20 year study of global wealth demolishes the myth of ‘trickle-down’ • Hacker News Board

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

#381

Post by [deleted] » Wed, Dec 08, 2021, 6:21 PM UTC

throwaway0a5e wrote: post #258

rbanffy wrote: post #170

Earlier quoted context omitted.

Also the trickle down proponents, however middle-class, think of themselves as wealthy and have the misconception that it’d be their money being reallocated.

Run the numbers, the billionaires don't actually have that much money compared to the hordes of doctors, lawyers and managers. If you want to cut the masses a meaningful sized check (lump sum or over time really makes no difference) you're going to need to take it from more than just the very top. Look at how Europe pays for its social safety nets. That's on the order what the tax burden would look like. You can't ju…

[deleted]

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

#382

Post by flavius29663 » Wed, Dec 08, 2021, 6:30 PM UTC

sofixa wrote: post #348

flavius29663 wrote: post #233

Earlier quoted context omitted.

Governments are notoriously bad at investments. Rich people will not keep money frozen in offshore accounts forever, to be eaten by inflation. They will invest at some point, and when they do it's going to be much more efficient than whatever the government can do. All the former communist states had the government make all the decisions where the money is invested, and they fell further and further behind in economy…

> Governments are notoriously bad at investments Not all governments, check Norway for a great example of great investment.

Didn't Norway just bought into the stock market via their pension fund? That is literally the opposite of investing it themselves. They take the largest part of the money and put it on the market, believing that the private companies can grow those money better than they can. And they were right...

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

#383

Post by flavius29663 » Wed, Dec 08, 2021, 6:32 PM UTC

d--b wrote: post #302

flavius29663 wrote: post #254

Earlier quoted context omitted.

> the wealthy can only consume so much That is exactly the point. The wealthy cannot consume too much, so they will invest the rest. Investment means factories and jobs for the poor. The government could take the money and do the investments themselves, but that never really works well. With so many inefficiencies, the governments would slow down the economic development significantly. Communist countries had 5 year…

My point is that investement isn’t money that flows from the rich to the poor, like the trickle down analogy would suggest. Investment is meant to be recouped. It’s always about creating a bigger pie…

> money that flows from the rich to the poor

Of course not, which is why whoever proposes these policies doesn't call them "trickle down". But what the poor will get is jobs, better jobs than 20 or 100 years ago, that pay for more goods and services compared to 20 or 100 years ago. Which is true, the working poor today live very well compared to even rich people 20 or 100 years ago.

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

#384

Post by netcan » Wed, Dec 08, 2021, 6:35 PM UTC

tomeon wrote: post #377

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…

> Circa 2005, I heard a podcast with 90-something Ronald Coase. He has pissed. Everyone had been teaching his theorem backwards for decades, backed with the "chalkboard economics" he despised Similar themes came up in Ronald Coase's appearance (at a stunningly-lucid 101 years old) on this 2012 episode of EconTalk: https://www.econtalk.org/coase-on-externalities-the-firm-and... Plugging this as it's one of my favorite…

Erm... correction then. This is the episode I was referencing.

100-something Ronald Coase

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

#385

Post by rbanffy » Wed, Dec 08, 2021, 6:50 PM UTC

EarlKing wrote: post #373

rbanffy wrote: post #182

Earlier quoted context omitted.

> 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. When we get to the point money is easily converted in political power, you can see not only the finger tipping the scale, but a whole foot firmly planted there. Good luck convincing the rich, who actually convinced themse…

Convincing the rich to stop tipping the scale is about as likely as convincing people that "eat the rich" is not an actual solution to the problem. Both are rooted in hatred and ignorance, and neither will actually lead to justice.

Indeed. The rich are too fatty and that may create health issues. Also, their biomass is insufficient to sustain the poor population.

We missed the opportunity of making them useful this way.

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

#386

Post by nouveaux » Wed, Dec 08, 2021, 7:06 PM UTC

mrep wrote: post #337

socialdemocrat wrote: post #264

Earlier quoted context omitted.

> More wealth, more wealth disparity... almost universally. That is a stark claim with little empirical evidence. If you look at the world, you will find that Europe, one of the most affluent parts of the world has the lowest wealth inequality. While wealth inequality is very high in Africa, one of the poorer regions of the world. Wealth inequality is far more likely to be the outcome of policies. Europe has been dom…

Then why do the netherlands, russia, and sweden have the first, second, and third highest wealth ginis [0]? [0]: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_in...

