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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

#211

Post by dredmorbius »

WalterBright wrote: post #210
dredmorbius wrote: post #208

Earlier quoted context omitted.

Microsoft's relative standing within the tech world also fell, though slightly later,, 2005-ish. PG's essay, as with most realisations, postdates reality, and specifically suggests by 2005. http://www.paulgraham.com/microsoft.html

Can you show that was the result of sacrificing the long term for the next quarter's profits? I'm not hypothesizing that corporations don't make strategic errors, of course they do. I'm saying they are not rewarded for sacrificing the long term to pump up quarterly results - and I've seen no evidence of Microsoft doing that.

You'd refuted the caim of long-term decline with a single counterexample.

I responded noting that an earlier period's darling had in fact declined.

I really don't have the time or patience to go into details here, though I can point to Microsoft's monopolistic and anticompetitive business practices, its quality problems with bugs, security, malware, and spyware, its "plays poorly with others" reputation (see PG's essay for a manifestation), and considerable brand erosion, to the point that Microsoft branding, particularly within the mobile space (WinCE, Windows Mobile, Zune), and search (Bing).

Much of which might be traced to pursuit of short-term returns over long-term risk.

Or in a word: yes.

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

#212

Post by _Tev »

specialist wrote: post #169
true_religion wrote: post #126

Earlier quoted context omitted.

The "source" is just inane fluff. It reads like a book review. It hints at topics, but never declares what is to be said about them. It was such an imposing wall of text, that I read it thrice hoping to fine anything that I could reply to in argument, but there's simply nothing there. It's not evidence. It's not a source. It's not even an argument. It's a teaser to buy the book and find out if the book has an argumen…

Kevin Phillips is an economist that served multiple administrations and teaches. He has no shortage of published works, interviews, reviews, criticisms. I encourage you start your quest by clicking the handy link provided.

Seems more like appeal to authority rather than an argument.

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

#213

Post by lifeisstillgood »

WalterBright wrote: post #163
ComradeTaco wrote: post #123

Earlier quoted context omitted.

The US has allowed complete unbridled capitalism during the gilded age. Quoting Wikpedia "From 1860 to 1900, the wealthiest 2% of American households owned more than a third of the nation's wealth, while the top 10% owned roughly three fourths of it.[61] The bottom 40% had no wealth at all.[59] In terms of property, the wealthiest 1% owned 51%, while the bottom 44% claimed 1.1%" So pure, unregulated capitalism, lead…

And yet there was explosive growth in the middle class in that era, the poor moving up into the middle class, and the US moving into a superpower economy. The standard of living went up, way up.

I would argue that is a "despite the greediest Robber Barons that ever Robbed, wealth was created by the industrial age on such a scale that some escaped and was shared more equally"

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

#214

Post by stevenwoo »

WalterBright wrote: post #167
stevenwoo wrote: post #161

Earlier quoted context omitted.

The S&P 500 is rebalanced periodically, meaning companies are removed and added. That makes it not a good assessment of the hypothesis, one needs to find something that is pinned to the S&P 500 one year, then tracks the same 500 companies over a given period of time, including those that drop out and excluding those that grow to be included in the time period of interest.

If the theory was correct, you'd see companies join the stock market with high valuations, and then trend downwards to oblivion as those long term chickens come to roost. But this is just not happening. Look how richly rewarded AMZN is for long term choices.

I think part of this is that the S&P 500 is the largest 500 by capital. It's not a perfect analogy but it is sort of like how wealthy people can live off interest/dividends of their investments where no one else can afford to live like that.

So there is a Worldcom or Enron or Toys R US or Sears or Montgomery Wards every once in a while to totally collapse but something like Kodak can go through a long period on top until it declines when its moat declines or even two of the three car manufacturers in the USA and most of the major financial institutions would have gone bankrupt without government intervention in the last 20 years.

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

#215

Post by dcosson »

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…

As with anything there is obviously some debate and disagreement. But growing inequality is basically the result of capital's share of income being higher than labor's share for the past several decades. When you look at where these consistent outsized returns for the wealthy are coming from, it turns out it's mostly housing [0].

