Submitted by Financial_Donut_64 t3_10lya0i in singularity
grahag t1_j61h7pg wrote
Reply to comment by mihaicl1981 in How life with UBI could look like by Financial_Donut_64
The way to prevent runaway inflation is strict government price controls on essential goods and services.
Housing, healthcare, transportation, food, fuel, education, and energy would all need extreme intervention to prevent predatory capitalism.
Or maybe an AGI has some ideas...
CellistDouble3772 t1_j63curn wrote
In theory this sounds good. But government intervention on prices has always lead to more harm in the long run.
grahag t1_j64p0co wrote
The problem with it has to do with corruption. There's always someone wanting to get around the controls and have exceptions made. That ugly head of capitalism shoving it's way through a tiny hole.
CellistDouble3772 t1_j64tz05 wrote
I disagree. The problem is that the government doesn't really know what they're doing or the unintended consequences, whether it's all well intentioned or not.
Case in point, the 2008 financial crisis was caused because for decades the government incentivesd irresponsible behavior from banks. Well intentioned or not, it pretty much destroyed the world's economy.
If you put price ceilings on things, you're just going to have people stop building houses, stop producing gas and groceries.
The real key is to let competitionand technology drive prices down.
For example, when 3d printing houses becomes the norm and companies can print entire neighborhoods of houses for a fraction of the cost in a fraction of the time, prices will naturally drop. And then lab grown beef and vertical farming will reduce the amount of farmland needed and therefore land prices will decrease. Creating price ceilings on things will only retard the development of these things.
Ultimately, in the next few decades, the only true store of value will be things that technology or governments can nit make more of cheaply. So, think gold and bitcoin. However, you will never find more bitcoin at the bottom of the ocean or on asteroids...
grahag t1_j653zmd wrote
> Case in point, the 2008 financial crisis was caused because for decades the government incentivesd irresponsible behavior from banks. Well intentioned or not, it pretty much destroyed the world's economy.
This was due to corruption and lax regulations. The financial sector was instrumental in stripping regulations that would have prevented the 2008 financial crisis.
>If you put price ceilings on things, you're just going to have people stop building houses, stop producing gas and groceries.
If there is an actual shortage on goods or services, this is the case. When that shortage is artificial, it's a manufactured crisis designed to manipulate prices.
Consider the housing "crisis" right now. There are companies that have algorithms designed to buy up swaths of available homes JUST to jack up the prices. Those homes are then turned around and put up for enormous prices OR rented out at huge prices. I've had offers on my house for 6 times what I paid for it and a number of my neighbors have taken those offers leaving the houses empty.
OPEC regularly manipulates the prices of oil by cutting back on production in the middle of an energy crisis. More refineries are sitting idle or shuttering completely, not because oil is scarce in the world, but because they aren't being shipped oil to refine.
Frankly, I'd rather err on the side of working against profiteering and FOR consumers rather than for the poor conglomerates who will make less profit than the previous quarter. Assuming that manufacturers will stop producing goods because we reduce their profits seems a weird argument. What will they do? Do you have significant examples of that thinking? I've seen more mom and pop shops closed down because they couldn't compete with the big boys, who then ended up raising prices once their competetiton was gone, rather than a company stop producing or selling goods because their profits were affected negatively.
>For example, when 3d printing houses becomes the norm and companies can print entire neighborhoods of houses for a fraction of the cost in a fraction of the time, prices will naturally drop. And then lab grown beef and vertical farming will reduce the amount of farmland needed and therefore land prices will decrease. Creating price ceilings on things will only retard the development of these things.
I'm not sure if you've been paying attention but land prices aren't decreasing at all. I've known people that have held onto land for decades only to see the offers keep coming in for higher and higher prices. My uncle's hovel in Redwood City, just sold for 1.2 million. 10th of an acre in a seedy neighborhood. They tore the house down and the developer is just sitting on the property.
These are all GREAT examples of predator capitalism and the corruption that it fosters and WHY price controls are required. There are plenty of empty homes out there. There's plenty of oil in the ground, and there's plenty of crops to be planted and picked. Prices don't have to be this high, and while it doesn't really affect me, because I can afford it, I see that many people I know are having a hard time.
CellistDouble3772 t1_j65bofh wrote
I agree that the 2008 crisis was exacerbated by deregulation. But that wasn't the cause. The cause was bad government policy that allowed people to get loans that they couldn't afford.
