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Economists Are Rethinking the Numbers on Inequality

economist.com

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Re: Economists Are Rethinking the Numbers on Inequality

#251

Post by beerandt »

onion2k wrote: post #206
kofejnik wrote: post #194

Earlier quoted context omitted.

If everybody is forced to be average, what's the point of even trying? I'd probably noodle on my guitar all day and play Fallout, rather than work

A huge number of people work very hard for much less than middle class Westerners have. They would all get more than they have now. I suspect that would lead to better global productivity even with the loss of your input.

Do people still actually believe this?

"Next time it will work because the workers will be properly motivated!"

Re: Economists Are Rethinking the Numbers on Inequality

#252

Post by K0SM0S »

hueving wrote: post #242
60654 wrote: post #7

This Economist article points out some of the many small academic works that quibble over details with Piketty and Saez. But that's not anything new. The major points of their work, and especially of Piketty's monumental _Capital for the 21st century_ still stand: that capital is a positive feedback loop in a way that labor is not; that mid-20th-century laws that put brakes on this feedback loop have been removed; th…

> that capital is a positive feedback loop This requires a lot of the investment environment that isn't a given. Capital loses its feedback loop if inflation outpaces economic growth or if the quality of investment opportunities declines significantly. There is no given that just having $10 million dollars means it will be easy to outpace inflation and not end up with less.

Having 10 million dollars as of 2019 and being unable to at least keep up with inflation means making terrible choices, many, many times over.

Re: Economists Are Rethinking the Numbers on Inequality

#253

Post by StacyRoberts »

empiricus wrote: post #228
StacyRoberts wrote: post #187

Earlier quoted context omitted.

Explanations for the down votes are appreciated. I've put a lot of thought into this.

Did not downvote. But this solution would make the rich try to hide their true wealth, so basically it becomes picking randomly from the first 0.x percent. Also do you agree your solution has zero chances of ever being implemented?

They do that now in shell companies and off shore accounts.

No I don't agree with that. Someone may have asked the founding fathers that too. You know the monarchy will never go for independent colonies, right?

Political systems change, violently eventually unfortunately and the goal of a new system is to avoid that.

Re: Economists Are Rethinking the Numbers on Inequality

#254

Post by Ancalagon »

airstrike wrote: post #96
giornogiovanna wrote: post #83

Earlier quoted context omitted.

What kinds of service jobs do you have in mind?

R&D in general (but, in particular, engineering, innovative software development and other highly-trained CS-based roles, life sciences research), highly-trained managerial roles in finance, accounting, operations management

Those are not service jobs. I think you might be confusing the definition of the service industry and information industry. Additionally, I would argue those jobs you listed could potentially be off-shored, while service industry roles (which typically pay far less) could not.

Re: Economists Are Rethinking the Numbers on Inequality

#255

Post by StacyRoberts »

keenmaster wrote: post #235
StacyRoberts wrote: post #187

Earlier quoted context omitted.

Explanations for the down votes are appreciated. I've put a lot of thought into this.

I didn't downvote, but while I see the value in a moderate wealth tax, I think cutting the rich down to median salary would destroy a lot of value. Our capitalist system is undergirded by pecuniary incentives to innovate, improve, and produce. If you take those incentives away, the most productive members of society will not produce as much. Some people are saying that billionaires shouldn't exist. I'm not so sure. I…

Can you imagine that Bill Gates would get wealthy again or Warren Buffett? They would be lauded as heroes! They already are for suggesting something similar, just at death. They give away so much already and are loved for that.

What if they were that person twice our three times! The most productive people will have a new incentive to create tremendous value again!

Very soon I will get a warning from hn that I'm posting too fast. I Don't know when that will be but I will respond when I can. I love the constructive dialog.

I really do believe in this plan.

Re: Economists Are Rethinking the Numbers on Inequality

#256

Post by Leherenn »

AnimalMuppet wrote: post #197
hundt wrote: post #196

Earlier quoted context omitted.

I don't think that's the assumption that it's based on. It's more like, when you own an asset, you get to benefit from the consumption of that asset. You did not "prepay" for the consumption of that asset. You paid to own the asset, which entitles you to consume it while you own it, but the value you get from consuming it is not deducted from the resale value of the asset. Example: you buy a house in 2010 for $500,00…

Well, dcolkitt was talking about imputed income in the context of tax advantages. I assumed (perhaps wrongly) that the subtext was that people who own houses should be taxed on the "imputed income" as if it were real income. That raised my hackles - perhaps wrongly. Still... there's something funny in the "imputed income" accounting. Let's say I buy a house for $500,000. I live in it. I don't pay rent, though the hou…

This tax on "imputed income" actually exists in Switzerland for properties, with interesting effects on the market.

