Rich asshat lays out modern economic thought in honest terms, sounds like a psychopath.

Tim Gurner made headlines with some comments he made a few days ago at the AFR Property Summit, basically saying workers have gotten arrogant and need to be put in their place. I'm only slightly exaggerating. Watch the video, it's about a minute and a half.

But, as much as he comes off as quite the entitled douche (and seriously, the line of thought shows traits of a psychopath), I can't help but appreciate the honesty on display here. Governments and businesses around the world are taking the actions he suggests, maybe giving different reasons but the goal is to increase unemployment. I suppose we shouldn't stone the man just for being the one to say the quite part out loud. But it begs the question, if inflicting pain among the plebeians is the only way to fix the economy, maybe we need to rethink how we do things.

Edit: Here's the quote to make things easier.

"I think the problem that we've had is that people decided they didn’t really want to work so much anymore through COVID and that has had a massive issue on productivity. Tradies *Australian slang for blue collar workers* have definitely pulled back on productivity. They have been paid a lot to do not too much in the last few years and we need to see that change. We need to see unemployment rise. Unemployment has to jump 40-50% in my view. We need to see pain in the economy. We need to remind people that they work for the employer, not the other way around. There’s been a systematic change where employees feel the employer is extremely lucky to have them as opposed to the other way around. So it’s a dynamic that has to change. We’ve got to kill that and that has to come through hurting the economy, which is what the whole global - the world - is trying to do. The governments around the world are trying to increase unemployment to get that to some sort of normality and we’re seeing it. I think every employer now is seeing it. I mean there is definitely massive layoffs going off. People might not be talking about it, but people are definitely laying people off and we’re starting to see less arrogance in the employment market and that has to continue because that will cascade across the costs balance".

And yes, this is the avocado toast guy.

I can't watch this yet, but I'm veeeeery interested in the thought process. I'll see what the merits and tradeoffs are once I'm able to.

No more avocado toast.

Disclaimer: I only read the paragraph provided

I don't see what the big deal is. I don't like some of the language that he uses and the way he positions some things and the 'why' he supposes, but yes we are generally looking for more unemployment.

This is especially true in the US that continues to add jobs despite raising interest rates to lower inflation. It was expected to also significantly cool off employment rates, but that hasn't really turned out to be true. In the longer term chronic labor shortages due to a red hot economy are not a good thing. It sounds great in the short term, but ultimately it erodes your competitiveness.

Similarly, it was completely moronic for Trump to lower taxes in a red hot economy, the effect of which has saddled the US with a huge amount of additional structural debt, that politically will be very difficult to reverse.

Generally I agree with the balance approach and any time one or more of the key economic factors goes sideways it is a problem for a system that highly prefers stability and predictability.

Also, provocative statements like unemployment needs to rise by 40-50% need proper context. The US was at 3.5% in July. A 40-50% increase would take it to approx. 5% which historically is a good number for the US over the last 70 yrs. Anything 4% or lower is considered red-hot and unstainable. Anything over 6% is generally considered bad for the opposite reason.

Balance is the key to diet, life, and the economy :)

I figured that was why the FED was raising the interest rates like it did. Too slow buying aka buisness. Usually results in businesses closing. What is it like 5%+ unemployment as an opportunity when prices start coming back down.

He's correct on the facts:

Governments are trying to raise unemployment - that's what raising rates is meant to accomplish.

That's how entrenched inflation is lowered as well. Whenever anyone calls for increased rates or lower inflation, they're calling for people to lose their jobs.

He just couched it in a really douchey and entitled way:

People haven't "stopped wanting to work." They never "wanted to work." They wanted to get paid and they provided their time and labor in exchange. It's a business relationship that works best when there's a balance of power at the negotiating table. He's openly pining for a return to the employer-favored imbalance of the post Great Recession years because guys like him received nearly all the productivity gains of that period.

My personal take is that we shouldn't try to go back to that era's imbalance, but should instead aim for a balance a little higher. A 2 percent inflation target is probably too low, but something between 3 and 4 is likely a much better compromise. Unemployment is too low right now, we probably want it closer to 4, although the Philips Curve seems a little out of whack these days so it's probably best to be flexible and open to new information as it develops on this front.

The biggest takeaway from this video is how adversarial he views the relationship, and what level he sees as balanced. Perhaps with some further questions he'd add some nuance to this stance. Perhaps not.

But he doesn't give a shit about inflation, he just wants to hurt the uppity workers who now have more options and are less inclined to grovel to their owners to stay employed.

It is about motivation in a way. As opposed to that of successful business owners, when you're subsisting, work's a ****ing misery.

