's again sadly how competition works, people (companies) have to keep an edge and maximise, while again people (companies) have to minimise, the balance has been off since decades as your video beautifully explained.
(Marketing is the only inherently "unjust" economical domain)
Greetings from Morocco.
I find it quite amusing that economists use all sorts of ways to track economical growth and welfare, but no one seems to talk about the real problem, cause it's god damn inconvenient to say "capitalism is no longer fit for purpose".
Capitalism worked based on one single truth, you produce something, you get paid for what you produce. Therefore as an individual how much money you made was tied into how much work you put in.
This is no longer true, and this is the reason behind the wealth gap, and it's going to keep getting worse until something has to give.
Putting in simpler terms.
Person makes 1 clay pot for company, company sells clay pot, person gets paid wages corresponding to part of the sale of the clay pot.
Company buys new fancy machine.
Person can now make 10 clay pots, company sells 10 clay pots, person still gets the same wage, wage is now partially detached from production.
Company gets the profits of the 9 clay pots.
Wealth funnels up.
Each new piece of automation and production efficiency repeats this loop.
Efficiency in productivity funnels wealth up, not down.
That's the fundamental truth of our economical system, and unless that changes and we start redistributing wealth from the top, the problem will only get worse. 0:02 0:02
I'm ok with the guy who started the business to sell clay pots 🍯 making more and more.
However scams like inflation which is a fancy name for counterfeiting and stealing money from the above 2 groups (workers and businesses) is where the real fraud lies.
Big banking cartels corrupt and control govts to funnel the 💵 money of others their way.
They do not produce any useful products which people buy voluntarily. Rather they force their wealth stealing scams upon the nation and milk the surplus of others.
Yes, but you're missing that you can buy company stocks and take a share of the profits yourself
You are at the doorstep of something bigger. Continue your journey in education and you might learn more flaws in capitalism and why it is cyclic failing.
For example, we have 40h workweek since Ford times for almost a century.
Somehow 40h/week was enough then, and it is still required now on a more automated technological society. In th current system this will hold on in the future: You will work as much as possible otherwise econony "collapses" according to some economists.
This is because in our current system, every single tech advancement converts into proffit. Not necessarily in reduction in work hours. So workers get paid the bare minimal to survive and coorporations can get away with proping margins higher and higher
Communist!
Economics failed about the time economists started looking at numbers going up instead of the value the economy brought to the people. The issue with the GDP measurement is that its not reflective of a growing economy, its reflective of growing debt, growing inflation and declining currency value. We are buying less stuff that costs progressively more and we are doing it by borrowing money we don't have and may never have if our jobs disappear. This is why the GDP is going up.
The problem with GDP I think is best explained in this joke.
The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit.
They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit.
Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can't help but feel like we both just ate shit for nothing."
"That's not true", responded the second economist. "We increased the GDP by $200!"
To expand on this GDP primarily measures the flow of money in the economy and not the productivity of it. As such there are times were a stag-net or falling GDP could be acceptable. If productively increases such that goods are made cheaper and eliminate inefficiency(such as the above joke where financial not much changes) then you could end up in a case where the amount of goods and services are increasing but their cost is decreasing causing the flow of money to decrease resulting in a declining GDP even though the overall material wealth of people is increasing.
Sadly though as is more common with GDP the cause of stagnet or decrease is due to market correction as unproductive sectors collapse due to their inefficiency and take with them all the investment, jobs, and etc. Causing other industries to further contract.
The flow of money is why ART is one of the most common and easily exploited tax write offs. Get a painter on the cheap to make some paintings. Put them up for auction and buy them yourself, or get a friend to buy them, for an insainly high price. You have now established the value of painting so you donate to a Museum and get tax write off for the amount. That's why terrible paintings go for so much, it's rich people flexing and moving money around to flex their bank accounts. Can also use this same tactic to get loans as you put down these supposedly high priced paintings as collateral for a loan.
