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’

#251

Post by xwdv » Wed, Dec 08, 2021, 2:04 PM UTC

What is the point of trying to prove trickle down is a myth? There is nothing to gain, except some cheap political points against dead politicians from decades ago. Are people that pressed?

This article is hot garbage anyway. These days people can afford far more things and of better quality that were once considered luxuries decades ago, and people with actual useful skills are earning more than past generations.

Maybe trickle down is a myth? I don’t know, but whatever we’re doing now, let’s keep doing it, because it is working.

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

#252

Post by AnIdiotOnTheNet » Wed, Dec 08, 2021, 2:04 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.

Because people have children who benefit from their resources without having done anything to earn it, because those in power (having wealth of one kind or another) can leverage that power to suppress the ability of others to attain it, because no one is free of biases, etc.

Honestly if you can't see how the ideal of a meritocracy is impossible you're just not trying. Surely, some elements of meritocratic ideas are useful, but it is folly to believe that people with wealth have 'earned' it purely on merit.

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

#253

Post by Loughla » Wed, Dec 08, 2021, 2:04 PM UTC

Enginerrrd wrote: post #192

Hnrobert42 wrote: post #69

Earlier quoted context omitted.

No. That is exactly the kind of argument that was debunked. The rich, when given money, do not take the money and create for the poor. In everything I’ve read about direct giving, inflation is so insignificant, it isn’t even concern that’s addressed.

>In everything I’ve read about direct giving, inflation is so insignificant, it isn’t even concern that’s addressed. I'm not necessarily against you here, but I'm curious: How does your sentiment square with the fact that a significant amount of direct giving just occurred, and we seem to now have significant demand-pull inflation to the point the ports are all backed up and the fed admits to 6% inflation which we kn…

I feel like this is an argument willfully ignoring many, many other factors than direct giving. Such as an actual global pandemic.

I cannot believe that the stimulus money given to the US public has had the supply effects spanning the globe that are also partially responsible for inflation. I firmly believe doing so is a) shortsighted, b) unbelievably arrogant, and c) just plain ignorant of how the world has changed in the last 18 months.

In other words, I do not believe this is as strong of an argument as you think it is. Supply chain, labor shortage, a bounce-back effect in various spending categories after a low year in 2020. All of these things absolutely must play a factor in that.

Not just handing out money to people.

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

#254

Post by flavius29663 » Wed, Dec 08, 2021, 2:04 PM UTC

d--b wrote: post #222

The thing about trickle down is that even the water analogy is backwards! It's combining many small streams that make up the big rivers... as in: give money to the lower classes, they will consume stuff and so the money will end up in the pockets of whoever produced the goods (usually large companies -> the sea?), and there the money will flow back up as income (clouds/rain?) and that will feed the small streams over…

> the wealthy can only consume so much

That is exactly the point. The wealthy cannot consume too much, so they will invest the rest. Investment means factories and jobs for the poor. The government could take the money and do the investments themselves, but that never really works well. With so many inefficiencies, the governments would slow down the economic development significantly. Communist countries had 5 year plans setup by the government and they fell further and further behind in the market. All the money was distributed by the government, based on studies and decisions made mostly by engineers and politicians (e.g. if a dam was deemed profitable it was built no matter what. If nuclear is better it was getting built, and get public support afterwards etc.), and still they fell behind.

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

#255

Post by xondono » Wed, Dec 08, 2021, 2:05 PM UTC

paulryanrogers wrote: post #190

xondono wrote: post #166

Earlier quoted context omitted.

> give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. That’s not a return, the economy doesn’t work that way.

It enriches food producers, distributors, and servers. Assuming those functions aren't already consolidated into a megacorp I'd say it has been more beneficial than pushing up numbers in some billionaires account.

And it impoverishes those who you took those 20M$.

You can’t assess real impact without taking that into account.

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

#256

Post by romwell » Wed, Dec 08, 2021, 2:06 PM UTC

ImprobableTruth wrote: post #221

romwell wrote: post #183

Earlier quoted context omitted.

