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Never mind the 1 percent Let's talk about the 0.01 percent (2017)

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Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#121

Post by AnimalMuppet »

hannasanarion wrote: post #70
lucaspm98 wrote: post #66

Earlier quoted context omitted.

Is that a serious question? Bill Gates provided a very valuable service that runs most personal computers to this day along with productivity tools that have improved almost every business in the world. He also built one of the largest companies in the world that now employs over 100 thousand people. If there is anyone who should be disproportionately rewarded it would be Bill Gates. He now has a large fortune, which…

Yeah, and he stopped doing all that in 2004. Why does he deserve the profits from the hard work done by thousands of engineers to make Vista, 7, 8, and 10, which he had absolutely nothing to do with?

What is your alternative? That when a founder retires, should they be stripped of all ownership of the company they founded, because they are no longer working? Or should the owners of a company receive zero of the profits of the company? Either of those will have rather large consequences, at least some of them rather negative.

So... what's your plan?

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#122

Post by happytoexplain »

allovernow wrote: post #36

>Smith, Yagan, Zidar, and Zwick find that the 1 percent’s income is being driven by owner-managers, mostly of small and medium-sized companies—specifically S corporations, partnerships, and limited liability companies. These are talented managers: the researchers find that profits of companies run by these 1 percent-ers are far higher than those of businesses owned by people in the top 5-–10 percent >“The demand for…

Encouraging people to believe that their contributions are as disproportionate as their rewards is absurd, even dangerous.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#123

Post by Ididntdothis »

allovernow wrote: post #36

>Smith, Yagan, Zidar, and Zwick find that the 1 percent’s income is being driven by owner-managers, mostly of small and medium-sized companies—specifically S corporations, partnerships, and limited liability companies. These are talented managers: the researchers find that profits of companies run by these 1 percent-ers are far higher than those of businesses owned by people in the top 5-–10 percent >“The demand for…

“Wealth inequality needs to be considered in the context of overall prosperity and despite the fearmongering you see online, most Americans are doing well. Even our poor have modern conveniences, access to emergency healthcare, generally safe food and infrastructure - eating the evil rich and redistributing their wealth is unlikely to solve any of the major issues in the country, as we're already throwing tons of money at schooling and healthcare and the like.”

This line is extremely condescending. Why don’t we tell the top 0.1% who seem to always need more to do their valuable service to society that they have it much better than any king had it a hundred years ago? So why they need more every year? why is this line only used against the little guy? Fact is that more and more wealth goes to a small group of people. In my view this is extremely damaging to a society in the long run. some level of inequality is probably helpful to motivate people but it shouldn’t be growing constantly.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#124

Post by bretpiatt »

hailwren wrote: post #95
georgeburdell wrote: post #88

As the article notes, an increasingly common path to the 1% is through skilled labor. I think this type of earner would have more in common with a 50%er than a 0.1%er. My family has been in the 1% for a few years and we’re just bottom-rung individual contributors at FAANGs. 50% of our net worth is in our house. We don’t run or have stakes in any private businesses. No investment properties. The only thing that sets u…

I was skeptical, then I checked [1] and apparently even if you separate by state you only need a household income of $512k to be in the top 1%. High, but certainly not unfathomably so to HN readers. 1 - https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to...

Many people end up in the 1% for a single year via sale of business, stock, etc.

There's a huge difference between that type of 1% for a year and age 30-40 dual (or very high single) annual income earners.

The former may retire with a $1-5M net worth, the latter is either spending heavily or retiring with a $10M+ (and likely $20M+ with reasonableiinvestment returns) nest egg.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#125

Post by nabla9 »

georgeburdell wrote: post #88

As the article notes, an increasingly common path to the 1% is through skilled labor. I think this type of earner would have more in common with a 50%er than a 0.1%er. My family has been in the 1% for a few years and we’re just bottom-rung individual contributors at FAANGs. 50% of our net worth is in our house. We don’t run or have stakes in any private businesses. No investment properties. The only thing that sets u…

The origin of the 1% meme came from occupy movement "We are the 99%" and meant net wealth, not income. I think that's what the left still means with the 1%.

>Mankiw noted that the 1 percent’s share of total income, excluding capital gains,...

I'm not completely sure how the discussion turned into top 1% of income earners and specially exuding capital gains. I think it's possible that there is intentional attempt to change the discussion.

If you are in the top 1% of wealth, your net wealth is roughly $7 million. If you get just 3 percent real return for you can get $210,000 a year income without working.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#126

Post by ci5er »

blunte wrote: post #83
allovernow wrote: post #36

>Smith, Yagan, Zidar, and Zwick find that the 1 percent’s income is being driven by owner-managers, mostly of small and medium-sized companies—specifically S corporations, partnerships, and limited liability companies. These are talented managers: the researchers find that profits of companies run by these 1 percent-ers are far higher than those of businesses owned by people in the top 5-–10 percent >“The demand for…

> disproportionate contributions Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? And in the case of heirs, such as the Walton family, are they contributing so vastly more than the guy who mows people's lawns during the day and cooks their dinners in a restaurant at night? Or how about the Renaissance folks. T…

> Oh wait, let's talk nurses and schoolteachers. They pretty clearly contribute very heavily to society, and they get paid pretty poorly. Are they really contributing less, by factors of tens or hundreds, than Larry Ellison?