You should talk about modern monopolization. I believe its the main reason both workers and producing businesses don't see any prospects nowadays.
exactly captilaism ultimatly ends up in a similar place as communism, but with one private entity running the show rather than the state.
as buisnesses grow, the bigger take over the smaller on and on until ultimately every buisness is owned by 1 buisness, the ultimate monopoly, and everyone has no alternative to it, just as with communism.
theres a new aristocracy only these ones aren't wearing top hats.
@@theant9821 just to make an important distinction here, "state communism" is not communism, that being a _stateless_, moneyless & classless society.
@@theant9821 communism in itself means no classes or state. So no it isn’t like it. But it does become like an autocracy.
When looking at the median salary, you must remember to include companies' expenses for employee health insurance, which have increased sharply in the same period.
In theory that increase should be absorbed by the inflation.
In practice, there is a good chance that CPI fails to reflect the real impact of healthcare spending on the consumer basket.
But that's mostly a transfer of wealth to financial sector louts
This is what Gary's economics has been saying
Working class getting poorer losing there assets
@@nickk8045, Gary's economics fails to take into the consideration of an aging population and low fertility rates that came from more cultural changes such as the Sexual Revolution.
If you have an aging population, then you will have a strained welfare economy and everything becomes more expensive for young people in terms of taxes and you will need to sell off assets to make up for the shortfall.
And Mr Stevenson is absolutely right. Brilliant man, really recommend reading his book The Trading Game.
Yeah how is raising taxes going for the UK? Vote socialism get socialism.
Gary's economics is a con man just telling you what you want to hear. He's an absolute donk.
I’m surprised you didn’t mention globalisation, which coincides with the same period. Factories moved overseas and workers lost their well paid jobs. Now they have to work in hospitality or the gig economy for much less.
Is the monetisation of all human interactions a healthy thing? when visiting the US I found the culture slightly unnerving
What human interactions are being monetised that you think goes too far?
@@DanivirAmadeus several examples, the tipping culture is out of control in the US, social media, the internet is unusable without an adblocker. Monetisation can lead to perverse and exploitative practices e.g. climate damage, the US food industry, healthcare. One prime example, I work as a doctor and the amount of people coming in seeking a diagnosis of Adhd and wanting amphetamines after being influenced by social media marketing when they have nothing wrong with them is sickening.
@@edjones3410 I think we might be using different definitions of monetisation. People want to be paid for the services they provide, I can't see if any other way. The problem as I see it is keeping businesses accountable and not letting them get away with providing bad service.
That much about the Internet and adblock is true, it's terrible. I don't blame advertisers for trying to milk people though, everyone is doing what's in their best interest.
Yeah, a lot of people think they have ADHD or are neurodivergent due to social media (and probably also a desire to stand out and be unique). I think that's only going to get worse.
It's strange though how doctors can diagnose you over the phone with depression or anxiety and give you a prescription for SSRIs in minutes but with ADHD or other psychiatric disorders it could be months or years before you receive any treatment...
I wouldn't mind prescription drugs or - all drugs for that matter - being monetised and not simply held behind the "compassion" of the healthcare industry
Isn’t a major reason why wages are stagnating due to the increasing contribution to productivity from computers, AI and industrial automation? This divergence between wages and profits is only going to accelerate unless governments intervene.
Governments need to intervene.
This will cause societal instability and it IS ALREADY HAPPENING.
No. These only increase total production. Distribution is the problem. It doesn't matter what people do in society nowadays because most jobs are automated anyway. With proper distribution you could even pay half of them to open and close holes on the street and we would all be a lot better off because this would generate a surge in demand. There is a lack of demand and thus a lack of production (there are plenty of production factors to surge but no increase is required unfortunately), this is because we are a rent seeking capitalist model. Whereas in industrial capitalism there is the potential for everyone to get richer, this is not the case in rentier capitalism. In financial capitalism the production stagnates eventually, most western countries are already there, and afterwards the only way of making money is by stealing from the poor because it becomes effectively a zero sum game.