And I don't disagree that people are suffering. It sucks. But it's because the government has acted irresponsibly and frankly, stupid, on many levels. And enacting prices controls as a way to band aid over their own mistakes will create short term relief. So maybe that is the way to go. But don't think for a second that there won't be consequences down the line.
grahag t1_j65puy7 wrote
> The cause was bad government policy that allowed people to get loans that they couldn't afford.
Incorrect. The cause was financial institutions giving loans to people they KNEW would end up defaulting.
It was made possible by deregulation, but it wasn't the government who actually made it happen. You COULD say that the government LET it happen, but it was really an inside job.
Those financial institutions were the cause and some of them are no longer around because of it. Frankly, we should have taken them over and made them a government institution for the good of the people. And that really SHOULD be the penalty for ANY company that betrays the public trust. Especially when the failure of it will cause widespread financial calamity.
CellistDouble3772 t1_j6631dt wrote
The government made possible and even incentived those institutions to give those bad loans. The institutions aren't free of blame, but the government was the enabler.
grahag t1_j66tata wrote
That's like saying that the criminal isn't fully to blame for committing a crime that the government made so easy to do.
C'mon, you HAVE to see that, right?
And you're acting like banks didn't have control of legislation to deregulate themselves. Phil Gramm, a Republican Texas senator, AND Bill Clinton, were largely responsible for getting Glass-Steagall repealed and later deregulating derivatives. Gramm is now towards the top of UBS now, benefiting from that deregulation.
This wasn't "the government". This was the banking industry who as a whole, spent money for lobbying to get the industry deregulated. The government was a tool to do that and the banking industry was largely responsible for it.
I, as well about a hundred million others were directly affected, either losing their homes, their 401k's dropping half their value, or other financial disasters that left us all worse off than when 2008 hit. This orchestrated event was a culmination of decades of planning by the financial industry and rests solidly on their shoulders.
I'm aware the government is broken in a way that can't be easily fixed, but I'll never forget the details of my financial ruin or the people responsible.
CellistDouble3772 t1_j685cv6 wrote
Ok. You win.
Financial_Donut_64 OP t1_j62rn89 wrote
Interesting take - there will prob be some form of government intervention
Ammordad t1_j63fcrt wrote
Venezuela and Iran both have strict price controls. But it didn't help. It only led to scarcity and curroption.
grahag t1_j64lxg4 wrote
Which is why the problem with corrupt regulation needs to be solved at the same time.
Lawjarp2 t1_j64qwfc wrote
Or you know, increase supply.
grahag t1_j64ygs5 wrote
I agree entirely.
Predatory capitalism though incentivizes artificial scarcity to raise prices.
This is why regulation is a requirement.
Lawjarp2 t1_j65jkm8 wrote
Price control is opposite of what you want. Prices will drive down to nearly nothing if supply is pushed. What you should be afraid of is people in power no longer needing to obey you. Increasing government control or power is quick way to extinction when robots do all the work.
grahag t1_j65p1z0 wrote
So how do you force a supplier to ramp up their supply when they don't have to work as hard, spend as much resources, and will make MORE money by limiting the supply? What if they are a monopoly like an energy, medicine, or food provider?
>What you should be afraid of is people in power no longer needing to obey you.
This already occurs, but we have a process in place to remedy that with voting.
What remedy do I have when the single broadband provider in my neighborhood doubles it's prices for internet, considering that being connected is part of my livelihood? I take it on the chin.
What do I do when gas prices skyrocket? What do I do when food or electricity doubles in price? What can we do when healthcare costs quadruple in a 10 year period? We take it on the chin because we have no alternatives.
I'm capable, and I can afford it, but what is something that chips away at my finances may ruin a family who is not doing so well. When business won't do the right thing, you have to regulate them to DO the right thing.
The problem we're seeing is one that will cause repercussions YEARS down the road. Less people are having kids. Less people are spending on house. Less people are buying new cars. Less people are splurging on vacations. All that money that COULD be going into the economy is going on things they consider essential because they have no choice. Pooling that money into these industries that are ALREADY making record profits is bad for the economy, and bad for the citizens.
Lawjarp2 t1_j679l0r wrote
Dude the government can just build it's own production. When cost of production is cheap and labour infinite what prevents them or anyone from creating more production. People are overcomplicating things here.
None of the issues you mention matter if we are at a point when ubi has to be doled out because of AGI. The hyper deflation that will occur due to sudden increase in productivity means the governments can and probably have to print their way out anyway.
grahag t1_j6cgtbx wrote
Frankly, I think that's a great idea. The government SHOULD produce anything that is required to live. It doesn't have to be top shelf quality, but it would need to be an alternative to for-profit products and services.
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