FAQ
It is currently Tue Apr 25, 2017 8:31 am


Author Message
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Tue Nov 11, 2014 1:19 am
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
I hope I didn't run you off, billvon. Your comments reminded me a bit of several conversations I've had with several others on this topic, usually folks who describe themselves as libertarians or fans of Ayn Rand. I don't know if this accurately describes your stance, but I would be unsurprised if it does.

All too often, these individuals... like you have here... continue to make claims and draw conclusions based on inaccurate premises or use logic rooted in flawed assumptions as the primary support for their position. For that reason, I focused a bit more on pointing toward and shining light upon the several inaccurate and mistaken claims you were continuing to make, especially since your responses seemed so immune and wholly unresponsive to clear and well supported counter arguments and rebuttals.


Moving on, here's another interesting study on this same topic that read just today:

http://www.sentierresearch.com/pressrel ... _21_13.pdf
Quote:
Based on new estimates derived from the monthly Current Population Survey (CPS), real median annual household income, while recovering somewhat from the low-point reached in August 2011, has fallen by 4.4 percent since the “economic recovery” began in June 2009. Adding this post-recession decline to the 1.8-percent drop that occurred during the recession leaves median annual household income now 6.1 percent below the December 2007 level.
<snip>
Compared to January 2000, the beginning point for our monthly statistical series, median annual household income is now lower by 7.2 percent. (All income amounts in this report are before-tax money income and are presented in terms of June 2013 dollars).

According to Gordon Green of Sentier Research: “This latest report continues our efforts to help chronicle one important dimension of the economic hardships now being experienced by a large number of American households. Our findings complement data on the unemployment rate, GDP estimates, leading economic indictors, and other economic data series. In many ways, median household income provides a measure of the net effect of economic activity on the middle class and how well they are able to buy food, housing, and other necessities every month, especially now during this unprecedented period of economic stagnation. Based on our data, almost every group is worse off now than it was four years ago.
<snip>
Real median annual household income declined significantly for both family and nonfamily households. <...> Real median annual household income declined more significantly for younger households and those with a householder between 55 and 64 years of age than for other age groups. <...> Declines in real median annual household income are noted regardless of the level of educational attainment.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Tue Nov 11, 2014 10:07 pm
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
billvon wrote:
Rory wrote:
Quote:
I don't know of any talented, highly educated and risk-accepting people "stuck" in jobs that can be replaced by robots. I am sure they exist - but they're pretty rare.

The low skilled jobs that graduates are now finding themselves in can generally be replaced by machines/robots: checkout assistants can quite easily be replaced by automated checkout machines; factory workers can easily be replaced by robots/machines. Basically any job that does not require higher thinking/creativity or human interaction can be replaced by machinery.

Agreed. But again, I don't know of any talented, highly educated and risk-accepting people who would be willing to remain a cashier until they were replaced by a POS system. There are definitely people out there (lacking one or more of those attributes) who will be replaced by automation, and that's an issue we have to deal with.


It depends on how badly they need that job, doesn't it? In order to save enough money to take a risk, they would need to be making more money than enough to subsist. So whatever the cheapest available rent, electricity, food, and probably transportation costs (so you can get to work), your salary has to exceed that by some amount.

If that salary is small to begin with, and you're only able to outpace your costs by a small margin, then it could take literally years to accumulate a small pittance of wealth to risk.

If you're working 3 part time jobs for a total of 80 hours a week just to make those costs, then you're really pushing the limits of human endurance if you try to find a few extra hours to study. But this is the trend in low skilled work. Hourly wage is eroding, and annual salaries are eroding by slightly less as workers close the gap by working more and more hours.

Quote:

Quote:
But we ought not to be content with an economic system that increasingly raises the bar to unattainable levels – if people cannot even imagine achieving their personal dream then they will quit trying sooner or later.

What is "the bar?" Do you mean the "American Dream" of owning a home? In that case, we're doing well - home ownership has increased from 62% (1960) to 67% (today.) There was a dropoff due to the real estate bubble after the 2008 recession, but even taking that into account, over the last 50 years the bar for that particular goal has gotten lower, not higher.

Or did you mean a different bar?


Probably the best "bar" would be the ability to move from being a worker to being an investor. Since that is how you become a retiree later in life. Or just upward mobility in general.

In a high wage environment everyone has a chance to move upward. If too much income gets distributed to too few, then the remaining GDP that falls to the rest may not be enough to give them that opportunity.

Then we lose out on their intellect. The remaining concentrated group that's running everything will become composed of a dumber and dumber average due to the stagnancy of not being augmented by the occasional "rags to riches" entrepreneur. (Of maybe there will still be a few of them, but not nearly as many as in the high wage environment.)



Quote:
Quote:
My problem with this is that it should be possible to take the safe option and to work hard and diligently to be paid a reasonable amount; to be financially comfortable and well treated at work, to pursue a career that has meaning.

I completely disagree. No one has a right to a safe, well paid, meaningful job where they are respected and comfortable. (Just as no one has a right to a safe, comfortable, fuel efficient car that they are proud to drive, or a right to a reasonably sized flat screen TV that makes them feel good about themselves.) All they have in the US is the right to work towards that job, or that car, or that TV.


I agree that it's dumb to make this a discussion about "rights".

It just makes sense to give the maximum amount of people the opportunity to enter the entrepreneurial world, so as to maximize the potential talent pool.

Unfortunately, the children of a very smart person are not automatically guaranteed to be as smart as their parents. Statistically, the IQ of children born to very smart people regresses over time toward the average, with each generation tending to be slightly dumber than the last until the average is reached.

So, if we concentrate all the wealth into the hands of a few very smart people, and then prevent anyone else from joining their ranks, then over time the largest fortunes will begin to get managed by people of average intellect instead of high intellect.

Quote:
Quote:
but that is not the situation we find ourselves in. The rich are becoming richer while the poor starve – argue that that is fair if you wish but I won’t join you.

People aren't starving. The #1 health problem of America's poor is obesity. Indeed, we have done so well that we have changed the name of the problem to "food insecurity" and we lead the world in overall food security.

Personally, a good friend of mine is president of a local food bank, and has recently taken the counterintutivie step of rejecting some kinds of food, like Yoplait, because they contain so much sugar. That is a step supported by the science, since high-sugar foods are causing obesity and diabetes in the poor population here, and the risk of getting too much sugar is far greater than the risk of not getting enough food in the US.

That's not to say that no one goes hungry, of course, and that's a problem we should continue to work on. But again, it is getting steadily better, not worse - so the solution should be "continue to improve it" not "change society."


The obesity problem is due to malnutrition. Cheap, unhealthy food, like Yoplait will make you obese if you eat too much of it.

But if you're poor, then when you're in the supermarket that more expensive healthy food can tend to erode your budget really fast.


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Tue Nov 11, 2014 11:10 pm
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Kojax,

Why is it "dumb" to make this discussion about rights? Note actually that I never introduced the term although itvis true that I do consider that all individuals ought to have the right to certain guaranteed standards in the workplace: to be paid a living wage; to be treated with respect; to have the opportunity to pursue meaningful work.

How else do any of your economic arguments make sense except by recourse to the human implications of economic strategy? Nobody pursues wealth generation as an end independent of the human condition.

Instead of calling my ideas "dumb" you might consider contributing an original idea rather than tacking a reply onto the end of a comment that was itself primarily a response to one of my posts and which I had already replied to.

Regards

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 12, 2014 12:42 am
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
Rory wrote:
Kojax,

Why is it "dumb" to make this discussion about rights? Note actually that I never introduced the term although itvis true that I do consider that all individuals ought to have the right to certain guaranteed standards in the workplace: to be paid a living wage; to be treated with respect; to have the opportunity to pursue meaningful work.


"Rights" and economics just dont' go together very well.

Economics is basically humankind's struggle against its own environment. The environment doesn't grant us a "right" to anything, not even life. We struggle to find our place and it grants us life as a privilege. But never as a right.

Your boss or the company owner or... whoever... is just serving as a middle man between you and that environment.

Quote:
How else do any of your economic arguments make sense except by recourse to the human implications of economic strategy? Nobody pursues wealth generation as an end independent of the human condition.

Instead of calling my ideas "dumb" you might consider contributing an original idea rather than tacking a reply onto the end of a comment that was itself primarily a response to one of my posts and which I had already replied to.

Regards


We should achieve as much as we can. We should make workers' conditions as good as we can get them.

I only object to the idea of trying to define a certain minimum as a "right", because there is no guarantee that minimum will even be possible. A "right" should always be something you know for sure you will be able to grant before you define it. Like the "right" to free speech, for example. There is nothing stopping us from letting others speak. Or the right to freedom of religion. etc.


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 12, 2014 4:47 am

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
kojax wrote:
It depends on how badly they need that job, doesn't it? In order to save enough money to take a risk, they would need to be making more money than enough to subsist. So whatever the cheapest available rent, electricity, food, and probably transportation costs (so you can get to work), your salary has to exceed that by some amount.
If that salary is small to begin with, and you're only able to outpace your costs by a small margin, then it could take literally years to accumulate a small pittance of wealth to risk.

Definitely. It might take years. Some people will invest the work and the time. Some people won't.
Quote:
If you're working 3 part time jobs for a total of 80 hours a week just to make those costs, then you're really pushing the limits of human endurance if you try to find a few extra hours to study.

Agreed. So instead you might live with 5 other people to save money on rent, or work at a restaurant where meals are included to save money on food.
Quote:
In a high wage environment everyone has a chance to move upward. If too much income gets distributed to too few, then the remaining GDP that falls to the rest may not be enough to give them that opportunity.

Again, I don't believe that this is a zero sum game - and what the top few make is largely unrelated to what the bottom few make. Thus there is not a "fixed amount" of GDP to distribute to the rest of the labor pool, and distributing a lot of income to a CEO does not decrease what the clerks at that company make. (Indeed, there is generally a positive correlation between those two, at least at that company.)
Quote:
I agree that it's dumb to make this a discussion about "rights".
It just makes sense to give the maximum amount of people the opportunity to enter the entrepreneurial world, so as to maximize the potential talent pool.

I agree, and I think the best way to do that is to make good education affordable to the largest number of people.
Quote:
The obesity problem is due to malnutrition.

Right - and that is due to too much crap food. We don't have undernutrition in the US (i.e. scurvy, kwashiorkor, marasmus, starvation) - people are getting enough calories, enough protein and enough vitamins. They are just eating way too much crap, and that leads to medical problems like obesity, heart disease, diabetes, arthritis etc. We have a problem of excess, not one of scarcity.
Quote:
But if you're poor, then when you're in the supermarket that more expensive healthy food can tend to erode your budget really fast.