@ I agree distribution is essential to fixing the problem of wage stagnation but this will take major government intervention like UBI or something similar. My point was that technology is causing wage stagnation and this holds true. Many politicians don’t even seem to understand this.
Automation increases productivity but the benefits go to the owners.
The stagnant wages are due to trade imbalance with China. The graph drastically shows the effects on wages immediately after opening trade with China. Globalism is coming to an end and hopefully America's labor market will rebound.
Government intervention _is_ the core problem.
It's about to trickle down... any day now... don't hold your breath
Two friends walk around the forest and see some shit. "Hey i dare to you to eat that shit for 100$" says one, and the one took on the challenge.
After a couple of minutes, they see another shit. Now the other gave the same challenge to the former and not wanting to back down, the first agreed.
After a while says the second friend laughing" I think we ate shit for nothing"
"Nah" said the first, "we increased GDP by 200$"
Not really. GDP depends on if these two guys have a contract or not. Ifit is two neighbor gifting each other it is not counting as GDP. In other conclusion I would approve that GDP likes to divide families from each other to make companies offer more worthy
Thanks for your videos Tejvan.
By deliberate design - not by coincidence nor by accident.
The rich get richer, the poor, to he delight of the "elites", get poorer.
The rich do get richer, but so does everyone else. The average person today has access to goods and services that even the wealthiest couldn’t dream of decades ago.
@@EthanBrown01 No.
I’d love to hear your reasoning instead of just a 'no.' Go ahead, prove me wrong. It's an objective fact that the average person today is richer than at any other point in history.
@@EthanBrown01 Did you study economics ?
I have, which is why I understand the data. If poverty is declining, which it is, then that clearly indicates the poor are getting richer. Rising living standards are undeniable, and you can argue otherwise, but the facts are clear. The average person today has access to many innovations, one of which is cutting-edge technology like high-speed internet, smartphones, computers, and TVs-luxuries that were once unimaginable for even the wealthiest people. So, how have the poor become poorer? What’s your explanation?
8:51 GDP is the best indicator because it shows how much goods you can steal from employees and satisfy your vanity
Cracking video. Well done.
All these issues stem from an economy grappling with uncertainties, including housing problems, foreclosures, global fluctuations, and the aftermath of the pandemic, leading to instability. Rising inflation, sluggish growth, and trade disruptions demand urgent attention from all sectors to restore stability and stimulate growth.
With $420,000 in retirement savings, diversifying into assets that historically perform well during inflationary periods, such as Treasury Inflation-Protected Securities (TIPS), commodities, or foreign currency assets, might help protect against potential dollar depreciation. Exploring options like global real estate, diversified foreign bonds, or high-quality international equities may also offer a hedge against a declining dollar and inflationary risks .
With my demanding job, I lack time for investment analysis. For seven years, a fiduciary has managed my portfolio, adapting to market conditions, enabling successful navigation and informed decisions.
Consider a similar approach.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
Jennafer Beaver Turner is the licensed advisor I use.
Just research the name. You'd find necessary details to work with to set up an appointment
Thanks, I looked her up on Google and was very impressed by her credentials. I reached out because I need all the help I can get. I've scheduled a phone call with her.
Once again proving that social democracy is better than neo-liberalism.
Unfortunately the only alternative the powers that be will accept is right wing populism, because they still get to line their pockets
Social democracy is only life support for capitalism. Far better than what we have now, but not sustainable forever. You still have exploitation on an imperialist scale.
Taking it to some form of socialism, syndicalism, communism or anarchism would greatly improve the priorities of society.
@GalacticNovaOverlord Communism is never going to be workable in reality. The mistake is assuming that capitalism is the only other possible system that can work,
@@GalacticNovaOverlord I'd like a better system, but one that doesn't implode or go authoritarian.
Something like libertarian socialism, or anarchism, yeah.
@@coolbanana165 Agreed, though a caveat to your first part is that to solve the global issues that we face today, a global government is inevitable if humanity isn't to decay.
