> Where redistribution runs vertically and broadly, the welfare state absorbs global finance shocks...
If this was true, then the Eurozone crisis would not have been as severe as it was in Portugal, Spain, Italy, Greece, and France - all countries with broad and large social assistance programs.
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Also, the HN title is editorialized, the correct title is "Who the welfare state protects shapes a country’s financial openness"
>The ECB could have brought government bond yields down from the beginning and most of the problems could have been avoided.
Is that sustainable? Argentina's predicament is basically caused by a variant of this. The Peronists gave handouts to buy votes, funded by money printing (ie. "The ECB could have brought government bond yields down"), but that has consequences and turned Argentina into an economic basket case. Of course, you might argue the EU doesn't have this problem because it's stronger economically and other states can prop them up, but that begs the question, why should member countries like Germany fund Southern Europeans's fiscal profligacy?
sorry but whatever Ger/FRA doing right now is %100 not sustainable. Future growth potential is so bleak and so low chance, along with population crisis, aging natives too. They literally need miracle, like one that exist in stories
Governments being able to borrow money (to run that deficit) relies on people believing that they will be paid back. The more the debt grows, the less likely people are to believe they’ll get paid back.
The other option is endlessly printing money, which causes hyperinflation and you get an Argentina/Turkey/Weimar Republic situation.
Austerity has become the boogeyman word for anytime a country doesn't increase spending as much as they originally planned or as much as some others think they should. An author who writes for Jacobin probably has a significantly different viewpoint on the term vs someone who works at a central bank.
The actual problem in the US is housing costs, but most people are around social media knowledge level in this area, and just blame the first thing in front of them. Raising wages will do nothing to lower housing costs, which eat the largest chunk of everyone's pay.
This is what happened in the UK but not immediately, it’s only in the current government where the minimum wage (especially for young people) got hiked massively in the context of a weak overall economy that the effect on job creation became obvious.
Now it’s quite bad though, a whole generation of 16-20 year olds entering the job market and there’s just no jobs because you can hire a 30 year old for the same money
Your "often" is not borne out by actual econometric studies. The actual rate of minimum wage that produces dead-weight loss is much higher than most minimum wages in the USA.
In any market, there is wide range of possible clearing prices with cost of production as a floor, and marginal value as a ceiling. Which price the market settles on is often a function of bargaining power as much as productivity. Minimum wage regulation is a heavy-handed way to change that bargaining relationship.
While true when minimum
is set too high, the level it is set to generally takes this into account so that "too high" is not reached over the entire jobs market.
> At best all you can say is that if you decide to hire, it cannot be lower than some minimum
That's pretty reasonable. Nobody should be working 40 hours a week at a job and not make enough to support themselves. Any company who can't afford to pay their employees at least that much is a failure who deserves to be out of business.
That's a false dichotomy. Those workers can get hired by a competent business who can afford to pay a living wage and doesn't need the government to subsidize their labor expenses.
It's because the most massive costs an American has like healthcare, child care, and higher education are free or vastly less expensive in Europe. Americans spend all their time at work for a very impressive number on their paystub while they're still one accident or illness away from homelessness or bankruptcy. Europeans get higher quality of life/happiness scores and spend far less time slaving away for their boss. Just because the number on your paycheck is bigger, it doesn't mean you're winning.
Not sure we do have better quality of life in Europe. We may have in the 2000s, but we're in decline relative to the US. Even if you take things like healthcare into account:
US average disposable income is $67,000, while it's $32,000 in the UK (with higher rents in the UK than the US).
Citation? Median earnings is less than that. And median household income is only marginally more.
the U.S. Census Bureau estimates that the median annual earnings for all workers (people aged 15 and over with earnings) was $51,370; and more specifically estimates that median annual earnings for those who worked full-time, year round, was $63,360.
According to the CPS, the median household income was $70,784 in 2021.
It seems a little bit cherry-picked that you selected an article about people on food stamps and federal aid during a global pandemic, which saw absolutely massive amounts of people lose their jobs.