Spinach, brown rice and carrots are cheaper than Big Macs. But Big Macs are easier and faster. And if you have someone who has a serious problem making food choices, supplementing their income might be the very worst thing you can do for them. They need the help of a dietician, not more Big Macs.


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 12, 2014 6:56 pm
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
billvon wrote:
I agree, and I think the best way to do that is to make good education affordable to the largest number of people.

Yet even those with higher education are struggling and have seen wage stagnation or decreases.

billvon wrote:
Right - and that is due to too much crap food. We don't have undernutrition in the US (i.e. scurvy, kwashiorkor, marasmus, starvation) - people are getting enough calories, enough protein and enough vitamins. They are just eating way too much crap, and that leads to medical problems like obesity, heart disease, diabetes, arthritis etc. We have a problem of excess, not one of scarcity.

For what reason is the data I've already shared above on this subject being ignored and instead replaced with opinion? Is there a problem with the actual data on the topic that should lead us to abandon it in favor of your personal gut instinct and preconceptions?

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 12, 2014 7:29 pm

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
iNow wrote:
billvon wrote:
I agree, and I think the best way to do that is to make good education affordable to the largest number of people.

Yet even those with higher education are struggling and have seen wage stagnation or decreases.

Of course; there will always be exceptions. But the best single thing you can do to increase your long term income is get higher education. By supporting high quality education for all we can give everyone the best possible chance.

iNow wrote:
billvon wrote:
Right - and that is due to too much crap food. We don't have undernutrition in the US (i.e. scurvy, kwashiorkor, marasmus, starvation) - people are getting enough calories, enough protein and enough vitamins. They are just eating way too much crap, and that leads to medical problems like obesity, heart disease, diabetes, arthritis etc. We have a problem of excess, not one of scarcity.

For what reason is the data I've already shared above on this subject being ignored and instead replaced with opinion? Is there a problem with the actual data on the topic that should lead us to abandon it in favor of your personal gut instinct and preconceptions?

What in the above statement do you disagree with?


Last edited by billvon on Wed Nov 12, 2014 9:10 pm, edited 1 time in total.


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 12, 2014 7:53 pm
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
billvon wrote:
iNow wrote:
Yet even those with higher education are struggling and have seen wage stagnation or decreases.

Of course; there will always be exceptions.

But it's not an exception. It's the overarching trend. Wages are stagnant or down across all education levels, and higher education is not performing better than lower.

http://www.sentierresearch.com/pressrel ... _21_13.pdf
Quote:
Compared to January 2000, the beginning point for our monthly statistical series, median annual household income is now lower by 7.2 percent. <...> median household income provides a measure of the net effect of economic activity on the middle class and how well they are able to buy food, housing, and other necessities every month, especially now during this unprecedented period of economic stagnation. Based on our data, almost every group is worse off now than in years past. <...> Declines in real median annual household income are noted regardless of the level of educational attainment.



billvon wrote:
But the best single thing you can do to increase your long term income is get higher education. By supporting high quality education for all we can give everyone the best possible chance.

Completely agree on both fronts, and would add that we should do more to help in this space.

billvon wrote:
What in the above statement do you disagree with?

The inherent suggestion that this is about poor choices and not lack of options.

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3198075/
Quote:
Poverty rates and obesity were reviewed across 3,139 counties in the U.S. (2,6). In contrast to international trends, people in America who live in the most poverty-dense counties are those most prone to obesity (Fig. 1A). Counties with poverty rates of >35% have obesity rates 145% greater than wealthy counties. <...> individuals who live in impoverished regions have poor access to fresh food. Poverty-dense areas are oftentimes called “food deserts,” implying diminished access to fresh food (7). However, 43% of households with incomes below the poverty line ($21,756) are food insecure (uncertain of having, or unable to acquire, sufficient food) (7) <...> Thus, in many poverty-dense regions, people are in hunger and unable to access affordable healthy food, even when funds avail.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 12, 2014 9:38 pm

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
iNow wrote:
billvon wrote:
iNow wrote:
Yet even those with higher education are struggling and have seen wage stagnation or decreases.

Of course; there will always be exceptions.

But it's not an exception. It's the overarching trend. Wages are stagnant or down across all education levels, and higher education is not performing better than lower.

I disagree. Workers with higher education levels are still performing better than lower.
http://soc101.wordpress.com/2011/09/13/education-pays-income-by-education-level-2011-update/
There may indeed be other problems with the economy - but the general rule remains that higher education status outperforms lower education.

Quote:
billvon wrote:
What in the above statement do you disagree with?

The inherent suggestion that this is about poor choices and not lack of options.

No, that was not my suggestion. My suggestion was that, in fact, people eat too much of the wrong sorts of food. The problem is overabundance and enabling of cheap/low quality food, not scarcity of food. There are several reasons for this, including inability/lack of desire to cook (which drives towards the fast-food model) lack of easy availability of cheap/good food (i.e. the "food deserts") lack of education (i.e. not knowing how to eat a healthy diet) and poor decisionmaking (decisions based on advertising rather than on desired health outcomes.)


Top
bunbury
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 13, 2014 12:04 am
Original Member
Original Member

Joined: Sun Aug 07, 2011 5:55 am
Posts: 978
Location: Denver, Colorado

Offline
Quote:
decisions based on advertising rather than on desired health outcomes.


An inevitable and predictable result of cynical corporate greed. If higher minimum wage and a progressive tax system was in place the people eating crap at McDonalds could choose healthier alternatives.


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 13, 2014 1:25 am

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
bunbury wrote:
Quote:
decisions based on advertising rather than on desired health outcomes.

An inevitable and predictable result of cynical corporate greed.

Yep. Of course you could ascribe the same motivations to any for-profit company, including Whole Foods, Souplantation etc. They exist to make money.
Quote:
If higher minimum wage and a progressive tax system was in place the people eating crap at McDonalds could choose healthier alternatives.

Since the most-represented income among McDonald's customers is $60,000, increasing minimum wage might well make the problem worse, not better. Again, if you really want to solve the problem, education is a good avenue; the more education customers have, the more likely they are to avoid fast-food restaurants.
http://www.ucdmc.ucdavis.edu/publish/news/newsroom/5673/


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 13, 2014 1:28 am
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
billvon wrote:
There may indeed be other problems with the economy - but the general rule remains that higher education status outperforms lower education.

I agree, but what you're saying and what I'm saying are not mutually exclusive. You are correct that higher education tends to outperform lower education in terms of median annual salary and income. That is not currently in dispute here.

The point I was making is that wages are flat and even down across all education levels, including for those with higher educational attainment. What that means is your previous argument that more education is needed as a key way to address our current economic issues is misguided and misses the broader point about the economic barriers people face regardless of education level.

You basically just presented another version of the "pull yourself up by your bootstraps" argument that doesn't map cleanly or accurately to the economic realities around us today.

billvon wrote:
Since the most-represented income among McDonald's customers is $60,000, increasing minimum wage might well make the problem worse, not better.

First, the study described at your link uses data from the mid-1990s, nearly two full decades ago. Perhaps you have something more recent and more representative of our current economic climate?

Second, even your own link says the following:
Quote:
"Pricing is critical to low-income families, and over the past 30 years the costs of less healthy options have dropped compared to healthier fare," said Leigh.

That comment alone more or less negates the tone and tenor of the comments you are making in response to those of us who are explaining the relationship between obesity in poverty and how little of it actually pertains to poor decision-making or laziness.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 13, 2014 1:52 am

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
iNow wrote:
billvon wrote:
The point I was making is that wages are flat and even down across all education levels, including for those with higher educational attainment.

Agreed. They were rising until 2000, were basically flat until 2008, then declined rather dramatically due to the recession. That seems like a good example of the effects of a recession, rather than an example of unfair barriers to low income and middle class.
Quote:
What that means is your previous argument that more education is needed as a key way to address our current economic issues is misguided . . . .

Do you disagree that more education is one way that individuals can address the problem of too low an income?
Quote:
You basically just presented another version of the "pull yourself up by your bootstraps" argument that doesn't map cleanly or accurately to the economic realities around us today.

The economic reality is that higher levels of education result in higher income potentials. This is not (nor is intended to be) a solution for all problems of society, although education does lead, generally, to a richer, more informed society that makes better decisions at the government level. It is simply one way that people who wish to make more money can do so.
Quote:
First, the study described at your link uses data from the mid-1990s, nearly two full decades ago. Perhaps you have something more recent and more representative of our current economic climate?

From the study, published in 2011: "The study was limited by the fact that the data came from the mid-1990s, the most recent information available on this subject."
Quote:
Quote:
"Pricing is critical to low-income families, and over the past 30 years the costs of less healthy options have dropped compared to healthier fare," said Leigh.

That comment alone more or less negates the tone and tenor of the comments you are making in response to those of us who are explaining the relationship between obesity in poverty and how little of it actually pertains to poor decision-making or laziness.

That comment was specifically directed towards the data in the study, which analyzed the income of people who went to fast-food restaurants vs. sit-down restaurants. So your point is invalid here. (Unless - and I hope this is not the case - you advocate sit-down restaurants as a means to address the problems of obesity, heart disease, diabetes and all the other problems associated with a largely fast-food diet.) It did not address the issue of whether store-bought healthy food was available to these same people.


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 13, 2014 4:26 am
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
billvon wrote:
iNow wrote:
First, the study described at your link uses data from the mid-1990s, nearly two full decades ago. Perhaps you have something more recent and more representative of our current economic climate?

From the study, published in 2011: "The study was limited by the fact that the data came from the mid-1990s, the most recent information available on this subject."

That's pretty much exactly my point. You've essentially just conceded it as you're using that study to support a position you hold about the economy and food choices in the present, yet the data is too old to accurately reflect the reality before us.

billvon wrote:
Do you disagree that more education is one way that individuals can address the problem of too low an income?

Higher educational attainment does tend to allow individuals to better seize upon and more fully realize the opportunities that happen to be made available to them (yes, "luck favors the prepared mind"), but it does not address a key underlying problem rampant and growing throughout today's economy, specifically a lack of available opportunity for those not fortunate enough to be born into wealth where that opportunity is in many ways being hoarded and localized.

Again, we have systemic challenges and the core of my point is illuminated by data showing that even the hardest working, most ambitious, best educated, innovative risk takers starting in poverty tend overall to do far worse than the laziest, most sloth, ignorant, uneducated, uncreative individuals starting from a position of wealth.

These are not exceptions. These are not anecdotes. These are facts and these are broad trends representative of the experience of the majority share of our population.

billvon wrote:
[Education] is simply one way that people who wish to make more money can do so.

