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Do the Rich Capture All the Gains from Economic Growth?

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Re: Do the Rich Capture All the Gains from Economic Growth?

#171

Post by watwut »

rwcarlsen wrote: post #151
watwut wrote: post #147

Earlier quoted context omitted.

Then again, your counterpoint completely ignores amount of household work needed in 1970 versus 2018. Cooking, cleaning, washing dishes and cloth now are incomparable to 1970. Changing diapers is a lot less work now too.

Some things have become more difficult since then too. Free range parenting is very frowned upon - and micro-managing kids takes a lot of time and effort.

That is not needed the way washing cloth and ironing was. Which is why the micromanagement trends are not domain of working classes as much as upper classes.

Micromanaged kids don't need parent at home a lot of it is outsourced to schools and clubs. And parent at home wishing to be needed or useful may be contributing to the perceived need for micromanagement (plus those who want women at home for emotional or ideological reasons want to see all that mecessary).

Re: Do the Rich Capture All the Gains from Economic Growth?

#172

Post by AnimalMuppet »

eiaoa wrote: post #161
AnimalMuppet wrote: post #157

Earlier quoted context omitted.

Nearly completely idle, except for the part about building a whole new steel mill. That's... not very idle. And it is exactly that creation of a new steel mill that is where the value is going to be created - by the steel mill producing it.

> Nearly completely idle, except for the part about building a whole new steel mill. That's... not very idle. No one said they built it, just that they owned it. It's totally possible (and common!) to own something that you didn't build and have never had a hand in operating. But lets say a new steel plant was built. Who actually built it? Was it the the owner, or the project managers, engineers, architects, construc…

All right, let me put it this way. Without the money, it doesn't get built. The project managers, engineers, architects, and construction crews (plus the steel workers' local) aren't going to have a bake sale and come up with the money. If there's going to be a steel mill, the owner has to do something - at least write the checks plus hire someone to be the general contractor, and someone else to be the plant manager once it's built.

And the owner has to have at least a reasonable chance of getting paid back for their investment. They're not building a steel mill as a charity. So if you don't let the owners make money off of their steel mills, then you don't get any steel mills. Whose life does that make better?

[Edit: And letting the owner make as much as the janitor isn't going to cut it. The owner is putting in hundreds of millions of dollars; letting them get back $15/hour is a completely inadequate return for the level of risk they are taking.]

Re: Do the Rich Capture All the Gains from Economic Growth?

#173

Post by jimbokun »

ryandrake wrote: post #106
esotericn wrote: post #58

The problem with most economic analysis is that adjustments are generally based on arbitrary metrics like PPP or inflation. If a child (or couple) in Britain earns three times as much, in "real" terms, that their parent (or parents) did at that stage of life, they will probably have to live in a smaller house, further from the center of town, with a worse commute. Pretty much the biggest QoL improvements knocked out.…

Exactly. I probably earn 2X what my father made, inflation adjusted, when he was my age. Buuuut, I pay 5X what he paid for housing, 20X what he paid for healthcare, ∞X what he paid in student loans, have a commute 6X longer than his, live in a house 75% the size of his (he also had two houses at my age, by the way), work 1.25X his hours and have a crappy 401k rather than a nice defined-benefit pension. Comparing just…

Shouldn't those things be factored into the "inflation adjusted" calculation? (housing, healthcare, student loans...)

Re: Do the Rich Capture All the Gains from Economic Growth?

#174

Post by JimboOmega »

rwcarlsen wrote: post #51

While attempting to refute the idea that the poor haven't improved their station since the 70s, they cite a lot of stats that show most households make more income than their parents did (inflation adjusted), but they completely neglect to account for the huge factor that is the number of people working (or cumulative hours worked) per household in order to achieve that improvement. In the 1970s, there were a lot mor…

That, to me, is what really seals it all as ridiculous. My parents had the standard of living they had with only my father working and in a fairly normal government job.

That as enough to support my mom and 2 children while also saving for retirement.

That standard of living now would require both parents working and being rather successful in their white collar careers. Even as a reasonably successful person in an advantaged field (tech), I can't imagine supporting an entire family.

Re: Do the Rich Capture All the Gains from Economic Growth?

#175

Post by rwcarlsen »

watwut wrote: post #171
rwcarlsen wrote: post #151

Earlier quoted context omitted.

Some things have become more difficult since then too. Free range parenting is very frowned upon - and micro-managing kids takes a lot of time and effort.

That is not needed the way washing cloth and ironing was. Which is why the micromanagement trends are not domain of working classes as much as upper classes. Micromanaged kids don't need parent at home a lot of it is outsourced to schools and clubs. And parent at home wishing to be needed or useful may be contributing to the perceived need for micromanagement (plus those who want women at home for emotional or ideolo…

I have four kids and several friends with kids, and I can tell you that the amount of effort+time it takes to not get CPS called on you (depending on where you live) can be very substantial.

