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

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

#321

Post by raxxorrax »

opportune wrote: post #309
WastingMyTime89 wrote: post #98

Earlier quoted context omitted.

> 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. I agree with you but it remains a pro…

This is not necessarily true because wealth parked in such a manner doesn’t enter the economy. We have a general problem in that people do not consume enough to grow our economy. Now, endlessly increasing consumption sounds bad, but it’s basically required for the economy to keep growing in real terms, since it’s the main component of GDP. Most wealthy people, not even billionaires but lots of run-of-the-mill hundred…

> We have a general problem in that people do not consume enough to grow our economy

We have a general problem that our economy doesn't support certain use cases of wealth.

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

#322

Post by cloverich »

api wrote: post #214
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.

In addition to flooding offshore it mostly goes into rent extraction schemes. That in turn raises the cost of living for everyone else, generally to no benefit. I've heard it called the "slumlord economy." A small percentage of it does get re-invested in actual production, but productive investments tend to be higher risk than rent extracting "investments." Conservative holders of wealth are not going to dump it into…

I would guess income tax and sales tax account for a far larger amount of tax dollars than ownership dollars -- Not well read but I'd wager it is a 100x difference or more. I.e. if so for that to work we'd have to vastly reduce government services. Either that or land tax would go way up, e.g. you have much more money from a lack of income and sales tax, but then 100x higher rent (as landlords could raise rent to cover the taxes).

(FWIW I think I would be pro high taxes on multiple home ownership, investors purchasing and parking in home real estate on the surface seems like a bad thing, but then commercial real estate and dense urban housing seems like it would require investment-driven development so not really sure)

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

#323

Post by alfor »

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.

That is the problem. High regulations that create a quasi-monopoly on products

Who make that regulations? The government.

The government is just a huge corporation without competition that can use violence legally on people.

At each place where the cost of service and product have gone up you will find regulations and monopolistic entreprises who are way too much connected to the government.

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

#324

Post by esarbe »

refurb wrote: post #121
esarbe wrote: post #95

Earlier quoted context omitted.

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.

> Supply side is a valid economic theory.

I presume that actually think that this is the case and that you didn't just forget the /s.

Supply-side economics has been thoroughly debunked, again and again[0]. Just look the current state of the US.

> Give people more money and they spend it.

It depends. It depends how much money they have, how much money they already have and what your definition of 'spending' is. Not every kind of 'spending' is of economic and social value. Give a billionaire a dollar and they'll forget it with the lint in their pocket, will get thrown out with the trousers and incinerated along with the trash. Give a billionaire a million dollars and they'll put it into NFT or crypto or something else of questionable social or economical value. It's only when you give a poor person some money that they will spend it in a 'useful' way that actually increases productivity.

But "Give people more money and they spend it" not supply-side economics, actually, is it?

In all actual actuality, supply-side economics is about lowering taxes, decreasing regulation, and allowing free trade, with a heavy emphasis on lowering taxes. You could say that it's primarily about lowering taxes, because 'decrease regulation' and 'promote free trade' is not exactly a supply-side original. SSE is about lowering taxes, primarily for the 'job creators'. That's what the Laffer curve is for. And only the beginning of the issues with supply-side economics ...

> Apparently we are still talking about it despite the economic expansion of the 1980’s

What good is economic expansion if no one but a very small and exclusive group of very exclusive and already very rich people profits said economic expansion? Do larger number make you happy? if so, here's a big number for you: 10↑10.

If you are not more happy now, then you are in the same boat as most US workers since 1979. Just because there was economic expansion, it doesn't mean their lives got better. Worse, in fact. Wages stalled, living expenses increased, social support networks were cut and cut and cut again. Why exactly? Yes, exactly. Supply-side economics, or "voodoo economic policy", as George H. W. Bush famously described it. Presumably because it thrives on the corpses of exsanguinated workers.

> a Democratic ploy [...]

To my knowledge, one of the mayor reasons for the '70ies economic downturn was the "Nixon shock" where prices and wages were frozen and import taxed increased. It's named after Richard Nixon. He was a Republicant President[1].

