Earlier quoted context omitted.
Housing is capital
But not the kind of capital people usually think about when railing about billionaires and wealth taxes.
It's capital in economic terms.
Economists Are Rethinking the Numbers on Inequality
111–120 of 367 posts
Re: Economists Are Rethinking the Numbers on Inequality
#112Earlier quoted context omitted.
> This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new These are not nitpicks. What you measure drastically changes the results. Piketty and Saez presented their own revision to their data in 2018 that shows starkly different results than the 2013 data everyone cites: http://gabriel-zucman.eu/files/PSZ2018QJE.pdf For examp…
INHO we should be looking much more at consumption and a lot less at income or (worst of all) assets. In what way does it matter that Warren Buffet has X times my income and Y times my assets, if he drives the same kind of car and lives in about the same kind of house? It means he has more power than me in a capitalistic system, sure. But is that really so wrong or unfair? I think it’s actually kind of a good thing:…
> INHO we should be looking much more at consumption and a lot less at income or (worst of all) assets.
At what age can you retire?
Can you afford education for yourself and your children? Can you afford the home in the district with the good schools? How much debt will you and your children be in after finishing college?
What are the odds you go bankrupt from a medical incident, even with "insurance"?
"Consumption" of cars, electronics, restaurant meals, etc. are not the really significant economic expenditures in a persons life. It's those big items that create debt slaves and crippling economic anxiety.
Re: Economists Are Rethinking the Numbers on Inequality
#113Why when we talk about inequality we never talk about the tide of economic progress that capitalism produces. If the rich get richer but the middle class has a better quality of life than what the rich had 200 years ago, is strict inequality still the only thing that matters?
Right, one wonders if the goal is to make the poor richer, or to make the rich poorer.
Based on historical evidence, the outcome of socialism is extreme poverty. But I guess in a perverse way that does accomplish the goal
Re: Economists Are Rethinking the Numbers on Inequality
#114Earlier quoted context omitted.
> This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new These are not nitpicks. What you measure drastically changes the results. Piketty and Saez presented their own revision to their data in 2018 that shows starkly different results than the 2013 data everyone cites: http://gabriel-zucman.eu/files/PSZ2018QJE.pdf For examp…
INHO we should be looking much more at consumption and a lot less at income or (worst of all) assets. In what way does it matter that Warren Buffet has X times my income and Y times my assets, if he drives the same kind of car and lives in about the same kind of house? It means he has more power than me in a capitalistic system, sure. But is that really so wrong or unfair? I think it’s actually kind of a good thing:…
Two things...
> if he drives the same kind of car and lives in about the same kind of house?
Most wealthy people don't behave like Warren Buffet.
> It means he has more power than me in a capitalistic system
Which allows him to shape the system however he chooses, and as is the case this is usually in favor of the power holder.
> But is that really so wrong or unfair? I think it’s actually kind of a good thing: most people would just consume like crazy and ruin the planet if they came into that kind of money...
In other words, poor people can't be trusted with money so they should remain poor and deprived?
If you honestly believe that people can't be trusted with their money then why not have a system where people aren't as reliant on money? (e.g. free health care, free basic housing, free public transportation) In such a system you don't have to worry about people abusing wealth they can't control.
Re: Economists Are Rethinking the Numbers on Inequality
#115I would rather focus on reducing absolute poverty than reducing inequality (gini-coefficient).
It's sad that we live in a world where reducing poverty is somehow a hot take on society. I do not understand why some people believe it is impossible to rise out of poverty without seizing someone else's property. Capitalism is not a zero sum game
Re: Economists Are Rethinking the Numbers on Inequality
#116Earlier quoted context omitted.
This is an often used argument, but can you elaborate how exactly that's the case? In most western democracies (the US included), the only way to elect a politician is for a human being to go to the polls and check the box next to the candidate's name. This opportunity is present regardless of whether one is a billionaire, a millionaire, a member of the upper-middle class, or a blue collar worker. A real world exampl…
Well, in the US, as possibly in other places, elections are usually won by the candidate who receives the most corporate support. On top of this, a bipartite political system can quite easily keep out candidates with views that are unpalatable to the rich and powerful (e.g. see how Bernie Sanders was treated by the Democratic establishment in 2016). Individuals mostly rubber-stamp one of the two mainstream candidates…
> Well, in the US, as possibly in other places, elections are usually won by the candidate who receives the most corporate support
Again, this is orthogonal to the point about inequality. Insofar as corporations or money are involved in politics in America, it's for campaigning — buying TV ads, flyers, etc. While it's true that this makes it easier for richer people to get their message out there, the fact of the matter is that the message still needs to resonate with a broad enough polity capturing working class, college educated, non-college educated, urban, rural voters etc (see: the Electoral College).