>Where do you think that money goes? Offshore. I think that money goes offshore. I even said it in the previous sentence, which you didn't quote. >Another word for that is investment. Well let's entertain the fantasy that the money doesn't flow away into offshore accounts for a second. So you're saying that investing is good? Then instead of giving money to rich people (e.g. by tax cuts), the government should do wha…

I'm curious as to what you even mean by "money goes offshore" and how does that cause it to appreciate? And of course investing is good - how could you even argue against that? Businesses need funding. And yes, governments in fact do invest in both companies and private housing, I don't understand why you think this is some gotcha. It's just that on average governments tend to do worse at investing, so it's generally…

>how does that cause it to appreciate?

Seems like you missed a step. The thing that appreciates is the financial product that this money buys.

>I'm curious as to what you even mean by "money goes offshore"

Buying stock in an IPO in a multinational corporation based in Taxhavenlandia would be one example.

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

#257

Post by dandanua » Wed, Dec 08, 2021, 2:06 PM UTC

JackFr wrote: post #149

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…

> as the billionaire holds on to whatever financial product they bought forever as long as it appreciates faster than inflation. Another word for that is investment. Where do you think that money goes? You don’t earn returns on money that isn’t doing anything.

> Where do you think that money goes?

Offshores, real estate, stocks, cryptocurrencies and other speculative bubbles. Probably on slaves, in a couple of decades.

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

#258

Post by throwaway0a5e » Wed, Dec 08, 2021, 2:07 PM UTC

rbanffy wrote: post #170

xondono wrote: post #157

Earlier quoted context omitted.

> I haven't ever heard trickle down proponents suggest we give the money to the working class. Because that would require taking from some people and giving to others through government, which is a very inefficient way to do it.

Also the trickle down proponents, however middle-class, think of themselves as wealthy and have the misconception that it’d be their money being reallocated.

Run the numbers, the billionaires don't actually have that much money compared to the hordes of doctors, lawyers and managers. If you want to cut the masses a meaningful sized check (lump sum or over time really makes no difference) you're going to need to take it from more than just the very top. Look at how Europe pays for its social safety nets. That's on the order what the tax burden would look like. You can't just snap your fingers and make that happen. Well you can, but that's a great way to get you and your like minded buddies shot in the hole you just dug. That frog needs to be boiled slowly and doing it that way isn't a sure thing. Basically you have to convince enough of the middle class that something that is very much not worth their while is the right thing to do.

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

#259

Post by romwell » Wed, Dec 08, 2021, 2:08 PM UTC

ImprobableTruth wrote: post #208

JKCalhoun wrote: post #163

Earlier quoted context omitted.

I assume it goes overseas.

Why would you assume that? Most stock people buy is of American companies. And hell, even if it was true, what is wrong with investing in foreign companies (of presumably underdeveloped nations)? That money still isn't "doing nothing", but rather giving the funding to companies that need it.

Whats wrong is that this money was generated domestically, and people who generated it are screwed by lack of healthcare, education, housing, infrastructure, transportation, etc.

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

#260

Post by api » Wed, Dec 08, 2021, 2:08 PM UTC

flavius29663 wrote: post #233

romwell wrote: post #183

Earlier quoted context omitted.

>Where do you think that money goes? Offshore. I think that money goes offshore. I even said it in the previous sentence, which you didn't quote. >Another word for that is investment. Well let's entertain the fantasy that the money doesn't flow away into offshore accounts for a second. So you're saying that investing is good? Then instead of giving money to rich people (e.g. by tax cuts), the government should do wha…

Governments are notoriously bad at investments. Rich people will not keep money frozen in offshore accounts forever, to be eaten by inflation. They will invest at some point, and when they do it's going to be much more efficient than whatever the government can do. All the former communist states had the government make all the decisions where the money is invested, and they fell further and further behind in economy…

I'm not sure everyone here is arguing that the government should make investments. Many are arguing that the poor and middle class must be capitalized to increase demand and that an economy with nothing but rich people trading vanity goods with each other is a recipe for stagnation and societal collapse.

There should not be a picture of Elon on the article. That speaks to ignorance. Elon gets a lot of flak because he's highly visible but he's nowhere near a poster child for the idle rich. The idle rich who sit and extract rent know to keep out of the limelight.