Yes, we agree that education tends to lead to higher incomes. It is not clear to me, however, whether you agree that there is a huge loss of available opportunity being experienced across almost all population cohorts and that this lost opportunity availability is being faced quite broadly regardless of effort or merit. It should be clear to anyone who not completely blinded by ideology that upward mobility and potential is significantly constrained right now, that income ceilings have been trending downward and are lower overall for most income groups, groups who also face reductions in median wages in parallel, and that growth for ~99% of the population is currently anchored far lower than we know the economy would/should/could allow.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 13, 2014 5:30 pm
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
In the meantime, another view of what the data is showing:

http://www.bloombergview.com/articles/2 ... -the-0-01-
Image

One thing that may be a reasonable approach to addressing this?
Quote:
Taxes: The superwealthy pay lots of taxes in actual dollars. On a percentage basis, though, not so much. Indeed, the wealthier you are, the more likely the bulk of your income comes from capital gains. These are taxed at about half the rate of wages and salary for a comparable high earner. According to the Internal Revenue Service, the wealthiest 400 people derived half their income from capital gains. Those in the top 0.01 percent not only earn much more than the 1 percent but also get to keep much more of what they earn.

Imagine what profound investments could be made in education, healthcare, infrastructure, housing, nutritional support, and jobs programs were this revenue actually making it into the treasury's coffers.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 13, 2014 6:03 pm

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
iNow wrote:
That's pretty much exactly my point. You've essentially just conceded it as you're using that study to support a position you hold about the economy and food choices in the present, yet the data is too old to accurately reflect the reality before us.

No, I quoted the part from the study that noted that it was the most current data available. If you have more data then by all means post it. If not, if you are just going off your "gut feel," that's fine too.

Quote:
Higher educational attainment does tend to allow individuals to better seize upon and more fully realize the opportunities that happen to be made available to them (yes, "luck favors the prepared mind"), but it does not address a key underlying problem . . . .

I agree. It is just one (very important) solution to the problem of the poor not making enough money. It does not solve all problems, of course.

Quote:
Again, we have systemic challenges and the core of my point is illuminated by data showing that even the hardest working, most ambitious, best educated, innovative risk takers starting in poverty tend overall to do far worse than the laziest, most sloth, ignorant, uneducated, uncreative individuals starting from a position of wealth.

Agreed - but that is nearly a tautology. People with more money tend to have more money. The "laziest, most sloth, ignorant, uneducated, uncreative individuals" who start off with tons of money often end up with far less money, while the hardest working, most ambitious, best educated, innovative risk takers tend to end up with more money. Your point is that at the end of that exercise the lazy guy may still have more money, which is true. What is important to me is that the ambitious guy is making more, and will tend to continue to do so.

Quote:
These are not exceptions. These are not anecdotes. These are facts and these are broad trends representative of the experience of the majority share of our population.

I agree. But again, that seems to me to be missing the point - which is that people who have high levels of educational achievement, people who take risks and people who work hard tend to make more and more money over the course of their lives, and do so at a much higher rate than people who do not take risks or pursue education. Yes, they may never reach the wealth of the lazy son of a billionaire. But one's success is not diminished by someone else's wealth.


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 13, 2014 10:54 pm
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
billvon wrote:
No, I quoted the part from the study that noted that it was the most current data available. If you have more data then by all means post it. If not, if you are just going off your "gut feel," that's fine too.

You appear to be trying to shift the burden of proof. I've made no claims regarding the income level of people who eat fast food. That was you. My point was related to the link between obesity and poverty and how clearly it is related to a lack of options as opposed to a lack of education or ability to make quality decisions, and I have supported that point with data already twice now.

billvon wrote:
Agreed - but that is nearly a tautology. People with more money tend to have more money.

Of course, and there's always been a delta between the lowest on the income scale and the highest. Nobody here is challenging that, nor do I personally or ideologically have any problems or qualms with that. The point you appear to be ignoring, however, is how and why that gap has grown so vastly since the late 1970s. The chart I posted prior to your reply illustrates rather clearly the issue I'm highlighting. Since that was ignored, here's another:

Image
^Click to enlarge

More here on the growth of inequality, reasons for it, and options to mitigate: http://eml.berkeley.edu/~saez/saez-zucm ... wealth.pdf

billvon wrote:
Your point is that at the end of that exercise the lazy guy may still have more money

No, it's actually not. See above. The gap exists for good reason and always has. I have no struggle with that. The increasing size of the gap and how rapidly that gap has changed since the late 1970s, however, is an issue to be discussed and addressed by a mature populace.

It wasn't always this way. It doesn't have to be this way. It's not this way in nearly any other advanced country. We can make things better.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Fri Nov 14, 2014 12:56 am
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Must challenge the premise that higher education leads in general to improved economic outcomes. I will post some stats at a later hour when I have access to something other than my android, but the overall picture is that in the UK the difference in unemployment rates between higher and lower educated stands in the region of 1%. The outcome is, on the face of it, better for graduates than school-leavers - but it is questionable if it is worth studying for three years and accumulating masses of debt only to then have a 1% advantage over your peers when entering the labour market and competing with the school-leavers for entry level jobs. The school-leavers, meanwhile, have been making those three years economically productive and so are in a better financial position than the grads. That is what happens with over-supply of grads in the job market - their qualifications are devalued and prove no guarantee of economic wellbeing. Personally I remain in favour of expanding access to higher education on the basis of intellectual abiluty rather than ability to pay but I think it is important that prospective students appreciate the reality of the difficulties post-graduation. Probably there will come a tipping point when young people wake upbto the fat that economically study is not worthwhile.

Taxation of the rich is to be welcomed to address the inequality that threatens the viability of the Western model and here in the UK only the Labour party are promising progressive tax of mansion owners. (As opposed to Cameron's tax breaks for the rich funded on the back of a 'spare bedroom tax' that unjustly punishes the disabled).

Well, considering the OP was a suggestion that the period 1950-2050 could be regarded as the 'golden age', I seem to have polarised in response to otger arguments to the position of decrying the current state of affairs. Point is, tge situation does not look likely to improve anytime soon - especially with the dominance of the Republicans in the US and the creeping increase in support for UKIP in the UK. At the one time when nations most need to look outward to solve problems that cannot be fixed by any one nation alone, each is turning inward.

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Fri Nov 14, 2014 1:06 am
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
Rory wrote:
Taxation of the rich is to be welcomed to address the inequality that threatens the viability of the Western model

I would clarify this to say, "Taxation of the rich at a rate that is at least equal to the rate at which incomes are taxed among the middle class and the poor is to be welcomed..."

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Fri Nov 14, 2014 4:24 am
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
billvon wrote:
kojax wrote:
It depends on how badly they need that job, doesn't it? In order to save enough money to take a risk, they would need to be making more money than enough to subsist. So whatever the cheapest available rent, electricity, food, and probably transportation costs (so you can get to work), your salary has to exceed that by some amount.
If that salary is small to begin with, and you're only able to outpace your costs by a small margin, then it could take literally years to accumulate a small pittance of wealth to risk.

Definitely. It might take years. Some people will invest the work and the time. Some people won't.


If wages get small enough, and the "buy in" price gets high enough, then it might take hundreds of years, or even thousands.

You're not going to get enough money to start a business putting away 5 bucks a week. Now when the minimum buy in for a Mc Donald's franchize is upwards of 1.25 million.

Quote:
Quote:
If you're working 3 part time jobs for a total of 80 hours a week just to make those costs, then you're really pushing the limits of human endurance if you try to find a few extra hours to study.

Agreed. So instead you might live with 5 other people to save money on rent, or work at a restaurant where meals are included to save money on food.


There aren't a lot of restaurants like that. There also aren't a lot of land lords who will be ok with 5 people living in a 2 person dwelling.

You've got to figure whenever you come up with a new "frugality" strategy, there will probably be about 100 or more other people who all had the same idea.

Restaurants get tired of running up high food costs because every college kid thinks he/she will just gorge themselves on the free food, so they start charging their employees for the food. Land lords get tired of seeing their apartment units get thoroughly trashed by overhabiting tenants, and start putting restrictions on how many people are allowed to live in a unit without paying additional rent.




Quote:
Quote:
In a high wage environment everyone has a chance to move upward. If too much income gets distributed to too few, then the remaining GDP that falls to the rest may not be enough to give them that opportunity.

Again, I don't believe that this is a zero sum game - and what the top few make is largely unrelated to what the bottom few make. Thus there is not a "fixed amount" of GDP to distribute to the rest of the labor pool, and distributing a lot of income to a CEO does not decrease what the clerks at that company make. (Indeed, there is generally a positive correlation between those two, at least at that company.)


Of course it's not a zero sum game.

But that doesn't automatically mean you get to assume that the outcome you want is the one that results in a greater than zero change.

It's a popular misconception that, the worse the income distribution gets, the better the economy gets. The reality is that it is more of a balancing act. An absolutely flat income distribution gets a less than zero result, but an extremely steep income distribution also gets a less than zero result. The greater than zero result falls between those extremes.


I'm suggesting that the greater than zero result happens when incomes are distributed more evenly, and I think there are good reasons to believe it.

When incomes are distributed more evenly, the economy is able to do what it does best, which is to produce perishable goods/services on massive scales that give a good economy of scale. Usually these are things that are not easy to save or store. "Mass production" which is the most efficient kind of production.

When income is distributed to a small core of very wealthy people, they mostly try to save their money, which forces the economy to focus on things that can be stored long term without losing value. Like gold, or real estate. They buy a smaller number of very expensive goods, like Lamborghini Diablos, instead of a large number of less expensive goods like Toyota Prius's. But the Toyota Prius's will be rolling off an assembly line that's probably 10 times more efficient than the assembly line at Lamborghini's factory is.



Quote:
Quote:
I agree that it's dumb to make this a discussion about "rights".
It just makes sense to give the maximum amount of people the opportunity to enter the entrepreneurial world, so as to maximize the potential talent pool.

I agree, and I think the best way to do that is to make good education affordable to the largest number of people.


You'll get no disagreement from me on that. Education is the most valuable form of "capital" if you want to move up, because an educated person can start a business, and gets reasonably easy access to investors.

They don't have to save up their own money to bootstrap into a better life. They can use someone else's.

Quote:

Quote:
But if you're poor, then when you're in the supermarket that more expensive healthy food can tend to erode your budget really fast.

Spinach, brown rice and carrots are cheaper than Big Macs. But Big Macs are easier and faster. And if you have someone who has a serious problem making food choices, supplementing their income might be the very worst thing you can do for them. They need the help of a dietician, not more Big Macs.


