Huge 20-Year Study Shows Trickle-Down Is a Myth, Inequality Rampant (businessinsider.com) 646
Inequality has remained persistently high for decades, and a new report shows just how stark the divide is between the richest and poorest people on the planet. Insider reports: The 2022 World Inequality Report, a huge undertaking coordinated by economic and inequality experts Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, was the product of four years of research and produced an unprecedented data set on just how wealth is distributed. "The world is marked by a very high level of income inequality and an extreme level of wealth inequality," the authors wrote. The data serves as a complete rebuke of the trickle-down economic theory, which posits that cutting taxes on the rich will "trickle down" to those below, with the cuts eventually benefiting everyone.
They argue in the new report that the last two decades of wealth data show that "inequality is a political choice, not an inevitability." For instance, when it comes to wealth, which accounts for the values of assets people hold, researchers found that the "poorest half of the global population barely owns any wealth at all." That bottom half owns just 2% of total wealth. That means that the top half of the world holds 98% of the world's wealth, and that gets even more concentrated the wealthier you get. Indeed, the richest 10% of the world's population hold 76%, or two-thirds of all wealth. That means the 517 million people who make up the top hold vastly more than the 2.5 billion who make up the bottom. The world's policy choices have led to wealth trickling up rather than down.
One group in particular has seen its share of global wealth swell. The report notes that "2020 marked the steepest increase in global billionaires' share of wealth on record." Broadly, the number of billionaires rose to a record-number in 2020, with Wealth-X finding that there are now over 3,000 members of the three-comma club. Billionaire gains are a well-documented trend: The left-leaning Institute for Policy Studies and Americans for Tax Fairness found that Americans added $2.1 trillion to their wealth during the pandemic, a 70% increase. Some of the solutions that the authors propose to help alleviate this disparity center around taxation. "It would be completely unreasonable not to ask more to top wealth-holders in the future, especially in light of the social, developmental and environmental challenges ahead," they write.
That means expanding wealth taxes like property taxes to all different types of wealth, and to make taxes progressive -- meaning they increase with net worth.
They argue in the new report that the last two decades of wealth data show that "inequality is a political choice, not an inevitability." For instance, when it comes to wealth, which accounts for the values of assets people hold, researchers found that the "poorest half of the global population barely owns any wealth at all." That bottom half owns just 2% of total wealth. That means that the top half of the world holds 98% of the world's wealth, and that gets even more concentrated the wealthier you get. Indeed, the richest 10% of the world's population hold 76%, or two-thirds of all wealth. That means the 517 million people who make up the top hold vastly more than the 2.5 billion who make up the bottom. The world's policy choices have led to wealth trickling up rather than down.
One group in particular has seen its share of global wealth swell. The report notes that "2020 marked the steepest increase in global billionaires' share of wealth on record." Broadly, the number of billionaires rose to a record-number in 2020, with Wealth-X finding that there are now over 3,000 members of the three-comma club. Billionaire gains are a well-documented trend: The left-leaning Institute for Policy Studies and Americans for Tax Fairness found that Americans added $2.1 trillion to their wealth during the pandemic, a 70% increase. Some of the solutions that the authors propose to help alleviate this disparity center around taxation. "It would be completely unreasonable not to ask more to top wealth-holders in the future, especially in light of the social, developmental and environmental challenges ahead," they write.
That means expanding wealth taxes like property taxes to all different types of wealth, and to make taxes progressive -- meaning they increase with net worth.
Summary has it (Score:5, Insightful)
"inequality is a political choice, not an inevitability."
On a global scale, there are countries dedicated to keeping the poor down. The poor are easier to control. People with significant wealth are more likely to try to acquire more, and disobey the control.
It's not the countries I worry about (Score:3)
Re:It's not the countries I worry about (Score:5, Interesting)
Some of those people have had their minds warped by religious beliefs intended to keep them working hard. Others, however, have had an even more corrupt version of those beliefs transmitted to them by politicians. Governments take an active role in keeping down the poors, and that propaganda is only one way in which they do it, but it's a real way with real effects. If propaganda didn't work to influence people to make decisions, no one would bother with it.
Re:Summary has it (Score:5, Insightful)
That's the problem, you would rather cling desperately to what (relatively) little you have, rather than working with others for mutual benefit. Alone you have little power, so things don't get better.
If you look at the countries with the highest standard of living, the best quality of life, they are countries where things like collective bargaining are baked into their very democracies.
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That's the problem, you would rather cling desperately to what (relatively) little you have, rather than working with others for mutual benefit. Alone you have little power, so things don't get better.
You are correct that working together is the only way to solve it; however, you conveniently forget that once we start working together, someone will get in charge of what we are doing and redirect the benefits to themselves. What you are proposing is to do the same thing we did before and you somehow expect a different outcome? Are you insane? Once your group gathers enough resources to be noticed, those resources will be taken from your group through hook or crook.
