http://www.theatlantic.com/business/archive/2014/12/millennials-arent-saving-money-because-theyre-not-making-money/383338/?utm_source=SFFB
QuoteThe Incredible Shrinking Incomes of Young Americans
It's repetitive for some to hear, but important for everybody to know: You can't explain Millennial economic behavior without explaining that real wages for young Americans have collapsed.
American families are grappling with stagnant wage growth, as the costs of health care, education, and housing continue to climb. But for many of America's younger workers, "stagnant" wages shouldn't sound so bad. In fact, they might sound like a massive raise.
Since the Great Recession struck in 2007, the median wage for people between the ages of 25 and 34, adjusted for inflation, has fallen in every major industry except for health care.
Young People's Wages Have Fallen Across Industries Between 2007 and 2013
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These numbers come from an analysis of the Census Current Population Survey by Konrad Mugglestone, an economist with Young Invincibles.
In retail, wholesale, leisure, and hospitality—which together employ more than one quarter of this age group—real wages have fallen more than 10 percent since 2007. To be clear, this doesn't mean that most of this cohort are seeing their pay slashed, year after year. Instead it suggests that wage growth is failing to keep up with inflation, and that, as twentysomethings pass into their thirties, they are earning less than their older peers did before the recession.
The picture isn't much better for the youngest group of workers between 18 and 24. Besides health care, the industries employing the vast majority of part-time students and recent graduates are also watching wages fall behind inflation. (40 percent of this group is enrolled in college.)
The Wages of the Youngest Workers (Ages 18-24) Have Fallen, Too
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There are a few reasonable follow-up questions to these stunning graphs.
First: Why are real wages falling across so many fields for young workers? The Great Recession devastated demand for hotels, amusement parks, and many restaurants, which explains the collapse in pay across those industries. As the ranks of young unemployed and underemployed Millennials pile up, companies around the country know they can attract applicants without raising starter wages.
But there's something deeper, too. The familiar bash brothers of globalization and technology (particularly information technology) have conspired to gut middle-class jobs by sending work abroad or replacing it with automation and software. A 2013 study by David Autor, David Dorn, and Gordon Hanson found that although the computerization of certain tasks hasn't reduced employment, it has reduced the number of decent-paying, routine-heavy jobs. Cheaper jobs have replaced them, and overall pay has declined.
Your second question might be: Why have health-care wages been the exception to the rule? One answer is that health care is, generally speaking, the exception to many rules. Demand for medical services is dominated by the government (i.e. Medicare, Medicaid, and the employer insurance tax break), which doesn't face the same vertiginous up-and-downs as the rest of the economy. So as the Great Recession steamrolled many industries, health care, propped up by sturdy government spending, kept adding workers. What's more, computerization and information technology have yet to work their magical price-cutting power in health care as they have in other industries, for a variety of reasons. Americans are spending four percent less on food away from home than in 2007; but we're spending 42 percent more on health insurance. As prices have increased, so have wages for younger workers in the medical field. (Update: Some readers have made the smart suggestion that money which might have gone to higher salaries has instead gone to paying higher health insurance costs.)
Once you account for falling wages among young workers—if you must: "the Millennials"—many mysteries of the economic behavior of young people cease to be mysterious, such as this generation's aversion to home-buying, auto loans, and savings. Indeed, the savings rate for Americans under 35, having briefly breached after the Great Recession, dove back underwater and now swims at negative-1.8 percent.
Savings Rates Since 2004, by Age
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Some of these young people could afford to save more, even if it's a small share of their meager income, since small amounts of money put away several decades before retirement (or an unexpected emergency) can help later. But it's easier to see why young Americans aren't saving any more than we used to: Their wages are falling behind the cost of basic goods and many are going into debt to pay for a college degree.
The evaporation of real wages for young Americans is a real mystery because it's coinciding with what is otherwise a real recovery. The economy has been growing steadily since 2009. We're adding 200,000 jobs a month in 2014. That's what a recovery looks like. And yet, overall U.S. wages are barely growing, and wages for young people are growing 60 percent more slowly than overall U.S. wages. How is a generation supposed to build a future on that?
QuoteOnce you account for falling wages among young workers—if you must: "the Millennials"—many mysteries of the economic behavior of young people cease to be mysterious, such as this generation's aversion to home-buying, auto loans, and savings. Indeed, the savings rate for Americans under 35, having briefly breached after the Great Recession, dove back underwater and now swims at negative-1.8 percent.
For whom was that a mystery? Obviously we aren't averse to those things, we simply can't afford them.
It's good for them to be averse to auto loans. Save up and buy cars in cash. :)
I'm averse to home buying and auto loans (taking a loan to get a car? Really? Must be an American thing)
Quote from: Tyr on November 26, 2015, 09:04:03 AM
I'm averse to home buying and auto loans (taking a loan to get a car? Really? Must be an American thing)
You are going to pay 30 000£ cash?
You are richer than I am.
Quote from: Grey Fox on November 26, 2015, 09:07:22 AM
Quote from: Tyr on November 26, 2015, 09:04:03 AM
I'm averse to home buying and auto loans (taking a loan to get a car? Really? Must be an American thing)
You are going to pay 30 000£ cash?
You are richer than I am.
I see what you did there.
Auto loans are pretty standard when buying new.
Quote from: Grey Fox on November 26, 2015, 09:07:22 AM
Quote from: Tyr on November 26, 2015, 09:04:03 AM
I'm averse to home buying and auto loans (taking a loan to get a car? Really? Must be an American thing)
You are going to pay 30 000£ cash?
You are richer than I am.
No. When I had a car I paid £200 cash :contract:
I have a family, I am not buying a car for 800$.
I got a ridiculously cheap car. I'm not suggesting everyone can go that low.
But if you can't afford a £30,000 car you can't afford a £30,000 car. I don't know anyone who has ever gotten a loan to get a car. Most people I know saved and bought something in their price range (usually second hand).
A car loan seems a ridiculously bad investment considering the value of cars halves within a year (IIRC).
Quote from: Tyr on November 26, 2015, 10:11:49 AM
I got a ridiculously cheap car. I'm not suggesting everyone can go that low.
But if you can't afford a £30,000 car you can't afford a £30,000 car. I don't know anyone who has ever gotten a loan to get a car. Most people I know saved and bought something in their price range (usually second hand).
In NA, car loans (and car leases) are much more common, I think.
However, I never used either. I always bought used cars, for cash (until my last car - when I was able to buy a new car, for cash. ;) ).
It always struck me as a massive luxury to buy a new car, and most unwise if money was tight. However, it is a type of unwisdom, for whatever reason, dear to many of us in NA.
Massive luxury to buy a new car? :wacko:
Quote from: Malthus on November 26, 2015, 10:15:10 AM
Quote from: Tyr on November 26, 2015, 10:11:49 AM
I got a ridiculously cheap car. I'm not suggesting everyone can go that low.
But if you can't afford a £30,000 car you can't afford a £30,000 car. I don't know anyone who has ever gotten a loan to get a car. Most people I know saved and bought something in their price range (usually second hand).
In NA, car loans (and car leases) are much more common, I think.
However, I never used either. I always bought used cars, for cash (until my last car - when I was able to buy a new car, for cash. ;) ).
It always struck me as a massive luxury to buy a new car, and most unwise if money was tight. However, it is a type of unwisdom, for whatever reason, dear to many of us in NA.
That depends. My new car is 350$/month and comes with a warranty. It is much easier to budget that way than hope my old car doesn't break anything this month because I do not have 2000$ to fix it.
Ever since i started looking at cars I am bombarded by UK ads to buy new cars on loan. And EVERY used car salesman offers loan payments. Ther are UK companies specialised to finance car purchases. In other words, Tyr doesn't know what he is talking about :p
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
It's Tatcher's fault
I see car buying as risky either way.
A new one is a fortune and a horrible investment in many ways but you know what you are buying and you have a guarantee on it.
A used one is cheaper but a big risk in terms of hidden faults and unkown level of wear and tear - a ticking time bomb for unforeseen expenditure
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
Uh, yes? You can get the same functionality by buying a used car, for a fraction of the price.
Quote from: Grey Fox on November 26, 2015, 10:31:34 AM
Quote from: Malthus on November 26, 2015, 10:15:10 AM
Quote from: Tyr on November 26, 2015, 10:11:49 AM
I got a ridiculously cheap car. I'm not suggesting everyone can go that low.
But if you can't afford a £30,000 car you can't afford a £30,000 car. I don't know anyone who has ever gotten a loan to get a car. Most people I know saved and bought something in their price range (usually second hand).
In NA, car loans (and car leases) are much more common, I think.
However, I never used either. I always bought used cars, for cash (until my last car - when I was able to buy a new car, for cash. ;) ).
It always struck me as a massive luxury to buy a new car, and most unwise if money was tight. However, it is a type of unwisdom, for whatever reason, dear to many of us in NA.
That depends. My new car is 350$/month and comes with a warranty. It is much easier to budget that way than hope my old car doesn't break anything this month because I do not have 2000$ to fix it.
I guess I was lucky then. I never had to face huge car repair bills, though I owned only used cars for twenty years.
Quote from: Malthus on November 26, 2015, 10:37:34 AM
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
Uh, yes? You can get the same functionality by buying a used car, for a fraction of the price.
I think a new car is less likely to break down (unless, of course, one buys a lemon).
Also is the definition of luxury any time you buy an item when you could have bought a cheaper version? :huh:
Mono downgrades Malthus from AA+ to B- .
Quote from: Malthus on November 26, 2015, 10:39:27 AM
Quote from: Grey Fox on November 26, 2015, 10:31:34 AM
Quote from: Malthus on November 26, 2015, 10:15:10 AM
Quote from: Tyr on November 26, 2015, 10:11:49 AM
I got a ridiculously cheap car. I'm not suggesting everyone can go that low.
But if you can't afford a £30,000 car you can't afford a £30,000 car. I don't know anyone who has ever gotten a loan to get a car. Most people I know saved and bought something in their price range (usually second hand).
In NA, car loans (and car leases) are much more common, I think.
However, I never used either. I always bought used cars, for cash (until my last car - when I was able to buy a new car, for cash. ;) ).
It always struck me as a massive luxury to buy a new car, and most unwise if money was tight. However, it is a type of unwisdom, for whatever reason, dear to many of us in NA.
That depends. My new car is 350$/month and comes with a warranty. It is much easier to budget that way than hope my old car doesn't break anything this month because I do not have 2000$ to fix it.
I guess I was lucky then. I never had to face huge car repair bills, though I owned only used cars for twenty years.
My first car was a used BMW. Had to go to the mechanic every couple months, and had to sell it about a year later at a huge loss because I couldn't afford the repairs.
I then had a used Taurus which was good until written off 6 months later in an accident (I was rear ended).
After that I went through four new vehicles and was generally pretty pleased with that route, as long as you kept them for a long period.
We just purchased a used Honda van - my first used vehicle since '96. We'll see how it goes.
Quote from: Malthus on November 26, 2015, 10:39:27 AM
Quote from: Grey Fox on November 26, 2015, 10:31:34 AM
Quote from: Malthus on November 26, 2015, 10:15:10 AM
Quote from: Tyr on November 26, 2015, 10:11:49 AM
I got a ridiculously cheap car. I'm not suggesting everyone can go that low.
But if you can't afford a £30,000 car you can't afford a £30,000 car. I don't know anyone who has ever gotten a loan to get a car. Most people I know saved and bought something in their price range (usually second hand).
In NA, car loans (and car leases) are much more common, I think.
However, I never used either. I always bought used cars, for cash (until my last car - when I was able to buy a new car, for cash. ;) ).
It always struck me as a massive luxury to buy a new car, and most unwise if money was tight. However, it is a type of unwisdom, for whatever reason, dear to many of us in NA.
That depends. My new car is 350$/month and comes with a warranty. It is much easier to budget that way than hope my old car doesn't break anything this month because I do not have 2000$ to fix it.
I guess I was lucky then. I never had to face huge car repair bills, though I owned only used cars for twenty years.
Yes and also you have to factor that I am also going to take out a loan on the used car just for less time.
We are on only our second car at the Hakluyt household, bought new on both occasions and used for years and years.
Quote from: garbon on November 26, 2015, 10:41:10 AM
Quote from: Malthus on November 26, 2015, 10:37:34 AM
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
Uh, yes? You can get the same functionality by buying a used car, for a fraction of the price.
I think a new car is less likely to break down (unless, of course, one buys a lemon).
Also is the definition of luxury any time you buy an item when you could have bought a cheaper version? :huh:
Wasn't my experience. Of course, I wasn't buying bottom-end beaters, either. I usually bought them with some warranty time left.
In my opinion, buying a new car is a "luxury", because you can get more or less the exact same thing for a fraction of the price, with a bit of looking around - and the price difference isn't small: it can be thousands of dollars, just in depreciation when it is driven off the lot. If you have that money, go for it; if you don't, it strikes me as very silly to go into debt for it.
Quote from: Richard Hakluyt on November 26, 2015, 10:41:33 AM
Mono downgrades Malthus from AA+ to B- .
I can live with that. :D
I have never bought a new car, but I would if I made Malthus-type money. Or even Mono-type money.
I bought one once but probably wouldn't do it again. The instant depreciation aspect of doing it just bothers me too much.
Quote from: Caliga on November 26, 2015, 10:53:11 AM
I bought one once but probably wouldn't do it again. The instant depreciation aspect of doing it just bothers me too much.
We used to say, "the most expensive drive you'll ever make with your new car is the one off the dealership's lot."
Quote from: Caliga on November 26, 2015, 10:53:11 AM
I bought one once but probably wouldn't do it again. The instant depreciation aspect of doing it just bothers me too much.
I agree with the sentiment, but I'd probably buy new again - simply because I don't have the time or patience I once had, to thoroughly investigate individual cars.
I do, however, think it is very deeply engrained in people that they
need a new car, that buying used is likely to end in disaster (or is a sign of low status). Then they wonder why they are in debt. :hmm:
In Germany we used to have "Jahreswagen," Zanza can say if they still exist.
Employees of manufacturers would get rebates on new cars of their employers but couldn't sell them for a year (they'd have the option of a new car every year). Some of them just put it in a garage or accrued only minimal mileage and sold it after a year with a mark up, but still cheaper than a new one.
When I went to buy my current car (a second hand Golf, but I'd say it's more a "first hand and a half" car, as it belonged to the fleet of replacement cars of an insurance company for barely a year) at the dealership I had every intention of paying cash for it (it was an effort but with some loaned money from my parents I could do it). They bent over backwards (doubled the warranty, which for an used car is important IMO) to get me to agree to finance half of it through their loan company, which I finally did.
Quote from: Malthus on November 26, 2015, 10:37:34 AM
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
Uh, yes? You can get the same functionality by buying a used car, for a fraction of the price.
I think it depends. Since I started working as a lawyer I have always bought new vehicles. I have bought a grand total of two for my own use over that period of time and I am still on my second vehicle. Both vehicles were purchased with interest free loans. With the benefit of free financing, a full warranty period and the full life of the vehicle available to me I think I am actually in a better position than the person who buys a used vehicle. I get many more years of dependable use without the risk that I will incur expensive repairs soon after purchasing.
But in general I don't think people keep their new cars as long as I do. The people who are leasing or purchasing new vehicles more often are definitely paying a significant premium for what is essentially luxury and prestige.
Quote from: crazy canuck on November 26, 2015, 11:40:58 AM
Quote from: Malthus on November 26, 2015, 10:37:34 AM
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
Uh, yes? You can get the same functionality by buying a used car, for a fraction of the price.
I think it depends. Since I started working as a lawyer I have always bought new vehicles. I have bought a grand total of two for my own use over that period of time and I am still on my second vehicle. Both vehicles were purchased with interest free loans. With the benefit of free financing, a full warranty period and the full life of the vehicle available to me I think I am actually in a better position than the person who buys a used vehicle. I get many more years of dependable use without the risk that I will incur expensive repairs soon after purchasing.
But in general I don't think people keep their new cars as long as I do. The people who are leasing or purchasing new vehicles more often are definitely paying a significant premium for what is essentially luxury and prestige.
Highlighted for emphasis. :D
Sure, buying new cars *can* be a part of a financially-sensible strategy - if you have the money already (or the credit rating) to get good terms, *and* intend to own the car for years and years. Hell, I use that strategy
myself, right now. My last car was a new car.
Once again, I will point out that it is possible to purchase a used car within its manufacturer's warranty period [though you definitely want to avoid shady aftermarket warranty offers that offer coverage apparently based on the Rules of "Fizzbin" from Star Trek :D]. I dunno how to rate the value of free financing against the value of the instant depreciation, but since I always paid upfront in cash financing wasn't a big deal for me.
And this is why I am in favor of the multi-generational set up. You need a good team to get by these days and stay out of poverty.
Quote from: Malthus on November 26, 2015, 11:58:10 AM
Quote from: crazy canuck on November 26, 2015, 11:40:58 AM
Quote from: Malthus on November 26, 2015, 10:37:34 AM
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
Uh, yes? You can get the same functionality by buying a used car, for a fraction of the price.