Don't forget to factor in the opportunity cost of lost time. For a worker who is already working 3 jobs, the cost of spending an hour making food in the kitchen is an hour of lost wages.

Time literally is money. Some people are both "money poor", and "time poor".


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Fri Nov 14, 2014 11:11 am
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Good point iNow.

kojax, I found your point interesting about the advantages of an optimum degree of wealth distribution in terms of facilitates economies of scale. These allow for greater efficiency, since the production and distribution procedures, once established, can be left to run without expensive changes being introduced. It also means that goods can be sold at a lower price while still generating profit. As for the desirability of encouraging the consumption of perishable goods, that would be a good argument only in the context of an economy built on green technologies. Until that happens, rampant consumerism only worsens climate change which - quite besides its threat to the existence of life and the world - will have knock-on effects for the economy as life and logistics become increasingly difficult. Also, you make the assertion that it is much easier for graduates to acquire investment for start-ups - do you have any data to qualify this statement? Even if it is slightly easier for graduates than for school-leavers to set up their own businesses, I do not think that this justifies higher education in terms of being a smart decision for improving economic wellbeing. Not all grads want to initiate their own business, and of those that do, many will fail. One problem with our economy is that there are not sufficient safe and well-paid jobs that are highly skilled and would warrant HE - teaching, research and development, etc.

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Nov 15, 2014 3:29 pm
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Some ONS stats

Quote:
Graduates had an unemployment rate of 4% which was lower than the unemployment rate for those
educated to A level standard (5%), A* to C grade GCSE standard (8%) and the rates for those with
other qualifications (11%) or no qualifications (16%).
[April-June 2013]

http://www.ons.gov.uk/ons/dcp171776_337841.pdf

If the difference in unemployment rate between graduates and A-level students is just 1%, then from a purely economic perspective it would make more sense to enter the labour market immediately after further education and to avoid the stress and debt associated with HE.

Another interesting statistic: 22% of UK citizens aged 16-64 are classed as 'economically inactive', meaning that they are neither employed nor seeking employment. This includes students and those unable to work for health reasons or because of family responsibilities and (presumably) those wealthy enough to neither need nor want to work. I still find it staggering that we have such a massive extent of spare capacity. With almost 1/4 people not producing anything, should we really be so surprised that GDP is sickly?

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sun Nov 16, 2014 4:20 am
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
What you're referring to is known as the "Labor Force Participation Rate," and is related to the concept of "slack" in the job market. Both are good terms to explore as you look deeper into the topic.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sun Nov 16, 2014 6:17 pm
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
Rory wrote:
As for the desirability of encouraging the consumption of perishable goods, that would be a good argument only in the context of an economy built on green technologies. Until that happens, rampant consumerism only worsens climate change which - quite besides its threat to the existence of life and the world - will have knock-on effects for the economy as life and logistics become increasingly difficult.


It also depends on what kinds of perishable good we're talking about. A back massage is a perishable good that doesn't hurt the environment. But the lotion they rub on your back was probably made in a factory that uses energy and maybe creates chemical waste byproducts.

Quote:
Also, you make the assertion that it is much easier for graduates to acquire investment for start-ups - do you have any data to qualify this statement? Even if it is slightly easier for graduates than for school-leavers to set up their own businesses, I do not think that this justifies higher education in terms of being a smart decision for improving economic wellbeing. Not all grads want to initiate their own business, and of those that do, many will fail. One problem with our economy is that there are not sufficient safe and well-paid jobs that are highly skilled and would warrant HE - teaching, research and development, etc.


The main thing if you want to get investors to invest in a startup is to be able to produce a good business plan that shows you've done all the research and that you are more or less certain your business will succeed and be able to pay them back for their investment.

If you have a degree in the field, that not only increases your credibility directly, but also means you probably know a lot more, which will make it easier for you to make a better business plan.

Investors care about one thing and one thing only : making sure they will actually get their principal back. There is no interst rate high enough that an investor will be willing to expose themself to a high likelihood of not getting their loan paid back.

If they feel safe about that, they won't care about the technicalities. They won't care who you are. They won't care how you look.

But, for every one, genuinely well thought out business plan they get presented with, about 100 idiots will show up and present them with a pipe dream, pie in the sky, unworkable business plan. They end up having to filter through that pile of failure to find a plan worth putting their money into. Having an education moves you to the top of the pile.


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sun Nov 16, 2014 7:47 pm
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
A back massage would hurt the environment more than inaction would. The masseuse would expel more CO2 by working than he/she would if at rest.

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Tue Nov 18, 2014 1:07 pm
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Watched the BBC's 'Why the rich get richer' last night, as reviewed here:

Quote:
Spectator editor and Telegraph columnist Fraser Nelson wisely didn’t even attempt to sex up the argument in his Dispatches debut How the Rich Get Richer (Channel 4). Compared to the kind of high definition, larger-than-life, arm-waving banter that has become the usual economics presentation style, from Robert Peston or Russell Brand, Nelson’s delivery was unfashionably soft spoken.

While this was no Damascene conversion from fiscal liberalism to red-under-the-bed socialism, Nelson’s political conservatism did lend weight to the argument that something had gone seriously wrong in the distribution of wealth over the last six years.

Although it took a while to get going, distracted by the ridiculously awful but expensive tastes of the super rich in London, when the programme began to coolly deliver the facts, they rang out like bullets from an assassin. The bottom 10 per cent of workers earn the same as they did in 1997 while the top 0.1 per cent have conversely seen their asset wealth balloon upwards.

Directed by Vicki Cooper, who also made the Bafta-nominated The Cruel Cut about female genital mutilation, the documentary performed the near miracle of drawing the dots between quantitative easing, spiralling property prices, the benefits trap and the intensification of social exclusion through private education and marriage without ever tipping into over-simplification or polemics. Nelson got great access to both sides of the argument but allowed neither point of view to dominate, crediting the demonised representatives of the poor with as much intelligence as the politicians.

A sliver of poetry crept through from Karl Lokko, former child criminal, when he pointed out that the low-paid, who often end up paying disproportionate tax rates, could see “you don’t reap what you sow”. This documentary was, all round, a welcome victory for the quietly angry man.


http://www.telegraph.co.uk/culture/tvandradio/tv-and-radio-reviews/11236906/How-the-Rich-Get-Richer-review.html

It makes a point that might challenge previous contentions stated in this thread that growing socioeconomic inequality in itself is not malign so long as all tiers on the socioeconomic scale see a net increase in their wealth. The rich and 'super-rich' are able to dominate assets that deliver a financial return (property, diamonds, etc) and, although it would be nice to imagine that they stop at the point of satiation, i.e. when they no longer require increasing returns for themselves or their families, that is a naive rose-tinted ideal that does not match reality. So long as the top richest minority dominate the property and similar markets, ordinary working people (the majority of the population) will always be out-bid, and so the inequality is further stoked, and so on ad infinitum.

The documentary featured working class families who, due to low pay and poor working conditions/job security (zero hour contracts) and the extortionate price of childcare, would be better off on welfare rather than working. One father stated that he chose to work despite this reality because he wanted to set a good example for his children. But, if you are teaching to work arbitrarily (it was a warehouse job, that could easily be replaced by any automaton) for no net profit, is that really a good lesson?

It is sad but true that it is no longer possible to teach children with honest conviction or confidence, that education or hard work will secure them a good standard of living, or opportunity to be regarded as worthy of love by the wealthy, or meaningful work.

The only lesson that it is possible to pass on is how to survive in dire circumstances. Under those conditions, it is questionable if it is really morally justifiable to even bring children into the world.

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 19, 2014 12:30 pm
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
Rory wrote:
The only lesson that it is possible to pass on is how to survive in dire circumstances. Under those conditions, it is questionable if it is really morally justifiable to even bring children into the world.

Yet we see that birth rates tend to be highest in situations where there is the fiercest poverty and lowest where opportunity and education are most available. It's about replacement due to high mortality and being able to add to the local family workforce through biological reproduction.

Given this, can you elaborate on what you mean when asking if it's morally justifiable to become a parent? Maybe share how extreme you see the concept of "dire" and what that means to you in this context?

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 19, 2014 5:01 pm
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
Probably the reason the rich are becoming ultra rich is because the present world investment market favors quick turn around investments. Whoever is able to move the most money around the most quickly will be able to pounce on a new short term opportunity as it opens up. Concentrated wealth has the most agility because only a few people need to be consulted when moving it.

However, the downside is that quick turn around investments are the least useful of all kinds of investment.

When you build infrastructure, that is typically not a quick turn around investment. You're spending a lot of money up front, and you're hoping to get it back gradually, a little bit at a time, over the life of the thing you're building.

And, right now government is the only institution likely to take meaningful interest in big infrastructure endeavors. That's usually the last entity we want to be managing an investment portfolio, but right now they're all we've got if we want to build into the future.


If we tried to change the system to make it stable for long term investment, the (now ultra rich) quick turn around investors would fight it tooth and nail. And given their financial strength, and accompanying ability to purchase advertising, they would probably win.

Rory wrote:

http://www.telegraph.co.uk/culture/tvandradio/tv-and-radio-reviews/11236906/How-the-Rich-Get-Richer-review.html

It makes a point that might challenge previous contentions stated in this thread that growing socioeconomic inequality in itself is not malign so long as all tiers on the socioeconomic scale see a net increase in their wealth. The rich and 'super-rich' are able to dominate assets that deliver a financial return (property, diamonds, etc) and, although it would be nice to imagine that they stop at the point of satiation, i.e. when they no longer require increasing returns for themselves or their families, that is a naive rose-tinted ideal that does not match reality. So long as the top richest minority dominate the property and similar markets, ordinary working people (the majority of the population) will always be out-bid, and so the inequality is further stoked, and so on ad infinitum.



There is no point of satiation, because no matter how much wealth you amass, you can never be sure it will be enough to secure the financial future of your great grand children. Or that they won't grow up to be idiots who squander it.

Quote:
It is sad but true that it is no longer possible to teach children with honest conviction or confidence, that education or hard work will secure them a good standard of living, or opportunity to be regarded as worthy of love by the wealthy, or meaningful work.

The only lesson that it is possible to pass on is how to survive in dire circumstances. Under those conditions, it is questionable if it is really morally justifiable to even bring children into the world.


The inability to get ahead by hard work is really just an extension of the favoring of quick turn arounds.

Hard work is a slow turn around investment. In a rapidly changing, unstable, economy your hard work is going to be wasted a significant amount of the time. You might get a degree in a technical field like programming, then get out of college and find out the profession has already been gutted by competition with programmers in India.

Time to retrain, right? But how many times will you need to retrain before you finally get a good job?

How many repetitions of the same investment does it take before you finally get a return on it? You might be paying 4 times the normal cost of education here.