[0] https://en.wikipedia.org/wiki/Kansas_experiment

[1] https://en.wikipedia.org/wiki/1973%E2%80%931975_recession

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

#325

Post by ZeroGravitas »

Andrew_nenakhov wrote: post #250
skywal_l wrote: post #147

Earlier quoted context omitted.

Absolutely. Piketty showed that wealth inequality peaked right before WWI and was very low in the 60/70s. The amount of wealth between these two periods does not even compare.

We have to thank socialism and communism for reducing wealth i equality in western Europe and in the US. But no, make no mistake, NOT because they are good , but because they're so disastrously bad , as was demonstrated by the USSR, that western elites did a lot to improve the working conditions of their workers, so they would put aside the comminust manifesto and would start caring about their nice car and a cosy ho…

So the first part of this is something I agree with, it feels like most of the gains came about because 'the rich' had to give 'the poor' something or they'd get rid of them in a bloody massacre. The history books are fairly clear on this, whether it's Magna Carta (rich lords putting the King on notice) or miner strikes. I believe Bismark is someone who made this strategy explicit.

> The second part of Bismarck’s strategy to destroy social democracy was the introduction of social legislation to woo the workers away from political radicalism. During the 1880s, accident and old-age insurance as well as a form of socialized medicine were introduced and implemented by the government. But Bismarck’s two-pronged strategy to win the workers for the conservative regime did not succeed. Support for the Social Democrats increased with each election.

I don't understand why the USSR failing or being 'bad' is necessary to further incentivize 'the rich', if anything I'd say the opposite is true.

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

#326

Post by dredmorbius »

LatteLazy wrote: post #220

The lie is almost 40 years old. It's done a lot of damage in that time. It's time to stop wasting time pretending the other side are open to discussion, compromise or persuasion. Even pointing out the falsehoods in these lies actually makes people more likely to believe them. You saw this with the "350m pounds a week for the nhs" lie in the Brexit campaign. Even after it was revealed and admitted to be untrue, the mo…

It's well over a century old. William Jennings Bryan's "Cross of Gold" speech was discrediting the same notion. Will Rogers's original coinage of "trickle down" to ridicule it dates to 1932.

https://en.wikipedia.org/wiki/Trickle-down_economics

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

#327

Post by credit_guy »

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…

The actual comparison is more like "Take $20 MM from a billionaire and give 1 million hungry people $20 each, or let the billionaire keep the $20 MM". The billionaire could invest in SV startups for example, and the hungry people could buy food. That's the first order effect. The second order effect is that the billionaire, if taxed, will see his future profits reduced, so next year you'll only tax $18 MM, and the year after only $16, maybe. If you leave him alone, next year he'll invest $22 MM in startups and the year after $24 MM.

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

#328

Post by maccolgan »

UncleMeat wrote: post #138
foverzar wrote: post #113

Earlier quoted context omitted.

> 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.

That's in fact why we can have a discussion about hiring processes and promotion schemes in the private sector. In the public sector that simply doesn't exist as it's all a monopoly (obviously enough), there's no alternatives to point to to say which one is a better model. That's what meritocracy is, meritocracy isn't that meritless things don't exist.

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

#329

Post by pydry »

FredPret wrote: post #287
pydry wrote: post #246

Earlier quoted context omitted.

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.

You're not familiar with buy and hold?

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

#330

Post by pydry »

throwaway0a5e wrote: post #306
pydry wrote: post #181

Earlier quoted context omitted.

>Surely the return on that is earned income? No. Why would it be? Those layers of abstraction cut out the risk such that in many cases cash is the riskier instrument.

>No. Why would it be? Because the doctor had to evaluate the investment opportunity and risk what they invested. >Those layers of abstraction cut out the risk And that's why you only make pennies on the dollar doing it that way vs the risky way of picking specific things with high growth potential to invest in.

>Because the doctor had to evaluate the investment opportunity and risk what they invested.

Unless it's the doctor's hobby somebody usually does this on the doctor's behalf in exchange for a %. This is one of the functions of a well oiled financial industry.

If nobody was willing to do this for >And that's why you only make pennies on the dollar doing it

Can you guess the average yearly S&P return over the last 30 years?

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