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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

#141

Post by splintercell »

nickik wrote: post #125
jonathanyc wrote: post #121

Earlier quoted context omitted.

If you’re going to make a drive-by comment whose content is just “the GP is wrong,” you should at least back it up with some evidence, especially when the GP has provided a source.

Or you can look at basic math. The government budget was simply never large enough to redesrbiute the amoutn of wealth the middle class holds.

Irrespective of whether your comment being correct, the GP has a point regarding the GGP comment being a drive-by.

Although I also think that GGGP comment is also a drive-by, it just has a color of 'reasoning'.

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

#142

Post by avs733 »

ScottBurson wrote: post #108

Something came up yesterday, in the discussion about business schools, that I think is also relevant here. A lot of people — as in, practically everyone — has been persuaded over the last half-century or so that the board of directors of a public corporation have a legal responsibility to maximize shareholder value. The general acceptance of that fiction is resulting in a tremendous amount of wealth transfer from the…

> And it is a fiction.

It's funny, that I came into the thread to make the same point to an extent. The problem is that it is a fiction but that fiction has become law [0]. I honestly don't know the legal system well enough to know how this gets fixed but in the interim it seems a slightly to strong effort in navel gazing to talk about how its incorrect without acknowledging that it is.

It is unfortunate that such transitions happen so consistently in management. The field seeks to be treated as a science (in the paradigm sense) despite not having the basic philosophical characteristics. Findings in physics may change what I look for in future physics experiments but observing a phenomenon isn't going to change it (and grant me some grace...we aren't talking about quantum). In management, the observations are the behavior of humans and the results inform human practice. That makes research management and practice inseparable, no matter how much they want to be science. However, that is ignored an an attempt to take a scientific stance. The result even affects pedagogy with techniques designed to communicate the development of critical thinking through engagement of multiple perspectives is usurped over time into just teaching the current 'rules' of business [1].

[0] https://www.litigationandtrial.com/2010/09/articles/series/s...

[1] Bridgman, T., Cummings, S., & McLaughlin, C. (2016). Re-stating the case: How revisting the development of the case method can help us think differently about the future of the business school. https://doi.org/10.5465/amle.2015.0291

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

#143

Post by kartan »

mjfl wrote: post #136
ScottBurson wrote: post #124

Earlier quoted context omitted.

Most corporate stock is owned by the wealthy: https://www.investopedia.com/news/stock-ownership-slips-ineq... Furthermore, it is mostly hedge funds that benefit from short-term price gains, as they're frequently leveraged, often with options. Long-term holders like individuals and mutual funds are usually unleveraged.

Even if most corporate stock is owned by the wealthy, in terms of relative wealth changes all that matters is a person's personal percentage investment in the stock market. For example, if you have a middle class person who has 80% of their retirement savings (wealth) in stocks and a rich person who has 50% of their wealth in stock (because of liquidity concerns for example - and this is common) then if the stock mar…

You didn't took into account that rich people can use more of their income for investments, to leverage and to spend more time to use marked fluctuations in their favor.

Your example looks correct. But I don't see how is the common case. Middle class investors usually don't have more percentage in the market that the 0.1%. Most middle class main investment is the home they live in.

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

#144

Post by laurencerowe »

mjfl wrote: post #136
ScottBurson wrote: post #124

Earlier quoted context omitted.

Most corporate stock is owned by the wealthy: https://www.investopedia.com/news/stock-ownership-slips-ineq... Furthermore, it is mostly hedge funds that benefit from short-term price gains, as they're frequently leveraged, often with options. Long-term holders like individuals and mutual funds are usually unleveraged.

Even if most corporate stock is owned by the wealthy, in terms of relative wealth changes all that matters is a person's personal percentage investment in the stock market. For example, if you have a middle class person who has 80% of their retirement savings (wealth) in stocks and a rich person who has 50% of their wealth in stock (because of liquidity concerns for example - and this is common) then if the stock mar…

Maximizing shareholder value concentrates returns in the hands of shareholders over employees. This has a significant distributional impact as for most income from employment dwarfs income from investments.

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

#145

Post by knuththetruth »

mjfl wrote: post #136
ScottBurson wrote: post #124

Earlier quoted context omitted.

Most corporate stock is owned by the wealthy: https://www.investopedia.com/news/stock-ownership-slips-ineq... Furthermore, it is mostly hedge funds that benefit from short-term price gains, as they're frequently leveraged, often with options. Long-term holders like individuals and mutual funds are usually unleveraged.

Even if most corporate stock is owned by the wealthy, in terms of relative wealth changes all that matters is a person's personal percentage investment in the stock market. For example, if you have a middle class person who has 80% of their retirement savings (wealth) in stocks and a rich person who has 50% of their wealth in stock (because of liquidity concerns for example - and this is common) then if the stock mar…

This is just a convoluted appeal for trickle-down economics.

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

#146

Post by eesha »

pitaj wrote: post #120
pdkl95 wrote: post #106

Earlier quoted context omitted.

