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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

#331

Post by bjornsing »

CharlesColeman wrote: post #92
bjornsing wrote: post #84

Earlier quoted context omitted.

INHO we should be looking much more at consumption and a lot less at income or (worst of all) assets. In what way does it matter that Warren Buffet has X times my income and Y times my assets, if he drives the same kind of car and lives in about the same kind of house? It means he has more power than me in a capitalistic system, sure. But is that really so wrong or unfair? I think it’s actually kind of a good thing:…

> It means [a billionaire] has more power than me in a capitalistic system, sure. But is that really so wrong or unfair? Where does that leave democracy? > I think it’s actually kind of a good thing: most people would just consume like crazy and ruin the planet if they came into that kind of money... That bears a striking resemblance to some anti-democratic rhetoric I've seen. For instance, one of the rationales the…

I don’t believe that economic power is the same as coercive power. The former let’s you dangle a carrot in front of people. The latter let’s you threaten to kill them. There’s a difference, and democracy (with constitutional restrictions) should IMHO primarily be a way to distribute coercive power.

Re: Economists Are Rethinking the Numbers on Inequality

#332

Post by retsibsi »

bhupy wrote: post #139
leto_ii wrote: post #133

Earlier quoted context omitted.

In a society there are may levers (official or not, transparent or not) that the powerful can pull to get politics to lean their preferred way. This is true of all places and all times. The more power is concentrated, the easier it is for a very small group of individuals to have a very large impact on decision making. All the billions poured in campaign funding, lobbying etc. do actually buy a lot of influence albei…

Unless you provide data or empirical evidence, it's just a vague intuition. There's more than enough evidence to the contrary (as I've provided). At the end of the day, people act as individuals, and they have their beliefs and biases. For example, a small group of wealthy individuals can pour as much money as they want into pro-abortion propaganda, but it's unlikely that it will sway pro-lifers' opinions (especially…

How do you explain presidential campaigns costing billions of dollars[0] in the first place? (And that's just one slice of the pie, when we take into account not only all the other election campaigns, but other sources of propaganda, lobbying, and so on.) If that's what it costs to buy 'a platform to try and change someone's mind', then almost nobody can afford to to so without big money backing.

As for the donors' motivations, maybe you'll argue that they are merely supporting the candidates with favourable policies, rather than buying influence with them. But even if that were true, the donations would still be a means of converting $ into desired political outcomes.

[0]https://en.m.wikipedia.org/wiki/Campaign_finance_in_the_Unit...

Re: Economists Are Rethinking the Numbers on Inequality

#333

Post by intarga »

s1k3b8 wrote: post #316
leto_ii wrote: post #13

A lot of this article reminded me of the techniques used by climate change deniers to sow doubt. Take for example the following: > Another correction concerns the tax reforms passed under Ronald Reagan in 1986. Apparent changes in top incomes around this reform account for about two-fifths of the total increase between 1962 and 2015 in the pre-tax incomes of the top 1% in Messrs Piketty and Saez’s estimates. Messrs A…

> A lot of this article reminded me of the techniques used by climate change deniers to sow doubt. And a lot of climate change advocates' technique reminds me of the religious zealots of the past. Even down to the ad hominems like "Christ denier"/"climate change denier". Firstly, I don't believe climate change is a matter of "belief". No such thing as a "climate change denier". Climate change is an intrinsic part of…

>If climate change was a developed science and we understood climate change adequately, we wouldn't have so many climate change models. We would have ONE.

In physics we have a dozen different models of gravity, yet we're still pretty sure that if you jump out of a building you're going to fall downward.

Re: Economists Are Rethinking the Numbers on Inequality

#334

Post by dragonwriter »

Merrill wrote: post #160
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 mid-20th-century laws that put brakes on this feedback loop have been removed; I don't believe that the purpose of mid-20th-century laws was to promote equality. Things were more equal then because: a) World Wars I & II destroyed huge amounts of capital, and b) fighting wars requires lots of money which requires raising taxes on people who can pay, since borrowing cannot fully fund general wars. Economics are c…

> I don't believe that the purpose of mid-20th-century laws was to promote equality.

They were rather explicitly a response to the conditions of the lower classes in a capitalist (in the relatively pure sense that was dominant before the rise of the modern mixed economy through the policies under discussion) economy.