While I wouldn't go as far as "psychopath", yeah, a lot of successful people are apparently incapable of imagining themselves into the position of someone with no options, money or prospects. Just so happens a complete lack of empathy isn't a hindrance in business.

It's a stupid reduction he's making.

Rich guy wants to continue being rich and wants to be even more rich.

If only more smart people would get attention. That'd be cool.

@rmpumper: The inflation bit was intended to bring current regular people's opinions into a similar frame of reference as his. A lot of people, many of them on this board, are arguing to drastically lower inflation still. They should be aware of the tradeoffs they're asking for.

Corporate profiteering makes up half of the inflation, so you could slash it by 50% and not hurt a single average Joe.

What he's saying is typical corporate bullshit seeing as how production and corporate profits has increased over the last few decades while wages have stagnated.

I do somewhat agree with him on the increase of entitlement and laziness embedded into work culture now. I've had so many issues with attendance and constant cell phone use it's absurd. In fact, if I'm interviewing someone in their early 20's that's a mental footnote in the back of my head because there's a higher probability that this person is going to be addicted to their cell phone and callout more often.

No, they're only arguing for it because a Democrat is in office. Switch the party and watch the narrative change.

A lot of employers complain about the current generation and their approach to work. Fire them. Eventually they'll get the message.

Slaves speaking back and coming up for their rights is so annoying.

@LJS9502_basic: Yup. I do a 30 day probationary period and a three strike and you're out rule. I think it's more than fair but you'd be suprised how much I'm told how unfair it is.

The UAW strikers have the right idea; ask for a giant increase in salary over a short amount of time.

If executives are seeing pay increases of 40%, why can't workers? You know, the people that actually make the damn product.

This is besides the big picture, though: the way we do things just can't be sustained, infinite growth in a finite world is not possible while keeping the majority of people happy. We need to find a way to make being profitable good enough.

My company made damn near $20 billion last quarter (last quarter!) and they're firing people left and right and talking about how times are tough because we didn't grow. WTF!?

Yeah! Damn millennials! You young whippersnappers!

...oh wait millennials are like 40 now and will be retiring sooner than we want to admit...

I mean, I know that's dramatic and hyperbolic (and probably offensive), but it sort of feels like they're just trying to keep us jusssssssssst above poverty levels so we grumble but don't full-on revolt.

When you read the statistics and hear some stories, though, it's pretty scary. So many people my age are going to have to work until they die. We can't afford homes. Cars are insanely expensive while the infrastructure we use to commute is crumbling. Most folks that do own homes can't afford major repairs, which will have to happen.

I am so thankful I only have myself to worry about. No pets, no kids. If things get bad I can just piss off to somewhere else. I might do that anyway, I just don't know where.

@mrbojangles25: Yeah, it's not enough to make money hand over fist, or even enough to make more than you made last year. You have to make at least as much as you told investors you'd make last year, or you cut head out.

Yup. And the worst part is you can't speak ill of capitalism in public. I'm not even that big of a socialist despite how I act on here; I think a lot of capitalism has merit.

But it's not a perfect system. Doubly so for American capitalism. And unfortunately it's so entwined with our politics we can't have an open and serious discussion about it.

@mrbojangles25: Eh, the entire capitalism vs socialism dichotomy is a false one. In practice every successful economy is nuanced by necessity.

@mattbbpl: @mrbojangles25: What really grates my cheese about it, (shut up, I had a long day dealing with IT issues) is this boot-strap pulling capitalist will wag his finger about wages being driven by the market when employees want more money, but then turns around and cries to the government for systematic implementation of "pain" into the economy when he feels his boots aren't being licked hard enough. Comical hypocrisy here. If the market demands it, it's on you to make your boots more lickable.

@judaspete: that note only grates my cheese, why, it also grinds my gears! You might even say it rubs my hair the wrong way.

Woh woh woh you're saying we can have our cake and eat it?

There is zero wrong with capitalism. It is a very simple economic construct with highly predictable outcomes that has elevated society far beyond any other economic system in a far shorter time.

The entirety of the problem is govt and politics.

Capitalism is just the engine. It is the gov't role to define the car, what performance and features you want and where you want the car to go. In doing so, the govt also defines/limits the specs for the engine itself and governs the boundary systems that the engine interfaces with. Like the driver, the govt operates the car; not the engine directly.

Capitalism has proven itself to operate efficiently and effectively in a near limitless number of scenarios. For example, you can regulate the hell out of a sector and still capitalism finds ways to improve within that environment. This is proven all over the world where privately owned utilities that are heavily regulated (and should be...which is a governance decision) consistently outperform publicly owned equivalents.

