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A Guide to Statistics on Historical Trends in Income Inequality

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

#131

Post by boomboomsubban »

rwcarlsen wrote: post #78
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…

As an engineer and computational scientist, drawing conclusions from correlations like this is absurd. Maybe Reagan was good for income inequality or maybe he was bad for it. Did you control for the other variables before drawing your conclusions? What about: * The governments' legislation and economic policies in countries like the USSR, China, etc. in the 80s * Changing technology especially communication technolog…

>As an engineer and computational scientist, drawing conclusions from correlations like this is absurd. Maybe Reagan was good for income inequality or maybe he was bad for it. Did you control for the other variables before drawing your conclusions?

Drawing absolute conclusions in this area is nearly impossible, and we can't say with any certainty that Reaganomics caused this problem. The evidence does seem to suggest that the policies are not fixing the problem, which is a far easier claim to make. They might not be the cause, but it seems very likely they aren't the solution.

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

#132

Post by darawk »

zanny wrote: post #129
darawk wrote: post #120

Earlier quoted context omitted.

> You are making some wild assumptions that require evidence. Specifically, you need to prove that the reason rich people are rich is because they "have proven themselves capable of efficiently allocating capital", as opposed to (or at least independent of) other factors, such as luck, inheritance, etc. I'm not making any assumptions. In aggregate, by definition, wealthy people are better at allocating capital than n…

Its a generally well documented trend that once rich it becomes difficult to actually fall out of wealth. I'd definitely love some unbiased research in how much better these purported rich people are better at allocating capital. Because I can easily start naming microeconomically selfish ways of managing capital that the wealthy practice on the regular that it is no way economically beneficial to the parent economy…

> Its a generally well documented trend that once rich it becomes difficult to actually fall out of wealth. I'd definitely love some unbiased research in how much better these purported rich people are better at allocating capital.

Huh? The fact that they're rich is proof.

> Because I can easily start naming microeconomically selfish ways of managing capital that the wealthy practice on the regular that it is no way economically beneficial to the parent economy - offshore tax havens, tax loopholes, real estate bubbles, buying politicians and policy to harm liberty, investing in companies that themselves offshore, launder, and hide their capital outside of the economy.

Sure, but they had to get rich in the first place.

> Businesses in the US are magnitudes wealthier today than they were forty years ago but the standard of living has at best remained stagnant for the last 20 (depending on locality, there are substantial regional swings). Money is flush in the upper echelons of society but it has provably and demonstrably not resulted in economic prosperity for the whole nation.

Yes, its been very unevenly distributed. How do you think that relates to the question at hand?

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

#133

Post by darawk »

maxxxxx wrote: post #124
darawk wrote: post #120

Earlier quoted context omitted.

> You are making some wild assumptions that require evidence. Specifically, you need to prove that the reason rich people are rich is because they "have proven themselves capable of efficiently allocating capital", as opposed to (or at least independent of) other factors, such as luck, inheritance, etc. I'm not making any assumptions. In aggregate, by definition, wealthy people are better at allocating capital than n…

What will these rich capital allocators do when nobody has money to buy their stuff? We need people to produce things and we need people who buy things. Both of these roles are equally important. Considering how housing and other asset prices are going up and companies like Apple are sitting on billions of dollars it seems there are a lot of rich people who don't know how to invest their money productively.

> What will these rich capital allocators do when nobody has money to buy their stuff? We need people to produce things and we need people who buy things. Both of these roles are equally important. Considering how housing and other asset prices are going up and companies like Apple are sitting on billions of dollars it seems there are a lot of rich people who don't know how to invest their money productively.

Totally agree. To be clear, i'm not advocating either narrative, just pointing out that both sides have one. I think they're both important. You need efficient allocators productively allocating capital...and you need them to have the capital to do it with. You also need consumers, with the buying power to make the capital allocators allocations work. The debate ends up being around what the right mix is, and I don't know the answer to that, simply pointing out that it's not a one-sided narrative of "give poor people money!" or "give rich people money!".

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

#134

Post by zanny »

darkerside wrote: post #34

Is there an inherent problem with income inequality? Would you rather live in: * World 1, where everybody has x, except one person has 100x * World 2, where everybody has .5x and is thus totally equal (I realize assets and income are not equal, but I think the point stands)

Instead of dealing in black and white absolutes, how about World 3, where 99% of everyone has .9x and 1% have 9x.

Plenty of economical arguments exist to supply a profit motive as a means to spur economic development and advancement. At the same time, I highly doubt Bob the CEO of Big Bucks would staunchly refuse the job and that no other qualified candidate would consider doing it if the mean CEO salary was only $600,000 a year instead of 7 million. Hell, thats what they did make until Clinton era tax incentives.

Its the same argument as to why lifetime of the creator + 70 years copyright is ridiculous and absurd. Maybe Jules Verne would have written ten sequels to 20000 Leagues if only he could guarantee a distribution monopoly for 70 years after he died?

The orders of magnitude of wealth difference are colossal, and something with plenty of documented study showing your average citizen has no clue how large the disparity is between the average and the extreme prosperity at the top.

Others have answered why its a problem, I just want to point out its not a black an white either you go full communism or laissez faire.

