Not a good sign.
http://www.pewresearch.org/fact-tank/2013/12/05/u-s-income-inequality-on-rise-for-decades-is-now-highest-since-1928/
QuotePresident Obama took on a topic yesterday that most Americans don't like to talk about much: inequality. There are a lot of ways to measure economic inequality (and we'll be discussing more on Fact Tank), but one basic approach is to look at how much income flows to groups at different steps on the economic ladder.
Emmanuel Saez, an economics professor at UC-Berkeley, has been doing just that for years. And according to his research, U.S. income inequality has been increasing steadily since the 1970s, and now has reached levels not seen since 1928. (The GIF file at the top of this post, created by Dorsey Shaw of Buzzfeed, compares growth in average income of the top 1% of Americans with everyone else.)
Using tax-return data from the IRS, Saez has built extensive income-distribution datasets going back 100 years. He defines "income" as pre-tax cash market income — wages and salaries; dividends, interest, rent and other returns on invested capital; business profits; and realized capital gains. He excludes Social Security payments, unemployment benefits and other government transfer payments, which are more substantial today than before the Great Depression.
In 1928, the top 1% of families received 23.9% of all pretax income, while the bottom 90% received 50.7%. But the Depression and World War II dramatically reshaped the nation's income distribution: By 1944 the top 1%'s share was down to 11.3%, while the bottom 90% were receiving 67.5%, levels that would remain more or less constant for the next three decades.
But starting in the mid- to late 1970s, the uppermost tier's income share began rising dramatically, while that of the bottom 90% started to fall. The top 1% took heavy hits from the dot-com crash and the Great Recession but recovered fairly quickly: Saez's preliminary estimates for 2012 (which will be updated next month) have that group receiving nearly 22.5% of all pretax income, while the bottom 90%'s share is below 50% for the first time ever (49.6%, to be precise).
A century ago, Saez notes that the highest earners derived much of their income from earnings on the accumulated wealth of past generations. By contrast, "[t]he evidence suggests that top incomes earners today are..."working rich," highly paid employees or new entrepreneurs who have not yet accumulated fortunes comparable to those accumulated during the Gilded Age."
Americans aren't unaware of these trends. More than half (61%) of Americans said the U.S. economic system favors the wealthy, while just 35% said it's fair to most people, according to a Pew Research Center survey conducted in March. A similar share (66%) of Americans said the gap between rich and poor had increased in the past five years; nearly three-quarters of respondents said the rich-poor gap was either a "very big" (47%) or "moderately big" (27%) problem.
As one might expect, low- and middle-income people were most likely to say the U.S. economic system favors the wealthy, but even 52% of high-income people agreed that it does. And while 54% of low-income people and 49% of middle-income people called the rich-poor gap a "very big" problem, only 36% of high-income people did so. A third of the high-income group said the rich-poor gap was either a small problem (19%) or not a problem at all (14%).
More than half (55%) of Republicans said the economic system is fair to most people, but majorities of Democrats (75%) and independents (63%) said it favors the wealthy. And 61% of Democrats and 50% of independents said the gap was a very big problem, versus only 28% of Republicans. Four-in-ten Republicans termed the gap either a small problem (22%) or not a problem at all (18%).
Quote from: jimmy olsen on December 10, 2013, 03:37:06 AM
Not a good sign.
Here, this one's much better, and the only one that matters.
QuoteDow Jones Industrial Average
Dow Jones Indices: .DJI - Dec 9 4:30 PM ET
16,025.53+5.33 (0.03%)
Someone will be along in a minute to say this is the best of worlds.
Quote from: mongers on December 10, 2013, 06:18:06 AM
Someone will be along in a minute to say this is the best of worlds.
Dr Pangloss?
Shouldn't the title be "worst" instead of "worse"? The latter suggests a continual decline since 1928.
You are correct
I was actually holding my tongue this time ...
Why would I say that?
Quote from: Admiral Yi on December 10, 2013, 12:41:02 PM
Why would I say that?
Seems like the kind of thing you've said in the past. You know... it's not the distance between the top and the bottom that matters, but that things at the bottom are better than ever what with colour TV and internet, cheap Walmart products and cheap meals at McDonald which they didn't have fifty years ago, and so on; and that the ever-accumulating wealth of the top tiers show how much economic freedom we enjoy, and so forth.
... but if that's not the kind of thing you'd say, I apologize for mischaracterizing your position.
No need to apologize; that is the kind of thing I say.
But how do you get from it doesn't matter to it's the it's the best of worlds?
Quote from: Admiral Yi on December 10, 2013, 01:37:30 PM
No need to apologize; that is the kind of thing I say.
But how do you get from it doesn't matter to it's the it's the best of worlds?
Well, it's a shorter distance for you to go from saying "it doesn't matter" to "it's the best of worlds" than it is for someone to register with the name Dr. Pangloss and saying "it's the best of worlds". Strictly speaking, that's all I claimed :)
That said, I'm not sure I understand the significance you place on the difference between "it doesn't matter" and "it's the best of worlds" in this particular scenario.
