Why 40,000 People Die for Every 1% Increase in Unemployment - The Big Short
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- čas přidán 25. 07. 2020
- the big short was a fantastic movie, for finance nerds and regular viewers alike. One of the lines that stood out the most, amongst many memorable lines, was the claim that for every 1% increase in unemployment 40,000 people die.
This is an incredibly significant claim, that adds even more weight to the already significant societal issues that come along with people out of the job.
So is this claim actually true?
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#bigshort #unemployment #economics
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He also said
“ You said you wanted to be rich
Now your rich “
When the federal reserve raises interest rates they are trying to keep inflation under control by increasing unemployment according to what they think is the natural rate of unemployment(Nairu). In essence, they are causing unemployment which results mass deaths to contain non existent inflation. We desperately need fiscal policy instead of monetary policy to just completely end involuntary unemployment via a Jobs guarantee program, a public option for jobs. Full employment is ultimately the responsibility of the federal govt as it is taxes that create unemployment, a condition in which you need to sell your labor or products in order to attain a currency that only the US issues. If there is unemployment then that is a sign that the US has not spent enough money into the economy to generate full employment. The private sector will never do it because labor is a cost and it doesn't make sense to hire someone unless they know it will result in overall profit. That is why it must be the federal govt's responsibility, because they tax us creating unemployment, and the private sector system is set up in such a way that they will never hire 100% of the people who want to work.
@@henrygustav7948
While that is true. I'm not sure there is a better way.
We haven't had another great depression. So that's good.
I went disabled retirement 35 yrs ago. But everyone I know has a job. Some even have reasonably good paying jobs for my area.
I was wondering how much government hand outs increase the number drug/substances abuse. I wonder how many people have died from suicide or drug overdoses compared to the covid 19.
@@thomasridley8675There is, the Federal jobs guarantee program proposed by MMT economists would replace monetary policy with fiscal policy. Its an automatic stabilizer the way it is set up to prevent long term unemployment, prevent people leaving the workforce involuntarily. It maximizes employment while also controlling for inflation because when the economy picks up, people leave the program for better private sector jobs. The Great depression is coming in a few months if not already here with 40 million people unemployed last I heard. Many of those jobs are not coming back. Everyone you know may have a job but look around you, restaurants and so many other businesses have closed up with no signs of help coming from the federal govt. We are going to be in deeper trouble.
Liechtenstein: *hits 1% unemployment rate*
All of Liechtenstein: Adios
median income AAA+
nichts ist für dich
nichts war für dich
nichts bleibt für dich
... für immer
Isn't Lichtenstein a tax haven for rich Europeans?
I checked and you're right: less than 39,000 persons.
So if 400 people lose their jobs everyone dies? That’s tough
I got fired from a decent paying ($40K ish a year) job and my family didn't quite recover until 3 years later. Right after that my wife got pneumonia, which caused some hefty medical medical bills. We even lived in a van with our one year old for a few months, which eventually helped us start saving again. We moved into an apartment right before Covid hit.
Best of luck to you my friend
Father, pour prosperity upon this man, give him supernatural intervention at every turn. In Jesus name I pray, Amen.
Sounds like hel... - I mean US.
I guess for that you can thank the jerks and their lawyers who sued every doctor for staining their shirt with blood for one gadzillion of compensation while saving their life through an emergency heart surgery.
@@glendakillough6726 Yes Jebus, rain golden coins from the sky using your fictional mystical powers!
What you get fired for?
Economics of a hostage situation
you are beginning to worry me bro.
"Never split the difference" by Chris Voss gives a good idea of the economics of hostage situations
@@EconomicsExplained *Just Do it! You can do it! We believe in you!*
@@EconomicsExplained please do private vs public ownership
It would turn into the trolley dilemma
Last time I was this early, there was money to be made shorting housing bonds.
Ыуат
But now is already late night tho
Last time I was this early, there was money in my bank account.
Hanz up if it was for me I would be earlier than never
Last time I was this early. Retirement was a body bag.
If the unemployment rate grows from 3.5% to 15% it is not an 11% increase but rather 428%
haha well I suppose you are correct.
oh god, dont even get started on that statistical quirk.
i guess it would be more accurate to say it increased by 11 percentage points.
😁
gotta love statistics :P
👏🏼👏🏼 it’s not a proper economics channel. I also take upbridge with them implying that 600,000 “corona” deaths are causing the joblessness. It was definitely the government shutting the economy that caused the sharp increase in jobless claims. P R O P A G A N D A
Shouldn't the big short just meet half way at The medium medium ?
I hate you.
@@EconomicsExplained ROASTED lol
Medium medium could be translated into A short straddle. An options strategy comprised of selling both a call option and a put option with the same strike price and expiration date. It is used when the trader believes the underlying asset will not move significantly higher or lower.
If you tried this during the housing market crash you would be bankrupt, this is what most banks typically did.
I found this really funny ... lol
@@EconomicsExplained You were my brother, @Economics Explained. I loved you.