> “The pattern invites us to read welfare as macroprudential policy, part of the toolkit that keeps financial openness politically survivable. Where redistribution runs vertically and broadly, the welfare state itself absorbs the shocks of global finance. Where it runs horizontally, protecting established insiders while the rest carry the risk, governments buy stability at the financial border instead. Capital controls work as a cheap, imperfect substitute for redistribution. They calm an exposed society without asking anyone at the top to pay.”
Their analysis will yield false conclusions because they’re completely ignoring a number of variables.
For instance, the USSR had capital controls for financial and political reasons. The article assumes that politics plays no role, only finance.
Wall Street influences US financial policy, but so does politics.
The laziness of this research is shocking, so I looked up the author. He’s an author for the Communist blog “Jacobin.”
Try to leave that welfare paradise, you are still on hook as tax resident for extra three years after leaving!
If this was true, then the Eurozone crisis would not have been as severe as it was in Portugal, Spain, Italy, Greece, and France - all countries with broad and large social assistance programs.
---
Also, the HN title is editorialized, the correct title is "Who the welfare state protects shapes a country’s financial openness"
The ECB could have brought government bond yields down from the beginning and most of the problems could have been avoided.
Is that sustainable? Argentina's predicament is basically caused by a variant of this. The Peronists gave handouts to buy votes, funded by money printing (ie. "The ECB could have brought government bond yields down"), but that has consequences and turned Argentina into an economic basket case. Of course, you might argue the EU doesn't have this problem because it's stronger economically and other states can prop them up, but that begs the question, why should member countries like Germany fund Southern Europeans's fiscal profligacy?
The other option is endlessly printing money, which causes hyperinflation and you get an Argentina/Turkey/Weimar Republic situation.
Of course it’s promoting Communism.
* https://www.washingtonpost.com/business/2026/07/22/amazon-gi...
At best all you can say is that if you decide to hire, it cannot be lower than some minimum, but often this results in no job at all.
Now it’s quite bad though, a whole generation of 16-20 year olds entering the job market and there’s just no jobs because you can hire a 30 year old for the same money
In any market, there is wide range of possible clearing prices with cost of production as a floor, and marginal value as a ceiling. Which price the market settles on is often a function of bargaining power as much as productivity. Minimum wage regulation is a heavy-handed way to change that bargaining relationship.
That's pretty reasonable. Nobody should be working 40 hours a week at a job and not make enough to support themselves. Any company who can't afford to pay their employees at least that much is a failure who deserves to be out of business.
So it’s better that they don’t get hired at all and live entirely off support of the (forced) largesse of the tax payer?
As one of those tax payers I’d much rather they work and earn at least something.
The author writes for Jacobin, which promotes a failed ideology where you CAN force people to “hire anyone at a given wage.”
It’s an advertisement for a failed ideology.
US average disposable income is $67,000, while it's $32,000 in the UK (with higher rents in the UK than the US).
the U.S. Census Bureau estimates that the median annual earnings for all workers (people aged 15 and over with earnings) was $51,370; and more specifically estimates that median annual earnings for those who worked full-time, year round, was $63,360.
According to the CPS, the median household income was $70,784 in 2021.
https://en.wikipedia.org/wiki/Personal_income_in_the_United_... https://en.wikipedia.org/wiki/Household_income_in_the_United...
We might make half as much (rather less for me actually) because of our specific industry, but that's not generally true.
Doesn’t feel objective.
Their analysis will yield false conclusions because they’re completely ignoring a number of variables.
For instance, the USSR had capital controls for financial and political reasons. The article assumes that politics plays no role, only finance.
Wall Street influences US financial policy, but so does politics.
The laziness of this research is shocking, so I looked up the author. He’s an author for the Communist blog “Jacobin.”
Why is this on Hacker News?
This paper is flimsy propaganda.
https://jacobin.com/author/martino-comelli