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

#135

Post by roenxi »

zanny wrote: post #123
roenxi wrote: post #84

Earlier quoted context omitted.

: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...

So the implication is that Reagan instituted broad and substantial tax reduction for the rich in combination with the institution of enormous federal deficit spending in order to offset rising oil consumption following two oil crisis the previous decade? We saw how oil turned out in the long run. Reagans policies, if anything, only gave dictatorships another two decades of unmitigated dominance in an industry we have…

The theme I'm replying to is 'Regan's stated policy objectives were implemented in the 70s and were probable causes of rising income inequality'. Maybe policy settings were twiddled, but the sudden stoppage of growth is probably linked to resource growth tapering off. In a counterfactual scenario where some other set of economic policies were in place, you'd probably have seen income growth trail off regardless.

The 'fix' could well be rich people being worse off, not poor or middle income people being better off. Not much of a solution, that.

A fun thought experiment, there are some good answers to this: at the end of the day, a different policy would be redistributing something real away from the rich. That wouldn't be food (rich people eat as much as everyone else), so what would it be? That is to day, what exactly are the rich securing that is unfair? (money isn't a valid answer, the answer is what the money is then used to buy)

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

#136

Post by darkerside »

zanny wrote: post #134
darkerside wrote: post #34

Is there an inherent problem with income inequality? Would you rather live in: * World 1, where everybody has x, except one person has 100x * World 2, where everybody has .5x and is thus totally equal (I realize assets and income are not equal, but I think the point stands)

Instead of dealing in black and white absolutes, how about World 3, where 99% of everyone has .9x and 1% have 9x. Plenty of economical arguments exist to supply a profit motive as a means to spur economic development and advancement. At the same time, I highly doubt Bob the CEO of Big Bucks would staunchly refuse the job and that no other qualified candidate would consider doing it if the mean CEO salary was only $60…

I agree it's not black and white. The reason I presented a theoretical extreme was not to straw man. It's because I think it illustrates an interesting philosophical paradox. It seems that people would rather that others (the CEO) make much less, even though it may not mean the "proceeds" are distributed broadly, and in fact, everyone may individually be worse off due to economic fallout.

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

#137

Post by thanatropism »

jahaja wrote: post #115
beat wrote: post #97

Earlier quoted context omitted.

The Frankfurt School, which coined the term "cultural Marxism", were German Marxists who survived WWI, saw the revolution fail in Germany and turn to Leninist/Stalinist horror in Russia, and tried to understand what went wrong. They were seeking a route to revolution that was not wracked with violence and dictatorship. Fascinating stuff, actually.

It doesn't seem helpful to say that the Frankfurt school coined the term when their academic use is so vastly different from the bullshit we see today.

You should read up on Gramsci. It's not that far removed from the alt-right's straw man -- indeed they seem to be learning tactics from him.

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

#138

Post by thanatropism »

beat wrote: post #97
thanatropism wrote: post #55

Earlier quoted context omitted.

In a past life I went to film school at a very very left-leaning university and distinctly remember learning about Lukács, Gramsci and Althusser as a "Cultural Marxist" wave that was all about correcting the excessive emphasis on economics of previous orthodox marxism. So there -- not only the phrase makes perfect sense if you do read Gramsci like I have, it's been uttered by Marxist professors somewhere in the world…

The Frankfurt School, which coined the term "cultural Marxism", were German Marxists who survived WWI, saw the revolution fail in Germany and turn to Leninist/Stalinist horror in Russia, and tried to understand what went wrong. They were seeking a route to revolution that was not wracked with violence and dictatorship. Fascinating stuff, actually.

But neither Lukács (Hungarian iirc), nor Gramsci (Italian, wrote in prison) nor Althusser (at one point the "French Freud" before Lacan rose to prominence) were from the Frankfurt school.

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

#139

Post by darkerside »

dragonwriter wrote: post #111
commandlinefan wrote: post #106

Earlier quoted context omitted.

Well, I think what he's saying (which I don't necessarily disagree with) is that if I have everything I need, what difference does it make to me - besides jealousy - if the guy down the street has more than he needs?

It's a common a priori moral argument about how many people think people should derive utility from material circumstances, sure, but “stop feeling pain from relative deprivation” is about as effective as “stop feeling pain from me twisting your arm”, even if you think it is morally obligatory for people to disregard having their arm twisted.

Yeah, parent post expressed it well. Probably better than me. I purposefully didn't say anyone should feel anything (and got flamed for being an absolutist for it). While it's how I personally feel, I think others should decide how they feel about it. Funny enough, framing the problem in a slightly different moral perspective leads to vast differences in how people feel about the situation.

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

#140

Post by darkerside »

munk-a wrote: post #50
darkerside wrote: post #34

Is there an inherent problem with income inequality? Would you rather live in: * World 1, where everybody has x, except one person has 100x * World 2, where everybody has .5x and is thus totally equal (I realize assets and income are not equal, but I think the point stands)

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…

malandrew explained my thought process pretty well. I elaborated a bit in my other comments on this thread as well. The point was more about illustrating the irony of people arguing about inequality instead of thinking about what they have.

A man is perfectly happy with his Corvette until he sees his neighbor pull up in a Ferrari.

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