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The [ECONOMY]

1356785

Posts

  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Scalfin wrote: »
    It just confuses me that the value of money isn't based on what you could buy with the money. My mind breaks down when people seriously try to claim that it's cheaper to buy everything in a certain location due to the value of the currency, as it seems like claiming that you have to drive farther in the US because we use miles.

    The value of money is indeed driven by what you can buy with it (with some caveats that are not entirely relevant to trade theory), and the claim that it is cheaper to buy everything in a certain location entirely due to different values of the currency is usually false (again, excepting some unusual circumstances).

    ronya on
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  • enc0reenc0re Registered User regular
    edited July 2010
    My only hope is that the Obama administration will be more apt to do something post november elections, because the dems will probably still have a majority, but too small to try to squeeze things through without using force (as it seems now they're trying to wiggle things through gently by bending on one knee and offering fellatio to the GOP)

    There's an even better chance during the lame duck session. You still have the big majority, are as far away from the next election as possible, and quite a few congresspeople know they are out anyway. Combine that with Volcker's deficit commission releasing their report on Dec 1.

    We can hope for some big long term cuts to Social Security and Medicare, and hopefully some tax raises to go along with it. (Come on VAT, come on VAT!) Too bad we can't ditch the mortgage interest deduction right now as the IMF recommends we do.

    enc0re on
  • chidonachidona Registered User regular
    edited July 2010
    ronya wrote: »
    Russia: coasting along on oil revenues, as far as I can tell.

    Pretty much, but Medvedev has been trying to restructure the economy to train more business leaders and get the rest of the economy kicking off. I think that, given a decade or two, Russia will be doing verrrrry well in economic terms, if it manages to somewhat deal with it's huge black market and crime levels.

    RE Scalfin:
    I don't suppose anybody can tell me why exchange rates aren't tied to the consumer price index or something?

    They are. Well, sort of.
    A brief explanation is that a long-run equilibrium value of the exchange rate can be given by relative purchasing power parity. To skip a load of maths, it's basically the logged change in exchange rate over time is equal to the difference between the inflation rates between the two countries. Whilst shocks mean that this equilibrium is rarely reached in the short-run, studies have suggested that the shocks tend to be mean-reverting, despite a high degree of persistence.

    A huge problem in Macroeconomics is modelling these short term shocks. The Dornbusch model is an elegant attempt to model it, if you wish to delve deeper, but ultimately lacks empirical credibility.

    chidona on
  • PeccaviPeccavi Registered User regular
    edited July 2010
    Scalfin wrote: »
    ronya wrote: »
    Well, prices might not converge due to real (rather than nominal) costs and differences. And for very large countries like the US any convergence that does happen would take a very long time to occur.

    I mean, measurements of the CPI already take nominal imports into account, since they don't distinguish between domestic goods and foreign goods available on the domestic market. For very small countries exchange rates would be tied closely to the CPI, yes.

    Russia: coasting along on oil revenues, as far as I can tell.

    It just confuses me that the value of money isn't based on what you could buy with the money. My mind breaks down when people seriously try to claim that it's cheaper to buy everything in a certain location due to the value of the currency, as it seems like claiming that you have to drive farther in the US because we use miles.

    It's doubtful that everything would be cheaper in a certain country, but since the CPI looks at a basket of certain goods, it can be more or less expensive for different countries to obtain those goods. As such, I've never really seen much evidence for absolute PPP between countries. An example of this is The Economist's Big Mac Index, which compares the relative price of Big Macs worldwide.

    However, I have seen evidence of relative PPP, which says that the difference in inflation rates between countries equals the percentage change in exchange rates. For my International Finance class a couple years ago, I had to write a memo on the Relative PPP model using Argentina for data, and what I found was that relative PPP held true for the most part other than the crash of the Argentinian Peso.