Quote from: Jacob on December 10, 2013, 01:45:59 PM
That said, I'm not sure I understand the significance you place on the difference between "it doesn't matter" and "it's the best of worlds" in this particular scenario.
This is a real head scratcher.
We already knew that Socialists want a great depression and a world war.
I wonder what the income disparity is for Canada, UK or other nations of people on Languish? Have other advanced economies kept the disparity between rich and poor more in check over the same time frame?
Quote from: Admiral Yi on December 10, 2013, 01:53:44 PM
Quote from: Jacob on December 10, 2013, 01:45:59 PM
That said, I'm not sure I understand the significance you place on the difference between "it doesn't matter" and "it's the best of worlds" in this particular scenario.
This is a real head scratcher.
How so?
Quote from: KRonn on December 10, 2013, 02:00:50 PM
I wonder what the income disparity is for Canada, UK or other nations of people on Languish? Have other advanced economies kept the disparity between rich and poor more in check over the same time frame?
They have. I don't have time to look it up right now, or probably ever, but they have.
Quote from: Jacob on December 10, 2013, 02:03:14 PM
How so?
To use Joan's excellent term, they're orthoganal. I'm totally indifferent to which team wins the Stanley Cup. It does not follow from this that the Bruins winning is the best of worlds. It's nonsensical to claim that there is no material difference between the two statements.
Quote from: Admiral Yi on December 10, 2013, 02:09:10 PM
Quote from: Jacob on December 10, 2013, 02:03:14 PM
How so?
To use Joan's excellent term, they're orthoganal. I'm totally indifferent to which team wins the Stanley Cup. It does not follow from this that the Bruins winning is the best of worlds. It's nonsensical to claim that there is no material difference between the two statements.
That's a pretty tortured metaphor :lol:
In any case, as I understand it you're on record as saying that two separate phenomena are positives: rich people are getting ever richer and that's a testament to freedom and potential of capitalism in generating wealth; and poor people have it better than poor people have ever had it before. You've made those comments when we've discussed income inequality in the past, and you've generally made them to argue against taking action to lessen income inequality.
You have not, it is true, said that this is the best of all possible worlds. You have, however, consistently argued against taking action to address income inequality, and those arguments seem to be predicated on things being better than they were before. As such, the distinction between what you argue and the Panglossian "best of all worlds" (with an implicit "possible" between "all" and "worlds") seems to be more a matter of rhetoric than substance.
Would be interesting to see what the trends are if post-tax transfers are included.
Quote from: Jacob on December 10, 2013, 02:39:56 PM
That's a pretty tortured metaphor :lol:
In any case, as I understand it you're on record as saying that two separate phenomena are positives: rich people are getting ever richer and that's a testament to freedom and potential of capitalism in generating wealth; and poor people have it better than poor people have ever had it before. You've made those comments when we've discussed income inequality in the past, and you've generally made them to argue against taking action to lessen income inequality.
You have not, it is true, said that this is the best of all possible worlds. You have, however, consistently argued against taking action to address income inequality, and those arguments seem to be predicated on things being better than they were before. As such, the distinction between what you argue and the Panglossian "best of all worlds" (with an implicit "possible" between "all" and "worlds") seems to be more a matter of rhetoric than substance.
It's a perfectly apt metaphor. :mellow:
I can't recall ever claiming the poor have it better than they've ever had it. My principle argument against redistribution has always been that whether Warren Buffet makes another zillion dollars or not, my life does not change in the slightest. My other principle argument against redistribution is property rights (cue Razz on slavery). We shouldn't be in the business of grabbing someone else's legitimately acquired wealth just because we want it.
Quote from: Admiral Yi on December 10, 2013, 03:02:01 PM
It's a perfectly apt metaphor. :mellow:
I can't recall ever claiming the poor have it better than they've ever had it. My principle argument against redistribution has always been that whether Warren Buffet makes another zillion dollars or not, my life does not change in the slightest. My other principle argument against redistribution is property rights (cue Razz on slavery). We shouldn't be in the business of grabbing someone else's legitimately acquired wealth just because we want it.
So you would be in favor of it if it could be demonstrated it impacted your life in someway? The second one we just need to come up with a reason to grab somebody else's legitimately acquired wealth for some reason other than just because we want it. Since we grab people's legitimately acquired wealth for all sorts of reasons besides that already that strikes me as rather weak.
I am not in favor of redistribution for its own sake but I do think having huge shares of the nations wealth in the private control of just a few individuals is not a good thing, especially since our system is so much about leveraging money into political power and influence. But I would prefer we concern ourselves with the economic and political facts that create that situation and think about what we can do about them rather than just taking the money from the rich people. That is not a real solution as a lot of them will probably just take their money and run.
