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

businessinsider.com

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

#371

Post by Clubber »

xondono wrote: post #343
Clubber wrote: post #201

Earlier quoted context omitted.

>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.

>So what?

Follow the thread:

>> 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.

The argument is even though trickle down proponents don't suggest we give the money to the working class, they're fine with giving money via several mechanisms to business, thus trickle down.

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

Our collective wealth should be spent on helping the "collective," i.e. citizenry directly. It's been hijacked with trickle down theory. Trickle down theory basically says if you give all the collective wealth to business, it will be spent helping the citizenry. I guess it does in the form of jobs, but the businesses certainly get most of the cut.

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

"...means to stimulate business investment in the short term and benefit society at large in the long term."

Of course it's a sham, but it's been going on since at least Reagan.

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

#372

Post by jdgoesmarching »

xondono wrote: post #339
jdgoesmarching wrote: post #316

Earlier quoted context omitted.

Regulatory capture is not inefficiency, it is an extremely efficient result of a system designed to serve capital. At some point we have to stop pretending like we aren’t successfully achieving what our economy is optimized for.

Regulatory capture is impossible without government enforcement. The way to fight it is not by giving more powers to government but giving less.

I’m not sure what Libertarian-minded people think the era of peak neoliberalism was all about, but defanging the powers of government 50 years ago is how we’ve arrived at the modern corporatocracy. It turns out that taking power away from government doesn’t result in an anarchist paradise, it just swings the balance of power in favor capital.

This is your paradise, your side won. Move the goalposts all you want, but we’re at the logical consequence of letting “the market” make every social, economic, and political decision.

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

#373

Post by EarlKing »

rbanffy wrote: post #182
EarlKing wrote: post #172

Earlier quoted context omitted.

No, parent was right, your comment lacks all substance. It supposes that 'the rich' simply hoard wealth like a mythical dragon in a cave, scrooge mcducking through it while the poor, tired masses starve to death. The truth is that they conserve their wealth by investing it, which means that money recirculates into the economy to provide for the continued prosperity of others. If they just sat on their money they'd ac…

> If, however, someone puts their finger on the scale and effectively ensures that the stupid-rich (literally) can't lose then the rich get richer and the poor get poorer. Solution: Stop doing that. When we get to the point money is easily converted in political power, you can see not only the finger tipping the scale, but a whole foot firmly planted there. Good luck convincing the rich, who actually convinced themse…

Convincing the rich to stop tipping the scale is about as likely as convincing people that "eat the rich" is not an actual solution to the problem. Both are rooted in hatred and ignorance, and neither will actually lead to justice.

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

#374

Post by gilmore606 »

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…

> Aristocrats used to explain that they could not be dispensed with because they had superior value and were needed to administer and guide while exploiting the collective labours of the population. Modern large shareholders and executives explain that they can’t be dispensed with due to their superior ability

Isn't this evidence that the aristocrats were right? We beheaded them and new aristocrats sprang up in the same place, almost as if there must and will always be people in such positions.

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

#375

Post by monocasa »

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…

Those numbers are out of date. Only something like 50% of millenials are doing better than their parents at the same time in their life, and it looks like genz is going to fall off even harder.

https://www.cnn.com/2020/01/11/politics/millennials-income-s...

As a side note, I personally know some former FEE writers, and they left because the editors wouldn't give a fair shake to facts that went against the world view they were trying to push. One of them actually went from being a FEE writer style libertarian to being a socialist over the whole thing.

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

#376

Post by rrrrrrrrrrrryan »

sokoloff wrote: post #360
rrrrrrrrrrrryan wrote: post #318

Earlier quoted context omitted.

> a poor kid in USA still has everything they need to get to top 10% Generally, after a lifetime of honest, hard work, you'll make it 1, maybe 2 tax brackets higher than your parents. To make it further than that you have to be especially talented, lucky, or both. I just looked it up: as of 2016, 7.5% of kids born in the bottom quintile make it to the top quintile, so it is indeed possible , though quite rare. [1] I…

> as of 2016, 7.5% of kids born in the bottom quintile make it to the top quintile, so it is indeed possible, though quite rare. [1] Is 7.5% “quite rare”? That’s around (and between) the portion of the population who is left handed and the portion of the US population that has naturally blond hair, neither of which would I describe as “quite rare”.

The parent described the "top 10%" (chosen arbitrarily, I'm sure), and the only stats I could find described quintiles.

