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20 year study of global wealth demolishes the myth of ‘trickle-down’

businessinsider.com

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Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#31

Post by aNoob7000 »

codegrappler wrote: post #2

I guess I’m not surprised that a bunch of folks who have made a career out of advising politicians on income inequality….discovered income inequality in their study. The two questions in my mind are: 1. Should we trust the government to spend the money more wisely than the folks who earned it? Or said another way, how do you combat the almost inevitable corruption you see with large government spending? 2. What will…

We need less government and better taxation policy.

I believe the inequality comes from the fact that individuals and companies with large sums of money can shape policies in government better than any individual or group of individuals.

I agree you shouldn't pay 90% tax rate but you shouldn't be paying zero either.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#32

Post by esja »

Simon321 wrote: post #19
esja wrote: post #16

Earlier quoted context omitted.

It’s not a straw man at all. The Fed explicitly justifies QE and the rest of their monetary insanity on the basis of the “wealth effect”. They believe asset price rises will create a feeling of wealth which will generate additional spending. They know that these asset price prices disproportionately benefit a wealthy minority. This is trickle-down economics.

>The Fed explicitly justifies QE and the rest of their monetary insanity on the basis of the “wealth effect”. They do?? Do you have a source for this?

They’ve said this publicly many, many times.

It’s quite incredible that the Left have not made the connection between the Fed openly aiming to increase wealth inequality (which is what this is) while also keeping a watchful eye out for any wage inflation (which is the only way the common person can keep up).

https://digitalcommons.trinity.edu/econ_faculty/31/

Search for Bernanke wealth effect or any variation you like. The BIS and other central banks talk about it openly as well.

The central banks are the biggest engines of wealth inequality in the world, and it’s all done in the open with barely any pushback.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#33

Post by q1w2 »

Simon321 wrote: post #19
esja wrote: post #16

Earlier quoted context omitted.

It’s not a straw man at all. The Fed explicitly justifies QE and the rest of their monetary insanity on the basis of the “wealth effect”. They believe asset price rises will create a feeling of wealth which will generate additional spending. They know that these asset price prices disproportionately benefit a wealthy minority. This is trickle-down economics.

>The Fed explicitly justifies QE and the rest of their monetary insanity on the basis of the “wealth effect”. They do?? Do you have a source for this?

Not really. They used this term in the housing crisis, in reference to stabilizing home prices. They recognized that home equity loans were driving a lot of spending AT THAT TIME. It's not some general core principle.

Also, the stimulus checks are also a "wealth effect" mechanism, but no one would confuse that for "trickle down".

The title makes a false comparison.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#34

Post by q1w2 »

romwell wrote: post #10

Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). It was pure mythology from the start; there's never been any basis for it to begin with. It's a pity we even have to debunk it like that. Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. Give a billionaire $20M, s…

I haven't seen a politician advocate for trickle down since the early 1980s.

Why is this strawman still the target for low-effort articles?

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#35

Post by pydry »

vixen99 wrote: post #25

Bit of a giveaway to write ' demolished the myth of 'trickle-down'. I am not familiar with the authors apart from Thomas Pickety. However would one seriously expect any other conclusion from him? He and the other authors (if they inserted the word 'myth') had an agenda and naturally, produced a report validating it.This is not to say there are no serious issues with the 98% of wealth distribution. I should not use th…

Thomas Piketty's work is surprisingly banal. If you've ever heard anybody with money talk about "the magic of compounding" they're essentially saying the same thing he demonstrated with a huge pile of data, except on a personal, rather than societal level.

It's controversial solely for the same reason global warming is - it threatens wealth.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#36

Post by mtberatwork »

q1w2 wrote: post #4

I haven't heard a politician advocate trickle-down since the Reagan era. This seems like one of those strawman political football arguments. Also, the methodology here is a bit flawed. I think that economic data that cherry picks the start of the covid-19 pandemic is deeply flawed. 2020 will always be known as an economic outlier. It's like selecting 2008, or September 2001. These are data points that should be elimi…

> I haven't heard a politician advocate trickle-down since the Reagan era.

That was the fundamental argument for Trump's tax cuts in 2017. "If we cut taxes on the wealthy then they will use that money to create jobs for the middle and lower classes." That mostly didn't happen of course. [1]

[1] https://www.pbs.org/newshour/economy/making-sense/did-trumps...

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#37

Post by garmaine »

q1w2 wrote: post #34
romwell wrote: post #10

Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). It was pure mythology from the start; there's never been any basis for it to begin with. It's a pity we even have to debunk it like that. Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. Give a billionaire $20M, s…

I haven't seen a politician advocate for trickle down since the early 1980s. Why is this strawman still the target for low-effort articles?

It is alive and well under the title "supply-side economics" https://en.wikipedia.org/wiki/Supply-side_economics#Trump_ye...

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#38

Post by esarbe »

pydry wrote: post #18
codegrappler wrote: post #2

I guess I’m not surprised that a bunch of folks who have made a career out of advising politicians on income inequality….discovered income inequality in their study. The two questions in my mind are: 1. Should we trust the government to spend the money more wisely than the folks who earned it? Or said another way, how do you combat the almost inevitable corruption you see with large government spending? 2. What will…

>the folks who earned It's quaint that there are people out there who believe that income at the top strata of society is primarily earned. Those dividend payments, rents and capital gains (realized) that make up the bulk of top earner incomes happen while they sleep. A minimum wage is earned. A doctor's wage is earned. A golden parachute after a CEO ruins a company? Somebody with a trust fund? A person living off di…

The frustrating thing is that this kind of rhetoric actually works. They call themselves "the makers" and "job creators" while all they are doing is leveraging their upbringing in a wealthy social environment that provided them with the necessary connections to get a comfy job.

Their actual added value is minimal, but they sell it so good that (almost) everyone actually believes the myth.

Sad.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#39

Post by chii »

romwell wrote: post #10

Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). It was pure mythology from the start; there's never been any basis for it to begin with. It's a pity we even have to debunk it like that. Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. Give a billionaire $20M, s…

> give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food.

if there wasn't enough food in the first place, then the $20m just got inflated. This 20m will not go towards investment in higher food productivity when given to individuals like that.

Give this 20m to "the rich", they will invest it in food creation machinery. At least there would be more food produced after the investment.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#40

Post by Applejinx »

xwolfi wrote: post #29
romwell wrote: post #10

Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). It was pure mythology from the start; there's never been any basis for it to begin with. It's a pity we even have to debunk it like that. Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. Give a billionaire $20M, s…

What's a financial instrument ? Usually a debt (a stock, a bond) which makes others live. Even to buy a house you need to give money to someone else who uses it for their own retirement or whatbot. If the millionaire receives gold and bury it in his garden, sure, but if he puts it in a bank or an instrument, chances are you're paid by it. And sure, giving money to non value added non productive endeavour like you pro…

The cleverest people around have gone into finance to invent instruments that are ever more abstract, specifically to avoid tying finance to inconvenient, fallible things like… business.

It all has to perform way better than anything tangible could hope to do, and this starves out the type of investing to which you refer.

Newest example: crypto. Like burying capital in pure abstractions, except they pollute (which gold doesn't)

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