Quote from: Admiral Yi on December 10, 2013, 03:02:01 PM
Quote from: Jacob on December 10, 2013, 02:39:56 PM
That's a pretty tortured metaphor :lol:
In any case, as I understand it you're on record as saying that two separate phenomena are positives: rich people are getting ever richer and that's a testament to freedom and potential of capitalism in generating wealth; and poor people have it better than poor people have ever had it before. You've made those comments when we've discussed income inequality in the past, and you've generally made them to argue against taking action to lessen income inequality.
You have not, it is true, said that this is the best of all possible worlds. You have, however, consistently argued against taking action to address income inequality, and those arguments seem to be predicated on things being better than they were before. As such, the distinction between what you argue and the Panglossian "best of all worlds" (with an implicit "possible" between "all" and "worlds") seems to be more a matter of rhetoric than substance.
It's a perfectly apt metaphor. :mellow:
I can't recall ever claiming the poor have it better than they've ever had it. My principle argument against redistribution has always been that whether Warren Buffet makes another zillion dollars or not, my life does not change in the slightest. My other principle argument against redistribution is property rights (cue Razz on slavery). We shouldn't be in the business of grabbing someone else's legitimately acquired wealth just because we want it.
I really don't understand how the discussion about income inequality (and its growth) always seems to come down to redistribution.
The one has only a slight relationship to the other, and if growing income inequality is in fact a problem, the problem did not come about because there was less redistribution, nor can it be solved by more redistribution, at least not in any real and practical sense.
The rich are not taking more and more of a share of the nations wealth because they are not taxed enough. We could double their taxes, and the trend would continue.
The wealthy and their share of the tax burden is a separate issue. The fact that the rich are getting richer suggests that they can likely afford a greater tax burden, but that isn't the same thing.
The banking/finance world needs more George Baileys and less Mr Potters.
Quote from: Admiral Yi on December 10, 2013, 03:02:01 PM
My principle argument against redistribution has always been that whether Warren Buffet makes another zillion dollars or not, my life does not change in the slightest.
The problem is that we would like your life to change in the slightest. We would like it if people like you and me got to see our incomes rise over time as productivity and output increases across the board, rather than just the wealthy enjoying those benefits while the rest of us sit around happy that things are actually getting worse for us.
Or, to put it another way, my argument is that Warren Buffet getting another billion dollars doesn't actually help Warren Buffet in the least, except to allow him to increase his High Score relative to the other super rich. He would say the same thing, actually.
Lastly, long term there is a very real effect on you. Your ability to influence and control your society and government is being eroded away by the fact that you (and people like you) have less and less control over the wealth of the country you live in. This is in fact a very real problem.
Quote from: Admiral Yi on December 10, 2013, 03:02:01 PM
... We shouldn't be in the business of grabbing someone else's legitimately acquired wealth just because we want it.
Perhaps you should ponder the distinction between legality and legitimacy.
History teaches us that when social mobility declines, and I believe this is an indicator of such a phenomenon, the cohesion of the affected society begins to falter. In fact I would say this is symptomatic of a general trend to 'thirdworldize' the advanced economies and bring most of us down to Indian or Chinese levels - all for the benefit of tiny minority of parasites. <_<
G.
Quote from: Berkut on December 10, 2013, 03:17:55 PM
The problem is that we would like your life to change in the slightest. We would like it if people like you and me got to see our incomes rise over time as productivity and output increases across the board, rather than just the wealthy enjoying those benefits while the rest of us sit around happy that things are actually getting worse for us.
I would like to see those things too. But I don't see how they would happen if Buffet didn't make that zillion dollars. I don't see how my real wages would rise if computers had never been invented and so much human work automated.
Quote from: Grallon on December 10, 2013, 03:25:06 PM
Perhaps you should ponder the distinction between legality and legitimacy.
I have.
It would be horrible, just horrible, if people with STEM degrees and other experts make more and more money and other people are reduced to being their servants. What a fucking nightmare!
Quote from: Admiral Yi on December 10, 2013, 03:25:28 PM
I would like to see those things too. But I don't see how they would happen if Buffet didn't make that zillion dollars. I don't see how my real wages would rise if computers had never been invented and so much human work automated.
Isn't that a rather ridiculous and extreme position? The idea is not that computers and automation are bad, they are very good, but life is not super simple back and white. There are some consequences to it that do have some problematic impacts that need to be addressed, not just destroy all computers luddite like.
Let's not go on attacking the Luddites all the time :P
I don't get the obsession with automation. It's come up here a few times and is often mentioned on many blogs, especially by American lefties. It's something - like anti-free trade sentiment - that, from my view, seems peculiarly American.
Quote from: Valmy on December 10, 2013, 03:35:59 PM
Isn't that a rather ridiculous and extreme position?
No.
QuoteThe idea is not that computers and automation are bad, they are very good, but life is not super simple back and white. There are some consequences to it that do have some problematic impacts that need to be addressed, not just destroy all computers luddite like.
