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Americans Are Horribly Misinformed About Who Has Money

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Re: Americans Are Horribly Misinformed About Who Has Money

#171

Post by lotusleaf1987 »

mbesto wrote: post #164
lotusleaf1987 wrote: post #118

Some of these comments are so bizarrely disconnected from reality trying to talk about how money isn't zero sum, but seriously when the top 20% of the population has 85% wealth there is something fundamentally and critically wrong.

And so what do you define as being "right"? (playing Devil's Advocate here btw)

It just strikes me that our system of monetary reward/punishment is fundamentally out of balance when the top 20% have 85% of the wealth/resources and the bottom 80% are left to fight over 15%. That is a banana republic. This is why revolutions occur.

Re: Americans Are Horribly Misinformed About Who Has Money

#172

Post by Alex3917 »

cperciva wrote: post #137
nostromo wrote: post #101

Earlier quoted context omitted.

The paper says that they addressed that: "We ensured that all respondents had the same working definition of wealth by requiring them to read the following before beginning the survey: “Wealth, also known as net worth, is defined as the total value of everything someone owns minus any debt that he or she owes. A person's net worth includes his or her bank account savings plus the value of other things such as propert…

Requiring people to read the definition doesn't guarantee that they will understand it.

Does it really matter if they don't understand it though? At some level if the point of the exercise to show that Americans don't understand how wealth is distributed, then the fact that Americans don't know what wealth is almost tautologically proves the point. I realize there is a bit more nuance, but it's still pretty interesting as is.

Re: Americans Are Horribly Misinformed About Who Has Money

#173

Post by ewjordan »

pelle wrote: post #167
dkarl wrote: post #130

Earlier quoted context omitted.

Are you suggesting that if you removed the grossly incorrect image of reality someone has and replaced it with a radically different one, that they would have the same opinions about closely related policy questions? I'm skeptical. People try to keep their view of reality in line with their political beliefs. How do you think Americans end up believing such wacky things? The survey show something like 19% of people t…

The whole problem with these scaremongering articles about equality and the lack of it is that it doesn't matter. They promote this because it fits in to their zero sum world view. A world where it is always someone-elses fault and where we as community must do something or we are selfish. This world view thats based on Dickensian stories of children living on the streets with coal dust on their cheeks. It just isn't…

Imagine we can put a number on quality of life. If the poor person starts out at say 1 and is at 10 after 10 years (as has happened in many developing countries). Does it matter that the rich person also is 10 times better off or even 100 times better off? I don't think so. That poor person now is healthier, has better opportunities etc than before.

The question on the table, though, is whether it's worth knocking the rich person (or maybe all rich people) down from (on some "quality of life" scale) a 100 to a 99.9 in order to lift the poor people from a 10 to a 20.

If you just look at that wealth distribution, you'll realize how little the rich have to suffer in order to help the poor a huge amount. And that's even before taking into account logarithmic utility functions...for all the arguments about how taxation reduces the incentive to make money, it's oh so rare for libertarians to explain why the rich still keep trying to make money even though they derive far less utility from it due to logarithmic utility functions than they could ever lose from a modest taxation rate.

In any case, here's where most of the disagreements stem from: most people that are against redistribution are concerned with optimizing the long term dollar value of the entire economy, so they want to keep wealth in the hands of those that are good at turning it into more wealth, even if the wealth that's created doesn't benefit those people directly at all (give $1 million to Bill Gates and he won't even notice; give it to someone on welfare, and it would change their life).

People that are for redistribution are concerned with optimizing the short term utility value of the entire economy, so they'd rather put wealth in the hands of the people that would benefit from it the most rather than in the hands of the people that would create more of it.

Taken to the extreme, each of these positions is absolutely indefensible and leads to a ridiculously inefficient and/or cruel economy. So we should always summarily discard any argument that does not promote some balance between the two sides.

Sadly, it's been a long time since I've heard someone present an argument that actually supports a stable balancing point, most people just argue blindly to push in one direction or the other.

Re: Americans Are Horribly Misinformed About Who Has Money

#174

Post by pragmar »

cletus wrote: post #61
jonhendry wrote: post #57

Earlier quoted context omitted.

" The reality is just that they're taking less money. Bit of a difference." Can you afford to take a year off from work? It's just taking less money. The fact is that tax cuts aren't free. If they aren't matched by spending cuts, you're just deferring the tax increase until later and incurring deficits in the meantime. So you have to decide what you're going to cut. Which means weighing, say, decent healthcare for ve…

Nice try but no sale. This is the problem: talking about this issue will get you labeled as being anti- (health care for veterans in your case). The budget is blowing out for three reasons: Social Security, health care and the military. Of the three only the last is largely discretionary (being the ongoing cost for campaigns in Iraq and Afghanistan). When FDR introduced Social Security there was something like 50 wor…

I'd like to clarify one point. That is the Social Security hasn't been pay as you go since a commission headed by Alan Greenspan put forward legislation to deal with the baby boomers in the 80s. Under Reagan, Social Security went from pay-go to a trust fund. The social security crisis is not a matter of depleted resources in trust (some 2.4 trillion in 2009 - http://www.ssa.gov/policy/docs/statcomps/supplement/2009/4a....), but a crisis of whether the US government will pay these Treasury Bonds at face value or not. The real crisis is the government not having the political will to tax in order to pay its debts.

http://www.ssa.gov/oact/progdata/fundFAQ.html#n7

Re: Americans Are Horribly Misinformed About Who Has Money

#175

Post by reinhardt »

sleight42 wrote: post #147
natrius wrote: post #79

Earlier quoted context omitted.

