patrick.net

Yet mobility is at all-time high. When else in history could new billionaires be made in 18 months?

Peter P says

Yet mobility is at all-time high. When else in history could new billionaires be made in 18 months?

Ahh, but it took 35 years of preferential government policy to enable that growth.

Can't wait for the fallout......

Diva24 says

Peter P says

Yet mobility is at all-time high. When else in history could new billionaires be made in 18 months?

Ahh, but it took 35 years of preferential government policy to enable that growth.

Can't wait for the fallout......

It has more to do with time-scale compression enabled by information technology.

Throughout history, people doing the same thing would not get better lives. Why should we expect anything different?

In America, the brief period after WW2 with generally rising real-wages was a mirage.

Peter P says

It has more to do with time-scale compression enabled by information technology.

Throughout history, people doing the same thing would not get better lives. Why should we expect anything different?

In America, the brief period after WW2 with generally rising real-wages was a mirage.

It doesn't have to be though--productivity is always increasing, so should real wages. We don't have a wealth creation problem, just a distribution one.

tatupu70 says

productivity is always increasing, so should real wages.

Historically, that is not the case. The primary motivation driver of productivity is competition, not generosity.

People want to improve themselves only because they want to sit high above others. What you are suggesting seems to be contrary to human nature.

Peter P says

Historically, that is not the case. The primary motivation driver of productivity is competition, not generosity.

To what history do you refer?

I think the driver is more likely laziness--people want to get work done faster and easier to allow for more leisure time.

tatupu70 says

I think the driver is more likely laziness--people want to get work done faster and easier to allow for more leisure time.

Which means for the same effort it will go further.

Peter P says

Which means for the same effort it will go further.

Yes.

tatupu70 says

productivity is always increasing, so should real wages.

Aside from the division of the profit pie between labor and capital (the latter holding the whip hand in many industries for a while), there is a third factor -- real estate.

Even if laborers saw more of the wealth that they create, since land is fixed in supply the bigger labor's paychecks become, the more they will bid up housing prices.

I know I say that [the Progress & Poverty thesis] every day here, but nobody really gets this apparently.

Housing is everyone's dominant life need. Really tough living without some form of tenancy in land.

Now with Obamacare, you can be broke-ass po' and maybe find good medical treatment via the Medicaid expansion.

Similar-scale socialist intervention in the housing market is far far away from us now.

housing expense / wages

tatupu70 says

I know, I know--the study is flawed because it doesn't adequately account for the value of welfare payments... (that's sarcasm for those that have a hard time)

The median household networth is only $80k. That's only the equivalent of a couple months worth of hospital stay! A a couple decades worth of Medicare and Medicaid is worth far more than $80K! Even food stamps at $400/mo is more than $80k at current discount rate. Section-8 rent subsidy at $1000/mo is $200k in present cash value! The chart is utter nonsense when it doesn't count the value of basic safety-net provided to the poor. Also goes to show why a large segment of the population has lost all incentives to work.

Bellingham Bill says

Even if laborers saw more of the wealth that they create, since land is fixed in supply the bigger labor's paychecks become, the more they will bid up housing prices.

I know I say that [the Progress & Poverty thesis] every day here, but nobody really gets this apparently.

Housing is everyone's dominant life need. Really tough living without some form of tenancy in land.

Unless you have been sleeping in national parks or on the pavement the last few years, your housing need is not limited by land, but by habitable housing structures. Houses have to be in good repair and decent condition to be available for people to live in them. Developers and landlords are the people who can deliver housing services more efficiently than government monopolies. If you want housing cost to come down, remove some of the zoning restrictions so more housing units can be built, and improve transportation network and reduce gasoline tax and tolls.

There is plenty land in Siberia as well as more than 1hr drive from any congested metropolitan area. The limiting factor is not land, but how to make more housing units accessible to commuters.

jazz music says

Yeah, if by mirage you mean FDR's new deal administration followed by Truman, Eisenhower, Kennedy, the rise leverage from collective bargaining after the owners failure to suppress the news of the mounting losses of life and limb of so many workers on ships, on docks, in mines, in construction, and in factories. civil rights.

