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Rising US Inequality: How We Got Here, Where We're Going

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Re: Rising US Inequality: How We Got Here, Where We're Going

#91

Post by deogeo »

cycrutchfield wrote: post #89
deogeo wrote: post #87

Earlier quoted context omitted.

It's really not - crab mentality refers to pulling others down for no reason other than envy. But in this case, the reason is the lower classes don't want to be pushed even lower. Are they supposed to selflessly sacrifice themselves so that the rich can get even richer?

They want the economy to suffer to preserve their legacy careers doing pointless things like mining coal or forging steel, things that somebody in a developing nation can do just as well for 1/10 the cost. Why are blue collar jobs so sacrosanct? When the careers of secretaries and travel agents essentially vanished, there was no weeping and moaning, no irrational protectionism, no economic suicide. People moved on to…

Ah yes, mustn't let "the economy" suffer - who cares about the actual workers within that economy.

Re: Rising US Inequality: How We Got Here, Where We're Going

#92

Post by car12 »

strken wrote: post #90
car12 wrote: post #81

Earlier quoted context omitted.

You can't win elections if you actually start talking about most contributing factors. In that case, very soon you'll be discussing immigration as your most important point and start sounding like Trump. Woops!

I sympathise with this view, but I'm not sure it's that simple. If you're Chinese or Bangladeshi or from anywhere else that's a poster child of globalisation, you can still compete with the US labour force from your own country. If you're allowed to immigrate, you get access to infrastructure, cultural knowledge, a somewhat functional legal system, and other force multipliers which might allow you to compete with mor…

Consider an individual John from Texas with a total population of N.

Initially John's chances of getting a job: 1/N

Now, with the arrival of new immigrant, John's chances: 1/(N+1) i.e. he's worse off.

Sure it turned out better for the new immigrant and he can earn way more than his original country and thus this is better for humanity and the globe but it is of little relief to John who is worse off now.

My assumptions in this:

- John is a low skilled worker who will not be easily able to switch to another line of work like a software developer

- John does not have significant savings to fall back on.

Another fun fact:

- The will to let the low skilled immigrant in, in today's environment does not stem necessarily from a position of goodwill, rather it is a calculated position to keep the numbers of a voting bloc which consistently votes for a given party, constant. This can be easily explained by seeing where the opposition to limiting immigration comes from.

So keeping in mind the above 2 points, it becomes readily apparent that what politics has gotten good at is winning elections and not betterment of people. One of the parties has discovered that one of the easiest "hacks" or "optimizations" is to keep importing poor people and that way you will have a steady stream of voters, otherwise you might actually have to start improving the stock of existing population.

This is somewhat analogous to how simply being good at a written test for a position does not necessarily mean you're a good fit for that position but you've simply optimized for the selection process.

All of this to say that as far as a hypothetical John is concerned, it is of no merit to him that the world is a bit more efficient because a person from Bangladesh is able to work with a little more efficiency, indeed whatever small gains from that are outright eclipse by an increased competition in the local pool of jobs and resources.

Re: Rising US Inequality: How We Got Here, Where We're Going

#93

Post by cycrutchfield »

deogeo wrote: post #91
cycrutchfield wrote: post #89

Earlier quoted context omitted.

They want the economy to suffer to preserve their legacy careers doing pointless things like mining coal or forging steel, things that somebody in a developing nation can do just as well for 1/10 the cost. Why are blue collar jobs so sacrosanct? When the careers of secretaries and travel agents essentially vanished, there was no weeping and moaning, no irrational protectionism, no economic suicide. People moved on to…

Ah yes, mustn't let "the economy" suffer - who cares about the actual workers within that economy.

I mean, you’ve shown that you don’t even understand the concept of comparative advantage at the individual vs. aggregate level. How am I supposed to explain to you that protectionist policies benefit a small minority of workers at the expense of almost everybody else?