Re: Do the Rich Capture All the Gains from Economic Growth?

#177

Post by chrismanfrank »

crazygringo wrote: post #82
chrismanfrank wrote: post #73

Earlier quoted context omitted.

From the article: "The study looks at people who were 35–40 in 1987 and then looks at how they were doing 20 years later, when they are 55–60. The median income of the people in the top 20% in 1987 ended up 5% lower twenty years later. The people in the middle 20% ended up with median income that was 27% higher. And if you started in the bottom 20%, your income doubled. If you were in the top 1% in 1987, 20 years lat…

In other words, regression to the mean. Of course the poorest people are more likely to gain in income -- when you start at the bottom, there's really only one direction you can go. You can still have regression to the mean among individuals while society itself is becoming horrifyingly unequal.

"Of course the poorest people are more likely to gain in income -- when you start at the bottom, there's really only one direction you can go."

But doesn't this claim in itself refute the thesis that all the income gains are going to the top? If we find people at the bottom gaining income far faster than people at the top, which is what my quote claims, isn't that evidence that we live in a just society, not an unjust one?

Re: Do the Rich Capture All the Gains from Economic Growth?

#178

Post by T2_t2 »

JimboOmega wrote: post #174
rwcarlsen wrote: post #51

While attempting to refute the idea that the poor haven't improved their station since the 70s, they cite a lot of stats that show most households make more income than their parents did (inflation adjusted), but they completely neglect to account for the huge factor that is the number of people working (or cumulative hours worked) per household in order to achieve that improvement. In the 1970s, there were a lot mor…

That, to me, is what really seals it all as ridiculous. My parents had the standard of living they had with only my father working and in a fairly normal government job. That as enough to support my mom and 2 children while also saving for retirement. That standard of living now would require both parents working and being rather successful in their white collar careers. Even as a reasonably successful person in an a…

That needs a citation.

If you cut out everything we have they didn't - cable TV, Netflix, computers, internet, cafes, restaurants, Kindle, better choices in grocery food and alcohol - and ate the sort of cheap food people lived on, things like meatloaf and crappy ingredient dishes, I reckon it would be entirely possible.

The only thing that is prohibitively expensive today vs 1980 is housing. The reasons for that are multiple, but mostly NIMBYism.

Re: Do the Rich Capture All the Gains from Economic Growth?

#179

Post by eiaoa »

weberc2 wrote: post #149
eiaoa wrote: post #134

Earlier quoted context omitted.

> Not sure what you mean here, but I'm saying investors are entitled to the returns stipulated in the investment agreement. You said "...(efficient) economics [means y]ou don't earn more money unless you're producing more value." However, an owner can be nearly completely idle yet still profit handsomely, by simply paying others a modest fee to increase her fortune, so your statement isn't really true.

I think you misunderstand investment. Enterprises are risky; someone has to lose money when they fail or otherwise lose value. Those people are investors. Employees can also be investors (e.g., employee owned companies or other arrangements in which employees buy stock in their companies). By definition, the people who get returns on investment are the investors. Buying risk (aka investment) is inherently valuable. I…

> I think you misunderstand investment.

I understand investment, I'm just telling you that your original statement is wrong. If you're an owner, you don't have to create any value to get paid. Mere ownership gets owners paid. Sure, they can actively invest if they want to, and they may be better off for it, but that kind of activity is strictly optional.

Re: Do the Rich Capture All the Gains from Economic Growth?

#180

Post by wehi »

roymurdock wrote: post #37

The author Russ Roberts runs the EconTalk podcast and is a well respected economist/journalist/thinker in the field, definitely worth reading for a fair assessment. Here he presents a few studies that go against general economic consensus popularized mainly by Piketty in "Capital in the 21st century" and through papers/writing by Krugman, Saez, Zucman, Stiglitz, etc. that most of the economic gains in the past 100 ye…

> The author Russ Roberts runs the EconTalk podcast and is a well respected economist/journalist/thinker in the field, definitely worth reading for a fair assessment.

I am starting to wonder if there is such a thing. I can respect an academic who writes scientific papers for their peers to review. I can respect an academic who has opinions of the state of the world. I can't respect someone who mixes the two. If you write something for an audience that can't asses the validity of your statement you are deliberately deceiving people. I can't respect that.

There is a reason why Piketty's book is 700 pages and certainly enough, both good and bad, have been said about it already. He isn't adding anything apparently noteworthy here. How does a normal person begin to explore all the "facts and figures" presented in the article. and how do you figure out if it is even valid to the overall discussion? The answer is that you don't, and the author knows this. It is dishonest.

When Neil Degrasse Tyson says that we should explore space his argument isn't a bunch of statistics on how it would benefit humanity 23.95%, even though I am sure he could come up with some. That is because he has made a career out of teaching people about space and hoping they will share his excitement, rather than being a politician telling people what to think.

So no, I really don't understand why I should listen to Russ Roberts.

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