    Peccavi on
  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Everyone is goddamn hoarding cash.

    h/t MR

    From the commentary I am still sympathetic to the explanation of "nobody trusts the financial market to remain stable, therefore heightened liquidity preference" rather than the moral-hazard debt argument (which would presumably only apply to TBTF firms?)

    (which would happily imply that much good can be done through monetary stimulus)

    ronya on
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  • Saint MadnessSaint Madness Registered User regular
    edited July 2010
    I know, quite literally, nothing about economics.

    Which is unfortunate because Ireland is one of the worst hit countries in Europe.

    Our unemployment is about 14% and our public debt is over 40% of our GDP.

    Our economy is supposed to grow by 3% this year but our government is still planning to cut €3bn out of the budget this Fall.

    We're fucked.

    Saint Madness on
  • VeritasVRVeritasVR Registered User regular
    edited July 2010
    I know, quite literally, nothing about economics.

    Which is unfortunate because Ireland is one of the worst hit countries in Europe.

    Our unemployment is about 14% and our public debt is over 40% of our GDP.

    Our economy is supposed to grow by 3% this year but our government is still planning to cut €3bn out of the budget this Fall.

    We're fucked.

    Damn. You guys were all over that Celtic Tiger thingy. It seemed to be awesome at the time.

    What the hell happened?

    VeritasVR on
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    Let 'em eat fucking pineapples!
  • Saint MadnessSaint Madness Registered User regular
    edited July 2010
    VeritasVR wrote: »
    I know, quite literally, nothing about economics.

    Which is unfortunate because Ireland is one of the worst hit countries in Europe.

    Our unemployment is about 14% and our public debt is over 40% of our GDP.

    Our economy is supposed to grow by 3% this year but our government is still planning to cut €3bn out of the budget this Fall.

    We're fucked.

    Damn. You guys were all over that Celtic Tiger thingy. It seemed to be awesome at the time.

    What the hell happened?

    The government didn't save anything, it didn't properly invest in infrastructure, it refused to bring in a property tax which let the bubble grow to monstrous proportions.

    Also it turned a blind eye to the shenanigans in the banking sector which lead to a spectacular implosion of the entire system, something that has cost tens of billions to repair and will need billions more still.

    It's not like Greece where half the country doesn't pay their taxes and 50% of the workforce are employed by the state, our country was just run by fucking idiots who are still in power.

    Saint Madness on
  • VeritasVRVeritasVR Registered User regular
    edited July 2010
    VeritasVR wrote: »
    I know, quite literally, nothing about economics.

    Which is unfortunate because Ireland is one of the worst hit countries in Europe.

    Our unemployment is about 14% and our public debt is over 40% of our GDP.

    Our economy is supposed to grow by 3% this year but our government is still planning to cut €3bn out of the budget this Fall.

    We're fucked.

    Damn. You guys were all over that Celtic Tiger thingy. It seemed to be awesome at the time.

    What the hell happened?

    The government didn't save anything, it didn't properly invest in infrastructure, it refused to bring in a property tax which let the bubble grow to monstrous proportions.

    Also it turned a blind eye to the shenanigans in the banking sector which lead to a spectacular implosion of the entire system, something that has cost tens of billions to repair and will need billions more still.

    So, I wouldn't say you know literally nothing about economics then. That sounds like a reasonable summary, albeit a really unfortunate one.

    Does that mean the growth there during the early 00's was actually a bubble, and not true growth?

    VeritasVR on
    CoH_infantry.jpg
    Let 'em eat fucking pineapples!
  • Saint MadnessSaint Madness Registered User regular
    edited July 2010
    VeritasVR wrote: »
    VeritasVR wrote: »
    I know, quite literally, nothing about economics.

    Which is unfortunate because Ireland is one of the worst hit countries in Europe.

    Our unemployment is about 14% and our public debt is over 40% of our GDP.

    Our economy is supposed to grow by 3% this year but our government is still planning to cut €3bn out of the budget this Fall.

    We're fucked.