I think it depends. Since I started working as a lawyer I have always bought new vehicles. I have bought a grand total of two for my own use over that period of time and I am still on my second vehicle. Both vehicles were purchased with interest free loans. With the benefit of free financing, a full warranty period and the full life of the vehicle available to me I think I am actually in a better position than the person who buys a used vehicle. I get many more years of dependable use without the risk that I will incur expensive repairs soon after purchasing.
But in general I don't think people keep their new cars as long as I do. The people who are leasing or purchasing new vehicles more often are definitely paying a significant premium for what is essentially luxury and prestige.
Highlighted for emphasis. :D
Sure, buying new cars *can* be a part of a financially-sensible strategy - if you have the money already (or the credit rating) to get good terms, *and* intend to own the car for years and years. Hell, I use that strategy myself, right now. My last car was a new car.
Ok, so you are agreeing with me that when I said "it depends" I was correct. Thank you.
By the way, it is not only lawyers who can buy a new car, interest free, and drive it for the life of the vehicle. ;)
Quote from: crazy canuck on November 26, 2015, 12:27:27 PM
Quote from: Malthus on November 26, 2015, 11:58:10 AM
Quote from: crazy canuck on November 26, 2015, 11:40:58 AM
Quote from: Malthus on November 26, 2015, 10:37:34 AM
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
Uh, yes? You can get the same functionality by buying a used car, for a fraction of the price.
I think it depends. Since I started working as a lawyer I have always bought new vehicles. I have bought a grand total of two for my own use over that period of time and I am still on my second vehicle. Both vehicles were purchased with interest free loans. With the benefit of free financing, a full warranty period and the full life of the vehicle available to me I think I am actually in a better position than the person who buys a used vehicle. I get many more years of dependable use without the risk that I will incur expensive repairs soon after purchasing.
But in general I don't think people keep their new cars as long as I do. The people who are leasing or purchasing new vehicles more often are definitely paying a significant premium for what is essentially luxury and prestige.
Highlighted for emphasis. :D
Sure, buying new cars *can* be a part of a financially-sensible strategy - if you have the money already (or the credit rating) to get good terms, *and* intend to own the car for years and years. Hell, I use that strategy myself, right now. My last car was a new car.
Ok, so you are agreeing with me that when I said "it depends" I was correct. Thank you.
By the way, it is not only lawyers who can buy a new car, interest free, and drive it for the life of the vehicle. ;)
Uh, yes? :huh:
Excellent.
You sure put Malthus in his place.
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
:secret: Malthus is a tad too conservative with money.
Quote from: Valmy on November 26, 2015, 12:38:17 PM
You sure put Malthus in his place.
Is that what I was doing Valmy? Do you consider this a competition?
Just had a quick tot-up and I think I've spent a net USD 2,000 on cars. :bowler:
Quote from: DGuller on November 26, 2015, 12:44:15 PM
:secret: Malthus is a tad too conservative with money.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fwww.kappit.com%2Fimg%2Fpics%2F201410_1000_debgg_sm.jpg&hash=89b0c0430f077cda4e44318f1f54a5e1ee8b60fe)
Quote from: Malthus on November 26, 2015, 11:58:10 AM
Quote from: crazy canuck on November 26, 2015, 11:40:58 AM
Quote from: Malthus on November 26, 2015, 10:37:34 AM
Quote from: garbon on November 26, 2015, 10:30:51 AM
Massive luxury to buy a new car? :wacko:
Uh, yes? You can get the same functionality by buying a used car, for a fraction of the price.
I think it depends. Since I started working as a lawyer I have always bought new vehicles. I have bought a grand total of two for my own use over that period of time and I am still on my second vehicle. Both vehicles were purchased with interest free loans. With the benefit of free financing, a full warranty period and the full life of the vehicle available to me I think I am actually in a better position than the person who buys a used vehicle. I get many more years of dependable use without the risk that I will incur expensive repairs soon after purchasing.
But in general I don't think people keep their new cars as long as I do. The people who are leasing or purchasing new vehicles more often are definitely paying a significant premium for what is essentially luxury and prestige.
Highlighted for emphasis. :D
Sure, buying new cars *can* be a part of a financially-sensible strategy - if you have the money already (or the credit rating) to get good terms, *and* intend to own the car for years and years. Hell, I use that strategy myself, right now. My last car was a new car.
Once again, I will point out that it is possible to purchase a used car within its manufacturer's warranty period [though you definitely want to avoid shady aftermarket warranty offers that offer coverage apparently based on the Rules of "Fizzbin" from Star Trek :D]. I dunno how to rate the value of free financing against the value of the instant depreciation, but since I always paid upfront in cash financing wasn't a big deal for me.
Fizzbin?!? :bleeding:
If you're going to use a nerd reference, at least get it close to right. The Star Trek race was the Ferengi, which would have been good enough, but for full marks it is the Rules of Acquisition. :contract:
The one used car we had in my family served us faithfully for many years. After we spent the buting price on repairs shortly after purchase. Still was a decent deal though, to be fair
What if young Americans cut their hair and got a job?
My wary regarding used cars is that how the car was used can have a major impact. eg. this used car of ours had to be handled very carelessly and brutally by the previous owner to end up in the shape it turned out to be.
Quote from: Barrister on November 26, 2015, 12:59:13 PM
Fizzbin?!? :bleeding:
If you're going to use a nerd reference, at least get it close to right. The Star Trek race was the Ferengi, which would have been good enough, but for full marks it is the Rules of Acquisition. :contract:
Original Trek is best Trek. :)
Anyway, Fizzbin is funnier. :P
Quote from: Malthus on November 26, 2015, 02:04:33 PM
Quote from: Barrister on November 26, 2015, 12:59:13 PM
Fizzbin?!? :bleeding:
If you're going to use a nerd reference, at least get it close to right. The Star Trek race was the Ferengi, which would have been good enough, but for full marks it is the Rules of Acquisition. :contract:
Original Trek is best Trek. :)
Anyway, Fizzbin is funnier. :P
You have, indeed, out-nerded me. :weep:
Rules of Fizzbin is a valid Star Trek reference that went over my head. :Embarrass:
Quote from: Barrister on November 26, 2015, 02:18:12 PM
Quote from: Malthus on November 26, 2015, 02:04:33 PM
Quote from: Barrister on November 26, 2015, 12:59:13 PM
Fizzbin?!? :bleeding:
If you're going to use a nerd reference, at least get it close to right. The Star Trek race was the Ferengi, which would have been good enough, but for full marks it is the Rules of Acquisition. :contract:
Original Trek is best Trek. :)
Anyway, Fizzbin is funnier. :P
You have, indeed, out-nerded me. :weep:
Rules of Fizzbin is a valid Star Trek reference that went over my head. :Embarrass:
Heh, I thought you got it, but were making fun of my using ToS. :D
If young Americans have it so bad, why are they not causing a ruckus?
Quote from: Phillip V on November 26, 2015, 02:44:52 PM
If young Americans have it so bad, why are they not causing a ruckus?
Because if they do, their parents will bang on the floor and tell them to keep it down. ;)
Quote from: Phillip V on November 26, 2015, 02:44:52 PM
If young Americans have it so bad, why are they not causing a ruckus?
Yeah, it's not like we've seen riots or protests in the last few years. :rolleyes:
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
I agree.
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
It does seem to be the case, yes.
Quote from: The Larch on November 26, 2015, 11:12:39 AMThey bent over backwards (doubled the warranty, which for an used car is important IMO) to get me to agree to finance half of it through their loan company, which I finally did.
I had a similar experience buying both my FJ and the Challenger. In both cases I paid the loan off anyway the next month. :P
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
It's an environment where expenses are higher and wages are lower. The solution to that problem is exactly what economists don't want people to do: save money. That's how people gain social mobility and separation from the paycheck to paycheck dependency.
Quote from: MadImmortalMan on November 26, 2015, 05:29:11 PM
Quote from: The Larch on November 26, 2015, 11:12:39 AMThey bent over backwards (doubled the warranty, which for an used car is important IMO) to get me to agree to finance half of it through their loan company, which I finally did.
I had a similar experience buying both my FJ and the Challenger. In both cases I paid the loan off anyway the next month. :P
I was tied to my deal for a year, I couldn't pay the loan instantly. The extra warranty still costed more than the little interest I had to pay, though.
Quote from: MadImmortalMan on November 26, 2015, 05:34:29 PM
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
It's an environment where expenses are higher and wages are lower. The solution to that problem is exactly what economists don't want people to do: save money. That's how people gain social mobility and separation from the paycheck to paycheck dependency.
Real wages certainly appear to be lower and the cost of living is higher. In addition the amount of income disparity is growing to levels not seen for a very long time. I doubt that merely telling people who have no disposable income to save more is the solution.
Quote from: crazy canuck on November 26, 2015, 06:03:22 PM
Real wages certainly appear to be lower and the cost of living is higher. In addition the amount of income disparity is growing to levels not seen for a very long time. I doubt that merely telling people who have no disposable income to save more is the solution.
Right. Enabling them to do so might help though. Raising minimum wages, shifting tax burdens from incomes to consumption, some things to put investing more in the hands of poor people, stopping the crazy price inflation of real estate ..somehow. Stuff like that.
Quote from: MadImmortalMan on November 26, 2015, 06:09:09 PM
Quote from: crazy canuck on November 26, 2015, 06:03:22 PM
Real wages certainly appear to be lower and the cost of living is higher. In addition the amount of income disparity is growing to levels not seen for a very long time. I doubt that merely telling people who have no disposable income to save more is the solution.
Right. Enabling them to do so might help though. Raising minimum wages, shifting tax burdens from incomes to consumption, some things to put investing more in the hands of poor people, stopping the crazy price inflation of real estate ..somehow. Stuff like that.
I don't disagree with you, but I think the bits you just outlined are the solution rather than "people saving more money", though maybe they're two sides of the same coin.
Quote from: Jacob on November 26, 2015, 07:14:04 PM
Quote from: MadImmortalMan on November 26, 2015, 06:09:09 PM
Quote from: crazy canuck on November 26, 2015, 06:03:22 PM
Real wages certainly appear to be lower and the cost of living is higher. In addition the amount of income disparity is growing to levels not seen for a very long time. I doubt that merely telling people who have no disposable income to save more is the solution.
Right. Enabling them to do so might help though. Raising minimum wages, shifting tax burdens from incomes to consumption, some things to put investing more in the hands of poor people, stopping the crazy price inflation of real estate ..somehow. Stuff like that.
I don't disagree with you, but I think the bits you just outlined are the solution rather than "people saving more money", though maybe they're two sides of the same coin.
The "people saving more money" is a route for some people to ensure that their family stays above the line. I am often surprised how many well-paid people spend the lot on consumerist tat, having some capital behind one's family is only getting more important with each passing year.
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
Is this so - I really cannot judge myself - or our definition of "have nots" in the Western World have improved to such a level of existence that would have put you in the "haves" a few decades earlier?
Quote from: Richard Hakluyt on November 27, 2015, 02:43:37 AM
Quote from: Jacob on November 26, 2015, 07:14:04 PM
Quote from: MadImmortalMan on November 26, 2015, 06:09:09 PM
Quote from: crazy canuck on November 26, 2015, 06:03:22 PM
Real wages certainly appear to be lower and the cost of living is higher. In addition the amount of income disparity is growing to levels not seen for a very long time. I doubt that merely telling people who have no disposable income to save more is the solution.
Right. Enabling them to do so might help though. Raising minimum wages, shifting tax burdens from incomes to consumption, some things to put investing more in the hands of poor people, stopping the crazy price inflation of real estate ..somehow. Stuff like that.
I don't disagree with you, but I think the bits you just outlined are the solution rather than "people saving more money", though maybe they're two sides of the same coin.
The "people saving more money" is a route for some people to ensure that their family stays above the line. I am often surprised how many well-paid people spend the lot on consumerist tat, having some capital behind one's family is only getting more important with each passing year.
I gotta agree with this, in part - it doesn't matter how much you make, if you spend more than you make. Particularly on stuff you don't actually need - like a shiny new car. ;)
The problem, though, is that it is hard to apply that logic to people who don't make enough to even buy what they *do* need.
There is a bit of inflation in expectations of what is "needed", as well - depending on where you live, you often don't "need" a car (for example), but many working people think you do. I lived without a car for a coupla years, it was perfectly doable in an urban setting.
It also depends on what kind of job it is. In my city, for example, it's hard to work as an engineer without a car. You need access to factories, infrastructures, warehouses and offices outside the city limits and employers will rarely give you a decent salary, much less a company car.
Quote from: Tamas on November 27, 2015, 04:09:28 AM
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
Is this so - I really cannot judge myself - or our definition of "have nots" in the Western World have improved to such a level of existence that would have put you in the "haves" a few decades earlier?
I'm thinking not in terms of the material goods they may have, but of their overall level of things like bargaining power and job security.
The characteristics of the "haves" are that, broadly speaking, they have experience and skills that give them the ability to either command significant concessions from employers, or go out on their own with some chances of success; they are 'in demand'. Such people are often offered bonuses and other performance incentives to keep them happy. Losing a job, while inconvenient, isn't a disaster for these people - they are likely to be snapped up by someone else soon enough, and they know it.
The characteristics of the "have nots" is that, again broadly speaking, they find themselves at the mercy of employers. They cannot command concessions. They are easily replaced. They are not 'in demand'. Such people are often offered short-term contracts that lack perquisites and rights offered to long-term employees. Losing a job is bad, because they have to go back to endlessly looking for more low-paid work, in competition with thousands of others. Prospects of career advancement are poor or non-existent.
The characteristics of a middle way between these two are a salaried employment with significant job security, possibly even steady career advancement (maybe even gradual acquiring of 'have' status) and contractual rights and benefits. This is the "way" that is shrinking, while the other two are growing.
It used to be that education alone could catapult you into at least the "middle way", and maybe into the "haves". That is increasingly not true.
Quote from: Iormlund on November 27, 2015, 10:05:31 AM
It also depends on what kind of job it is. In my city, for example, it's hard to work as an engineer without a car. You need access to factories, infrastructures, warehouses and offices outside the city limits and employers will rarely give you a decent salary, much less a company car.
Absolutely, it may be a requirement for your job. But for many people, like me, work is basically static. I don't actually 'need' a car to get to it (in fact, because it is right downtown, given this city's truly horrible traffic, driving to work is ... difficult). Having a car is a great convenience - for shopping, travel to the countryside, visiting relatives and friends, etc. - but it is not really "necessary".
Quote from: Richard Hakluyt on November 27, 2015, 02:43:37 AM
Quote from: Jacob on November 26, 2015, 07:14:04 PM
Quote from: MadImmortalMan on November 26, 2015, 06:09:09 PM
Quote from: crazy canuck on November 26, 2015, 06:03:22 PM
Real wages certainly appear to be lower and the cost of living is higher. In addition the amount of income disparity is growing to levels not seen for a very long time. I doubt that merely telling people who have no disposable income to save more is the solution.
Right. Enabling them to do so might help though. Raising minimum wages, shifting tax burdens from incomes to consumption, some things to put investing more in the hands of poor people, stopping the crazy price inflation of real estate ..somehow. Stuff like that.
I don't disagree with you, but I think the bits you just outlined are the solution rather than "people saving more money", though maybe they're two sides of the same coin.
The "people saving more money" is a route for some people to ensure that their family stays above the line. I am often surprised how many well-paid people spend the lot on consumerist tat, having some capital behind one's family is only getting more important with each passing year.
I agree but given the growing income disparity I don't think we should worry too much about the people that do make relatively large amounts of money and spend it foolishly.
Quote from: crazy canuck on November 27, 2015, 10:17:51 AM
Quote from: Richard Hakluyt on November 27, 2015, 02:43:37 AM
Quote from: Jacob on November 26, 2015, 07:14:04 PM
Quote from: MadImmortalMan on November 26, 2015, 06:09:09 PM
Quote from: crazy canuck on November 26, 2015, 06:03:22 PM
Real wages certainly appear to be lower and the cost of living is higher. In addition the amount of income disparity is growing to levels not seen for a very long time. I doubt that merely telling people who have no disposable income to save more is the solution.
Right. Enabling them to do so might help though. Raising minimum wages, shifting tax burdens from incomes to consumption, some things to put investing more in the hands of poor people, stopping the crazy price inflation of real estate ..somehow. Stuff like that.
I don't disagree with you, but I think the bits you just outlined are the solution rather than "people saving more money", though maybe they're two sides of the same coin.
The "people saving more money" is a route for some people to ensure that their family stays above the line. I am often surprised how many well-paid people spend the lot on consumerist tat, having some capital behind one's family is only getting more important with each passing year.
I agree but given the growing income disparity I don't think we should worry too much about the people that do make relatively large amounts of money and spend it foolishly.
Indeed CC, my own concern if for people who're not just struggling to make end meet, but who can't survive and have to rely on food banks, which pretty much every UK town, no matter if wealthy, now seems to have. <_<
Our health service has started collecting statistics on people turning up at their doctors or hospitals with complaints, whose underlying cause is malnutrition. :(
In the UK though, mongers, it is probably more informative to find out what someone's housing situation is than their income. The rents are terribly high. It is why you find poverty even in the wealthier areas, there are parts of the country where the median wage is essentially a poverty wage if you are paying market rents.
