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20 year study of global wealth demolishes the myth of ‘trickle-down’

businessinsider.com

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Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#171

Post by JKCalhoun »

q1w2 wrote: post #34
romwell wrote: post #10

Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). It was pure mythology from the start; there's never been any basis for it to begin with. It's a pity we even have to debunk it like that. Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. Give a billionaire $20M, s…

I haven't seen a politician advocate for trickle down since the early 1980s. Why is this strawman still the target for low-effort articles?

Aren't tax cuts for the wealthy the same thing as trickle-down?

Good thing politicians haven't done the wealthy any tax favors since the 1980's...

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#172

Post by EarlKing »

romwell wrote: post #116
bottled_poe wrote: post #77

Earlier quoted context omitted.

While I want to agree with you, you’re comment is just hyperbole/rhetoric and no substance.

While I want to agree with you , it so happens that your comment is just hyperbole/rhetoric and no substance. The substance of my comment is a simple model that explains why trickle-down doesn't work. If it helps, I'll add some references to support my argument: [1] TFA Thank you for the effort you put into providing your feedback.

No, parent was right, your comment lacks all substance. It supposes that 'the rich' simply hoard wealth like a mythical dragon in a cave, scrooge mcducking through it while the poor, tired masses starve to death. The truth is that they conserve their wealth by investing it, which means that money recirculates into the economy to provide for the continued prosperity of others. If they just sat on their money they'd actually lose out as their money becomes less valuable through inflation. The one objection that truly matters in this scenario (and it's one you haven't raised) is that some people get a bailout when their investments fail, and others don't. That's the real problem. As long as intelligence is normally distributed and there is pressure against all to regress to the mean then malinvestment will occur and ultimately result in 'the rich' becoming 'not rich'. If, however, someone puts their finger on the scale and effectively ensures that the stupid-rich (literally) can't lose then the rich get richer and the poor get poorer. Solution: Stop doing that.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#173

Post by rbanffy »

masklinn wrote: post #130
netcan wrote: post #52

In college, I studied Ronald Coase's famous 1920s papers. The major application ATT was infrastructure stuff. Coase's argument was that "given 0 transaction costs," it doesn't matter who owns what property or right. The market will achieve efficient solutions as firms sell each other radio spectrum or whatnot. Policy should focus on minimizing transaction costs and let the market organize itself. Circa 2005, I heard…

> Trickle down economics is the same kind of error. Is it really an error if what is observed is what was expected is what was desired?

What is observed is more or less the opposite of what its proponents say would be observed.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#174

Post by titzer »

romwell wrote: post #10

Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). It was pure mythology from the start; there's never been any basis for it to begin with. It's a pity we even have to debunk it like that. Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. Give a billionaire $20M, s…

> Cue Pikachu face when the economy doesn't improve.

It was never about the "economy". It has always been about pumping up the profit-generating machinery. It used to be that profit-generating machinery had real meatspace jobs backing it, and real machines and factories to feed. But now, given that machinery is now fully virtualized, first in the stock market, then in financial instruments, then tech, now in the unholy marriage of finance and technology and crypto currencies, I think the money'd elites would consider everything "working as intended". The stock market is generating record profits, therefore nothing is broken.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#175

Post by xondono »

Fricken wrote: post #30

In a watershed, rain falls and distributes water far and wide. It then trickles downward to where the water is most concentrated. This one is easy. If the monetary system was a watershed, the rich would be at the bottom. You can't dump a billion litres at the mouth of the Amazon and reasonably expect it to make its way to the rest of the rainforest.

That’s because you are looking at the money, but you can’t eat money, you can’t dress yourself with money, you can use money as shelter.

You “pour money” at Amazon and lower prices come out the end. Note that I put “pour money” because no one has never suggested actually giving money, just taking less.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#176

Post by bluGill »

UncleMeat wrote: post #129
foverzar wrote: post #91

Earlier quoted context omitted.

