The shapes of economic recovery | General financial discussion | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
The shapes of economic recovery
October 18, 2020
7:33 am
hwyc
GTA
Member
Members
Forum Posts: 281
Member Since:
September 30, 2017
sp_UserOfflineSmall Offline

Over the months, I heard about the V-shaped, the U-shaped, the W-shaped & the L shaped economic recovery models. And recently, there's talk of the K-shaped.

... Is that even a legit "recovery" model ? Seems to me the gap between the rich and the poor has always been growing sf-frown

( ... In my youth, being a millionaire means alot ... but not so much these days. Yet still most of us will never reach that threshold after a lifetime of working and saving. The norm's more likely to buy a house, then begin with a 6-digit debt and try to regain the debt-free status )

October 18, 2020
8:03 am
Kidd
Member
Members
Forum Posts: 575
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline

Mortgages are a trade off. For us, interest rates were high (11.25%) but the house prices were low. Today, interest rates are (free) and the house prices are high. Someone else can do the math (norman) but i would guess, the monthly payments i made decades ago are pretty close to what the kids are paying today. All factors considered, we may have had it worse. I was paid peanuts when i started working, by retirement i had a good 6 figure income.

K curve is not really a K but it kind of takes that shape. We drop, start to climb on an angle and then drop again. The recovery was starting to look like a "V" which was just insane because we are all still floundering. I believe a "U" was what was expected. We drop, take a long period of time to get back onto our feet before we climb.

October 18, 2020
8:42 am
rodeworthy
Member
Members
Forum Posts: 60
Member Since:
February 1, 2016
sp_UserOfflineSmall Offline

I believe the 'K' curve is supposed to be symbolic of the growing inequality in society. The rich are getting richer, the poor are getting poorer. The gap is widening and it is harder to bridge that gap and bring oneself across the divide.

Historically, it is a serious problem and the basis of many revolutions when the situation got so bad the poor rose up. Sometimes they were successful. My guess is, inequality was the fodder that resulted in the birth of communism. The principle of the state owning everything is cause to make us all shudder in this society. But governments exist to some extent to practice redistribution to take from the rich and give to the poor. It is a useful tool to soften the effect and keep the population restrained.

October 18, 2020
9:29 am
Kidd
Member
Members
Forum Posts: 575
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline

The question might be... has our standard of living improved? If the poorest of the poor in Canada can walk around with overpriced cell phones and not just one phone, the kids all have one.. LIKE REALLY? In my day... if i called my father at work, my brother better be dead or the house burnt down. The dog didn't matter.

Credit cards are relatively new, layaway was the means of buying something your family needed. My heart does NOT bleed for those with iPhones and no food on the table. It's called "priorities".

I admit wages and salaries are crazy. Is a hockey player worth millions? Bobby Hull and Gordie Howe played hockey because they loved the game, they also had real jobs to support their families.

What's the true value of a CEO? It's what the market demands (now that's a Bill answer). That music singer makes millions because you are willing to buy their product, pay $100's to see them live.

There will always be some better off than others, it's a fact of life.

October 18, 2020
10:15 am
hwyc
GTA
Member
Members
Forum Posts: 281
Member Since:
September 30, 2017
sp_UserOfflineSmall Offline

I suppose the K-shaped recovery is a different way of saying the beginning of the end of the lifelines for those who needed it. Going forward, some will float, some will sink.

October 18, 2020
10:16 am
Bill
Member
Members
Forum Posts: 2027
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Kidd, it's true that the poor with their iPhones etc are better off than before, but at the other end the rich are way better off than before, so that's why income inequality is said to be increasing. In fact things are better for everybody, but humans rate themselves against others instead of in absolute terms so many folks are even more mad/envious despite their improved conditions.

The (seems to me) coming communism will end income inequality, aside from a small elite the 99% will have the income equality we advocate for.

October 18, 2020
10:38 am
Kidd
Member
Members
Forum Posts: 575
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline

One of the HUGE faults with communism. I get paid $15 per hour, you get paid $15 per hour, we are all equal. There is no incentive for innovation.

I (as a country) have to steal the secrets on how to make a nuclear bomb because my scientists are not going to break their necks for $15 per hour.

Money, big money drives the thought process... how the hell do i make more money?

October 18, 2020
10:48 am
Norman1
Member
Members
Forum Posts: 3466
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

hwyc said
Over the months, I heard about the V-shaped, the U-shaped, the W-shaped & the L shaped economic recovery models. And recently, there's talk of the K-shaped.

... Is that even a legit "recovery" model ? Seems to me the gap between the rich and the poor has always been growing sf-frown

That is an inaccurate interpretation of a K-shaped recovery.

