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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’

#391

Post by nouveaux »

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…

"Clearly investment, or "trickling down" (as its critics like to call it) isn't just effective, it is the only thing that works to make people's lives better."

I'm not sure if you're being hyperbolic or not but innovation is often cited as the thing that improves people's lives. You might say that innovation requires investment but there have been many examples of poor people, without outside investment, innovating to make people's lives better.

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

#392

Post by cies »

hypertele-Xii wrote: post #164
cies wrote: post #94

Earlier quoted context omitted.

> you’re comment is just hyperbole/rhetoric and no substance. So what is unsubstantiated in your view? The fact that super rich use offshore accounts? That super rich make more money with moving assets than they could make with labor? That poor people will likely spend given money quickly?

Moving assets is labor. Just like making computers copy data over the Internet is labor.

Labor is what makes a wage. Moving assets is called investing.

With labor the pay is tied to the number of hours worked.

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

#393

Post by nouveaux »

syshum wrote: post #299
esarbe wrote: post #85

Earlier quoted context omitted.

> I did not earn any of that? >> A doctor's wage is earned. Your wage is earned. > invested most of my income in that 20 years in to dividend paying stocks Whether that one is 'earned' is debatable. From a neoliberal economists perspective you probably 'earned' it by risking your income. Although I always have to chuckle a bit of someone says that speculation is 'investment'. Investment is buying machinery, investmen…

At its core companies sell stocks to buy machinery and other things to invest in their business. >>You didn't work for it and - since you were able to put it aside for a later use - you didn't actually 'need' it. So from a moral and societal point of view, that money should have rather gone to pay for teachers wages wow. just wow. So morally a person should only be paid what the need to live that is your honest posit…

"wow. just wow. So morally a person should only be paid what the need to live"

GP isn't saying that the good and upstanding thing is be paid only what you need to live. GP is saying that if we're looking at the moral essence of what "earning money" means, then investing in stocks is not "earning money".

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

#394

Post by MereInterest »

sokoloff wrote: post #356
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…

There’s a lot of folks living an upper-middle class lifestyle who need to accumulate a handful of millions to support that lifestyle in retirement. (Raise capital gains taxes and they might need two handfuls to sustain their lifestyle in retirement.)

The combination of lower birth rates, not having a socialized retirement system and not having any significant estate tax seems tailor-made to build up an aristocracy over just a few generations.

1. Because birth rates are lower, being directly supported by one's children/grandchildren is no longer feasible.

2. No socialized retirement system. As a result, each individual must accumulate a small fortune in order to retire. Most retirement plans rely on living off of the investment income without touching the principal. Therefore, the amount required to retire is also sufficient for a person to live indefinitely. (Back of the envelope calculation, assuming 3% annual return on investment after inflation, $3M in retirement savings yields about $90k/year perpetually.)

3. Currently, the first $11.18M of an estate is entirely exempt from the estate tax, and the even the top marginal rate is only 40%. At no point would it prevent inheritance of a perpetuity by several descendants.

(1) is a long-term demographic change, and I think it's good overall, in terms of the care and attention children can receive. (2) forces the accumulation of wealth, out of fear of societal abandonment in old age. (3) allows those accumulations to persist across generations. I think that the appropriate spots to break this cycle are at (2), by instituting better social safety nets and retirement care, reducing the incentive to indefinitely accumulate, and at (3) by significantly increasing the estate tax.

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

#395

Post by Digit-Al »

throw0101a wrote: post #23

Trickle-down economics didn't start with Reagan. One reference to it from 1896: > There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upo…

The article did not claim it started with Reagan.

> In America, trickle-down was exemplified by President Ronald Reagan's tax slashes.

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

#396

Post by vanusa »

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…

Also, there is no such thing as "trickle down economics",

Whether or not is is, or ever was a a thing -- it absolutely was the unquestioned gospel among U.S. conservatives (and most definitely a staple in the rhetoric of the Reagan administration) in the 80s-90s, and continues to suffuse the current debate, albeit in other guises -- "income mobility" -- up through the current day.

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

#397

Post by titzer »

toss1 wrote: post #298
titzer wrote: post #174

Earlier quoted context omitted.

> Cue Pikachu face when the economy doesn't improve. It was never about the "economy". It has always been about pumping up the profit-generating machinery. It used to be that profit-generating machinery had real meatspace jobs backing it, and real machines and factories to feed. But now, given that machinery is now fully virtualized, first in the stock market, then in financial instruments, then tech, now in the unho…

You are right that it was never about "the economy". It was merely a trope to market the new rules as somehow being beneficial to the general public who was about to be fleeced, so they didn't protest and riot and let it go through. No different from the Grinch's claim to Cindy Lou Who that he'd be fixing the tree and bring it back - just say anything to keep someone who sees they're being robbed from raising the ala…

100% agree with this.

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

#398

Post by mrjangles »

Frost1x wrote: post #270
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…

>The poorest person alive in a first world country today lives better than the richest 100 years ago. What? Not even remotely close. John D Rockefeller was shrouded in wealth about 100 years ago. If you think the poorest, homeless person now stuck on the streets lives better than Rockefeller did, you're confused. Do not conflate general human progress of what's available with more knowledge, science, and basic techno…

>homeless person now stuck on the streets lives better than Rockefeller did, Ok good point, not the absolute lowest, but someone in the bottom 10% has access to food from all over the world that Rockefeller did not. They are usually overweight, which poor people back then were not. They have access to medicine the Rockerfeller couldn't dream of.

>Do not conflate general human progress of what's available with more knowledge, science, and basic technology

You seem to imagine that these things magically just appeared. They were created because humans with money invested in them.

>China is arguably just as technologically advanced as the US.

China stole every single thing it had from the US. They have developed almost zero technology. (You could very nearly say the same for Europe, though they are less socialist than China and so have developed some things on their own - barely). This is always the way. Countries with authoritarian, dominating governments never develop anything - they can't. They can only steal and destroy, they can't create. Individuals develop new things and push humanity forward and only countries that empower individuals can create.

You need to ask the question about why humans have progressed so much, and why all that advancement happened in certain places only and not others.

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

#399

Post by mrjangles »

nouveaux wrote: post #391
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…

"Clearly investment, or "trickling down" (as its critics like to call it) isn't just effective, it is the only thing that works to make people's lives better." I'm not sure if you're being hyperbolic or not but innovation is often cited as the thing that improves people's lives. You might say that innovation requires investment but there have been many examples of poor people, without outside investment, innovating t…

>You might say that innovation requires investment but there have been many examples of poor people, without outside investment, innovating to make people's lives better.

What examples?

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