    Damn. You guys were all over that Celtic Tiger thingy. It seemed to be awesome at the time.

    What the hell happened?

    The government didn't save anything, it didn't properly invest in infrastructure, it refused to bring in a property tax which let the bubble grow to monstrous proportions.

    Also it turned a blind eye to the shenanigans in the banking sector which lead to a spectacular implosion of the entire system, something that has cost tens of billions to repair and will need billions more still.

    So, I wouldn't say you know literally nothing about economics then. That sounds like a reasonable summary, albeit a really unfortunate one.

    Does that mean the growth there during the early 00's was actually a bubble, and not true growth?

    Well my post was basically just a rehash of what I've read in the papers over the past year or so.

    Regarding the thing about "true growth" (I don't have a breeze what it means) I read something in the NYT's Economix blog that had something to say about that here.

    Saint Madness on
  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    It's still a bit early to tell on Ireland, I think; there were similar shenanigans in East Asia back during 1997. But the region mostly bounced back after a couple of years. The question is always over fundamentals and it's hard to tell in the midst of the crash itself.

    Debt at 40% of GDP is high, but hardly devastating.

    ronya on
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  • CidonaBoyCidonaBoy Registered User regular
    edited July 2010
    Irelands 40%, that doesn't include NAMA does it? o_O

    CidonaBoy on
  • EvanderEvander Disappointed Father Registered User regular
    edited July 2010
    Scalfin wrote: »
    ronya wrote: »
    Well, prices might not converge due to real (rather than nominal) costs and differences. And for very large countries like the US any convergence that does happen would take a very long time to occur.

    I mean, measurements of the CPI already take nominal imports into account, since they don't distinguish between domestic goods and foreign goods available on the domestic market. For very small countries exchange rates would be tied closely to the CPI, yes.

    Russia: coasting along on oil revenues, as far as I can tell.

    It just confuses me that the value of money isn't based on what you could buy with the money. My mind breaks down when people seriously try to claim that it's cheaper to buy everything in a certain location due to the value of the currency, as it seems like claiming that you have to drive farther in the US because we use miles.

    Money isn't concrete. It is INCREDIBLY fluid. It may be a bit of a mind freak to accept that, but push past it and things make much more sense.

    Shall we talk about how banks just invent money out of thin air?

    Evander on
  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Any system that allows one to buy and sell promises to pay in full later creates money out of thin air, really.

    ronya on
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  • Saint MadnessSaint Madness Registered User regular
    edited July 2010
    CidonaBoy wrote: »
    Irelands 40%, that doesn't include NAMA does it? o_O

    I don't know, the European Commission redefined the recapitalisation of the banks from investment to spending a month or so ago and that pushed our national debt to the highest level in the EU. I don't think they did the same with NAMA as the government is still insisting it will turn a profit.

    Saint Madness on
  • ScalfinScalfin __BANNED USERS regular
    edited July 2010
    Evander wrote: »
    Scalfin wrote: »
    ronya wrote: »
    Well, prices might not converge due to real (rather than nominal) costs and differences. And for very large countries like the US any convergence that does happen would take a very long time to occur.

    I mean, measurements of the CPI already take nominal imports into account, since they don't distinguish between domestic goods and foreign goods available on the domestic market. For very small countries exchange rates would be tied closely to the CPI, yes.

    Russia: coasting along on oil revenues, as far as I can tell.

    It just confuses me that the value of money isn't based on what you could buy with the money. My mind breaks down when people seriously try to claim that it's cheaper to buy everything in a certain location due to the value of the currency, as it seems like claiming that you have to drive farther in the US because we use miles.

    Money isn't concrete. It is INCREDIBLY fluid. It may be a bit of a mind freak to accept that, but push past it and things make much more sense.

    Shall we talk about how banks just invent money out of thin air?

    No, the banking thing makes sense. It's just the claims that China has a trade advantage and Europeans coming here to buy shit that makes my head hurt, just like how I can't figure out what dividend-free stock prices are based on.