Computers and automation have generated a return on investment, multiplying wealth. They have replaced human labor in a number of industries. In a hypothetical world in which computerization/automation had never occurred, labor's share of GDP vis a vis capital would be higher. But our real incomes would not.
What I'm wondering is where is the growth? It used to be that high income inequality was correlated with economic growth. Why don't we have 1928's GDP growth rate of 7% or whatever it was?
Obama.
Quote from: MadImmortalMan on December 10, 2013, 03:45:15 PM
What I'm wondering is where is the growth?
Presumably overseas, where capital is most scarce and therefore recieves the highest returns.
Quote from: Sheilbh on December 10, 2013, 03:42:29 PM
Let's not go on attacking the Luddites all the time :P
I don't get the obsession with automation. It's come up here a few times and is often mentioned on many blogs, especially by American lefties. It's something - like anti-free trade sentiment - that, from my view, seems peculiarly American.
It's a convenient simple scapegoat for growing income inequality. It seems it's not just American leftists who reason that way; Yi seems to consider it the primary cause as well.
Quote from: Jacob on December 10, 2013, 03:53:30 PM
It's a convenient simple scapegoat for growing income inequality. It seems it's not just American leftists who reason that way; Yi seems to consider it the primary cause as well.
It may simply be a correlation and not a causation :P
But when we see tellers being replaced at banks, servers being replaced at restaurants, workers being replaced at factories, and so forth....we wonder. I mean ultimately it is good we utilize the latest technologies but surely there are some social consequences no?
I don't really get the link to income inequality though.
Quote from: Sheilbh on December 10, 2013, 04:17:05 PM
I don't really get the link to income inequality though.
Return on investment, winner take all markets, and replacement of semi-skilled labor.
Quote from: Sheilbh on December 10, 2013, 03:42:29 PM
Let's not go on attacking the Luddites all the time :P
I don't get the obsession with automation.
I don't either. The evidence of the connection between automation and income inequality or labor share is less than overwhelming. In particular there is a lack of evidence for increased levels of capital intensivity or substitution of capital for labor, which is what we would expect to see in a machine-replaces-man scenario.
Quote from: Admiral Yi on December 10, 2013, 03:52:05 PM
Quote from: MadImmortalMan on December 10, 2013, 03:45:15 PM
What I'm wondering is where is the growth?
Presumably overseas, where capital is most scarce and therefore recieves the highest returns.
?
Certainly not in East Asia where capital is very far from scarce.
Quote from: The Minsky Moment on December 10, 2013, 04:29:05 PM
?
Certainly not in East Asia where capital is very far from scarce.
Capital that is free to seek a return is arguably very scarce in China.
Quote from: Admiral Yi on December 10, 2013, 04:20:19 PM
Return on investment, winner take all markets, and replacement of semi-skilled labor.
Okay. But this is all very Garrett Fitzgerald, that's fine in practice but does it work in theory. Automations been going on for a century at least. I'm not sure that peaks and troughs of income inequality map terribly well with it.
I also don't get how this is causing problems in the US now, as opposed to a few decades ago. Surely increasing automation is a problem for countries that do the cheap manufacturing - like China and Thailand - not ones that are heavily automated, but already high-skill manufacturing like the remaining factories in the US, UK and Germany.
Automation's important in changes to the labour market but I think it's probably the least important of it, feminism and globalisation. I also don't quite see the link between it and income inequality.
Quote from: Valmy on December 10, 2013, 04:14:51 PM
But when we see tellers being replaced at banks
Did the mass roll out of ATMs result in a decrease or increase in the number of people employed by banks?
Quote from: The Minsky Moment on December 10, 2013, 04:38:50 PM
Quote from: Valmy on December 10, 2013, 04:14:51 PM
But when we see tellers being replaced at banks
Did the mass roll out of ATMs result in a decrease or increase in the number of people employed by banks?
It did.
Quote from: The Minsky Moment on December 10, 2013, 04:38:50 PM
Quote from: Valmy on December 10, 2013, 04:14:51 PM
But when we see tellers being replaced at banks
Did the mass roll out of ATMs result in a decrease or increase in the number of people employed by banks?
:o :unsure:
I always thought ATM had little bank tellers inside them. Like Gnomes or Vietnamese or something.
Quote from: Razgovory on December 10, 2013, 04:44:19 PM
I always thought ATM had little bank tellers inside them. Like Gnomes or Vietnamese or something.
Someone has to count the money before the machine spits it out.
Quote from: Razgovory on December 10, 2013, 04:44:19 PM
I always thought ATM had little bank tellers inside them. Like Gnomes or Vietnamese or something.
They tried it with Mexican tellers but that didn't work so well.
https://www.youtube.com/watch?v=vh173tJRNX4 (https://www.youtube.com/watch?v=vh173tJRNX4)
Quote from: Berkut on December 10, 2013, 03:14:37 PM
I really don't understand how the discussion about income inequality (and its growth) always seems to come down to redistribution.
