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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’

#121

Post by refurb »

esarbe wrote: post #95
refurb wrote: post #86

People realize “trickle down” was just a made up political punching bag, right?

What do you mean? That 'Trickle Down' was a satirical term coined to disparagingly talk about supply-side economics? Sure, I know. That doesn't mean that there aren't more than enough people still clinging to supply-side economic theories as if their undeserved wealth depended on it. Because it does.

Supply side is a valid economic theory. Give people more money and they spend it.

You disagree?

“Trickle down” was a Democratic ploy to disparage the policy of reducing tax rates. Apparently we are still talking about it despite the economic expansion of the 1980’s in contrast to the “malaise” of the 70’s.

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

#122

Post by pegasus »

bottled_poe wrote: post #107
cies wrote: post #94

Earlier quoted context omitted.

> you’re comment is just hyperbole/rhetoric and no substance. So what is unsubstantiated in your view? The fact that super rich use offshore accounts? That super rich make more money with moving assets than they could make with labor? That poor people will likely spend given money quickly?

Should I quote the parts in question? They seem obvious to me, as it’s every sentence.

Should he/she beg you to do so? They've already asked you once. And no, it's not obvious to me what your counterargument is.

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

#124

Post by foverzar »

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.

> People who earn $1m+ salaries do not work long hours or make sacrifices

Do you have any evidence to support this claim? Especially the sacrifices part -- this seems like an awfully bold assertion, especially if you consider that most people earning millions have spent their entire careers to get there.

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

#125

Post by koheripbal »

bottled_poe wrote: post #77
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…

While I want to agree with you, you’re comment is just hyperbole/rhetoric and no substance.

The article is also hyperbole.

They use 2020 as a key data point, despite it obviously being an outlier due to covid.

Moreover, the only people talking about trickle down are people on the left. No one on the right has mentioned trickle down since Reagan was president.

It's a complete strawman.

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

#126

Post by sleepysysadmin »

forinti wrote: post #15
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…

Long before we get to something like a 90% tax bracket, we could have the very wealthy pay the same rates as regular folks. Anyway, I don't see why a billionaire shouldn't have a 90% bracket.

>Long before we get to something like a 90% tax bracket, we could have the very wealthy pay the same rates as regular folks.

Flat tax for all!

>Anyway, I don't see why a billionaire shouldn't have a 90% bracket.

Lets ignore the economics and how going off the gold standard removed the government's ability to tax and taxation will trend toward 0% for everyone until we figure out a new standard.

However, let me tell you about 3 brothers. They all live on the same culdesac, they all have the same education, same type of job. The only difference is hours worked. The first brother works 20 hours, middle brother works 40 hours, and final brother works 60 hour/weeks. They come together and agree they want to contract a landscaping/flower place to put flowers on their culdesac. The flat cost is $10,000/each but the brother who only works 20 hours cant afford that. He wants his brothers to pay for it. They protest that he should pay his cut. The middle brother however devises a plan.

The poor brother will pay very little if not nothing. The middle brother pays less than $10,000. The final brother has to pay for most of it. They vote and 2 to 1 they win.

What happens? The brother working 60 hour weeks is now incentivized to reduce his hours so he gets less penalized.

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

#127

Post by throwaway0a5e »

Spooky23 wrote: post #7
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…

I’m sure someone would shed a tear for you. Think of how productive thousands of people would be if they weren’t staring down at death or disability daily because some ambitious motherfucker decided to make a cheap commodity like insulin a monopolized product, essential for life at a usurious price.

>because some ambitious motherfucker decided to make a cheap commodity like insulin a monopolized product

You're talking about the legislators and the bureaucrats, right? Sure, the lobbyists asked them too but you'd think professionals would be a little more responsible than to just do what the lobbyists ask (yes I know they only did so incrementally over a decades long time period but my point stands).

This stuff is only a monopoly because we've made it so slow and money consuming to break into these industries that there is not a steady enough flow of new entrants who undercut incumbents and drive costs down to actually keep the costs down.

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

#128

Post by TheOtherHobbes »

chii wrote: post #89
iso1631 wrote: post #48

Earlier quoted context omitted.

> 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. That's the falacy. Reality is nearer they'll buy an NFT of a hamburger and then ask for another $20m

> Reality is nearer they'll buy an NFT of a hamburger and then ask for another $20m let's say for argument's sake, that they ended up doing this - what's the difference than the food buyers in this case? Both is generating economic activity. And if the $20m was spent on food, wouldn't those people also then ask for another $20m after having eaten their food? My point is, gov't handouts are better off being invested i…

Your point is still wrong, because "productivity investments" are more likely to destroy jobs - certainly stable, well-paid jobs - than to create them.

In a very obvious and mundane way, how often do people find that when someone leaves a job they're suddenly doing their own work and the work of the person who left? But without a pay rise?

That's a productivity increase. It is very much not a "generated job."

Add automation to this and it's even more obvious.

The only time jobs are generated is when new markets are opened and this allows new kinds of activity which weren't possible before.

The textbook example is government seed funding of computing in the 50s, which created completely new kinds of business activity. But only after the initial research was paid for by the public. And at the cost of many traditional jobs. (Secretaries, clerks of all kinds, etc.)

Traditional economic theory has almost nothing of value to say about processes like these. There's plenty of mythology, but nothing that will accurately quantify wider social costs/benefits in a strategically useful way.

In reality technologies have downsides as well as upsides, not just in terms of direct externalities but in terms of job losses - and sometimes in terms of productive value losses.

It's exactly this feature of "economic progress" which conventional economics fails to analyse, quantify, or - often - even notice.

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

#129

Post by UncleMeat »

foverzar wrote: post #91
esarbe wrote: post #38

Earlier quoted context omitted.

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.

I think your logic is flawed in the part where you consider "added value". Obviously, managers never actually "add" value. All they do is organize, so that value can be generated in the first place. And obviously they are the ones who gain the most profit if succeed and loose the most if not. Anyone can verify it by founding a startup, but surprisingly people prefer comfy jobs. Try organizing something and it will be…

A manager is a laborer like any other. A CEO being paid a wage is not bad. They are doing labor too. The problem is when people are obtaining a large amount of their wealth through means other than labor.

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

#130

Post by masklinn »

netcan wrote: post #52

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…

> Trickle down economics is the same kind of error.

Is it really an error if what is observed is what was expected is what was desired?

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