Well done man! Very well explained--- thank you
It's almost as if profit maximization, privatized industry, and GDP-reductionism are what cause both market failures and ecological collapse!
they are just schemes - human behaviors are the problems
@firstlast-pt5pp sure.. we just gotta accept the scheme that's obviously the problem
@@BrickGriff - some call it adulthood
@firstlast-pt5pp and that's how we got Trump... Again... You can keep it. It's bad philosophy and bad politics
Predicting inflation starting to rise again this quarter while leading indicators showing economy slowing (not to mention governm*nt figures pumped up for the election). Global economy very weak which affects US. Fed dropping rates 0.50 shows they're VERY worried about financial downturn/crisis. interest rates coming down are also an indication banks are LESS willing to loan money into existence. The question here is where is the inflation going to come from in the near term? Consumers are mostly tapped out which is 70% of US economy (consumption). Yes inflation very likely to return but not before it continues to come down... Inflation can be a concern, but remember, certain assets like stocks and Crypto’s acts as a hedge. Long & short-term trading is generally safer, allowing investors to weather market volatility. I have managed to grow a nest egg of around 3.2 B'tc to a decent 27B'tc in the space of a few months... I'm especially grateful to Francine Duguay, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.
Francine duguay program is widely available online..
One thing I know for certain is crypto is here to stay, the only thing that leaves is the people who don't manage their risk. Manage that, or the market will manage it for you. With the right strategies you will survive.
Thank you for sharing your experience. She’s helped grow my reserve, despite inflation, from $87k to $246k as of today…..Her insights and daily siignals are worth following.
Thank you…. I have searched her up Google I think I am satisfied with her experience.
The market has gone berserk! whether you're a newbie or a veteran trader, everyone needs a sort of coach at some point to thrive forward.
Yeah it's almost like the workers producing all the value don't get paid the full value of their labor. Someone should write a book about this 150 years ago. :V
Value isn’t just about labor; it’s also about innovation, risk, and investment. Without those, there wouldn’t even be jobs for workers in the first place.
6:58 almost 7 minutes in before you said it.
If over a given time span you have 1% growth in GDP but 2% growth in population, then your GDP per head is going DOWN
@@csuporj but the more you spend on groceries, the less you have to spend on housing etc. ..
If you are saying inflation is underestimated , I would agree. Here in the uk the goveranment now insist on using CPI rather than PRI, and suprise surprise, CPI just happens to be lower. Because CPI dose not include housing costs.
However you look at it, the spending power of the average wage has done nothing but FALL since the early 2000s
Yes. It's like that island with 10 families. 1 has 10.000 while the other 9 have 1.000 $ per year.
GDP 19.000 average income 1.900 per year.
The problem is you need to exclude the outliers in your computation.
Gr8 video! Thank you 😊
Forget all those goofy happiness index stats. At this point just use housing cost H as a misery index to replace GDP, or 1/H as the GDP replacement. It seems to be the dominant factor at this point, though you could use 1/(H+C+E) where H is housing cost per capita, C is healthcare cost, and E is education cost.
Innequality rates better reflect the health of a nation and the lived experience of people in an economy. Gdp means next to nothing.
GDP technically goes up, even when importing people who take out more than they contribute.
GDP per capita (of the private sector working class) tells the real story.
By private sector, I mean those producing real goods and services in the economy that people voluntarily purchase.
Not those sitting in banking and other such jobs that rely on the central bank money printing, bailout, market manipulating and other scams. That is not just unproductive work, that is destructive work.
Yes
Brilliant break down. I am a subscriber now.
In the Uk the so called average worker earns £38.000 and will in total pay 43% of that wage in tax before they get to spend a penny of it..
@@geocam2 Hmm we pay out of our wages weather we use it or not And any product we us or consume that the government deems a high health risk like: Cigarettes 16.5% of the retail price plus £6.69 on a packet of 20 , You buy a 1 litre bottle of 40% ABV vodka (spirit). The Alcohol Duty you pay is worked out at:
1 litre of vodka.
40% (the ABV) of 1 litre = 0.4 litres of pure alcohol.
