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The Biggest Economic Divides Aren’t Regional, They’re Local

nytimes.com

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Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#21

Post by chiefalchemist »

hash872 wrote: post #15
therealforsen wrote: post #10

Earlier quoted context omitted.

i think by globalism he means that free trade brings with it the free movement of labor across countries >what type of alternate reality could exist where foreigners would be polite enough to not, like, turn a wrench or run an assembly line for cheaper than Americans did in the 50s. We as a country don't have the option of 'choosing' an alternate economic reality where developing country wages aren't cheaper than our…

Manufacturing jobs were leaving the US in the millions pre-NAFTA and China joining the WTO. Even with high tariffs & restrictionist immigration policies, it can't change the fact that someone in a 3rd world country can do x semi-skilled labor for $2 an hour whereas a unionized American does it for $30+. You can't pass a law against cheaper. Even with the highest tariffs in the world, manufacturers would still have le…

The cheap labor is part of the equation. Less environmental restrictions also contributed significantly to cheap goods. But the final blow is the low cost of shipping / transportation.

There has always been differences in markets. It's the low cost (and ease) of shipping / transportation that changed everything.

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#22

Post by RickJWagner »

sct202 wrote: post #6
burlesona wrote: post #4

I’m amazed the article didn’t mention the political correlation between the “big metros” and everywhere else. We know that increasingly “Blue America” is exclusively these major metros and “Red America” is everywhere else. But all these better outcomes are correlated to living in Red America, which they say is mostly due to affordable housing. I don’t really know what to make of that, but it’s interesting to me.

The current city = Blue and rural = Red division is a relatively recent one; so across the timescale of people born in the 80s to now you'd have a lot of political shifts that would be hard to account for. Just look at the 1996 election results by county seems unimaginable now, but it wasn't that long ago. https://en.wikipedia.org/wiki/1996_United_States_presidentia...

That is truly interesting. Thanks for posting it.

(I agree, it seems unthinkable today.)

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#23

Post by mdorazio »

hash872 wrote: post #8
DataWorker wrote: post #3

This seems like an obvious consequence of globalism and the nature of the labor market. Also seems consistent with Picketty’s thesis about capital growth. The days when being a US citizen gauranteed affluence are coming to a close. To see the future look at California; refugees from Guatemala living amongst young millionaires, mostly immigrants also. A global community, sliced into ever narrower tranches by the invis…

Much of Piketty's work has been widely debunked, especially r > g, so I'm not sure why one would start with his thesis. Top 1% income earners are typically business founder-owners, and reams of evidence from the Forbes 400 to tax data show that the wealthiest in US society are entrepreneurs who again created their own business- not rentiers living off of inherited wealth. (Anecdotally, children of inherited wealth th…

> Top 1% income earners are typically business founder-owners

No, they're not. The top 1% are people who work "normal" high-paying jobs [1]. You're probably thinking a smaller slice like 0.1%. Also if you're going to claim that someone's work is debunked, at least point to some references to back that up.

[1] https://archive.nytimes.com/www.nytimes.com/packages/html/ne...

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#24

Post by mdorazio »

mc32 wrote: post #12
inscionent wrote: post #9

Earlier quoted context omitted.

If you are going to use the 1996 county map you need to factor out Perot. Louisiana for example is much bluer Parish by Parish in 1996 than any of the elections going back to 1980.

I think Perot was ‘92, no? There, yes, like Nader after him was a “spoiler” as the losers like to call them.

He was actually both (he ran again in '96). The second time around he still managed to get over 8% of the popular vote, which is pretty impressive [1].

[1] https://en.wikipedia.org/wiki/1996_United_States_presidentia...

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#25

Post by matthewowen »

peterhadlaw wrote: post #18
danharaj wrote: post #13

Earlier quoted context omitted.

> Much of Piketty's work has been widely debunked, especially r > g Big claim.

