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TED and inequality: The real story

tedchris.posterous.com

161–170 of 202 posts

Re: TED and inequality: The real story

#161
post #150

Earlier quoted context omitted.

His talk makes the mistake that spending money is what drives the economy. This is a fundamental error. What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value. Simply handing people money to spend is not stimulative because it does not create value. Put another way, taking money from A and giving it t…

> Simply handing people money to spend is not stimulative because it does not create value. Put another way, taking money from A and giving it to B so B can buy things from A does not (and cannot) make A wealthier. Sure they can, according to some models. Here's the argument: Say A and B produce goods for each other, and so A might buy something from B for $5, and B might come back and buy something from A with the s…

This is only true if you believe recessions are caused by a lack of confidence, rather than by negative returns on bad choices.

It also assumes that A stuffs the money into the mattress rather than lending it to C, who uses the money to create something that B wants to buy.

It's a very simplistic two-part scenario and has a lot of problems, not in the least what the 'something scares A' part of it. It also assumes that nobody else wants to buy products from B.

In fact the more I read it, the less I am convinced it has any merit at all.

Re: TED and inequality: The real story

#162
post #157

I watched the video after reading TED's response, and I'm skeptical of some of their claims, but I can also see why they didn't initially choose to publish it on their site. The video is at http://www.youtube.com/watch?v=bBx2Y5HhplI Since it's short, I'll go over it point-by-point. 1. "It is astounding how significantly one idea can shape a society and its policies. Consider this one: if taxes on the rich go up, job…

Thanks for providing the transcript. I listened to this and the guy is not a good presenter. Both the content and the delivery need serious work. What's worse is you can tell he has rehearsed this thing ad nauseum. And it's still really stiff and awkward. Now, in some way he, being as lame as he is in this presentation, has proven his own argument. A lot of wisdom is imparted on the wealthy to be leaders of the econo…

> And what's with use of the term "capitalist"? Are there lots of socialists in America now? Are American workers not capitalists?

Workers (as in people who work for a wage) aren't Capitalists (as in the Noun).

You don't have to be a Socialist if you are not a Capitalist. There are not 'a lot' of Capitalists anywhere (proportional to the overall population).

Re: TED and inequality: The real story

#163
post #161
post #150

Earlier quoted context omitted.

> Simply handing people money to spend is not stimulative because it does not create value. Put another way, taking money from A and giving it to B so B can buy things from A does not (and cannot) make A wealthier. Sure they can, according to some models. Here's the argument: Say A and B produce goods for each other, and so A might buy something from B for $5, and B might come back and buy something from A with the s…

This is only true if you believe recessions are caused by a lack of confidence, rather than by negative returns on bad choices. It also assumes that A stuffs the money into the mattress rather than lending it to C, who uses the money to create something that B wants to buy. It's a very simplistic two-part scenario and has a lot of problems, not in the least what the 'something scares A' part of it. It also assumes th…

In fact the more I read it, the less I am convinced it has any merit at all.

Which? The model ealloc describes or the Babysitting Co-op scenario? They aren't actually the same.

Re: TED and inequality: The real story

#164
post #115

Earlier quoted context omitted.

'Increasing demand' is itself a supplier-directed activity; it's one of the primary functions of marketing. It seems baffling to consider this from a political/macroeconomic perspective; how would you increase demand but through marketing activity, without your methods becoming coercive or oppressive? > If the necessity of demand isn't the elephant in the room, then why isn't there broad political support for higher…

> 'Increasing demand' is itself a supplier-directed activity; it's one of the primary functions of marketing. It seems baffling to consider this from a political/macroeconomic perspective; how would you increase demand but through marketing activity...? You assume here that demand is possible, it just needs to be created through marketing. I get that that's what marketing does -- I really do. I read a great article r…

> We're talking about an economic environment in which people don't have enough money to spend. And the solution to that -- and, it seems, your solution as well -- seems to be to give more incentives to the people who do have money to spend.

