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Joseph Stiglitz Says American Inequality Didn’t Just Happen

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Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#11

Post by scroot »

montrose wrote: post #2

His thesis is that changes in government policy are the cause of the increasing economic inequality in America. But a simple thought experiment is enough to disprove this: imagine what Larry Page would have done in 1950 vs 1998. In 1950 he would have become a professor or gone to work for Bell Labs. In 1998 he was able to start his own company and become a billionaire. But it wasn't changes in government policy that…

> But it wasn't changes in government policy that made this possible. It was the rise of microcomputers and networks that made this possible

The history of computing is precisely one of government policy, namely the ARPA funding from the 60s and early 70s.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#12

Post by quantumofmalice »

ItsMe000001 wrote: post #8
quantumofmalice wrote: post #6

As is so often the case, the first comment explains more than the entire article: "Economic division was built into USD: you either pay interest on Treasury bonds, or you live off it."

I don't see it. Money moves the real world each time it changes hands (except for in purely financial transactions), so why would only the two tax paying and the getting-interest-from-government-debt steps have a real world impact? The cycle of money is far larger than that. It's certainly possible I'm overlooking some larger aggregate effect because I'm not taking a far enough step back. I also don't think it is all…

Well, you aren't alone: most professional economists ignore banking and debt entirely. To paraphrase Paul Krugman: "It's just money we owe ourselves."

Historically, however, debt has been social nitroglycerine, which is why Christianity outlawed usury and Judaism had a 50-year debt jubilee built into it. We will relearn this lesson eventually, but in the meantime our bandaged finger goes wabbling back to the fire.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#13

Post by analog31 »

quantumofmalice wrote: post #12
ItsMe000001 wrote: post #8

Earlier quoted context omitted.

I don't see it. Money moves the real world each time it changes hands (except for in purely financial transactions), so why would only the two tax paying and the getting-interest-from-government-debt steps have a real world impact? The cycle of money is far larger than that. It's certainly possible I'm overlooking some larger aggregate effect because I'm not taking a far enough step back. I also don't think it is all…

Well, you aren't alone: most professional economists ignore banking and debt entirely. To paraphrase Paul Krugman: "It's just money we owe ourselves." Historically, however, debt has been social nitroglycerine, which is why Christianity outlawed usury and Judaism had a 50-year debt jubilee built into it. We will relearn this lesson eventually, but in the meantime our bandaged finger goes wabbling back to the fire.

I suspect that personal debt and national debt are of different species. There's also an old saying: "If you owe the bank a dollar, you're a debtor. If you owe the bank a million dollars, you're a partner."

For an economic prediction to be meaningful, it needs an approximate date attached to it.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#14

Post by hshehehjdjdjd »

quantumofmalice wrote: post #12
ItsMe000001 wrote: post #8

Earlier quoted context omitted.

I don't see it. Money moves the real world each time it changes hands (except for in purely financial transactions), so why would only the two tax paying and the getting-interest-from-government-debt steps have a real world impact? The cycle of money is far larger than that. It's certainly possible I'm overlooking some larger aggregate effect because I'm not taking a far enough step back. I also don't think it is all…

Well, you aren't alone: most professional economists ignore banking and debt entirely. To paraphrase Paul Krugman: "It's just money we owe ourselves." Historically, however, debt has been social nitroglycerine, which is why Christianity outlawed usury and Judaism had a 50-year debt jubilee built into it. We will relearn this lesson eventually, but in the meantime our bandaged finger goes wabbling back to the fire.

I’m not sure the idiosyncratic tenets of Christianity or Judaism can serve as the foundation of sound economic (or other) policy. I need something more compelling than “a myth invented more than two thousand years ago says it’s a bad idea” to make me believe that there is something wrong with T-bills. For that matter, this seems like not such a great argument, because substantially all other countries also have their own analogue of treasury bonds, and few of them have inequality as bad as we do in the US.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#15

Post by ebbv »

sokoloff wrote: post #7

I half wonder if the issue of inequality is that America may have a fatter right tail on the distribution rather than an ever-narrowing tail. Instead of only having the Rockefeller, Vanderbilt, etc 0.001% wealthy, we have a 5-6% band of households who are millionaires[0] and that makes the wealth more visible when it’s a handful of people in your town or social circle than when it was only a handful of people in the…

You don’t have to wonder. The data is out there.

While there are “more millionaires” than before, that’s a bogus metric due to inflation. You have to look at concentration of wealth as a percentage and a ratio between. Wealthy and poor and “middle class”.