Quote from: Malthus on November 27, 2015, 10:08:52 AM
Quote from: Tamas on November 27, 2015, 04:09:28 AM
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
Is this so - I really cannot judge myself - or our definition of "have nots" in the Western World have improved to such a level of existence that would have put you in the "haves" a few decades earlier?
I'm thinking not in terms of the material goods they may have, but of their overall level of things like bargaining power and job security.
The characteristics of the "haves" are that, broadly speaking, they have experience and skills that give them the ability to either command significant concessions from employers, or go out on their own with some chances of success; they are 'in demand'. Such people are often offered bonuses and other performance incentives to keep them happy. Losing a job, while inconvenient, isn't a disaster for these people - they are likely to be snapped up by someone else soon enough, and they know it.
The characteristics of the "have nots" is that, again broadly speaking, they find themselves at the mercy of employers. They cannot command concessions. They are easily replaced. They are not 'in demand'. Such people are often offered short-term contracts that lack perquisites and rights offered to long-term employees. Losing a job is bad, because they have to go back to endlessly looking for more low-paid work, in competition with thousands of others. Prospects of career advancement are poor or non-existent.
The characteristics of a middle way between these two are a salaried employment with significant job security, possibly even steady career advancement (maybe even gradual acquiring of 'have' status) and contractual rights and benefits. This is the "way" that is shrinking, while the other two are growing.
It used to be that education alone could catapult you into at least the "middle way", and maybe into the "haves". That is increasingly not true.
I see. Makes sense! As I said I can't really judge because by the time capitalism came to Hungary, the situation immediately was as you described, I think
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
I think Piketty gives a fairly plausible diagnosis.
Quote from: Hamilcar on November 27, 2015, 02:35:14 PM
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
I think Piketty gives a fairly plausible diagnosis.
On a related note, it is also mind-boggling to me how the default "common sense" taxation of income has become so counter-intuitive in Western democracies.
If you look at it from the public interest perspective, you probably want to encourage and reward people who get rich through their own work; then people who get rich through the use of their own capital; and in the last order only people who get rich because someone dies and leaves them with inheritance, right?
Yet, our tax systems are completely the opposite of that: you usually pay a progressive tax on the income coming from your own hard work; a usually reduced (often flat) tax on the income coming from your capital, such as dividend or, say, letting of a flat; and then usually no tax on what you inherit from your parents. This is fucked up.
Ah, but the current elite like the system, that's why it won't change.
Quote from: Hamilcar on November 27, 2015, 03:04:13 PM
Ah, but the current elite like the system, that's why it won't change.
It isn't just the elite. I've often argued in various contexts that more stress should be made on taxing (say) inheritance, and it is almost never popular. People generally
hate the notion, even though you point out it would presumably lower taxes from income and from such regressive sources as sales taxes.
Quote from: Hamilcar on November 27, 2015, 03:04:13 PM
Ah, but the current elite like the system, that's why it won't change.
They do, of course. What's scary is how many of those who are not elites nor have any chance of becoming a part of it, accept the system in which the income from their own hard work is heavily taxed, yet completely oppose any attempts to tax inheritance - which is the least productive and most parasitic of all sources of income (even more than welfare).
Quote from: Martinus on November 27, 2015, 03:08:12 PM
Quote from: Hamilcar on November 27, 2015, 03:04:13 PM
Ah, but the current elite like the system, that's why it won't change.
They do, of course. What's scary is how many of those who are not elites nor have any chance of being a part of it, accept the system in which the income from their own work is heavily taxed, yet completely oppose any attempts to tax inheritance - which is the least productive and most parasitic of all sources of income (even more than welfare).
Heh. See post above yours. :D
I see you have had some of the same debates ...
Quote from: Malthus on November 27, 2015, 03:09:21 PM
Quote from: Martinus on November 27, 2015, 03:08:12 PM
Quote from: Hamilcar on November 27, 2015, 03:04:13 PM
Ah, but the current elite like the system, that's why it won't change.
They do, of course. What's scary is how many of those who are not elites nor have any chance of being a part of it, accept the system in which the income from their own work is heavily taxed, yet completely oppose any attempts to tax inheritance - which is the least productive and most parasitic of all sources of income (even more than welfare).
Heh. See post above yours. :D
I see you have had some of the same debates ...
Yup. That's why I have always argued that people with kids should not be allowed to vote. :D
Quote from: Martinus on November 27, 2015, 03:10:12 PM
Yup. That's why I have always argued that people with kids should not be allowed to vote. :D
:P
It's the people who *are* someone's kids that's the problem! I.e., everyone.
I'll have you know
my parents fully plan on spending every penny they own before they die. :D
[But seriously ... with life expectancies these days, "inheritance" is something you can expect to get when you are 60 or so yourself. So not exactly a huge boost to life prospects]
Inheritance is probably also the easiest to dodge of the three.
Quote from: Malthus on November 27, 2015, 09:52:46 AM
I lived without a car for a coupla years, it was perfectly doable in an urban setting.
Tragic.
Quote from: Admiral Yi on November 27, 2015, 03:15:27 PM
Inheritance is probably also the easiest to dodge of the three.
It's a good point. Practically, increasing inheritance taxes would just lead to less money lying around to be taxed.
However, most people are opposed to it in principle, even if it was workable.
Quote from: Malthus on November 27, 2015, 09:52:46 AM
There is a bit of inflation in expectations of what is "needed", as well - depending on where you live, you often don't "need" a car (for example), but many working people think you do. I lived without a car for a coupla years, it was perfectly doable in an urban setting.
It kind of depends - if you live on good transit routes to where you work, you can get by without a car yes. Of course rent/ property prices tend to be fairly expensive in such centres. If you're coming in from the suburbs, in many cases not having a car is severely impractical.
Personally, I lived without a car until I was 40 and it was pretty doable - but I lived in a pretty good location for commuting via walking/ biking/ transit. However, once we had a kid it was pretty much a game changer. While I think it's technically possible to raise a kid without a car, I don't think terming it a luxury is accurate.
Piketty's solution of a (global) wealth tax on extremely large fortunes (1bn+) would be a big step, but even he admits that it's neither practical, nor politically palatable.
Quote from: Hamilcar on November 27, 2015, 02:35:14 PM
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
I think Piketty gives a fairly plausible diagnosis.
He is really more descriptive of the problem than providing a diagnosis of the problem. Although he does provide some suggestions for what might assist with the problem of income inequality
Quote from: Jacob on November 27, 2015, 03:56:11 PM
Quote from: Malthus on November 27, 2015, 09:52:46 AM
There is a bit of inflation in expectations of what is "needed", as well - depending on where you live, you often don't "need" a car (for example), but many working people think you do. I lived without a car for a coupla years, it was perfectly doable in an urban setting.
It kind of depends - if you live on good transit routes to where you work, you can get by without a car yes. Of course rent/ property prices tend to be fairly expensive in such centres. If you're coming in from the suburbs, in many cases not having a car is severely impractical.
Personally, I lived without a car until I was 40 and it was pretty doable - but I lived in a pretty good location for commuting via walking/ biking/ transit. However, once we had a kid it was pretty much a game changer. While I think it's technically possible to raise a kid without a car, I don't think terming it a luxury is accurate.
I don't think a car is a "luxury". I think a
new car is a "luxury".
As I noted, whether a car is a
necessity depends on where you live, so I don't think we are really in disagreement.
Of course, if you are elderly, disabled, or have kids, or (as someone mentioned already) have to travel a lot for work, having a car is more of a "necessity".
My point, though, was that many people in our society are bad at accurately determining what is really a "necessity" for them, and that this problem occurs with people at all income levels. The car thing is simply one example of this: people seem to be highly unwilling to go without, well,
anything, in order to save money. Everyone "needs" TV with cable packages, new cars (used won't do), cell phones, laptops, holidays to foreign destinations and all the rest - if they don't have all that stuff, they feel they can't really live in the modern world (and yes, some of that stuff may be a work necessity). Any hint that people could possibly learn to live with less (and so actually save money) is met with incomprehension, hostility or ridicule.
Is it any wonder that debt levels in our country are at all-time high, and savings levels at all-time low? Part of it is the increasing cost of housing, part of it is the decrease in the middle class, but part of it is what I'm describing: that everyone has absorbed the mantra of consumerism, and simply can't differentiate between "needs" and "wants" very well.
Quote from: Hamilcar on November 27, 2015, 03:57:44 PM
Piketty's solution of a (global) wealth tax on extremely large fortunes (1bn+) would be a big step, but even he admits that it's neither practical, nor politically palatable.
For starters, once Occupy Wall Street types realize that any reasonable distribution would send all of the money to African and Asian shitholes, they might be somewhat less enthusiastic.
Quote from: crazy canuck on November 27, 2015, 04:18:07 PM
Quote from: Hamilcar on November 27, 2015, 02:35:14 PM
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
I think Piketty gives a fairly plausible diagnosis.
He is really more descriptive of the problem than providing a diagnosis of the problem. Although he does provide some suggestions for what might assist with the problem of income inequality
I think he did more than just describe the problem, he does list a series of long-term trends coming together combined with some fundamental economics.
I really worry that he's right, because if he is, there may not be much we can do.
Quote from: Hamilcar on November 27, 2015, 04:49:41 PM
Quote from: crazy canuck on November 27, 2015, 04:18:07 PM
Quote from: Hamilcar on November 27, 2015, 02:35:14 PM
Quote from: Malthus on November 26, 2015, 03:50:38 PM
More seriously - it is really hard to complain when the source of the problem isn't well understood, even by professional economists.
I've been saying for years now that the West is moving to a system where the non-rich are divvied up into "haves" and "have nots", and the middle ground between 'em is getting relentlessly squeezed.
What there is to be done about it is less obvious.
I think Piketty gives a fairly plausible diagnosis.
He is really more descriptive of the problem than providing a diagnosis of the problem. Although he does provide some suggestions for what might assist with the problem of income inequality
I think he did more than just describe the problem, he does list a series of long-term trends coming together combined with some fundamental economics.
I really worry that he's right, because if he is, there may not be much we can do.
I think he is probably right about the trend lines he identified. That is certainly his area of expertise. But iirc he has said a number of times that his book is meant to be descriptive of the data he has accumulated (no pun intended).
Quote from: crazy canuck on November 27, 2015, 04:52:15 PMBut iirc he has said a number of times that his book is meant to be descriptive of the data he has accumulated (no pun intended).
I think that's him just being coy.
I'm just glad you can't inherit your parents' debt. I'd really be screwed then. :P
Quote from: Hamilcar on November 27, 2015, 04:55:43 PM
Quote from: crazy canuck on November 27, 2015, 04:52:15 PMBut iirc he has said a number of times that his book is meant to be descriptive of the data he has accumulated (no pun intended).
I think that's him just being coy.
More importantly I think it was him avoiding the groundless accusation that he was a communist leveled at him by American and other right wing media outlets. The bulk of his book is straight data analysis. The conclusions he draws are uncomfortable for some to be sure.
Quote from: MadImmortalMan on November 27, 2015, 04:56:40 PM
I'm just glad you can't inherit your parents' debt. I'd really be screwed then. :P
:D
Quote from: MadImmortalMan on November 27, 2015, 04:56:40 PM
I'm just glad you can't inherit your parents' debt. I'd really be screwed then. :P
You can in Germany, though you can choose to renounce your heritage.
Quote from: Malthus on November 27, 2015, 04:20:38 PM
Everyone "needs" TV with cable packages, new cars (used won't do), cell phones, laptops, holidays to foreign destinations and all the rest - if they don't have all that stuff, they feel they can't really live in the modern world
:unsure:
I don't have a laptop either(though my phone is an even more mobile computer /shrug).
But yeah, couldn't live without cable tv. :sleep:
I plan to cancel my cable eventually when my contract is over. -_-
I dream of the day when buying a new car is something I could even consider as an option. -_-
Right now I'm trying to find the least-worst beater that's <$5000 to replace my totaled car.
Quote from: Peter Wiggin on November 27, 2015, 06:06:22 PM
Quote from: Malthus on November 27, 2015, 04:20:38 PM
Everyone "needs" TV with cable packages, new cars (used won't do), cell phones, laptops, holidays to foreign destinations and all the rest - if they don't have all that stuff, they feel they can't really live in the modern world
:unsure:
I don't have a laptop either(though my phone is an even more mobile computer /shrug).
But yeah, couldn't live without cable tv. :sleep:
For Americans "foreign" means two counties over.
Quote from: Admiral Yi on November 27, 2015, 03:15:27 PM
Inheritance is probably also the easiest to dodge of the three.
It kind of depends on the type of inheritance. The type easiest to dodge is the one that you wouldn't want to tax much or at all anyway - parents leaving a house or some small savings to kids and the like. On the other hand, for inheritance of fortunes you need a paper trail, making it much harder to dodge - and the truly rich are rarely willing to give up control of their assets while they are still alive just to make it easier for their kids to dodge tax when they are dead.
Civilized countries don't have inheritance tax.
Quote from: The Brain on November 28, 2015, 03:57:02 AM
Civilized countries don't have inheritance tax.
It's actually the opposite. Civilized countries have inheritance tax, uncivilized don't.
Quote from: Martinus on November 28, 2015, 03:57:40 AM
Quote from: The Brain on November 28, 2015, 03:57:02 AM
Civilized countries don't have inheritance tax.
It's actually the opposite. Civilized countries have inheritance tax, uncivilized don't.
No.
Quote from: The Brain on November 28, 2015, 04:01:59 AM
Quote from: Martinus on November 28, 2015, 04:00:11 AM
Quote from: The Brain on November 28, 2015, 03:59:06 AM
Quote from: Martinus on November 28, 2015, 03:57:40 AM
Quote from: The Brain on November 28, 2015, 03:57:02 AM
Civilized countries don't have inheritance tax.
It's actually the opposite. Civilized countries have inheritance tax, uncivilized don't.
No.
Yes.
You're Polish so you can't override a no.
Actually precisely because he's Polish he CAN override a no. Liberium Veto. :D
Quote from: Martinus on November 27, 2015, 03:00:40 PM
If you look at it from the public interest perspective, you probably want to encourage and reward people who get rich through their own work; then people who get rich through the use of their own capital; and in the last order only people who get rich because someone dies and leaves them with inheritance, right?
Yet, our tax systems are completely the opposite of that: you usually pay a progressive tax on the income coming from your own hard work; a usually reduced (often flat) tax on the income coming from your capital, such as dividend or, say, letting of a flat; and then usually no tax on what you inherit from your parents. This is fucked up.
Yeah that sounds like a great plan in an era of rapidly declining wages. No way out then, you cannot even steadily build of capital because it will just be taken back by the elites when you die.
Can you just keep your capital invested? Is there a tax if say -- a corporation passes from parent to child?
Quote from: Jaron on November 29, 2015, 10:46:37 PM
Can you just keep your capital invested? Is there a tax if say -- a corporation passes from parent to child?
Yup.
Quote from: Jaron on November 29, 2015, 10:46:37 PM
Can you just keep your capital invested? Is there a tax if say -- a corporation passes from parent to child?
This is my plan actually. Piketty's book influenced my thinking quite a bit.
Quote from: Admiral Yi on November 29, 2015, 10:50:51 PM
Quote from: Jaron on November 29, 2015, 10:46:37 PM
Can you just keep your capital invested? Is there a tax if say -- a corporation passes from parent to child?
Yup.
No. Corporations do not pass through inheritance. Shares may be bequeathed but then there is a deemed crystallization of the value of the share when the share is transferred and capital gains are owed by the estate. At least that is how it works in countries that tax inheritances.
Quote from: Valmy on November 29, 2015, 10:56:44 PM
Quote from: Jaron on November 29, 2015, 10:46:37 PM
Can you just keep your capital invested? Is there a tax if say -- a corporation passes from parent to child?
This is my plan actually. Piketty's book influenced my thinking quite a bit.
You should get some tax planning advice.
Quote from: Valmy on November 29, 2015, 10:34:50 PM
Quote from: Martinus on November 27, 2015, 03:00:40 PM
If you look at it from the public interest perspective, you probably want to encourage and reward people who get rich through their own work; then people who get rich through the use of their own capital; and in the last order only people who get rich because someone dies and leaves them with inheritance, right?
Yet, our tax systems are completely the opposite of that: you usually pay a progressive tax on the income coming from your own hard work; a usually reduced (often flat) tax on the income coming from your capital, such as dividend or, say, letting of a flat; and then usually no tax on what you inherit from your parents. This is fucked up.
Yeah that sounds like a great plan in an era of rapidly declining wages. No way out then, you cannot even steadily build of capital because it will just be taken back by the elites when you die.
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
The "problem" with that is that the 99% aren't getting it too. Because they can't save money.
Quote from: MadImmortalMan on November 30, 2015, 11:37:53 AM
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
The "problem" with that is that the 99% aren't getting it too. Because they can't save money.
But that has a lot to do with vast amounts of wealth that is untaxed. The 99% would be able to save if government provided basic support like a universal single payor health care system and more affordable education. But that cant be adequately funded if the least wealthy think that the tax policy that only benefits the rich also benefit them.
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
Those people will benefit either way. They will have access to huge salaries and investments.
But most people will never have huge salaries but they can chip away through saving and investing.