Instead, I’ll just suggest that you find a good Freshman-level Economics textbook and read carefully. You may find it illuminating to understand the concepts behind complex policy decisions.

Re: Rising US Inequality: How We Got Here, Where We're Going

#94

Post by deogeo »

cycrutchfield wrote: post #93
deogeo wrote: post #91

Earlier quoted context omitted.

Ah yes, mustn't let "the economy" suffer - who cares about the actual workers within that economy.

I mean, you’ve shown that you don’t even understand the concept of comparative advantage at the individual vs. aggregate level. How am I supposed to explain to you that protectionist policies benefit a small minority of workers at the expense of almost everybody else? Instead, I’ll just suggest that you find a good Freshman-level Economics textbook and read carefully. You may find it illuminating to understand the co…

> How am I supposed to explain to you that protectionist policies benefit a small minority of workers at the expense of almost everybody else?

Given that none of the most successful economies developed without protectionism [1,2], you'll have a difficult time explaining that indeed. That pesky reality, always getting in the way of "good Freshman-level Economics textbooks".

[1] https://en.wikipedia.org/wiki/Comparative_advantage#Criticis...

[2] https://news.ycombinator.com/item?id=20320483

Re: Rising US Inequality: How We Got Here, Where We're Going

#95

Post by cycrutchfield »

deogeo wrote: post #94
cycrutchfield wrote: post #93

Earlier quoted context omitted.

I mean, you’ve shown that you don’t even understand the concept of comparative advantage at the individual vs. aggregate level. How am I supposed to explain to you that protectionist policies benefit a small minority of workers at the expense of almost everybody else? Instead, I’ll just suggest that you find a good Freshman-level Economics textbook and read carefully. You may find it illuminating to understand the co…

> How am I supposed to explain to you that protectionist policies benefit a small minority of workers at the expense of almost everybody else? Given that none of the most successful economies developed without protectionism [1,2], you'll have a difficult time explaining that indeed. That pesky reality, always getting in the way of "good Freshman-level Economics textbooks". [1] https://en.wikipedia.org/wiki/Comparativ…

I forget, are we talking about workers in first world countries or workers in developing countries? I’m not quite sure why you are gloating like you just made a strong counterargument, but it’s not a good look.

Re: Rising US Inequality: How We Got Here, Where We're Going

#96

Post by Aloha »

harryh wrote: post #88
jdavis703 wrote: post #85

Earlier quoted context omitted.

How does this explain the price increases in older, urban housing stock? I’ve been renting 500-600 sq. ft. one bedroom apartments for the past seven years. My rent has gone up from $1900 a month to now $2790 month. This is all within the same zip code.

There are definitely some outliers, particularly in urban centers (primarily due to overly restrictive zoning codes). I was speaking about averages.

You also make a good point, in many places zoning would prohibit construction of identical replacements of much of the housing that is located there.

One of the commenters on the article you linked makes a good point:

"new single family homes are a very small part of the real estate market.

most of the big price moves have been in urban areas where single family dwellings uncommon and new homes extremely rare."

Re: Rising US Inequality: How We Got Here, Where We're Going

#97

Post by la6470 »

I read through to the end of TFA and they gave no FSolution. The only solution is to guarantee everyone a basic social security net for life that cover all the basics ie food shelter clothing healthcare and education. Anything more than that will need individuals to figure it out. As human civilization progresses our basic guarantees to human life also need to keep up and elevate.

Re: Rising US Inequality: How We Got Here, Where We're Going

#98

Post by la6470 »

car12 wrote: post #92
strken wrote: post #90

Earlier quoted context omitted.

