Pope Francis claims global economy is close to collapse and describes youth unemployment rates as an ‘atrocity’ in damning message

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Bubba_Switzler said:
Simple reasoning will suffice, although there is much literature on this relationship already.

What do you think would happen to youth unemployment if the minimum wage were raised to $1000/hour?
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One of the ironies in this issue is that the same wages also serve as spending money for goods and services, from which capitalists profit. Thus, the removal of minimum wage actually works against capitalists, as lower wages also means lower sales. The same goes for unemployment, which means lower sales for businesses.

What capitalism wants is actually increasing minimum wages, but just enough to maintain the profit margin. To raise the profit margin, the same workers must be induced to produce more given the same pay: hence, efficiency.

Given competition, capitalists will keep prices as low as possible while maintaining profits, which can be done if workers produce more at the same pay. But producing more obviously means more goods available; who will buy the excess goods.

Capitalists use their profits to expand businesses or borrow from investors, and with expansion they hire more workers and in turn allow the market to expand.

However, there comes a point when investors want better returns, such that capitalists in competition with each other will want more profits each time. Without raising prices that much (as workers’ wages have to be kept as low as possible) they will have to sell more goods (as their businesses, and hence production, expand). But how can they sell more goods to workers who don’t earn as much?

That’s when banks start lending at lower interest rates not just to businesses but also to workers. They will have to in any event as they can only earn money (and earn more money) by continuously lending more sums of money.

This is exactly what happened to the U.S., and explained here:

“RSA Animate - Crises of Capitalism”

youtube.com/watch?v=qOP2V_np2c0

That is, both businesses and government provided easy credit to workers, who in turn used the money to buy houses, and then use the houses as leverage to buy all sorts of consumer goods and services, including funds to take higher degrees and thus move away from manufacturing and agriculture and towards better pay in the service industry.

The implication is that for this system to continue ever-increasing amounts of credit have to be created to fund ever-increasing production and consumption of goods and services by workers (who are also consumers) who have to be more productive but also borrow more money to buy more goods and services to ensure increasing profits for capitalists.
 
Bubba_Switzler said:
Sadly, I suspect you are right that this is probably the entire depth of his thinking on the subject. The Church supports policies that cause youth unemployment and then expects the rich to solve them. So sad.
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That is the entire depth of the subject, Also, the rich should solve the problem as they created it, and will actually profit from it if they solve it.
 
ralfyman said:
A mixed economy is a capitalist economy. Capitalism involves both free market and state capitalism. Crony capitalism is the result of any type of capitalist system.
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A mixed economy is a compromise between capitalism and socialism. Crony capitalism is the result of naively empowering politicians to improve on capitalism.
 
stinkcat_14 said:
To be honest, it is not clear that you understand what economic theory has to say about the effect of the minimum wage on unemployment.
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We both know you do not support a minimum wage either, maybe not for the same reason as Bubba, but you still don’t.
 
freeRadical said:
We both know you do not support a minimum wage either, maybe not for the same reason as Bubba, but you still don’t.
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I agree that we are both against it. But what is debatable is how much impact it has on youth unemployment. It is easy to overstate the case against the minimum wage, particularly in the US where it is relatively low.
 
Hi, read the first page and didn’t want to start a new thread because it seemed related. I have been struggling with this topic on the inside regarding Pope Francis’ encyclical EVANGELII GAUDIUM regarding his social stances. Tie that with the Pope being infallible in regards to ‘morals and faith’ and how vague that can be and Im not sure about the entire ordeal. I don’t believe in gray areas, I only like absolutes. Sure there are case-by-case but they still boil down to 2 end results.

So a little about my background. Born and raised Catholic, from a VERY devout family. We’re Vietnamese so Catholic “mysticism” is big with us. What I do for a living is day trading the markets, what I believe is the final frontier in the “wild west” of free market capitalism. You are either right or wrong in your trade and the market will let you know immediately. Only the best make money as an income and that’s how I believe it should be.

Anyway, my family owns a successful beauty salon that has operated for over 20 years on the fact that they provide the best service in the area, hence the long time of operation.

I didn’t believe it at first when I read about it in the headlines regarding Pope Francis’ stance on economics until I read his encyclical. Can the Pope be infallible in the realm of economics?

Is there an official source from the CCC that can debase the Pope’s stance? I’m sorry but I don’t believe **at all ** in the Pope’s call for the social ideal of taking from the richer and giving to the poorer (unless it was stolen, ergo the Government subsidies, money that is unearned but stolen from savers). Even Saint Paul recognizes “if a man does not work, let him not eat.” Why should I provide money to those who are too lazy to work? Let him reap what his sows so he can learn and better himself. Is it “heartless”? No, nothing is more heartless than forming his mind to live as a worthless man, woman, or child. God has created us to become better than that, it’s our choice to give up or persevere.