Quote from: crazy canuck on November 30, 2015, 11:49:45 AM
But that has a lot to do with vast amounts of wealth that is untaxed. The 99% would be able to save if government provided basic support like a universal single payor health care system and more affordable education. But that cant be adequately funded if the least wealthy think that the tax policy that only benefits the rich also benefit them.
Ok now you are talking about something totally different. I was responding to Marty's suggestion we should favor fat salaries and hammer savings. I guess the way it was presented it was just substituting one government revenue for another not huge increases in government funds leading to an expansion of the welfare state.
Quote from: Valmy on November 30, 2015, 11:51:58 AM
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
Those people will benefit either way. They will have access to huge salaries and investments.
But most people will never have huge salaries but they can chip away through saving and investing.
Yes, that is why an effective tax system would progressively tax all sources of revenue. People who earn very little would pay no tax while people who earn progressively more will pay progressively more tax.
Meh. Taxation should concentrate on consumption.
Quote from: Valmy on November 30, 2015, 11:56:11 AM
Quote from: crazy canuck on November 30, 2015, 11:49:45 AM
But that has a lot to do with vast amounts of wealth that is untaxed. The 99% would be able to save if government provided basic support like a universal single payor health care system and more affordable education. But that cant be adequately funded if the least wealthy think that the tax policy that only benefits the rich also benefit them.
Ok now you are talking about something totally different. I was responding to Marty's suggestion we should favor fat salaries and hammer savings. I guess the way it was presented it was just substituting one government revenue for another not huge increases in government funds leading to an expansion of the welfare state.
Yes, I see your point. It would make no sense to tax dividends progressively but not income. It would be the same problem but with everyone taking out their money in salary and dividends would become a thing of the past.
Quote from: Tamas on November 30, 2015, 12:00:15 PM
Meh. Taxation should concentrate on consumption.
That would be the best way to accelerate income disparity.
Quote from: crazy canuck on November 30, 2015, 11:58:24 AM
Quote from: Valmy on November 30, 2015, 11:51:58 AM
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
Those people will benefit either way. They will have access to huge salaries and investments.
But most people will never have huge salaries but they can chip away through saving and investing.
Yes, that is why an effective tax system would progressively tax all sources of revenue. People who earn very little would pay no tax while people who earn progressively more will pay progressively more tax.
When the minimum wage was tax free in Hungary, a lot of people (pretty much everyone who wasn't working for a corporation too big to try and cook the books) were on minimum wage on paper, then received extra in cash on the side from the employer.
the thing is, all these glorious plans of destroying savings, or preventing people from leaving something for their families after they die, they would just cuse angst and pain and they would fail. The more complex a taxation system is, the easier to find loopholes.
I would try to devise a taxation system that concentrates on taxing consumption (much harder to hide than income/wealth), and try to keep it as simple as possible.
Simple is better. CC is right about fixing health care and education though. That's two huge expenses for young people in the US at least. So damn much college shouldn't even be needed. I'd make all college courses free for anyone who is employed.
Quote from: Tamas on November 30, 2015, 12:03:20 PM
Quote from: crazy canuck on November 30, 2015, 11:58:24 AM
Quote from: Valmy on November 30, 2015, 11:51:58 AM
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
Those people will benefit either way. They will have access to huge salaries and investments.
But most people will never have huge salaries but they can chip away through saving and investing.
Yes, that is why an effective tax system would progressively tax all sources of revenue. People who earn very little would pay no tax while people who earn progressively more will pay progressively more tax.
When the minimum wage was tax free in Hungary, a lot of people (pretty much everyone who wasn't working for a corporation too big to try and cook the books) were on minimum wage on paper, then received extra in cash on the side from the employer.
the thing is, all these glorious plans of destroying savings, or preventing people from leaving something for their families after they die, they would just cuse angst and pain and they would fail. The more complex a taxation system is, the easier to find loopholes.
I would try to devise a taxation system that concentrates on taxing consumption (much harder to hide than income/wealth), and try to keep it as simple as possible.
You are certainly correct that efficient tax systems do not work well in countries that are corrupt or do not have good enforcement infrastructure. But I don't think that is a good counter example for why countries that are not corrupt and have good enforcement infrastructure should not employ good tax policy.
Quote from: MadImmortalMan on November 30, 2015, 12:06:50 PM
Simple is better. CC is right about fixing health care and education though. That's two huge expenses for young people in the US at least. So damn much college shouldn't even be needed. I'd make all college courses free for anyone who is employed.
The nice thing about taxing all income progressively regardless of source is that it is simple. Certainly a lot more simple than our current system where the main beneficiaries are tax lawyers, accountants and their clients.
Yeah H&R Block has a ten billion dollar market cap. That's an awful lot of human productivity that could be used for something worthwhile.
Quote from: crazy canuck on November 30, 2015, 12:17:59 PM
Quote from: MadImmortalMan on November 30, 2015, 12:06:50 PM
Simple is better. CC is right about fixing health care and education though. That's two huge expenses for young people in the US at least. So damn much college shouldn't even be needed. I'd make all college courses free for anyone who is employed.
The nice thing about taxing all income progressively regardless of source is that it is simple. Certainly a lot more simple than our current system where the main beneficiaries are tax lawyers, accountants and their clients.
I am not saying taxation systems are good as they are, and I am open to be convinced that a progressive income tax system is better than a flat one, but I am 100% convinced that it is not SIMPLER.
Quote from: Tamas on November 30, 2015, 12:00:15 PM
Meh. Taxation should concentrate on consumption.
Then you would be penalising the poor who spend on consumption a much greater proportion of their revenues than the wealthy.
Taxation should concentrate on assets (with generous allowances for "first home" and the like).
Quote from: crazy canuck on November 30, 2015, 11:58:24 AM
Quote from: Valmy on November 30, 2015, 11:51:58 AM
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
Those people will benefit either way. They will have access to huge salaries and investments.
But most people will never have huge salaries but they can chip away through saving and investing.
Yes, that is why an effective tax system would progressively tax all sources of revenue. People who earn very little would pay no tax while people who earn progressively more will pay progressively more tax.
The problem with that is that revenue taxes are easiest to avoid by clever tax planning.
Quote from: crazy canuck on November 30, 2015, 12:15:03 PM
You are certainly correct that efficient tax systems do not work well in countries that are corrupt or do not have good enforcement infrastructure. But I don't think that is a good counter example for why countries that are not corrupt and have good enforcement infrastructure should not employ good tax policy.
I don't know about Canada, but by that definition both US and the UK are corrupt countries that do not have good enforcement infrastructure. At least judging by what the rich and corporations get away with when it comes to paying taxes on their revenues. ;)
The thing is at the end of the day:
- consumption tax (or, even more extremely, poll tax) penalises the poor because they spend the most on consumption compared to their overal revenue and/or assets;
- revenue tax penalises the middle class because middle class is the one living off their work and work (still) generates highest revenues compared to capital investment - but middle class is still below the level where they can afford good tax lawyers to optimise their taxes;
- asset (capital) tax penalises the rich, because they have accumulated the most capital proportionally to their revenues and consumption.
To me, it's fairly clear which group should be taxed the most - yet, in practice, asset tax is the only one that is considered least orthodox or normal of the three. Oh the glories of oligarchic democracy!
Incidentally, it also makes more sense from the purely utilitarian perspective - outside of investment into people, such as health care or education, the government infrastructure, utilities and resources are spend mainly on protecting assets of the people, not their revenues or consumption. It is only fair that whoever has biggest assets should pay the most.
And there is also the benefit of simplicity - unlike revenues or consumption, assets are not easy to move (or hide) - you want your mansion to be in London, not Bumfuck, Cyprus, for example. So you should pay where you keep it.
Ah, but focusing on income is a great way to distract people from wealth because most people understand income acutely. All the talk of income and gini things and whatnot is the best thing the rich have to distract the anger of the poor off of them and onto the less-poor.
Quote from: Martinus on November 30, 2015, 12:35:11 PM
Quote from: crazy canuck on November 30, 2015, 12:15:03 PM
You are certainly correct that efficient tax systems do not work well in countries that are corrupt or do not have good enforcement infrastructure. But I don't think that is a good counter example for why countries that are not corrupt and have good enforcement infrastructure should not employ good tax policy.
I don't know about Canada, but by that definition both US and the UK are corrupt countries that do not have good enforcement infrastructure. At least judging by what the rich and corporations get away with when it comes to paying taxes on their revenues. ;)
:rolleyes:
Corruption is applying the rules? The problem is the rules not people following the rules.
Quote from: Martinus on November 30, 2015, 12:43:24 PM
Incidentally, it also makes more sense from the purely utilitarian perspective - outside of investment into people, such as health care or education, the government infrastructure, utilities and resources are spend mainly on protecting assets of the people, not their revenues or consumption. It is only fair that whoever has biggest assets should pay the most.
And there is also the benefit of simplicity - unlike revenues or consumption, assets are not easy to move (or hide) - you want your mansion to be in London, not Bumfuck, Cyprus, for example. So you should pay where you keep it.
You know you have a point there.
The problem with taxing all income identically is that some income has already been taxed.
This is a US centric example. The federal corporate tax rate for C Corps (most of your big ones) is 35%. State corporate taxes are on top of that--lets say combined we hit 40% in this example.
A high earner, depending on the state of residence, can have combined state and federal taxes of over 40%.
So if this high earner owns a part of a C Corp, the earnings of the C Corp will pay those 40% taxes, and then when it passes the income on to the owner in the form of dividends, the owner will pay say another 45% in personal taxes. It makes the C Corp an incredibly tax inefficient way to do business, and the result would be such corporations would be deterred from coming into existence.
The tax code acknowledges this problem, and the solution is that the owner in this case only pays the capital gains rate on the dividends, which is quite a bit lower.
A more ideal solution would be to cut corporate taxes to the bone--say perhaps 10%--and get rid of capital gains treatment like CC is proposing, but good luck with selling a major corporate tax cut to be paid for with higher personal income taxes.
Quote from: Martinus on November 30, 2015, 12:33:42 PM
Quote from: crazy canuck on November 30, 2015, 11:58:24 AM
Quote from: Valmy on November 30, 2015, 11:51:58 AM
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
Those people will benefit either way. They will have access to huge salaries and investments.
But most people will never have huge salaries but they can chip away through saving and investing.
Yes, that is why an effective tax system would progressively tax all sources of revenue. People who earn very little would pay no tax while people who earn progressively more will pay progressively more tax.
The problem with that is that revenue taxes are easiest to avoid by clever tax planning.
Under current systems yes. But that is not what I was advocating for. ;)
Quote from: crazy canuck on November 30, 2015, 01:00:04 PM
Quote from: Martinus on November 30, 2015, 12:33:42 PM
Quote from: crazy canuck on November 30, 2015, 11:58:24 AM
Quote from: Valmy on November 30, 2015, 11:51:58 AM
Quote from: crazy canuck on November 30, 2015, 11:30:12 AM
You demonstrate the political problem of implementing sound tax policy. The .01% are huge beneficiaries of preferential taxation of dividends. The problem is magnified if there is no inheritance tax. But people who will benefit very little from the current system seem to think it actually works for them.
Those people will benefit either way. They will have access to huge salaries and investments.
But most people will never have huge salaries but they can chip away through saving and investing.
Yes, that is why an effective tax system would progressively tax all sources of revenue. People who earn very little would pay no tax while people who earn progressively more will pay progressively more tax.
The problem with that is that revenue taxes are easiest to avoid by clever tax planning.
Under current systems yes. But that is not what I was advocating for. ;)
Ah, so we just need to come up with a tax system that's not possible to cheat. Glad we have this one worked out! Next topic please! :P
Quote from: Tamas on November 30, 2015, 01:03:50 PM
Ah, so we just need to come up with a tax system that's not possible to cheat. Glad we have this one worked out! Next topic please! :P
No, what we (speaking mainly about Western Nations here) need is a tax system that is not so riddled with special rules and exemptions that really only benefit a small number who are the most wealthy.
A flat tax is the next worst alternative proposal.
If you cant think past those two options then the discussion is indeed not worth having.
Quote from: Martinus on November 30, 2015, 12:31:17 PM
Quote from: Tamas on November 30, 2015, 12:00:15 PM
Meh. Taxation should concentrate on consumption.
Then you would be penalising the poor who spend on consumption a much greater proportion of their revenues than the wealthy.
Taxation should concentrate on assets (with generous allowances for "first home" and the like).
In the long run, is that true? The point of money is to use it for consumption, eventually. Someone who doesn't consume isn't really claiming society's resources, he's just claiming pieces of paper.
Quote from: DGuller on November 30, 2015, 01:15:50 PMThe point of money is to use it for consumption, eventually.
I would say it isn't.
Quote from: DGuller on November 30, 2015, 01:24:00 PM
Quote from: MadImmortalMan on November 30, 2015, 01:19:43 PM
Quote from: DGuller on November 30, 2015, 01:15:50 PMThe point of money is to use it for consumption, eventually.
I would say it isn't.
So what is it then?
The main purpose of money is to create capital to make more money. Only a fool or someone who has no other choice uses their capital to fund their consumption.
I'm pretty sure the ultimate end for our money is to be burned by the Treasury Department. :P
:D
Quote from: DGuller on November 30, 2015, 01:15:50 PM
Quote from: Martinus on November 30, 2015, 12:31:17 PM
Quote from: Tamas on November 30, 2015, 12:00:15 PM
Meh. Taxation should concentrate on consumption.
Then you would be penalising the poor who spend on consumption a much greater proportion of their revenues than the wealthy.
Taxation should concentrate on assets (with generous allowances for "first home" and the like).
In the long run, is that true? The point of money is to use it for consumption, eventually. Someone who doesn't consume isn't really claiming society's resources, he's just claiming pieces of paper.
Not really - assets take many more forms than money - they can take form of real property, works of art, fixed assets etc.
The problem with taxing consumption is that it does not take into account the asset's longevity - ultimately, whether you buy one million burgers or a Beverly Hills mansion, the consumption-based tax will be the same. But the resources needed to protect and maintain either aren't.
That is why an asset tax is superior as it taxes into account the longevity of the asset (and, thus, resources needed to maintain) - something consumption tax doesn't do or does in only a remote way.
Edit: and this was only a side-argument about an asset tax - not the main rationale for it.
Quote from: crazy canuck on November 30, 2015, 01:51:46 PM
Quote from: DGuller on November 30, 2015, 01:24:00 PM
Quote from: MadImmortalMan on November 30, 2015, 01:19:43 PM
Quote from: DGuller on November 30, 2015, 01:15:50 PMThe point of money is to use it for consumption, eventually.
I would say it isn't.
So what is it then?
The main purpose of money is to create capital to make more money. Only a fool or someone who has no other choice uses their capital to fund their consumption.
Wow what a sad perspective.
Quote from: crazy canuck on November 30, 2015, 02:15:24 PM
Quote from: Martinus on November 30, 2015, 02:10:50 PM
Wow what a sad perspective.
:huh:
You can't take money with you to your grave. Consumption is the only sensible way to use money. The only question is whether to consume now or later.
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
That's still deferred consumption. This is my point. And surely, unless your kids are disabled or minors when you die, they should be able to earn their living, rather than counting on daddy to support them from beyond the grave, no?
Quote from: Martinus on November 30, 2015, 02:19:38 PM
Quote from: crazy canuck on November 30, 2015, 02:15:24 PM
Quote from: Martinus on November 30, 2015, 02:10:50 PM
Wow what a sad perspective.
:huh:
You can't take money with you to your grave. Consumption is the only sensible way to use money. The only question is whether to consume now or later.
Ah, truly spoken as someone only looking out for themselves. For those of us who do think about other people, it is not all about simply spending it all on ourselves at some point. Even people without children should think about the wider uses to which their accumulated capital can be used after their death.
Quote from: crazy canuck on November 30, 2015, 02:32:25 PM
Quote from: Martinus on November 30, 2015, 02:19:38 PM
Quote from: crazy canuck on November 30, 2015, 02:15:24 PM
Quote from: Martinus on November 30, 2015, 02:10:50 PM
Wow what a sad perspective.
:huh:
You can't take money with you to your grave. Consumption is the only sensible way to use money. The only question is whether to consume now or later.
Ah, truly spoken as someone only looking out for themselves. For those of us who do think about other people, it is not all about simply spending it all on ourselves at some point. Even people without children should think about the wider uses to which their accumulated capital can be used after their death.
Ah, but that's not what you said. Using your money to help others may be a more or less worthy goal (depending largely on how well they are able to fend off for themselves) but this still means the money is ultimately spent on consumption, which was my point.
I questioned your claim that the ultimate purpose of money is to create capital to make more money. This is patently untrue. The ultimate purpose of money is to make life easier for ourselves, our loved ones and people we care about (the "care" may be inspired by family ties, by our political views, by our artistic preferences or humanistic sensibilities - it does not matter).
Love, not greed, should inspire what we spend our money on.
Quote from: Martinus on November 30, 2015, 02:29:19 PM
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
That's still deferred consumption. This is my point. And surely, unless your kids are disabled or minors when you die, they should be able to earn their living, rather than counting on daddy to support them from beyond the grave, no?
No its not. The capital never has to be disturbed.
Use it for investments that make peoples' lives better. Like building roads, apartment buildings and satellite networks. Money continues in circulation and new value is created.