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 19, 2014 11:29 pm

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
Rory wrote:
It makes a point that might challenge previous contentions stated in this thread that growing socioeconomic inequality in itself is not malign so long as all tiers on the socioeconomic scale see a net increase in their wealth. The rich and 'super-rich' are able to dominate assets that deliver a financial return (property, diamonds, etc) . . .

Right. And again, provided the poor are ALSO making more money, that is a don't-care (outside of class jealousy, of course.)
Quote:
and, although it would be nice to imagine that they stop at the point of satiation, i.e. when they no longer require increasing returns for themselves or their families, that is a naive rose-tinted ideal that does not match reality.

Nor does it match anything claimed in this thread. It is thus a strawman argument.
Quote:
The documentary featured working class families who, due to low pay and poor working conditions/job security (zero hour contracts) and the extortionate price of childcare, would be better off on welfare rather than working. One father stated that he chose to work despite this reality because he wanted to set a good example for his children. But, if you are teaching to work arbitrarily (it was a warehouse job, that could easily be replaced by any automaton) for no net profit, is that really a good lesson?

Yes. And if at the same time you are attending school, that is an excellent lesson for children that schooling is important, and is much, much easier to accomplish when you are NOT working 40 hours a week taking care of a family.
Quote:
It is sad but true that it is no longer possible to teach children with honest conviction or confidence, that education or hard work will secure them a good standard of living, or opportunity to be regarded as worthy of love by the wealthy, or meaningful work.

Someone's inability to teach children a specific (and odd) lesson is not really germane to the conversation. Indeed, I would not think much of a parent who tried to teach his children that it was desirable to "be regarded as worthy of love by the wealthy." I would think much more highly of someone who taught their children that they should love whom they choose without regard to wealth, and that hard work, education and good judgment were the best ways to become successful (if that is what they desire.)
Quote:
The only lesson that it is possible to pass on is how to survive in dire circumstances. Under those conditions, it is questionable if it is really morally justifiable to even bring children into the world.

Fortunately you have an easy remedy to that dilemma.


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Fri Nov 21, 2014 5:07 am
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
billvon wrote:
Quote:
It is sad but true that it is no longer possible to teach children with honest conviction or confidence, that education or hard work will secure them a good standard of living, or opportunity to be regarded as worthy of love by the wealthy, or meaningful work.

Someone's inability to teach children a specific (and odd) lesson is not really germane to the conversation. Indeed, I would not think much of a parent who tried to teach his children that it was desirable to "be regarded as worthy of love by the wealthy." I would think much more highly of someone who taught their children that they should love whom they choose without regard to wealth, and that hard work, education and good judgment were the best ways to become successful (if that is what they desire.)


It is an increasingly false lesson, as the environment shifts ever more away from rewarding long term investment and focusing it's entire reward system on the mere ability to move wealth rapidly (by owning a lot of it already.)

Hard work is a long term investment. It only makes sense to work hard when long term investments are being rewarded, instead of penalized.

Suppose you go to school for 6 years to get a master's degree in computer programming (which is what quite a lot of people did around the turn of the 21st century) only to get done and have your company import a bunch of programmers from India with low salary requirements, and thereby gut the pay level for that field (which is also what happened.)

Now you owe some very expensive school loans, and you've only a limited ability to pay on them. Are you better off than the guy who went to plumbing school for 6 months? Or the guy who attended a CDL school for one month?

The people who lay out the biggest investments are increasingly becoming the ones who get screwed the worst, because the system is constantly shifting every couple of years, and changing the landscape too fast for people who do invest to have a chance to reap what they've sown.


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Fri Nov 21, 2014 4:33 pm
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Quote:
iNow wrote:
Yet we see that birth rates tend to be highest in situations where there is the fiercest poverty and lowest where opportunity and education are most available. It's about replacement due to high mortality and being able to add to the local family workforce through biological reproduction.

Given this, can you elaborate on what you mean when asking if it's morally justifiable to become a parent? Maybe share how extreme you see the concept of "dire" and what that means to you in this context?


Empirically it holds true that birth rates tend to fall as parent wealth increases. However that has no bearing on the moral implications of the decision to bring children into the world. It is a personal decision but in my opinion it is not morally justifiable to bring children into the world when there is a greater than equal to 80% chance of them failing to secure any meaningful kind of employment with good working conditions/security and a salary that would guarantee that their socioeconomic fortunes would be better when compared with simply receiving state welfare. Anything less than this standard of living and you may as well conscript your children as slaves of the upper classes. It is possible to find fulfilment and life meaning outside of the context of work but this becomes increasingly difficult when your household budget is such that even a standard class return ticket it something that has to be planned weeks in advance.

Quote:
kojax wrote:
Probably the reason the rich are becoming ultra rich is because the present world investment market favors quick turn around investments. Whoever is able to move the most money around the most quickly will be able to pounce on a new short term opportunity as it opens up. Concentrated wealth has the most agility because only a few people need to be consulted when moving it.

However, the downside is that quick turn around investments are the least useful of all kinds of investment.

When you build infrastructure, that is typically not a quick turn around investment. You're spending a lot of money up front, and you're hoping to get it back gradually, a little bit at a time, over the life of the thing you're building.

And, right now government is the only institution likely to take meaningful interest in big infrastructure endeavors. That's usually the last entity we want to be managing an investment portfolio, but right now they're all we've got if we want to build into the future.


If we tried to change the system to make it stable for long term investment, the (now ultra rich) quick turn around investors would fight it tooth and nail. And given their financial strength, and accompanying ability to purchase advertising, they would probably win.


Absolutely - succinctly put.

Quote:
kojax wrote:
There is no point of satiation, because no matter how much wealth you amass, you can never be sure it will be enough to secure the financial future of your great grand children. Or that they won't grow up to be idiots who squander it.


There has to come a point at which one ‘lets go’, or at which it is at least not helpful to try to exert control over future familial generations, because whether one amasses a million or a billion, there is always going to be the uncontrollable possibility that it will be accidentally squandered. But, as you say, many wealthy people still insist on trying.

Quote:
kojax wrote:
The inability to get ahead by hard work is really just an extension of the favoring of quick turn arounds.

Hard work is a slow turn around investment. In a rapidly changing, unstable, economy your hard work is going to be wasted a significant amount of the time. You might get a degree in a technical field like programming, then get out of college and find out the profession has already been gutted by competition with programmers in India.

Time to retrain, right? But how many times will you need to retrain before you finally get a good job?

How many repetitions of the same investment does it take before you finally get a return on it? You might be paying 4 times the normal cost of education here.


And so education is ideal for broadening the mind, developing new skills and following a passion but is no guarantee of economic wellbeing.

Quote:
billvon wrote:
Right. And again, provided the poor are ALSO making more money, that is a don't-care (outside of class jealousy, of course.)


But the point is that the slight increase in wealth for the lower classes really doesn’t make enough difference in real terms for them to be able to define and realise their own fate; to live their life in the way that they would choose to live it. They still will be blocked out of the kinds of markets that deliver a return.

Quote:
billvon wrote:
Yes. And if at the same time you are attending school, that is an excellent lesson for children that schooling is important, and is much, much easier to accomplish when you are NOT working 40 hours a week taking care of a family.


The only people that profit from workers working under poor conditions and with a lack of job security for pay that is less than equal to welfare handouts are the owners of the means of production. You would only be teaching your children to be subservient robots.

Quote:
billvon wrote:
Someone's inability to teach children a specific (and odd) lesson is not really germane to the conversation. Indeed, I would not think much of a parent who tried to teach his children that it was desirable to "be regarded as worthy of love by the wealthy." I would think much more highly of someone who taught their children that they should love whom they choose without regard to wealth, and that hard work, education and good judgment were the best ways to become successful (if that is what they desire.)


I didn’t mean to imply that the rationale for bringing children into the world is to acquire a high class mate; I only meant that I would not wish to bring children into a world in which they are guaranteed to be deemed unworthy of love by any one section of society. That is the reality today.

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Nov 22, 2014 12:24 am
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
Rory wrote:
It is a personal decision but in my opinion it is not morally justifiable to bring children into the world when there is a greater than equal to 80% chance of them failing to secure any meaningful kind of employment with good working conditions/security and a salary that would guarantee that their socioeconomic fortunes would be better when compared with simply receiving state welfare.

Interesting. I have a different take, but appreciate you explaining.
Rory wrote:
But the point is that the slight increase in wealth for the lower classes really doesn’t make enough difference in real terms for them to be able to define and realise their own fate;

I have to disagree with you here. At the lower income levels, even small and seemingly insignificant changes in income and wealth have PROFOUND impacts on the quality of life and ability to more successfully realize ones own fate.

Let me explain by example. When you're struggling to put gasoline in your car... Perhaps to get to one of your three jobs... then the difference between having $5 to spare on petrol and $15 to spare on petrol is enormous. Likewise, when putting food on the table is hard, the difference between $4 & $6 on any given day is large. That's extra produce or protein that one would otherwise have to go without.

That same effect carries forward to other goods and various services and also allows for greater cushion against unexpected expenses like a repair or medical need. In parallel, while I stipulate it's not perfect and larger changes in wealth or income are clearly better than smaller ones, small changes still provide greater opportunity to save for the future in ways that can accrue interest and they also allow for larger purchases.

Remember, even the largest of buckets will eventually overflow if you continue adding small drops. Of course it will overflow more quickly when larger drops are available, but that doesn't negate the positive impact of the smaller ones.

Anyway, my point is that it's really at the higher end of the income scale that small changes matter less (which is obvious when viewed as a percentage), not at the lower end where they can in very real ways be life changing.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Nov 22, 2014 2:14 am
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Small increases in wealth will have a disproportionately beneficial impact upon the quality of life of the impoverished when compared with the wealthy. However, I do not think that this justifies the implicit argument being made by other members that an increasing disparity between upper and lower socioeconomic classes is acceptable on the condition that all tiers of the hierarchy see some degree of increase in wealth. If the best that a welfare dependant or working class citizen can hope to achieve is the ability to purchase groceries of a slightly superior brand than previously, while the wealthy dominate 90% of the property market and let properties to the former who cough up their dead rent payment money each month, so making the rich richer and now able to dominate 95% of the property market... I would not regard that as a success either from a moral or a purely economic standpoint. The reality is that welfare dependants can only just afford to exist (never mind live) and are almost invariably unable to save towards a brighter future. But, hey, they can afford two more sausages in this week's food shop so, no problem with inequality right?

