TYR Tactical

How The Economic Machine Works

I realize this post is somewhat unusual for SSD but I’ve noticed a trend in the comments that has made me realize that all too many commenters don’t understand how business works, let alone basic economics.

This animated video, narrated by Ray Dallio of Bridgewater Associates, offers a very straightforward look at why things go the way they do. Granted, it is about 30 minutes long, but well worth your time, as well as a share with others.

28 Responses to “How The Economic Machine Works”

  1. Steve says:

    Screw economics, feel the BERN!

    • SSD says:

      That seems to be the prevailing attitude.

    • David Hensley says:

      You mean “Free shit for all” doesn’t work?!?!?

      • joe says:

        it will when 50% workforce is unemployABLE, because of robots and computers in 30 years. Robots don’t care if they work so someone else drinks beer all day.

        • NP says:

          Robots and computers create more jobs than they replace.

          • elliot says:

            @NP: How is that, exactly? (Genuinely curious.)

            • AlexC says:

              What I have been taught is that robots and computers require more men to achieve the same task. You need a programmer, a maintainer, someone who builds the robot, someone who designs the robots, and someone to supervise to robots. That’s about 4-6 jobs depending on overlap and or specializations.

              Now, why you would want this is that the robot can accomplish more work, faster, cheaper, and to a higher consistency than if those 4-6 people were doing the work themselves directly.

              So even though you have more jobs, and those jobs are higher paid, your output is increased to a higher degree.

              This assumes though, that demand for products are high. When demand is low, this isn’t worth it, because the upfront costs are higher than in just people doing the work themselves.

  2. Maskirovka says:

    Shared! Good stuff. Also, as much as I am generally against leery of consumer credit (with the exception of mortgages), it’s interesting to see how credit in general can grow the economy.

  3. Desert Lizard says:

    Great stuff. Thanks for getting it out there.

  4. Blake Slamson says:

    Thanks dad for taking care of us.

  5. F. Olvera says:

    Simple enough. Why can’t public education compete with this type of knowledge with everyone….

    • Pete says:

      Well, for what it’s worth, I first really learned this stuff in a major publicly funded university. But basic Macro and Micro Economics classes are typically not Secondary or Primary School material. I know it would for sure have gone right over my self-righteous, know-it-all 17 year old head, but stuck well enough in my self-righteous, know-it-all 19-20 year old head…

  6. LWM says:

    I never post on forums, but this video is the typical junk you’ll get from Keynesian Economists. They claim that spending is what drives the economy, and that the government needs to spend money during a recession to kick-start it back into production. This is simple lunacy and it has failed us for decades…

    I’ll attach this video to explain to those who are interested.

    https://www.youtube.com/watch?v=vj7XExwChwI

    • HSR47 says:

      This.

      Long term growth is due not to spending per-se, but on spending that serves to increase long-term growth.

      The short and long term bubble cycles are therefore the result of spending credit on things that DON’T serve to increase long-term growth.

      Similarly, the “solutions” proposed by the video are wrong, because they are a cure for the wrong disease: The problem isn’t that spending is too low, the problem is that too much money is being spent on things that don’t serve to increase productivity. For this reason, inflationary policy is extremely bad, because it serves to disproportionately penalize those who are most responsible for productivity: Those with savings. Inflation devalues savings, which in turn makes it progressively harder for people to actually save money, and therefore makes it harder for productive people to borrow, while also increasing the amount of money they would need to borrow. In other words, Keynesian “solutions” to this type of problem end up just making matters far worse than they otherwise would have been, because they serve as a parachute: They provide resistance, which slows economic movement, thus greatly increasing the length and severity of economic downturns.

  7. Blehtastic says:

    “Because we borrow, we have cycles, this isn’t due to any laws or regulations…”

    While theoretically true, according to Wharton school brainwashing, realistically asinine. And also, not at all actually true.

    SSD is really approaching parody at this point with these “quit complaining about how much stuff costs” posts.

    Everybody who has thought about it, for even a moment, must come to a quick and obvious conclusion that night vision, howitzer parts, JLTV’s, and 40 mm rounds, etc. are expensive due to a monopsonistic market with buyers that are almost totally unaccountable as to the cost of items, with boutique and absurdly specific customers who are informed more by the latest Marvel Hollywood movie, than they are by any knowledge of the scientific or technical hurdles presented by the juvenile and industry serving list of “requirements” that they are mistakenly given the authority to present to the procurement process.

    We were gifted with a second amendment in this country. It was never intended to be a right before it was a responsibility. There’s a reason cops can buy their uniforms at seemingly jokingly low prices, while Tyr Tactical has the gall to put a jacket for sale, before God and Country, for $1000, apparently without shame.

    Cops are, in many cases given a stipend for gear, and encouraged to buy the highest value they can find, as they can pocket the rest. They’re given the opportunity to pick between “buy once, cry once” and buying something that will only last a month, but which they can buy 12 of for 1/3 the cost of boutique “high speed” gear.

    Special Operations gear will always be absurdly expensive, and it should be, as no one tasked with those missions should ever feel the need to go into battle without $1 million of America’s finest toys and whizbangs at their disposal. But let’s make no mistakes, if we repealed the NFA, GCA, and a few other unconstitutional laws tomorrow, our Infantry troops would be far better equipped, 6 months from now, than they are today, for half the price.

    • SSD says:

      Wow, you are so wrong. The reason blue goods are so cheap is because they are cheap. They’re not made here in the good o’l US of A.

    • Chris K. says:

      Wow, very wrong. LE is moving more and more towards quality gear over cheaper alternative, and I say this as an industry partner who works with LE on a regular basis. Hell, our local SWAT team has Crye’s CAGE Chassis, a $1600 item without armor. Tyr Tac’s “high speed” clothing items are labor intensive and use quality materials plus are USA made. And, they don’t make many of them in terms of the jacket you’re referring to. How much is a single can of Coke vs a can from a 12 pack? Think about it. Quality gear is more expensive than low quality stuff. Small niche items that aren’t sold as often or in high qty’s are gonna be more expensive just to due the nature of profit margins. And SOF does not always use the most expensive “whiz-bang” kit, just look at what they use to haul gear in mountainous terrain….

  8. SSD says:

    I kinda figured we’d have more economists show up than this. I’m a little disappointed.

  9. Dev says:

    It’s simple really. Be happy with what you can afford and don’t spend and live beyond your means. Want more, work hard(er) and sometimes smart(er).

    Doesn’t take a PhD economist to figure that out…

    Also a man far wise than myself said this, some wise words to live by:

    Far and away the best prize that life offers is the chance to work hard at work worth doing.
    Theodore Roosevelt, September 7, 1903

    We should be learning and working until our last breath and until the body gives up.