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
:hmm: So they would do what with that money? Pass it on to their children? And their children would pass it on to their children?
Quote from: crazy canuck on November 30, 2015, 02:41:28 PM
Quote from: Martinus on November 30, 2015, 02:29:19 PM
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
That's still deferred consumption. This is my point. And surely, unless your kids are disabled or minors when you die, they should be able to earn their living, rather than counting on daddy to support them from beyond the grave, no?
No its not. The capital never has to be disturbed.
Thinking like yours is what got us into the mess we are in today. Let's hope Picketty's ideas will get us out of it.
Quote from: DGuller on November 30, 2015, 02:43:09 PM
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
:hmm: So they would do what with that money? Pass it on to their children? And their children would pass it on to their children?
And their children's children!
Quote from: Martinus on November 30, 2015, 02:43:44 PM
Thinking like yours is what got us into the mess we are in today. Let's hope Picketty's ideas will get us out of it.
Nobody is going to follow his solutions.
However his diagnosis is something everybody should bear in mind when making financial decisions -_-
Capital should be kept in a vault where you can go swimming in it.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fnandovanberlo.com%2Fnando%2Fwp-content%2Fuploads%2F2013%2F02%2FDagobertDuik-300x274.jpg&hash=df086882e8843a644207f2d468ee0f5d8a182920)
Quote from: MadImmortalMan on November 30, 2015, 02:42:11 PM
Use it for investments that make peoples' lives better. Like building roads, apartment buildings and satellite networks. Money continues in circulation and new value is created.
The state is better at this sort of decisions - that's why we need to tax assets so that the likes of CC and Tamas do not have incentive to hoard their assets for some idiotic reason.
Quote from: crazy canuck on November 30, 2015, 02:41:28 PM
Quote from: Martinus on November 30, 2015, 02:29:19 PM
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
That's still deferred consumption. This is my point. And surely, unless your kids are disabled or minors when you die, they should be able to earn their living, rather than counting on daddy to support them from beyond the grave, no?
No its not. The capital never has to be disturbed.
It still either reaches equilibrium at which points income and consumption are directly related to each other, or it reaches a point where you grow capital perpetually just for the feeling of pleasure you get from growing capital perpetually.
Quote from: Martinus on November 30, 2015, 02:44:29 PM
Quote from: DGuller on November 30, 2015, 02:43:09 PM
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
:hmm: So they would do what with that money? Pass it on to their children? And their children would pass it on to their children?
And their children's children!
We are just on different wavelengths on this point. I think robots are going to replace most productive work for humans in the long term so I am not eager to embrace the notion that everything should be engineered around one's salary sustaining you. Also I tend to view life as a team game, I do want to look out for my people.
Quote from: DGuller on November 30, 2015, 02:47:01 PM
Quote from: crazy canuck on November 30, 2015, 02:41:28 PM
Quote from: Martinus on November 30, 2015, 02:29:19 PM
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
That's still deferred consumption. This is my point. And surely, unless your kids are disabled or minors when you die, they should be able to earn their living, rather than counting on daddy to support them from beyond the grave, no?
No its not. The capital never has to be disturbed.
It still either reaches equilibrium at which points income and consumption are directly related to each other, or it reaches a point where you grow capital perpetually just for the feeling of pleasure you get from growing capital perpetually.
Which is also a form of consumption, I guess - I mean, consumption does not need to be physical, it could be pleasure you derive from using it in some other way. Still, that being said, it's hardly the most efficient use of it, nor the most ethical.
Quote from: Valmy on November 30, 2015, 02:47:39 PM
Quote from: Martinus on November 30, 2015, 02:44:29 PM
Quote from: DGuller on November 30, 2015, 02:43:09 PM
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
:hmm: So they would do what with that money? Pass it on to their children? And their children would pass it on to their children?
And their children's children!
We are just on different wavelengths on this point. I think robots are going to replace most productive work for humans in the long term so I am not eager to embrace the notion that everything should be engineered around one's salary sustaining you. Also I tend to view life as a team game, I do want to look out for my people.
Did you just miss my other post?
I can see why the banks who own the Congress would want to make sure dad's house gets sold and Jr needs to get a mortgage, but I see no reason society as a whole wouldn't want Jr to have it debt-free. We all benefit from the aggregate of having less debt and more disposable income then.
Quote from: MadImmortalMan on November 30, 2015, 02:49:36 PM
I can see why the banks who own the Congress would want to make sure dad's house gets sold and Jr needs to get a mortgage, but I see no reason society as a whole wouldn't want Jr to have it debt-free. We all benefit from the aggregate of having less debt and more disposable income then.
That's right. The problem is in fact that most people are thinking about these things in exactly the same terms as you do, which is both harmful and misleading. This is because the real question is when you reach the point when further accumulation of capital in the hands of one person or family ceases to be beneficial. Because I am not convinced we all benefit when Koch Jr. gets, debt-free, the same amount of capital as ten millions of mortgage-paying people.
And, as Picketty has amply demonstrated, with no intervention of the state, capital ends up being accumulated in the hands of fewer and fewer.
Quote from: Martinus on November 30, 2015, 02:52:53 PM
Quote from: MadImmortalMan on November 30, 2015, 02:49:36 PM
I can see why the banks who own the Congress would want to make sure dad's house gets sold and Jr needs to get a mortgage, but I see no reason society as a whole wouldn't want Jr to have it debt-free. We all benefit from the aggregate of having less debt and more disposable income then.
That's right. The problem is in fact that most people are thinking about these things in exactly the same terms as you do, which is both harmful and misleading. This is because the real question is when you reach the point when further accumulation of capital in the hands of one person or family ceases to be beneficial. Because I am not convinced we all benefit when Koch Jr. gets, debt-free, the same amount of capital as ten millions of mortgage-paying people.
And, as Picketty has amply demonstrated, with no intervention of the state, capital ends up being accumulated in the hands of fewer and fewer.
So tax it when it gets that big. No problem.
Quote from: MadImmortalMan on November 30, 2015, 02:54:28 PM
Quote from: Martinus on November 30, 2015, 02:52:53 PM
Quote from: MadImmortalMan on November 30, 2015, 02:49:36 PM
I can see why the banks who own the Congress would want to make sure dad's house gets sold and Jr needs to get a mortgage, but I see no reason society as a whole wouldn't want Jr to have it debt-free. We all benefit from the aggregate of having less debt and more disposable income then.
That's right. The problem is in fact that most people are thinking about these things in exactly the same terms as you do, which is both harmful and misleading. This is because the real question is when you reach the point when further accumulation of capital in the hands of one person or family ceases to be beneficial. Because I am not convinced we all benefit when Koch Jr. gets, debt-free, the same amount of capital as ten millions of mortgage-paying people.
And, as Picketty has amply demonstrated, with no intervention of the state, capital ends up being accumulated in the hands of fewer and fewer.
So tax it when it gets that big. No problem.
Hasn't this been my point all along? :huh:
Quote from: Martinus on November 30, 2015, 02:52:53 PM
And, as Picketty has amply demonstrated, with no intervention of the state, capital ends up being accumulated in the hands of fewer and fewer.
You said you read his book, didn't you?
The above fact certainly doesn't follow from his often mentioned finding that historically the return on capital exceeds GDP growth, and it certainly doesn't match up with observation of the world around us.
State intervention doesn't seem to be stopping the accumulation, rather the opposite. :P
Quote from: MadImmortalMan on November 30, 2015, 03:12:50 PM
State intervention doesn't seem to be stopping the accumulation, rather the opposite. :P
Wouldn't it rather depend on the type and intensity of the state intervention?
I don't know. In Russia they murdered everybody middle class and above and when the Soviet Union collapsed they quickly had the most billionaires in the world.
Quote from: Admiral Yi on November 30, 2015, 03:00:33 PM
Quote from: Martinus on November 30, 2015, 02:52:53 PM
And, as Picketty has amply demonstrated, with no intervention of the state, capital ends up being accumulated in the hands of fewer and fewer.
You said you read his book, didn't you?
The above fact certainly doesn't follow from his often mentioned finding that historically the return on capital exceeds GDP growth, and it certainly doesn't match up with observation of the world around us.
Err, yes it follows directly from that. The fact that the return on capital exceeds GDP growth means that the return on capital will always be better than return on work (as GPD = capital and work growth). It means that wealth will always, in the absence of state intervention, move from those who work to those who own capital - thus making it concentrate in fewer and fewer hands. :huh:
Quote from: Martinus on November 30, 2015, 03:23:42 PM
Err, yes it follows directly from that. The fact that the return on capital exceeds GDP growth means that the return on capital will always be better than return on work (as GPD = capital and work growth). It means that wealth will always, in the absence of state intervention, move from those who work to those who own capital - thus making it concentrate in fewer and fewer hands. :huh:
No it doesn't. It means that those who accumulate capital will see their incomes grow faster than those who don't accumulate capital. It says nothing at all about the number of people who accumulate capital.
Quote from: Martinus on November 30, 2015, 03:23:42 PMIt means that wealth will always, in the absence of state intervention, move from those who work to those who own capital - thus making it concentrate in fewer and fewer hands.
I think making this a much bigger movement would be beneficial. Make it easier to own capital. Hard to accumulate insane amounts. It's already begun as a mass movement in retirement funds and such. But it's difficult to make your savings pay in such a low interest rate environment.
Instead the ultra rich have little new competition and public corporations just borrow cheap money to buy back stock and bump up their share prices without having to actually create anything.
Quote from: Martinus on November 30, 2015, 02:43:44 PM
Quote from: crazy canuck on November 30, 2015, 02:41:28 PM
Quote from: Martinus on November 30, 2015, 02:29:19 PM
Quote from: Tamas on November 30, 2015, 02:26:05 PM
You can also leave it behind for your children and other people you care about to make their lives easier but you have shown you have no grasp of this concept
That's still deferred consumption. This is my point. And surely, unless your kids are disabled or minors when you die, they should be able to earn their living, rather than counting on daddy to support them from beyond the grave, no?
No its not. The capital never has to be disturbed.
Thinking like yours is what got us into the mess we are in today. Let's hope Picketty's ideas will get us out of it.
You claim to have read Pickety's book but boy did you miss the point. In an ideal world everyone would be able to save and grow their own capital. It is not capital ownership disparity that he says is the problem. It is income inequality and the fact that too many people cannot save never mind invest. You don't address income inequality by having an asset tax. You address income inequality by progressively taxing income - from all sources.
Quote from: Admiral Yi on November 30, 2015, 03:35:52 PM
Quote from: Martinus on November 30, 2015, 03:23:42 PM
Err, yes it follows directly from that. The fact that the return on capital exceeds GDP growth means that the return on capital will always be better than return on work (as GPD = capital and work growth). It means that wealth will always, in the absence of state intervention, move from those who work to those who own capital - thus making it concentrate in fewer and fewer hands. :huh:
No it doesn't. It means that those who accumulate capital will see their incomes grow faster than those who don't accumulate capital. It says nothing at all about the number of people who accumulate capital.
I agree with the Yi on this point. I am beginning to now understand why people mistook Pickety to be a communist when the likes of Marti begin to characterize his work in these terms.
One thing I think is a problem is when you have unproductive grazing land going for 10k per acre. That's just stupid. We'll all be eating Chinese cloned warehouse meat at that rate.
Maybe we should dump fifty million acres of public land on the market at rock-bottom rates.
Quote from: Martinus on November 30, 2015, 02:52:53 PMBecause I am not convinced we all benefit when Koch Jr. gets
koch jr might save the money, but koch the third or the fourth will waste it all
Quote from: LaCroix on November 30, 2015, 09:52:01 PM
Quote from: Martinus on November 30, 2015, 02:52:53 PMBecause I am not convinced we all benefit when Koch Jr. gets
koch jr might save the money, but koch the third or the fourth will waste it all
You mean boost the economy through consumption!
Quote from: MadImmortalMan on November 30, 2015, 05:46:16 PM
One thing I think is a problem is when you have unproductive grazing land going for 10k per acre. That's just stupid. We'll all be eating Chinese cloned warehouse meat at that rate.
Maybe we should dump fifty million acres of public land on the market at rock-bottom rates.
We have to get away from these ultra-low interest rates, the distortions are getting worse every year.
Quote from: mongers on November 26, 2015, 12:48:07 PM
Just had a quick tot-up and I think I've spent a net USD 2,000 on cars. :bowler:
I spent $0 fin the acquisition of my cars until two months ago :blushing:
Quote from: katmai on December 01, 2015, 02:24:23 AM
Quote from: mongers on November 26, 2015, 12:48:07 PM
Just had a quick tot-up and I think I've spent a net USD 2,000 on cars. :bowler:
I spent $0 fin the acquisition of my cars until two months ago :blushing:
GTA: Anchorage?
But most countries have had a progressive tax system and they still have rich people left so that doesn't seem to solve piketty's problem
Quote from: Caliga on November 26, 2015, 08:50:54 AM
It's good for them to be averse to auto loans. Save up and buy cars in cash. :)
Or buy no car ;)
Quote from: Rex Francorum on December 01, 2015, 07:31:17 AM
Quote from: Caliga on November 26, 2015, 08:50:54 AM
It's good for them to be averse to auto loans. Save up and buy cars in cash. :)
Or buy no car ;)
Pretty piss poor Americans then.
Quote from: Tamas on December 01, 2015, 03:53:18 AM
But most countries have had a progressive tax system and they still have rich people left so that doesn't seem to solve piketty's problem
I thought the problem Piketty was exposing was that owning shit is so much more of an effective wealth accumulating tactic than working. Just the existence of rich people was not the issue.
Quote from: Rex Francorum on December 01, 2015, 07:31:17 AM
Quote from: Caliga on November 26, 2015, 08:50:54 AM
It's good for them to be averse to auto loans. Save up and buy cars in cash. :)
Or buy no car ;)
Coureur des bois like Rex prefer canoeing through the back country.
Quote from: Valmy on December 01, 2015, 08:48:37 AM
Quote from: Tamas on December 01, 2015, 03:53:18 AM
But most countries have had a progressive tax system and they still have rich people left so that doesn't seem to solve piketty's problem
I thought the problem Piketty was exposing was that owning shit is so much more of an effective wealth accumulating tactic than working. Just the existence of rich people was not the issue.
I was being sarcastic, and hinting at the fact that wealth accumulation, even wealth accumulation resulting in extreme differences between top and bottom is not evil incarnate: somebody needs to build those factories and offices to make meaningful work in, you know.
But of course I realise its more complicated than that, and we have plenty of distorted policies around helping the rich get richer.
Quote from: Tamas on December 01, 2015, 09:01:40 AM
Quote from: Valmy on December 01, 2015, 08:48:37 AM
Quote from: Tamas on December 01, 2015, 03:53:18 AM
But most countries have had a progressive tax system and they still have rich people left so that doesn't seem to solve piketty's problem
I thought the problem Piketty was exposing was that owning shit is so much more of an effective wealth accumulating tactic than working. Just the existence of rich people was not the issue.
I was being sarcastic, and hinting at the fact that wealth accumulation, even wealth accumulation resulting in extreme differences between top and bottom is not evil incarnate: somebody needs to build those factories and offices to make meaningful work in, you know.
But of course I realise its more complicated than that, and we have plenty of distorted policies around helping the rich get richer.
Probably because you missed the point which in turn is probably because Marti has mangled Picketty's argument so badly. Again, Piketty's problem isn't that there are wealthy people. He expressly says so in his book. His concern is income disparity which in turn reduces social mobility which in turn reduces the legitimacy of the whole system.
I agree, that capital is required to build the economy. Nobody but Marti is claiming that capital itself is evil. The problem is that the ability to accumulate capital is becoming restricted to a diminishing group of people at the high end of the income earners. If income is taxed progressively there is a lot more incentive to build wealth through capital investment (so those factories get built) rather than spending the resources of companies on high executive compensation.
Good point and I would agree. I am just worried that in effect it would be just an incentive against chasing a higher salary/income, and/or for tinkering with tax avoidance.
Quote from: Tamas on December 01, 2015, 11:45:40 AM
Good point and I would agree. I am just worried that in effect it would be just an incentive against chasing a higher salary/income, and/or for tinkering with tax avoidance.
I am not sure why one should be concerned about a person seeking to earn 108 million a year instead of just 100 million a year - or for that matter 10 million a year. I think we should be a lot more concerned about people making a median income not being able to save. High income earners are not going to stop working because their taxes go up. They just wont enjoy as much capital accumulation as they once did if a real progressive tax is introduced. As for tax avoidance - that is why the tax code needs to deal equitably with all forms of income.
Ok but is it REALLY going to make a huge difference in a country's economy if we do a bit of extra tax for the super rich? there can't be that many of them.
Quote from: Tamas on December 01, 2015, 12:20:30 PM
Ok but is it REALLY going to make a huge difference in a country's economy if we do a bit of extra tax for the super rich? there can't be that many of them.
Picketty would say the answer is yes with the proviso that the tax code and enforcement deal effectively with tax evasion.
But even if there is evasion Picketty's other answer is that at least there would be some increased tax revenue which can be spent on providing better opportunities for social mobility by providing better education (something he emphasizes) and something he didn't address directly but I think is important - universal single payor health care. Although I hasten to add that at least in the US they don't need more tax revenue to implement universal health care. Their government already spends more per capita then we do on their system. Changing it would likely save their government money which can in turn be invested in education.