The one has only a slight relationship to the other, and if growing income inequality is in fact a problem, the problem did not come about because there was less redistribution, nor can it be solved by more redistribution, at least not in any real and practical sense.
The rich are not taking more and more of a share of the nations wealth because they are not taxed enough. We could double their taxes, and the trend would continue.
The wealthy and their share of the tax burden is a separate issue. The fact that the rich are getting richer suggests that they can likely afford a greater tax burden, but that isn't the same thing.
Nations with a higher tax rate seem to have less income inequality. How are we so sure there's not a casual connection?
Quote from: jimmy olsen on December 10, 2013, 06:01:24 PM
Nations with a higher tax rate seem to have less income inequality. How are we so sure there's not a casual connection?
Generally the way it works is that if you want to argue that a correlation really indicates a causal connection, you offer some sort of evidence.
"Do we have any evidence that it's not?" does not constitute such evidence.
:face:
Quote from: Capetan Mihali on December 10, 2013, 06:32:24 PM
:face:
You are awarded 1 Crazy Canuck point of honour for the appropriate use of :face:
Quote from: Capetan Mihali on December 10, 2013, 04:43:42 PM
Quote from: The Minsky Moment on December 10, 2013, 04:38:50 PM
Quote from: Valmy on December 10, 2013, 04:14:51 PM
But when we see tellers being replaced at banks
Did the mass roll out of ATMs result in a decrease or increase in the number of people employed by banks?
It did.
He asked an or question and your answer was essentially yes? :unsure:
Quote from: garbon on December 10, 2013, 06:42:04 PM
Quote from: Capetan Mihali on December 10, 2013, 04:43:42 PM
Quote from: The Minsky Moment on December 10, 2013, 04:38:50 PM
Quote from: Valmy on December 10, 2013, 04:14:51 PM
But when we see tellers being replaced at banks
Did the mass roll out of ATMs result in a decrease or increase in the number of people employed by banks?
It did.
He asked an or question and your answer was essentially yes? :unsure:
I assumed he was covering all the bases
The economist apparently did a piece on this. Answer, no and Obama was wrong to say it did.
http://www.economist.com/blogs/democracyinamerica/2011/06/technology-and-unemployment
Though this was interesting.
QuoteI wouldn't blame ATMs on our jobless recovery, but surely the general skill-bias of technological change is an important part of the issue. I suspect Tyler Cowen may be right that the recession created an occasion for firms to shed "zero-marginal-product workers". In that case, the ranks of the unemployed are filled with wannabe workers whose labour is at present worth less to employers than the cost of employing them. This puts Mr Obama in a politically perilous position. We can expect rising aggregate demand to make it pay for some firms to once again employ some significant number of relatively low-productivity workers, but we probably can't reasonably expect the unemployment rate to return to its pre-recession level, at least not in the absence of politically unlikely employment subsidies or government make-work schemes.
Quote from: Jacob on December 10, 2013, 06:23:06 PM
Quote from: jimmy olsen on December 10, 2013, 06:01:24 PM
Nations with a higher tax rate seem to have less income inequality. How are we so sure there's not a casual connection?
Generally the way it works is that if there if you want to argue that a correlation really indicates a causal connection, you offer some sort of evidence.
"Do we have any evidence that it's not?" does not constitute such evidence.
But I'm lazy. :(
We know that.
Quote from: Jacob on December 10, 2013, 01:31:22 PM
it's not the distance between the top and the bottom that matters,
Imho, it's not that it doesn't matter, it's that in itself it tells us nothing.
Quebec doesn't have a huge gap between poor and rich. To be in the top 1% earner, you need to make a little above 200k$/year.
Realistically, what can you do in Quebec with 200 000$/year? Buy a nice house, afford a cottage, buy a nice car, have decent life insurance policies and that's about it. Of course, you can send your kids to a private school, but anyone except the unemployed can do that in Quebec (private education is subsidized). You can't afford to take vacations every year outside the country, you can't own properties outside of Quebec in very nice place, basically, nothing like Warren Buffet could do.
To know that you're in the upper 1% at 200 000$ and the lower 1% at 10 000$ that does not tell me what these poeple do. Are you at 10 000$ because you can't find a decent job above that? Are you there because you're mentally ill? Are you there because you're an artist who doesn't want to earn more money and prefer living poor while doing your hobby full time?
That's why most of these stats are useless.
Imho, what's important, is how many generations it takes to go from the bottom to the upper echelons. As it is in the US, it tends to increase. That is alarming. If poor people can't at least hope to stop being poor, it tends creates a bottom underclass and a top aristocracy, with all the priviledges that come with it. In the past, an economic crisis could rebalance the thing, but nowadays, the government will always jump at the opportunity to help the rich survive the crisis they themselves provoked (1980s, 1990s, 2008 comes to mind, when the governments of the world saved their banks and their shareholders).
Quote from: viper37 on December 11, 2013, 02:01:06 PM
Imho, what's important, is how many generations it takes to go from the bottom to the upper echelons.
