20 year study of global wealth demolishes the myth of ‘trickle-down’ • Hacker News Board

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

#131

Post by romwell » Wed, Dec 08, 2021, 1:14 PM UTC

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.

I'd be so happy if everything I said was obvious, because in that case, trickle-down wouldn't have been the de-facto economic direction of the US since Reagan.

But it seems like the obviousness of the stupidity of the idea of trickle-down has been lost on us; hence the study.

Do quote though — maybe it'll help the obvious point trickle down to the rest of the population.

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

#132

Post by Spooky23 » Wed, Dec 08, 2021, 1:16 PM UTC

nrdvana wrote: post #83

Spooky23 wrote: post #7

Earlier quoted context omitted.

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.

Think of how dead they would be if the insulin didn't exist. The part of the topic of insulin relevant to a discussion of trickle down economics is whether the insulin could have been researched and invented without letting people become wealthy profiting off of it. The monopoly on insulin that happened recently is one of the evil tendencies of capitalism that needs curtailed with laws, but unrelated to supply-side e…

I think insulin is yet another great example of why trickle down theories are bunk.

Our economic policy for decades has been mostly centered around pumping capital into markets to prop them up or grow them. The problem is there’s too much money pursuing too little novel work. Ironically, making billions of “surplus” dollars available to big companies drives lots of little command economies, not healthy markets. It makes more sense to corner the market on insulin or some foot fungus cream and rip people off than to create a new or improved product. There is very low R&D at improving anything associated with insulin because of rent seeking behaviors.

Profits don’t motivate research. Market activity does. I hope we learn from the successful aspects of COVID and pump money at people to make economic decisions for themselves.

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

#133

Post by rsfern » Wed, Dec 08, 2021, 1:16 PM UTC

simonsarris wrote: post #105

mtberatwork wrote: post #60

Earlier quoted context omitted.

> 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".

I hope you understand that the SALT deduction that Dems want that he is referring to is a tax cut for the wealthy only. It exclusively applies to people wealthy enough to break the cap. https://www.nytimes.com/2021/11/02/us/politics/salt-cap-tax-...

It seems a bit misleading to focus on just this SALT cap aspect when that is part of a broader tax policy change. It’s at least being pitched as a sort of political compromise to get the rest of the build back better plan through. Thoughts?

NYT is paywalled, but I found https://www.vox.com/2021/11/6/22766735/salt-deduction-cap-de... interesting

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

#134

Post by [deleted] » Wed, Dec 08, 2021, 1:16 PM UTC

throwaway98797 wrote: post #115

bottled_poe wrote: post #92

Earlier quoted context omitted.

> Should we trust the government to spend the money more wisely than the folks who earned it? Yes. > Or said another way, how do you combat the almost inevitable corruption you see with large government spending? Transparent auditing of taxpayer funds. Presumably this exists to some degree in your country. > 2. What will incentivize people to work at insane rates if the vast majority of their income and wealth is tax…

Not all people aiming for $1m+ in earnings are doing it for a safety net. Some people like to compete for the heck of it.

[deleted]

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

#135

Post by syndacks » Wed, Dec 08, 2021, 1:16 PM UTC

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.

I actually think this is a great comment, with more substance than your typical HN nit. They are introducing the concept of marginal propensity to consume(https://en.m.wikipedia.org/wiki/Marginal_propensity_to_consu...), an economic idea that has everything to do with why trickle down is bogus.

AND, it's funny. So extra points for that.

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

#136

Post by adgjlsfhk1 » Wed, Dec 08, 2021, 1:16 PM UTC

jpadkins wrote: post #117

One observation I have on this topic and how the corp. media (vox, et al) handles the topic: The proposed solutions are always along the lines of increased income taxes, which impact people who are getting wealthy (high earning doctors, execs, entrepreneurs, etc). I rarely see discussion from corp. media on wealth taxes, which would impact the already wealthy. It is not widely known that billionaires don't have large…

what you're missing here is that discussions of higher marginal income taxes also often come with discussions about higher capital gains tax and higher estate tax which are the two main ways wealth is hoarded.

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

#137

Post by Emma_Goldman » Wed, Dec 08, 2021, 1:17 PM UTC

foverzar wrote: post #97

Emma_Goldman wrote: post #46

Earlier quoted context omitted.