Also you would remove the perverse incentive for large managerial pay packages and redirect those resources into growing companies instead.
I could be wrong but my impression has been that one of the reasons for obscene managerial bonuses and such is that basically -to a degree- the people deciding ont hem are the ones receiving them. If not directly, then their immediate collegaues/circle.
And while I support the intention, one thing you learn by living in an overcomplicated Byzantine law environment, is that if people want to do something, they will find a way.
The best we can do is avoid incentivising it. You cannot stop it and probably can't really slow it down beyond that.
eg. if you want to super-tax high-end cash bonuses to move the corporations toward investing in assets and such, then they will just, for example, buy a house and give it to the manager they want to reward. If you tax that they will move on to expensive jewelry etc. Or just buy something from the manager at a ridicoulously high price.
Force them to spend it on non-officer employees or take it away.
Quote from: Tamas on December 01, 2015, 12:35:03 PM
eg. if you want to super-tax high-end cash bonuses to move the corporations toward investing in assets and such, then they will just, for example, buy a house and give it to the manager they want to reward. If you tax that they will move on to expensive jewelry etc. Or just buy something from the manager at a ridicoulously high price.
That shit may work in Eastern Europe or former USSR, but in countries with entrenched rule of law, all of that would be illegal.
Quote from: Tamas on December 01, 2015, 12:33:10 PM
I could be wrong but my impression has been that one of the reasons for obscene managerial bonuses and such is that basically -to a degree- the people deciding ont hem are the ones receiving them. If not directly, then their immediate collegaues/circle.
You are correct. And that is one of the strongest arguments for why there needs to be an economic incentive to stop that practice rather than cutting income taxes for the wealthy and further exacerbate the problem.
Btw your example of buying a house (or something else) and giving it would be caught as income. It already is a taxable benefit under the current tax code - at least in Canada. Again, taxing all forms of income is relatively straight forward. What is missing is the political will to do it.
Quote from: crazy canuck on December 01, 2015, 11:01:41 AM
Probably because you missed the point which in turn is probably because Marti has mangled Picketty's argument so badly. Again, Piketty's problem isn't that there are wealthy people. He expressly says so in his book. His concern is income disparity which in turn reduces social mobility which in turn reduces the legitimacy of the whole system.
I've personally felt that the lack of social mobility in previous times has been more utilitarian than it is given credit for (with most accounts citing it as a result of a rigid social structure enforced by religious and government decrees).
For example, in a close to subsistence agrarian economy with low population density where very few are literate and there aren't textbooks, there probably aren't the resources to give more than a handful of people an education, under an apprenticeship model. Those will naturally (and probably most efficiently) the children of the rulers, who will then likely be the only qualified rulers in their time.
it seems more and more that relevant education is on the job. In my narrow field, yes you need a college degree in accounting, but every accountant I know says they knew very little when starting work. In a lot of ways it seems it has a lot of elements of an apprenticeship model, which is of course not new, but with the increasing complexity and technical nature I think that is increasing. So much is based on the experience you get early on, and parents who are in a spot to land their kids plum gigs (or the resources for the kids to create their own) are giving them a big leg up.
Since I am a direct beneficiary of social mobility through education I have to say I don't agree that only educating the children of the elites is a particularly attractive model. ;)
Quote from: crazy canuck on December 01, 2015, 01:13:17 PM
Since I am a direct beneficiary of social mobility through education I have to say I don't agree that only educating the children of the elites is a particularly attractive model. ;)
Of course not. I'm a beneficiary of that as well, and paid for college with scholarships and student loans.
Neither of us are really reaching the super elite status though.
I have been working for about 10 years. When I look at what the CEO of my company was doing with my experience level, I am way behind, even if most people would say I'm doing well. The CEO's father would qualify as elite, and while it doesn't say in his official biography, it isn't hard to imagine his early opportunities were partially opened by his father.
Free market capitalism. That's all we need.
Quote from: alfred russel on December 01, 2015, 01:24:23 PM
Quote from: crazy canuck on December 01, 2015, 01:13:17 PM
Since I am a direct beneficiary of social mobility through education I have to say I don't agree that only educating the children of the elites is a particularly attractive model. ;)
Of course not. I'm a beneficiary of that as well, and paid for college with scholarships and student loans.
Neither of us are really reaching the super elite status though.
I have been working for about 10 years. When I look at what the CEO of my company was doing with my experience level, I am way behind, even if most people would say I'm doing well. The CEO's father would qualify as elite, and while it doesn't say in his official biography, it isn't hard to imagine his early opportunities were partially opened by his father.
I am not sure what you are arguing. That only the children of the elite in society can become very successful? If so, there are too many counter examples to bother listing here.
Quote from: crazy canuck on December 01, 2015, 01:28:57 PM
I am not sure what you are arguing. That only the children of the elite in society can become very successful? If so, there are too many counter examples to bother listing here.
Counter-examples work in algebra. They don't work in statistics.
Quote from: DGuller on December 01, 2015, 01:31:22 PM
Counter-examples work in algebra. They don't work in statistics.
Interesting. Care to explain?
Quote from: crazy canuck on December 01, 2015, 01:28:57 PM
I am not sure what you are arguing. That only the children of the elite in society can become very successful? If so, there are too many counter examples to bother listing here.
Children of elites have a disproportionate opportunity to be successful.
The reason is because as as education increasingly moves outside of traditional classroom settings, the children of elites have much better access to this informal system, which in part negates the work done to ensure improved access to traditional schooling across income groups.
Quote from: Jacob on December 01, 2015, 01:33:15 PM
Quote from: DGuller on December 01, 2015, 01:31:22 PM
Counter-examples work in algebra. They don't work in statistics.
Interesting. Care to explain?
What we're concerned with here is tendency, not ironclad certainty. Do people born into privilege start with an advantage? How strong? That's what we want to answer, and correct if we don't like the answer. There will always be outliers that either pissed away their family fortune, or pulled themselves by their bootstraps from grinding poverty to insane riches, but they don't by themselves say much about how egalitarian our society really is.
Quote from: alfred russel on December 01, 2015, 01:24:23 PM
Quote from: crazy canuck on December 01, 2015, 01:13:17 PM
Since I am a direct beneficiary of social mobility through education I have to say I don't agree that only educating the children of the elites is a particularly attractive model. ;)
Of course not. I'm a beneficiary of that as well, and paid for college with scholarships and student loans.
Neither of us are really reaching the super elite status though.
I have been working for about 10 years. When I look at what the CEO of my company was doing with my experience level, I am way behind, even if most people would say I'm doing well. The CEO's father would qualify as elite, and while it doesn't say in his official biography, it isn't hard to imagine his early opportunities were partially opened by his father.
The problem these days - and not talking only about the super-elite here - is that education is increasingly a necessary - but not sufficient - criterion for success.
Quote from: DGuller on December 01, 2015, 01:39:52 PM
What we're concerned with here is tendency, not ironclad certainty. Do people born into privilege start with an advantage? How strong? That's what we want to answer, and correct if we don't like the answer. There will always be outliers that either pissed away their family fortune, or pulled themselves by their bootstraps from grinding poverty to insane riches, but they don't by themselves say much about how egalitarian our society really is.
Ah, I see. Yeah, that makes sense - though I don't think either of Alfred Russel nor CC were framing the question in that way, so I'm not sure whether that's what they want to answer. It seemed more like an exchange of anecdotes and opinions than an attempt at answering a statistical question.
Quote from: Malthus on December 01, 2015, 01:49:21 PM
Quote from: alfred russel on December 01, 2015, 01:24:23 PM
Quote from: crazy canuck on December 01, 2015, 01:13:17 PM
Since I am a direct beneficiary of social mobility through education I have to say I don't agree that only educating the children of the elites is a particularly attractive model. ;)
Of course not. I'm a beneficiary of that as well, and paid for college with scholarships and student loans.
Neither of us are really reaching the super elite status though.
I have been working for about 10 years. When I look at what the CEO of my company was doing with my experience level, I am way behind, even if most people would say I'm doing well. The CEO's father would qualify as elite, and while it doesn't say in his official biography, it isn't hard to imagine his early opportunities were partially opened by his father.
The problem these days - and not talking only about the super-elite here - is that education is increasingly a necessary - but not sufficient - criterion for success.
Exactly the point.
Quote from: alfred russel on December 01, 2015, 01:39:34 PM
Quote from: crazy canuck on December 01, 2015, 01:28:57 PM
I am not sure what you are arguing. That only the children of the elite in society can become very successful? If so, there are too many counter examples to bother listing here.
Children of elites have a disproportionate opportunity to be successful.
The reason is because as as education increasingly moves outside of traditional classroom settings, the children of elites have much better access to this informal system, which in part negates the work done to ensure improved access to traditional schooling across income groups.
I am not sure what your evidence is for that assertion. I am certainly proof of someone who is an exception to that assertion. And I know a number of people you would likely consider to be elites who started in similar circumstances to mine. I just don't buy your argument that social mobility has little utility. Rather I consider it to be one of the most important aspects of modern society.
Quote from: crazy canuck on December 01, 2015, 02:05:52 PM
I just don't buy your argument that social mobility has little utility. Rather I consider it to be one of the most important aspects of modern society.
You have completely misunderstood everything I've been saying if that is your takeaway. That is definitely not my argument.
FWIW, you agreed with Malthus, and I would as well, only I'm trying to expand on what is needed in addition to education, given that it is no longer a sufficient "criterion for success."
What I am arguing, is that what is needed in addition to education is something the elite have disproportionate access to.
Quote from: crazy canuck on December 01, 2015, 02:05:52 PM
I just don't buy your argument that social mobility has little utility. Rather I consider it to be one of the most important aspects of modern society.
I don't think he's arguing that it has little utility, but that we don't have as much of it as we like to think. :hmm:
Quote from: alfred russel on December 01, 2015, 02:10:51 PM
Quote from: crazy canuck on December 01, 2015, 02:05:52 PM
I just don't buy your argument that social mobility has little utility. Rather I consider it to be one of the most important aspects of modern society.
You have completely misunderstood everything I've been saying if that is your takeaway. That is definitely not my argument.
FWIW, you agreed with Malthus, and I would as well, only I'm trying to expand on what is needed in addition to education, given that it is no longer a sufficient "criterion for success."
What I am arguing, is that what is needed in addition to education is something the elite have disproportionate access to.
Ok, I guess I have misunderstood your point. From my vantage point the children of elites have the advantage of going to the best schools where they in turn make the connections that will most assist. If the children of non elites also get access to the best schools then the significant advantages you say exist become mitigated to a considerable extent. Sure there is still going to be a certain amount of cronyism but that is more the exception than the rule. When the stakes are high people, even the elites, want the best people - not someone who's main credential is that they are the child of another elite. You seem to think of it like the Roman divide between the Patricians and Plebs. Perhaps it really has gotten that bad in the US, but I doubt it. Or at the very least Western democracies should do what they can to avoid or fix that problem. Which is really my point.
Quote from: DGuller on December 01, 2015, 12:47:09 PM
Quote from: Tamas on December 01, 2015, 12:35:03 PM
eg. if you want to super-tax high-end cash bonuses to move the corporations toward investing in assets and such, then they will just, for example, buy a house and give it to the manager they want to reward. If you tax that they will move on to expensive jewelry etc. Or just buy something from the manager at a ridicoulously high price.
That shit may work in Eastern Europe or former USSR, but in countries with entrenched rule of law, all of that would be illegal.
:lol:
Cute
Quote from: crazy canuck on December 01, 2015, 02:16:54 PM
Ok, I guess I have misunderstood your point. From my vantage point the children of elite's have the advantage of going to the best schools where they in turn make the connections that will most assist. If the children of non elites also get access to the best schools then the significant advantages you say exist become mitigated to a considerable extent. Sure there is still going to be a certain amount of cronyism but that is more the exception than the rule. When the stakes are high people, even the elites, want the best people - not someone who's main credential is that they are the child of another elite. You seem to think of it like the Roman divide between the Patricians and Plebs. Perhaps it really has gotten that bad in the US, but I doubt it. Or at the very least Western democracies should do what they can to avoid or fix that problem. Which is really my point.
I definitely don't see a Patricians vs. Plebes divide.
I look at it as a variety of factors:
-informal education: there is a big advantage for children of educated parents, who tend to be better off, versus uneducated parents. After all, most learning is outside the classroom.
-structured learning outside of classrooms: better off parents have the ability to hire tutors to help kids falling behind, or to accelerate them ahead of their peers.
-formal education: I think that while better off children have more opportunities to attend better schools, the gap is closing. Elite ivy league schools are increasingly free to poor students, public colleges in the US are improving, and student loans enable access to good colleges for almost everyone with a solid record.
-networking and career planning: This is a huge advantage for kids from better backgrounds. It isn't enough to just go to college, but uneducated parents likely don't realize what is needed. Kids don't get the guidance to enter the right majors, or how to find employers on campus. Kids from better backgrounds also have better experience and access to advice on how to behave and what to wear in professional settings.
-career placement: everything from outright nepotism to using parental resources to help fund a startup.
Quote from: Tamas on December 01, 2015, 02:23:28 PM
Quote from: DGuller on December 01, 2015, 12:47:09 PM
Quote from: Tamas on December 01, 2015, 12:35:03 PM
eg. if you want to super-tax high-end cash bonuses to move the corporations toward investing in assets and such, then they will just, for example, buy a house and give it to the manager they want to reward. If you tax that they will move on to expensive jewelry etc. Or just buy something from the manager at a ridicoulously high price.
That shit may work in Eastern Europe or former USSR, but in countries with entrenched rule of law, all of that would be illegal.
:lol:
Cute
:huh:
Quote from: alfred russel on December 01, 2015, 02:29:36 PM
Quote from: crazy canuck on December 01, 2015, 02:16:54 PM
Ok, I guess I have misunderstood your point. From my vantage point the children of elite's have the advantage of going to the best schools where they in turn make the connections that will most assist. If the children of non elites also get access to the best schools then the significant advantages you say exist become mitigated to a considerable extent. Sure there is still going to be a certain amount of cronyism but that is more the exception than the rule. When the stakes are high people, even the elites, want the best people - not someone who's main credential is that they are the child of another elite. You seem to think of it like the Roman divide between the Patricians and Plebs. Perhaps it really has gotten that bad in the US, but I doubt it. Or at the very least Western democracies should do what they can to avoid or fix that problem. Which is really my point.
I definitely don't see a Patricians vs. Plebes divide.
I look at it as a variety of factors:
-informal education: there is a big advantage for children of educated parents, who tend to be better off, versus uneducated parents. After all, most learning is outside the classroom.
-structured learning outside of classrooms: better off parents have the ability to hire tutors to help kids falling behind, or to accelerate them ahead of their peers.
-formal education: I think that while better off children have more opportunities to attend better schools, the gap is closing. Elite ivy league schools are increasingly free to poor students, public colleges in the US are improving, and student loans enable access to good colleges for almost everyone with a solid record.
-networking and career planning: This is a huge advantage for kids from better backgrounds. It isn't enough to just go to college, but uneducated parents likely don't realize what is needed. Kids don't get the guidance to enter the right majors, or how to find employers on campus. Kids from better backgrounds also have better experience and access to advice on how to behave and what to wear in professional settings.
-career placement: everything from outright nepotism to using parental resources to help fund a startup.
You are making assertions that do not match my experience.
informal education - All children get informal education. I would actually argue that mine was better than many pampered elites because when I did have the opportunity to go to university I worked harder than many of my peers.
structured learning - I didn't have tutors to be sure - but I finished in the top of my class so I am not sure it mattered as much as you think
network and career planning - Now you sound like Ide - pray tell, what is the "right" major to take and what makes you think that the children of elites disproportionately take that course of study? In my experience the children of elites disproportionately take the easier courses of study. And your what to wear advice is really something. Because my dad never wore a suit, I couldn't figure out what to wear?
Career placement - If you are correct then the US really is lost. But I doubt it is as bad as you suggest.
Quote from: crazy canuck on December 01, 2015, 02:44:27 PM
But I doubt it is as bad as you suggest.
It isn't a case of any single item being decisive. It is a question on each factor: over the general population, which groups have the advantage? When you start to combine those advantages, the result is that while social mobility is not zero, it is reduced. Which is what we see.
Quote from: Jacob on December 01, 2015, 01:59:02 PM
Quote from: DGuller on December 01, 2015, 01:39:52 PM
What we're concerned with here is tendency, not ironclad certainty. Do people born into privilege start with an advantage? How strong? That's what we want to answer, and correct if we don't like the answer. There will always be outliers that either pissed away their family fortune, or pulled themselves by their bootstraps from grinding poverty to insane riches, but they don't by themselves say much about how egalitarian our society really is.
Ah, I see. Yeah, that makes sense - though I don't think either of Alfred Russel nor CC were framing the question in that way, so I'm not sure whether that's what they want to answer. It seemed more like an exchange of anecdotes and opinions than an attempt at answering a statistical question.
It's fine to exchange anecdotes, as long as you realize their limitations in discussions like this. FWIW, I think AR does and CC does not.
Family-friendly anecdotes?
