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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’

#341

Post by FredPret »

pydry wrote: post #329
FredPret wrote: post #287

Earlier quoted context omitted.

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?

Well, thanks for ignoring my entire point. I hope you get your hands on $5m one day and try the very easy "buy and hold" strategy and see for yourself

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

#342

Post by refurb »

esarbe wrote: post #324
refurb wrote: post #121

Earlier quoted context omitted.

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 ev…

Huh. Supply side economics is exactly giving more people money to spend”. You even admit that.

Real wages grew and unemployment was at record lows during the 80’s. Even for the lower class. Please stop getting your information from social media.

Are you saying that’s wrong?

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

#343

Post by xondono »

Clubber wrote: post #201
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.

>Because that would require taking from some people and giving to others through government, which is a very inefficient way to do it. I mean where do you think defense contractor profits come from? How about medical and Pharma? Medicare is the largest single payor in the US and they deal exclusively with the elderly who require more prescriptions and medical care. Many large industry's largest client is the federal,…

> I mean where do you think defense contractor profits come from?

So what? What’s the argument here? Because we have programs that take X amount of dollars, burn a portion of it and give the rest to people in group Y, we should have other programs doing the same for the people in group Z1,Z2,…?

Call me crazy, but IMO the solution is not having programs that burn our collective wealth.

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

#344

Post by refurb »

temp10298385 wrote: post #320
refurb wrote: post #121

Earlier quoted context omitted.

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.

Giving people more money (i.e tie wages to increase in productivity) is demand side economics. Supply side economics is increasing the amount of available goods regardless of demand. The lagging wages are mitigated by credit, i.e. debt.

You’re taking the words to literally.

“ Supply-side economics is a macroeconomic theory that postulates economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade”

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

#345

Post by dredmorbius »

leto_ii wrote: post #177
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…

> More wealth, more wealth disparity... almost universally. How so? Why would you assume that the distribution of wealth is correlated to the total stock? In reality this actually doesn't have to be the case at all. Aside from direct means of wealth redistribution, the are ways of setting up an economic system such that wealth inequality is reduced. > Many or most people have no wealth, depending on your semantics of…

This is covered well in Gregory Clark's book A Farewell to Alms.

Increased wealth through technological means has had two effects.

1. It's raised the maximum possible wealth ceiling. That is, the wealthiest people who've ever lived, are alive today.

2. It's lowered the minimum survivable poverty floor. That is, it's possible to survive being poorer than at any previous point in history.

As Clark puts it in his introduction, "There walk the earth now both the richest people who ever lived and the poorest."

Sample chapter online: http://assets.press.princeton.edu/chapters/s8461.pdf

https://archive.org/details/farewelltoalmsbr00clar/page/n9/m...

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

#346

Post by DeathArrow »

dredmorbius wrote: post #332
DeathArrow wrote: post #101

What's the problem with the income inequality? Isn't it normal that people who do different things and have different skills to win different amounts of money?

Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconvenience to the society? The answer seems at first sight abundantly plain. Servants, laborers and workmen of different kinds make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. N…

That doesn't mean all people should earn the same.

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

#347

Post by lifeisstillgood »

WastingMyTime89 wrote: post #98
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…

> 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…

* VCs are a commodity because Capital is so prevalent * Entrepreneurs are a commodity because talent is so prevalent

So, the market should look like "lots o small companies funded by cheap money" but it does not. And is that because Jeff Bezos is basically Marie Antoinette?

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

#348

Post by sofixa »

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…

> Governments are notoriously bad at investments

Not all governments, check Norway for a great example of great investment.

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

#349

Post by esarbe »

refurb wrote: post #342
esarbe wrote: post #324

Earlier quoted context omitted.

> 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 ev…

Huh. Supply side economics is exactly giving more people money to spend” . You even admit that. Real wages grew and unemployment was at record lows during the 80’s. Even for the lower class. Please stop getting your information from social media. Are you saying that’s wrong?

> Huh. Supply side economics is exactly giving more people money to spend”. You even admit that.

What, no! Here, let me quote myself from the previous answer I gave you.

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

Here, have a look at what supply-side economic is[0]. Supply-side economics is basically just lowering taxes.

> Real wages grew and unemployment was at record lows during the 80’s.

Nope, they didn't. Check [1] or [2]. Here's a pretty picture of the same data, just to be sure: [3].

Here's one for unemplyment: [4]; in the early 1980 unemployment skyrocketed, only to slowly fall back towards the level it was at the beginning of the 1980. I guess you could say that you are technically correct say that is was falling for most of the time - because it shot up so much at the beginning. Technically correct; the worst way of being correct.

In fact, ever since the introduction of supply-side "economics", wages have more or less flatlined and the profit from increased productivity has gone pretty much excursively to the very small layer of scum floating on top of the economic sewage water while everyone else is eating shit.

> Are you saying that’s wrong?

I guess I am? My suggestion would be to check the data.

> Please stop getting your information from social media.

There's no need for insults, is there?

[0] https://en.wikipedia.org/wiki/Supply-side_economics

[1] https://www.epi.org/publication/swa-wages-2019/#fig-e

[2] https://fred.stlouisfed.org/series/AHETPI

[3] https://en.wikipedia.org/wiki/File:United_States_real_wages_...

[4] https://en.wikipedia.org/wiki/File:US_1980s_unemployment.png

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

#350

Post by netcan »

cloverich wrote: post #315
opportune wrote: post #309

Earlier quoted context omitted.

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…

Aren't savings required to support loans -- business, home, etc? Does that imply saved money actually is doing something?

No, strictly.

EG, the ECB recently "loaned" EU member states quite a lot of euros. They do this every year, with the amount determined by public deficits. The amount is not determined by the amount of savings in ECB savings accounts. They can loan as much as they need, subject to EU law.

Public surpluses (deposits by EU member states into their national ECB savings account) are not common. The public doesn't make up the difference. There's no auction of ECB bonds before budget season to balance savings and loans.

Banks access funds in a similar way, though the EU chain is more complex that the UK or US'. There are often rules that dictate a balance between savings and access to central bank funds. Basically though, banks can loan as much as their regulators allow them to... for the same reason that states can.

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