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The rich are hoarding economic growth

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Re: The rich are hoarding economic growth

#111

Post by closeparen »

lordCarbonFiber wrote: post #103
closeparen wrote: post #81

Earlier quoted context omitted.

"Capable" isn't a binary, lifelong condition. The remedy for incapability is generally considered to be education.

The dirty secret is that there's a whole class of jobs, mostly decently paying white collar jobs, that have most of the training on the job. Hell most of the jobs that only require an undergraduate degree involve extensive on the job training; college is used as a weak signal for aptitude, interest, and class not really capability (this is the entire business model around coding boot-camps).

I got about 3 days of on-the-job training, pitched at showing generally skilled programmers the company's specific tools, practices, and environment. The rest was just being thrown into the normal day-to-day work, with the expectation that I'd ask more questions and make slower progress at first.

You can't just throw a laid-off factory worker into that position, though I agree, you can probable prepare him to handle it more efficiently than a 4-year BS degree program, which is what bootcamps are looking to capitalize on.

It matters a great deal to the employee to have been put in a situation like that before (homework & hobby projects) and developed a decent intuition & familiarity. It matters a great deal to the employer to know that that the candidate has done something like this before and will be substantially likely to succeed. There's a little more going on here than class signaling.

Re: The rich are hoarding economic growth

#112

Post by WalterBright »

chrisgd wrote: post #107
WalterBright wrote: post #98

Earlier quoted context omitted.

> would be unleashed That's the theory that the rich hoard their money in Scrooge McDuck cash vaults, keeping it out of the economy. That's false - all of it is in the economy, via investments. Even money kept in a checking account is invested in the economy (banks loan out that money). The only cash kept in cash vaults is the reserve that the government requires banks to keep to provide a buffer against runs on the…

Loans create deposits. Banks are not constrained to make loans based on how much is on deposit.

> Loans create deposits

Initially, yes. But people borrow money in order to spend it, not leave it on deposit.

> not constrained

That's right, just as airlines are not constrained to keep their airplanes flying payloads. But if they don't, they are not making money.

Every time you step in a bank, they try to sell you a loan for a reason.

Re: The rich are hoarding economic growth

#113

Post by JamesBarney »

cs702 wrote: post #25

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in the US over the past three decades has indeed gone to the top 1%, and particularly to the top 0.01%, leaving everyone else behind.[1] Here's the money shot: https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Sc... However, rather than debate the causes o…

The cause matters because it tells us what the workable solutions are.

For instance say a company's CEO was the only person who got a raise for 30 years.

One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated.

The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up budget to write himself large bonuses.

Obviously these two situations aren't going to be solved by the same solution.

Re: The rich are hoarding economic growth

#114

Post by JamesBarney »

cs702 wrote: post #25

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in the US over the past three decades has indeed gone to the top 1%, and particularly to the top 0.01%, leaving everyone else behind.[1] Here's the money shot: https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Sc... However, rather than debate the causes o…

The cause matters because it tells us what the workable solution are.

For instance say a company's CEO was the only person who got a raise for 30 years.

One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated.

The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up budget to write himself large bonuses.

Obviously these two situations aren't going to be solved by the same solution.

Re: The rich are hoarding economic growth

#115

Post by JamesBarney »

cs702 wrote: post #25

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in the US over the past three decades has indeed gone to the top 1%, and particularly to the top 0.01%, leaving everyone else behind.[1] Here's the money shot: https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Sc... However, rather than debate the causes o…

The cause matters because it tells us what the workable solution are.

For instance say a company's CEO was the only person who got a raise for 30 years.

One possibility is the CEO was a real go getter who kept getting better and more valuable at his job and while everyone else stagnated.

The other possibility is that the CEO locked all of his employees into non-competes, keeping their salaries low, and freeing up budget to write himself large bonuses.

Obviously these two situations aren't going to be solved by the same solution.

Re: The rich are hoarding economic growth

#116

Post by mdorazio »

taneq wrote: post #47
mdorazio wrote: post #15

Earlier quoted context omitted.

While I agree in principle, the counter-argument is that you're just going to end up with that job going overseas or getting automated. Basically, if you need something done and it's only worth $10/hour to you to have it done, but no one near you will do it for less than $15/hour, either 1) it won't get done and that $10/hour economic input is lost, or 2) you'll find a way to get it done for $10/hour or less via mean…

Actually you get 3) the cost of the output of that process goes up, leading to a small price rise to the end user.

