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Defending the One Percent

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31–40 of 52 posts

Re: Defending the One Percent

#31
post #12
post #10

The absurd example in the second paragraph put me off, so I didn't really find it in me to read the argument thoroughly. But if the premise is that a single man can "come up with an idea" and magically produce an ipod with comparable personal effort, and no reliance of a third world factory economy -- as an author can come up with a book -- then I don't think the author of the article has the required connection to r…

Did the iPod require a "third world factory economy", or was that merely the best way to make it when it was developed? Go back to the original Apple II and subsequent products, they were per memory and Wikipedia all made in the US until the late 1990s. The IBM PC was originally manufactured by SCI Systems in Huntsville, Alabama.

I believe the fact that this factory economy is third world is very much besides the point that e12e was trying to make.

Paraphrasing, I think the point is that writing a book and building an iPod are vastly different tasks, and immensely so. A better criticism to what e12e was trying to imply is perhaps that Rowling certainly wouldn't be rich if it weren't for a network of publishers. Like Jobs, she depended on other people for channeling the income she received to her. (Of course, the difference in how that happened is still huge.)

Re: Defending the One Percent

#32
post #3

Please mark as pdf.

No kidding. I never really pay attention to links on HN because I tend to trust the community. I clicked on this one and a PDF started downloading to my horror. I immediately nuked it from my download folder.

http://www.cvedetails.com/vulnerability-list/vendor_id-53/pr...

Re: Defending the One Percent

#33
post #4

This guy's a professor of economics at Harvard?! ...Actually that explains a lot.

Yeah, I was thinking that too... it is really well written, it makes compelling and nuanced arguments and it sets a nice thought framework for the debate. This is really an excellent piece, no wonder he's an econ professor at one of the most prestigious university in the world, that guy is brilliant.

Either you way over did the sarcasm or you and I are reading totally different articles. This thing is full of undefended assertions and logical holes. The thought experiment it opened with is so simplistic that it does little beyond revealing the author's bias and assumptions. Assumptions that are absurdly disconnected from reality (such as all voluntary transactions make both people's lives better).

Re: Defending the One Percent

#34
post #9

Isn't the entire 'one percent' debate (in America) centered around the fact that one party wants to institute a modest tax increase on that group, and the other party wants to, irrationally, keep cutting their taxes even when faced with deficits? Nobody reasonable is actually advocating for 'perfect economic equality'. I'm generally a free market guy (in that I believe the free market should be the foundation of the…

and the other party wants to, irrationally, keep cutting their taxes even when faced with deficits One thing we've learned is that never, ever happens. Instead, increased revenues, such as provided by Reagan's tax rate cuts, allows higher leverage AKA deficits. So "starving the beast" seems to be the best approach, until, of course, the accumulated deficits are inevitably reneged on one way or another (e.g. inflation…

Can you provide evidence that Reagan's tax rate cuts actually improved revenues? Here's a counterargument that they didn't have that effect: http://krugman.blogs.nytimes.com/2008/01/17/reagan-and-reven...

Re: Defending the One Percent

#35

Earlier quoted context omitted.

Yeah, I was thinking that too... it is really well written, it makes compelling and nuanced arguments and it sets a nice thought framework for the debate. This is really an excellent piece, no wonder he's an econ professor at one of the most prestigious university in the world, that guy is brilliant.

Either you way over did the sarcasm or you and I are reading totally different articles. This thing is full of undefended assertions and logical holes. The thought experiment it opened with is so simplistic that it does little beyond revealing the author's bias and assumptions. Assumptions that are absurdly disconnected from reality (such as all voluntary transactions make both people's lives better).

I genuinely think it's a great piece, no sarcasm intended (though I obviously playfully ignored the fact that the OP was implying the opposite)

Experiments in general are meant to be simplistic. The goal is to remove as many confounding factors as possible to isolate a single phenomenon and study it.

From there, he builds up to a more realistic model by incorporating more and more factors.

Re: Defending the One Percent

#36

This article seems to argue "Taxing the rich leads to reduced growth and therefore all of society is worse off for it." That every extra $1 the rich makes leads to a economy wide increase in $1.10. If this were true we would want to reduce taxation levels of the rich considerably. And we would expect inequality to be associated with very strong growth. Luckily we don't have to just speculate. The IMF has done in-dept…

You know when even the IMF is recommending we tax the rich more, there's probably something to the idea...

Re: Defending the One Percent

#37

A large number (majority?) of people who are proponents for american-style capitalism, advocating for less government intervention, are from big universities around the U.S, and will often earn a relatively high wage. Although it's very hard to quantify, I feel as though these people are very disassociated from the everyday life the claim to be studying. If you live near Harvard earning ~300k a year, how easy is it t…

Wow lots of strawmen here. "A large number (majority?) of people who are proponents for american-style capitalism, advocating for less government intervention, are from big universities around the U.S" Source? So what? "Boiled down - can people who are part of such a skewed system really produce unbiased studies and theories about the system?" Can people who are part of the lower earning rung of society give a unbias…

"Source? So what?"

Apologies for that intro, I had planned to delete it but I'll leave it so your comment makes sense. I was planning to expand a thought about how it's always the rich who casually conclude that lower taxes and less welfare will help the economy.

"Can people who are part of the lower earning rung of society give a unbiased opinion of the system?"

In a democracy, yes, they do. Someone who is lower down on the earning rung of society (say earning the median US income), has a far more accurate view of the "average" society than someone who is at the very top, merely because they represent an average citizen.

"Yes the evidence does speak for itself. Capitalism worked out pretty great for much of Western Civilization. Everywhere where more socialist approaches were tried it failed. Just ask all soviet countries', Japan, East Germany, China etc. citizens if they are happy."