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Nov 22, 2014 6:39 am
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
billvon wrote:
Rory wrote:
It makes a point that might challenge previous contentions stated in this thread that growing socioeconomic inequality in itself is not malign so long as all tiers on the socioeconomic scale see a net increase in their wealth. The rich and 'super-rich' are able to dominate assets that deliver a financial return (property, diamonds, etc) . . .

Right. And again, provided the poor are ALSO making more money, that is a don't-care (outside of class jealousy, of course.)



Is there any reason to believe that this assumption would hold true in the present world market place? Are the poor also making more money?

If you look at China, it would be possible to say yes. Although it is hard to evaluate because most of those poor people are coming in out of rural agricultural communities where trade was primarily facilitated by barter or "off the grid" "under the table" types of transactions. When they become factory workers they start making an officially recognized income, but they also have to pay rent and other expenses out of that income, and many of these new expenses were things they didn't even incurr while living in their rural community.

They probably didn't have a TV set or running water before, though.

It's clearly not the case in the USA, though. The USA's real GDP has not grown by an ammount that would make it possible for so much wealth to concentrate on so few people, and the poorer class still come out ahead of where it was previously.

For it to be true that both rich and poor have become richer (but the rich more so), the USA's GDP would need to have massively sky rocketed over the last decade.



iNow wrote:
Rory wrote:
But the point is that the slight increase in wealth for the lower classes really doesn’t make enough difference in real terms for them to be able to define and realise their own fate;

I have to disagree with you here. At the lower income levels, even small and seemingly insignificant changes in income and wealth have PROFOUND impacts on the quality of life and ability to more successfully realize ones own fate.

Let me explain by example. When you're struggling to put gasoline in your car... Perhaps to get to one of your three jobs... then the difference between having $5 to spare on petrol and $15 to spare on petrol is enormous. Likewise, when putting food on the table is hard, the difference between $4 & $6 on any given day is large. That's extra produce or protein that one would otherwise have to go without.

That same effect carries forward to other goods and various services and also allows for greater cushion against unexpected expenses like a repair or medical need. In parallel, while I stipulate it's not perfect and larger changes in wealth or income are clearly better than smaller ones, small changes still provide greater opportunity to save for the future in ways that can accrue interest and they also allow for larger purchases.

Remember, even the largest of buckets will eventually overflow if you continue adding small drops. Of course it will overflow more quickly when larger drops are available, but that doesn't negate the positive impact of the smaller ones.

Anyway, my point is that it's really at the higher end of the income scale that small changes matter less (which is obvious when viewed as a percentage), not at the lower end where they can in very real ways be life changing.


The flipside is also true, of course. If gasoline was previously 2 dollars a gallon, and now it's 4 dollars per gallon, the worker will have to allocate more income to paying for the fuel to get from one job to the next.

That means other things will begin to drop out of their budget, which they were previously purchasing. This also carries forward, shrinking their margin, and giving them less of a buffer. Soon they switch from the more expensive full coverage health insurance to "don't get sick" health insurance.

The problem right now, though, is not basic commodities so much. The cost of "upward mobility" has increased to the point where poorer people really can't afford it. A small increase in income won't be enough to "buy in" to the good life if the cost of "buying in" grows by leaps and bounds but the poor peoples' incomes are growing by small steps. (And I say this hypothetically, because it is not at all clear that poor people's inflation-adjusted incomes are growing at all in the first world.)


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sun Nov 23, 2014 5:20 pm
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
kojax wrote:
The flipside is also true, of course. If gasoline was previously 2 dollars a gallon, and now it's 4 dollars per gallon, the worker will have to allocate more income to paying for the fuel to get from one job to the next.

That means other things will begin to drop out of their budget, which they were previously purchasing. This also carries forward, shrinking their margin, and giving them less of a buffer. Soon they switch from the more expensive full coverage health insurance to "don't get sick" health insurance.

The problem right now, though, is not basic commodities so much. The cost of "upward mobility" has increased to the point where poorer people really can't afford it. A small increase in income won't be enough to "buy in" to the good life if the cost of "buying in" grows by leaps and bounds but the poor peoples' incomes are growing by small steps. (And I say this hypothetically, because it is not at all clear that poor people's inflation-adjusted incomes are growing at all in the first world.)

Agree completely, and you're right about growth of income not keeping pace with the loss of purchasing power from those incomes for folks at the lower end of the earning spectrum who often work harder than anyone else around them and yet still struggle to get by.

Rory wrote:
Small increases in wealth will have a disproportionately beneficial impact upon the quality of life of the impoverished when compared with the wealthy. However, I do not think that this justifies the implicit argument being made by other members that an increasing disparity between upper and lower socioeconomic classes is acceptable on the condition that all tiers of the hierarchy see some degree of increase in wealth.

Also find myself agreeing completely with this.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Mon Nov 24, 2014 7:10 pm

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
Rory wrote:
But the point is that the slight increase in wealth for the lower classes really doesn’t make enough difference in real terms for them to be able to define and realise their own fate; to live their life in the way that they would choose to live it.

The ability to "live their life in the way they would choose to live it" is not purchased; it is the net result of all the decisions made by a person over the course of their lives. A billionaire might be miserable, and after three divorces decide that his life is nothing like he would choose it to be. Likewise, a teacher might be doing exactly what she wants to do with her life, even though she makes a tiny fraction of what the billionaire makes.

To put it another way, there is NO amount of increase of wealth that will make enough difference in people's lives to allow them to all live their lives in the way they would choose to live it.

However, that is not to say that improving real income (and thus standard of living) is a bad thing. A greater real income allows better access to healthcare, higher education, safe housing etc. Improved incomes are overall a good thing - and provided that, on average, we are improving wealth for the lower classes, we are heading in the right direction.

Quote:
They still will be blocked out of the kinds of markets that deliver a return.

What, specifically, will they be blocked out of? There is now more access than there has ever been to the stock markets, and anyone with a spare $100 can get an Etrade account and begin day-trading risky stocks. (Of course, this is not the best idea for someone who desperately needs that $100 - but again, that is their decision; they can choose foolish investments if they wish.)

Quote:
The only people that profit from workers working under poor conditions and with a lack of job security for pay that is less than equal to welfare handouts are the owners of the means of production. You would only be teaching your children to be subservient robots.

If an employee is not benefiting from his employment, he should (and ought to) quit. Most people decide to work because they feel that their employment is an equitable exchange - their labor for money. If they can get a better deal somewhere else, they should absolutely take it. If they cannot get a better deal anywhere else, then they are fortunate to have found the best possible trade for their skills.

Quote:
I didn’t mean to imply that the rationale for bringing children into the world is to acquire a high class mate; I only meant that I would not wish to bring children into a world in which they are guaranteed to be deemed unworthy of love by any one section of society. That is the reality today.

Hmm. Poor people are not "guaranteed to be deemed unworthy of love" in reality. People tend to fall in love based on who they meet and the chemistry between them, rather than their financial status. (Although I imagine if you teach children this it might become a self-fulfilling prophecy.)

Of course, since college kids hang out together they tend to meet other college kids rather than billionaires or teenagers living in slums, but our society is well mixed enough that a billionaire meeting someone like a housecleaner - and falling in love - happens with regularity. Google Piasecka Johnson for an example.


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Tue Nov 25, 2014 2:38 am
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
billvon wrote:
Rory wrote:
But the point is that the slight increase in wealth for the lower classes really doesn’t make enough difference in real terms for them to be able to define and realise their own fate; to live their life in the way that they would choose to live it.

The ability to "live their life in the way they would choose to live it" is not purchased; it is the net result of all the decisions made by a person over the course of their lives. A billionaire might be miserable, and after three divorces decide that his life is nothing like he would choose it to be. Likewise, a teacher might be doing exactly what she wants to do with her life, even though she makes a tiny fraction of what the billionaire makes.

To put it another way, there is NO amount of increase of wealth that will make enough difference in people's lives to allow them to all live their lives in the way they would choose to live it.

However, that is not to say that improving real income (and thus standard of living) is a bad thing. A greater real income allows better access to healthcare, higher education, safe housing etc. Improved incomes are overall a good thing - and provided that, on average, we are improving wealth for the lower classes, we are heading in the right direction.


The absolute extreme of perfect freedom is clearly unobtainable. But you can get closer and closer.

Your level of self determination drops to very nearly zero if you can't earn more money than just barely enough to meet your basic needs.

If you are at least able to save money over time (by force of discipline), then you have at least some potential for self determination. You could look at the intervening time as a period of "indentured servitude". Temporary slavery. You've no choice but to do what you are doing for a living, but at least it won't last your whole life.

However, if saving were impossible then it would be permanent slavery. This is often the way women are held in sex servitude. They're told they owe a certain amount of debt to their pimp and they won't be allowed to leave until they've paid it. And of course they are never allowed to earn enough money to make any substantial payments on that debt (since their pimp is the one deciding how much of the money they earn he'll let them have, and how much to consider "his cut".)

Quote:

Quote:
They still will be blocked out of the kinds of markets that deliver a return.

What, specifically, will they be blocked out of? There is now more access than there has ever been to the stock markets, and anyone with a spare $100 can get an Etrade account and begin day-trading risky stocks. (Of course, this is not the best idea for someone who desperately needs that $100 - but again, that is their decision; they can choose foolish investments if they wish.)


And how big is the return on e-trade, realistically?

The big earnings only go to people who can move money around in bulk, and fast. The small pittances of an earning go to people who put 100 bucks in. And I don't mean the guy who moves a billion and earns 10% is making more than the guy who moves 100 and gets 10%. That is true too, but irrelevant.

I mean the guy who can move a billion will probably get 20%.

Quote:

Quote:
The only people that profit from workers working under poor conditions and with a lack of job security for pay that is less than equal to welfare handouts are the owners of the means of production. You would only be teaching your children to be subservient robots.

If an employee is not benefiting from his employment, he should (and ought to) quit. Most people decide to work because they feel that their employment is an equitable exchange - their labor for money. If they can get a better deal somewhere else, they should absolutely take it.


That is only true if the worker has money in savings (or a good source of credit). Most workers are never more than about 2 months from homelessness if they quit their job.
Quote:

If they cannot get a better deal anywhere else, then they are fortunate to have found the best possible trade for their skills.


This the point: we don't want the "best possible trade for their skills" to be a bad trade.

"best possible" may open to change. In Mexico, "best possible" is much less than it is in the USA. That's why so many illegal immigrants risk their lives trying to cross the border.

We need to keep "best possible" as high as we can get it.

Accepting a bad "best possible" as inevitable is really the worst kind of defeatism an economist can display. If a particular economic ideology requires workers to be miserable, and to have few optioins, then it's fair to call that a dumb ideology. Unless all the other ideologies have the same problem.