This book was a great read and I highly recommend it for anyone who wants a little more perspective on Piketty's work: https://campus.aynrand.org/works/2015/10/09/equal-is-unfair

Published by the Ayn Rand institute.

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#26

Post by hash872 »

mdorazio wrote: post #23
hash872 wrote: post #8

Earlier quoted context omitted.

Much of Piketty's work has been widely debunked, especially r > g, so I'm not sure why one would start with his thesis. Top 1% income earners are typically business founder-owners, and reams of evidence from the Forbes 400 to tax data show that the wealthiest in US society are entrepreneurs who again created their own business- not rentiers living off of inherited wealth. (Anecdotally, children of inherited wealth th…

> Top 1% income earners are typically business founder-owners No, they're not. The top 1% are people who work "normal" high-paying jobs [1]. You're probably thinking a smaller slice like 0.1%. Also if you're going to claim that someone's work is debunked, at least point to some references to back that up. [1] https://archive.nytimes.com/www.nytimes.com/packages/html/ne...

https://www.nber.org/papers/w25442

'Have the idle rich replaced the working rich at the top of the U.S. income distribution? Using tax data linking 11 million firms to their owners, this paper finds that entrepreneurs who actively manage their firms are key for top income inequality. Most top income is non-wage income, a primary source of which is private business profit. These profits accrue to working-age owners of closely-held, mid-market firms in skill-intensive industries.'

Without going into the extensive exaggerations, lies and data-fudging of Piketty- do you look at the Forbes 400 list of wealthiest Americans and see a lot of inherited wealth there? A lot of Rockefellers, Morgans, and Vanderbilts? It's a bit surprising, right, because if we accept r > g then Rockefellers/Morgans/Vanderbilts should own most of the US by compounding wealth starting over 100 years ago at this point....

And in fact we find the Forbes 400 is virtually all- self-made entrepreneurs who created their own wealth. If you find a Rockefeller there who's never worked a day in his life but is simply living on rentier income, please let me know. (As I mentioned in the original comment, one of the reasons Piketty's rentier fantasies don't work is that he doesn't gauge consumption- and I suspect idle wealthy inheritant-types who don't work burn cash at a greater rate than r)

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#27

Post by RestlessMind »

hash872 wrote: post #26
mdorazio wrote: post #23

Earlier quoted context omitted.

> Top 1% income earners are typically business founder-owners No, they're not. The top 1% are people who work "normal" high-paying jobs [1]. You're probably thinking a smaller slice like 0.1%. Also if you're going to claim that someone's work is debunked, at least point to some references to back that up. [1] https://archive.nytimes.com/www.nytimes.com/packages/html/ne...

https://www.nber.org/papers/w25442 'Have the idle rich replaced the working rich at the top of the U.S. income distribution? Using tax data linking 11 million firms to their owners, this paper finds that entrepreneurs who actively manage their firms are key for top income inequality. Most top income is non-wage income, a primary source of which is private business profit. These profits accrue to working-age owners of…

Forbes 400 for 2018: https://www.forbes.com/forbes-400/#715eb42a7e2f

Looking at top 40 (because it gets boring to look up bios after a while), I see the following folks who inherited companies founded by their family members: Charles Koch, David Koch, Jim Walton, Alice Walton, Robson Walton, Jacqueline Mars, John Mars, Abigail Johnson, Donald Bren, Lukas Walton, Leonard Lauder.

That is 11 out of top 40 (or 27.5%) have inherited their wealth. That is certainly a big fraction of billionaires who did nothing but win the birth lottery.