The problem with this measure of social mobility is it doesn't account for the distance between echelons in different countries. I think a fairer measure of mobility is absolute change: what are the chances (or how long does it take) to move from your parents making 25K to you making 50K (or whatever).
Quote from: jimmy olsen on December 10, 2013, 06:01:24 PM
Nations with a higher tax rate seem to have less income inequality. How are we so sure there's not a casual connection?
depends on how it's calculated too. Different countries use different statistics.
As an example, in the US, poverty rate is calculated with a relative measure (how far you are from median income). In Quebec, it's calculated from a market basket measure. This gives you 2 really different measure called "poverty rate".
With income inequality, you get the same problem unless you use a universal measure. You could also have a theoritical society where income inequality is very low but median income is 10k$/year. Is it better than a society with a median income of 80k$ and huge income disparity? Large countries like the US and Canada will have huge income disparity from one place to another. How good are you with 80 000$/year in Manhattan? How do you fare in rural Alabama?
Stats in themselves won't tell you much, you really got to see if they use similar measure and you got to dig deeper to take definitive conclusions on what is wrong or not.
Quote from: Admiral Yi on December 11, 2013, 02:11:29 PM
Quote from: viper37 on December 11, 2013, 02:01:06 PM
Imho, what's important, is how many generations it takes to go from the bottom to the upper echelons.
The problem with this measure of social mobility is it doesn't account for the distance between echelons in different countries. I think a fairer measure of mobility is absolute change: what are the chances (or how long does it take) to move from your parents making 25K to you making 50K (or whatever).
it gets skewed by purchase power then.
Quote from: jimmy olsen on December 10, 2013, 06:58:30 PM
Quote from: Jacob on December 10, 2013, 06:23:06 PM
Quote from: jimmy olsen on December 10, 2013, 06:01:24 PM
Nations with a higher tax rate seem to have less income inequality. How are we so sure there's not a casual connection?
Generally the way it works is that if there if you want to argue that a correlation really indicates a causal connection, you offer some sort of evidence.
"Do we have any evidence that it's not?" does not constitute such evidence.
But I'm lazy. :(
Also, a little on the slow side. And hell, if we are being honest about everything not exactly handsome either.
Quote from: viper37 on December 11, 2013, 02:14:12 PM
it gets skewed by purchase power then.
Adjust for purchasing power then.
Quote from: Admiral Yi on December 11, 2013, 03:29:45 PM
Quote from: viper37 on December 11, 2013, 02:14:12 PM
it gets skewed by purchase power then.
Adjust for purchasing power then.
then it's about the same as what I was talking about the first time... We've discussed these stats before, here, I think. A long time ago, early in Bush 2nd mandate, I think.
Quote from: viper37 on December 11, 2013, 05:38:36 PM
then it's about the same as what I was talking about the first time... We've discussed these stats before, here, I think. A long time ago, early in Bush 2nd mandate, I think.
No it isn't. The US has a cheap cost of living, but a huge span between the lowest and highest incomes.
Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Job and education opportunities are a product of lower taxes and higher attraction to investments.
The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.
Why can't people understand such a simple concept as supply-side economics?
Quote from: Admiral Yi on December 11, 2013, 05:42:15 PM
Quote from: viper37 on December 11, 2013, 05:38:36 PM
then it's about the same as what I was talking about the first time... We've discussed these stats before, here, I think. A long time ago, early in Bush 2nd mandate, I think.
No it isn't. The US has a cheap cost of living, but a huge span between the lowest and highest incomes.
I see no problem with having a huge span between the lowest and higher incomes as long as the lowest still higher than the average in the rest of the world.
Raise the poor, don't lower the rich.
Quote from: Siege on December 13, 2013, 09:19:11 AM
Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Job and education opportunities are a product of lower taxes and higher attraction to investments.
The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.
Why can't people understand such a simple concept as supply-side economics?
It's not that people don't understand it, it's that it's a great theory, but it's not the way the world works.
Business owners don't create jobs when they get tax breaks, they pocket more money because they feel they're entitled to more profits. Taxpayers are still in such bad financial shape that savings from tax breaks are likely to just go toward digging out of the hole on bills and debt obligations. Also, "the more economic activity the more rich people" is just flat-out wrong. What we've seen is that the rich get richer and the poor don't really go up or down.
Quote from: Siege on December 13, 2013, 09:19:11 AM
Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Job and education opportunities are a product of lower taxes and higher attraction to investments.
The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.
Why can't people understand such a simple concept as supply-side economics?
People understand it. That is why they do supply side policies all the time. But, as I said before, economic activity is about more than just taxes. Political people seem to forget that. There are countries in the world that do not need to tax yet they are not leading the world in economic activity because there are other factors involved.
Quote from: Siege on December 13, 2013, 09:21:24 AM
I see no problem with having a huge span between the lowest and higher incomes as long as the lowest still higher than the average in the rest of the world.