I think this is only true in a closed system. In an open, globalized world like we have today, the price of the output doesn't have to go up if another place with cheaper labor can produce the same output for cheaper. Thus is many cases you end up with a situation where you can't raise the price of your output because your customers will just buy the foreign-produced version.

Re: The rich are hoarding economic growth

#117

Post by kamaal »

tmnvix wrote: post #77
cs702 wrote: post #25

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in the US over the past three decades has indeed gone to the top 1%, and particularly to the top 0.01%, leaving everyone else behind.[1] Here's the money shot: https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Sc... However, rather than debate the causes o…

We should be taxing productive activity less and income earned through simply owning things more. The balance has moved too far in the opposite direction.

This is true if both are unrelated.

If you tax owning things a lot, then you tell people that there is no point being very productive as savings throughs higher income go all into taxes. Then people don't have much incentive to be productive.

Most of these ideas have been tried before and you eventually arrive to picking up lesser of many evils kind of situation.

Re: The rich are hoarding economic growth

#118

Post by zaptheimpaler »

WalterBright wrote: post #102
zaptheimpaler wrote: post #70

Earlier quoted context omitted.

Because the rich are getting richer, and hoarded money is useless to the rest of society. Regardless of why they get richer, the economy exists to serve society. Large amounts of money lying in investments hoping to outpace inflation is not useful to society - there are practical limits on how much money can be invested usefully at all, determined by how many capital intensive tasks businesses take on as a whole. Per…

> hoarded money is useless to the rest of society. There is no hoarded money. It's all invested. Where do you think Gates' money is, for example?

A large part of Gates' money goes to preventing common disease, providing education etc. Buying mosquito nets was the latest one I saw.

These aren't investments and they aren't going to generate a monetary return for Gates. Under traditional economic dogma, no one should ever do this. Its not an investment, its donation.

Money set out purely for generating return can be hoarded when theres no good use for it. Money lying in an investment fund or an investors bank account is useless while not invested and can continue to be useless when invested in a company that fails or does nothing to help society.

Re: The rich are hoarding economic growth

#119

Post by Frondo »

WhitneyLand wrote: post #85
cs702 wrote: post #25

The title and the tone of the OP are a bit inflammatory for my taste, but the data and graphs from the research paper are eye-opening: most economic growth in the US over the past three decades has indeed gone to the top 1%, and particularly to the top 0.01%, leaving everyone else behind.[1] Here's the money shot: https://cdn.vox-cdn.com/uploads/chorus_asset/file/9013427/Sc... However, rather than debate the causes o…

Why should we be looking for solutions? To be clear I would agree it's intuitively disturbing and seems "not fair". But do you call for solutions because: 1) There might be a way to have higher productivity than we have now. This can't be why, it's always a goal regardless right? 2) Strategies should be considered than intentionally reduce productivity and/economic growth in order to increase worker compensation. Now…

"Why should we be looking for solutions?"

At the end of the day, because I and the other not-ultra-wealthy want that money the ultra-wealth are capturing to be more equitably distributed.

The system didn't just end up this way as a quirk of chance--the ultra-wealthy have used their money to influence laws to arrange everything this way. They didn't need a reason to make it this way, except they wanted more.

Why even say "why should we be looking for solutions" as though that's what any of this is about?

Re: The rich are hoarding economic growth

#120

Post by WalterBright »

zaptheimpaler wrote: post #118
WalterBright wrote: post #102

Earlier quoted context omitted.

> hoarded money is useless to the rest of society. There is no hoarded money. It's all invested. Where do you think Gates' money is, for example?

A large part of Gates' money goes to preventing common disease, providing education etc. Buying mosquito nets was the latest one I saw. These aren't investments and they aren't going to generate a monetary return for Gates. Under traditional economic dogma, no one should ever do this. Its not an investment, its donation. Money set out purely for generating return can be hoarded when theres no good use for it. Money l…

> These aren't investments and they aren't going to generate a monetary return for Gates.

That's correct, but it isn't hoarded, either. It's spent.

> Under traditional economic dogma, no one should ever do this. Its not an investment, its donation.

There's no such dogma.

> Money lying in an investment fund or an investors bank account is useless while not invested

It's always invested. Investment accounts/funds do not hoard cash in Scrooge McDuck cash vaults, either. It's all invested.

> and can continue to be useless when invested in a company that fails or does nothing to help society.

Wealthy people tend to be good at investing, which is why they're wealthy in the first place. Besides, money spent on a failed investment was still spent, and others were the recipients of that money.

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