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#28

Post by roenxi »

RestlessMind wrote: post #27
hash872 wrote: post #26

Earlier quoted context omitted.

https://www.nber.org/papers/w25442 'Have the idle rich replaced the working rich at the top of the U.S. income distribution? Using tax data linking 11 million firms to their owners, this paper finds that entrepreneurs who actively manage their firms are key for top income inequality. Most top income is non-wage income, a primary source of which is private business profit. These profits accrue to working-age owners of…

Forbes 400 for 2018: https://www.forbes.com/forbes-400/#715eb42a7e2f Looking at top 40 (because it gets boring to look up bios after a while), I see the following folks who inherited companies founded by their family members: Charles Koch, David Koch, Jim Walton, Alice Walton, Robson Walton, Jacqueline Mars, John Mars, Abigail Johnson, Donald Bren, Lukas Walton, Leonard Lauder. That is 11 out of top 40 (or 27.5%) hav…

I don't know exactly what Mr. Piketty actually claimed, but that statistic pretty good evidence that return on capital vs the growth of income is not the major cause of wealth inequality. The major cause would be inheritance law and birth rates in wealthy families.

Economic divides are a strange concern anyway; I don't see how I am unfairly disadvantaged by someone else's obscene wealth through winning the birth lottery. The issues as I see them are (1) high inequality is often an indicator of corruption and (2) many cities won't build sufficient high-density housing for political reasons.

What exactly is Jim Walton consuming that should be given to the poor? He probably doesn't eat that much food, and I doubt he is competing for housing stock with people who are struggling to make rent.

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#29

Post by usaar333 »

hash872 wrote: post #26
mdorazio wrote: post #23

Earlier quoted context omitted.

> Top 1% income earners are typically business founder-owners No, they're not. The top 1% are people who work "normal" high-paying jobs [1]. You're probably thinking a smaller slice like 0.1%. Also if you're going to claim that someone's work is debunked, at least point to some references to back that up. [1] https://archive.nytimes.com/www.nytimes.com/packages/html/ne...

https://www.nber.org/papers/w25442 'Have the idle rich replaced the working rich at the top of the U.S. income distribution? Using tax data linking 11 million firms to their owners, this paper finds that entrepreneurs who actively manage their firms are key for top income inequality. Most top income is non-wage income, a primary source of which is private business profit. These profits accrue to working-age owners of…

Do you have a direct link to the paper?

It doesn't look like it refute's the OP's point that the top 1% of people sorted by income are wage earners.

The abstract seems to be talking about "top income' (i.e. sort people by income and fetch from highest to lowest until you have 1% of all income in the US), which is a different measure.

But hard to tell without the paper.

Re: The Biggest Economic Divides Aren’t Regional, They’re Local

#30

Post by hash872 »

RestlessMind wrote: post #27
hash872 wrote: post #26

Earlier quoted context omitted.

https://www.nber.org/papers/w25442 'Have the idle rich replaced the working rich at the top of the U.S. income distribution? Using tax data linking 11 million firms to their owners, this paper finds that entrepreneurs who actively manage their firms are key for top income inequality. Most top income is non-wage income, a primary source of which is private business profit. These profits accrue to working-age owners of…

Forbes 400 for 2018: https://www.forbes.com/forbes-400/#715eb42a7e2f Looking at top 40 (because it gets boring to look up bios after a while), I see the following folks who inherited companies founded by their family members: Charles Koch, David Koch, Jim Walton, Alice Walton, Robson Walton, Jacqueline Mars, John Mars, Abigail Johnson, Donald Bren, Lukas Walton, Leonard Lauder. That is 11 out of top 40 (or 27.5%) hav…

The Kochs are active executives within their companies, which is a huge % of net worth. Wikipedia states that their stakes were worth $1.1 billion in 1983 when the brothers took them over, obviously they are worth vastly more now. It's not like they're rentiers who never worked- they still created most of their current wealth. This seems to be true for a number of 2nd generation wealthy.

If r > g is true- why are the large majority self-made entrepreneurs? Wouldn't the compounding effect of inherited wealth make say the Rockefellers top the list by 2019? I couldn't find them in the top 100.

The broader point is to use actual data versus empty theorizing from first principles. While I don't personally agree with what you stated above, you're already miles ahead of Piketty by using real-world data that we have on wealthy families vs. extremely broad theorizing on stuff like 'r always exceeds g'

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