Re: Economists Are Rethinking the Numbers on Inequality

#257

Post by darawk »

dangerlibrary wrote: post #233
rayiner wrote: post #176

Earlier quoted context omitted.

My biggest problem with Piketty & Saez's work is that it made pretty major economic policy prescriptions based on a model that was so simplistic that the result was borderline click-bait. And the end-result is that assertions have entered the political discourse ("the middle class's standard of living has been stagnant since the 1970s") that just aren't true. Let's unpack that. If you want to quantify the middle clas…

You are mixing up correlation and causation re: married couples.

The relationship is causal. Married couples are a household. Married couples consist of two people. Two people is more than one person. Two incomes is more than one income, etc. Even though all married households are not dual income, those that are shift up the mean for the rest. This is an artifact of measurement via 'household'.

Re: Economists Are Rethinking the Numbers on Inequality

#258

Post by bigger_cheese »

pksdjfikkkkdsff wrote: post #110
simoom22 wrote: post #81

Earlier quoted context omitted.

Are you saying poor people aren't exploited?

Presumably there are people who are being exploited in the world. But to claim in general poverty is a result of exploitation seems very questionable. Start with basics. People live in the woods, with nothing. Some start building a hut from sticks, others don't. The ones living in huts suddenly are richer than the ones who don't, even though they haven't taken anything away from the ones who don't have huts. And of t…

People in huts eventually band together into villages, villages start to trade goods with one another. Eventually the largest village is able to coerce (either using the threat of force via superior military or through infiltration, bribery subversion etc) the smaller villages into giving it the best deals.

The largest village gets very rich while extracting all the resources and goods from the smaller villages around it. The largest village is able to ram through treaties, trade pacts etc that favor it's interests, it is able to interfere in politics of surrounding villages and sometimes provides backing to despots or outright overthrow leadership of smaller villages that might be doing something the largest village does not agree with.

Re: Economists Are Rethinking the Numbers on Inequality

#259

Post by Domenic_S »

harryh wrote: post #238
Domenic_S wrote: post #236

Earlier quoted context omitted.

Say you and I each buy a house. Yours is new construction and cost $1mm, mine was built in 1970, never remodeled, and is perhaps located somewhere more expensive and also cost $1mm. Common scenario in the SFBA. Is one year of your consumption equivalent to one year of my consumption? Like a car, the longer you use it the higher the likelihood that something expensive goes wrong. But unlike a car, our homes are probab…

Is one year of your consumption equivalent to one year of my consumption? Yes. That's why both houses cost the same.

That's a circular explanation, but maybe I'm reading it that way because we aren't aligned on what 'consumption' means. For a durable good like a house or a couch I think it would be something like expected service life / interval * over-or-underuse multiplier.

The interval technique makes sense to me on goods that are used over time or taxed over time. You can pay for a house all at once, and if you were only paying property tax once I think I would agree with you that the tax is consumption tax. Yet property taxes are annual, so in order for property tax to be a consumption tax we would have to enumerate how much consumption is occurring during that year.

Consider something simpler, like a sofa. We both buy the same sofa with a service life of 10 years. Did we consume the sofa when we bought it? Or do we consume it over its useful life? If I jump on the sofa daily and it lasts for 1 year, I've consumed it in a year. If you barely sit on it and it lasts you 20 years, you've consumed it over 20 years.

Does that make sense? How are you defining consumption?

Re: Economists Are Rethinking the Numbers on Inequality

#260

Post by jopsen »

bhupy wrote: post #152
dwiel wrote: post #134

Earlier quoted context omitted.

How do you measure quality of life though? People say this kind of thing all the time "the poor are better off now than rich of the past". My guess is that most poor of today would switch places with the rich of the past in a heartbeat. My point is just that "quality of life" is more complex than just longer expected lifetime, or has access to faster internet, as nice as those things are.

Great question. Check out [1] and scroll down to Table A-7 (it's an Excel file). It's the real earnings data (in 2018 dollars), by gender, from 1960 to 2018 (though it's kind of spotty before 1967). What sticks out: * For men (looking at Total Workers), real earnings are currently around 10% higher than they were in the 70s (moving from low-$40K's to recently just past mid-$40K's, with some peaks and valleys along th…

Nice work!

We often forget that things are no actually so bad.

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