Mounting losses of lives and limbs? Are you talking about the draftees the FDR dragooned into the military in order to fight his world war? Why would anyone want to work for a risky job without compensating pay advantage, unless there is government enforced enslavement such as a military draft? It's not like the private employee can hold a gun to your head to make you work, like the government can via the draft!

There was a liberal supreme court. You could sue big companies and get treble damages, you could sue doctors,

Sure, everyone suing everyone else is the road to society prosperity. Not!

you could get state university education if you wanted without lifetime debt, people got houses paid off, foreclosures were nonexistent by today's standards, jobs lasted 30 years not 2 years.

The early clients of Charles Ponzi were paid really well. LOL.

Reality says

The median household networth is only $80k. That's only the equivalent of a couple months worth of hospital stay! A a couple decades worth of Medicare and Medicaid is worth far more than $80K! Even food stamps at $400/mo is more than $80k at current discount rate. Section-8 rent subsidy at $1000/mo is $200k in present cash value! The chart is utter nonsense when it doesn't count the value of basic safety-net provided to the poor. Also goes to show why a large segment of the population has lost all incentives to work.

So, should I include the present value of my salary until I retire as my "wealth" then? I think most sane people would disagree with that treatment...

Reality says

Why would anyone want to work for a risky job without compensating pay advantage, unless there is government enforced enslavement such as a military draft?

Because it beats dying penniless on the streets of hunger. And that's where we're headed--labor has no leverage, so corporations can pay as little as they want for a job no matter how hazardous.

Reality says

Sure, everyone suing everyone else is the road to society prosperity. Not!

Good one, Wayne.

If you set the rules of the race, and can start right before the finish line, and if the judges can alter the rules if you were to experience a set-back, you might find that you have more trophies than the poor slobs who had to run an honest race.

Blurtman says

If you set the rules of the race, and can start right before the finish line, and if the judges can alter the rules if you were to experience a set-back, you might find that you have more trophies than the poor slobs who had to run an honest race.

That's been happening since 1980?

tatupu70 says

Blurtman says

If you set the rules of the race, and can start right before the finish line, and if the judges can alter the rules if you were to experience a set-back, you might find that you have more trophies than the poor slobs who had to run an honest race.

That's been happening since 1980?

If we were back in the days of newspapers and periodicals only, do you think folks would know more or less about Wall Street fraud and the lack of prosecutions?

Blurtman says

If we were back in the days of newspapers and periodicals only, do you think folks would know more or less about Wall Street fraud and the lack of prosecutions?

So is that a yes?

tatupu70 says

Blurtman says

If we were back in the days of newspapers and periodicals only, do you think folks would know more or less about Wall Street fraud and the lack of prosecutions?

So is that a yes?

Even George W. Bush jailed financial criminals. And any answer that I give will be subject to information availability bias.

Blurtman says

Even George W. Bush jailed financial criminals. And any answer that I give will be subject to information availability bias.

OK great--is theory then that lack of prosecution of financial crimes is what is causing wealth inequality?

If so, what changed in 1980 that caused the downward trend to change direction?

Blurtman says

Even George W. Bush jailed financial criminals. And any answer that I give will be subject to information availability bias.

Yea, but they were Clinton's financial criminals. The ones he created went scott free.

tatupu70 says

Blurtman says

Even George W. Bush jailed financial criminals. And any answer that I give will be subject to information availability bias.

OK great--is theory then that lack of prosecution of financial crimes is what is causing wealth inequality?

If so, what changed in 1980 that caused the downward trend to change direction?

Taxation for 20 Alex.