You need to come up with something more t
Re:Summary has it (Score:5, Insightful)
The flaw in the way many places try to do it is not having a strong, representative democracy in place. Again, if you look at the best countries for quality of life, they usually have very good representation for citizens. Coalition governments are the norm, and the power structures are set up so that even the ruling coalition doesn't have too much power and most decisions are by broad consensus.
Or to put it another way, hyper partisan politics is a sign that a country has a very poor quality democracy that doesn't represent the citizens.
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Well, good for them. That's the nice thing about having different countries with different ways.
I personally would not be happy living there...I don't want to give half or more of my earnings to the tax man for the "collective good".
I appreciate the more individualistic countries.
Re:Summary has it (Score:5, Insightful)
Inequality is the gap between the richest and the poorest. It tends to be very lop-sided, so there is also a huge gap between the middle class and the very wealthy.
The smaller that gap, the greater the overall quality of life for a country tends to be.
That's due not only to individuals being less likely to be in poverty and suffering form money problems, but also because it reduces crime (which is often driven by poverty) and leads to an overall more pleasant environment where everyone feels that they have a stake in it.
Re:Summary has it (Score:5, Insightful)
Every time I hear the word "equal", I reach for my revolver.
Because it gives you fantasies of self-sufficiency that make you want to stroke your gun?
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That's one possible explanation. Another explanation would be that they understand the horrors that the quest for equality has created. Faced with the prospect of gulags, mass executions, forced labor, physical abuse, and widespread starvation I don't think a revolver is sufficient.
So just to be clear, you think that stuff was part of a quest for equality? Ever notice that none of the so-called efforts to institute equality by entire nations involve the people running the show actually behaving in an equal manner? That's because none of them were honest. Or maybe you didn't notice that, because you love your little argument and don't want to see anything happen to it. Closing your eyes, however, does not make you informed.
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Trickle down was always an insult. (Score:5, Insightful)
Re:Trickle down was always an insult. (Score:5, Insightful)
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Congrats on your success, but are talking microeconomics, not macroeconomics.
Supply-siders would say that, in order to drive prosperity for your workers, we need to give business owners like you massive tax cuts and remove regulations on your business.
It's not that those things are necessarily bad, but when they are done at the expense of other policies it just doesn't really work. Business owners just pocket the tax cuts, and if they can, pocket any productivity gains as well.
Re: Trickle down was always an insult. (Score:2)
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More like piss down economics, but politicians can't be honest.
Not sure why you are knocking it, it’s economic polices are pegged to the golden shower standard.
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It's true, politicians can't be honest. Generally speaking, honesty doesn't earn votes. "The masses" aren't the smartest bunch, and are quick to vote for pleasing promises rather than harsh truths. So, the best liars are the ones who win.
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First, this "article" is pretty much straight-up political propaganda, but yes, "Trickle down" was always an insult, because it's a term made-up by people in order to oppose what they made it up to describe. There's no such thing as an economist or politician in favor of "trickle down economics". It's a straw-man name created to deceive people.
Second, the idea that income or wealth is distributed [google.com], i.e. "shared or spread out" is generally false. In a market, sources of income and wealth are created and volun
Re:Income inequality is not the problem. Here's pr (Score:5, Insightful)
I'm not quite sure what is you are arguing for. Sure. The Somalian who now makes $230,000 a year can, for a very very short moment, afford things he could never dream of. But only for a brief instant and after that he's back where he started, except that the disparity is even greater than it was before. Really all you're doing pressing the magic button is sudden and massive inflation combined with an increased gap between rich and poor, leaving the Somalian poorer than he was before. I'm sure we could work out the math and the inflationary effect but I suspect the buying power of the poorest (at $230,000 a year) would be worse than it was before.
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The OP is arguing, I think, that the issue isn't inequality but the absolute poverty. The magic button just confuses everything because it's a fake made-up example.
To a degree, I tend to agree. The fact that some people straight up can't afford decent food and shelter is a bigger issue than someone, somewhere, having more money. And the theory goes that allowing some inequality will result in more total productivity so it will be better for everyone.
Buuut the scam part of this is that this will magically tr
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What TFA doesn't explain or offer is what happened historically between that bottom half and the 10 top percent thy mention
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But he's not taking into account inflation, which is an obvious side-effect, he is saying something else: why do you care how many billionaires are there and how many billions they added in their bank accounts this year if more people moved from absolute poverty towards the middle class (yes, they are not there yet, I know it's a continuum and not a discrete class system in reality)?
Right, I think that was the OP's point.
The problem with billionaires is that they have insane amounts of influence through their wealth. They can run newspaper and media empires and write their own laws. In the mean time, that money could've been used to benefit millions of people and grow the economy overall.
And there's of course absolutely no way that any of them wouldn't have started their businesses if they thought they would only be allowed to have 1 billion instead of 100 or whatever.