    Now, the problem in Ireland is that they don't actually have any tigers, so their economy was based on nothing.

    Scalfin on
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  • enlightenedbumenlightenedbum Registered User regular
    edited July 2010
    In his February budget proposal, the president requested $266 billion for additional stimulus for the economy. And just a month ago, the President called for $50 billion in emergency aid to states alongside the extension of unemployment benefits. This morning Axelrod called again for extension of unemployment benefits, but aid to states was not on his list.

    “It’s true that there is not a great desire” on Capitol Hill to spend more money, Axelrod said, “even though there is some argument for additional spending in the short-run to continue to generate economic activity.”

    “There’s not a great appetite for it, but I do think we can get additional tax relief for small businesses – that’s what we want to do – additional lending for small businesses,” the President’s senior advisor said.

    Truly, that will increase... aww, fuck it. We're boned.

    enlightenedbum on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Why they are all on about lending when the interest rate is already nailed to the floor is beyond me. Unless their plan is to have loans with negative rates - don't pay us back, just watch it evaporate!
    Scalfin wrote: »
    No, the banking thing makes sense. It's just the claims that China has a trade advantage and Europeans coming here to buy shit that makes my head hurt, just like how I can't figure out what dividend-free stock prices are based on.

    Dividend-free stock prices: here's an explanation. Essentially, capital gains, plus some tax-code-driven distortion.

    Trade advantages: any discussion proposing the existence of trade advantages entails leaving the comparative advantage model, so it really varies from claim to claim. With the exchange rate, it may be worth remembering that the stuff individual people in a country want to buy or sell tends to be different. People who consumer imports - that is, consumers - tend to be less politically organized than businesses which make stuff for export and who may be competing directly with foreign businesses.

    ronya on
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  • enlightenedbumenlightenedbum Registered User regular
    edited July 2010
    It's because they've bought into the government can't create jobs rhetoric so they have to focus on "free market" solutions by giving lots of money to small businesses to do what exactly with I'm not sure.

    enlightenedbum on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Henry Blodget on why the economy might implode again. Tyler Cowen on Henry Blodget on why etc. etc.

    I am inclined to agree with Cowen's #2 - if the PRC goes, it'll take the rest of the world with it for at least another decade. If there is something truly strange about the world economy today, it's that East Asian savers (1) save a lot, and (2) really, really, really love US dollars and securities, despite the low returns. It's not just China, but Japan, Korea, Taiwan, Singapore, Hong Kong, Malaysia, etc. - but obviously the PRC is the 800 pound gorilla here. Let us hope that this regional desire for dollars remains high.

    I don't know about Europe, though. I mean, a recession would certainly hurt hard, but how likely is even a Euro collapse to provoke a sustained recession? The ECB isn't that incompetent, is it?

    ronya on
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  • AegisAegis Fear My Dance Overshot Toronto, Landed in OttawaRegistered User regular
    edited July 2010
    Why would China be a threat about imploding? I had thought that at most this recession has had the effect of just making China's economy grow a tad bit slower. They still have a while to still develop economically before I'd think they'd face similar slowdowns like the US.

    Aegis on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    It's because they've bought into the government can't create jobs rhetoric so they have to focus on "free market" solutions by giving lots of money to small businesses to do what exactly with I'm not sure.

    But direct demand-side policies are out of the question. Sigh.

    Even if a recovery happens, it will probably balloon into another bubble incredibly rapidly - way too many of these measures entail loaning money to businesses who then sit on them. And then the policy response is to give away even more money, etc. Once the desire for huge cushions made of cash falls, there's going to be a lot of money out there.

    ronya on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Aegis wrote: »
    Why would China be a threat about imploding? I had thought that at most this recession has had the effect of just making China's economy grow a tad bit slower. They still have a while to still develop economically before I'd think they'd face similar slowdowns like the US.