" If the misery of the poor be caused not by the laws of nature but by our institutions , great is our sin ! " - Charles Darwin
Charles of all people?
@@geradosolusyon511 To be fair, societal Darwinism is a terrible misunderstanding of his theories...
Do you know how high was the life expectancy in industrial areas at Darwin's time ?
@@julien344 no, please tell us.
"There are people who believe in fake quotes"
-Stephen Hawking
15 percent unemployment.
"A'IGHT IM'MA HEAD OUT."
-400,000 people,circa 2020
*600,000
Well the increased unemployment & stimulus checks should counteract that
The finacial impact is only one small factor in why unemployment kills.
Today 80.000 a year opium. Add alcohol and health attack. If those 80.000 are related to the 2000 economic crash - the numbers next decade will be far worse because the unemployment numbers this time are far worse.
Asuming it is linear and not exponential.
Las time I was this early I was employed...
:(
For the reason i whas never so early i feel you
masterofpureawesome lol
Last time I was this early employment/unemployment was a foreign concept because everyone hunted or gathered.
maybe that's why you got fired, watching youtube instead of working
This video makes me glad I live in Australia.
yeyeye we'll be right mate.
One of the very few things that can make you want to Iive in Ailartsua.
@@themongolsarecoming_9437 Buggering upside down
Up the Knights!
@Rajeev Vij laughs in germany. we still have less than 3 million people unemployed thanks to the good reaction of our government to the crisis
*me graduated in 2020*
Interviewer: stay home stay safe
if you have school debt, then you are unlucky.
*Unemployment rate is 15%
Well this isn’t good...
That's pretty much the norm for Newfoundland. Although it was hanging around 12% for a few years which were okay for our island.
The undertaker's cash register goes *_BBBRRRRRRRRRR_*
Laughs in south african with unemployment rate of 29 percent before the recession
James Easson man I didn’t know it was that bad there!
@@kairon156 smh norway should just colonize it already
"Cheer up, you're not structurally unemployed. You're cyclically unemployed. We think jobs will eventually come back. One day."
Short answer - No.
Long Answer - Yes and No. It's affected by economic conditions on the ground that are far more complex.
For all that, it's still a terrible thing if people can't get back to work because there's not much work left to begin with, or the work that is available doesn't pay enough for even basic subsistence.
Nice video!
haha yeah the TLDR
Economics Explained I guess this is a TLDW 😂
@@DKTrue TLDWOR
too long, didn't watch or read ;)
As someone who was unemployed more than once in my life, I absolutely can imagine how widespread layoffs contributes to a heightened death toll.
Bold of you to assume that I have a job.
Wait..
RIP you I guess
@@EconomicsExplained 😢
@@EconomicsExplained *Nani* ?!!!
apple's lover Omae wa mō shinde iru
...got fired for using a company computer to post comments on CZcams.
South Africa has a total of 7.01 million people who are unemployment which is roughly 30.1% Q1 of the population. And this was before Corona hit the country. This is a very scary time for recent graduates.
a country with 100 people, 1 guy loses job
everyone else: intense sweating
What country would that be?
The Vatican City?
@@infidelheretic923 I don't know. Why don't you google it?
@@infidelheretic923 The Vatican has a population of 1,000.
Please make a video on what would happen to the economy if everyone over 70 died! I threw out this what if at a new year party last year ... and now I want to know what kind of future I've doomed us to.
ooh, interesting I explored something similar in the video about what a thanos snap would do to the economy. I imagine a lot of the points there would still hold true in your hypothetical.
There would be a surplus in retiremnt funds which ould account to increase of pensions which could lead to retirement funds being exposed as pyramid schemes
So the economics of Logan's Run with a bit of an age bump.
Well I just want to explore the impacts of mass amounts of wealth shifting down a generation and the impacts on the aged care industry. Impacts on healthcare costs. It's a pretty interesting and complex picture. Would it be good in the long run?
@@MeHungy136 The mass amounts of wealth will be disappointingly small as much has already been concentrated at the top. Healthcare will continue to nibble away at what's left.
Ermm why are the auto-generated subtitles only available in Korean? Does YT have trouble understanding your accent, EE? Lol 😂
I actually don't know why it keeps on doing this.
All hail supreme leader
@@EconomicsExplained VPN when you upload ?
What are our next orders supreme leader
@Doven Ro Galus it's only one of the languages with the most words out of any language.
I think you forgot to mention that healthcare is often tied to our employment, and we are in the middle of a booming pandemic. Tens of thousands of people are finding themselves high and dry with way to seek medical care when they get sick. This is resulting many more deaths than we would otherwise have.
2:36
Yep health care is nearly impossible to get if you're not employed in the US. If you're employed, *some* of the time, you get health care. You probably can't afford to use it, but there's a chance. And don't get seriously sick at all, or you'll lose your job, house, family, everything. Learn to build guillotines now and avoid the rush.