You bring up a point about how can this be causing inequality across the nation. Well if you think about it there really isn't consistent inequality across the nation, wealthy people by and large tend to live in or around big expensive cities, where their returns are consistently driven higher than they would otherwise be thanks to housing prices. It's not only NY and SF that have housing issues, it's more pronounced in these places but lots of cities across the country are seeing housing costs increase quickly.

[0] https://www.brookings.edu/bpea-articles/deciphering-the-fall...

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

#216

Post by WalterBright »

dredmorbius wrote: post #211
WalterBright wrote: post #210

Earlier quoted context omitted.

Can you show that was the result of sacrificing the long term for the next quarter's profits? I'm not hypothesizing that corporations don't make strategic errors, of course they do. I'm saying they are not rewarded for sacrificing the long term to pump up quarterly results - and I've seen no evidence of Microsoft doing that.

You'd refuted the caim of long-term decline with a single counterexample. I responded noting that an earlier period's darling had in fact declined. I really don't have the time or patience to go into details here, though I can point to Microsoft's monopolistic and anticompetitive business practices, its quality problems with bugs, security, malware, and spyware, its "plays poorly with others" reputation (see PG's ess…

> Much of which might be

I.e. speculation

> long term decline

Microsoft stock is dancing around its all time high. Not bad for a company that supposedly has been sacrificing the long term for the short term all along, and so should have died out 30 years ago.

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

#217

Post by sgt101 »

ergothus wrote: post #111
sgt101 wrote: post #90

Earlier quoted context omitted.

The other side of the equation should be rebalanced too - there is every reason to believe that less extreme inequality would lead to greater overall economic activity and wealth (so more money in the pot). So the it should be $740k distributed more evenly vs $325 skewed to the right.

That might be true....if we hadn't spent the previous two generations in a period of extreme wealth creation and far more equitable wealth distribution. I can certainly accept a level of inequality being healthy. I see no evidence for "every reason to believe" - I actually see the opposite: We have evidence that such extreme inequality is not necessary. Even if the argument was accepted, one would have to prove such…

I think you are strongly agreeing with me. I am arguing that a less extreme inequality (more equal shares) will generate more activity and more wealth overall.

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

#218

Post by dredmorbius »

WalterBright wrote: post #216
dredmorbius wrote: post #211

Earlier quoted context omitted.

You'd refuted the caim of long-term decline with a single counterexample. I responded noting that an earlier period's darling had in fact declined. I really don't have the time or patience to go into details here, though I can point to Microsoft's monopolistic and anticompetitive business practices, its quality problems with bugs, security, malware, and spyware, its "plays poorly with others" reputation (see PG's ess…

> Much of which might be I.e. speculation > long term decline Microsoft stock is dancing around its all time high. Not bad for a company that supposedly has been sacrificing the long term for the short term all along, and so should have died out 30 years ago.

Is that quite honestly the most charitable interpretation you can muster?

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

#219

Post by WalterBright »

dredmorbius wrote: post #218
WalterBright wrote: post #216

Earlier quoted context omitted.

> Much of which might be I.e. speculation > long term decline Microsoft stock is dancing around its all time high. Not bad for a company that supposedly has been sacrificing the long term for the short term all along, and so should have died out 30 years ago.

Is that quite honestly the most charitable interpretation you can muster?

The best answer I can give to that is I've been an investor in MSFT since the early 90s and am well pleased with the long term results.

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

#220

Post by photojosh »

sokoloff wrote: post #117
eecc wrote: post #116

Earlier quoted context omitted.

Well 120k for doing nothing is a pretty rent I would say... unless you have a nasty disease and no health insurance. (Unlikely)

Most commonly, it's $120K/yr in income based on a lifetime of two earners carefully saving (deferring current consumption-this is the "doing") and investing for their self-managed retirement. Couple A with $3MM in liquid assets and self-funding their retirement is not particularly better off than couple B[0] who has zero liquid assets and $120K/yr in state-funded pensions, yet couple A is the target of multi-milliona…

Searching didn't help me out much; is $120k in state-funded pensions for a couple a typical amount?

In Australia, it's A$35k (US$27k) a year for a couple. I would have thought the US amount to be less than ours off the top of my head.

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