    Authoritarian states don't really deal with urban unemployment well, and much of their economy is still based on selling stuff to the US and Europe, which isn't buying as much as it used to.

    ronya on
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  • AegisAegis Fear My Dance Overshot Toronto, Landed in OttawaRegistered User regular
    edited July 2010
    ronya wrote: »
    Aegis wrote: »
    Why would China be a threat about imploding? I had thought that at most this recession has had the effect of just making China's economy grow a tad bit slower. They still have a while to still develop economically before I'd think they'd face similar slowdowns like the US.

    Authoritarian states don't really deal with urban unemployment well, and much of their economy is still based on selling stuff to the US and Europe, which isn't buying as much as it used to.

    Wouldn't this be a good opportunity for states like China to take advantage of their growing middle class and start spurring more technical jobs and/or leverage their own domestic markets?

    Aegis on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Aegis wrote: »
    ronya wrote: »
    Aegis wrote: »
    Why would China be a threat about imploding? I had thought that at most this recession has had the effect of just making China's economy grow a tad bit slower. They still have a while to still develop economically before I'd think they'd face similar slowdowns like the US.

    Authoritarian states don't really deal with urban unemployment well, and much of their economy is still based on selling stuff to the US and Europe, which isn't buying as much as it used to.

    Wouldn't this be a good opportunity for states like China to take advantage of their growing middle class and start spurring more technical jobs and/or leverage their own domestic markets?

    For reasons that yet remain unknown to us, people even in first-world states like Korea or Singapore seem content to work a lot, but not spend very much, instead loaning their earnings to Americans. If this changed, well, the US would then have a budget problem instead.

    But ignoring that issue. The PRC's middle class is far from rich, earning maybe $6000 USD a year on average in household income. And they are far from numerous, being less than 5% of the entire country still. Most (90%+) of the country's people do not have what we might call significant amounts of discretionary purchasing power.

    So, there's not really much of a middle class to leverage. But ignoring that issue. Why would massive structural change be a good idea in any country already facing unemployment? :P

    ronya on
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  • enlightenedbumenlightenedbum Registered User regular
    edited July 2010
    ronya wrote: »
    It's because they've bought into the government can't create jobs rhetoric so they have to focus on "free market" solutions by giving lots of money to small businesses to do what exactly with I'm not sure.

    But direct demand-side policies are out of the question. Sigh.

    Even if a recovery happens, it will probably balloon into another bubble incredibly rapidly - way too many of these measures entail loaning money to businesses who then sit on them. And then the policy response is to give away even more money, etc. Once the desire for huge cushions made of cash falls, there's going to be a lot of money out there.

    Bring back the WPA and CCC! I mean, it'd never get through Congress, but...

    ::sigh::

    enlightenedbum on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Business profits have recovered rapidly. Most companies are, again, hoarding said profit rather than handing it out to shareholders, though.

    Tyler Cowen comments. There are also a bunch of other hypotheses in the comments section. Doesn't really seem clear which one might be right.

    ronya on
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  • PantsBPantsB Fake Thomas Jefferson Registered User regular
    edited July 2010
    chidona wrote: »
    Pretty much, but Medvedev has been trying to restructure the economy to train more business leaders and get the rest of the economy kicking off. I think that, given a decade or two, Russia will be doing verrrrry well in economic terms, if it manages to somewhat deal with it's huge black market and crime levels.

    Russia has been trying to create an educated workforce since Peter the Great. They have not had a lot of success overall

    PantsB on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    How representative is this kind of problem? Skills mismatch that bad?

    ronya on
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  • zeenyzeeny Registered User regular
    edited July 2010
    Damn it. Give me at least a clue what that article is about, I'm curious but I can't read the NYT.

    zeeny on
  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Sorry, here's a link.
    Plenty of people are applying for the jobs. The problem, the companies say, is a mismatch between the kind of skilled workers needed and the ranks of the unemployed.

    ...