You’ve probably never heard of EMTALA, Medicare, or Medicaid.
@@HenryPaulThe3rd I think you had to be on welfare to get medicaid and you had to not get any job offers (not even any without health ins) to stay on welfare. So it would be possible not to qualify.
benish borogove Maybe so. I know with EMTALA anyone who comes to the emergency room must be treated regardless of ability to pay, and regardless of their insurance status
love this explanation! I think there's a couple of interesting additional points to take on board:
1) Brad Pitt's character is a pessimistic and paranoid individual after years of working in the financial markets. While he's probably a really bright guy, that quote does as much to reinforce his "seeds are the new currency" mindset as much as it serves to ground the viewer in realizing it's not just about numbers.
2) I think it would be interesting to at the worldwide economic effect of the crisis. I'm from Canada and people definitely felt the impact. I wonder if the figure he quotes would be more accurate if considered worldwide.
Actually, the low structural unemployment in Denmark is a product of the danish flexicurity labour model, in which the labour market has flexibility (it is easy to dismiss and hire workers) and the workers get social security.
flexicurity , i like this word.
Canada nominally has something similar. But the reality is that "Employment Insurance" pays too little and too late to sustain the same lifestyle.
Love the video! I was never interested in economics however I discovered your videos during quarantine and I've learned a lot and it has gotten me much more interested in economics. Keep up the great work!
Wait a minute. Spain have a 26% unemployment in 2013. That means I'm dead since 2013??🧐🤔🤔
RIP you I guess.
@@EconomicsExplained :((((((
Are we not all a little dead on the inside? 😜
how does spain even function at such a high rate?
@@correctionguy7632 prob bc of the eu
I actually did my final paper for my Political Economy class on this (which was at the end of April, during the height of COVID here) but I used a different study to find the mortality rate which was done in Canada. I found the increased mortality rate significant enough to deter drastic actions which caused unemployment.
What a coincidence I was just watching this movie and thinking about the exact line 🍻
haha it was meant to be! Great Flick for sure
Movie name?
Yes. Google and CZcams know everything you do and everything you thinking about. 😈😅
꧁꧂ (☞ ͡° ͜ʖ ͡°)☞𝕤𝕒𝕞𝕖⚢𓃟✔︎☻︎❤︎(ง'̀-'́)ง(❍ᴥ❍ʋ)
@An Vode thanks
What a great channel!
I just discovered it today, and I binge'd several videos. Now, I am subscribed.
This was a both *Terrifiying* and Somewhat *Depresing* One ! :s
37.000 damn! :/
Good topic! Been thinking about this quote a lot, especially during the pandemic and seeing nations' different approaches to restrictions and the economic impact of those measures.
Hopefully I do the topic justice :)
@@EconomicsExplained I think you did! I've always taken the quote with a grain of salt obviously, because Hollywood, but never bothered to look into it.
What about all the small businesses that will never open again?
Yeah, that's the "death of a thousand cuts" that's not being talked about. Heard stats of 49% of small business in San Francisco have closed and are not likely to ever reopen. Of course places like Amazon and Walmart looooooovvvveee the "consolidation" and their profits are higher now. The Chinese were smart enough to not automate certain jobs simply because it was better for a person to work a job rather than have a robot do it.
As for the social safety nets, the US is of the mind that we need to support arms mfg'ers and export war as a priority. Raytheon will get their check long before Joe Bloe who's been unemployed in W.VA
Consolidated. Small biz was squeezed out, with many startup founders having to sell their babies for pennies on the dollar to companies that could afford it ..take a guess who that is. No one wants to talk about it though, among many other things:
czcams.com/video/7GuhoZDWu-8/video.html
Yet another high quality video that feeds curiosity and thought in increasing humanities consciousness. Thank you!
So 37k in 1981, wouldnt it stand to reason that with population inflation over 30 years the 40k number was accurate if not actually LOW?
dosmastrify
got it :)
Yes, if everything else was held true.
@@EconomicsExplained this is true it would depend on everything else all the other assumptions cannot change
There's a correlation between the number of flue deaths (I mean flue) and average winter temperature in warm countries, like Greece where you can't really even freeze to death. Basically, on a large enough sample, some people will go below the point of survival given a slight decrease in the standards of living.
It's almost impossible to estimate death toll of a particular inconvenience, because society adapts, and consequences manifest themselves in non-straightforward ways. Same goes for viruses. Virus is rarely a sole reason. Combination of health problems (which in turn can be caused by individual/policies) does this thing
Sadly there are no studies that even try to measure effects of different tactics. They always take only one or two factors, not an aggregate
PS. Regarding studies. The method can go like this:
1. Take a dozen of societal/individual factors, policy factors and environmental (without naming them).
2. Take average timestamps with percentages of people affected by policy/environmental factor (i.e virus spread, air quality, etc)/societal factors (unemployment, media and alcohol consumption, etc) during this timestamp + a variable tail to account for delayed effects.
3. Make simple equations (like perceptron equations) that attributes each factor to death number number using timestamped data.