0.4 litres of pure alcohol x £31.64 = £12.65 duty to pay and fuel (the duty 52.95p per litre for both petrol and diesel, while VAT at 20% is then charged on both the product price and the duty rate) so we pay tax on being taxed???
Yet, the UK's infrastructure is crumbling (NHS, rail, sewage etc.). It begs the question: where does our tax money go?
Please exclude London from that average. Theres no way £38k is average wage in the UK.
@@Loundsify Median gross annual earnings for full-time employees were £37,430 in April 2024, compared with £35,004 in April 2023, an increase of 6.9%. this information can be found here ( www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2024)
@@Loundsifyit’s not, also average is not the best metric for income, most sources will use the median income. It’s definitely not 38k for the uk, but also probably not as far off as you would think.
Good statistics. Good analysis!
It is probably a pretty easy explanation to this. Inflation, inflation is systematically under-reported because there is an incentive to do so. The state do so because the books looks better that way saying you have inflation of 2% but reality have 5% means you have 3% margin in spending. Companies owning assets, will have their assets go up in value according to the true inflation They pass along true inflation to the paying customer. While when doing the book keeping they count with reported inflation, that too looks better for the share holders. The workers however, well when the time come for a wage hike, then it is the reported inflation that is used. If you are a worker and want to keep up, the only way is to frequently change jobs.
As religion began to decline Economics took over as the exploitation model of choice of the elite. Economics is the 'science' of how to exploit the poor without causing a revolt.
GDP increases with increasing population but salaries go down with surplus labour.
Glad someone is finally pointing this out.
Good content. More people should talk about this.
I think best analysis comes with comparing median salary after tax and prices and local social or environment factors.
Numbeo collects alot of data about prices and some quality indicators . Good tool to look up which places has good quality of life, some is extremely striking when you include housing (rent or mortgage) or not.
Before "Trickle Down" money was flowing down. They figured out how to turn it into a trickle by stopping the money flowing to the working class.
Hi. Can you please do a case study video on why investments in UK is falling when compared to its peers countries
1 point - electricity price
It is energy prices, stupid ...
Peer countries? Like Algeria?
@@karolnowosad9765
2 - Expensive upfront costs that come with them
3 - Too much environmental red tape despite not having the green infrastructure to put such regulations in the first place.
4 - NIMBYism - why invest when local pressure groups have so much power stopping nationally significant infrastructure projects.
yup thats what caused the steal works to fail in port talbot, they nearly made a deal but the government refused to subsidise electricity
These videos are incredible
Brilliant discussion
Excellent Analysis
Thank you Sir
I agree!!
The founder of GDP indicator Simon Kuznets had warned people from using it as a measure of nation's wealth.
0:49 how did they do that. Are they all just still?
War also increases GDP while bringing massive destruction.
War = Earth dying
very good video, thank you
What is Net Domestic Product?
What happened to the Depreciation of Durable Consumer Goods since Sputnik?
One problem with GDP is that the economy isn't actually growing if it's not above inflation, in other words, the US ecenomy is not really bigger now then in the 80s...
There is No point replacing GDP or GNI with another index that’s more complicated to calculate, harder to compare across economies and doesn’t have long time series when the other index have a correlation close to 0,99 with GDP. Such are most of those alternatives mentioned.
Good point.
Some things don't make sense. Like to calculate human development, we measure access to healthcare but not individual's actual health.
If I am healthy, i will not need diabetes medicine so even though I don't access to diabetes medication, I am living good.
On the other hand, if a town has half people with diabetes and good access. The GDP will be higher and human development index will also be higher. But people will be unhappy.