If they don't have enough money to spend, what's with all of the money that's circulating every day? What's with the (admittedly contrived) metric of GDP indicating that there's about of $13 trillion of value being generated via economic transactions in the United States each year.

You're also neglecting the fact that money isn't actually worth anything intrinsically; it's entirely a token of exchange that merely represents the actual utility value of the goods and services that are available for trade in the market. If the money supply remains constant but the real economy expands, then each dollar is worth more; i.e. if what you were saying is true, we'd see deflation. The fact that prices of goods seem to gradually increase suggests that, if anything, there's more money in the economy than is proportionate to the real demand that exists in the market.

The bottom line is that if there's real value to be obtained via trade, then trade will take place, and the value of the unit of exchange will simply fluctuate in response to the real value that exists in the market.

What you're really complaining about here is that people aren't spending money in the way that you expect/desire them to. You're treating the results of actual people's manifest choices as though they're a problem that needs to be corrected, as though people pursuing their own goals in life are obligated to conform to your expectations in doing so.

> So, at what point should we step back and say, "OK, this strategy isn't working"?

Why don't we take it a step further back, and consider whether and when it's appropriate and efficacious to design and implement any top-down strategies for what fundamentally amount to other people's lives. That's what economies are, after all, no matter how many layers of abstraction and aggregation you pile on top of your understanding.

> You object to my macro-level perspective on economics. I object to the idea of managing a system as complex as economics at anything other than the macro level.

Right, that's the fundamental disagreement. You've got it in your head that economies are somehow predictable systems that conform to well-understood models, and which can be managed via carefully-calculated planning.

The reality, of course, is that economies are vastly complex emergent phenomena whose patterns form from the individual decisions of billions of human beings in real time, and which follow no consistent and predictable rules at the macro level, and indeed may adhere to no fixed set of rules whatsoever, and for which, in any case, no theoretical model can even be tested in a controlled and scientific way.

I don't intend to be dismissive or condescending here, but I unfortunately can't think of a more descriptive summarization here: you're just wrong.

> I hate to do this, but "many people" is not a good counter-point. I'm trying to stick either to specifics, or to things that I could produce citations for, or to things which (I hope) are clearly opinion. Would you mind doing the same? Otherwise, we're just making things up.

I'm not making a counterpoint; I'm answering your question. You inquired as to why so many people seem to oppose your list of policy positions. This is why. You're seeing the dispute as one over which means best pursue uncontroversial ends. In reality, most of the opposition is the result of people opposing the intended ends of those policies.

> So, I should be one of the darlings of the Republican constituency, right? I wish it were so.

Either them or the Democrats. Both parties seem to have a philosophy similar to what you're advocating here.

> It's not politics to me, it's life.

I'm not sure I understand what you mean here. Why do you resent that other people have opposing positions to yours? I don't mean to sound condescending, but I really don't understand how the description of your personal circumstances relates to the discussion. What was it intended to be an example of?

> I have, for better or for worse, a middle class mentality.

What does this mean? What does it mean to have any kind of a class mentality?

> Now, this is the part where I'm supposed to say -- if I were wealthy or if my business were bigger -- that it's all the fault of those mean old taxes.

Of course it's not. Not for large-scale business anyway; capital-intensive ventures with external investors calculate their tax burden as a cost of doing business, and we can't quantify how many businesses never launched because the tax burden would have pushed them into unprofitability. And although it's possible that cost and complexity of taxes actually do prevent many very small businesses - e.g. those run by families or individuals - from being sustainable, even this isn't the crux of the objection.

The problem is that taxes provide revenue to the government, and what those taxes are spent on is almost invariably destructive. Tax 'the wealthy' so we can have more foreign wars, TSA strip-searches, email surveillance and drug wars? No thanks. Tax 'the wealthy' so we can implement more policies that treat people's lives as instantiations of presumptive socioeconomic categories and shoehorn them into patterns of behavior irrespective of their own goals and intentions? No thanks. Tax 'the wealthy' so we further politicize deeply personal value judgement relating to matters such as health care and education, simply to make the macro-level picture look pretty? No thanks. Tax 'the wealthy' so we can artificially create more customers for your business? No thanks - tweak your business model, not the world around you.