So I only looked up Netherlands:

"The issue is that the accumulated inter-generational wealth compounds itself quicker than the Dutch government can reduce the money added to it. The Netherlands’ historical wealth can be traced back centuries ago, with huge money-makers like the Dutch East Indies company. They allowed an extremely small minority of the Dutch population to accumulate astronomical amounts of wealth that are still compounding and increasing the wealth gap to this day."[0]

Even with their ginormous disparity, the poor in the Netherlands are not doing so bad.[1]

[0] https://uweb.berkeley.edu/2021/04/11/the-duality-of-the-dutc...

[1] https://en.wikipedia.org/wiki/List_of_countries_by_percentag...

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

#387

Post by throwaway0a5e » Wed, Dec 08, 2021, 7:08 PM UTC

alphabettsy wrote: post #380

throwaway0a5e wrote: post #258

Earlier quoted context omitted.

Run the numbers, the billionaires don't actually have that much money compared to the hordes of doctors, lawyers and managers. If you want to cut the masses a meaningful sized check (lump sum or over time really makes no difference) you're going to need to take it from more than just the very top. Look at how Europe pays for its social safety nets. That's on the order what the tax burden would look like. You can't ju…

Wouldn’t those professions listed be uppper-middle class or something else? I’ve never thought of doctors and lawyers as middle-class professions or income.

Your average lawyer isn't a partner at a prestigious firm that prints money. Your average manager isn't a PM making 250k+ at FAANG.

https://www.bls.gov/oes/current/oes_nat.htm#00-0000

I probably shouldn't have included doctors though. I always forget how grossly overpaid they are.

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

#388

Post by OrderlyTiamat » Wed, Dec 08, 2021, 7:15 PM UTC

gilmore606 wrote: post #374

WastingMyTime89 wrote: post #98

Earlier quoted context omitted.

> In any case, the "wealth disparity" discussion is almost always badly anchored. The first thing to understand about wealth disparity is that it maps pretty much to wealth. More wealth, more wealth disparity... almost universally. Many or most people have no wealth, depending on your semantics of "wealth." Therefore, if the value/quantity of wealth rises, wealth disparity rises. I agree with you but it remains a pro…

> Aristocrats used to explain that they could not be dispensed with because they had superior value and were needed to administer and guide while exploiting the collective labours of the population. Modern large shareholders and executives explain that they can’t be dispensed with due to their superior ability Isn't this evidence that the aristocrats were right? We beheaded them and new aristocrats sprang up in the s…

I'd say it's evidence that the class is self creating, but not specifically that the class is necessary for society to function. It could be for instance that it must necessarily exist, but only as a byproduct of society (e.g. some people have slightly more resources and therefore an advantage to press to get more resources etc.)

Or possibly it's just a consequence of the kinds of society we've had up till now. Perhaps in [your favorite utopia] it's not necessary nor beneficial.

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

#389

Post by danaris » Wed, Dec 08, 2021, 7:15 PM UTC

gilmore606 wrote: post #374

WastingMyTime89 wrote: post #98

Earlier quoted context omitted.

> In any case, the "wealth disparity" discussion is almost always badly anchored. The first thing to understand about wealth disparity is that it maps pretty much to wealth. More wealth, more wealth disparity... almost universally. Many or most people have no wealth, depending on your semantics of "wealth." Therefore, if the value/quantity of wealth rises, wealth disparity rises. I agree with you but it remains a pro…

> Aristocrats used to explain that they could not be dispensed with because they had superior value and were needed to administer and guide while exploiting the collective labours of the population. Modern large shareholders and executives explain that they can’t be dispensed with due to their superior ability Isn't this evidence that the aristocrats were right? We beheaded them and new aristocrats sprang up in the s…

No; it's evidence that some people will attempt to become that class of society, even after it's been abolished, so that they can have power over others.

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

#390

Post by nouveaux » Wed, Dec 08, 2021, 7:17 PM UTC

flavius29663 wrote: post #382

sofixa wrote: post #348

Earlier quoted context omitted.

> Governments are notoriously bad at investments Not all governments, check Norway for a great example of great investment.

Didn't Norway just bought into the stock market via their pension fund? That is literally the opposite of investing it themselves. They take the largest part of the money and put it on the market, believing that the private companies can grow those money better than they can. And they were right...

"Didn't Norway just bought into the stock market via their pension fund? That is literally the opposite of investing it themselves."

A pension fund is payment to a group of people over a period of time. Traditional investment from a government into a country comes in the form of building infrastructure and military. Dollars spent on infrastructure and the military will not pay yearly cash dividends.

A factory can take it's payroll budget and "invest" it on machines, but it will not be able to pay it's employees, which defeats the purpose of a payroll budget.

Norway has a yearly budget and it invests in traditional things like infrastructure and their military. This is what the GP means when they say that governments can make good investments. [1]

[1] https://en.wikipedia.org/wiki/State_budget_of_Norway