I think your logic is flawed in the part where you consider "added value". Obviously, managers never actually "add" value. All they do is organize, so that value can be generated in the first place. And obviously they are the ones who gain the most profit if succeed and loose the most if not. Anyone can verify it by founding a startup, but surprisingly people prefer comfy jobs. Try organizing something and it will be…

A manager is a laborer like any other. A CEO being paid a wage is not bad. They are doing labor too. The problem is when people are obtaining a large amount of their wealth through means other than labor.

A CEO is doing very hard labor. It isn't easy figuring out that the future will be and positioning the company to be there. Everyone would like the salary of a CEO, few would actually like that work (it isn't as easy as it sound), and even fewer are good at it. Many companies have failed after a bad CEO took over, or improved greatly when a good one took over. If a good CEO wants millions to do the job they are well worth it. (Yes I know Steve Jobs took $1 - but that doesn't change the point)

Note that figuring out who is a good CEO is left as an exercise to the reader. (meaning I don't think anyone knows how to tell in advance)

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#177

Post by leto_ii »

netcan wrote: post #52

In college, I studied Ronald Coase's famous 1920s papers. The major application ATT was infrastructure stuff. Coase's argument was that "given 0 transaction costs," it doesn't matter who owns what property or right. The market will achieve efficient solutions as firms sell each other radio spectrum or whatnot. Policy should focus on minimizing transaction costs and let the market organize itself. Circa 2005, I heard…

> More wealth, more wealth disparity... almost universally.

How so? Why would you assume that the distribution of wealth is correlated to the total stock? In reality this actually doesn't have to be the case at all. Aside from direct means of wealth redistribution, the are ways of setting up an economic system such that wealth inequality is reduced.

> Many or most people have no wealth, depending on your semantics of "wealth."

Again, this is not a fact of nature. It's not in the biological nature of most people to be poor. Poverty is a result of a badly functioning society and can be alleviated.

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#178

Post by FredPret »

forinti wrote: post #15
codegrappler wrote: post #2

I guess I’m not surprised that a bunch of folks who have made a career out of advising politicians on income inequality….discovered income inequality in their study. The two questions in my mind are: 1. Should we trust the government to spend the money more wisely than the folks who earned it? Or said another way, how do you combat the almost inevitable corruption you see with large government spending? 2. What will…

Long before we get to something like a 90% tax bracket, we could have the very wealthy pay the same rates as regular folks. Anyway, I don't see why a billionaire shouldn't have a 90% bracket.

They pay a much higher rate, with a few well-publicized exceptions.

And if you think you can tax a rich person at 90% without all their money disappearing into tax havens, I have a bridge to sell you

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#179

Post by FredPret »

jl6 wrote: post #9
codegrappler wrote: post #2

I guess I’m not surprised that a bunch of folks who have made a career out of advising politicians on income inequality….discovered income inequality in their study. The two questions in my mind are: 1. Should we trust the government to spend the money more wisely than the folks who earned it? Or said another way, how do you combat the almost inevitable corruption you see with large government spending? 2. What will…

Maybe people shouldn’t be incentivized to work at insane rates, and maybe nobody needs a $1m+ salary?

So the entire earth is supposed to be middle class? Interesting how this would leave 100% of the power to the elite bureaucrats

Re: 20 year study of global wealth demolishes the myth of ‘trickle-down’

#180

Post by flooow »

refurb wrote: post #88
romwell wrote: post #10

Ahh, the good old trickle-down, aka "piss in my eyes and tell me it's raining" (which is the only way trickle-down actually works). It was pure mythology from the start; there's never been any basis for it to begin with. It's a pity we even have to debunk it like that. Go figure, give a million hungry people $20 each, and see $20M return to the economy the next day as they spend it on food. Give a billionaire $20M, s…

Low quality post unworthy of HN.

When someone makes a bad-faith argument, should one go to great lengths to refute it? Perhaps sometimes. Other times, it is better to dismiss it as nonsense and get on with one's day.

"Trickle-down economics" is an extremely bad-faith argument, essentially boiling down to "rich people pay slightly less rich people to tell poor people it's better for The Economy if they stay poor". That it was ever given credence in the first place reflects very badly on the economics profession (or, as I would reframe it, shows that economics as a subject has been wholly captured by elites).

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