The problem starts with people thinking that capitalism as a concept exists in a void and/or they want to duscuss things that have nothing to do with the very basic economic theory. Hence, the term has been bastardized to cover off all manner of govt roles. This has led to the stupidity of creating sub-terms/types of capitalism...when in reality the sub term describes govt roles.

A perfect example of this is healthcare. The rules of capitalism fail in any asymmetric information environment, of which healthcare is one. Therefore, it is the role of govt to regulate this sector in some form. This happens everywhere on earth and the difference in countries is only the degree of regulation. The choices and outcomes are therefore entirely driven by governance, not capitalism. Yet we throw around terms like private vs socialized healthcare neither of which actually addresses capitalism.

As an example, I happen to think the US system around prescription drugs is abysmal. To simplify I will ignore insurance for now. The drug companies will complain about R&D costs, regulation, the time to bring new product to market, etc...and there is some legitimacy there. However, when you check their financials you will find they spend just as much on sales & marketing costs as they do on R&D costs. Therein lies the primary problem of asymmetric information. Ironically this screws both the buyer/patient and the seller. The seller maintains large armies of drug reps to push their product on every doctor/hospital and also spends large amounts of direct to consumer advertising to drive brand recognition. Meanwhile, the patient doesn't give a damn about the brand or the producer, and just wants to get better....but they will take whatever the doctor recommends or what they see on TV. Going back to the basics, this has nothing to do with capitalism, per se, and everything to do with governance and rules over a sector that suffers from asymmetric information.

In short, capitalism is damn amazing because its principles work in a myriad of social/governance constructs. All of our problems are based on governance choices, not the economic engine itself.

Yes, I wrote a book. But I am tired of discussions about capitalism, which is just a few simple rules. Our problems are governance and we should talk about that. Frankly, as an avowed capitalist pig...I say fcuk the companies. Who gives a shit about paper constructs? What do we the people want? Demand that of gov't. Define the rules. Then stay out of the way of the companies. Let them do their job. Then look for problems and adjust. Then stay out of the way again. Rinse and repeat. Gov't...do your damn job.

/rant

Sorry :)

The irony of the USA is not lost on me. They changed one form of nobility (English) into another kind of nobility (ultra rich). People who fought for the independecy of the USA would roll over in their graves if they could see this.

@SUD123456: I'm fairly certain Bo knows, Sud. He's been in on these conversations before, and knows that what's defined as Capitalism in the disgusting US political arena isn't actually what it is.

I'm not sure matt was advocating for any real world allowance regarding the actual consuming of cake, but rather arguing such measures may at times be hypothetically contingent on the satisfaction of certain predefined cake possession criteria.

I'm always thinking about moving further up north. So either The Netherlands or Scandinavian countries.

More nature = more happy people is the general rule.

But it's very hard for me to just pack up and leave, even without kids or a family... I feel firmly rooted where I am now. Still like entertaining the thought though :)

When I go to the grocery store or get my monthly utility bills, or put gas in my car I see the results of inflation. As for Democrats in office the last administration upon leaving office the inflation rate was 1.7 and medium income was $4,000 higher that all changed with the current administration of Democrats. So yeas we are complaining about inflation and the Democrats brought on us on purpose.

Inflation was caused by covid and the measures taken to lessen the effects and protect society. it takes time to recover and if a republication was in office, that same inflation would have occurred. What IS important is how it's handled and thus far, it's been a positive. The US handled this better than many other countries that we normally compare ourselves with. So to complain about inflation is exactly what I said. You're complaining because a Democrat is in office. Thank your for the example.

If anyone is to blame, you can point at trump because he mishandled covid to further his own interests in maintaining the presidency and basically said to hell with the people.

@SUD123456: Nah don't be sorry. I come here for perspective and I'll take it in giant, huge post format 😁😋

You and I agree on a lot, btw, based on your post. Capitalism is amazing when it is allowed to be and is fair to all; the problem is, it really isn't with the way we have implemented it. I'd argue that has more to do with corporate lobbying (capitalism) and our shit politicians (politics) than the base ideals of capitalism, though.

We can still salvage it, save it, rescue it! Temper it with socialist ideals.

Meanwhile, at the White House:

Trump had the first full year of covid with no vaccine and little knowledge of the disease. Doctors were scrambling to find ways of treatment and on advice from the medical professionals Trump shut down the economy that was thriving. When he left office inflation was at 1.7, we were energy independent, there was a vaccine and a lot of the fear over the disease had abated. The incoming administration with incompetence and by design destroyed the lives of the citizens and it is continuing. The Democrats put their hate of Trump over the welfare of the citizens. Spin it any way you want the Democrats did this and they own the condition of the country.