> markets We regularly hear people concerned about the hypothetical existential threat of a paperclip maximizer AI being invented in the future, yet this concern reliably ignores the AI overlords we already have : paperclip^Wprofit maximizing corporations. The VM for this type of AI has an incredibly slow clock rate and an extreme CISC ISA that often modifies itself in the RTC interrupt. The AIs are not a future thre…

> unregulated capitalism Ah yes, the unbridled laissez-faire capitalist markets throughout the world. It couldn't possibly be that our markets are more regulated than ever before, or that the very regulations and bureaucracy meant to protect us have caused these failures. No no no, it's capitalism's fault. It's certainly not that government power has for decades been exploited by the incumbents to kill competition. T…

Some statists regulate markets into inefficiency, then other statists use the inefficiency as justification for more regulation. Yet other statists use crony capitalism as justification for giving the state more power, as if the problem of crony capitalism was one with capitalism itself rather than the state having too much power already! The statists don't necessarily do this in a coordinated, conscious or intentional way. Most of them sincerely believe that regulation is for the best. As electors their vote has an infinitesimal chance of being decisive, so the cost to them of having irrational beliefs about politics is negligible. Simultaneously they have preferences over beliefs. Whether having beliefs similar to those of people they want to associate with, loyalty to a political ideology or signaling moral qualities, when the political influence of any person in a large electorate is so small people will have irrational beliefs.

Good law in a democracy is a positive externality. Desirable policies benefit everyone but their private benefit to an individual is small even if the individual is altruistic. Government is supposed to resolve market failures, but it itself is the sole reason they exist.

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

#147

Post by bobbygoodlatte »

leetcrew wrote: post #105
dcosson wrote: post #70

Earlier quoted context omitted.

I don’t think it’s really that intractable. The traditional middle class lifestyle in the US for the past several decades involves getting married, probably having a few kids, and buying a 3 bedroom house to live in. Probably even in the towns you’re thinking of, that describes a middle or upper middle class lifestyle. The thing that’s crazy is that this can cost 2-3 million dollars in many places in the Bay Area. Th…

> The thing that’s crazy is that this can cost 2-3 million dollars in many places in the Bay Area. The housing crises in affluent cities is absolutely the driving factor of our growing inequality issues. how can this be so? i agree it sucks that {insert middle class profession} can't afford a 3br in the bay area or NYC, but how can that be the root cause of inequality across an entire nation? there are tons of afford…

I also don't agree it's the root cause, but certainly it's a big contributing factor. Buying that 3 bedroom house in a more affordable area might be a smart idea, or it might severely limit one's economic mobility. Most of the jobs that mint new members of the upper / upper-middle class are based in big cities. Living elsewhere might mean trading class mobility for housing security, a trade-off that some don't have to make.

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

#148

Post by return1 »

ScottBurson wrote: post #108

Something came up yesterday, in the discussion about business schools, that I think is also relevant here. A lot of people — as in, practically everyone — has been persuaded over the last half-century or so that the board of directors of a public corporation have a legal responsibility to maximize shareholder value. The general acceptance of that fiction is resulting in a tremendous amount of wealth transfer from the…

How could that problem be solved? Is it something that market forces could somehow self-correct? It is in a sense a general cultural issue, but how does one go about correcting the culture?

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

#149

Post by mjfl »

laurencerowe wrote: post #144
mjfl wrote: post #136

Earlier quoted context omitted.

Even if most corporate stock is owned by the wealthy, in terms of relative wealth changes all that matters is a person's personal percentage investment in the stock market. For example, if you have a middle class person who has 80% of their retirement savings (wealth) in stocks and a rich person who has 50% of their wealth in stock (because of liquidity concerns for example - and this is common) then if the stock mar…

Maximizing shareholder value concentrates returns in the hands of shareholders over employees. This has a significant distributional impact as for most income from employment dwarfs income from investments.

again, why do you treat employees as a distinct group from shareholders? At many companies, employees are the shareholders.

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

#150

Post by coldtea »

dwaltrip wrote: post #107
coldtea wrote: post #67

Earlier quoted context omitted.

> I think it should be obvious that you won't get rich unless you sell something... None of those people sold things or seemed to be interested in the process of selling things Obvious under the current system maybe. Obvious that it should be so, and that it's better that it's so, or that it can only ever be so? Not so much. I, for one, think that society would be so much better if production of value like what Einst…

> I, for one, think that society would be so much better if production of value like what Einstein did or what Tesla did etc, was rewarded with richness, rather than selling something. Unfortunately, there's no mechanism for doing this in a decentralized, dynamic fashion. The great strength of markets is their decentralized and dynamic nature. They are the original hivemind and crowd-sourced wisdom. Of course, they h…

>The great strength of markets is their decentralized and dynamic nature. They are the original hivemind and crowd-sourced wisdom.

The problem is that markets optimize for one thing, to the detriment of all others: profit.

Anything else (e.g. more inventions, etc) is a byproduct. If avoiding it will bring more profit, that's totally fine for the actors involved.

And it's not even long term profit (which, because of costs to reputation and such, will require more good behavior) -- quick term profit is equally good a motive under such a market system, human costs and externalities be damned.

Under such a system, if people could sell baby milk mixed with chlorine to make a profit, they would (and they have -- among countless of other examples of putting profit first).

We should create and foster decentralized and dynamic systems that optimize for a better world in aspects that we want -- instead of piggybacking on a naturally occurring decentralized system based on greed like monkeys.

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