@@parulkumar8606 you are wrong, in Human Development Index, the only data used to calculate "Health" is Life Expectancy, which is a measurement of a lot of mortality and fertility data,
The longer the average person in your country lives, the HDI will be higher
Very interesting presentation. I can see why people don’t like the inequality of high-low earners but I’m not convinced that is the reason for low growth in low earners wages. It would be interesting to look at the impact of open economies and accessibility of global labour (not just immigration but also outsourcing) on wage growth for the lowest quartile. I suspect that is what is going on. Ie for a decade or two the west benefitted from importing cheap goods and services from Asia but now those countries and others are catching up (and even overtaking) in education and infrastructure allowing them to compete for higher wages in the now international labour market. And it doesn’t take a full catch up to have an impact because population sizes in Asia are so large that you just need a fraction coming out with PhDs and other technical qualifications, plus English speaking and that’s potent competition. In addition, if a lot of those well educated and now more wealthy non-westerners want to migrate to the west they will bid up property prices. For example, Canada with all its land has still seen a steep rise in property prices in part because construction can’t keep pace with immigration. Hard to see what policy can do about this other than try to make sure the population is as well educated and skilled as possible and potentially limit the speed at which immigration takes place so infrastructure and construction can keep pace.
In that last 20 years , taxes and government spending have gone up massively to try equalise the economy and its just made 95 percent of people poorer. governments use government spending to boost gdp by overspending on big corporate contracts to give the lowest amount possible to the taxpayer aswell.
We need to reduce taxes and privatize.
Here is the problem with measuring "GDP".
Let's say you double your production in goods to 2X, but there is still only 1x of currencies in the economy, then you doubled your production but in number gains, it suddenly looks absolutely horrible. Thus, the currency completely fails as a measuring tool. It looks as if the economy is doing well, just because asset prices are inflated into oblivion. However, as for goods and services, it stays flat. Real economy stays flat. There is no economic growth, hasn't been in decades. The GDP growth is just "growth" of numbers. It's terrible for measuring economic output.
Real Wage growth is adjusted to inflation, the problem is, the real inflation are not prices going up, but the amount of currency in the economy. Since central banks began their policies of quantitative easing printing trillions of dollars, inequality has risen, since poor people have almost all their wealth in dollars, while rich people have assets that are ajusted to inflation. Inequality numbers began to grow when gold standard was abolished in 1971, and the fact that US outperfoms other economies is because they export inflation through its dollar hegemony.
@@otavioguimaraes5798 Adjusted for CPI (Consumer price inflation). CPI measures the inflation of daily goods. These are directly dependend on the wages, aka the purchasing power of wages.
It's not the actual inflation. Othwerwise it would include the housing and stock markets. So whatever numbers there are, don't adjust them for inflation cause that number is more useless than before.
I've always said that rather than a trickle down there is a gush upwards.
Any analysis that doesn't consider that R>G has blind spots.
Excellent! I learnt something>
Public debt measured in gdp. Politicians moved themself into a corner with incompetence, they want to keep inflate the currency to cover their mess ups and impossibble promises, they need more gdp growth to be able to spend more debt. Hidden taxing everyone with inflation more and more.
Remember when working hard to get real results was so easy? Not since productivity was decoupled from wages back in the mid 70s.
At first, early shocks, such as high inflation combined with rapid job losses due to de-industrialisation and the rise of the financial services sector back in the 80s could be absorbed by an economy that was much less debt ridden and more asset rich. So it could invest in stronger social programs to, at least partially, compensate for entire communities suddenly becoming unemployed, along with the purchasing power of wages left over still being much stronger than today.
The situation is very different over 40 years later, with massively debt burdened economies no longer able to invest in ongoing social programs to hold things together, along with most of the money making assets having long since been sold of to foreign interests, resulting in increasing levels of austerity being imposed on the masses. This, along with real wages no longer making ends meet due to significantly higher than CPI/RPI (whichever looks better for public relations) inflation affecting necessities such as food, energy and housing, coupled with the now massively wide gap between stagnant wages and productivity gains, resulting in the cost of everything crisis today.
So it's no wonder that more and more people are feeling that national GDP is that of Governments and big business, not theirs.
Welcome to the new Victorian era.
Really good video and factual
Please do me a favor and find someone actually advocating for trickle down economics as you call it. Trickle down economics is the term that critics have used to blame Republican policies it has never once been used by a serious politician or economist to describe an economic model.
