I’m probably irrational about this, but the 1 year holding period and $10k max for I Bonds has always felt like a major drawback for something that someone is looking at something like a cash equivalent. I haven’t found myself ever really getting excited about them because I’d rather just have a bucket of liquid cash and then the rest in equities.
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This might happen, but as a consequence of an aging population creating more demand and simultaneously shrinking the workforce more than any specific policy or the rich soaking the poor
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One of the better ones in that he stfu about getting in the news for being a POS more. Musk types are the norm not the exception.
In 1948 Penicillin had only just become widely available. There was no polio vaccine. That alone makes current healthcare for the poor better than it was in the 40’s. There are a lot more cheap medicines and procedures that just didn’t exist then and you would just end up dead or disabled.
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God bless the billionaires that invented penicillin and polio vaccines.
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This right here is my main criticism of Mungers larger point. It assumes what virtually every ‘capitalism is actually good’ take assumes which is that capitalism is inherently responsible for the economic and technological development of the last couple of centuries. I think there’s more than enough counter evidence to that point for it to be if not entirely false certainly extremely dubious… and if you get the stuff that capitalism takes credit for and push it out of the pro column you win the argument. If capitalism isn’t directly responsible for everything positive about our lives it goes from being something unpleasant but extremely defensible homeless people and all to something evil with good PR.
There was an interesting article in the Atlantic about Economics since the Pandemic started and how we have shifted the recurring Economic problem from there not being enough Demand to there not being enough Supply.
I think it’s possible that this is the larger picture when we talk about “Late Stage Capitalism”. Capitalism is great at allocating resources and creating incentives when there is not enough to go around. It’s ruthless but it creates incentives for people to create more for cheaper because demand will be there.
In a world of more abundant resources, the incentives of Capitalism become misaligned and rather than focusing on producing more for less cost, companies focus on hoarding competitive advantages and keeping supply artificially low.
Not sure this is a fully fleshed out thought, but it makes sense in my head.
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There’s a diminishing returns on complexity theory that may apply. Like without new inputs, there’s only so much we can throw at the global market economy to get more out of it. How much more optimized and interconnected can things get? It’s hard to imagine supply chains getting much more efficient when they’re already so tight that one stuck boat screwed everything up for a month. The easy cheap labor in Asia has already been fully tapped, repeating that in Africa will be harder, and there’s not really anywhere to go after that. The cheapest energy sources are getting more expensive, and they have huge environmental externalities. And now we’re in a situation where many things are hard to get no matter how much money people are willing to spend.
On a finite planet growth has to stop eventually. Maybe that’s now?
It does seem like we need some kind of major technological breakthrough, like cheap power, to keep growing the world economy at rate we have been since the industrial revolution.
My concern is that the whole system doesn’t work at all w/o constant growth, and a no growth state quickly leads to societal collapse, which ushers in various forms of fascism and totalitarianism.
I almost feel like that’s inevitable at some point. But maybe we have a few more generations before it happens.
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Sometimes I think maybe the post-war western world was already heading in that direction when the tech revolution of the 90’s bought us another few decades. Like I remember the gloomy outlook of the late 70’s/early 80’s when everything was falling apart and the future looked pretty grim. Then everything rocketed up when we started tapping the full potential of networked computers, but it seems like we might be approaching the limits of those benefits, if we haven’t already passed them.
Fortunately AI and biotech are poised to significantly push what’s possible outward. But yeah the current system is getting pretty long in the tooth and starting to show a ton of pretty major cracks.
Munger is just old and out of touch because he’s a billionaire and pushing 100. I doubt he would have been this out of touch 30 year ago when he was only 60 something. He really is one of the very best billionaires, which is an admittedly low bar. He’s just doing what most people do and trying to find a narrative that lets him off the hook.
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I’ve been following this line of thinking as well. Basic thesis is that for the first time in our lifetimes we will continue to deal with (inherently inflationary) supply problems due to aging population, shifting energy supply, and hardening supply chains (moving away from JIT, etc). The existing tools of monetary policy are not equipped to deal with this.
In any case, I assume that on balance this will be relatively good for the lower and middle classes in industrialized economies and bad for the rich. As mentioned above, some paradigm shifting technology such as AI could swamp these effects.
edited to add: It seems that many think the most effective fiscal policy to address this would be making child care better/cheaper to boost labor force participation.
I think there’s a lot to be gained over the next two decades from moving information technology systems from giant webs of if statements and iterative structures to data science models (e.g. regressions, neural nets, SVM or whatever else is cutting edge in that field). In my opinion we’re still at the stage with data science that we were with programming in the early / mid 90s, where anyone with the background and skills can basically write their ticket and companies are investing scattershot in it trying to figure it out.
I expect we’ll see a rapid improvement in decision support type technology for another decade and then things will be mature enough that AI type models can make a lot of decisions fully autonomously.
A lot of that stuff has been around for a while but it actually takes a long time for it to be widely and effectively utilized across many industries. For example, many non-software companies are still figuring out how to do agile and service oriented development even though those ideas are now 20+ years old.
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Yeah there’s some unified theory here that I feel like all the pieces are there but I can’t quite connect them.
I feel like it has to do with the study that came out a long time ago that (If I recall correctly) showed that happiness increases with income almost linearly up until about $150k for a couple, then it sharply levels off above that.
As much as Charlie Munger is a shitbag for his scorching take that average people should just shut up and be happy, he’s right in that macro-wise conditions continue to improve for people. Energy is getting cheaper especially for renewable energy. Goods that were considered luxury goods 30-40 years ago are considered staples. The cost of food continues to drop relative to incomes.
I feel like we are still bending towards a version of the nation where fewer and fewer people are unable to meet their basic needs. We would get there way faster with continued redistributive policies in both wealth and income. Once we do get there, I’m unsure what that means for the economy as a whole. I assume consumption as a % of GDP would decrease because people no longer need to spend as high of a % of their income on consumable goods to meet their basic needs.
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they will just spend it on housing and healthcare instead
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Solar and wind are the cheapest energy, by far, and getting cheaper. Theres a ton of runway left on renewables.
Asian cheap labour definitely not tapped out yet. Not at at the lower skill end of the market and certainly not at the higher skill end.
I’ve talked about my mega trend thesis above ITT. I.e. that high skill labour and white collar jobs in the developing world will be outcompeted in the developing world by better educated, cheaper, harder working, younger folks.
Theres also a lot of other productivity and technology improvements across multiple industries, not least AI which I think is only just getting started.
That happiness study is often quoted but generally debunked.
It’s a notoriously difficult area to study/reproduce. But most recent studies show a much more complex picture.
People absolutely can get get happier as they get richer, if they spend it on the right things.
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This is correct. Money is a powerful tool to build happiness with, but you first have to have the basic foundation of behaviors and habits and attitudes to enable happiness. If you are a monumental asshole with no social skills and you’re not able to maintain a happy relationship and you constantly fret about what you don’t have and never feel grateful for anything and have no sense of purpose in life, money cannot overcome that. “Money can’t buy happiness” is a very misunderstood idea straight out wrong if you don’t understand all the caveats and nuances to that statement.
I started spending a TON of time of Berkley’s happiness website starting in 2020 because the pandemic fucking sucked. Leaning about this stuff made my happiness shoot through the roof
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Without reading, do these studies try to define “happiness?”
Yes, with a scientific lens. Studying the science of happiness is now a developed discipline. They understand the challenges with getting people to self report on happiness.
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