Unmitigated free market leads there inevitably. Which is why I always say that unmitigated free market is a dumb idea.


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 26, 2014 10:31 pm

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
kojax wrote:
The absolute extreme of perfect freedom is clearly unobtainable. But you can get closer and closer.

Agreed
Quote:
Your level of self determination drops to very nearly zero if you can't earn more money than just barely enough to meet your basic needs.

I reject the concept that freedom and opportunity are always proportional to income. I've already given several examples where that was not true. There is a relationship - but it is certainly not universal.
Quote:
However, if saving were impossible then it would be permanent slavery.

No, slavery is a form of labor where you cannot leave your employ under threat of physical restraint or punishment. Calling a minimum wage job that does not allow you to save money "slavery" is like calling an off-color joke "rape."
Quote:
And how big is the return on e-trade, realistically?

You can lose everything or you can make triple digits. On average mutual funds return about 7% annually.
Quote:
The big earnings only go to people who can move money around in bulk, and fast.

The guy with $100 in Etrade can make the same percentages as the big boy day traders. The flip side, of course, is he takes the same risks.
Quote:
I mean the guy who can move a billion will probably get 20%.

Never mind 20% - 100% is quite possible (and has been done.) And again the same return is available to the small investor.

However, investing in the stock market does take some skill, and not everyone has that skill. The risk is losing everything you have. It is essentially a form of gambling, but a form that on average as a positive return.

Quote:
Quote:
If they cannot get a better deal anywhere else, then they are fortunate to have found the best possible trade for their skills.

This the point: we don't want the "best possible trade for their skills" to be a bad trade.

Agreed! It should be a trade that makes sense for both people.
Quote:
We need to keep "best possible" as high as we can get it.

Then it's not "best possible." Someone loses if you force it to be either higher than or lower than a fair trade.

Take two examples. Case 1 is a guy in high school who gets a job as a janitor making minimum wage with minimal benefits. They treat him poorly, but provides him with some money for college. This is both a good deal for him (easy money with no experience requirements) and for the company (cheap labor.) After a year in college he looks around and says "this job sucks, I'd much rather be a CEO." He looks around and gets an internship with an investment firm. This is a good deal for him (more money) and a good deal for the new company (they now have 'dibs' on a potentially valuable employee.) It's even a good deal for the previous employer, since they can now get a new minimum wage worker. Will this guye become a CEO? Maybe, maybe not. He will in general get the best job he is qualified for, if he looks for it.

Case 2 is a guy who does not want to complete high school. He prefers drinking with his buddies. He gets a job as a janitor making minimum wage with minimal benefits. They treat him poorly, but provides him with some money for beer and rent. With that money he is able to move out of his Mom's and (barely) live on his own with a roommate. This is both a good deal for him (easy money with no experience requirements) and for the company (cheap labor.) After a year pushing a mop and drinking beer he looks around and says "this job sucks, I'd much rather be an international restaurant owner." He looks around does not find any openings for drunken high school dropout international restaurant owners. He does not get promoted, nor does he get raises, because his problems (coming to work drunk, missing work due to hangovers) makes him less worthwhile than a better employee would be. He does not like this and feels his life sucks, especially since his employer is always badgering to get counseling/treatment that he does not want.

He is still, however, getting a good deal. He is being paid for his (minimal) skills, a wage that allows him to do at least some of what he wants to do (move out of his mom's and drink beer.) He may of course not have the freedom, money or talent to be an international restaurant owner. He may feel this is a problem. However it is, IMO, is a problem for him, not society, to solve.

Quote:
Which is why I always say that unmitigated free market is a dumb idea.

Agreed. Which is why I think our regulated free market is a good compromise.


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Wed Nov 26, 2014 10:59 pm
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Oh God, the Forum's gone all Good Will Hunting! I'll reply to this strawman tomorrow!

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Thu Nov 27, 2014 2:52 pm
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
Do you like apples? Well how 'bout them apples!

A good article from a few years ago from an investment fund manager discussing the flaws in the idea that (to borrow from the discussion points above) $100 and an eTrade account is good enough.

http://www.businessinsider.com/an-inves ... ew-2013-11
Investment Manager Explains Why 99.5% Of Americans Can Never Win

I also take exception with the implicit suggestion that people already struggling to pay bills and energy costs and buy food for today will still somehow have enough "spare" money to invest $100, own a computer and have ready access to a decent Internet connection, and that above all of these things they will also have enough free time outside of their 3 jobs and kids to actively trade on those funds... But I'll save that criticism for another day.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
kojax
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Nov 29, 2014 3:55 am
Original Member
Original Member

Joined: Mon Aug 15, 2011 11:43 am
Posts: 582

Offline
billvon wrote:
kojax wrote:
The absolute extreme of perfect freedom is clearly unobtainable. But you can get closer and closer.

Agreed
Quote:
Your level of self determination drops to very nearly zero if you can't earn more money than just barely enough to meet your basic needs.

I reject the concept that freedom and opportunity are always proportional to income. I've already given several examples where that was not true. There is a relationship - but it is certainly not universal.


It's not directly proportional. The relationship between income and freedom is more complicated than that.

It's more of a threshold. If you can exceed your minimum needs, then you are free to move to another position in life. That is freedom.

Imagine if you legs were just barely strong enough to hold you up, but you couldn't walk. Now imagine they're just slightly stronger, and you can sort of shuffle around, but you can't run. Now imagine you can run. After you've reached that point, making your legs even further stronger won't make much of a difference.

Making more money than your minimum needs is like having legs that are stronger than the minimum amount required to hold up your body weight.


Quote:
Quote:
However, if saving were impossible then it would be permanent slavery.

No, slavery is a form of labor where you cannot leave your employ under threat of physical restraint or punishment. Calling a minimum wage job that does not allow you to save money "slavery" is like calling an off-color joke "rape."



If you didn't have any other jobs available? That's like how your dog is free to run away, but he always comes back to where the food is.

It's a prison with a different kind of walls. Not the obvious kind, with chains, but just as effective as if it did have them.

There are actually some tent prisons set up in Arizona out in the desert. There's no need for walls on a prison like that. If the inmates decide to run away, where are they going to go? How far do you think they'll make it on foot in the desert?

Does it not count as a "prison" if the means of containing the prisoners is environmental like that?


Quote:


Quote:
And how big is the return on e-trade, realistically?

You can lose everything or you can make triple digits. On average mutual funds return about 7% annually.
Quote:
The big earnings only go to people who can move money around in bulk, and fast.

The guy with $100 in Etrade can make the same percentages as the big boy day traders. The flip side, of course, is he takes the same risks.
Quote:
I mean the guy who can move a billion will probably get 20%.

Never mind 20% - 100% is quite possible (and has been done.) And again the same return is available to the small investor.

However, investing in the stock market does take some skill, and not everyone has that skill. The risk is losing everything you have. It is essentially a form of gambling, but a form that on average as a positive return.


Inflation has been pretty low lately, so I guess 7% isn't bad.

http://www.usinflationcalculator.com/in ... ion-rates/


And I agree that it is true that when you join a mutual fund, you are getting the advantage of having lots of money gathered in one place, even if your personal contribution is small (and your return will be proportional.)

But mutual funds are so big they're too big. When they start buying a stock, their own purchases may influence the price, causing the price to go down (since they have single handedly increased the demand curve for that stock by buying so much of it at once.)

A rich person has other options. They can do their own research and invest in ventures. If you know an industry well, and choose the right venture, you can end up very rich.

That agility is very useful. The biggest windfalls are the ones that require you to do your own research. If everyone else knows the value of your chosen investment, then they'll invest and saturate the market. But the only way to invest discreetly and quietly is if you have either a lot of credit, or a lot of money in the bank. Those investments are the ones that make billionaires.

Quote:

Quote:
Quote:
If they cannot get a better deal anywhere else, then they are fortunate to have found the best possible trade for their skills.

This the point: we don't want the "best possible trade for their skills" to be a bad trade.

Agreed! It should be a trade that makes sense for both people.
Quote:
We need to keep "best possible" as high as we can get it.

Then it's not "best possible." Someone loses if you force it to be either higher than or lower than a fair trade.



That's not necessarily true either. The market doesn't alway choose the "most fair" option. That's not even what it's even designed to do.


Quote:

Take two examples. Case 1 is a guy in high school who gets a job as a janitor making minimum wage with minimal benefits. They treat him poorly, but provides him with some money for college. This is both a good deal for him (easy money with no experience requirements) and for the company (cheap labor.) After a year in college he looks around and says "this job sucks, I'd much rather be a CEO." He looks around and gets an internship with an investment firm. This is a good deal for him (more money) and a good deal for the new company (they now have 'dibs' on a potentially valuable employee.) It's even a good deal for the previous employer, since they can now get a new minimum wage worker. Will this guye become a CEO? Maybe, maybe not. He will in general get the best job he is qualified for, if he looks for it.

Case 2 is a guy who does not want to complete high school. He prefers drinking with his buddies. He gets a job as a janitor making minimum wage with minimal benefits. They treat him poorly, but provides him with some money for beer and rent. With that money he is able to move out of his Mom's and (barely) live on his own with a roommate. This is both a good deal for him (easy money with no experience requirements) and for the company (cheap labor.) After a year pushing a mop and drinking beer he looks around and says "this job sucks, I'd much rather be an international restaurant owner." He looks around does not find any openings for drunken high school dropout international restaurant owners. He does not get promoted, nor does he get raises, because his problems (coming to work drunk, missing work due to hangovers) makes him less worthwhile than a better employee would be. He does not like this and feels his life sucks, especially since his employer is always badgering to get counseling/treatment that he does not want.

He is still, however, getting a good deal. He is being paid for his (minimal) skills, a wage that allows him to do at least some of what he wants to do (move out of his mom's and drink beer.) He may of course not have the freedom, money or talent to be an international restaurant owner. He may feel this is a problem. However it is, IMO, is a problem for him, not society, to solve.


In an ideal world, the story you just told would be the story that we see.

In the real world, there are quite a lot of people who fall into category #1 who never get any of the doors opened to them that your guy got.

I definitely agree that there needs to be meritocracy. I only want to make sure there are doors that can open for people who deserve them. I don't want only 1 out of 100 guys like the guy in story number 1 to get lucky and be allowed to move up. I'd like something closer to 50% of them to get doors opened (100% might be unrealistic.)



Quote:

Quote:
Which is why I always say that unmitigated free market is a dumb idea.

Agreed. Which is why I think our regulated free market is a good compromise.



We definitely agree on that.


