Maybe we should govern our nation by the laws of economics??? Sounds like a idea ;)

[ScienceRocks]

Maybe we should govern our nation by the laws of economics??? Sounds like a idea

Microeconomics - Wikipedia, the free encyclopedia

Typically, it applies to markets where goods or services are bought and sold. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and quantity demanded of goods and services.[2][3]

This is in contrast to macroeconomics, which involves the "sum total of economic activity, dealing with the issues of growth, inflation, and unemployment."[2] Microeconomics also deals with the effects of national economic policies (such as changing taxation levels) on the aforementioned aspects of the economy.[4] Particularly in the wake of the Lucas critique, much of modern macroeconomic theory has been built upon 'microfoundations'—i.e. based upon basic assumptions about micro-level behavior.

One of the goals of microeconomics is to analyze market mechanisms that establish relative prices amongst goods and services and allocation of limited resources amongst many alternative uses. Microeconomics analyzes market failure, where markets fail to produce efficient results, and describes the theoretical conditions needed for perfect competition. Significant fields of study in microeconomics include general equilibrium, markets under asymmetric information, choice under uncertainty and economic applications of game theory. Also considered is the elasticity of products within the market system.

Raising the price of a product may make it unaffordable for the consumer that can't afford that price. Equilibrium is the line where the price to the supplier crosses the max amount of demanders(people that want burgers). As you increase the cost to pay for worker that want $15 instead of 7.5 you add the cost of everything else + that increase ontop. This normally = the price of the good(burgers) increasing. On the map below you show how the demand goes down as you are forced to raise the price????

Let's take me as a point on this graph...I hardly want to eat fast food as it is too expensive already. This means that I'm outside of the shaded area and by raising the price even more moves it even further away from me.

Economic equilibrium - Wikipedia, the free encyclopedia

In economics, economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. For example, in the standard text-book model of perfect competition, equilibrium occurs at the point at which quantity demanded and quantity supplied are equal.[1] Market equilibrium in this case refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the competitive price or market clearing price and will tend not to change unless demand or supply changes.

So we have to 1. consider how much does rent or taxes cost for the building, 2. cost of the good???? 3. Pay of the workers.

Then 4. we have to consider competition from other fast food joints.

Can we raise the wages to $15 dollars per hour? You know the demand will be less even with the higher price of the good to give the worker more wages.

Outside forces like competition as I said is also very important as other fast food joints can steal customers away.

Think about this.

 

[ScienceRocks]

This is why a centralized economy can't work Way to many dynamics that can only be handled by a boss that understands his own ass is on the line.

 

[ScienceRocks]

If robots=cheaper. Maybe some workers should be fired and things set up differently?

The ceo needs to see that his corporation makes a profit and then look at how much he can raise wages.

 

[regent]

After all these years why haven't economists come up with a tried and true way to prevent depression/recession?

 

[Pete7469]

I'm not that smart I suppose, so I won't even try and pretend I understand all the nuances to how modern economics work.

I will say this though, I don't know if there are "laws" to economics. It seems like there's an abundance of theories, but nothing concrete that says "A+B will always = C"

Given my limited understanding of economics and the little bit I've read I reject Keynesian Theories outright. The Austrian School is far more plausible, and Ludwig Von Mises has been the best reading regarding economics I can cite. Therefore the entire foundation of "progressive" economics in my mind are something only bed wetters adhere too, but I'd be willing to listen to them attempt to convert me.

 

[National Socialist]

The elite and politically connected exploit the weak and poor? SOUNDS LIKE A PLAN!

 

[ScienceRocks]

The elite and politically connected exploit the weak and poor? SOUNDS LIKE A PLAN!

Marxism ends up making the poor poorer...Learn some history.

 

[National Socialist]

Don't want communism either.

 

[Londoner]

Think about this.

During the postwar years, the United States had the strongest consumption economy in world history. This was partly because workers made such high wages and benefits.

But it was also because of a whole infrastructure of "After Market" policies, programs and regulations that kept the cost of living for the middle class affordable. There were tougher anti-trust (consumer protection) laws and the Sherman Act was enforced, making it harder for large corporations to fleece consumers who were trapped in monopolized or otherwise anti-competitive markets.

Then Ronald Reagan happened. The corporations finally had someone in office who would beat down the world's most expensive labor market - the American Middle Class. Reagan famously waged war on Unions and accelerated the globalization of production, which allowed corporations to shop the globe for cheap labor. At the end of the day: Nike and Apple make more money when their products are made by workers who make under $5/day and live in hovels beneath dictators in freedom-hating places like Taiwan, Vietnam, Mexico and Communist China.

As the Reagan Revolution drove wages down (in order to incentivize investment), there was a slight demand problem, initially. This is one of the challenges of capitalism: the drive for lower wages takes money out of the wallets of consumers and thereby lowers consumer demand. The Reagan Revolution solved this demand problem by aggressively finanicializing the economy and expanding credit markets. Starting in the the 80s household debt exploded. Americans went on a 30 year borrowing binge. Indeed, the American credit card shopper was the symbol of global consumption. Americans borrowed just to keep pace as their energy prices and health care were quietly bid up inside consumer markets that had been monopolized by large mega-corporations that poured trillions into Washington to make sure corporations like Exxon didn't have to compete with alternative energy or face conservation laws. [Conservative media does not report Reagan's era of mega-mergers where companies simply bought each other rather than competing.]

But the fact remains, corporations are now sitting on unprecedented levels of cash. The problem corporations have is that there are not enough consumers. The easy credit decades of Reagan-thru-Clinton have finally run their course. Now Americans are marching toward retirement with nothing, and they are well aware that Republicans are going to strip their Social Security and Medicare ... which means they are afraid to spend - whereas in the postwar years the middle class had the appropriate wage and retirement safety to consume and drive economic growth. We forgot an important lesson which worked so well during the postwar years. Government stimulates middle class demand, and capital has no choice but to invest and add jobs in order to capture that demand.

"Build it and they will come." When consumers have money and benefits and affordable health care and affordable education and a secure future, they spend more money. And when they spend more, the capitalist and the investors are forced to add jobs and innovate in order to capture that demand. Reagan sold us Snake oil in the 80s. He convinced us to stop taking care of middle class demand and focus on increasing the profits of the suppliers. He said that the jobs and the benefits and the good life would trickle down. Who knew that right after he said it, the jobs would be strategically shipped to the very freedom-hating nations his party used to scare us. It was the most effective "snow job" ever perpetrated on a population.

If you don't think a demand centered economy works, look at the economy growth in the 50s and 60s when postwar Keynesianism was practiced brilliantly my great presidents like Dwight Eisenhower.

America swallowed poison in 1980. We traded jobs for credit cards. We were told to double down on petroleum rather than slowly transitioning to a more sustainable energy future. The poison has run its course. Reaganomics started with the S&L Scandal and it ended with TARP. The country was rolled as the serfs were distracted with gays and terrorists. Game over

 

[Missouri_Mike]

After all these years why haven't economists come up with a tried and true way to prevent depression/recession?

Because we turned our money supply over to the FED. The Fed makes money by manipulating the supply of that money. If you want a stable economy you get rid of fiat money printed by the same jack offs that make money by printing it.