It doesn't help that these days people also buy tech and cars worth insane money. In the past there was far less to spend money on, eating out was even a once in a year event but now people spend a months wages on a bag/weekend away or on a car payment.
Shit runs downhill, wealth doesn't!
It is not the failure of economics. It is the failure of modern capitalism, which is basically fueling oligarchies around the world.
But capitalism is supposed to promote competition and prevent monopolies surely?
@@gerhard7323 Is it?
Or are the richest people constantly changing the rules, while they instill the myth that capitalism will protect competition into the others.
It is all about myth building. And when the masses believe it, the system works -- for the richest.
@@gerhard7323 Is it?
Or are the richest people constantly changing the rules, while they instill the myth that capitalism will protect competition into the others.
It is all about myth building. And when the masses believe it, the system works -- for the richest.
@@gerhard7323 Is it? Or is it a myth?
@@What_do_I_Think On current evidence I'm gonna go with a no there.
I would love to hear about the "alternative theories of a more just economy"
This is not a failure of economics, nor a failure of 'gdp'. It's actually how the [capitalist] system is intended to function; this is in other words, success. Wage is simply the minimum price of working capital. The more efficient the market becomes--the more you can make for cheaper--the cheaper will be the price a factory or other producer will have to pay it's **working capital** . That is people, who's jobs is dependent to produce the product. Once you reach the automation stage, you can get away with people altogether, and use only machines for maximum efficiency.
The actual problem is capitalism, and the ever-growing technological automation of our world, which (to some degree) eliminates the 'working capital' in question. When those forces collide with our factors for quality of life, you get this issue. The solution would be to change our economic system. Automation could do wonders for humanity if we didn't channel it into the most greedy systems known to man...
False. Decoupling the monetary supply from anything else, and then the government giving a private monopoly to that entity is not capitalism.
Trickle Down is like the moisture that gathers in your sock if you don’t shake 3 times… and just as satisfying.
The problem with today's society is wealth is not distributed evenly across all income groups.
Imagine an economy where everything is made by robots. So, people does not work. GDP is high. Wages are low. I don't think there is any kind of a failure in indicators. If a worker in 18th century produced one swork and earned 20$ per hour, now he is producing 100 swords per day receiving 25$.
Can someone smarter then me explain to me: Do the income tax people pay make the gdp go higher?
You'd have to compare how much 1 more dollar in tax expands the economy vs how much 1 more dollar in disposable income for the taxed individual expands the economy. Ultimately, it's about the aggregate demand multiplier effect. It's not easy to calcualte, as the impact of the marginal dollar depends on the marginal propensity to consume of the individual. Imagine a 100 dollar tax increase for everyone. Imagine a person making 2000 dollars a month. This means the new tax cut their income by 5%. Now imagine someone making 20000 dollars a month. This means the new tax cut their income by only 0.5%. The tax collected on the average person may be too much, whilst the tax collected on the richer person may be too little. In short: if you tax the hell out of me while I can barely make ends meet, the taxing will likely have a recessive effect. The matter is more nuanced though, as one cannot simply suggest to re-engineer the taxation system to make it fairer. Taxation is just one of many costs. If the aggregate supply is still in control of a few companies, the expected benefits will be extremely reduced
Please make videos on economics in general so that non UK/USA residents can also learn.
Not only does the growth of GDP not help the average person, but it actually harms him. If his rent goes up that increases GDP. With a stagnant salary that is really bad.
There is a quite of reverb in the audio, and it's quite bothersome
At the end of the day, GDP is merely a measure of how much value goes into transactions. It has nothing to do with living standards, only how much money is spent
It is almost as if statistics and clinging to the target numers alone (or worse obeing obsessed with the graphs moves compared to expetced target) is not sound...
Trickle down economics is a joke. If I get 1000 GDP a month i will use it all every month. If I get 10 000 GBP per month I will save a lot meaning buying assets not to use them just to invest my surplus money. The main "asset" is housing, maybe half of the wolds assets?