On an individual basis, leveraged through his organization - I think that it is objectively clear that the answer is: yes.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#127

Post by stale2002 »

blunte wrote: post #83
allovernow wrote: post #36

>Smith, Yagan, Zidar, and Zwick find that the 1 percent’s income is being driven by owner-managers, mostly of small and medium-sized companies—specifically S corporations, partnerships, and limited liability companies. These are talented managers: the researchers find that profits of companies run by these 1 percent-ers are far higher than those of businesses owned by people in the top 5-–10 percent >“The demand for…

> disproportionate contributions Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? And in the case of heirs, such as the Walton family, are they contributing so vastly more than the guy who mows people's lawns during the day and cooks their dinners in a restaurant at night? Or how about the Renaissance folks. T…

> Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people?

Yes. That is because of of the impact of their actions.

Let's take the example of a CEO of a major company. The difference between a good CEO, and a great CEO might only change the value of a company by 1%. But 1% of a 100 billion dollar company, is 1 billion dollars.

So if you are effecting a large enough company or area, then only being a little bit better than everyone else, turns out to be massively valuable, and therefore this value needs to be incentivized.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#128

Post by 6gvONxR4sf7o »

blunte wrote: post #83
allovernow wrote: post #36

>Smith, Yagan, Zidar, and Zwick find that the 1 percent’s income is being driven by owner-managers, mostly of small and medium-sized companies—specifically S corporations, partnerships, and limited liability companies. These are talented managers: the researchers find that profits of companies run by these 1 percent-ers are far higher than those of businesses owned by people in the top 5-–10 percent >“The demand for…

> disproportionate contributions Do you really argue that the people in the top 0.01% are contributing to society at a rate hundreds or thousands of times higher than the rest of the people? And in the case of heirs, such as the Walton family, are they contributing so vastly more than the guy who mows people's lawns during the day and cooks their dinners in a restaurant at night? Or how about the Renaissance folks. T…

>Oh wait, let's talk nurses and schoolteachers. They pretty clearly contribute very heavily to society, and they get paid pretty poorly. Are they really contributing less, by factors of tens or hundreds, than Larry Ellison?

I've been thinking about this lately. A schoolteacher generates huge value for dozens of people per year. A CEO of a big firm may generate tiny value for millions or billions of people per year. If the schoolteacher is generating a thousand times more value for each of their students than the CEO does for each of their customers, then the CEO still generated a ton more value to humanity.

My napkin math is that teachers make about $200B/year in the U.S. (3.2M teachers * $60k/year). The top 0.01% seems to make about $100B/year (16k families * $7M/year). So we're in a situation where yes teachers make more value than the 0.01%, but they also earn almost twice as much. (To be fair, it seem reasonable that teachers should earn more than 2x more, but that's a separate conversation).

The scale factor is a weird one for fairness. If someone's value to others is the value per person (X) times the number of people (Y), it seems like our society or technology or something is set up so that it's much easier to maximize X*Y by making Y huge and lowering X than it is to make X huge and lower Y. You can make your firm serve a million times more people, but you can't teach a million times better. Framed this way, no wonder a "value" maximizing world is getting less personal and more corporate as people lower X wherever they can to explode Y.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#129

Post by stale2002 »

rapind wrote: post #44
dijit wrote: post #9

Wasn’t that always the case. Nobody cares about the guy earning 250k/y. It’s the handful of people who control 90% of all wealth. “1%” was a catchy soundbite but it was always the 0.0001%

The real issue should be the multiplier on CEO pay and boards. 300x or more is pretty obviously ridiculous. Hard work should be rewarding, but is anyone really working 300 times harder than the delivery guy? I could believe 10x I guess.

The difference between a good and a bad CEO might only change the value of a company by 1%. But it turns out that 1% of 100 billion dollars, is 1 billion dollars.

The reason why CEOs get paid so much is not because of how hard they work, it is because the effect of their actions is massive, and eaking out that extra 1% is worth it.

Re: Never mind the 1 percent Let's talk about the 0.01 percent (2017)

#130

Post by mam2 »

Ididntdothis wrote: post #123
allovernow wrote: post #36

>Smith, Yagan, Zidar, and Zwick find that the 1 percent’s income is being driven by owner-managers, mostly of small and medium-sized companies—specifically S corporations, partnerships, and limited liability companies. These are talented managers: the researchers find that profits of companies run by these 1 percent-ers are far higher than those of businesses owned by people in the top 5-–10 percent >“The demand for…

“Wealth inequality needs to be considered in the context of overall prosperity and despite the fearmongering you see online, most Americans are doing well. Even our poor have modern conveniences, access to emergency healthcare, generally safe food and infrastructure - eating the evil rich and redistributing their wealth is unlikely to solve any of the major issues in the country, as we're already throwing tons of mon…

They dont "need" more nor even look for it so much in fact.

What makes inequality increase is actually the mindset of poor people that their poverty is "someone else's fault" like this kind of comment ( and also that "the state should do something" like it is their mother ).

The hard truth is that inequality increases because poor people dont fight against and do nothing about it except complaining. Its always the fighting that has brought any of the social improvements, not the goodwill of politicians or anykind of "fair invisible hand".

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