4. Run some clustering and orthogonalization algorithms to remove high-entropy factors (which can't be really correlated) and check if the correlations in the source data aren't accidental.
5. Remove bad data from step 2 based on this analysis.
6. Run training algorithm until equations from step 3 are producing historically accurate numbers of deaths
7. Explore attribution of these adjusted equations to find out what's the main culprit. Now you can name factors from step 1, by checking how much weight is assigned in their equation to different events.
8. Test: run this model for a similar country. Try to train after removing each of the factors (one at a time) to check answer's correctness probability
It's just a basic Big Data analysis. Someone will do it sooner or later
This channel is so educational and informative. I would love to join your patreon once I'm able to do so. Keep up the great content 👍
Thanks mate, you are always welcome to the content we make, of course Patrons are always appreciated but nobody should ever give anything they cannot!
Swear that I’ll be thinking about an economic claim or concept and later that week the exact vid is in my recommended.
Great content, keep it up.
The big short is honestly one of my favorite movies of all time.
I've got simple tastes and I'm pretty sure that I'm in the 1%, which together mean that I genuinely struggle to spend more than about 10% of my income. One of the main reasons why I don't just pack it all in and live out the next four or five decades in leisure is the fact that not working is associated with much higher rates of morbidity. I'd love to be able to get a bit more granularity on some of these statistics so that I can make better informed life-choices.
The amount of times EE used the "Well yes, but actually no" meme in this video deserves its own statistic
Me being a NEET for the past 3 months:"Interesting"
@Archers Be ready
Are you on disability?
Outstanding video!!! I love watching your content. It holds as true for my reality here in Brazil as for yours in Australia. Thank you.
Thanks for watching!
I other words:
"Every 1% unemployment means 40k people die"
True, but very inaccurate.
The "truth" (or "Truth") in these sorts of statements really depends on who pays for the books and studies and figures, and for what purpose.
I actually think the thrust of this video is that it's a misleadingly simplistic claim, wouldn't you say?
@@georgeholloway3981 It's a generalization based on dubious facts presented in a (biased) study of dated economies. It's also a sensationalist and alarming claim without citing any substance. Bold statements require bold proofs to be taken seriously, anything else is just advertising.
@@georgeholloway3981 I don't know. My takeaway was that it's murky but there appears to be a certain validity to a claim of that nature. So actually it's perhaps your comment that's misleadingly simplistic.
I never realized how bad it was here until now. But like everything with Covid, it took what was already terrible and made it a million times worst. Now you have to be under a rock to not be aware of how bad everything is. I just hope our government can restructure and reform fast. If not, the US is going to be an uglier dystopia than it already is.
“please don’t shout at me” is so going in my presentations from now on. excellent video
We need more videos like that ! Glad uou raised the topic !
You know if the United States had a guaranteed coverage healthcare system and better unemployment benefits then these affects can be pretty much eliminated. When trump says “more people are dying from suicide than from the coronavirus“ well if that’s so then those deaths are also preventable because if these people have access to mental health services, healthcare, and unemployment benefits, then their needs are met and their life doesn’t change much. And in the end it’s not really that we’re talking about unemployment being the cause of death for these people, but really it’s a lack of money to meet their basic needs, be it healthcare, housing, food, etc.
Keeping universal benefits to a minimum here in the US keeps people quiet. Shut up and go to work or risk losing everything. The French yellow vest thing doesn't happen here for that reason. It stops being effective when there isn't work to be had (see COVID and "George Floyd" protests).
The healthcare thing might be relevant but the unemployment is NOT a factor in the U.S. Until the end of July all people receiving unemployment in the U.S. were getting an extra $600 a week on top of what the state they should already be getting. I collected twice as much on unemployment as I got when I was working. I got a new job at the end of July and now that Trump has instituted a $400 unemployment boost (assuming it actually goes into effect) I wish I hadn't. Even though my new employer has a "mandatory overtime" policy (crazy busy online retailer) I still make considerably less working 45 hours a week than the government would be paying me to stay home. The current system is INCENTIVIZING high unemployment.
@@darthhodges If I had a job that paid that badly and was receiving good unemployment, I'd keep my mouth shut. I couldn't pay my mortgage on this unemployment scheme. Fortunately, I work in pharmaceuticals, and an epidemic just means more product to push.
@@ThatsMrPencilneck2U People (especially the government) don't realize that $15/hr (full time) is a middle class income (just below the national average) and upper class (assuming you divide into thirds) starts around $45,000/yr. Trying to force such conditions through government spending is how you trash your economy and bankrupt the government (Greece).
@@darthhodges Nonsense! The minimum wage is whatever your society deems is the least amount a person needs to live on. If you think that living in cardboard box in an alley is just fine, then $7.25/hr is good. In the 1930's, when the Minimum wage was created, the People of the United States decided that a man, working 40/week should be able to buy a house and support a family. The figure $15/hr comes from a relatively simple inflation calculation that compares the Minimum Wage, at it's height in 1968, compared to today and rounded.