If you do that it’s obvious what the issue is; wages have stayed very flat for the poor and middle class and almost all wealth gain has been concentrated in the top very few percent. Because most wealth gain is happening in finance and investing, and like I said wages have stayed flat for many decades.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#16

Post by hshehehjdjdjd »

zdw wrote: post #3
montrose wrote: post #2

His thesis is that changes in government policy are the cause of the increasing economic inequality in America. But a simple thought experiment is enough to disprove this: imagine what Larry Page would have done in 1950 vs 1998. In 1950 he would have become a professor or gone to work for Bell Labs. In 1998 he was able to start his own company and become a billionaire. But it wasn't changes in government policy that…

The meteoric rise of Google is pretty much the definition of "the exception".

On the other hand, exceptions such as this have proven very important to the American economy over the past half century or so, especially within the last twenty years. When your exceptions are numerous enough, or large enough, they sort of start to form their own rule.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#17

Post by aphextron »

alex_young wrote: post #4
montrose wrote: post #2

His thesis is that changes in government policy are the cause of the increasing economic inequality in America. But a simple thought experiment is enough to disprove this: imagine what Larry Page would have done in 1950 vs 1998. In 1950 he would have become a professor or gone to work for Bell Labs. In 1998 he was able to start his own company and become a billionaire. But it wasn't changes in government policy that…

> In 1950 he would have become a professor or gone to work for Bell Labs. Why wouldn't he have started one of the numerous profitable companies of the 50s? It seems more likely that an entrepreneur would do that rather than work in another field. > In 1998 he was able to start his own company and become a billionaire. This appears to prove Stiglitz' point doesn't it? There was no deficit of innovation in the mid 20th…

>This appears to prove Stiglitz' point doesn't it? There was no deficit of innovation in the mid 20th century, all without massive economic inequality.

The main argument of Keynesianism always comes down to the baseline of wealth for all people though. The average person today is far wealthier than the average person in 1950, and that's the real goal. Not necessarily equality of outcomes for each individual.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#18

Post by quantumofmalice »

hshehehjdjdjd wrote: post #14
quantumofmalice wrote: post #12

Earlier quoted context omitted.

Well, you aren't alone: most professional economists ignore banking and debt entirely. To paraphrase Paul Krugman: "It's just money we owe ourselves." Historically, however, debt has been social nitroglycerine, which is why Christianity outlawed usury and Judaism had a 50-year debt jubilee built into it. We will relearn this lesson eventually, but in the meantime our bandaged finger goes wabbling back to the fire.

I’m not sure the idiosyncratic tenets of Christianity or Judaism can serve as the foundation of sound economic (or other) policy. I need something more compelling than “a myth invented more than two thousand years ago says it’s a bad idea” to make me believe that there is something wrong with T-bills. For that matter, this seems like not such a great argument, because substantially all other countries also have their…

If you'd like a more technical explanation why the older systems were right, you can read Steve Keen's work.

On the other hand, if you enjoy the surprise of financial crises every decade and major currency crises every five decades, you can continue listening to modern economists.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#19

Post by gaius »

quantumofmalice wrote: post #12
ItsMe000001 wrote: post #8

Earlier quoted context omitted.

I don't see it. Money moves the real world each time it changes hands (except for in purely financial transactions), so why would only the two tax paying and the getting-interest-from-government-debt steps have a real world impact? The cycle of money is far larger than that. It's certainly possible I'm overlooking some larger aggregate effect because I'm not taking a far enough step back. I also don't think it is all…

Well, you aren't alone: most professional economists ignore banking and debt entirely. To paraphrase Paul Krugman: "It's just money we owe ourselves." Historically, however, debt has been social nitroglycerine, which is why Christianity outlawed usury and Judaism had a 50-year debt jubilee built into it. We will relearn this lesson eventually, but in the meantime our bandaged finger goes wabbling back to the fire.

It's just money we owe ourselves

Not quite true: it’s the money we owe our future selves.

So you can arrive in the future and find that the pension that should have been waiting for you there was borrowed by past-people and they never paid it back. And you can’t go back in time to demand it back.

Re: Joseph Stiglitz Says American Inequality Didn’t Just Happen

#20

Post by eaenki »

ppereira wrote: post #10

The distincion between creating value and hacking the economic system is interesting. “Think of Alan Turing, whose genius provided the mathematics underlying the modern computer. Or of Einstein. Or of the discoverers of the laser (in which Charles Townes played a central role) or John Bardeen, Walter Brattain, and William Shockley, the inventors of transistors. Or of Watson and Crick, who unraveled the mysteries of D…

What's even more ironic is that Watson and Crick did NOT discover the DNA. Actually, a woman did. Not only she hasn't been rewarded economically but even culturally-wise.
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