We engineers live in an information economy. Many, if not most Americans do not (pardon my lack of statistics). They work in service jobs that will be trivially automatable in our lifetimes. Wealthy people will actually own the means of production in a very meaningful way, and those that aren't equipped by their genes, upbringing, or education to participate in the information economy will be unable to earn an income…

Spoken like someone in the second 20% who believes that they are in the top 20%. "We engineers" are barely in that top 20% if at all. It's occupied by corporate CEOs, Wall Street bankers, and lawyers: the people who either write or lobby/bribe the people who write the laws (at least in the plutonomy/plutocracy that we call the United States). "We engineers" don't control the information. We write the tools that do. T…

I seriously doubt that there are ~60 million corporate CEOs, Wall Street bankers and lawyers to make up the top 20%. Doctors, middle managers and, yes, engineers probably cover a sizeable chunk of this slice.

Re: Americans Are Horribly Misinformed About Who Has Money

#176

Post by pelle »

ewjordan wrote: post #173
pelle wrote: post #167

Earlier quoted context omitted.

The whole problem with these scaremongering articles about equality and the lack of it is that it doesn't matter. They promote this because it fits in to their zero sum world view. A world where it is always someone-elses fault and where we as community must do something or we are selfish. This world view thats based on Dickensian stories of children living on the streets with coal dust on their cheeks. It just isn't…

Imagine we can put a number on quality of life. If the poor person starts out at say 1 and is at 10 after 10 years (as has happened in many developing countries). Does it matter that the rich person also is 10 times better off or even 100 times better off? I don't think so. That poor person now is healthier, has better opportunities etc than before. The question on the table, though, is whether it's worth knocking th…

It is true what you say when you are talking about the mega rich that they can do a lot to help and that is what people like Bill Gates etc are doing without anyone legislating them to do so.

When it comes to wealth distribution, I can not see any better way of doing it than letting the markets manage it. Where the governments and charity's come in should be in efficient exception handling dealing with the various emergencies the real world raises. Don't misunderstand me though. "Rich" people are not necessarily nice people and often are not believers in free markets. They are often directly in cahoots with government and make lots of money being invested in the status quo.

The problem with just about every single attempt at taxing this little tiny group of extremely rich people is that in the end it hardly affects them, but almost always harm the entrepreneurs who aren't yet at the Billionaire level.

(Excuse my CS metaphors) My own country Denmark got rich by having an open economy with little redistribution but plenty of exception handling. Since the late 60s the focus shifted from exception handling to having a heavy handed kernel process maintaining resource sharing in realtime which now counts for over half the economy. This has stagnated the economy, which currently only looks better than Greece because of our oil resources. We are an extremely equal country, with only a small handful of outliers. End result to maintain our equality many of the smart coders/entrepreneurs now live abroad (eg. DHH, Rasmus Lerdorf) while more and more resources are being spent beating immigrants into being as equals as the rest of us to which we are now being rightly condemned throughout the world.

A little thought experiment to which I do not know the answer:

What part of Bill Gates deeds will over history have done more to multiply peoples quality of life in the developing world? The Bill and Melinda Gates foundations good work throughout the world or the millions of pirated Windows copies used throughout the developing world in everything from small businesses to internet cafe's to schools.

Re: Americans Are Horribly Misinformed About Who Has Money

#177

Post by dkarl »

pelle wrote: post #167
dkarl wrote: post #130

Earlier quoted context omitted.

Are you suggesting that if you removed the grossly incorrect image of reality someone has and replaced it with a radically different one, that they would have the same opinions about closely related policy questions? I'm skeptical. People try to keep their view of reality in line with their political beliefs. How do you think Americans end up believing such wacky things? The survey show something like 19% of people t…

The whole problem with these scaremongering articles about equality and the lack of it is that it doesn't matter. They promote this because it fits in to their zero sum world view. A world where it is always someone-elses fault and where we as community must do something or we are selfish. This world view thats based on Dickensian stories of children living on the streets with coal dust on their cheeks. It just isn't…

I find it particularly disturbing that these thoughts even find an outlet on HN which is the antithesis of the zero sum world.