Re:Income inequality is not the problem. Here's pr (Score:5, Interesting)
That means a Somalian who was scraping by on $100 per year will now get $230,000 per year. If you press the button, you ELIMINATE absolute poverty everywhere on Earth. It also means that if a person made $30 billion this year, their new income will be $9.0000002 trillion. If you press the button, you will MASSIVELY INCREASE INCOME INEQUALITY. Would you refrain from pressing the button -- thereby dooming a billion people to continue to live in absolute poverty -- just because leftists have brainwashed each other into believing that income inequality is a problem?
If you think that would reduce absolute poverty, you have absolutely no idea how inflation works. That Somalian probably still be barely scraping by. His new $230,000 will purchase what the $100 purchased because we would be locked in hyper-inflation.
Increase the money supply by 100 fold and you'll decrease the purchasing power of the supply by a hundred fold.
When I was a kid, you could buy a coke and a snickers for about a buck. $0.50 / each, roughly. Why do the same items now cost $4? One reason and one reason only.
20 Years (Score:5, Insightful)
Starting in 2001 after the dot-com bust and 9/11 recession, the US federal reserve has been printing trillions of virtual dollars and pumping them into the largest banks. Have you been getting that money? No? Guess who gets most of it?
Weird how the never-ending low interest rates and quantitative easing lines up with the increase in inequality.
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Inequality has been getting worse since about 1980 or so, chief.
Re:20 Years (Score:5, Informative)
Median inflation-adjusted income in the USA has not increased significantly since 1968.
https://dqydj.com/household-in... [dqydj.com]
Re: 20 Years (Score:3)
It's interesting.
I could not care less how much people who earn more than I do make. I also don't care how much wealth they have. I don't think it affects me much. I don't need to "catch up" to them.
On the other hand, I care a great deal about how much people who earn less than I do make, and how much wealth they have. That's the group I am trying to stay ahead of. The more they make, and the more wealth they have, the more I have to make and the more wealth I need to stay ahead of them.
My goal in life is t
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There's a serious flaw in your reasoning. Can you see it?
Here's a clue: What happened between 1980 and today in terms of technology?
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There's a serious flaw in your reasoning. Can you see it?
Here's a clue: What happened between 1980 and today in terms of technology?
What drove that technology? What always drives the adoption of new technology? The rich. The rich begin to buy it and the growth in sales allows for increased production which drives the per-unit price down. The first cell-phones cost something like $15,000. Had they not sold, you'd not be talking on a $500 smart-phone today. The rich early adopters funded the development of most of the technologies you use.
The flaws are in your reasoning.
Re:20 Years (Score:5, Insightful)
You're combining the "hidden value in technology" theory of economics (that there is some value in technology which is not in the price, making people magically wealthier somehow) with some weird belief that rich people are solely responsible for all technological development because they may have bought it first - which is obviously not the case since businesses and governments/militaries are often the first to purchase the technology, and technological development does not slow down in periods of history with low inequality...often quite the opposite in fact.
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Well, no.
Rich early adopters do not fund the development. We can see that from the work of Sir Clive Sinclair. As much as I really hate some of his inventions, he built most of the "early adopter" devices and they were for those who weren't rich.
In the days when rich early adopters had cell phones (Tomorrow's World demoed them in 1974), absolutely bugger all development went into making them affordable. The development went into keeping them for the rich. Affordable cell phones didn't arrive until the late
You have the only actual answer. (Score:3, Insightful)
Starting in 2001 after the dot-com bust and 9/11 recession, the US federal reserve has been printing trillions of virtual dollars and pumping them into the largest banks.
Congratulations on being one of maybe three Slashdot readers who actually knows what is going on. I see the moderators are attempting to punish you for it, as expected when you speak Truth to Glower.
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Starting in 2001 after the dot-com bust and 9/11 recession, the US federal reserve has been printing trillions of virtual dollars and pumping them into the largest banks.
Congratulations on being one of maybe three Slashdot readers who actually knows what is going on. I see the moderators are attempting to punish you for it, as expected when you speak Truth to Glower.
More accurate translation: I *also* have little or no understanding of this subject - we should comment on it together, friend!
Re: (Score:3, Interesting)
Close, but that's not exactly what is going on. The Fed is artificially keeping interest rates low. It does that because we owe $30T in debt. Consider this, we collect about $2.5T in taxes not earmarked for specific purposes (like Social Security). 2.5/30 = 8%. So if interest rates rise to 8% all taxes will go to paying interest. At 4% half of all taxes collected go to interest, etc. Washington likes to spend money where they want to, and if interest expense is eating up 100% of taxes collected, they can't
Re: You have the only actual answer. (Score:4, Insightful)
Re:20 Years (Score:4, Insightful)
The only thing that matters is the average quality of life.
That's absurd. If I'm at the bottom, increasing the average by making rich people richer isn't helping me one bit.
How about taxing them a tiny bit more and spending that on the lowest of the low.
You know, the inequality the whole article is about. The rich wouldn't even notice the difference, poor people get to eat three meals a day.
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How about taxing them a tiny bit more and spending that on the lowest of the low.