The way you bankrupt your country is make sure every banker gets paid in full. Bankers do not actually produce anything, and, unlike any entity that really does make things, their income growth is exponential. That means, there will never be enough money to pay the banks. This is what happened to Greece. If they owed all their debts in their own money, they could have hosed the bankers, but the EU does what's good for Germany.
You are legitimately the only youtuber I have clicked the bell icon for 🤣🤣 as soon as your vids go live or as soon as I wake up in the morning I watch your vids as soon as I can, you have taught me so much and just like Neil de grass Tyson says, you have taught me how to think more scientifically and logically, not mentioning all the crazy fucked up things about how the world economy works that really I don't think I would have known otherwise and the way you put that information into such a well made interesting video should be commended and I really wish you had 10 million more subs and viewers per vid, as the ceo of the US Central bank said if I remember correctly even thought I'm paraphrasing "if more people knew how the world economy works there would be a revolution within a day" keep it up if you can bro and I just hope you can coast off this for the rest of your life. Much luv
Thanks mate, that's amazing to here, your comment made my night :)
Hmm... felt like I missed something in here... staying at home alse saves lives, doesn't it? I mean... less traffic means less air polution means less people dying from lung diseases. Also there should be less traffic incidents which kill people. I've also read that criminals are more likely to stay at home, which means reduced crime rates (which probably also adds to fewer people dying).. I felt that this was kind of important to talk about as well when discussing this, especially looking at the current situation...
All that life saving stuff means fuckall when you can't afford to eat. Famine has a way higher death rate than the commie cough.
I love your videos! Keep up the good work.
Shouldn't it be "per year" or something? Or is it just a one-time thing?
its over a non specific time period, it's definitely worth reading the book because it details how it all breaks down pretty well.
No, that doesn't matter. If 1% become unemployed, a certain number die. It doesn't matter when they die as long as it was a result of the unemployment. The 1% increase is a single event.
It's a completely stupid concept. People are dying all the time for every reason under the sun. To say with certainty that a death was due to unemployment is magical thinking.
A motorist is travelling down a freeway with windows open. A wasp flies in and in a panic stings the driver. The driver is severely distracted and winds up striking and killing a motorcyclist. Did the motorcyclist die due to motorcycling? Traffic accident? Wasp sting? Or by unemployment because he lost his job a few hours earlier? Maybe he wouldn't have been there at all had he instead been at his job.
Lenard Segnitz Assuming there are the same number of motorists who die the same way every year, that is accounted for by subtracting the previous years' death toll. There are more sophisticated ways of doing it, but that's not a bad one
@@eoghan.5003 And even if those newly unemployed would not die quickly, one can assume year or two is shaved off their life expectancy.
When the person who was in jail for dealing crack gets the job instead of you because he has more sales experience
I like that
Have you done an economic look at Denmark yet? I've seen your video titled 'Is Norway the perfect economy' or something, and i really liked it.
Maybe you could tackle the bank money laundering or how its covid-19 response will affect its economy in the long term compared to Sweden.
I'd also especially like to know Denmark's economic shortcomings. As a dane myself it feels weird that my country gets so much praise, when one of our favorite passtimes is complaining about our country.
I'm a big fan of your channel. You have cleared away some of the mist on macro economics, and I've begun thinking about the economy in ways that I wouldn't have before.
-A proud patron
Assuming that since the unemployment isn't "as structural" in the case of COVID, and therefore should lead to as many deaths is faulty. Because on top of not having a job, most people (if they follow the rules in the many places) can't go to church, social groups, or even see their family. But they can still go to casinos, and liquor stores, which makes everything way way worse.
Which one is correct? "'Both of them"". A typical economist answer 😂😂
A typical scholar's answer :)
This study does not take into consideration the amount of people that will have their health situation worsened due to the loss of their job. I believe that it is unquestionable that unemployed people will eat less or will not eat at all and, because of this, will become more vulnerable to other diseases and end up dying because of this. It not just about stress issues. The death toll because of job loss is much higher than this figure. It's just that there is no study on it.
I guess for most Americans having to stop eating is a good thing.
I tried looking this up couldn't find it... you earned yourself a sub!!
I was always interested in this, thanks for the video.
@Economics Explained
Will there be an episode about the economy of Vietnam ?
Yes there will be a video about every country eventually :)
One already out
This time , in my 21 years of age is the most depressing period I’ve ever been in . I’ve been unemployed since February of 2020, and have been unable to find any employment ever since . This is extremely depressing .
Um, I am in construction and have been since 1998. I can tell you with absolutely zero doubt that a lot of people in the industry definitely saw it coming. Shea, for instance, reseeded an entire development project in late 2006 after they cleared the land for 600 houses. The speck homes I was working on for another builder saw a winding down of inventory in mid-2006 to early 2007. Why, because everyone knew that people were buying way too much house for their own good.
Thanks mate!