Raise the poor, don't lower the rich.
The rich have exactly 0% chance of being lowered in this country, at least by government policies. It is the middle class that gets blasted on a regular basis. Why are you so paranoid about the rich? They are doing great.
Quote from: Siege on December 13, 2013, 09:19:11 AM
Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Agreed.
QuoteJob and education opportunities are a product of lower taxes and higher attraction to investments.
Not convinced at all.
QuoteThe more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.
The rule of law and sensible regulatory schemes are way more important than low taxes to encourage economic activity.
Quote from: Siege on December 13, 2013, 09:19:11 AM
Income inequality can only be resolved by raising the poor, not lowering the rich.
You raise the poor with more job and education opportunities.
Job and education opportunities are a product of lower taxes and higher attraction to investments.
The more rich people, the more people to tax.
The lower the taxes, the more economic activity.
The more economic activity the more rich people.
Why can't people understand such a simple concept as supply-side economics?
So does that mean if you lower taxes to zero you will have infinite economic activity?
Quote from: Siege on December 13, 2013, 09:19:11 AM
Why can't people understand such a simple concept as supply-side economics?
because you forget many factors. And you make it an absolute game.
Rich people buy properties at higher costs = house values increase = lower income workers are pushed aside.
Rich people don't pay enough taxes = they tend to form an aristocracy, as in ancient europe. The next generation inherit their wealth, with not much to do to maintain their standard of living (see Paris Hilton, no talent, but lots of money. Do we want a nation of Paris Hilton?)
If decent education is not partly subsidized (directly or indirectly via student loans&grants), or if there are elite schools where the wealthy go and it's the only way to get a decent job, you can't become rich unless you are already rich. Going back to aristocracy.
If health care is not subsidized and there's no way to get a decent coverage unless your employer offers one or unless you are already rich, than being sick or having an accident will prevent you and possibly the next generation from becoming rich.
How can education opportunities be the product of lower taxes? You gonna get your two-year degree at General Motors U.?
Quote from: Ideologue on December 13, 2013, 04:05:40 PM
How can education opportunities be the product of lower taxes? You gonna get your two-year degree at General Motors U.?
You do know there was a General Motors Institute, right? :unsure:
It's called Kettering now http://en.wikipedia.org/wiki/Kettering_University (http://en.wikipedia.org/wiki/Kettering_University) and is quite different now. At one time General Motors paid for tuition and salary during co-op. Even when I was looking at college in 1990 General Motors Canada still did that.
Empirical data does not support a strong connection between marginal individual income tax rates and overall national or regional economic performance. That isn't suprising because even theoretically one wouldn't expect individual tax rates to have significant impact on firm supply decisions unless there were unusually high. Other than some hard-core Laffer acolytes and Club for Growth types, the emphasis on the supply side tends to be focusing more on structural and regulatory barriers.
Quote from: The Minsky Moment on December 13, 2013, 04:26:46 PM
Empirical data does not support a strong connection between marginal individual income tax rates and overall national or regional economic performance. That isn't suprising because even theoretically one wouldn't expect individual tax rates to have significant impact on firm supply decisions unless there were unusually high. Other than some hard-core Laffer acolytes and Club for Growth types, the emphasis on the supply side tends to be focusing more on structural and regulatory barriers.
Sure. The problem is nobody can agree on whether it's more ("more robust and comprehensive") or less ("leaner and more efficient") regulation that would provide the needed jump start.
Personally, I'm thinking it's a combination, and I just don't know enough to know which areas need to be targeted for stricter regulation versus which areas are being choked out by unnecessary red tape. Good luck getting DC regulatory hawks to admit some red tape needs to go or getting deregulation ideologues to admit that some sectors have been running roughshod for far too long, though.
Ideologues are the worst.
When people talk about regulatory regimes they're usually referring to third world hell holes or Eastern European kleptocracies.
Quote from: Admiral Yi on December 13, 2013, 06:46:20 PM
When people talk about regulatory regimes they're usually referring to third world hell holes or Eastern European kleptocracies.
In what context?
I thought "regulatory regime" meant the a specific framework set up by regulations for conducting business and implied nothing about the content or quality of the regulations.
Quote from: Jacob on December 13, 2013, 06:56:50 PM
In what context?
I thought "regulatory regime" meant the a specific framework set up by regulations for conducting business and implied nothing about the content or quality of the regulations.
In the context of "we could generate a lot of growth by fixing the regulatory regime." I.e., no more need for 35 permits from 4 different ministries to open a hot dog stand.
I bet you could generate lots of growths by deregulating hot dog stands.
Cancerous growths?
Quote from: Admiral Yi on December 13, 2013, 07:20:01 PMIn the context of "we could generate a lot of growth by fixing the regulatory regime." I.e., no more need for 35 permits from 4 different ministries to open a hot dog stand.
Huh. Interesting. That's not what I mean at all when I speak of suitable regulatory schemes. Or rather, it's merely one (albeit important) component.