Because your definition of "a tiny bit more" isn't going to resemble person B's definition of "a tiny bit more". Any sane person would already understand they already pay "a tiny bit more" because the top 10% already pay 40% of all the fucking taxes. So, clearly, we disagree on what makes "a tiny bit more".
Y'all love to harp about equality but you hypocrite yourselves immediately by being opposed to tax rate equality. it's ALWAYS "soak the rich for "a tiny bit more" and then when you want more, you want
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The problem is money is power and the quality of life is declining in the USA, as the already wealthy accrete more money and thus more power and spend it fighting laws like a living minimum wage. This is a downward spiral and there's nothing good at the bottom, as it is going straight down the toilet. A capitalism cannot function for the masses unless the masses have sufficient income and right now most of them don't. Huge numbers of women have been quitting jobs because they cannot afford childcare, a majo
And everyone is surprised. (Score:3, Insightful)
Did they really need to undertake a 20-year study?
Awesome math skills there. (Score:5, Funny)
76%, or two-thirds
Slow clap to "Business Insider".
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I noticed that as well. A complicated math analysis and the summary can't even get 76%~3/4 rather than 2/3. I would grant them 3/4 not that far off. Now I instinctively don't trust anything without seeing the data
Poor habits (Score:2, Interesting)
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Because shitheads like yourself still exist - utter fucking mouthbreathing morons who think the only reason people are poor is because they make "poor choices" and "watch Netflix". And so long ignorant jackasses like yourself continue to exist, we'll keep pointing out the truth and hoping that eventually you'll learn.
(It's kind of ironic that the folks who bleat about learning and education are the same ones that refuse to learn and insist on remaining i
Re: Poor habits (Score:3)
when it comes to learning new skills and saving money
That may be true, but not sure why you bring that up. Do you really think that billionaires became billionaires by "learning new skills and saving money"?
If not, why is it relevant? Why subjecting the poor to a different bar than the rich?
Re: Poor habits (Score:3, Insightful)
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I got where I am now with a shit ton of hard work and a shit ton of amazing luck.
and nothing in what you say negates the comments that you responded to. The fact is that you ignored the point of placing money to make money for you. It's not about saving. The rich that I know personally didn't have the opportunities that you described. They didn't come from wealthy families. Most are uneducated since they didn't finish primary school. Schools today teach conformity over life skills. Society teaches us instant gratification. Most don't even understand the difference between the cost vs th
The Trickle-Down Economic Theory (Score:2)
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It's hard to answer because it's an apples-to-oranges comparision.
On the plus side, consumers evidently like amazon.
The minuses are slightly less direct - putting the squeeze on competitors and workers, so fewer people get to be business owners. Entrepreneurship is down by about 50
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Except it didn't really work out in the U.S. either. The rich got richer and everyone else's wages remained stagnant.
Re:The Trickle-Down Economic Theory (Score:4, Informative)
But food and shelter are sometimes problematic for many. The premise of trickle down was that MONEY was to trickle down and show up in the bank accounts of the middle class and lower class. It didn't happen and no amount of moving the goal post changes that.
The most billiant thing the right wing ever did (Score:3, Insightful)
There's a lot wrong here (Score:3)
The world is a cold
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It's not "people without jobs", it's people searching for jobs. Many have decided to not work for one reason or another.
We've known this for a while. (Score:5, Informative)
Give a rich man a dollar, he'll lock it away in savings. Eventually he'll spend it, maybe.
Give a poor man a dollar, he'll put it right back into circulation, immediately benefitting the economy. Because everyone knows that the poor can't save money.
The difference between the two behaviors is called the Marginal Propensity to Consume [wikipedia.org].
So if you want to improve the economy, take money from the rich and give it to the poor.
Trickle-down economics was always a myth. What works in real life is trickle-up economics!
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Something else a relative pointed out. One will not grow rich working for a poor man.
Re:We've known this for a while. (Score:5, Insightful)
Something else a relative pointed out. One will not grow rich working for a poor man.
And most people working for rich men don't become rich either.
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you know, this is pretty much true for anyone just working for someone else.
unless you go out and start building a business, or investing in assets outside of you 9-5, you'll never grow wealth.
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The point isn't getting rich. It used to be that a middle class income was enough to house and feed your family and have some security. That's becoming a pipe dream for many people.
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>>The rich are far more likely to "put their money to work" than are the poor; that's how they got to be rich in the first place.
Holy shit, it's worse than I thought. They actually told you guys that rent-seeking is work. War is peace.
Re:We've known this for a while. (Score:5, Interesting)
Yes, and most of that doesn't benefit the city or even the state they live in. Much is held in international stocks. In contrast, a poor person spends most of their money locally.
Re:We've known this for a while. (Score:4, Informative)
If by "lock it away in savings" you actually mean "invest it, thus putting it right back into circulation" then you are correct.