Quote from: Siege on December 01, 2015, 01:27:41 PM
Free market capitalism. That's all we need.
But you've never participated in it, having lived your entire professional life having all your needs taken care of by government spending.
Quote from: alfred russel on December 01, 2015, 02:56:41 PM
Quote from: crazy canuck on December 01, 2015, 02:44:27 PM
But I doubt it is as bad as you suggest.
It isn't a case of any single item being decisive. It is a question on each factor: over the general population, which groups have the advantage? When you start to combine those advantages, the result is that while social mobility is not zero, it is reduced. Which is what we see.
...but skipped all the extra curriculars and job search stuff early on. When it came time to find a job, he couldn't overcome those problems. He never did interview prep. My guess would be that had his parents been lawyers, they would have helped him see the importance of those minor things that make all the difference when seeking employment out of law school.
I am not going to comment on what Ide did or didn't do because that is backroom material and should not be discussed here. But again your assumptions do not accord with my experience. I didn't need my parents to tell me that I should take part fully at law school, make contacts there and essentially take advantage of the whole experience. Neither did my parents or anyone else need to tell me to prepare for interviews. Poor people are not stupid. They are just poor.
Quote from: DGuller on December 01, 2015, 03:03:19 PM
FWIW, I think AR does and CC does not.
:huh:
Got any stats to back that up?
Quote from: crazy canuck on December 01, 2015, 06:10:44 PM
Poor people are not stupid. They are just poor.
I think there is something to be said regarding expectations from life. When I look at my mostly poor extended family, I don't see stupid people, but I do see many who didn't expect to amount to much / for life to give them much more beyond what they were familiar with and knew. Striving for an upper middle class existence was only natural for me, but not so with my cousins of poorer backgrounds.
Quote from: crazy canuck on December 01, 2015, 06:10:44 PM
I am not going to comment on what Ide did or didn't do because that is backroom material and should not be discussed here. But again your assumptions do not accord with my experience. I didn't need my parents to tell me that I should take part fully at law school, make contacts there and essentially take advantage of the whole experience. Neither did my parents or anyone else need to tell me to prepare for interviews. Poor people are not stupid. They are just poor.
I edited out the stuff in my post about Ide in the event it was backroom material--I don't think it was exclusively so--I didn't have BR access back at the relevant time period--and also have spoken with him in person. But to be safe can you delete the stuff I wrote out of your post?
I agree there are many people--you apparently being one--that can figure out certain tasks improve their odds and complete them without being told. There are others that need encouragement. It seems likely to me that a group more prone to receive encouragement and sound advice will be more successful than a group that doesn't.
Quote from: garbon on December 01, 2015, 06:17:32 PM
Quote from: crazy canuck on December 01, 2015, 06:10:44 PM
Poor people are not stupid. They are just poor.
I think there is something to be said regarding expectations from life. When I look at my mostly poor extended family, I don't see stupid people, but I do see many who didn't expect to amount to much / for life to give them much more beyond what they were familiar with and knew. Striving for an upper middle class existence was only natural for me, but not so with my cousins of poorer backgrounds.
Yeah, I agree with that entirely. Once I started university my whole world view changed and expanded dramatically. I would never have gone to university without being asked to attend by my university coach. It was certainly not something I ever aspired to do. That is why I agree with Picketty that education is the key. If kids of the poor can be educated to think about university as a viable option and if it is in fact a viable option economically then a large hurdle in social mobility will be overcome.
Is simply striving to achieve something greater than that which you know so alien? The concept that a person must be institutionalized in order to be educated has always struck me as wrong. Education is a thing that a person does to him or herself. It's not a process of feeding skills to someone. Like the verb to grow. A person grows. An economy grows. You don't grow it.
The process of growing plants or crops is one of providing and maintaining a suitable environment and allowing the growth to occur. This is how I think of education too. I am more and more educated each day of my life than I was the day before. I have a great big fire hose of knowledge coming down that internet pipe into my face and I use it. A university might be the best environment or it might not be. Many people are brilliant but don't do well in an institutionalized setting. Some get addicted to that kind of thing as well. Like criminals who re-commit crimes because they are more comfortable in a prison environment. It's predictable and it's what they know.
But the process of reaching beyond the known and comfortable is something that to some degree may simply be down to personality. And it may be that the people whose known and comfortable environment is one which generally reproduces a good lifestyle simply benefit from that, but there has to be some way to encourage the risk-taking mentality that is what really creates the jumps from one paradigm to the next. Maybe Ide was going to be successful even without the prior knowledge that living in a lawyer family might have afforded him simply because he was willing to risk it.
Quote from: MadImmortalMan on December 01, 2015, 07:39:55 PM
Is simply striving to achieve something greater than that which you know so alien? The concept that a person must be institutionalized in order to be educated has always struck me as wrong. Education is a thing that a person does to him or herself. It's not a process of feeding skills to someone. Like the verb to grow. A person grows. An economy grows. You don't grow it.
The process of growing plants or crops is one of providing and maintaining a suitable environment and allowing the growth to occur. This is how I think of education too. I am more and more educated each day of my life than I was the day before. I have a great big fire hose of knowledge coming down that internet pipe into my face and I use it. A university might be the best environment or it might not be. Many people are brilliant but don't do well in an institutionalized setting. Some get addicted to that kind of thing as well. Like criminals who re-commit crimes because they are more comfortable in a prison environment. It's predictable and it's what they know.
But the process of reaching beyond the known and comfortable is something that to some degree may simply be down to personality. And it may be that the people whose known and comfortable environment is one which generally reproduces a good lifestyle simply benefit from that, but there has to be some way to encourage the risk-taking mentality that is what really creates the jumps from one paradigm to the next. Maybe Ide was going to be successful even without the prior knowledge that living in a lawyer family might have afforded him simply because he was willing to risk it.
I agree it is not a process of feeding skills. And that is definitely not what a university should be - hence my ongoing disagreement with Ide about that point.
Its hard to explain but before I went to university the limit of my aspiration was getting on full time at one of the local mills. Most of my friends had the same aspiration. To us that was striving to achieve something greater because at the time we were all working odd jobs at a much lower wage. To get on at the mill was making it. University was not only about teaching me things. Its most important impact on me was being exposed to a whole world of other opportunities.
Yeah, I think the main thing is the combination of laying out the possibilities, as well as indicating where the roadmaps to them can be found. It seems absurd to those who are already aware of those possibilities that someone could not be, but to someone who is not it's basically a blind spot that they need some specific moment to make visible.
Personally I can recall two very distinct moments of "seeing a blind spot" like that in my own life like that. I mean, I come from a pretty decent academic/ bourgeois background but between immigrating - so changing systems and expectations - at a critical point, and a fairly low level of engagement in my education on the part of my stepfather (and to be fair to him, I don't know if I would have welcomed it) I missed some things that I think would be considered very basic by many.
Once, in art school, I was chatting to a girl. Her parents were both successful doctors, and could be considered rather wealthy. We were talking about this and that, and she mentioned how she was getting her stuff together to apply for a Masters program at Yale. Up until that point, I had never considered it either a possibility for someone in my sphere of life - or for me - to go to one of those schools and, more importantly, I had never even considered a reason for wanting to. That whole calculus of the benefits of going to an elite school, of considering it a possibility, of lining up the requirements, and of figuring out the benefits from doing so had never been one I'd engaged in. Not until I met someone in my daily life for whom there were real expectations and concrete real actions to be taken did that move from the realm of "things that happen on TV" to "things that are theoretically within reach."
Similarly with entrepreneurship and business. Not until I'd run into enough friends and acquaintances who'd done this sort of things themselves and offered enough off hand comments to create a sort of framework of a roadmap (and a resource for bouncing questions of off), did engaging in that sort of activity become even theoretically possible.
Those switches were both very specific "aha" moments that happened because of how life went for me. I think those "aha" moments could have happened earlier if there had been some focused educational effort to make them happen. I expect that situation is generalizable to other realizations of potential that some - many - people have to have before they pursue specific paths for success; while for others, those realizations were instilled into them as part of the environments in which they were raised.
Quote from: Jacob on December 01, 2015, 08:21:40 PM
Yeah, I think the main thing is the combination of laying out the possibilities, as well as indicating where the roadmaps to them can be found. It seems absurd to those who are already aware of those possibilities that someone could not be, but to someone who is not it's basically a blind spot that they need some specific moment to make visible.
Personally I can recall two very distinct moments of "seeing a blind spot" like that in my own life like that. I mean, I come from a pretty decent academic/ bourgeois background but between immigrating - so changing systems and expectations - at a critical point, and a fairly low level of engagement in my education on the part of my stepfather (and to be fair to him, I don't know if I would have welcomed it) I missed some things that I think would be considered very basic by many.
Once, in art school, I was chatting to a girl. Her parents were both successful doctors, and could be considered rather wealthy. We were talking about this and that, and she mentioned how she was getting her stuff together to apply for a Masters program at Yale. Up until that point, I had never considered it either a possibility for someone in my sphere of life - or for me - to go to one of those schools and, more importantly, I had never even considered a reason for wanting to. That whole calculus of the benefits of going to an elite school, of considering it a possibility, of lining up the requirements, and of figuring out the benefits from doing so had never been one I'd engaged in. Not until I met someone in my daily life for whom there were real expectations and concrete real actions to be taken did that move from the realm of "things that happen on TV" to "things that are theoretically within reach."
Similarly with entrepreneurship and business. Not until I'd run into enough friends and acquaintances who'd done this sort of things themselves and offered enough off hand comments to create a sort of framework of a roadmap (and a resource for bouncing questions of off), did engaging in that sort of activity become even theoretically possible.
Those switches were both very specific "aha" moments that happened because of how life went for me. I think those "aha" moments could have happened earlier if there had been some focused educational effort to make them happen. I expect that situation is generalizable to other realizations of potential that some - many - people have to have before they pursue specific paths for success; while for others, those realizations were instilled into them as part of the environments in which they were raised.
Good for you Jacob. :cheers:
Personally I miss that stuff all the time. :bowler:
Quote from: Jacob on December 01, 2015, 08:21:40 PM
Yeah, I think the main thing is the combination of laying out the possibilities, as well as indicating where the roadmaps to them can be found. It seems absurd to those who are already aware of those possibilities that someone could not be, but to someone who is not it's basically a blind spot that they need some specific moment to make visible.
Personally I can recall two very distinct moments of "seeing a blind spot" like that in my own life like that. I mean, I come from a pretty decent academic/ bourgeois background but between immigrating - so changing systems and expectations - at a critical point, and a fairly low level of engagement in my education on the part of my stepfather (and to be fair to him, I don't know if I would have welcomed it) I missed some things that I think would be considered very basic by many.
Once, in art school, I was chatting to a girl. Her parents were both successful doctors, and could be considered rather wealthy. We were talking about this and that, and she mentioned how she was getting her stuff together to apply for a Masters program at Yale. Up until that point, I had never considered it either a possibility for someone in my sphere of life - or for me - to go to one of those schools and, more importantly, I had never even considered a reason for wanting to. That whole calculus of the benefits of going to an elite school, of considering it a possibility, of lining up the requirements, and of figuring out the benefits from doing so had never been one I'd engaged in. Not until I met someone in my daily life for whom there were real expectations and concrete real actions to be taken did that move from the realm of "things that happen on TV" to "things that are theoretically within reach."
Similarly with entrepreneurship and business. Not until I'd run into enough friends and acquaintances who'd done this sort of things themselves and offered enough off hand comments to create a sort of framework of a roadmap (and a resource for bouncing questions of off), did engaging in that sort of activity become even theoretically possible.
Those switches were both very specific "aha" moments that happened because of how life went for me. I think those "aha" moments could have happened earlier if there had been some focused educational effort to make them happen. I expect that situation is generalizable to other realizations of potential that some - many - people have to have before they pursue specific paths for success; while for others, those realizations were instilled into them as part of the environments in which they were raised.
Great story Jake.
However...I am going to cut across the grain a little. While I do not disagree with any of what you are saying here, or even what CC is saying, I do think there is an element here of wishing for the world to work in a certain way, and assuming that it would, if only society could make it so...
In other words, it is certainly the case that there are people out there who can benefit from an educational system that does a good job of making it clear what opportunities are available, and even do a better job of communicating those opportunities outside the "typical" comfort zone for many people.
However, I do not think it is the case that doing so, if we could do so perfectly, would somehow mean that everyone would then achieve their potential. We should strive for this anyway, since the concern is that there are still people who could, but that is not the same as saying that this is a solution to the problem of poverty.
The simple reality is that there are people out there who are relatively poor because they lack drive, ambition, and/or intelligence. And no matter how well we adjust the system to make more opportunity available and visible, not everyone is going to take advantage.
Indeed, I think we can look at western liberal advancement as a continuing (hopefully) opening up of opportunity across social boundaries. In an ideal world, the lack of opportunity would simply not be a variable in the calculus of success. I think we are much closer to that now than ever before...but I don't think the end state is one where poverty has been eliminated (at least not for this reason). Because the simple, harsh reality is that there are people out there who are "poor" because they deserve to be, and simply do not care to work at being not poor.
QuoteIndeed, I think we can look at western liberal advancement as a continuing (hopefully) opening up of opportunity across social boundaries. In an ideal world, the lack of opportunity would simply not be a variable in the calculus of success. I think we are much closer to that now than ever before...but I don't think the end state is one where poverty has been eliminated (at least not for this reason). Because the simple, harsh reality is that there are people out there who are "poor" because they deserve to be, and simply do not care to work at being not poor.
I agree.
However, as you pointed out, it would be important to make sure that everyone who wants (AND able) to improve themselves are given a fair shot at it. We can't guarantee success, we sure as hell can't guarantee success without ever trying, but we can create an environment that offers the chance.
And we already do, probably better than ever before in history. But it is most certainly pretty far from perfect.
And that is BTW a large part behind my stance on pro free market - the current overload of regulation (in parts of Europe at least), really favours fortifying existing privileges and raising the barrier of entry into markets and self-reliance. Things like the insane regulation on taxi drivers in Paris are the most blatant examples but there could be plenty more made.
But that's a complex topic on its own.
Quote from: Tamas on December 02, 2015, 11:46:06 AM
I agree.
However, as you pointed out, it would be important to make sure that everyone who wants (AND able) to improve themselves are given a fair shot at it. We can't guarantee success, we sure as hell can't guarantee success without ever trying, but we can create an environment that offers the chance.
And we already do, probably better than ever before in history. But it is most certainly pretty far from perfect.
I think an important element of such environment is also creating a safety net for those who, despite not acting grossly unreasonably, do not achieve success. Would you agree?
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
Quote from: Tamas on December 02, 2015, 11:46:06 AM
QuoteIndeed, I think we can look at western liberal advancement as a continuing (hopefully) opening up of opportunity across social boundaries. In an ideal world, the lack of opportunity would simply not be a variable in the calculus of success. I think we are much closer to that now than ever before...but I don't think the end state is one where poverty has been eliminated (at least not for this reason). Because the simple, harsh reality is that there are people out there who are "poor" because they deserve to be, and simply do not care to work at being not poor.
I agree.
However, as you pointed out, it would be important to make sure that everyone who wants (AND able) to improve themselves are given a fair shot at it. We can't guarantee success, we sure as hell can't guarantee success without ever trying, but we can create an environment that offers the chance.
And we already do, probably better than ever before in history. But it is most certainly pretty far from perfect.
And that is BTW a large part behind my stance on pro free market - the current overload of regulation (in parts of Europe at least), really favours fortifying existing privileges and raising the barrier of entry into markets and self-reliance. Things like the insane regulation on taxi drivers in Paris are the most blatant examples but there could be plenty more made.
But that's a complex topic on its own.
I used to think that as well, but over time I've come to the conclusion that the free market is no panacea for equality of opportunity. Nor is there any objective reason it should be - there is nothing magical about the "free market" that is going to ensure equality of opportunity. It isn't even designed to provide that at all, in fact.
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
Well yeah that's the problem isn't it? I think we need to stop (or in case of US, never start) "help" that enables people to choose that help as a lifestyle choice.
Yes that is difficult because there will be people who will have no choice due to bad luck/utter stupidity, but the alternative is distorting your society for the worse.
eg. in the UK every time there is a proposed welfare cut, BBC finds a single mother who explains why that is bad. In general the country either really has a separate noticable demographic of "single moms" or at least pretend there is this big group of citizens.
This seems to be because if you are fine with having a very limited poor lot in life here, all you need to do is be a single mother. Or pretend to be one and have your significant other as a lodger or something.
And this would be extremely hard to solve now. There should not be tax pounds spent on financing somebody from 16 years old to the grave just because she is fine with never working and living in a dump.
But you can't just stop paying these welfare payments either, not now anyways, when so many have organised their existence around it.
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
No one is born stupid. Many people just degenerate mentally after birth.
Quote from: Berkut on December 02, 2015, 11:34:52 AM
However, I do not think it is the case that doing so, if we could do so perfectly, would somehow mean that everyone would then achieve their potential. We should strive for this anyway, since the concern is that there are still people who could, but that is not the same as saying that this is a solution to the problem of poverty.
The simple reality is that there are people out there who are relatively poor because they lack drive, ambition, and/or intelligence. And no matter how well we adjust the system to make more opportunity available and visible, not everyone is going to take advantage.
