A Guide to Statistics on Historical Trends in Income Inequality • Hacker News Board

Re: A Guide to Statistics on Historical Trends in Income Inequality

#81

Post by munk-a » Mon, Nov 19, 2018, 10:34 PM UTC

malandrew wrote: post #66

munk-a wrote: post #50

Earlier quoted context omitted.

I don't really understand why this scenario is worded this way, it seems like World 2 where everybody has .5x is just worse due to World 2 getting the shaft. Here's a setup: * World 1, where everybody has x except one person has 100x * World 2, where everybody has 1.2x I think World 2 pretty clearly wins but this is a bit of a strawman to begin with. I'd personally rather live in a world where the poor have x and the…

Well you actually do end up with 0.5x instead of 1.2x because in World 2 you have eliminated the profit motive that drives progress forward. Basically you forego all progress that would have happened with the opportunity to profit by creating and inventing things and then making those things faster, cheaper and better.

Sorry, so part of your scenario to divine why wealth inequality isn't so bad is an assumption (without grounding or explanation) that a lack of wealth inequality necessarily leads to high levels of economic inefficiency?

I feel like your initial question is just coming from a very disingenuous place, the discussion of the relative economic efficiency of unequal vs. perfectly equally distributed wealth is a bit aside from the question of how extreme wealth inequality is. So I suppose, I agree that wealth inequality does provide value, but it does so in very small doses which we have greatly exceeded at this point.

Re: A Guide to Statistics on Historical Trends in Income Inequality

#82

Post by dragonwriter » Mon, Nov 19, 2018, 10:35 PM UTC

GabrielBen wrote: post #47

digitalmaster wrote: post #8

So looks like the 80s is when things start going south (increased income inequality) so I looked up who was president during that time, then looked at their wiki page to see their economic policy and found this gem of a quote: "Soon after taking office, Reagan began implementing sweeping new political and economic initiatives. His supply-side economic policies, dubbed "Reaganomics", advocated tax rate reduction to sp…

This is something that economists have debated over for decades since. Stiglitz specifically attacks Reagan on that front. Milton Friedman defends it. Reagan was the last president to make a deep impact change in how economics and politics relate. He was unique in the way he self-deprecated government, something that is truly rare for presidents. He would actively advocate the government was the problem not the solut…

> He was unique in the way he self-deprecated government,

This is false on two levels:

First, Reagan was not a monarch who shared personality with the State, so any deprecation of government he did was not self-deprecation

Second, he is not at all unique in that. Bush (43 more than 41) and Trump have done much the same, and even Clinton did it off and on.

Re: A Guide to Statistics on Historical Trends in Income Inequality

#83

Post by RobertoG » Mon, Nov 19, 2018, 10:35 PM UTC

djrobstep wrote: post #72

conanbatt wrote: post #52

Earlier quoted context omitted.

Trickle down economics is a pejorative term from the 30's. As a proposition it is as naive as trickle-up, which is what the other spectrum usually sells. ('if you give poor people more resources, its good for everyone') Economics, as the expression of human beings exchanging with each other, accepts neither.

> Economics, as the expression of human beings exchanging with each other, accepts neither. I will never understand how adults can believe that things like economics, journalism, central banking, and (especially) the US constitution can be non-political.

Because that idea (about economics) has been heavily, and successfully, pushed by interested parties:

'The economy' and 'the market' are sacred things that are disconnected from the dirty world, and work perfectly in their own if you don't bother them. No need for 'political economy' anymore, only 'economics'.

Re: A Guide to Statistics on Historical Trends in Income Inequality

#84

Post by roenxi » Mon, Nov 19, 2018, 10:35 PM UTC

digitalmaster wrote: post #8

So looks like the 80s is when things start going south (increased income inequality) so I looked up who was president during that time, then looked at their wiki page to see their economic policy and found this gem of a quote: "Soon after taking office, Reagan began implementing sweeping new political and economic initiatives. His supply-side economic policies, dubbed "Reaganomics", advocated tax rate reduction to sp…

:P Ouch, going right for the partisans. Presidents are important people, but they are a lot more reactive than is generally accepted - what about the theory that Reagan was reforming economics in response to some deeper underlying problem [0]?

[0] https://assets.weforum.org/wp-content/uploads/2015/07/150710...

Re: A Guide to Statistics on Historical Trends in Income Inequality

#85

Post by chii » Mon, Nov 19, 2018, 10:36 PM UTC

malandrew wrote: post #66

munk-a wrote: post #50

Earlier quoted context omitted.

I don't really understand why this scenario is worded this way, it seems like World 2 where everybody has .5x is just worse due to World 2 getting the shaft. Here's a setup: * World 1, where everybody has x except one person has 100x * World 2, where everybody has 1.2x I think World 2 pretty clearly wins but this is a bit of a strawman to begin with. I'd personally rather live in a world where the poor have x and the…

Well you actually do end up with 0.5x instead of 1.2x because in World 2 you have eliminated the profit motive that drives progress forward. Basically you forego all progress that would have happened with the opportunity to profit by creating and inventing things and then making those things faster, cheaper and better.

Is it really proven that profits are what drives progress?

Would Einstein have stilled discovered relativity regardless if he had been paid large amounts of monney for doing research or not?

