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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’

#91

Post by foverzar »

esarbe wrote: post #38
pydry wrote: post #18

Earlier quoted context omitted.

>the folks who earned It's quaint that there are people out there who believe that income at the top strata of society is primarily earned. Those dividend payments, rents and capital gains (realized) that make up the bulk of top earner incomes happen while they sleep. A minimum wage is earned. A doctor's wage is earned. A golden parachute after a CEO ruins a company? Somebody with a trust fund? A person living off di…

The frustrating thing is that this kind of rhetoric actually works. They call themselves "the makers" and "job creators" while all they are doing is leveraging their upbringing in a wealthy social environment that provided them with the necessary connections to get a comfy job. Their actual added value is minimal, but they sell it so good that (almost) everyone actually believes the myth. Sad.

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 immediately evident how hard it is to actually make people work effectively towards the same goal. I have actually left a position of a team lead in favor of a linear software development job -- it's just SOOOOOO much simpler and less nervous than any kind of organizational stuff.

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

#92

Post by bottled_poe »

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…

> Should we trust the government to spend the money more wisely than the folks who earned it?

Yes.

> Or said another way, how do you combat the almost inevitable corruption you see with large government spending?

Transparent auditing of taxpayer funds. Presumably this exists to some degree in your country.

> 2. What will incentivize people to work at insane rates if the vast majority of their income and wealth is taxed?

This is a loaded question, as it implies that incentives beyond survival/comfort exist under the incumbent model of operation.

> Would I be willing to put in the long hours and sacrifices usually required to work up to a $1m+ salary if it’s taxed at a 90% rate?

To what end? The proposal is an alternative model of living which lifts the baseline quality of life, thus reducing this incorrect perceived need for an extreme financial safety net.

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

#93

Post by mrjangles »

God this article is bad on so many levels I don't know where to start.

First, income inequality doesn't measure income mobility. Places like the US that have a huge number of unskilled illegal and legal immigrants constantly entering at the bottom level will always have high income inequality. The question is, what happens to each individual over the course of their lives?

83% of Americans will earn more than their parents. 73% of Americans will spend at least 1 year in the top 20% of income earners in their lifetime.

https://fee.org/articles/income-mobility-data-show-america-s...

Also, there is no such thing as "trickle down economics", that is an insult leveled by critics of the idea you should let people spend and invest their own money rather than the government. The results speak for themselves and are astounding. The poorest person alive in a first world country today lives better than the richest 100 years ago. This was all because of investment. Clearly investment, or "trickling down" (as its critics like to call it) isn't just effective, it is the only thing that works to make people's lives better.

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

#94

Post by cies »

bottled_poe wrote: post #77
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…

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

> you’re comment is just hyperbole/rhetoric and no substance.

So what is unsubstantiated in your view? The fact that super rich use offshore accounts? That super rich make more money with moving assets than they could make with labor? That poor people will likely spend given money quickly?

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

#95

Post by esarbe »

refurb wrote: post #86

People realize “trickle down” was just a made up political punching bag, right?

What do you mean? That 'Trickle Down' was a satirical term coined to disparagingly talk about supply-side economics? Sure, I know.

That doesn't mean that there aren't more than enough people still clinging to supply-side economic theories as if their undeserved wealth depended on it. Because it does.

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

#96

Post by [deleted] »

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…

[deleted]

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

#97

Post by foverzar »

Emma_Goldman wrote: post #46
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…

>'Should we trust the government to spend the money more wisely than the folks who earned it' This is a false opposition. Taxed money does not have to be spent at the point of the state. A sovereign wealth fund could raise funds from wealth taxes and assign a share to every citizen in the country. It could then use its interest-bearing assets to pay out a dividend to all shareholders every year. It could be run by an…

> A sovereign wealth fund could raise funds from wealth taxes and assign a share to every citizen in the country. It could then use its interest-bearing assets to pay out a dividend to all shareholders every year

This assumes responsible spending, which is not the case IRL. And what about shared infrastructure projects?

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

#98

Post by WastingMyTime89 »

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…

> 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 problematic point. The issue is the power imbalance it creates and outlines.

Because in and of itself, wealth is of little interest. Economy is first and foremost the study of exchanges. If the wealthy stayed amongst themselves with their wealth parked peacefully and little interaction with the rest of the system, you could pretend they didn’t exist and from the point of view of the economy experienced by the majority of the people that would mostly be true. That’s mostly what’s happening actually which is why people don’t riot.

It is both a blessing and a curse because as usual throughout history when an aristocracy arise, their main fear is that the general population realise they are not actually providing that much value and could be dispensed with. That’s why they use the power they own - the ability to put the system out of balance - to lobby in their favour, keep control of the political system and information apparatus in order to keep being able to extract value from the system.

From my point of view, we are in situation which has a lot to do with the Old Regime. 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 to manage and impart a strategy while exploiting the collective labour of their employees tolling for meager wages.

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

#99

Post by littlestymaar »

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…

> The first thing to understand about wealth disparity is that it maps pretty much to wealth. More wealth, more wealth disparity... almost universally.

This is obviously wrong. Take India vs Switzerland as an example. Also, in the post-war era, the Western European countries saw a diminution of wealth disparity at the same time as a great wealth increase.

Actually the history of the western world in the 20th century looks more like “the less wealth disparity, the more wealth growth” (I'm not implying causality, but at least the correlation goes this way).

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

#100

Post by user3939382 »

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…

I've had The Nature of the Firm sitting on my bookshelf for 3-4 years. Maybe I should get around to reading it...
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