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’

#281

Post by cycomanic » Wed, Dec 08, 2021, 2:23 PM UTC

mrjangles wrote: post #93

God this article is bad on so many levels I don't know where to start. First, income inequality doesn't measure income mobility. Places like the US that have a huge number of unskilled illegal and legal immigrants constantly entering at the bottom level will always have high income inequality. The question is, what happens to each individual over the course of their lives? 83% of Americans will earn more than their p…

It's funny how you complain about the quality of the original article and then bring up your cited one, which is so obviously biased it's not even funny.

Just to pick up on the income mobility. The US is one of the worst countries regarding income mobility while at the same time one of the ones implementing the most "trickle down" economic policies [1]. The contrast is particularly stark when comparing to the Scandinavian countries, which get often called "socialist" in the US. So by your own metric, trickle down does not work, because it leads to worse outcomes.

[1] https://en.wikipedia.org/wiki/Socioeconomic_mobility_in_the_...

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

#282

Post by goohle » Wed, Dec 08, 2021, 2:24 PM UTC

wilkommen wrote: post #234

JackFr wrote: post #149

Earlier quoted context omitted.

> 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.

Yes you absolutely do earn returns on money that isn’t doing anything. If I buy a share of Apple and the share price goes up, I’ve just made a return on money that isn’t doing anything. The money I spent on that share didn’t enable any real economic activity other that me buying that share. My money didn’t go to Apple to enable them to grow their business. It went to some other investor who is primarily engaged in th…

For example, I raised some money from Alice, so I have obligation to pay $1M(+%) to Alice. In other words, Alice invested $1M into me. Now, my business grows, risks are reduced, so Bob paid $1.25M to Alice. Now, I have obligation to pay $1M(+%) to Bob instead of Alice.

What's wrong with that?

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

#283

Post by Jensson » Wed, Dec 08, 2021, 2:26 PM UTC

hiptobecubic wrote: post #266

seibelj wrote: post #141

Earlier quoted context omitted.

A major difference now is the majority of those with vast wealth earned it themselves through creating new enterprises. The aristocrats of old received it through birth or politicking. The rich today are far more effective and organizationally superior considering it was those exact skills that made them their wealth.

No? There are more wealthy people today who earned it without being bootstrapped by an insanely good starting position than ever before, but to suggest that it's the _majority_ is to ignore everything people have been complaining about in the streets for the last two years. A huge predictor, if not the single biggest predictor, of wealth is still just whether or not your parents are wealthy, especially at the top. E.…

> huge predictor, if not the single biggest predictor, of wealth is still just whether or not your parents are wealthy, especially at the top.

If you count top 10% as wealthy, sure then you need to be wealthy to make it big. A kid with top 10% parents has everything they need to succeed and create a top company. A poor kid doesn't, true, but a poor kid in USA still has everything they need to get to top 10%, and then their kids has everything they need to become top 0.1%. So you are right, this process isn't perfect, but it works in 2 generations, which is still really good compared to historically.

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

#284

Post by [deleted] » Wed, Dec 08, 2021, 2:27 PM UTC

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…

[deleted]

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

#285

Post by throw0101a » Wed, Dec 08, 2021, 2:29 PM UTC

nrdvana wrote: post #139

throw0101a wrote: post #47

Earlier quoted context omitted.

> 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 "s…

Piketty suggested a top 'wealth tax' rate of 2% for valuations over something like US$ 1B:

* https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...

Given the general trend of capital growth being higher than economic growth, that would be probably be small amount of shares at any given time, and would take a while before they deplete having large control over their companies.

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

#286

Post by goohle » Wed, Dec 08, 2021, 2:29 PM UTC

jcfrei wrote: post #218

JackFr wrote: post #149

Earlier quoted context omitted.

> 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.

Those investments only benefit very few people though, who already have well paying jobs. Private investors prefer to take long bets in technology corporations (like FAANG, etc). That benefits to a small extent the few people working there because the high stock price convinces the CEO that he can afford another position here or there. It does nothing for the people in the lower income percentiles, because the additi…

> Those investments only benefit very few people though

Buy stock and benefit (or take a loss) with them.

> Instead the government needs to invest in projects that create jobs for everyone.

Vote for such government or immigrate to a socialists country, Venezuela or North Korea. They have the lot of jobs.

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

#287

Post by FredPret » Wed, Dec 08, 2021, 2:29 PM UTC

pydry wrote: post #246

FredPret wrote: post #205

Earlier quoted context omitted.

If an investment works well and is well known (S&P), it’ll only work for so long. The PE ratio’s in the 500 S&P co’s have been heading ever upward ( https://www.multpl.com/shiller-pe ) indicating some sort of self-reinforcing effect.

70 years?

Very, very few investors have the vision and nerve to hold their money in one thing for 70 years through the ups and downs. In the case of the S&P500, this would have worked out, but in 99.9999% of other investments, you’d simply have ended with $0 (or less…) and high blood pressure. It is not obvious ahead of time what strategy will work best.

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

#288

Post by goohle » Wed, Dec 08, 2021, 2:30 PM UTC

romwell wrote: post #259

ImprobableTruth wrote: post #208

Earlier quoted context omitted.

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.

Can you name the country, please?

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

#289

Post by pydry » Wed, Dec 08, 2021, 2:30 PM UTC

superfunny wrote: post #239

Werewolf255 wrote: post #73

Earlier quoted context omitted.

I mean, no? In this specific example, the doctor is buying instruments which derive their interest from exploiting the labor and capital of those in the offering company, and after 20 years, the doctor is just living off others work because he 'earned it'. Plus, of course, in this perfect market scenario, no crashes or corrections can ever occur.

Are the workers slaves? Are they forced to work for the offering company, or do they choose to do so?

They're essentially forced. If you dont for one you have to work for another that is essentially equivalent.

With a basic income/free housing your comment would be valid though.

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

#290

Post by socialdemocrat » Wed, Dec 08, 2021, 2:33 PM UTC

naruvimama wrote: post #65

Speaking from a historical perspective. The East India company/ies pretty much won much of the world for Britain & Europe. Europe was neither wealthy nor technologically more advanced than India. But the Church with its christianising mission and doctrine of christian discovery allowed the pooling of resources. Concentration of wealth is important and the wealth did trickle down to other countries of Europe. A modern…

Europe was more technologically advanced than India. I know it is popular with revisionism, because people like to explain away Western dominance as if being alone about excelling at being a bigger asshole than everybody else.

Reality is that Europe conquered the world because it was economically and technologically superior to all other nations. Neither India nor China had modern science that developed in Europe in the age of enlightenment. There was nobody like Galileo Galilei, da Vinci, Kepler, Newton, Leibniz, Descart, Pascal, Christiaan Huygens, James Watt, Newcomb etc outside of Europe. This is just a small selection of European thinkers from that era. These was a huge number of them involved in all areas of science and engineering.

All this stuff meant Europe could mass produce high quality guns, cannons, warships etc. It meant Europe could mechanize all sorts of production. Produce steam engines etc.

I am not writing this to suggest that Indians or Chinese are somehow inherently lesser people. Development fluctuates over time. In periods India and China was more developed than Europe. However many developments happened in Europe which caused European development to get supercharged and move ahead. This wasn't colonization. Rather colonization was made possible due to technological, economic and social development which gave Europeans and advantage over their competitors.