Good content as always,
just seemed to me that the "densitiy" wasn't so high as in previous videos. I felt you could have packed the video in half the time
😁seems like economics explained working hard to not be fired by us
Yes please, I WANNA LIVE!
@@EconomicsExplained How about basic income, for a society to be civil - it should help everyone meet their most basic needs as humans, a home and food at minimum.
@@ulurag inflation would drag prices up since some people wouldn't know how to save money and waste everything. Some also wouldn't have the incentive to work thus damaging the economy : )
Try Kurzgesagt for a video on Universal Basic Income or UBI
@@chrono-glitchwaterlily8776 Last time I checked Kurtzegast argued for UBI. Most people will still want to afford more than the absolute minimum, like food and rent that the UBI would cover, therefore the insentive to work would still be strong.
EE: "Almost no one saw the fallout of the housing market collapse comming"
Austriacs: "Am I a joke to you?"
To be fair both the Marxian and Austrian schools always point to the business cycle as if everyone else is oblivious to it; as if it were a rhetorical device. Of course, economists (not every) expected an economic downturn after a peak that's a given I would be careful not to give too much credit to one school over another just because we're unfamiliar with the contributions of another. Either way, the metric of when an economic downturn will happen is largely speculative and most experts that do pride themselves on these predictions often give themselves a large enough wedge of deniability that it doesn't even matter.
The crisis was practically guaranteed to happen when the government forced private institutions to provide loans to unqualified applicants. It was called a NINJA (No Income No Job Application) loan.
@@12vscience en.wikipedia.org/wiki/Government_policies_and_the_subprime_mortgage_crisis
great video as always, thank you
you are welcome, glad you enjoyed :)
You say that it's unfair to compare the US to underdeveloped countries but I think it's an interesting question because it tells us in the US how bad we could make it if we start to destroy our social programs which a number of people in government are trying to do. Just how bad could we make it from where we are now if we start cutting social security, food stamps, unemployment checks, Medicaid and other programs like that?
Middle income guy: The poor people are dying!
Rich guy: Don't care. I have to catch my plane to Swiss to hide my cash.
Poor guy #1: I am not poor!
Poor guy #2: I just have to work more...
Poor guy #3: I soon will become a millionaire!
hblaub work smart and hard, u will be a millionaire
Ok leftist
@@user-lr4bo Ok right-wing.
You operate under a false premise. None of the middle income families I know believe they are middle income, they all think they are poor (myself included since I qualify for food stamps and my kids for medicaid despite being middle income). And almost none of the rich families I know (relatives and people I go to church with) believe they are actually rich, they think they are middle class. The federal poverty line is above the threshold for being middle class in this country and what most people consider acceptable is above average (and every federal politician is in the 1% from their salary alone). And we are one of the richest countries in the world. 25% of Occupy Wall Street protesters were themselves in the 1%. Our perceptions are skewed and the government has made it worse.
I suggest the following is more realistic:
Middle income guy: We poor people are dying!
Rich guy: This poor person is dying! (But you can't have my money to fix it)
Child of rich guy: Socialism will correct the evils I have suffered under capitalism!
Actual poor guy #1: Passed out on drugs
Actual poor guy #2: I just have to work harder
Actual poor guy #3: Poor? Getting a job would be a pay cut compared to what I get from the government.
Don't blame a drug dealers for making a quick income times are tuff. A drug dealer never runs out of customers. This country has joined the shithole list.
EE: “All countries with no form of social security are either underdeveloped or developing.” United States: “Allow us to introduce ourselves.”
The US has a form of social security.
Its (rather intentionally) terrible and ineffective, but they have one.
@fane babanu Pretty much every country has great social security for their elite. Its a toss-up in some cases whether government officials are considered "elite" but there's almost always a class of rich untouchables that are given privilege during (and usually even profit off) even the most horrid civil wars, famines and other disasters.
@WHATS YOURSOC Its funny how the misogyny that triggers you to whine about "OLD Wemen" sucking off the system is the same misogyny that forced them to do nothing with their lives beyond raise babies for the "man of the house." Most of them would have loved it if the society of the 1920s and 1930s (and even up to the 60s, 70s and beyond) would have allowed them the choice of going out and finding meaningful employment. You know how you've been going crazy being semi-stuck inside for a few months because of covid? For a lot of women in "the old days," that was their entire lives.
But leaving history aside, you never suggested a solution. Are you going to go snuff out _your_ grandmother? Are you going to voluntarily take your own life when you're no longer useful to society? Because unless you're suggesting mass murder of the elderly, there isn't a whole lot of options. There's a lot of things in this world that suck and the only thing that sucks more is all of the alternatives. We can't magically make old people be not old, nor can we go back to 1920 and tell them that women need to get into the workforce ASAP because 100 years later we're going to decide that dollars are worth more than lives.
Your only options are support the elderly or kill them off. Take your pick, but be ready and willing to start with your own family if you choose the latter.