Re: Economists Are Rethinking the Numbers on Inequality

#335

Post by kofejnik »

VladimirIvanov wrote: post #201
pksdjfikkkkdsff wrote: post #145

Earlier quoted context omitted.

He has been going at it consistently for many, many years now. He just happened to be lucky year after year? Most people don't even try, but it doesn't stop them from accusing people who put in the work and who take the risks from just being lucky.

Bezos also had parents that gave him a several 100 thousand dollar loan that they never expected to be paid back. He's a product of Montessori and Ivy League education. Definitely not a rags to riches story

I was a very bright kid (won math olympiads a lot), and I can get loans easily. Still I'm not Bezos-rich somehow ...

Re: Economists Are Rethinking the Numbers on Inequality

#336

Post by TFYS »

bjornsing wrote: post #331
CharlesColeman wrote: post #92

Earlier quoted context omitted.

> It means [a billionaire] has more power than me in a capitalistic system, sure. But is that really so wrong or unfair? Where does that leave democracy? > I think it’s actually kind of a good thing: most people would just consume like crazy and ruin the planet if they came into that kind of money... That bears a striking resemblance to some anti-democratic rhetoric I've seen. For instance, one of the rationales the…

I don’t believe that economic power is the same as coercive power. The former let’s you dangle a carrot in front of people. The latter let’s you threaten to kill them. There’s a difference, and democracy (with constitutional restrictions) should IMHO primarily be a way to distribute coercive power.

Economic power can do much more than dangle a carrot. It can buy coercive power. It can also buy propaganda machines to fool people into believing what economic power needs them to believe. Economic power also gets to decide which projects are worth pursuing in our society.

Re: Economists Are Rethinking the Numbers on Inequality

#337

Post by mensetmanusman »

rayiner wrote: post #176
CharlesColeman wrote: post #151

Earlier quoted context omitted.

> I'm fairly well acquainted with the literature on this topic How so, exactly? > and I think the opposite; the fact that most people don't understand why these "nitpicks" actually seriously undermine the premise and totally butcher the prescriptive suggestions Personally, I'm inclined to withhold judgement until the dust settles, yay or nay. The topic is technically difficult, and there are a lot of actors with poli…

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…

Okay, but it’s not quite true that ‘nobody’s standard of living would change.’

Cartels would be free to cross the border and operate in the U.S. (no way the U.S. could handle a sudden spike in 100,000+ Member sophisticated criminal operations), so their quality of life would increase.

The lower class in the U.S. would have even more wage competition, so theirs might decrease, etc.

Re: Economists Are Rethinking the Numbers on Inequality

#338

Post by mensetmanusman »

dennisgorelik wrote: post #291
darawk wrote: post #257

Earlier quoted context omitted.

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'.

People who make more money are more likely to marry and to stay married.

True, but even poor people who decide to get married see a benefit relative to cohabitation.

Re: Economists Are Rethinking the Numbers on Inequality

#339

Post by mensetmanusman »

ledauphin wrote: post #314
maxsilver wrote: post #82

Earlier quoted context omitted.

> But hoarding wealth isn't a problem for inequality. It absolutely can be, especially for wealth that is finite. (Like land for housing) > Inflation is the process that incentivizes capital to be put to work. Does it though? Inflation mostly just punishes labor alone, labor feels the effects of inflation far more severely than anyone else. With enough capital (the amount anyone 'hoarding wealth' already has), the ca…

I'm not an expert, but what you describe as "capital sitting doing nothing" is, presumably, capital invested in some kind of market index? In which case it's by definition not "sitting doing nothing", right? Unless you were referring to capital in the sense of owned non-market property that appreciates with time? Land/property values are a major topic of discussion throughout this thread for sure. Just trying to make…

You are correct, it isn’t ever ‘doing nothing’

The issue is that the returns to the investor far outweigh the gains in wages etc. to the people actually doing the work to increase prosperity.

Re: Economists Are Rethinking the Numbers on Inequality

#340

Post by mensetmanusman »

hervature wrote: post #11
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…

I had a very different takeaway from Piketty's book. Namely, that inflation (primarily hyper inflation) has been the only force to reduce income inequality. For example, Jeff Bezos is much more affected than I am if the government decides to give everyone a $1B. Thus, governments looking to end income inequality shouldn't be afraid of high inflation.

Anyone commoner who lived through hyperinflation will disagree.
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