I sympathise with this view, but I'm not sure it's that simple. If you're Chinese or Bangladeshi or from anywhere else that's a poster child of globalisation, you can still compete with the US labour force from your own country. If you're allowed to immigrate, you get access to infrastructure, cultural knowledge, a somewhat functional legal system, and other force multipliers which might allow you to compete with mor…

Consider an individual John from Texas with a total population of N. Initially John's chances of getting a job: 1/N Now, with the arrival of new immigrant, John's chances: 1/(N+1) i.e. he's worse off. Sure it turned out better for the new immigrant and he can earn way more than his original country and thus this is better for humanity and the globe but it is of little relief to John who is worse off now. My assumptio…

The businessman who belongs to Johns town called William had decided to shift his manufacturing to Bangladesh as well as sell his wares in Bangladesh. It was good for the Bangladeshi worker and extremely good for William. Not so good for John and an unknown Bangladeshi entrepreneur who could not compete with William and went into oblivion.

Re: Rising US Inequality: How We Got Here, Where We're Going

#99

Post by digitaltrees »

car12 wrote: post #92
strken wrote: post #90

Earlier quoted context omitted.

I sympathise with this view, but I'm not sure it's that simple. If you're Chinese or Bangladeshi or from anywhere else that's a poster child of globalisation, you can still compete with the US labour force from your own country. If you're allowed to immigrate, you get access to infrastructure, cultural knowledge, a somewhat functional legal system, and other force multipliers which might allow you to compete with mor…

Consider an individual John from Texas with a total population of N. Initially John's chances of getting a job: 1/N Now, with the arrival of new immigrant, John's chances: 1/(N+1) i.e. he's worse off. Sure it turned out better for the new immigrant and he can earn way more than his original country and thus this is better for humanity and the globe but it is of little relief to John who is worse off now. My assumptio…

Except that the N+1 economy is now bigger with +1 demand for johns labor; thus it is actually increasing. Further, there is a +1 supply for production and export making the economy more competitive and productive overall.

Economists used to believe that many things were zero sum, (ie if England allows French cheese imports it will be at the expense of British cheese producers. Yet often allowing imports and increased trade leaves both France and England richer as consumers in both places value the additional selection and the competition lowers prices or foreign items can charge a premium for their novelty). Immigration is similar; it’s not zero sum.

Blaming this on a cynical political motive to create a voting block is contrary to the history of commerce and global trade and also contrary to your own analysis. It seems to me that the party most opposed to immigration is also the party that had been driving inequality by 1. Promoting globalization while also decimating the social safety net that would ease the transition, 2. Shifting to regressive taxation on sales while drastically lowering taxes on capital and its accumulation i.e. inheritance taxes. 3. Destroying any bargaining power for workers and employees and resisting minimum wage increases. I could go on and on.

Re: Rising US Inequality: How We Got Here, Where We're Going

#100

Post by dredmorbius »

imtringued wrote: post #75
nabla9 wrote: post #42

Earlier quoted context omitted.

> In other words, inflation is a policy choice to combat sticky wages, which (if you think that's a problem), the solution is to, apparently, screw labor by devaluing their wages from under them. This is complete misunderstanding of how this works. Inflation does not increase the real return from stock markets. Inflation erodes also capital. Capital must work just to stay still. Inflation or not, the wages reach equi…

>This is complete misunderstanding of how this works. Inflation does not increase the real return from stock markets. Inflation erodes also capital. Capital must work just to stay still. I think you made a basic mistake there. The assumption you're making is that the inflation is spread over every single citizen. In reality there is no reason for that to happen. It is equally possible for all inflation to happen in t…

Asset price inflation != currency devaluation.

There are structural incentives to inflate asset prices (free wealth to the holders), though those aren't ironclad (bubbles burst). Bernhard J. Stein's work (1930s - 50s) is interesting here.

Commodity price inflation tends to have different mechanisms, as does wage erosion. There are other classes of economic goods, including public goods, taxes, interest and (in some cases distinguished from assets) capital goods.

For all that Adam Smith discussed these (the better parts of books 1, 2, and 5 of Wealth of Nations), they are, IMO, poorly considered in most modern economics. Marginal analysis only explains part of their dynamics.

I'm also increasingly convinced inflation is a symptom rather than a fundamental problem.

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