The short answer is that Wall Street, for the last thirty years or so, has been skimming prodigiously from the top. The graph above shows how the total economic cost of financial intermediation grew from under 2 percent in 1870 to nearly 6 percent before the stock market collapsed in 1929. It grew slowly throughout the postwar expansion, reaching 5 percent in 1980. Then, beginning during the deregulatory years of the Reagan administration, the money flowing to financial intermediaries skyrocketed, rising to almost 9 percent of GDP in 2010.

http://tcf.org/blog/detail/graph-how-the-financial-sector-consumed-americas-economic-growth

Blurtman says

Taxation for 20 Alex.

I agree that's a good part of it at least. But as much as I think the financial industry is a complete waste of resources hat adds zero value to the economy, I don't see a cause and effect with wealth inequality.

Gini coefficient going down mid 1930s, and starts going up 1970s.

The largest knob on the Gini is manufacturing and R&D.

We the USA used our liberty to build smarts, and saved Europe against communism.

Then the 1960s came along and the Love of Drugs and Rock and Roll roiled the US.

tatupu70 says

Reality says

The median household networth is only $80k. That's only the equivalent of a couple months worth of hospital stay! A a couple decades worth of Medicare and Medicaid is

So, should I include the present value of my salary until I retire as my "wealth" then? I think most sane people would disagree with that treatment...

No. You have to continue working to earn that money. Welfare entitlement however is literally like inheritance and trust fund, both of which would be counted as wealth by most sane people.

tatupu70 says

Reality says

Why would anyone want to work for a risky job without compensating pay advantage, unless there is government enforced enslavement such as a military draft?

Because it beats dying penniless on the streets of hunger. And that's where we're headed--labor has no leverage, so corporations can pay as little as they want for a job no matter how hazardous.

Everyone wants the best deal, including yourself. It is the presence of other employers that give the worker the ability to refuse the lowest bidder. That's why government restriction on competing employers and government becoming the employer can only lead to slavery. Paternalism doesn't work, because people have rising expectations.

Reality says

Welfare entitlement however is literally like inheritance and trust fund, both of which would be counted as wealth by most sane people.

lol--really? Show me a definition of wealth that would include potential future income as wealth.

Welfare isn't guaranteed...

Reality says

That's why government restriction on competing employers and government becoming the employer can only lead to slavery. Paternalistic doesn't work, because people have rising expectations.

Which industries do you think the government is crowding out potential employers?

tatupu70 says

Reality says

Welfare entitlement however is literally like inheritance and trust fund, both of which would be counted as wealth by most sane people.

lol--really? Show me a definition of wealth that would include potential future income as wealth.

Welfare isn't guaranteed...

Wealth is nothing but the potential for generating future income without having to work for it. Under our current social system, welfare payment is far more reliable than dividends from Kodak, the former proverbial widow and orphan stock.

tatupu70 says

Reality says

That's why government restriction on competing employers and government becoming the employer can only lead to slavery. Paternalistic doesn't work, because people have rising expectations.

Which industries do you think the government is crowding out potential employers?

Education, medicine and banking/finance, just to name a few. The very same industries where cost rise is far out pacing returns. Government housing projects were also attempted a few decades ago, but that came to ignoble end quickly as government "projects" manifested themselves as centers of crime and human misery.

Reality says

Wealth is nothing but the potential for generating future income without having to work for it.

No, it's really not. Can someone sell their stake in welfare? Can they leave it to their heirs? It is not considered wealth under any definition that I've ever seen.

Reality says

Education, medicine and banking/finance, just to name a few

Last I checked there were a LOT of private higher education outlets. What is keeping employers from creating their own schools?

Regardless, those industries are pretty large--are you implying that there would be MORE people employed in banking/finance were it not for the government? And that would be a better scenario?

tatupu70 says

Reality says

Wealth is nothing but the potential for generating future income without having to work for it.

No, it's really not. Can someone sell their stake in welfare? Can they leave it to their heirs? It is not considered wealth under any definition that I've ever seen.

Nor can many beneficiaries of family trust funds. Yet that is certainly wealth. The welfare safety net is the equivalent of a family trust fund for being born American. The value of that trust fund should be counted just like the heir of a family fortune that has stipulation that he can not sell the trust assets but only derive monthly stipend payments.

tatupu70 says

Reality says

Education, medicine and banking/finance, just to name a few

Last I checked there were a LOT of private higher education outlets. What is keeping employers from creating their own schools?