K-shaped means the recovery is uneven. It doesn't mean the rich recover and the poor do not.

Just ask the "poor" who are doing home parcel and home food deliveries. The delivery people are probably doing better than ever.

Just ask the "rich" who own all those shopping malls. The shopping mall owners are not doing so well.

Also, don't assume that when the gap between the rich and the poor is growing, that the poor are getting poorer. The rich can get richer without the poor becoming poorer.

The poor could just be stuck because of "poor" decision making like spending money on expensive iPhones instead of food, as Kidd mentioned. Not sure why one could not make do with a $100 cellphone and have food on the table, until one can afford both the iPhone and the food.

October 18, 2020
11:25 am
Bill
Member
Members
Forum Posts: 2027
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Kidd, you're absolutely right (and with the creation of the popular idea of guaranteed income you don't even have to work for your $15/hr), but comfy "ethical" people of today like to signal they're not driven by money so they're chasing greedy large business and capital away. They want to have neighborhood small businesses (local micro-breweries being a favorite example du jour) and gov't money as bases for economy, they vote accordingly, ergo coming communism.

K-shaped implies the rich are going up and the rest are going down, a popular falsehood that's catching on with the impressionable.

October 18, 2020
7:36 pm
Loonie
Member
Members
Forum Posts: 6452
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

rodeworthy said
I believe the 'K' curve is supposed to be symbolic of the growing inequality in society. The rich are getting richer, the poor are getting poorer. The gap is widening and it is harder to bridge that gap and bring oneself across the divide.

Historically, it is a serious problem and the basis of many revolutions when the situation got so bad the poor rose up. Sometimes they were successful. My guess is, inequality was the fodder that resulted in the birth of communism. The principle of the state owning everything is cause to make us all shudder in this society. But governments exist to some extent to practice redistribution to take from the rich and give to the poor. It is a useful tool to soften the effect and keep the population restrained.  

Extreme inequalities have indeed sometimes led to revolutions. It takes a lot of desperation for that many people to take to the streets and risk their lives. Unfortunately, hard times also open the door to fascism. The poor, hopeless and, latterly, de-industrialized exercise their anger by aligning with xenophobes, imagining that some targeted group is getting an advantage over them. The classic example is 1930s Germany, still reeling from the measures imposed on it to deal with WW1. It's worth remembering too that Hitler and Mussolini both came to power legally.
The way to avoid extremes is for everyone to have a fair chance of economic success. You'll never get there on a minimum wage job, and somebody has to do those jobs because we depend on them doing them. If it weren't for minimum wage jobs, your online orders might never be fulfilled. We have a lot of work to do on that score.

I don't know much about these lettered shapes, but there is ample evidence that the rich are getting richer and wealth is becoming more concentrated among those who couldn't ever spend it all.

October 19, 2020
6:15 am
Alexandre
Member
Members
Forum Posts: 237
Member Since:
November 8, 2018
sp_UserOfflineSmall Offline

Kidd said
One of the HUGE faults with communism. I get paid $15 per hour, you get paid $15 per hour, we are all equal. There is no incentive for innovation.

Well, one could call Soviet Russia or North Korea a communist country, but that would not be true.
Simple criteria: if money changes hands in day to day activities of the country (society, nation) - that is not communist country. At least, not as envisioned by Karl Marx.

There is no concept of "getting paid" in communism. You do the work you like, your reward is enjoying what you do, feeling of being productive member of society, useful to others.

Money, big money drives the thought process... how the hell do i make more money? 

I remember once I saw someone wrote "I had a job I really hated, but it paid well and I worked there till I retired, now I can enjoy comfy retirement."

Here is me, thinking: you filled best years of your life with self inflicted misery and sadness, slaved for 40 years, felt demotivated and depressed every day, saw your job as a pointless activity, just to save some money for retirement?
How many people, like you, spent all their productive life unhappily, suffering 8-10 hours a day?

Would not it be better to have guaranteed basic income, so that when you are 25 or 35 or even 45 you are not locked into job you hate, instead can choose to do something you like, even if it does not pay well?
Because, you know, you have safety net.

The question might be... has our standard of living improved?

For sure. Look back not 30 years, but 130. Go back to 1890 and tell people there that in 2020 we will have:

1. Free emergency medical care;
2. Free family doctors service;
3. Safety net for people over 65: income, medical, living arrangements;
4. Free secondary education;
5. Basic safety net for the most vulnerable part of population;
6. No child labor;
7. Strict labor laws, including work hours, minimum salary, vacations, maternity leave;
8. Can work just 24 hours a month at a minimum salary (3 days out of 30) to put food on table for yourself for the whole month.

Just to mention few.

