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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’

#51

Post by pydry »

esarbe wrote: post #38
pydry wrote: post #18

Earlier quoted context omitted.

>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.

It's a natural function of a parasite to trick the host into thinking it is necessary.

https://www.nationalgeographic.com/animals/article/141031-zo...

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

#52

Post by netcan »

In college, I studied Ronald Coase's famous 1920s papers. The major application ATT was infrastructure stuff.

Coase's argument was that "given 0 transaction costs," it doesn't matter who owns what property or right. The market will achieve efficient solutions as firms sell each other radio spectrum or whatnot. Policy should focus on minimizing transaction costs and let the market organize itself.

Circa 2005, I heard a podcast with 90-something Ronald Coase. He has pissed. Everyone had been teaching his theorem backwards for decades, backed with the "chalkboard economics" he despised.

What Coase actually meant is that (1) transaction costs tend to be high (2) this explains the clearly observable inefficiencies of such markets. Literally the opposite of what I was taught as "Coase Theorem."

He meant that because market are imperfect, it really matters what the starting position is. Trickle down economics is the same kind of error. If we are extremely confident that markets work the way efficiency-assuming models do... Trickle down makes sense. It doesn't really matter where the money starts, the market will deal with allocation efficiently. If not it does matter where the money starts.

In any case, the "wealth disparity" discussion is almost always badly anchored. The first thing to understand about wealth disparity is that it maps pretty much to wealth. More wealth, more wealth disparity... almost universally. Many or most people have no wealth, depending on your semantics of "wealth." Therefore, if the value/quantity of wealth rises, wealth disparity rises.

The actual equality dichotomy is ROIs vs labour/income.

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

#54

Post by ianai »

Applejinx wrote: post #40
xwolfi wrote: post #29

Earlier quoted context omitted.

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 go…

Gold does pollute-but it’s probably a lot less polluting once it’s out of the ground.

You make an excellent point about modern finance. Increasingly to me it seems modern finance should be considered for its affects on money supply and finance not dissimilar to actions of central banks and certain government spending. It’s probably gone unnoticed largely exactly because the corporate finance machinations are not anywhere near as visible and widely disclosed at a Fed decision.

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

#55

Post by yorwba »

dontreact wrote: post #11
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…

1) There are certain issues which are unlikely to receive spending due to well-known economic effects. For example: building highways and public transportation are things unlikely to be funded by individuals because they are public goods. 2) There is little evidence that the high tax rates in the middle of the century led to decreased productivity. Tax rates are marginal, meaning that more effort leads to more reward…

> Tax rates are marginal, meaning that more effort leads to more reward, still.

> Why would you try to push forward your society if it seems like no matter what you do, wealth inequality is just going to increase

Curious how you seem to flip-flop between understanding marginal gains and not understanding them. The reason you would try to push forward your society is that more effort leads to more reward, still.

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

#56

Post by gadders »

burntbridge wrote: post #22
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…

You seem incredibly naive. People who earn $1m+ salaries do not work long hours or make sacrifices. You will never be wealthy if this is what you think. Most CEOs that I've known are out the door well before everyone else.

>> Most CEOs that I've known are out the door well before everyone else.

But did that hold true for their whole career?

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

#57

Post by redkabbage »

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…

Politicians and the democratic government have at least a tacit responsibility to serve the people and to not let them starve; billionaires do not. It's no coincidence that open hostility to democratic values has risen along with the number of billionaires.

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

#58

Post by syshum »

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…

So if I worked as a doctor for 20 years, invested most of my income in that 20 years in to dividend paying stocks, then at age 45 or so retire to live off my dividends that my hard work paid of, I did not earn any of that?

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

#59

Post by Werewolf255 »

chii wrote: post #39
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…

Do you have evidence of this or just good feelings that 20M surely would be used correctly? Have you considered that wealthy people would lie if it suits their material interests?

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

#60

Post by mtberatwork »

q1w2 wrote: post #44
romwell wrote: post #28

Earlier quoted context omitted.

>I haven't heard a politician advocate trickle-down since the Reagan era Which country are you from? Certainly not the US, are you? It's called "cutting taxes" these days, with the tax cuts being mostly applied to the ultra rich. The entire Republican party economic agenda still preaches trickle-down. If only because they are doing everything they can to prevent Reagan's trickle-down policies from being reverted. > 2…

Any tax cuts are trickle down? So the Democrat's push to reinstate the SALT tax credit (cut) are trickle down also? Are tax cuts in any bracket trickle down? When the GOP raises taxes - do they implode?

> Any tax cuts are trickle down?

Of course not, but when tax cuts for the top are billed to be wealth generating mechanisms for the middle and lower classes, that is literally the definition of "trickle-down economics".

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