Potential consumers of private education having already have to pay for public education via taxes.

Regardless, those industries are pretty large--are you implying that there would be MORE people employed in banking/finance were it not for the government? And that would be a better scenario?

Silly misdirection. The point of any industry is not to employ more people but delivering real value to customers. Any industry with government subsidy to hire more people while delivering little to no value to customers is essentially welfare, and slavery. Yes, the slaves on the plantation also had free housing, free food, free medicine, free education . . . All at the discretion of the slave owner! Paying for something with one's own money gives one the right and option to choose. In the bigger picture, it is this drive to optimize and get better deals that ultimately improve economic efficiency and lift the standards of living for all.

Reality says

Nor can many beneficiaries of family trust funds. Yet that is certainly wealth. The welfare safety net is the equivalent of a family trust fund for being born American. The value of that trust fund should be counted just like the heir of a family fortune that has stipulation that he can not sell the trust assets but only derive monthly stipend payments.

So, you can't find any definitions that would include welfare as wealth then?

Reality says

Potential consumers of private education having already have to pay for public education via taxes.

So what? The cost of education is rising exponentially, right? You're telling me that the much more efficient private industry can't compete??

Reality says

Silly misdirection

Not at all. You said:

Reality says

It is the presence of other employers that give the worker the ability to refuse the lowest bidder.

implying that the reason employees have less leverage is because there are fewer employers (and fewer jobs) because of government crowding.

Don't now change the subject to delivering value.

tatupu70 says

Reality says

Nor can many beneficiaries of family trust funds. Yet that is certainly wealth. The welfare safety net is the equivalent of a family trust fund for being born American. The value of that trust fund should be counted just like the heir of a family fortune that has stipulation that he can not sell the trust assets but only derive monthly stipend payments.

So, you can't find any definitions that would include welfare as wealth then?

If it accrues benefit like wealth and trust fund, then it is wealth and a form of trust fund. Even your god FDR himself called benefits one will receive via Social Security as "your own money"; so SSI and SSDI administered by the same social security apparatus are "your money" and asset/ wealth too. LOL

tatupu70 says

Reality says

Potential consumers of private education having already have to pay for public education via taxes.

So what? The cost of education is rising exponentially, right? You're telling me that the much more efficient private industry can't compete??

Just like even if you were a productive person, if someone mugs you every month right after your payday and take away all your money, you'd still starve. A productive private person is not a miracle, despite what you think :-)

Reality says

Silly misdirection

Not at all. You said:

Reality says

It is the presence of other employers that give the worker the ability to refuse the lowest bidder.

implying that the reason employees have less leverage is because there are fewer employers (and fewer jobs) because of government crowding.

Don't now change the subject to delivering value.

Delivering value is the same as making profit in a competitive market place: others actively judging your service as delivering value therefore willing to pay up after comparison shopping elsewhere. It may be a foreign concept for people having spent too much time I government bureaucracy.

Btw, "less leverage" than what? Some people will always have more leverage than others, just like some girls are prettier than others. Making every girl wear a burqa or cutting off all noses on all female faces would only make lives more miserable for all. There is nothing preventing an employee saving up capital and becoming an employer in a competitive market place. Government red tapes and privileges would only get in the way of that social mobility, and make the society even more unequal.

Reality says

If it accrues benefit like wealth and trust fund, then it is wealth and a form of trust fund. Even your god FDR himself called benefits one will receive via Social Security as "your own money"; so SSI and SSDI administered by the same social security apparatus are "your money" and asset/ wealth too. LOL

Again--let's stick to the subject. Would you consider your future social security benefits to be wealth today? If so, how would you calculate it?

Honestly, I know you can BS much longer than my interest in replying will remain. It is obvious that welfare is not wealth under any commonly used definition.