Wrong. The rich currently have unprecedented cash reserves, so do corporations! Apple literally has hundreds of billions of dollars of cash, for example, and no I do not mean "liquid investments", I mean actual cash money in the bank that they can just spend if they want to. But they apparently don't.
You may have heard of "tax havens" before, these are places where the wealthy are stashing actual cash so they don't have to pay taxes on it. There are a number of US states which now permit creating "perpetuities", or hoards of wealth which by contract are paid (or held for) individuals. Some states even allow these perpetuities to exist without identifying information, which makes it possible to hide money from the federal government.
This whole notion that the wealthy are the job creators because they invest all their money because it's a problem for them to hold it is stupid, was always stupid, and has been soundly debunked time and again. It's consumers with money who are the job creators. When demand exists then opportunities exist to fill it. Unless people have money to spend then there's no demand, no opportunity, and capitalism doesn't work. The word currency itself means "a condition of flowing", which sense is deprecated today (although still valid) but which underscores the function of money — if it does not move, then it does not do work.
TL;DR: You have no idea what you are on about, the wealthy have more cash on hand than they have for decades and they are overwhelmingly not investing it, to the detriment of all workers.
Re:We've known this for a while. (Score:4, Insightful)
Even the richest king 200 years ago did not live half as well as someone in the US below the poverty line.
That's patently bullshit unless you count "living well" very narrowly as access to technology.
The richest king of 1821 didn't have to work 16 hours a day on two jobs, struggle home with a long commute, crash only to start again the next day and the next and the next knowing that if they get sick they won't have enough for food AND rent. The richest kings of 1821 ate like, well, kings.
Ooh but they have a TV and those didn't exist in 1821, so that's "living well". FFS.
Living well involves security, not technology.
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a rich man won't save it, he'll invest that dollar into something that will bring back $2.
Try, try, try [nytimes.com] not to be a deluded [business-standard.com] chucklefuck. Your naive ideas have been soundly debunked.
being poor or rich isn't all that different, it's just the choices you make in what you do with the money you have.
The rich make more in a day than many people will see in their lifetime. You are off your fucking nut.
You think meta is bad (Score:5, Insightful)
The "i" in selfish. (Score:2)
The world's policy choices have led to wealth trickling up rather than down.
In which direction does greed flow?
More like 120 years (Score:5, Insightful)
In 1896, Democratic presidential candidate William Jennings Bryan described the concept using the metaphor of a "leak" in his Cross of Gold speech:
“There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.”
We've been cracking jokes on trickle down and supply-side economics for the entirety of the 20th century. Anyone who isn't laughing by now is either in on the joke or the next sucker.
Improve the standard of living of your workers and they'll take that prosperity and send it straight into the economy without even pausing to consider if they should shield it in a tax haven or save it in a bank. What a wealthy person does with a windfall is a far different story.
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Capitalism is a decent system, but if people start gaming the rules
There is only one rule of capitalism, and that is that capital controls the means of production. And we have seen that this is unsustainable, which is why we make laws to regulate it. But those laws are not capitalistic, they are collectivist. In fact, they generally smack of socialism. Capitalism is a shit system when all you have is capitalism, and you have to mix some socialism into it or it is unsustainable and everything collapses under the weight of the rich. This is what has happened literally every
Just as one would expect the (Score:2, Funny)
Is it actually a problem? (Score:4, Interesting)
I don't care about "inequality". I care about whether people are doing okay.
The economy is not a zero-sum game. For one person to be rich does not require another person to be poor. We could have everyone doing at least okay and a few people super-wealthy, and I would be fine with that.
In America, even people considered to be poor usually have access to food and even things like cell phones. Now consider this: even the richest person in the world did not have access to a smartphone in 1980. As technology improves, we all get better off... this is part of what I mean when I say that the economy is not a zero-sum game.
I don't want people to suffer, and I would like to see the poor get helped. But we already tax the wealthy at a really high rate, and according to this page [heritage.org] the top 1% of taxpayers pay 40% of all income taxes. Is that not enough to be "their fair share"? If not, what would be?
I'm comfortably middle-class, and while I don't like inflation it doesn't hurt me much. But the US government is "printing" lots of currency (most of it virtual, just rows in banking databases) and inflating the heck out of the money, and that hurts the people who are trying to get by on limited income. Where I live, the cost of restaurant meals has gone up by something like 2.5 times in just the past couple of decades. Meanwhile, government benefits have not kept up [fool.com], because they are indexed to the official inflation numbers, and officially there isn't much inflation. (It used to be that inflation was tracked by checking on the prices of things, but these days the government uses hedonics [mises.org] to argue that there isn't much inflation even when prices go up. For example, the cost of steak might have gone up, but the government will tell you that people simply switched to eating chicken and were equally happy, so there was in effect no food price inflation!)
So I am not convinced that it is an actual problem that there is an "inequality gap"... people not having enough money to live on is a problem, but the rich getting richer is not in and of itself a problem. And I'm not sure what we could do to fix this problem even if I accepted it as a problem; IMHO the government has not been doing a good job of helping the poorest (inflating the money supply hurts the poorest the most and benefits have not kept pace).