My family’s business did not survive on socialistic ideas, we provided a service to people at a price they freely chose to pay and saw value in. THAT’S WHAT A BUSINESS IS. It is nothing more than someone who sees the market inefficiency and fills that void of supply and demand, therefore making a profit. The large amount of money is simply a scorecard of our work. Is it greedy that we live better than others? I will not be guilted for my hard work and 18-hour days that I myself had to do to make my business work while someone else did not.

I believe God has given us the free will to such an extent that every single person on earth is fully responsible for what they do and the results they reap from it, good or bad. How else can there be true free will? Jesus has already suffered and conquered sin on our behalf, we are now free to be as incredible as we wish to be, no holds barred and enjoying the beautiful world that God has created.

We need to get rid of all these excuses to “boo hoo” their situation so they can become the best person God calls them to. Let people remove their crutches of a welfare mentality and run freely, Jesus did not die so we can live luke-warmly. How I see Earth is that it is ‘heaven’ for the body as can be experienced by the human senses and after death, we experience the TRUE Heaven with God himself. A clue: Fibonacci equation, the pattern that is seen in everything on earth and nature, including the markets I trade. Just like everything on earth, it is a small mirror, reflecting God. We are but a small fibonacci to THE FIBONACCI, God. (Saint Thomas Aquinas related if you don’t understand my thinking)

What i’m saying is that my faith is balanced on a razor’s edge. If what the Pope says is supposed to be infallible, I don’t believe I can be a devout Catholic.
 
Confuzzled said:
What i’m saying is that my faith is balanced on a razor’s edge. If what the Pope says is supposed to be infallible, I don’t believe I can be a devout Catholic.
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The short answer is that, no, the pope is not infallible on matters of economics but although I disagree with Pope Francis on his claim that greed is the cause of youth unemployment, I think it is important to remember that economics is a combination of science and morality and that even where he is not infallible, the pope should speak his mind and we should weigh his words carefully.

I strongly recommend that you visit www.acton.org where I am confident you will find the inspiration you are seeking.
 
stinkcat_14 said:
I agree that we are both against it. But what is debatable is how much impact it has on youth unemployment. It is easy to overstate the case against the minimum wage, particularly in the US where it is relatively low.
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I agree that it is debatable, but I think it is reasonable to assume that the minimum wage does have an impact on low-skilled workers, of which youth usually are, however there are a lot of other variables in play that make the issue complex and thus, the relative impact is hard to discern.

I believe that the main reason that youth unemployment is so high is simply that the young don’t want to work or they don’t work to work the jobs they can get for the pay they can get. Maybe they don’t need to work or their parents don’t want them to work, etc. There are a lot of things that could explain why youth unemployment is so high. However, if you are going to use the minimum wage to argue why the youth unemployment is high then you have to make two assumptions: (1) that the young want to work and (2) that they are unable to find work.

I have a question for you: If you wouldn’t use unemployment to argue against the minimum wage, how would you argue against it?
 
Confuzzled said:
My family’s business did not survive on socialistic ideas, we provided a service to people at a price they freely chose to pay and saw value in. THAT’S WHAT A BUSINESS IS. It is nothing more than someone who sees the market inefficiency and fills that void of supply and demand, therefore making a profit. The large amount of money is simply a scorecard of our work. Is it greedy that we live better than others? I will not be guilted for my hard work and 18-hour days that I myself had to do to make my business work while someone else did not.
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You did well by working hard and providing good services. You have not done anything wrong.
 
Bubba_Switzler said:
Do you honestly believe that deregulation caused youth unemployment?
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It’s hard to believe now but Carter deregulated the airline, trucking, and rail industries and job growth was actually stimulated by it, though it ultimately got him in trouble with the unions and cost him a possible re-election. He barely survived a renomination due to Kennedy’s attacks against him.
 
Just jumping in here - I haven’t read all the previous posts.

I saw this World Cup promo film made on the streets of Brazil. I’ve never been to South America. Just one look at the city neighborhoods made me realize where the Pope is coming from. If I grew up in an area like that, I’d talk and think just like him. (And Brazil actually is doing all right economically, right?) You have to keep a cultural perspective on his comments about poverty. I am not dismissing the debate about which economic policies best help the poor and I believe good Catholics can disagree about that. I don’t know enough about economics to really speak to it myself. But we have to remember the background of the Pope. All he has even seen is intense poverty, institutionalized injustice and income inequality on a scale most people in North America or Europe can’t imagine. He has lived with the poor all his life. He will always speak for them. He’s probably right in believing God wants him to.
 
Bubba_Switzler said:
A mixed economy is a compromise between capitalism and socialism. Crony capitalism is the result of naively empowering politicians to improve on capitalism.
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A mixed economy is a combination of market and planned economies:

en.wikipedia.org/wiki/Mixed_economy

State-owned corporations operate as part of state capitalism:

en.wikipedia.org/wiki/State_capitalism

Crony capitalism involves close cooperation between businessmen and the government, which is what eventually happens when some become richer and then take over:

en.wikipedia.org/wiki/Crony_capitalism
 
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