For people in 1890 that might sound as a communism, or at least getting close to it.
Which would be true, because capitalist society will evolve gradually into communist society, unless capitalists destroy the world before it happens.

October 19, 2020
7:47 am
Bill
Member
Members
Forum Posts: 2027
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Along with fascism hard times have also led to communist (leftist) dictatorships, czarist Russia being the classic example.

And no point talking about guaranteed income, safety net, without indicating who would create the wealth to pay for it. Not really possible if your system allows everybody to pick to do only what they enjoy.

October 19, 2020
8:01 am
Kidd
Member
Members
Forum Posts: 575
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline

I may be mistaken, i thought those living in the likes of Russia were assessed by means of aptitude tests, your future career was decided for you. Examples being their Olympic gymnasts.

If i was allowed to pick and i was to be paid no matter what i picked... lounge chair tester would be my top pick.

October 19, 2020
10:17 am
Norman1
Member
Members
Forum Posts: 3466
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Allowing everyone to pick what they enjoy definitely does not work.

We have that in North America today where everyone is allowed to pick what they study in post secondary education. The result is that we have an oversupply of people with degrees in literature, political science, sociology, marketing, and human resources.

At the same time, employers are not able to fill positions in the trades. Lots of those trade positions are not minimum wage.

When people indulge themselves, they are not thinking of what everyone else needs.

Unfortunately, we don't need as many actors, English literature people, political scientists, or people in HR as there are people who would like to do that kind of work.

October 19, 2020
11:29 am
Vatox
Member
Members
Forum Posts: 754
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

Norman1 said
Allowing everyone to pick what they enjoy definitely does not work.

We have that in North America today where everyone is allowed to pick what they study in post secondary education. The result is that we have an oversupply of people with degrees in literature, political science, sociology, marketing, and human resources.

At the same time, employers are not able to fill positions in the trades. Lots of those trade positions are not minimum wage.

When people indulge themselves, they are not thinking of what everyone else needs.

Unfortunately, we don't need as many actors, English literature people, political scientists, or people in HR as there are people who would like to do that kind of work.  

I totally agree with this. It’s also true that people can suck at their chosen careers, which can actually hurt society. Not so much in the private sector, but government jobs and unions protect and pay good money to people that just shouldn’t be employed in that given career or job.
We need a schooling system where qualified people are “sniffed out” and properly groomed for management positions and particular areas of occupation.

October 19, 2020
12:30 pm
Alexandre
Member
Members
Forum Posts: 237
Member Since:
November 8, 2018
sp_UserOfflineSmall Offline

Norman1 said
Allowing everyone to pick what they enjoy definitely does not work.

Even smart people might not notice the flaw in an argument "... definitely does not work now."

we have an oversupply of people with degrees in literature, political science, sociology, marketing, and human resources

Was this a concern in 1890? No, likely not. Why? Because the economic system determines other features of a society, according to Marx, and in 1890 that system couldn't support those useless professions in such large numbers.
Speaking simply, those people could have starved to death 130 years ago, and some (artists, actors) probably did.

How many people with these non-productive degrees you see starving to death in 2020?
That's your answer. With time, society which is based on ever evolving economic system could afford having more and more people choose jobs of their liking, including jobs that bring no material benefit to society.

October 19, 2020
12:45 pm
Bill
Member
Members
Forum Posts: 2027
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Alexandre, you have not yet indicated who is creating the wealth so that society "could afford" these jobs with "no material benefit to society" - ? Have you noticed the debt levels, going up every minute, of municipal, provincial and federal levels of government in this society? That's no "evolving economic system", it's called running a tab.

October 19, 2020
2:28 pm
Alexandre
Member
Members
Forum Posts: 237
Member Since:
November 8, 2018
sp_UserOfflineSmall Offline

If you've noticed, I already pointed that society today does afford many "useless" jobs and also many free goodies that someone in 1890 couldn't even dream of.

Who is creating the wealth to support just those I listed above?

October 19, 2020
4:08 pm
Bill
Member
Members
Forum Posts: 2027
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

Alexandre, my point is that there is not enough wealth being created for the "useless" jobs, free stuff, that it's largely being paid for by gov't borrowing. That is unsustainable. That's my answer. I welcome your answer, if you can provide one.

October 19, 2020
4:24 pm
Kidd
Member
Members
Forum Posts: 575
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline

I understand that taxes are based off a percentage of your earnings. When i posted my cra quarterly payments, the replies from this forum were... you are lucky to be making so much in retirement.

I do NOT feel lucky, i feel violated. When i see the wasteful spending by every branch of government, i truly question the need of government.

No permission to create posts

Please write your comments in the forum.