IMHO the real problem is "how best can we help those who need help?" Not "how can we drag the rich people down?"
P.S. If the economy is good and everyone is becoming better off, I would count that is a win even if the richest people grow richer faster. Because that's how it always works.
If you have a guy who is starving, and then he gets some more money, he immediately spends the money on some food. This doesn't grow his wealth at all. If you have a rich guy who is already well-off, and then he gets some more money, he can just buy stocks with it. Later when the stocks go up he made a bunch of money.
If we had no inflation, or even deflation, combined with a strong economy so that everyone was getting better off... I would count that as a win, but inequality would go up.
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Maybe you don't have a problem with inequality because you are comfortably middle class.
It's ok to say 'it's bad to envy people who have got more than you' but inequality has consequences which in practice means you want to avoid 'too much inequality'. If too much power gets concentrated in too few hands this minority starts to shape the world to their needs, and then the majority with no power becomes expendable and they simply get parked somewhere out of sight.
Piketty showed that power tends to shift tow
They're measuring inequality? Or better lives? (Score:4, Insightful)
The summary makes it sound like they're judging trickle-down on the basis of reducing inequality. The original idea behind trickle-down was "a rising tide lifts all boats."
The question should be "are people's lives better," not "are the rich people richer than the poor people."
Re:They're measuring inequality? Or better lives? (Score:4, Insightful)
If inequality has increased then the rising tide has not lifted all boats equally.
The idea was that things improved for everyone, but this shows that it mostly improves for people who are already rich, and not much for the people who have little wealth to start with.
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Cool. So we get mobile phones while the billionaires get trips into space and mega-yachts.
Re:They're measuring inequality? Or better lives? (Score:4, Insightful)
The question should be "are people's lives better," not "are the rich people richer than the poor people."
Well, their lives aren't better. There was a time in America when the federal minimum wage was a living wage, as it was intended. At that time people could afford the necessities of life in exchange for many less hours of work. They could own a home and a car, afford to take some vacations, etc. Fewer and fewer people are able to do any of that in this country every year. We are in a race to the bottom of a toilet and the only thing at the end of that race is shit.
Why are we even doing a study here?! (Score:5, Insightful)
It's been pretty well documented since the late 1980's that "trickle down economics" wasn't really something that worked. In fact, if you look at the history of the whole thing in America? It was never more than a pretty general theory or economic experiment that Reagan's financial advisors decided to "sell" him on as though it was fact, so they could try it out.
It's not even that the concept itself is completely wrong? It's just too simplistic. (If you have a big, successful company and you're given a bunch of incentives or breaks? Now you've got to decide what to do with those extra windfall profits. The "trickle down economics" proponents assumed you'd obviously re-invest it in business growth. You'd hire many more people and give existing people raises, etc. In reality, most big businesses have a synergy going. They're "properly sized" to be very successful, as-is. If they try to grow further just because they got some tax breaks or special deals, they risk upsetting that balance and imploding the company. Over-extending a company, trying to get involved in too many different areas can be a problem. And so can adding more employees than you can reasonably manage. So what they usually did was a combination of owners pocketing the extra profits for themselves, and possibly spending on buyouts or mergers - which hurts competition.)
I've often said we needed more of a "trickle-up" economy, where those same breaks and incentives existed -- but for SMALL and start-up businesses. Help encourage people starting their own companies and help the small ones grow to stable, mid-sized businesses. That's how you really keep competition going for goods and services, and how you create more jobs.
Beyond that, though? Yeah.... income disparity is huge now, for many different reasons. Across the globe, you've got many nations running under forms of government who believe THEY'RE entitled to the lion's share of any profits, while the rest of their nation lives in poverty. In America, you've got a similar thing going on except one step removed from government leadership doing it all directly. We have collusion between big business and government so one group helps the other stay super-wealthy, and vice-versa.
But IMO, what you need to focus on primarily is the ABILITY for the masses to do ok for themselves if they put in the effort. America always promised it was a "land of opportunity". It never promised it was a land of "guaranteed equality". It's fine to have some people FAR wealthier than others. What's not fine is a corrupt government that keeps making it unfairly difficult for the little guy to try to compete with his own business that challenges one of the big guys. And what's also not fine is just putting the burden on the "middle class" full-time worker to help make the poor "more equal". (When you try to tax businesses, this is all you wind up doing because businesses just pass on taxes as costs of doing business. That means paying their workers less and/or raising prices on the things those middle class people buy. The owners of said businesses won't be materially affected. Tax their company 80% more and they'll just change salaries and product prices to cover the 80%.)
It doesn't matter (Score:4, Interesting)
You can point out that the trickle down scam has worked to impoverish the vast bulk of the American people while making the rich even richer until the cows come home, and it won't change anything.
When they're away from the cameras, the neofeudalists will give you their best Montgomery Burns "UH-DUUUH" and tell you to your face that that's the point.
