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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?

#301
post #178

Earlier quoted context omitted.

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…

It's interesting when you imagine the other person is doing cooking, grocery shopping, child care, etc - doing the things you pay an app an inflated price to do for you.

However, it's housing - in the bay area in particular - that makes it look very impossible. For a relatively modest 1 BR apartment in SF, I'm paying close to half my after tax, after-401(k) take home, as a senior engineer doing relatively well.

If I'd need to pay 50% more to have a 2BR (at a minimum) for a wife and a child or two, that leaves a very small amount (for what's now twice as many people) to live on; roughly 10% of my base salary. It looks nearly impossible.

If you are extremely frugal (no restaurants, no vacations), if you get really lucky in finding housing, and most of all if there are no big surprise expenses (e.g. medical ones), MAYBE.

But none of those caveats applied in the case of my father; his standard of living was higher than mine is now.

Of course, if I were to move to another market, it's quite possible. I might take a 20% pay cut but if real estate is a third the cost than suddenly it doesn't seem like an impossible scaling issue that it currently is. I might even be able to afford a car.

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

#302

Earlier quoted context omitted.

Rent is not in the CPI. That's what made Shiller's work useful (comparing housing costs and CPI). Edit: Shiller was wrong (I asked him about this point after a lecture about his work on historical housing prices).

I think Shiller's work was useful because housing prices (if I'm not mistaken) are not part of CPI. Housing prices go into much bigger bubbles than rent. If interest rates go up or down, it doesn't very much affect the average person's ability to pay rent. But it has a huge impact on how much the average person can borrow. My understanding for the reason that housing prices aren't included in CPI is because nobody bu…

I think my original statement was wrong, but I may have misheard what he told me. Looking up references on housing and CPI I see a lot about how the housing component gives bad signal -- it was rising during the 2008 crash for example. It's easy to see how it lags since people usually only buy at multi-year intervals.

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

#303

Earlier quoted context omitted.

That not accurate because important information about the spatial distribution gets filtered out. Economists are pretending their statistics are filtering out 'noise' when they are really filtering out data they don't want people to see.

Inflation is an average. Newspapers usually report the national average, but there are a lot of other averages and they aren't being kept secret. This page has data for California: http://www.dof.ca.gov/Forecasting/Economics/Indicators/Infla... I don't think anyone is all that interested in a bunch of dry statistics. No conspiracy is needed.

The problem is while other statistics exist in practice policy makers, political leaders, businessmen, and economists in general have come ignore them. Rather than believing some small brained primate on the internet, here is Paul Volcker saying the same thing.

https://www.bloomberg.com/opinion/articles/2018-10-24/what-s...

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

#304

Earlier quoted context omitted.

I'd like you to actually cite those claims you've made, because so far you've just repeated a lot of nonsense I hear from people that refuse to back up their arguments with empirical evidence. Immigration is hardly the issue. Low-wage jobs exist because of the lack of labor protections for workers resulting in companies looking for the cheapest and most efficient labor they can, even if it means tapping desperate peo…

> I'd like you to actually cite those claims you've made You're making a claim in face of evidence. YOU back it up. Choose an urban area at random... https://www.payscale.com/cost-of-living-calculator/Washingto... https://www.payscale.com/cost-of-living-calculator/New-York-... etc - Go wild.

That's not how arguments work. He made a claim without evidence and I called him out on it.

Also effectively telling people to just find the results themselves is not an argument either.

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

#305

I can only speak of my experience. Adam smith pointed out that the rich will always dominate the poor, as we are small and we can talk to each other. This has been my experience as well.

Sorry, when did he pointed that out? I don't think that is true at all. In fact, he claims that the worst and most pernicious oppression of the poor is done by the measures and people that claim to do it in their aid.

I could point out a few but I’m currently partying. Here’s my favorite and tell me if it is close enough to convince you “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

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

#306
post #99

Earlier quoted context omitted.

1. I don't think this is true in any meaningful capacity; it just means we need to find ways to keep a critical mass of people involved in productivity. 2. This is a different argument than the one to which I was responding (which seemed to be something like, "it's mean to have the opinion that economic systems reward productivity").

You cannot pursue "pure capitalism" to its logical end. Like "pure communism", it just ends in misery and suffering for everyone. "Productivity" cannot be re-defined so that those that do the actual labor are removed from the equation. If a company or firm produces more revenue, than it's a simple value judgement as to how that revenue is distributed, and, right now, those at the top of company management and investo…

Your comment seems to agree with mine. I’m not advocating for “pure capitalism”, and your “simple value judgment” (as described) is pure economic reasoning:

> You may want to keep all of the revenue gains from your automation to yourself and your investors, but you may not be able to if it means that most of your workforce walks off the job.

Which isn’t to say that it’s not a value judgment, but rather that an economy is made up of a sea of value judgments interoperating, though not all value judgments are sustainable or well-calculated.

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

#307
post #273

Earlier quoted context omitted.

Wasn't the primary activity for children 40 years ago "go play in the street with your friends"? Has that become any more expensive?

Yes, outside wandering has been replaced with, "here's an iPad". But if you're talking about any sort of instruction I'd say the prices have tripled. If you're talking about something like organized hockey? Prices are astronomical.

Hockey is not a good measure of kids activities. Not really common outside of the north, and wayyyy more expensive than most other sports.

Kids basketball consists of 1) kid. 2) shoes. 3) ball. And you only need 1 ball per group of kids. Ditto for soccer (futbol) A jersey is optional.

Hockey requires a bunch of pads which will be changed out every year or two as the kid gets bigger. Hopefully they have a sibling that can make use of them otherwise it's a sunk cost. Then there are broken sticks, broken teeth, hockey bags, ice time -- non-trvial -- and it adds up.

Hell, the cost of replacement skate blades -- not including the yearly sharpening -- is more than the cost of a basketball and a cheapo pair of wal-mart athletic shoes: https://www.bladzskateshop.com/product/bauer-lightspeed-repl...

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

#308

Earlier quoted context omitted.

> I'd like you to actually cite those claims you've made You're making a claim in face of evidence. YOU back it up. Choose an urban area at random... https://www.payscale.com/cost-of-living-calculator/Washingto... https://www.payscale.com/cost-of-living-calculator/New-York-... etc - Go wild.

That's not how arguments work. He made a claim without evidence and I called him out on it. Also effectively telling people to just find the results themselves is not an argument either.

> That's not how arguments work

Saying you believe something in spite of the data, isn't how arguments work. You have the burden. I await your next deflection.

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

#309

Earlier quoted context omitted.

Sorry, when did he pointed that out? I don't think that is true at all. In fact, he claims that the worst and most pernicious oppression of the poor is done by the measures and people that claim to do it in their aid.

I could point out a few but I’m currently partying. Here’s my favorite and tell me if it is close enough to convince you “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

He continues to say that any attempt to prevent it would be either ineffective or cause the monopoly itself. He gives as examples the regulations of “making a registry with name and address of every tradesman makes it easier for them to congregate” and “the requirement to make a retirement fund makes congregation a necessity”. Praphrasing

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

#310

Earlier quoted context omitted.

Exactly. Low inflation doesn't help much if your salary increases get eaten up by housing, education hand healthcare. Rent, health care and education should be counted into inflation numbers.

Good point. Of these 3 which are truly free market? Zero.

What do people mean by truly free market? Can you provide an example of one?
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