Just to give you some numbers, in the 2016 election, Hillary Clinton outspent Donald Trump $132M vs $92M.
In the ongoing Democratic Primary for the upcoming 2020 election, the TV ad spending through 12/3/2019 is as follows. The candidate's polling percentage at the same time is included in parenthesis.
Steyer: $63.4 million (1%)
Bloomberg: $37 million (Sanders: $6.7 million (15%)
Buttigieg: $5.1 million (13%)
Yang: $2.9 million (4%)
Biden: $1.7 million (25%)
Klobuchar: $1.3 million (3%)
Bennet: $1 million (Gabbard: $1 million (1%)
Warren: $926k (18%)
Delaney: $662k (> On top of this, a bipartite political system can quite easily keep out candidates with views that are unpalatable to the rich and powerful (e.g. see how Bernie Sanders was treated by the Democratic establishment in 2016)
You're right about this, but the Democratic Primaries are not a good example of a democratic institution (ironically) — it's a private club and they can make their own rules, for better or for worse. During the general election, the opposite happened; the rich and powerful overwhelmingly supported Hillary Clinton, and yet she still lost.
> Individuals mostly rubber-stamp one of the two mainstream candidates.
This is true, but has nothing to do with economic inequality. The two-party system is an artifact of the first-past-the-post voting system. Since ~1860, there have only been two mainstream candidates, and inequality has varied wildly in that time period: i.e. no correlation.
Re: Economists Are Rethinking the Numbers on Inequality
#117Earlier quoted context omitted.
Are you saying poor people aren't exploited?
not the parent's OP, but yes; I'm saying the whole notion of exploitation is rather silly
We'll, I guess all notions can seem silly from some perspective. Children climbing up chimneys or adults wearing diapers to meet chicken plucking quotas can seen silly from a certain perspective, but usually not a first person one.
Re: Economists Are Rethinking the Numbers on Inequality
#118Earlier quoted context omitted.
But not the kind of capital people usually think about when railing about billionaires and wealth taxes.
Housing is already taxed. In the U.S., property taxes are about 17% of government revenue. https://www.economist.com/finance-and-economics/2013/06/29/l...
True. But housing is also tax-privileged in other ways. Most notable is the mortgage interest on federal income tax.
More subtle is the fact that the value of the imputed rent from owning your own home is not taxed. I.e. if you rent your home to someone else, you pay income tax on the rent you collect. But if you "rent to yourself" by owning your own home, you don't pay tax on this implicit form of income.
Re: Economists Are Rethinking the Numbers on Inequality
#119Earlier quoted context omitted.
Arguably, almost everybody in the Western world has gotten rich. Go visit a medieval castle sometime. The standards that now everybody has required an army of servants in the old days. It is just a hateful lie of the left to claim "being rich" is dependent on exploiting poor people.
That's silly - compared to cavemen, even workers in third world countries are "rich", being able to trade things for goods and services and not being required to hunt and gather. Inequality solved?
Why exactly is inequality a problem? Because people suffer from their envy?
People starving, having no health care, low life expectancy, that sort of thing, are problems. Their neighbor having more money in the bank is not really a problem.
There are also actually differences in skills, performance, diligence, and so on. It would be very unfair if some people weren't allowed to earn more money than others.
Whether it should be possible to be arbitrarily rich is another question.
Re: Economists Are Rethinking the Numbers on Inequality
#120Earlier quoted context omitted.
> This means the overnight lending rate, U.S. bond rate, etc. The overnight lending rate is set by the Fed, yes. Treasuries are sold in the market. Although an initial auction price is set, the rates will fluctuate based on demand for the bonds. I don't deny the Fed are a major influence on rates, as it's a major component of their mandate now. However, the market can "agree" or "disagree" with those rates and set co…
But your missing the key part. Sometimes if the Fed sets rates too low and there's not enough demand for the bonds the Fed buys the bonds thus keeping the interest rates artificially low.
>Sometimes if the Fed sets rates too low and there's not enough demand for the bonds the Fed buys the bonds thus keeping the interest rates artificially low.
Yes, it's how the Fed conducts monetary policy. Can you name the last time that US treasuries were under-subscribed? Greek bonds have lower rates to US treasuries; which would you rather own? On a relative basis, how can one claim that US interest rates are "too low"?