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What if incomes grew like GDP?

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Re: What if incomes grew like GDP?

#121

Post by bsanr »

rualca wrote: post #118
bsanr wrote: post #100

Earlier quoted context omitted.

Doctors and lawyers are not making $50k a year. $50k is not even the average annual income in this country; it is not the income of the barely-wealthy. This is the problem: people making multiples of $50k live fundamentally different lives from those making sub-$50k. They have money to burn, and they do just that, often on self-serving goods and services with limited ROI compared to what the same amount of money woul…

> $50k is not even the average annual income in this country; You really should refresh your statistics. Average means absolutely nothing if you don't take into account how uneven the income distribution is, specially in the US where income inequality reached abismal levels. To focus on the facts, the median household income in the US is close to $63k. Note it's median, not average, and note it's household income , a…

>[...] if you don't take into account how uneven the income distribution is, specially in the US where income inequality reached abismal levels.

I did, which is precisely why I used that figure in the first place. I made the (evidently correct) assumption that most people would know that the median income is lower than $50k and the average. Grandparent's "barely rich" figure doesn't even hit the (high-earner overburdened) average, yet is higher than the income the median earner brings home. It's damning and inappropriate from two angles, which brings into question his entire argument.

Re: What if incomes grew like GDP?

#122

Post by JMTQp8lwXL »

BoiledCabbage wrote: post #102
boh wrote: post #44

Earlier quoted context omitted.

Not exactly: https://www.forbes.com/sites/timworstall/2016/10/25/were-doi... And as far as Microsoft: software was only added after 1999 and its relevance is only measured in sales not actual productivity. GDP assumes the production of more of something is growth--software doesn't work like that so its inclusion still fails as an accurate measure.

I'm trying hard to understand your point, but it still feels to me like you're off the mark here. GDP is not a measure of productivity. It's a measure of output per capita. If you're saying that productivity when up due to software, then output (per capita per hours worked) must have gone up somewhere due to using that software. And as a result it would be captured in GDP. Imaging for example I sold a manual tool to…

Having twice as many crops may decrease the price per unit of crop. So, in this economy consisting of nothing other than the crop, we might not see 2x dollar valuation in products sold even though the technical innovation doubled the number of crops. Diminishing returns, etc.

Re: What if incomes grew like GDP?

#123

Post by ardy42 »

imgabe wrote: post #91
ardy42 wrote: post #76

Earlier quoted context omitted.

> There is no "we" allowing or disallowing anything. Who is this "we" and why do use suppose they have some divine insight into the ideal allocation of capital? You only really own something if enough people in society ("we") agree that you do own it. If enough of "us" change our mind (for instance, if your ownership is no longer useful to us), then you don't really own that thing anymore.

We , that is you are free to devalue Facebook stock at any time by not buying it. The fact that most people are not doing that should tell you that you are not as much a part of the dominant "we" as you think.

> We, that is you are free to devalue Facebook stock at any time by not buying it.

> The fact that most people are not doing that should tell you that you are not as much a part of the dominant "we" as you think.

You missed the point that I was making entirely.

Re: What if incomes grew like GDP?

#124

Post by wegs »

throwaway189262 wrote: post #105
wegs wrote: post #93

Earlier quoted context omitted.

I think OP's comment is different. It's demand-side, not supply-side. If a CEO causes 1000 employees to be 1% more efficient, that creates the same value as 1000 employees each being 1% more efficient. Ergo, if I'm an investor, if I believe a CEO will be slightly better than another CEO, it makes sense to pay a lot more. If I have a market of 7 billion people in the world, and my software saves everyone a dollar, I'v…

Your assumptions fall apart of you consider that it's not all skill, part of it is random. You're falling into the same trap. You think someone is better when in all probability they got luckier. And you think that picking someone you think is better will statistically get you a better person when that's not true if credentials are highly luck based. It's like buying lotto tickets from a gas station that's produced m…

They don't fall apart. You need to look at it as expected values. Most signals are not 100% noise, but e.g. 90% noise and 10% signal.

If you have a candidate from Harvard, it's a mixture of ALDCs and really smart people with some bias for policies like affirmative action. You might not know what you're getting, but there are odds of scoring that genius. Ditto with most other low-quality signals.

And statistically, you do get someone better than a random schmuck off the street. I mean, the processes are noisy, and perhaps 10% of your workforce might make a better CEO, but you have no way of finding those 10%.

(And the noisy signals problem in hiring isn't specific to CEOs).

Re: What if incomes grew like GDP?

#125

Post by wegs »

throwaway189262 wrote: post #77
usaar333 wrote: post #73

Earlier quoted context omitted.

I don't really view the skill vs luck as a "moral" question. In the end, everything is luck - we're a product of our genes and our environment. What you do want to ask is what the proper incentives need to be to have a functional society. Fundamentally, we're just trying to define some social utility function and maximizing it.. but even ignoring political problems, it's hard to understand how wealth transfers (or an…

The socialist "nanny state" democracies in europe have much lower wealth inequality, and much higher social mobility than the US. To me, it's a clear blueprint to follow.

No. Europe has lower income inequality, and higher wealth inequality.

Good numbers are hard to come by since:

1) Much of the wealth inequality in Europe does a nice job of hiding wealth. Old money doesn't talk about wealth. But there are families in Europe with fortunes dating back a half-millennium. A half-millennium of interest, even at the relatively low rates over most of history, is a lot of money.

2) The figures are biased by people with negative wealth (e.g. debt) in ways which are somewhat different from what one would hope to understand.

A model to follow is based on a modernized version of Islam -- a wealth tax.

Re: What if incomes grew like GDP?

#126

Post by apta »

rualca wrote: post #82
apta wrote: post #70

Earlier quoted context omitted.

> That's only true if you raise taxes on the kind and amount of income that doctors and lawyers typically make. That's what Biden wants to do, terrible idea. Removing favorable treatment of long term capital gains is also a terrible idea. Ideally, there should be 0% gains tax (and income tax), but people will settle for favorable treatment compared to income tax.

> Ideally, there should be 0% gains tax (and income tax) (...) Why? Your income is disproportionally dependent on investments and expenditure made by society to pave the way to your ability to generate income. It's fair that those who benefit the most from society also help the most to preserve its uplifting impact on the people.

Islam has the superior approach. Look up Zakat laws.
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