Trump left with some of the worst economical record in history.

Trump will have the worst jobs record in modern U.S. history - The Washington Post

A lot of our poor Covid response is on him going by multiple studies. He messed up.

Most fact checks show it would have happened either way, as it's mostly global. Due to poor Covid responses.

@mattbbpl: that upcoming/announced move by Biden is basically unprecedented by modern presidents and really caught me by surprise. On the one hand I'm glad he's doing it, on the other I can't exactly forget the railroad workers Biden sided against just a few months prior. Yes there would have been economic pain had he sided with them, but you can't look at that and call the UAW a principled stance, either.

@Serraph105: Biden is only going because both Trump and Cornel West announced they were going first. Bad optics to not go when your competition is and your trying to win an election.

Capitalism fundamentally a system that, in practice, is about greed and endless growth. A system which invariably -- and consistently -- leads to oppression, a necessary poverty class, death and imperialism. When closely inspected, its speedy successes have almost always arrived secondary to some degree of slavery and/or indentured servitude (not surprising as it is a child of Feudalism). Corruption is a problem in all systems because humans are at the wheel, but that makes the problems in practical application that much more obvious. That's what Capitalism really looks like and its why organized labor is so critical. The failure of other systems has almost always been a function of the agents of Capitalism adding a thumb to the scale in a host of ways rather than their own merits not being sufficient.

I'm trying to imagine your book being practical and grounded in the real world and being meaningfully applicable (and somehow not complete trash). I'm having a hard time imagining it. Suggesting there is "zero wrong with capitalism", putting it on a pedestal as an idol and blaming its failures on "da politics" is like saying there's zero wrong with Communism if not for those darn politicians. It's a shockingly embryonic commentary.

Democrats traditionally support unions. Republicans do not. And the UAW told trump not to come. They know.

@Serraph105: Oh, no one argues Biden or the Democrats at large are perfect on the subject, for sure. But Duverger's Law and all that.

I suspect one of the first thing a corporation would do in response to decreased profits ( for example from some gov't regulation or new tax ) would be layoffs to cut expenses. pretty sure that would hurt the average Joe.

They can only layoff so many before it hurts their product. Most corporations hire what they need, not extras. They need to raise taxes on corporations. The US was at best when they paid a higher tax.

The Washington Post is a biased source for information. Trump was the only politician taking the covid pandemic serious when the first cases appeared in the United States. You should go back and look at the news form that time. Of course history for the Democrats begins today not yesterday. Who did the studies and who funded them?

Capitalism is based in freedom. More people in the world are free because of capitalism. other form of economics. All others enslave people. A new monitary system is about to be mandated in the Unioted States which will give the governmewnt unlimited control over the citizens, we will have no freedom whats so ever.

See? This is why we can't talk about it, because anything that isn't capitalism "is slavery" and only capitalism "can set us free". It's an emotional issue for most. You'd have better luck insulting their mom than even considering talking about a different economic system (or a slightly modified one at that!).

The irony of course is that it's capitalism that is making a new serfdom and slowly but surely bringing back feudalism, a system where a small group of rich people and "haves" tends to lord over a large group of "have nots".

Whatever ideal of capitalism you think you might know, we aren't living it. The glory days of capitalism, of "all you have to do is work hard" to get the American dream, is over. The rules that applied to my parents, who did so well, no longer apply to me and I am pissed about it.

@mrbojangles25: What you're really upset about, I'd argue, isn't capitalism itself but aspects of our economy that people have mislabeled as capitalism as a way to defend them.

SUD, I'd wager, agrees, and it's why he's upset about the broad use of the term capitalism in this conversation. But I understand your use of it when a vast majority of the population thinks that decreasing patent length and providing public education is socialism.

Biases as in they don't feed you trump propaganda. Trump did NOT take covid seriously. He knew months in advance how damaging it is and he refused to even hold a press conference about because it was an election year. When the news came out, he downplayed it at every turn and is gullible supporters bought that, and still do.

Listen to the Woodward tapes, it's by his own mouth.

Capitalism is not based in freedom. Unfettered capitalism is never good for society. Money makes the rules at the expense of others. Just look at how your party treats labor. Look at how we are creating wealth disparity. Look at how money is making the laws we all have to live under.

That is NOT freedom.

That's very true. I suppose I'd make a better argument with that nuance and alienate fewer people that way.

You catch more flies with honey than you do with vinegar, as the saying goes 😀

Like Nancy Pelosi having a photo op in China Town telling people to come there and not to worry about covid.

Every thing Trump proposed or did the Democrats and the media ridiculed only to be done by the Democrats later.