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Nov 29, 2014 3:24 pm
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
^ The "in an ideal world" point is IMO the strongest in conversations like this. Too often in my experience some folks in these discussions rely on pure logic and assumptions or premises that do not cleanly map to our reality, and consequentially it leads to some well intentioned but often absurd and unrealistic conclusions that don't actually represent the world in which we live.

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Nov 29, 2014 11:04 pm
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
Billvon,

Your argument that nobody is ever in a position to live their life in the way that they would choose to, merely because no single option guarantees 100% happiness, is naive and out of sync with the way that people make lie decisionscon a day-to-day basis. Nobody who has reached adulthood with an intact brin believes that marriage or education or employment is going to guarantee perfect happiness 365/24/7. However, they will rightly be aware that each if these options is likely to improve their overall prospects for happiness (assuming that they have picked the right partner/course/career). I think that people value the opportunity to choose between alternative options in life not because it guarantees happiness as an outcome but because in doing so they are able to progress in learning more about the world and themselves and so ultimately to make well-informed decisions as to which life options are likely to lead to happiness. Imagine if you lived in a splendid mansion with two well-intentioned but overbearing parents. The parents make all of your decisions for you on the basis of what is empirically known to make peopke happy. So they tell you when and where you are going to participate in what event and to what rnd. Even if you happen to like all of the things forced upon you, the fact that your agency is undermined will lead paradoxically to misery.

My original point was to say that, while it is better that both the lower and upper classes see increases in their wealth, rather than neither or only one seeing an increase, it very much depends on the relative extent of increase. If the rich person is able to expand their stranglehold on the property market by 20% while the poor person is only able to add a few items to their grocery list each week, then tgat is not going to be a positive outcome for the poor person. They are still impoverished. The kinds of things that have some chance of genuinely improving living standards: education, home ownership and high quality employment, are the parameters against which progress should be measured.

The impoverished are blocked out of the property market. We have seen this in the UK: diminished investment in property and increased demand coupled to the fact that tge younger generations have been penalised since the recession, has resulted in the so-called 'boomerang' generation of people aged in their 20s, 30s and even higher age groyps having to move back into their parental homes.

Talking about employment opportunities as 'deals' does not make sense if all of the options available to the prospective employee - tgrough no fault of their own - are bad options.

It is true that some people choose to cross the class divide when choosing a lufe partner but they are in the minority. Wealthy familues are encouraged

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
Rory
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Nov 29, 2014 11:18 pm
User avatar

Joined: Wed May 07, 2014 6:02 am
Posts: 1895

Offline
to associate only with other wealthy families. From a Darwinian perspective this makes sense but what I cannot tolerate is the attitude of some wealthy people who think that because of their material status they are intrinsically 'better than' those who own less than themselves.

As for your janitor analogy - it seems that your argumemt rests on the importance of personal responsibility. Once upon a time I would have agreed with you, but having seen firsthand the opportunities made available to certain people ob the basis of personal connections rather than merit, I can only say that perhaps you should open your eyes. There are varioys games in life that each of us knowingly or unwittingly engage in. The main one is evolution although there are others. Each game requires a self-estimation of value relative to others and relative to others' perceptions of our own worth. Like a game of Deal or No Deal. The only strategy available to us amidst tge chaos and noise of pure luckbor chance is to periodically look back at tge board and to make estimations based on probabilities. As such, people find their choen place in the labour market based on considerations of tgeir starting point, likely offers, and the probabilities of various uncontollable events. The arrogance of the rich man derives from his having picked the 250k box and thinking therefore that it was his superior Godlike abilities what done it. The truly wise person only knows when is the right time to deal. And they usually settle for a more modest lot.

_________________
If you are doomed to be boring - make it short. Andre Geim


Top
billvon
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Mon Dec 01, 2014 5:54 pm

Joined: Thu Oct 02, 2014 5:23 pm
Posts: 86

Offline
kojax wrote:
It's not directly proportional. The relationship between income and freedom is more complicated than that.

DEFINITELY true!
Quote:
It's more of a threshold. If you can exceed your minimum needs, then you are free to move to another position in life. That is freedom.

And if you cannot meet your minimum needs, you are also free to move to another position in life. (I've given several examples already.) That is also freedom. It is certainly not as easy if you are poor - but again, freedom does not mean "freedom from effort."
Quote:
Imagine if you legs were just barely strong enough to hold you up, but you couldn't walk. Now imagine they're just slightly stronger, and you can sort of shuffle around, but you can't run. Now imagine you can run. After you've reached that point, making your legs even further stronger won't make much of a difference.

If you spend your entire life in a chair anyway none of that matters. If you are like many Americans, as long as you can walk it doesn't matter if you can run. If you are a professional football player then making your legs stronger than you need to run makes a very big difference indeed.
As you mention above, such relationships are complicated.
Quote:
If you didn't have any other jobs available? That's like how your dog is free to run away, but he always comes back to where the food is.

Correct. He can decide to come back for food. Or he can find another family that will feed him. (We adopted one dog and one cat that way.) Or he can go feral and find his own food, which thousands do every year.
Quote:
There are actually some tent prisons set up in Arizona out in the desert. There's no need for walls on a prison like that. If the inmates decide to run away, where are they going to go? How far do you think they'll make it on foot in the desert? Does it not count as a "prison" if the means of containing the prisoners is environmental like that?

If you're put there by the government in order to physically confine you against your will, yes - it is still a prison. Doesn't matter what the bars are made of.
Quote:
And I agree that it is true that when you join a mutual fund, you are getting the advantage of having lots of money gathered in one place, even if your personal contribution is small (and your return will be proportional.) But mutual funds are so big they're too big. When they start buying a stock, their own purchases may influence the price, causing the price to go down (since they have single handedly increased the demand curve for that stock by buying so much of it at once.)

You seem to be saying two different things here. Really big money can make a lot of money because of the "power of their money", but really big money loses money during investment because of its size. (BTW I think both are true but in very limited ways; neither is a good generalization.)

In general, sudden large purchases _increase_ the price of a stock. (Simple supply and demand.) People of course try to game the system to make money this way, but so many people are trying to game it in such a way that the returns aren't much above average.

Also there are plenty of mutual funds out there from tiny (run by a single investor) to mammoth (like the Vanguard funds.) So if an investor worries about the effects of a large mutual fund, they are free to choose smaller ones.

Quote:
A rich person has other options. They can do their own research and invest in ventures. If you know an industry well, and choose the right venture, you can end up very rich.

Agreed. And a poor person can do their own research and invest in risky stocks. If they know an industry well, and choose the right venture, they can end up very rich. I know a few people of very low income who had that happen to them during the 2000 tech stock boom. Unfortunately, all but two did not get out in time and lost almost everything.

That agility is very useful. The biggest windfalls are the ones that require you to do your own research. If everyone else knows the value of your chosen investment, then they'll invest and saturate the market. But the only way to invest discreetly and quietly is if you have either a lot of credit, or a lot of money in the bank. Those investments are the ones that make billionaires.

Quote:
That's not necessarily true either. The market doesn't always choose the "most fair" option. That's not even what it's even designed to do.

The market is only fair within the very narrow confines of a single transaction. If you get the best possible value for your labor (as valued by employers) then you have made the best possible trade. That is fair at the level of the transaction. That may well not be fair at a larger societal level (i.e. "I have crippling PTSD from serving in Iraq; it's not fair that my labor is now valued less!") - which is why we have take other measures as a society to ameliorate the problems caused by the reduction in value of their labor.
Quote:
In the real world, there are quite a lot of people who fall into category #1 who never get any of the doors opened to them that your guy got.

Which doors did he need opened? (In other words, in the example above, which doors did he not open himself?)
Quote:
I definitely agree that there needs to be meritocracy. I only want to make sure there are doors that can open for people who deserve them. I don't want only 1 out of 100 guys like the guy in story number 1 to get lucky and be allowed to move up. I'd like something closer to 50% of them to get doors opened (100% might be unrealistic.)

That's a great goal, and I agree we should be working towards making sure there are educational and training opportunities for everyone. But I think we are closer to the 50% than the 1% right now.


Top
iNow
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Jan 17, 2015 3:59 am
User avatar
Original Member
Original Member

Joined: Thu Aug 04, 2011 11:40 pm
Posts: 5491
Location: Austin, Texas

Offline
Speaking of education, we perhaps have a deeper societal need to change our priorities and rebalance our regulatory focus, especially when we look at studies showing how big of a negative impact poverty, economic stressors, and difficulty finding food have on childhood education outcomes and long-term performance.

http://www.marketplace.org/topics/wealt ... ic-schools
Quote:
We’ve passed a sobering milestone in this country. For the first time in at least 50 years, the majority of students in public schools are considered poor. <...> We tend to think of poverty as a problem concentrated in rural areas or the inner city, he says. Those boundaries are falling away.

“Even in the suburbs, low-income students are now 40% of the student population in the public schools,” Suitts says. “It’s everyone’s problem.”

_________________
iNow

"[Time] is one of those concepts that is profoundly resistant to a simple definition." ~C. Sagan


Top
Futilitist
Post  Post subject: Re: 1950-2050: The Golden Age?  |  Posted: Sat Feb 07, 2015 7:49 am
User avatar

Joined: Fri Sep 14, 2012 9:33 pm
Posts: 656

Offline
Rory wrote:
Does anybody else ever think that in the West we may well be living in what may prove to be for humanity the golden age of civilisation? We find ourselves in a society with sufficient division of labour to ensure that the standards of service provided by each sector are generally high, and with a mechanism of redress for those occasions when performance falls short of a goven standard. We are sufficiently economically advanced to ensure that even the poorest are guaranteed a basic living standard. We have access to information on other cultures that is globalvand instant and that so far is not heavily restricted by the internet police. As such we have freedom of thought and speech. Even our health care is of a good standard and is affordable for most people. Education standards are high with universal access.

Yet, our civilisations face a number of concurrent serios threats that, if tackled individually, would probably be manageable, but their simultaneity may mean that lufe post2050 is fairly precarious.


I think you might well be justified in saying that we are currently experiencing a "golden age". However, you have absolutely no basis to extend that golden age arbitrarily to the year 2050. The years 2015-2050 have yet to happen and might not be a smooth continuation of today's "golden age". You could easily have had the same discussion using 1950-2015 as the duration of your golden age and then we could look at actual historical data to evaluate the premise.

Anyway, If you except that we might eventually get overwhelmed by our problems, why can't you imagine that we might get overwhelmed sooner than 2050?


---Futilitist :ugeek:


Top
Display posts from previous:  Sort by  
Print view

Who is online
Users browsing this forum: No registered users and 0 guests
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
Jump to:   
cron

Delete all board cookies | The team | All times are UTC


This free forum is proudly hosted by ProphpBB | phpBB software | Report Abuse | Privacy