    Manufacturers who profess to being shorthanded say they have retooled the way they make products, calling for higher-skilled employees. “It’s not just what is being made,” said David Autor, an economist at the Massachusetts Institute of Technology, “but to the degree that you make it at all, you make it differently.”

    ronya on
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  • zeenyzeeny Registered User regular
    edited July 2010
    I read it, it's kind of strange. The quote about failing the test with 9th grade maths and literacy was a o_O.
    I'm not convinced it's an actual problem, as I'd expect that companies would start programs where they they educate their own employees on the required tasks if the shortage was really that bad.
    Still, I'd certainly agree that re-education of the unemployed should be getting more attention than it currently is.

    zeeny on
  • Kipling217Kipling217 Registered User regular
    edited July 2010
    PantsB wrote: »
    chidona wrote: »
    Pretty much, but Medvedev has been trying to restructure the economy to train more business leaders and get the rest of the economy kicking off. I think that, given a decade or two, Russia will be doing verrrrry well in economic terms, if it manages to somewhat deal with it's huge black market and crime levels.

    Russia has been trying to create an educated workforce since Peter the Great. They have not had a lot of success overall

    That might have been conected to the newly educated saying: "Why is this Tsar asshole running the show" and getting themselves sent to Siberia as a result.

    Educated people can figure out when they get the raw end of the deal.

    Kipling217 on
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  • zeenyzeeny Registered User regular
    edited July 2010
    Kipling217 wrote: »
    PantsB wrote: »
    chidona wrote: »
    Pretty much, but Medvedev has been trying to restructure the economy to train more business leaders and get the rest of the economy kicking off. I think that, given a decade or two, Russia will be doing verrrrry well in economic terms, if it manages to somewhat deal with it's huge black market and crime levels.

    Russia has been trying to create an educated workforce since Peter the Great. They have not had a lot of success overall

    That might have been conected to the newly educated saying: "Why is this Tsar asshole running the show" and getting themselves sent to Siberia as a result.

    Educated people can figure out when they get the raw end of the deal.

    Unfortunately, their political system has not changed much since Peter the Great too.

    zeeny on
  • Modern ManModern Man Registered User regular
    edited July 2010
    zeeny wrote: »
    Kipling217 wrote: »
    PantsB wrote: »
    chidona wrote: »
    Pretty much, but Medvedev has been trying to restructure the economy to train more business leaders and get the rest of the economy kicking off. I think that, given a decade or two, Russia will be doing verrrrry well in economic terms, if it manages to somewhat deal with it's huge black market and crime levels.

    Russia has been trying to create an educated workforce since Peter the Great. They have not had a lot of success overall

    That might have been conected to the newly educated saying: "Why is this Tsar asshole running the show" and getting themselves sent to Siberia as a result.

    Educated people can figure out when they get the raw end of the deal.

    Unfortunately, their political system has not changed much since Peter the Great too.
    That's not true. The current sytem where certain favored oligarchs get to loot the country in return for supporting the government is nothing like the system under the Czars where certain favored nobles got to loot the country in return for supporting the government. See, there are elections now.

    Modern Man on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    Russia could have escaped its decade of chaos if it had liberalized in a less abrupt fashion. China only formally recognized private property in 2004 - more than two decades after Deng's reforms - for a good reason.

    It's sad, really...

    ronya on
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  • RiemannLivesRiemannLives Registered User regular
    edited July 2010
    ronya wrote: »
    How representative is this kind of problem? Skills mismatch that bad?

    I really empathise with that article. I am a programmer and even during the worst of the recession it was so hard to find qualified people. Like, not even Good people. Just people can create slightly more than they fuck up.

    You want to know why large software companies love them some H1B Visas (despite the fact that they get paid as much and are a huge headache in terms of paperwork)? We can't find enough permanent workers who can do the job.

    RiemannLives on
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  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited July 2010
    ronya wrote: »
    How representative is this kind of problem? Skills mismatch that bad?