If the US didn’t have any form of social security there wouldn’t be any jokes/complaints about welfare fraud or the fundamentally insolvent social security system for the elderly. Entire books have been written on how the US welfare state incentivizes people not to work and leads to generational poverty. You can’t compare the US to any other country because no other country is as massive and culturally heterogeneous. Culture is what allows the children of poor East Asians to succeed while the children of poor whites fail.
The US is a deliberately underdeveloped nation trampled by an oligarchy.
The Big Short was an excellent movie. It was what got me interested in economics.
I've had the fun privilege of experiencing both cyclical unemployment, because of the tech crash back in 2001, and structural unemployment, when the company closed down the entire subsidiary I worked in. Both cases I was made redundant along with everyone else. Luckily no major impacts in the long run. I got a masters afte the tech crash and I was only out of work for a week the second time.
However, some of my colleague sin the second company really struggled to get new jobs
"Almost no one even saw it coming"
Seriously? The people most involved in it were very aware of it and just went along
Congresspeople had a meeting about what stocks to sell instead of how to keep us alive :^)
The movie, The Big Short, highlighted a bunch of real-life people who knew full well that the real estate market pre-2008 was BS. John Paulson had connections inside Goldman-Sachs with whom he invented a bunch of financial instruments that skyrocketed with the real estate collapse. In 2007 Paulson drew nearly $4 BILLION in personal compensation.
The financial industry the world over is terrible. It draws in very clever people to invent schemes which do nothing other than to transfer money from the bigger fools. Finance has been tasked with robbing governments of needed tax revenue which by extension is to rob labour of its surplus value.
John Paulson's contribution to humanity was to spot a fallacy in the market, a real estate bubble, and hasten its collapse. But instead of using his talents to lessen the impact he chose to take obscene personal compensation. Millions lost their jobs and homes. The blow-back from 2008 was probably the root cause of the rise of Trump.
Lenard Segnitz Capitalism is great. Financial world is amazing. Fiat money is responsible for the amazing and beautiful world we live in today.
@@CarFreeSegnitz but a economic bubble is Pandoras box its only a matter of time before enough people with enough money find out and take advantage of it
what could John Paulson do to lessen the crash? even if you had absurd levels of money to throw away if you tried to slowly smooth out the bubble the entire rest of the stock market will still pull out as soon as stocks start going down instead of up and if someone else with lots of money tried to profit from bursting the bubble all that effort would be for nothing anyway
the only 2 ways to fix a bubble is to pop it
or somehow blow up the rest of the economy extremely quickly but not the bubble in such away that relative values would be corrected causing mass inflation which is extremely difficult and risky to the point only a nation state could consider trying to pull it off and most wouldn't be stupid enough to go ahead with it
the financial industry is terrible but there's nothing individuals like John Paulson could do about it if we abolished the FED and reduced barriers to market a free economy without a inevitable debt cycle and with more competition and less crony capitalism in the corporate sector would not allow such a huge bubble to form in the first place
the problem is systematic so it calls for a systematic solution
@@Inquiring Because of Capitalism less than 25% of the world live in extreme poverty, before capitalism 99%+ lived in extreme poverty. Before Capitalism a famine could kill millions, now only famine happens in places with corrupt governments.
Well the movie was in the context of people losing their homes and jobs through a "depression"....so the figures were actually undercutting the full impact of the crisis at hand. Had the government not "helped" in some way, we would have seen far more deaths due to unemployment because those jobs wouldn't have come back, they would have gone bankrupt.....but they were bailed out. Context is important.
Great vid as always!
Glad you enjoyed!
I can tell you right now, I make JUST enough to cover living expenses. If anything goes wrong at all, car break down, somebody gets sick or injured, unexpected expense.... Thats it. Theres nothing to cover it. If the car breaks it stays broke. If one of us gets sick, we're eating food bank donations for the next month. The rise in cost of living over the last year has completely eaten up our ability to save or plan ahead. Unless we are dumping all efforts into just maintaining our position, it all goes away.
7:21 : starts playing
Me, a random Czech dude : Hey, czech it out!
being broke should be illegal 😭
if people doesnt go broke who would be willing to work part time jobs with no health insurance at Amazon Storehouses
So when you become broke you get arrested? doesn't sound good to me.
@@geradosolusyon511 yea but the cops will shoot you while aresting you. Bc you only cost money if your in jail
Move to the U.S. my guy - being broke already is illegal. Look up "criminalization of poverty".
@@joshuadyer6983 well, if you live there, I advice to move as soon as possible.
This channel is absolutely fantastic.
Another classic line from the movie when Steve Carell challanges Fitch on AAA for sub prime mortgages . What are you 4(years), still remember the line
Why is switzerland always left out when making comparisons?
Its right up there together with sweden, norway and denmark.
Just curious why its always Norway or Sweden thats mentioned, but never Switzerland.