Indeed, I think we can look at western liberal advancement as a continuing (hopefully) opening up of opportunity across social boundaries. In an ideal world, the lack of opportunity would simply not be a variable in the calculus of success. I think we are much closer to that now than ever before...but I don't think the end state is one where poverty has been eliminated (at least not for this reason). Because the simple, harsh reality is that there are people out there who are "poor" because they deserve to be, and simply do not care to work at being not poor.
I agree, there is always going to be people who do not take advantage of opportunity as well as others. Those people populate all socio-economic levels of society. There are also people in all socio-economic levels who will pursue those opportunities. I think we are in agreement that it is important to do what we can to provide that opportunity as equitably as possible.
Quote from: Berkut on December 02, 2015, 11:34:52 AM
Great story Jake.
However...I am going to cut across the grain a little. While I do not disagree with any of what you are saying here, or even what CC is saying, I do think there is an element here of wishing for the world to work in a certain way, and assuming that it would, if only society could make it so...
In other words, it is certainly the case that there are people out there who can benefit from an educational system that does a good job of making it clear what opportunities are available, and even do a better job of communicating those opportunities outside the "typical" comfort zone for many people.
However, I do not think it is the case that doing so, if we could do so perfectly, would somehow mean that everyone would then achieve their potential. We should strive for this anyway, since the concern is that there are still people who could, but that is not the same as saying that this is a solution to the problem of poverty.
The simple reality is that there are people out there who are relatively poor because they lack drive, ambition, and/or intelligence. And no matter how well we adjust the system to make more opportunity available and visible, not everyone is going to take advantage.
Indeed, I think we can look at western liberal advancement as a continuing (hopefully) opening up of opportunity across social boundaries. In an ideal world, the lack of opportunity would simply not be a variable in the calculus of success. I think we are much closer to that now than ever before...but I don't think the end state is one where poverty has been eliminated (at least not for this reason). Because the simple, harsh reality is that there are people out there who are "poor" because they deserve to be, and simply do not care to work at being not poor.
Yeah, I'm not arguing that a specific educational approach will automatically solve the disparity in perception of potential across the board, in all cases. The point of the anecdote was merely that I personally agree that there are signficant differences in perception, skills, and networking based on background, and that those have a real impact on the direction of people's lives, individually and based on socio-economic groupings. I'd go so far as to hold that that's a basic factual description of reality, and however you may wish to approach that philosophically/ ideologically/ politically, you (general you) ought to take that fact into account whatever your approach is. There are inherent benefits that come from growing up in a stable family, with people who can provide contacts, examples, advice, guidance to succeed, with access to frameworks and roadmaps to success; and the fewer of those elements members of a particular socio-economic cohort has, the fewer of them will succeed (whatever metric we use for success).
Now, moving on to the philosophical approach, I personally don't think "deserve" is a particularly useful concept to be applying whether we're speaking of poor outcomes (so we don't have to feel bad about them) or services (so we must provide X, because everyone deserves that). I take it as a given that increasing the frequency of good outcome is desirable (though some may disagree on political grounds, which is legitimate); I take it as a given that one of the obstacles the people from less advantaged backgrounds have is the lack of frameworks to easily apply (which I think is a description of facts). What remains, IMO is to prioritize the amount of resources dedicated to alleviating that (a political question), and continual attention to improvements in outcomes from specific programs to use the resources the best possible way (partially a fact based issue in determining what works and what doesn't, and partially a political question in terms of valuing some outcome over another).
One point to make about the "bad outcomes" is that in a modern democratic state these people can be very expensive to support. In the UK the ("evil tory") government identified 120k "troubled" families that were costing the state £75k per annum :
https://www.gov.uk/government/news/troubled-families-programme-turning-117000-lives-around
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
Yes.
Quote from: Martinus on December 02, 2015, 02:07:42 PM
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
Yes.
:yes:
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
I think the answer to that is dependent on how much safety net can be afforded. As there is more resources available, it makes sense to extend that safety net to more and more people who might need it for various reasons. That extension should, IMO, be driven by the realization that for many people, their "drive" is dependent on necessity, and hence it makes sense to maintain that pressure when contrasted with reasons for potential need that are not related to that a lack of drive.
Quote from: crazy canuck on December 02, 2015, 12:22:42 PM
Quote from: Berkut on December 02, 2015, 11:34:52 AM
However, I do not think it is the case that doing so, if we could do so perfectly, would somehow mean that everyone would then achieve their potential. We should strive for this anyway, since the concern is that there are still people who could, but that is not the same as saying that this is a solution to the problem of poverty.
The simple reality is that there are people out there who are relatively poor because they lack drive, ambition, and/or intelligence. And no matter how well we adjust the system to make more opportunity available and visible, not everyone is going to take advantage.
Indeed, I think we can look at western liberal advancement as a continuing (hopefully) opening up of opportunity across social boundaries. In an ideal world, the lack of opportunity would simply not be a variable in the calculus of success. I think we are much closer to that now than ever before...but I don't think the end state is one where poverty has been eliminated (at least not for this reason). Because the simple, harsh reality is that there are people out there who are "poor" because they deserve to be, and simply do not care to work at being not poor.
I agree, there is always going to be people who do not take advantage of opportunity as well as others. Those people populate all socio-economic levels of society. There are also people in all socio-economic levels who will pursue those opportunities. I think we are in agreement that it is important to do what we can to provide that opportunity as equitably as possible.
Yep, we are certainly in agreement.
One thing that is very annoying, but of course there is little we can do about it, are people without drive who are convinced that their success is about their awesomeness anyway. Those people who happen to be born into wealth from the beginning, and think their lifestyle is based on their own efforts.
As someone once remarked, it is like someone being born on third base thinking they hit a home run.
However, one thing I do think we should all realize is that simply by being lucky enough to be born in the wealthy west, we have all, in a relative sense to other humans, been born on third base.
Quote from: Jacob on December 02, 2015, 12:50:51 PM
There are inherent benefits that come from growing up in a stable family, with people who can provide contacts, examples, advice, guidance to succeed, with access to frameworks and roadmaps to success; and the fewer of those elements members of a particular socio-economic cohort has, the fewer of them will succeed (whatever metric we use for success).
Indeed. As someone who comes from a *relatively* terrible background, but not so terrible that I could not see the difference (and react accordingly), I am acutely aware of how critical those somewhat intangible resources are - and as I said in my reply to CC, I think you can extend this beyond our own cultural/societal framework to humanity in general. When you do that, you can't help but notice how huge an advantage we have because we are in cultures that have even more basic intangible resources, like stable governments, respect for the rule of law, basic economic security, etc., etc.
Quote from: Berkut on December 02, 2015, 02:43:09 PM
One thing that is very annoying, but of course there is little we can do about it, are people without drive who are convinced that their success is about their awesomeness anyway. Those people who happen to be born into wealth from the beginning, and think their lifestyle is based on their own efforts.
*cough* inheritance tax *cough*
Quote from: Berkut on December 02, 2015, 02:40:11 PM
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
I think the answer to that is dependent on how much safety net can be afforded. As there is more resources available, it makes sense to extend that safety net to more and more people who might need it for various reasons. That extension should, IMO, be driven by the realization that for many people, their "drive" is dependent on necessity, and hence it makes sense to maintain that pressure when contrasted with reasons for potential need that are not related to that a lack of drive.
I'm not fussed so much about the inevitable free riders any safety net will attract. I agree that the greater problem is the impact a safety net has on motivations generally. The issue is how much that should be weighed against the harms caused by too stringent a screening for the safety net.
The problem is that much of what causes people to not become purely opportunistic free riders is intangibles like "pride" and "having one's self-worth measured by supporting oneself". We still lack much insight into what causes some people to think that way, and not others. The impact though is fundamental - if people lack that sense, it seems to me, no amount of social help can 'save' them - if you provide a safety net they will take full advantage, and of you don't, they tend to turn to sponging off relations, petty frauds and crime.
Conservatives of course tend to locate that sense in having good old conservative values, while Liberals tend to deny its importance, or claim lacking that sense is the result of historical traumas beyond the individual's control ...
I have never seen a country where the welfare safety net was sufficiently enticing I would consider abandoning my work for that kind of lifestyle - so I am not too concerned with the "motivations" argument...
Quote from: Martinus on December 02, 2015, 02:56:50 PM
I have never seen a country where the welfare safety net was sufficiently enticing I would consider abandoning my work for that kind of lifestyle - so I am not too concerned with the "motivations" argument...
I suspect that is because you were raised to become accustomed to a life style that would not be possible if you lived off the safety net. I can tell you from anecdotal experience that there are seasonal workers who think it works fairly well for them - ie work just long enough to qualify for unemployment benefits and then spend the rest of the year on those benefits.
Quote from: Martinus on December 02, 2015, 02:56:50 PM
I have never seen a country where the welfare safety net was sufficiently enticing I would consider abandoning my work for that kind of lifestyle - so I am not too concerned with the "motivations" argument...
No safety net can provide you the lifestyle of a gay Polish lawyer. Some of them could compete with actual employment on providing you the lifestyle of an unskilled laborer, however.
Quote from: Martinus on December 02, 2015, 02:56:50 PM
I have never seen a country where the welfare safety net was sufficiently enticing I would consider abandoning my work for that kind of lifestyle - so I am not too concerned with the "motivations" argument...
That is just the kind of anecdotal response that isn't very useful though. You are an individual, and we know that you are very driven - you don't become a fake internet lawyer otherwise! :P
Quote from: Martinus on December 02, 2015, 02:56:50 PM
I have never seen a country where the welfare safety net was sufficiently enticing I would consider abandoning my work for that kind of lifestyle - so I am not too concerned with the "motivations" argument...
It would have to be some net, to substitute for a lawyer's income. ;)
Quote from: The Brain on December 02, 2015, 12:11:19 PM
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
No one is born stupid. Many people just degenerate mentally after birth.
That's not true at all. There are tons of people who just don't get it.
That's a lesson I learned when I was 12 or so. One of my school friends was a really hard-working student, who would diligently study several hours every day. Yet he struggled in most subjects. It was a puzzling realization for me, since I aced most classes effortlessly.
Quote from: Iormlund on December 02, 2015, 03:17:40 PM
Quote from: The Brain on December 02, 2015, 12:11:19 PM
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
No one is born stupid. Many people just degenerate mentally after birth.
That's not true at all. There are tons of people who just don't get it.
That's a lesson I learned when I was 12 or so. One of my school friends was a really hard-working student, who would diligently study several hours every day. Yet he struggled in most subjects. It was a puzzling realization for me, since I aced most classes effortlessly.
I don't know how to respond to this.
Quote from: DGuller on December 02, 2015, 03:05:42 PM
Quote from: Martinus on December 02, 2015, 02:56:50 PM
I have never seen a country where the welfare safety net was sufficiently enticing I would consider abandoning my work for that kind of lifestyle - so I am not too concerned with the "motivations" argument...
No safety net can provide you the lifestyle of a gay Polish lawyer. Some of them could compete with actual employment on providing you the lifestyle of an unskilled laborer, however.
So as unskilled laborers quit to live off the dole, the value of unskilled labor goes up. Eventually robots are gonna take most of those jobs anyway.
Quote from: Peter Wiggin on December 02, 2015, 03:28:03 PM
So as unskilled laborers quit to live off the dole, the value of unskilled labor goes up.
Nope, the jobs will go to undocumented illegals, because no native wants to do them.
Quote from: DGuller on December 02, 2015, 03:35:24 PM
Quote from: Peter Wiggin on December 02, 2015, 03:28:03 PM
So as unskilled laborers quit to live off the dole, the value of unskilled labor goes up.
Nope, the jobs will go to undocumented illegals, because no native wants to do them.
Well, assuming there are enforced immigration laws, the value of unskilled labor goes up.
Quote from: Iormlund on December 02, 2015, 03:17:40 PM
Quote from: The Brain on December 02, 2015, 12:11:19 PM
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
No one is born stupid. Many people just degenerate mentally after birth.
That's not true at all. There are tons of people who just don't get it.
That's a lesson I learned when I was 12 or so. One of my school friends was a really hard-working student, who would diligently study several hours every day. Yet he struggled in most subjects. It was a puzzling realization for me, since I aced most classes effortlessly.
That hard working guy will likely do well though. The desire, ability, and willingness to simply work hard is, IMO, more valuable than intelligence. Smart lazy people are often worse than useless.
Quote from: Peter Wiggin on December 02, 2015, 03:36:42 PM
Quote from: DGuller on December 02, 2015, 03:35:24 PM
Quote from: Peter Wiggin on December 02, 2015, 03:28:03 PM
So as unskilled laborers quit to live off the dole, the value of unskilled labor goes up.
Nope, the jobs will go to undocumented illegals, because no native wants to do them.
Well, assuming there are enforced immigration laws, the value of unskilled labor goes up.
No because legal immigrants who are either not eligible for the welfare or just happy to earn that money step in to do it.
Quote from: DGuller on December 02, 2015, 03:35:24 PM
Quote from: Peter Wiggin on December 02, 2015, 03:28:03 PM
So as unskilled laborers quit to live off the dole, the value of unskilled labor goes up.
Nope, the jobs will go to undocumented illegals, because no native wants to do them.
Yeah. That's how Donald Trump got his wives.
Quote from: Berkut on December 02, 2015, 03:38:29 PM
Quote from: Iormlund on December 02, 2015, 03:17:40 PM
Quote from: The Brain on December 02, 2015, 12:11:19 PM
Quote from: DGuller on December 02, 2015, 11:53:11 AM
It seems like at some point you have to make a value judgment on everything that can make you poor. Should the safety net protect you if you had the bad luck of having a serious and permanent disability? Should the safety net protect you if you had the bad luck of losing your job? Should it protect you if you had the bad luck of being born stupid? Should it protect you if you had the bad luck of being born without a drive?
No one is born stupid. Many people just degenerate mentally after birth.
That's not true at all. There are tons of people who just don't get it.
That's a lesson I learned when I was 12 or so. One of my school friends was a really hard-working student, who would diligently study several hours every day. Yet he struggled in most subjects. It was a puzzling realization for me, since I aced most classes effortlessly.
That hard working guy will likely do well though. The desire, ability, and willingness to simply work hard is, IMO, more valuable than intelligence. Smart lazy people are often worse than useless.
Fuck you too.
Quote from: Berkut on December 02, 2015, 03:38:29 PM
That hard working guy will likely do well though. The desire, ability, and willingness to simply work hard is, IMO, more valuable than intelligence. Smart lazy people are often worse than useless.
Depends on the job, I would say.
QuoteThose who are clever and industrious I appoint to the General Staff. Use can under certain circumstances be made of those who are stupid and lazy. The man who is clever and lazy qualifies for the highest leadership posts. He has the requisite nerves and the mental clarity for difficult decisions. But whoever is stupid and industrious must be got rid of, for he is too dangerous."
Quote from: Berkut on December 02, 2015, 11:34:52 AMI do think there is an element here of wishing for the world to work in a certain way, and assuming that it would, if only society could make it so...
I think shedding this is one of the fundamental hallmarks of maturity. You see it all the time in teenagers who want to fix society to make it more conducive to what they believe will make them successful. Or if you read Paradox OT for five minutes. The first instinct is always to blame society. Only after you get rid of that and start to look at improving yourself can you make any progress. That kind of thinking can actually hold incredibly intelligent people back from achieving what they could otherwise accomplish. And of course the first instinct is to blame society again. Rinse, repeat.
Quote from: MadImmortalMan on December 02, 2015, 04:52:49 PM
Quote from: Berkut on December 02, 2015, 11:34:52 AMI do think there is an element here of wishing for the world to work in a certain way, and assuming that it would, if only society could make it so...
I think shedding this is one of the fundamental hallmarks of maturity. You see it all the time in teenagers who want to fix society to make it more conducive to what they believe will make them successful. Or if you read Paradox OT for five minutes. The first instinct is always to blame society. Only after you get rid of that and start to look at improving yourself can you make any progress. That kind of thinking can actually hold incredibly intelligent people back from achieving what they could otherwise accomplish. And of course the first instinct is to blame society again. Rinse, repeat.
https://www.youtube.com/watch?v=MKIaS0lh-uo
;)
Quote from: Martinus on December 02, 2015, 02:56:50 PM
I have never seen a country where the welfare safety net was sufficiently enticing I would consider abandoning my work for that kind of lifestyle - so I am not too concerned with the "motivations" argument...
Oh, i have seen plenty of people with low expectations.
They value their free time over the freedom provided by money. I really cannot understand them, but they are there, cashing their welfare checks paid for with my taxes.
Quote from: Siege on December 03, 2015, 04:29:54 PM
Quote from: Martinus on December 02, 2015, 02:56:50 PM
I have never seen a country where the welfare safety net was sufficiently enticing I would consider abandoning my work for that kind of lifestyle - so I am not too concerned with the "motivations" argument...
Oh, i have seen plenty of people with low expectations.
They value their free time over the freedom provided by money. I really cannot understand them, but they are there, cashing their welfare checks paid for with my taxes.
Not my taxes though. My taxes are all going to make up for the $10 million dollars Willie Nelson didn't pay back in 1990. It is a good cause.