Sure, there are examples like Ford - where without profit motive, they would not have gotten the advances that happened. But those examples tend to have less impact than the non-profit driven motives.

Re: A Guide to Statistics on Historical Trends in Income Inequality

#86

Post by dragonwriter » Mon, Nov 19, 2018, 10:37 PM UTC

vondur wrote: post #26

digitalmaster wrote: post #8

So looks like the 80s is when things start going south (increased income inequality) so I looked up who was president during that time, then looked at their wiki page to see their economic policy and found this gem of a quote: "Soon after taking office, Reagan began implementing sweeping new political and economic initiatives. His supply-side economic policies, dubbed "Reaganomics", advocated tax rate reduction to sp…

From the graph it looks like it really took off in the 90's and then again around 2010.

Inequality also seems edged up noticeably just after 2000, though by the bottom dropping more than by the top rising.

Re: A Guide to Statistics on Historical Trends in Income Inequality

#87

Post by [deleted] » Mon, Nov 19, 2018, 10:38 PM UTC

dragonwriter wrote: post #30

jjoonathan wrote: post #9

Earlier quoted context omitted.

I'm still amazed at how effectively we have collectively shunned thought along these lines by turning the founding father of the relevant branch of economical philosophy into a real life he-who-shall-not-be-named. Anyone who wants to talk about these problems either has to either re-invent the wheel or mention the unmentionable name and doom themselves to immediate dismissal as a kook.

At least on HN, you can actually say “Karl Marx” in a non-negative context without automatic dismissal.

[deleted]

Re: A Guide to Statistics on Historical Trends in Income Inequality

#88

Post by darawk » Mon, Nov 19, 2018, 10:39 PM UTC

dragonwriter wrote: post #82

GabrielBen wrote: post #47

Earlier quoted context omitted.

This is something that economists have debated over for decades since. Stiglitz specifically attacks Reagan on that front. Milton Friedman defends it. Reagan was the last president to make a deep impact change in how economics and politics relate. He was unique in the way he self-deprecated government, something that is truly rare for presidents. He would actively advocate the government was the problem not the solut…

> He was unique in the way he self-deprecated government, This is false on two levels: First, Reagan was not a monarch who shared personality with the State, so any deprecation of government he did was not self-deprecation Second, he is not at all unique in that. Bush (43 more than 41) and Trump have done much the same, and even Clinton did it off and on.

> First, Reagan was not a monarch who shared personality with the State, so any deprecation of government he did was not self-deprecation

It is absolutely legitimate to characterize the president denigrating government as self-deprecating, splitting hairs about this is silly.

> Second, he is not at all unique in that. Bush (43 more than 41) and Trump have done much the same, and even Clinton did it off and on.

Reagan was more unique in his ability to actually do it, though. The others had much less impact.

Re: A Guide to Statistics on Historical Trends in Income Inequality

#89

Post by maneesh » Mon, Nov 19, 2018, 10:40 PM UTC

I posted my take on this recently on Facebook. (And I recently gave a TedX talk on the same concept entitled "Money: The Greatest Story Ever Told" [1])

Here is an image of the entire world's Money supply [2].

In my eyes, the majority shift occurred due to two things:

1) Ending the gold standard peg

2) Creation of the derivative market

1 --- Ending the Gold Standard Peg

In 1971, Nixon severed the connection between Gold and the US-Dollar. The USD now became purely fiat --- no actual resource backed the USD anymore.

This allowed the dollar to change. Banks could create money -- really. Credit could be expanded and offered to customers. Debt could become an asset, and banks could trade.

But the most interesting part is that it led to #2 --- the Derivate market

2 -- Creation of the Derivative Market

By removing the gold standard tether, money became anything that people believe in

In 1973, the first derivative began to trade.

And banks utilized this to create futures, contracts, warrants, swaps --- bets against bets against bets against bets. The money isn't really there. It's just a financial instrument traded to hedge against fluctuations.

It's a betting system. And it's turtles the whole way down.

Here's the crazy part. The global derivatives market is 1.4 QUADRILLION dollars. That is, 20 times larger than the GDP of the entire WORLD.

In the picture attached --- see that giganticly long section at the bottom? That is derivates. It outweighs the rest of the world's money by FAR.

1.4 Quadrillion USD are in derivatives. Guess how much money world-wide is in coins and banknotes? $5 trillion.

That is --- derivatives are 280x the amount of coins and bank notes in THE ENTIRE WORLD.

[1] https://www.youtube.com/watch?v=9G0F-VUPTa4 [2] http://money.visualcapitalist.com/worlds-money-markets-one-v...

Re: A Guide to Statistics on Historical Trends in Income Inequality

#90

Post by logfromblammo » Mon, Nov 19, 2018, 10:41 PM UTC

paulddraper wrote: post #29

brandonmenc wrote: post #12

Earlier quoted context omitted.

> Other than war or complete societal upheaval, what can actually be done to solve the problem? A wealth (not income) tax.

Gut feel: Repeating taxing someone more for living frugally is wrong.

I'd prefer a tax on increase in wealth. Which is to say a tax on income with a deduction for consumption.

So you're taxing the act of becoming richer, rather than just owning stuff. I suppose you could still have a wealth tax, if you set the threshold high enough that it only affects the top 10%.