Re: (Score:2)
Communists? Where?
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I'll be the CEO one day if only I scrub these toilets better than anyone ever expected.
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Equal tax rates for equal income is communism? Since when?
Re:Taxes go to the state (Score:5, Insightful)
Since Reagan, the wealthy get to keep a larger percentage of their income because they pay less taxes. Reagan shifted taxes away from the rich claiming that the rich would invest this extra money and through those investments money would 'trickle down' to everyone. After 40 years that has moved all of the money to the top. Why should someone that has money to invest pay only 15% while someone that earns money from labor pays 24% or more?
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But they did re-invest that money and created millions of jobs.
The catch is, they used that money to move manufacturing from the USA to Asia and create jobs there.
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Much of it was due to a shift to gig work, i.e. no security, work two or three jobs. More jobs to go around, but poorer quality jobs with even lower pay than was previously possible.
Many places people working part time have fewer rights, don't get the same benefits etc. Businesses figured out that they could just move everyone onto that and reduce their costs.
Re: (Score:3)
Or we could cut the crap and call income simply income, and forget about whether it came from an investment or came from labor, and tax it the same. The wealthiest do not pay 'far more' or even the same *on a percentage basis* which is how taxes are calculated.
Re: Taxes go to the state (Score:5, Insightful)
Trillions in federal spending definitely devalues the dollar by creating inflation.
No, it doesn't.
It's been measured. Federal spending appreciates the value of the dollar.
A thing isn't true just because you want it to be.
Federal spending doesn't come from increase of the monetary supply, it comes from the selling of treasury bonds, which pull money out of the economy.
We are seeing this today already with Biden.
Na. The recent spike in spending started in FY2020, which was released by Trump's OMB in March 2019, with a deficit of $1.1T.
Now Biden's time in office hasn't shown any evidence that it's going to go in the opposite direction, but trying to point fingers between the two right now is nothing but naked partisanship.
You guys need to wake up.
If that's the case, it's not because of any information you presented here, since your points are... well, false.
The Democrats are not your friend and the government is not going to save you.
Oh that's for fucking sure.
But if you think voting Republican and getting fucking con artists is the way forward, you can eat a dick and die.
I think most of us socially liberal and fiscally conservative folks would gladly have picked a Romney or a McCain over Biden, but you gave us fucking Trump.
The rich love the Democrats because they keep everyone else relatively poor.
Nope. I'm not "rich", by any means, but I'm solidly "upper middle class".
I don't love democrats. But I do chose them in national elections without hesitation currently because you tiki torch brigade piles of shit are representative of a descent into the destruction of a republic. You're the fucking fascists, and we're a crumbling Weimar Republic.
We the middle class are worse off under Biden than we were under Trump.
I'm about the same-off.
Time will tell if that changes, but it hasn't so far. And I haven't had to give more money to my family this year than I did the last 4.
Of course you guys will never accept that because of your social justice politics but that is the truth and you know it.
I'm sympathetic to this.
Social Justice is... running amok.
There are, unfortunately, bad compromises being forced upon us due to our lack of choice.
Do I vote my conscience socially, and embrace some fucking inept dumbfucks with an entrenched culture that can't get fuck-all done? Or do I vote my conscience about politics and side with a bunch of fucking fascists? Unfortunately, there's only 1 real choice there.
Anybody who knows their history knows what happens to those who join sides with the fascists: They're the first that are taken out.
As soon as you decide you're not a bunch of fucking fascists and white supremacists, perhaps you'll have people like me voting for your guys again.
And trump is a fucking idiot but the Democrats are truly evil and the enemy of the middle and lower classes. They always have been.
They're not evil... They're... also fucking idiots. But a different kind of idiot.
A safer kind of idiot.
Re: (Score:3)
So, are you saying that when you had the opportunities to vote for them, you did?
Also, no, that's not at all how the money supply works. Federal spending does not increase the value of a dollar, it increases the amount of money in circulation, aka inflation. You don't need to look any further than a gas pump or store shelf today to see that.
Yo
Re: Taxes go to the state (Score:4, Insightful)
So, are you saying that when you had the opportunities to vote for them, you did?
I did not, but only because I thought Obama was the stronger candidate.
I would have voted for either of them over every Democratic candidate since Obama, though.
Also, no, that's not at all how the money supply works. Federal spending does not increase the value of a dollar, it increases the amount of money in circulation, aka inflation. You don't need to look any further than a gas pump or store shelf today to see that.
Federal spending does not increase the amount of money in circulation.
There is a limited case where it does, and that's via instances of QE where the Fed purchases treasury bonds with funny money.
Other than that, it's financed by dollars leaving the money supply to purchase treasury bonds.