East Germany no longer exists and Russia is essentially a dictatorship with a very powerful upper class of plutocrats, not unlike the US. The happiest countries in the world are Switzerland, Iceland, Denmark, Norway and Canada according to the World Happiness index. Do you notice a trend among those countries?

"America is not for nothing the land of opportunity, and it is not for nothing that emigrants are flocking to the USA, Europe and Australia."

Denmark has twice the social mobility of "the land of opportunity" as defined by the probability of someone born in the poorest 25% of society making his/her way up to the richest 25% of society within their lifetime. I don't think America is the land of opportunity, unless you count the children of the rich who were shuttled into Ivy Leagues as those with opportunity.

"Unfortunately the soviets discovered you cannot have a classless society. It is that drive to elevate yourself to a higher class that makes us want to achieve more than the absolute minimum required effort."

I do not disagree, it is impossible to have a completely classless society. But that does not mean that the lowest class cannot have a decent quality of life and financial security. I think it begins with education. After all, only 5.7% of the US population has an education above high-school level. (obviously skewed by <18s, but still a shocking number)

Re: Defending the One Percent

#38
post #9

Earlier quoted context omitted.

and the other party wants to, irrationally, keep cutting their taxes even when faced with deficits One thing we've learned is that never, ever happens. Instead, increased revenues, such as provided by Reagan's tax rate cuts, allows higher leverage AKA deficits. So "starving the beast" seems to be the best approach, until, of course, the accumulated deficits are inevitably reneged on one way or another (e.g. inflation…

Can you provide evidence that Reagan's tax rate cuts actually improved revenues? Here's a counterargument that they didn't have that effect: http://krugman.blogs.nytimes.com/2008/01/17/reagan-and-reven...

Look at this: https://en.wikipedia.org/wiki/File:U.S.-income-taxes-out-of-...

The tax rate cuts were fully in place in 1982-3 (the phased in delay the Democratic House insisted on put a lot of thing on hold till then, and likely extended the recession Reagan inherited, see below for more), then income tax revenue steadily marches up. (I fudge the year based on memory and how there are various effective years, e.g. there's the usually but not always a calendar year for tax rates (and some are retroactive in various ways!), they have to be fully payed in the next year, and the Federal fiscal year runs October 1 to September 30, e.g. 2016 starts October 1st, 2015.

All Krugman argues in that column you linked to is how we calculate the magnitude of the increase, he doesn't deny there wasn't a substantial one, he says 19% for 1980-88. Which of course substantially understates the reality (but also note you need to adjust for inflation, it was roaring when Reagan entered office, and the prime rate was 20% or greater (!)), since that includes the period before the rates fully changed after which people, including my father, changed their business behavior.

Ah, here's a table with accurate figures for all three types of income, "ordinary" AKA "unearned" (things like interest), "earned" (wages) and realized capital gains, http://eml.berkeley.edu/~saez/course/Labortaxes/taxableincom... page 4 table A1, note Carter radically reduced the latter from 39.9%, also e.g. deregulated airlines and trucking, and note the JFK rate cuts from "I like Ike???" 91% !!! for income (and also note Reagan started indexing various details for inflation):

  1980 70.0 50.0 28.0
  1981 68.8 50.0 23.7
  1982 50.0 50.0 20.0
  1987 38.5 38.5 28.0
  1988 28.8 28.0 28.0
Note again how the 1986 changes immediately increased capital gains tax rates while phasing in the income tax cuts.

The history of this is ferociously complicated, I haven't even mentioned the FICA rate increases, who's large excesses went into the general budget, filling Al Gore's infamous "lock box" with unmarketable Federal government IOUs (bonds). I "know" as much as I do since I came of age in the '70s, when all this really started to get out of hand, Nixon closed the gold window (for foreigners, FDR did for us in 1933), we were again allowed to own bullion gold, Nixon did his wage and price controls, the Yom-Kippur War resulted in an oil embargo, contemporaneously OPEC at least partly legitimately increased dollar oil prices since the dollar was being devalued (see gold window above), government control of oil and gas was retained when the wage and price controls were generally relaxed, all that resulted in the '70s "energy crisis", which ended when Reagan ended the controls, Carter's obsession with oil "windfall profits", etc. etc. etc.

Seriously, in many ways the economic history of the last decade and a half has been simpler....

Re: Defending the One Percent

#39

This article seems to argue "Taxing the rich leads to reduced growth and therefore all of society is worse off for it." That every extra $1 the rich makes leads to a economy wide increase in $1.10. If this were true we would want to reduce taxation levels of the rich considerably. And we would expect inequality to be associated with very strong growth. Luckily we don't have to just speculate. The IMF has done in-dept…

> This article seems to argue "Taxing the rich leads to reduced growth and therefore all of society is worse off for it."

No, that's the utilitarian argument, which the article specifically considers unsatisfying, instead proposing an argument from justice.

Re: Defending the One Percent

#40

The trouble is not that inequality exists -- I think, that some form is necessary in our world -- but that the inequality is increasing in a rapid rate and that in the current state of our society, not achievements where the society benefits are rewarded by the system, but rather achievements where society looses (e.g. speculations, pure possession of wealth, investing -- whatever frivolous it might be, omitting taxe…

> Even Buffett spoke out, that his class wins, but it should not (for the good of society). And he said, that something is wrong, when his secretary has to pay a much higher tax-rate as himself.

Did you read the article? Mankiw noted that when CBO statistics are used, taking into account all taxation, not just income taxes, the United States have a very progressive tax system.

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