    I really empathise with that article. I am a programmer and even during the worst of the recession it was so hard to find qualified people. Like, not even Good people. Just people can create slightly more than they fuck up.

    You want to know why large software companies love them some H1B Visas (despite the fact that they get paid as much and are a huge headache in terms of paperwork)? We can't find enough permanent workers who can do the job.

    Economics isn't really prepared to handle the idea of people who authentically cost to employ than they can ever create, but I suppose their existence is inevitable given improving technology.

    ronya on
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  • ACSISACSIS Registered User regular
    edited July 2010
    ronya wrote: »
    [...] however, Germany and Britain are far richer than the other countries to begin with, so perhaps they will face less trouble!So says The Guardian, anyway.

    LOL

    Okaaay... i am going to tell you a little story about the financial situation of the government in Germany.
    It will be entertaining.

    Lets remeber back to the german election 1990 - the reunion-election wich united east and west Germany again.

    The SPD party under Oscar Lafontaine tried a unique and never repeated experiment: he told the voters the truth.

    He told the german population: "The reunion will be expensive, we will have to support east Germany for years, maybe decades. We must raise taxes."

    This is pretty much the stupidest thing you can suggest to a german: sharing wealth. It was the worst election result for the SPD ever.

    Helmut Kohl of the CDU party however proposed: "Nobody will have to share anything. This are germans, we remove the junk and the economy will blossom. The taxes won't be raised under any circumstance."

    A miscalculation in the budget plan of the government was discovered three moths after the election by the german minister of finance, Theo Waigel.

    Approximately 200 BILLION DOLLARS.

    "Thats really a huge miscalculation. How could we overlook this?"
    "Gosh, how did that happen?"

    And to fill that hole the taxes had to be raised, of course.
    The oil tax was raised and a tax to support east germany was introduced.

    That and taking the debts wich wreck our economy today.
    Half of the debts we have today were taken at that time.

    German financial experts today will tell you: during 1990-1991 everything what could be done during the reunification was messed up.

    They took up too much debts because they promised too much and paralel to that they ruined the social security systems of Germany (yes, we had that... and still today, in a way...). They also ruined the support system for the old. Fully aware what they were doing.

    A lot of people said: "This will lead into chaos".
    "Nono", the government said, "we can do that".

    And are you aware WHO suggested this approach?
    It wasn't Theo Waigel. He only signed it.

    It was Horst Köhler, President of Germany from 2004 to 2010, in 2000 to 2004 he was DIRECTOR of the International Monetary Fund (IMF) of the United Nations (187 nations currently).

    OH SHIT, indeed.

    I told you it would be entertaining.

    ACSIS on
  • RiemannLivesRiemannLives Registered User regular
    edited July 2010
    ronya wrote: »
    ronya wrote: »
    How representative is this kind of problem? Skills mismatch that bad?

    I really empathise with that article. I am a programmer and even during the worst of the recession it was so hard to find qualified people. Like, not even Good people. Just people can create slightly more than they fuck up.

    You want to know why large software companies love them some H1B Visas (despite the fact that they get paid as much and are a huge headache in terms of paperwork)? We can't find enough permanent workers who can do the job.

    Economics isn't really prepared to handle the idea of people who authentically cost to employ than they can ever create, but I suppose their existence is inevitable given improving technology.

    They are disturbingly common in the software industry. And it is really difficult to tell the good from the bad. On a lot of projects, it can take weeks or months to bring a new employee up to speed and with most people you'll never be sure if they are going to work out until at least a couple weeks in.

    Earlier this year we went through a couple rounds of hiring / firing that ended up costing probably around 3 man months overall. Both from a management perspective (interviews etc...) and because of the need to throw away everything they had done during their time here and re-do it from scratch.

    There's a lot of headaches involved with hiring H1B people, and they don't come cheap that's for sure, but without the wider pool of applicants they make available I don't know what we'd do.

    RiemannLives on
    Attacked by tweeeeeeees!
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