I'd love to live in a world without taxes. In this world, I prefer for my taxes to go into pork-barrel projects, the pockets of corrupt lobbyists, and general waste, anything really, that prevents taxes from funding the grandiose ambitions of people who want to remake society and people's lives from the top down, and especially those who prefer for everyone to outsource their happiness and security to outside institutions and abstract 'systems'.

Re: TED and inequality: The real story

#165
post #142
post #115

Earlier quoted context omitted.

'Increasing demand' is itself a supplier-directed activity; it's one of the primary functions of marketing. It seems baffling to consider this from a political/macroeconomic perspective; how would you increase demand but through marketing activity, without your methods becoming coercive or oppressive? > If the necessity of demand isn't the elephant in the room, then why isn't there broad political support for higher…

Some quick pie based economics. Marketing only increases the amount of pie you get when compared to no marketing at all, it doesn't increase the amount of pie available to get however. The problem is not in grabbing more pie than everyone else, the problem is a shortage of pie being made available because certain people collect pies as a hobby and they are doing rather well these days and have fantastic new methods t…

And what do they do with the 'pies' they collect?

Re: TED and inequality: The real story

#168

If true, the aggressively planned PR campaign indicates that this was more than just a politically-sensitive topic, but rather a politically-motivated talk: He had hired a PR firm to promote the talk to MoveOn and others, and the PR firm warned us . . . TED should allow sensitive topics, but to allow others to use TED manipulatively as a pawn in the larger political debate subverts their mission and damages their cre…

He also has a fairly recently published book[1] to promote.

I wonder if that's what the PR push is about.

[1] http://www.amazon.com/The-Gardens-Democracy-Citizenship-Gove...

Re: TED and inequality: The real story

#169
post #162
post #157

Earlier quoted context omitted.

Thanks for providing the transcript. I listened to this and the guy is not a good presenter. Both the content and the delivery need serious work. What's worse is you can tell he has rehearsed this thing ad nauseum. And it's still really stiff and awkward. Now, in some way he, being as lame as he is in this presentation, has proven his own argument. A lot of wisdom is imparted on the wealthy to be leaders of the econo…

> And what's with use of the term "capitalist"? Are there lots of socialists in America now? Are American workers not capitalists? Workers (as in people who work for a wage) aren't Capitalists (as in the Noun). You don't have to be a Socialist if you are not a Capitalist. There are not 'a lot' of Capitalists anywhere (proportional to the overall population).

That's not what Webster's dictionary says. A capitalist is someone who has capital for investment. Would you agree with that definition? It certainly does not imply that a salaried worker is not a capitalist. Every person with a 401k is a capitalist by this definition.

It's true you don't have to be a socialist if you are not a capitalist. But in terms of `ist's, what else would an American likely be? A communist?

Re: TED and inequality: The real story

#170
post #132
post #115

Earlier quoted context omitted.

'Increasing demand' is itself a supplier-directed activity; it's one of the primary functions of marketing. It seems baffling to consider this from a political/macroeconomic perspective; how would you increase demand but through marketing activity, without your methods becoming coercive or oppressive? > If the necessity of demand isn't the elephant in the room, then why isn't there broad political support for higher…

'Increasing demand' is itself a supplier-directed activity; it's one of the primary functions of marketing. It seems baffling to consider this from a political/macroeconomic perspective; how would you increase demand but through marketing activity, without your methods becoming coercive or oppressive? Wow, seriously? As an extreme example, and something no one is proposing: give all unemployed people a $1 million cas…

In 2001, the U.S. passed a tax cut bill that immediately sent rebate checks out to most households. It produced a modest, short-lived bump in the economy but did not increase sustainable demand or create long-term growth. It certainly didn't prevent the recession after 9/11 or the financial meltdown.

Government-funded spending does spur economic activity--true. However it is merely temporary and is essentially borrowing money from the future to buy fake economic growth today--which is why governments reserve it for truly crisis situations like the ones you list above.

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