Sensible regulatory schemes - in addition to being streamlined and not providing unreasonable hinderances for the carrying out of business as you point out - also have the following features off the top of my head:
- counteract monopolies and cartel forming
- ensure reasonable access to the market for new players
- ensures that innovation and successful risk taking is rewarded without stifling access for new players and leading to excessive rent seeking
- regulates to ensure reasonable solutions to fields where the tragedy of the commons and similar scenarios apply
- ensure reliable health and safety standards for workers and consumers
- set, provide, and monitor common standards where such will facilitate the carrying out of business
- ensures fair dealing and transparency and minimizes fraud and deception
... I think business flourishes where regulatory schemes have those features, more so than where they are absent.
Quote from: Jacob on December 13, 2013, 07:37:32 PM
Sensible regulatory schemes - in addition to being streamlined and not providing unreasonable hinderances for the carrying out of business as you point out - also have the following features off the top of my head:
- counteract monopolies and cartel forming
- ensure reasonable access to the market for new players
- ensures that innovation and successful risk taking is rewarded without stifling access for new players and leading to excessive rent seeking
- regulates to ensure reasonable solutions to fields where the tragedy of the commons and similar scenarios apply
- ensure reliable health and safety standards for workers and consumers
- set, provide, and monitor common standards where such will facilitate the carrying out of business
- ensures fair dealing and transparency and minimizes fraud and deception
... I think business flourishes where regulatory schemes have those features, more so than where they are absent.
Yep. I'd agree with this. I think the bolded bit is one of the problems is that there's almost a corporatist element of big business and government working together to pass regulations that may have good intentions in theory, but in practice raise the cost for new players and restrict market access.
Quote from: Admiral Yi on December 13, 2013, 07:20:01 PM
Quote from: Jacob on December 13, 2013, 06:56:50 PM
In what context?
I thought "regulatory regime" meant the a specific framework set up by regulations for conducting business and implied nothing about the content or quality of the regulations.
In the context of "we could generate a lot of growth by fixing the regulatory regime." I.e., no more need for 35 permits from 4 different ministries to open a hot dog stand.
As Berkut and I discussed the other day. This is a real failing of the right as they view the only good regulation as no or very limited regulation.
Quote from: viper37 on December 13, 2013, 04:02:52 PM
Rich people don't pay enough taxes = they tend to form an aristocracy, as in ancient europe. The next generation inherit their wealth, with not much to do to maintain their standard of living (see Paris Hilton, no talent, but lots of money. Do we want a nation of Paris Hilton?)
Bad example. She's actually made quite a bit of money on her own.
Quote from: crazy canuck on December 13, 2013, 09:55:39 PM
As Berkut and I discussed the other day. This is a real failing of the right as they view the only good regulation as no or very limited regulation.
Your statement does not logically follow from my post.
Quote from: Admiral Yi on December 14, 2013, 02:48:58 AM
Quote from: crazy canuck on December 13, 2013, 09:55:39 PM
As Berkut and I discussed the other day. This is a real failing of the right as they view the only good regulation as no or very limited regulation.
Your statement does not logically follow from my post.
Your post seemed to say that the way to have good regulation is to have much less of it, which seems perfectly in line with CC's characterisation.
Quote from: Jacob on December 14, 2013, 12:20:00 PM
Your post seemed to say that the way to have good regulation is to have much less of it, which seems perfectly in line with CC's characterisation.
I was saying that the countries that are usually referred to when talking about gains to growth from improving regulatory environments are shit holes with horrible red tape. Generally speaking it's not a subject that comes up when talking about sources of growth in well run first world countries.
So. That wealth gap thingie. Anybody see the markets today? This whole year we've had the stock market going to the moon and the economy staying in the toilet. Still a mystery where that wealth gap is coming from? :P
Quote from: Peter Wiggin on December 13, 2013, 10:10:13 PM
Quote from: viper37 on December 13, 2013, 04:02:52 PM
Rich people don't pay enough taxes = they tend to form an aristocracy, as in ancient europe. The next generation inherit their wealth, with not much to do to maintain their standard of living (see Paris Hilton, no talent, but lots of money. Do we want a nation of Paris Hilton?)
Bad example. She's actually made quite a bit of money on her own.
She wouldn't have made a dime of it without the leg up she already had.
Perhaps not, but she doesn't fit the idle rich living off inherited investments paradigm.
Quote from: MadImmortalMan on December 18, 2013, 06:48:22 PM
So. That wealth gap thingie. Anybody see the markets today? This whole year we've had the stock market going to the moon and the economy staying in the toilet. Still a mystery where that wealth gap is coming from? :P
Yet everyone knows where the Gap of Rohan is.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fstatic.businessinsider.com%2Fimage%2F52b1c84669beddf30dbe02d7-1200%2Fliz-ann-sonders-charles-schwab.jpg&hash=4c79ae1e827e85987615463ed3afbcfce6b3e23a)