>'Should we trust the government to spend the money more wisely than the folks who earned it' This is a false opposition. Taxed money does not have to be spent at the point of the state. A sovereign wealth fund could raise funds from wealth taxes and assign a share to every citizen in the country. It could then use its interest-bearing assets to pay out a dividend to all shareholders every year. It could be run by an…

> A sovereign wealth fund could raise funds from wealth taxes and assign a share to every citizen in the country. It could then use its interest-bearing assets to pay out a dividend to all shareholders every year This assumes responsible spending, which is not the case IRL. And what about shared infrastructure projects?

No it doesn't, the case for such a scheme depends on two kinds of arguments: (1) intrinsic arguments that people have a right to a portion of collective wealth, to the means of life, or to the means of being able to freely spend their time as they see fit; (2) and instrumental arguments that it would rebalance the power of capital over labour, lead to various positive social outcomes, and tame the plutocracy that is ruining Western democracies.

If your standard is 'responsible spending', the counterfactual baseline is keeping this money in the hands of the wealthy. For obvious reasons - diminishing marginal utility, the breakdown of the social compact, the corruption of politics - I don't think they would spend a dollar on the margin any more 'responsibly'.

What about shared infrastructure projects? I'm not suggesting this ought to replace the state, simply that global wealth can be equalised without reallocating that wealth to the state to spend.

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

#138

Post by UncleMeat » Wed, Dec 08, 2021, 1:17 PM UTC

foverzar wrote: post #113

AnIdiotOnTheNet wrote: post #104

Earlier quoted context omitted.

> Should we trust the government to spend the money more wisely than the folks who earned it? When the aristocracy watched as the new-born communist Russia brutally executed its royal family, in their hearts they knew their narrative of birthright and nobility would no longer be accepted. They needed a new reasoning to justify their positions of power, to convince the peasantry that their lords were just and inevitab…

> Thus was the narrative of 'meritocracy' born in a world where there is obviously no possibility of such a thing. How is it "obviously"? All the business relations between people are inherently meritocratic. Not only relations, the whole principle of "you reap what you sow" is inherently meritocratic: you have to put in some merit to generate value in return.

> All the business relations between people are inherently meritocratic.

That is why there are precisely zero complaints about broken hiring processes and promotion schemes.

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

#139

Post by nrdvana » Wed, Dec 08, 2021, 1:17 PM UTC

throw0101a wrote: post #47

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. 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? The folks that have a lot of money don't spend it. Out of all of Buffett's, Gates', and Bezos' fortunes how much is being spent 'productively' and how much is just sitting around collecting interest on interest.…

> The folks that have a lot of money don't spend it. Out of all of Buffett's, Gates', and Bezos' fortunes how much is being spent 'productively' and how much is just sitting around collecting interest on interest. The velocity of money hasn't been doing much in recent decades

You seem to indicate they have lots of money, but most of their wealth is assets, much of which is ownership of their own companies. If they "spent" that it would mean selling pieces of the company to someone else, and they would lose power to make the sorts of decisions that made the company successful in the first place. Letting a lot of middle class people's retirement savings managers make all the board decisions for Microsoft is not going to provide the same level of innovation as letting Gates have a large vote. The only reason those stocks have any value at all is because of the size and market position of the company. There is no benefit in letting this form of wealth have "money velocity".

Maybe you left Musk off the list on purpose, but what he's "doing with his wealth" is trying to make humans a multi-planet race, and he literally doesn't even care what his company shares are worth to other people. Is it really "money" if he doesn't intend to sell it? His recent sale of lots of Tesla was only because he had options to buy more of the company and immediately sell it. (and now he'll pay a few billion in tax, on that, since it was actually income) Until he did that, all his "wealth" was a mental fiction invented by him and the hard working people in his company. The real money just moved into his account for the first time in a long while, as he drained your retirement account in exchange for the idea that they now have a tiny piece of control over Tesla.

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

#140

Post by iso1631 » Wed, Dec 08, 2021, 1:18 PM UTC

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…

> My point is, gov't handouts are better off being invested into productivity producing investments

So fund companies doing useful work directly.

If you don't like the government deciding, and want to say spend $350b to stimulate the economy and be useful, give everyone a $1000 "investment voucher" that can be invested in exchange for a share, into companies with a net worth of say between $1m and $50m, to be spent on R&D.