Splitting the world into two sides based on some simple criterion, and assuming that one side will always have one opinion and the other side the opposite opinion, is a gross oversimplification and disrespectful of everyone involved.

To run with the taxation example, taxing the rich is not simply a matter of "less" or "more," "good" or "bad." That kind of thinking simply drives the rate to 0% or 100%. Of course there is some optimal level, and deciding whether that level is higher or lower than the current rate requires some examination of the current state of affairs, not just a cartoon narrative that always says "less" or "more" no matter what the current situation is.

Policy decisions have to be based in facts and reality. I find it flabbergasting to see on HN -- where we are supposed to be hackers, people adept at working with concrete technology that is not amenable to rhetoric (could you please persuade my code it should run faster?) -- I am flabbergasted to see someone suggest that a gross misconception about reality is harmless, and that drawing attention to such a misconception should be stigmatized as "scaremongering." The author doesn't hide his political leaning, but he limits his editorializing to a few stray comments, and he makes an excellent point about the importance of facts: "It's fine if reasonable people have different ideas about whether we should extend the Bush tax cuts for people making more than $250,000. Or think estate taxes are unfair. But when we have those debates, it's critical that everyone has a clear understanding of how things really are."

If anything should be accepted as fair in political argument, it's the presentation of facts, unless you wish to challenge their accuracy.

Finally, as a point of rhetoric: By disagreeing with the above, by stigmatizing facts as "scaremongering" without challenging their accuracy, and by assuming that the presentation of these facts has an inherently redistributionist implication, you appear to be endorsing the slogan, "Reality has a well-known liberal bias." You may want to consider making your point in a different way to avoid this perception.

Re: Americans Are Horribly Misinformed About Who Has Money

#178

Post by jfager »

waqf wrote: post #155
jfager wrote: post #64

Earlier quoted context omitted.

Cognitive biases are going to skew these numbers horribly I guess I thought the point of the article was to demonstrate exactly this skew. Where does a person's emotional reaction to tax cuts or welfare come from? If people casually think that poor people aren't as poor as they really are and that wealthy people aren't as wealthy as they really are, they're going to act accordingly when it comes up in their daily lif…

You missed my point, or at least part of my point. The point is that the numbers people write down in this survey will not accurately represent their own impression of how poor poor people are.

I don't think I missed your point - you're saying that people confronted with a question they aren't qualified or interested in enough to answer thoughtfully will be biased towards responses that "sound good".

I have no disagreement there, I'm just saying that it's still interesting to know what that incorrect "sounds good" answer is in this case, because it reflects how people casually regard an issue. My unsubstantiated hypothesis is that this casual regard may actually be more important anyways, because many people aren't thoughtful in their regular daily lives, either.

In other words: if a cognitive bias can affect how someone responds to a survey, why can't it affect how that same someone acts in their daily lives?

Re: Americans Are Horribly Misinformed About Who Has Money

#179

Post by dspeyer »

pelle wrote: post #167
dkarl wrote: post #130

Earlier quoted context omitted.

Are you suggesting that if you removed the grossly incorrect image of reality someone has and replaced it with a radically different one, that they would have the same opinions about closely related policy questions? I'm skeptical. People try to keep their view of reality in line with their political beliefs. How do you think Americans end up believing such wacky things? The survey show something like 19% of people t…

The whole problem with these scaremongering articles about equality and the lack of it is that it doesn't matter. They promote this because it fits in to their zero sum world view. A world where it is always someone-elses fault and where we as community must do something or we are selfish. This world view thats based on Dickensian stories of children living on the streets with coal dust on their cheeks. It just isn't…

America is a very unequal country that is true. Just not unequal in opportunities. The richest people in the US (the ones with 80% of the wealth) have probably in most cases earned it.

Can you provide evidence for either of these claims?

Re: Americans Are Horribly Misinformed About Who Has Money

#180

Post by pelle »

dspeyer wrote: post #179
pelle wrote: post #167

Earlier quoted context omitted.

The whole problem with these scaremongering articles about equality and the lack of it is that it doesn't matter. They promote this because it fits in to their zero sum world view. A world where it is always someone-elses fault and where we as community must do something or we are selfish. This world view thats based on Dickensian stories of children living on the streets with coal dust on their cheeks. It just isn't…

America is a very unequal country that is true. Just not unequal in opportunities. The richest people in the US (the ones with 80% of the wealth) have probably in most cases earned it. Can you provide evidence for either of these claims?

Which part do I need to provide evidence for?

That America is not unequal in opportunities? Just look at the membership of HN and YC. People from all over the world come here to follow opportunities they did not have at home.

I may very well have overstated the issue about 80% of the wealth have earned it, but if they inherited at some point in their family history someone earned it. It is far from the old communist image though of fat laughing capitalists in top hats stomping over the poor proletariat, which while extreme is essentially the subtext to "The rich are not paying their fair share". "Ooh the rich own 80% of the US" etc. etc. ad nauseum.

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