You also seem to be using the term "fascist" without any real understanding of the political philosophy you're talking about. If you did, you'd know that not only is the American Right diametrically opposed to fascism in every respect, but that there are politicians on the Left drifting perilously close to that abominable ideology. The GOP wants to reduce, or at least restrain, the scope and authority of government. Fascism is totalitarian - maximal authority and a scope that encompasses every aspect of life. Utterly incompatible with Republicanism, but entirely compatible with an increasingly Socialist Left.
Oh horseshit.
One word. Charlottesville.
The American right hasn't been anti-fascism since Bush 1, the last great Republican.
As for reducing the scope and authority of government? Also horseshit.
Both parties want to constrain the ability of the other side to force their policies on each other, and on their other hand expand government authority to enforce their own policies.
You can't talk to me about reducing government authority while going after stupid social issues such as abortion.
Repubalicans (big R) are not republicans (little r). They haven't been for a long time.
And if you try to argue that Trump was anything but a wannabe dictator constrained only by his own stupidity, then you're blinded by partisanship.
The only axis where Fascism and Socialism diverge, in theory but not always in practice, is Nationalism. That is also the only axis along which Republicanism and Fascism are not polar opposites, though there is still quite a bit of distance. I say "not always in practice", as China and the DPRK are far more nationalistic than Socialism/Communism is intended to be, and thus may possibly be better defined as Fascist.
This is a huge pile of horseshit.
As I said, step 1 for the Fuhrer was to eliminate each and every socialist in the party, and then outlaw any left-wing parties from the Reichstag.
The trope that National Socialists were socialist is tired and borne of weak minds.
They had no desire to nationalize industries, or publicly own anything. They merely coerced the private sector to do its bidding at the end of a fucking gun.
They were as authoritarian right-wing as they could possibly be.
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Are you for real?
Yup.
The Federal Reserve doesn't have any goddamn say in what the government borrows.
The government can not print money. It "borrowing" does not create more money.
They borrow in the form of selling bonds, which pulls money out of the economy in exchange for interest.
They buy the Treasury Bills they are TOLD to buy.
That's false. They do hold bonds, but they are not directed to do so. They cannot be.
The government borrows far too much money for the public to finance the debt through the private (or even commercial) purchase of Treasury Bills.
There really isn't any evidence to back up that claim.
The Federal Reserve is, and has been, increasing inflation by doing as you describe (They call it "QE")
But that isn't standard operating procedure, and it is not to fund the government
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I'd note that printing money is a form of tax since it devalues the existing money held by the population and gives a greater proportion to the government. In this way it is also a wealth tax (although not targetted solely at the very wealthy).
As a very rough guess this might be in effect a 3% wealth tax? It would be interesting to compare that with the level the report recommends.
Re:Thomas Piketty? (Score:5, Insightful)
The very wealthy do not have shitloads of cash(Compared to the poor they do, but not compared to their wealth). Instead, the vast majority of their money is tied up in things which largely gain "value" directly as inflation increases. Inflation is primarily an attack on the middle class who have a much greater share of their wealth in cash or goods which do not accrue value directly with inflation and the poor who end up paying significantly more for food and housing unless the government also increases their dependence generators... sorry "assistance".
Re:Thomas Piketty? (Score:5, Insightful)
The rate of the tax is exactly the same as inflation.
Inflation is a tax on cash, so it hits people who have a disproportionate share of their wealth in cash, which is mostly low-income people.
Low-income people see their rents increase, while higher-income people see their property values jump.
Re: Thomas Piketty? (Score:3)
Re: Thomas Piketty? (Score:4, Informative)
Retail banks are the engine of liquidity. They are not increasers of money supply. They get their actual money from Federal Reserve banks, with the policy for that dictated by the Federal Reserve.
Banks can literally create money out of nothing.
They have to be careful that they lend it responsibly and don't go broke. They need to keep some assets in reserve. But they 100% can create new money out of nothing just by making a loan to someone.
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Banks get the money for credit from several sources.
One of those is the central bank, which may or may not "print" the money based on its monetary policy (are we north or south of their inflation target)
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You are splitting semantic hairs, and doing so incorrectly. Here is how it works:
A. Bob puts 100 dollars in the bank, in savings.
b. The bank loans out that 100 dollars to Fred, to start a business.
C, Bob STILL has $100 in the bank! So now bob has $100, and Fred also has $100.
That money which APPEARS to be sitting in the bank, immobile, is actually out circulating in the economy. Thus we say that the "money supply" as increased, even if the number of physical dollars printed has not.
This is not some weird
Re: (Score:3, Interesting)
Cars are abundant because they do trickle down. The wealthier members of society get rid of their vehicles well before they’ve exhausted their useful lifespan. I own two vehicles - one is a really cheap late model economy car, and the other is 22 years old. Having a lot of cars isn’t a sign of wealth. There’s that old Jeff Foxworthy joke that goes “If you have a house that’s mobile and four cars that ain’t..”
I completely agree that we’ve got more inexpensiv
Re: Thomas Piketty? (Score:3)
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Bezos is wealthy because he's largely a welfare queen. Not directly, of course, but because his businesses are able to pay low enough