7.5% of the bottom 20% make it to the top 20%. In a perfectly fair and equitable society, you'd expect it to be 20%. I wouldn't call this "quite rare," though I would call this uncommon.

But what percentage of the bottom 10% do you think make it to the top 10%? It's probably even fewer.

And to go step further: I'm not convinced the "top 10%" actually has everything they need to become a billionaire. Zuckerberg's parents were both doctors, Bill Gate's dad co-founded a successful law firm, Musk's parents owned an emerald mine in South Africa. These folks almost certainly grew up in the top 5% of household income.

If you need to grow up as a child in a top 5% household to "have everything you need" to start a wildly successful company, what percentage of the bottom 5% make it to the top 5%?

I'll bet you it's indeed "quite rare."

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

#377

Post by tomeon »

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…

> Circa 2005, I heard a podcast with 90-something Ronald Coase. He has pissed. Everyone had been teaching his theorem backwards for decades, backed with the "chalkboard economics" he despised

Similar themes came up in Ronald Coase's appearance (at a stunningly-lucid 101 years old) on this 2012 episode of EconTalk: https://www.econtalk.org/coase-on-externalities-the-firm-and...

Plugging this as it's one of my favorite episodes of one of my favorite podcasts.

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

#379

Post by EarlKing »

romwell wrote: post #212
EarlKing wrote: post #172

Earlier quoted context omitted.

No, parent was right, your comment lacks all substance. It supposes that 'the rich' simply hoard wealth like a mythical dragon in a cave, scrooge mcducking through it while the poor, tired masses starve to death. The truth is that they conserve their wealth by investing it, which means that money recirculates into the economy to provide for the continued prosperity of others. If they just sat on their money they'd ac…

>The truth is that they conserve their wealth by investing it, which means that money recirculates into the economy to provide for the continued prosperity of others. I know asking to read the article is too much, but maybe read the title? Also, is the word "offshore" not in your vocabulary? Otherwise agreed. Bailouts, of course, are atrocious. Investment should be a risk. Speaking of which, reminder: bankruptcy does…

> I know asking to read the article is too much, but maybe read the title?

There's nothing in the article that actually refutes the notion of trickle-down economics. It is little more than a summary of a summary of the actual report[1].

The actual report is even worse than the summary when you dig into it. For example, the report notes on page 63 that taxes and transfers did nothing to change inequality. That's precisely what you'd expect in an economy where labor is specialized to produce different things, with some producing greater value, and some producing lesser. Increasing taxes doesn't change that fact. It's also what you'd expect from some populations having greater literacy and education than others, and greater infrastructure to facilitate investment and trade. Taxes won't change that. Investment will.

As a further example, page 168 "Lessons from failed trickle-down economics" falsely claims that when taxes were reduced, GDP growth did not increase, pointing to the period of the 1980s which was in the middle of the dot-com boom. This is a sleight-of-hand on their part where they use figures showing a lack of growth in GDP per capita and attempt to imply this means there was no GDP growth whatsoever. However, GDP in that period did in fact increase, as did the population.

The real point of this report lays further in where they finally drop the mask and begin discussing "global redistribution" and "ending center-periphery imbalances" between the "Global North" and "Global South". Put simply: This entire report is agitprop intended to convince people that because some people dodged their taxes in the 1980s-2020s period that means we should all accept "redistribution" to even things out... except, of course, they're not talking about tax evaders having to pay their fair share, but rather justifying theft from those who produce the real value in the world. This is nothing more than a sham attempt to legitimize greed and theft.

> Also, is the word "offshore" not in your vocabulary?

Moving money offshore and not paying taxes on it because it's still technically not "earned", and hence not their money, is certainly a problem... but the solution then is to treat that money as earned and subject to taxation immediately, even if you have to take out a loan against that money which you haven't really received yet. That said, the money sitting offshore isn't just sitting there: it's invested.

> Speaking of which, reminder: bankruptcy doesn't clear away student loans, making them an effectively risk-free investment for the banks. Yay.

Ah yes, how dare those banks invest in your future. They should've spent it all on hookers and blow in Vegas. Clearly that's a better investment. :D

[1] https://wir2022.wid.world/www-site/uploads/2021/12/WorldIneq...

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

#380

Post by alphabettsy »

throwaway0a5e wrote: post #258
rbanffy wrote: post #170

Earlier quoted context omitted.

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 ju…

Wouldn’t those professions listed be uppper-middle class or something else? I’ve never thought of doctors and lawyers as middle-class professions or income.
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