It sort of depends on how Civil War/Revolution/Police State scenario plays out. In this particular episode, the people that die from American and other Western economy unemployment will be in developing countries through impacts on child mortality, etc. But those folks might be the walking dead anyway, depending on how the collapse of global trade plays out.
2:08 No, it's not a rounding error, it's just stated to a lower degree of accuracy (the degree to which we round and what is correct is totally arbitrary, but depends on the number of significant figures, in terms of achievable/real accuracy, in the data). Some numbers can be merely mathematical artifacts, not tied to meaningful empirical data.
Just finished watching all of your videos! Could you do an economic analysis on CANZUK in a future video?
The video makes a distinction between structural unemployment and cyclical unemployment. The former leads to permanent job loss, while the latter manifests itself as a transient loss of jobs, and these jobs, given enough time, will return. While most of the jobs that are lost as a result of the COVID-19 lock down can be considered cyclical, is it possible that, given the gravity of this cyclical loss, that companies will be compelled to accelerate their investment into automation? Hence, what started out as cyclical unemployment could hasten the structural unemployment that automation was supposed to bring about, but now it will do so sooner. In other words, COVID-19 may expedite the very permanent unemployment dystopia that we thought was a few decades down the road.
Really love your work and how you break things down. I wish more of my friends here in Kentucky took the time to understand how economics work. I guess I'll just keep posting your videos.
Funny thing I am reading wealth of nations and when I started the labour part in book 1. It still stands out today even if it was written in 1778.
Can you do a video on the long term affects of Covid? Like what industries/businesses will go up or down? What industries will arise and what industries will go away? What are the other effects? How will this affect labor, employment, economic policy (UBI, etc) and daily life?
Next time people tell you that caring about the economy is caring about money instead of lives, prove them wrong. The economy is lives.
is there a link to the study?
it's a book, you can find it on amazon pretty easily, but unfortunately it's not available as a download online anywhere I was able to find.
Love the videos. I make my girlfriend watch them as your explanations are clear, concise, and simple.
I'd be curious on your thoughts as to if these figures would be closer to accurate (obviously not counting Covid deaths) if we assume that there is a long term chance that we don't get back into the swing of things.
Being a victorian myself, i'm not super confident, and while i understand that the number would likely have to be scaled down (due to less population being talked about i believe) i feel like Victoria might be in this place for longer then we would like.
Make a video on "Future job market economic changes due to AI , Data Science and Automation"
There will be a bunch of videos on that topic and here's the tip - nobody knows. They will all get it wrong. Happens all the time through history.
@@wajnerw i know that nobody knows exact future , all I wanted to know is the view point of an experienced economist and his way of thinking. 🙂
@@rahultherash You want bullshit? Read Thomas Malthus predictions. Karl Marx also. They were highly educated and experienced, and they got it all wrong.
@@wajnerw I wanted to learn how good economists think and what factors they consider while analysing. I wanted to learn the process and then use that myself to come to my own conclusions. 🙂
@@rahultherash F.A. Hayek, Ludwig von Mises... Knock yourself out!
Now I know the vids are posted at 5:30am PST
Actually just posted this one a little early. They are normally half an hour later than this.
So you post at 11pm AEST?
Why can’t you upload at a good time for Australians
I love how many of the accompanying shots are from Prague!
This is worse than the GFC in 2008 folks. I'm glad I'm not graduate and entering the workforce in this times. I have scars from the GFC which have not healed. Get ready for scarring young folks.
Imagine graduating in 2008, and getting your 10 years industry experience going into this mess.
Well than there are less people unemployed😂
Modern problems require modern solutions.
The Kim Jong-un method
@@EconomicsExplained That's gotta be the most dystopian use of that phrase I've ever heard hahaha
Economics Explained modern problems require the guillotining of the upper 0.01%.
Society doesn't want 0% unemployment. If nobody is unemployed then the workers can start demanding higher wages and cherry-pick the jobs. Instead of 1000 applicants for a job there will be only one who set the terms. Companies don't want that.
I lost my job and I’m much poorer but more healthy physically and mentally and emotionally
How so?
@@s0so328 My best guess is his job was too stressful, so when he lost his job it became stress _relief_
Great vid as always
11:20 Plenty of people saw it coming. The only people who didn't see it coming had no business being in the market or were blinded by the bubble. It was an 'emperor has no clothes' situation. Market experts saw this coming including Greenspan himself years before.
So many comments in too short a time to have watched the whole video...
ahh some people just like to be heard you know? let them have their fun :)
Back when MSN allowed for comments on news stories people would post 100+ word essays just minutes after a story was posted suggesting a select group of people were given the article in advance of its public release,
Any other movie recommendation for finance nerds!?
it’s not really technical, but Margin Call was pretty good.
@@sethwilliams8625 ohkk I'll have look👍tq
margin call and the OG wall street are pretty good IMO, not quiet as detail oriented as this but definitely fun for finance nerds.
Boiler Room
Can you do a video about the economics behind the resell industry (like yeezys, and other hypebeast items). This could also include general retail arbitrage buying and selling