[Alberta's Child]

The stock market reached new highs over the last few years even as profits have stagnated. Check out the P/E ratios on the major stock indexes, and you'll see that they're trading at very high levels right now. It's not profits that is driving Wall Street -- it's a lack of alternative investments that offer any yields at all.

We had a functioning economy before personal computers and automation and we built things that lasted many years and were repairable. Everyone acts like a small decrease in economic efficiency will doom the economy. When your only metric is the value of the stock market, I guess that’s true. But if your metric is the economic health of the American people, then the picture begins to change.

I agree with a lot of this, but keep in mind that our economy is driven by consumers, not employers. If one contractor offered to replace the roof on your house for $10,000 and the other offered to do the same job for $9,000, would you even think of hiring the more expensive guy to do the same project? Maybe a tiny fraction of Americans would, but most people would not -- even if the more expensive contractor had 10 people working on the job and the less expensive one had only 5.

[Bryanw92]

>>If one contractor offered to replace the roof on your house for $10,000 and the other offered to do the sam

I’m not just talking about price. That’s ceteris paribus economics. In your analogy, let’s say that the $10k roof is a 25 year roof and the $9k roof is a 20 year roof. Or let’s say that the $10k roof is being done by a company from your town and the $9k roof is being done by a company from 1000 miles away that came into town after a storm and will be long gone.

I’m in that situation from hurricane Matthew. I chose the local, more expensive, roofer because the real world does not obey the economist’s ceteris paribus “laws”.