Hudson on the Piketty Phenomenon

[ProdigyofZen]

Re: Hudson on the Piketty Phenomenon

Not debateable? Thanks, God, for weighing in.

Rarely have I ever been called God, it doesn't suit me. The reality is that inequality is at its historical highs, that is not debatable but what is debatable is the why and how and should we do anything about it.

If we can't even agree that inequality is at its historical high than there is no use in debating the reasons for it.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

There's no particular relationship between a person's income and their value to society.
I'd say police and sanitation inspectors are near the top in terms of protecting my safety, but they lag way behind lawyers, advertising executives, and pharmaceutical representatives in terms of salary.

In Japan, police had very high prestige, and it was a very sought after job. Perhaps the important jobs should be paid in "prestige" if they lack payment in $.

I can't think of a solution to this very fundamental problem, and it deserves to have a special word referring to it.

In fact there IS a particular relationship between a person's income and their value to society. It's called supply and demand. It's partially distorted in the case of government workers but even then there is usually some supply and demand relationship.

Your logic is that because something is important, it should be expensive. Water is vital to your safety/survival, but because it is so plentiful, it is very cheap. Do you propose that the price of water be artificially inflated to match it's importance in your life?

The people that take away your garbage are also critically important to ensuring you have a safe living environment. I dare say the service they provide is far more beneficial to society than a surgeon who can remove a brain tumor. However, the skills needed to drive a truck and throw garbage in it are far more common than those of a brain surgeon. For this reason society is willing to pay more for the skills of the surgeon.

This isn't a problem so much as it is a fact of life. The problem comes when people think they can suspend reality and that everyone will benefit as a result.

As for paying people in prestige...If you have a boss I'm sure he will gladly cut your pay and pay you in prestige instead.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

Rarely have I ever been called God, it doesn't suit me. The reality is that inequality is at its historical highs, that is not debatable but what is debatable is the why and how and should we do anything about it.

If we can't even agree that inequality is at its historical high than there is no use in debating the reasons for it.

The issue I have with the people who think "something" should be done is that they only think this if they will be on the receiving end (or want to sell books).

People on the lower end in the US want more income equality within the US. But they sure don't want income equality if it includes India and China.

http://www.bbc.com/news/magazine-17512040

On a global basis this study claims the average wage (using purchasing power, not nominal which is even lower) is about $18,000. Only the very bottom sliver of the US workforce would benefit from globalized equal income.

People protesting for $15 an hour don't want income equality. They want to make 70% more than what the average worker in the world makes.

[ProdigyofZen]

Re: Hudson on the Piketty Phenomenon

On a global basis this study claims the average wage (using purchasing power, not nominal which is even lower) is about $18,000. Only the very bottom sliver of the US workforce would benefit from globalized equal income.

People protesting for $15 an hour don't want income equality. They want to make 70% more than what the average worker in the world makes.

Spencer this isn't much of an argument. Sure everything is relative but the poor living in the US have to live in the US and compete with wages here not the wages in China or India.

But I can agree that usually people who think something should be done are on the lower end (as it benefits them) but then again the people on the high end have benefited from FIRE policies for the better part of 30+ years, why would they complain?

Every leader of every country is "supposed" to enact policies that help their own citizens not the citizens of other countries.

[Milton Kuo]

Re: Hudson on the Piketty Phenomenon

People protesting for $15 an hour don't want income equality. They want to make 70% more than what the average worker in the world makes.

It costs at least 70% more to live in the U.S. than where the average world worker lives.

[Woodsman]

Re: Hudson on the Piketty Phenomenon

People protesting for $15 an hour don't want income equality. They want to make 70% more than what the average worker in the world makes.

Really, that's what you think? Ever consider how much more do these people take, spence, percentage-wise?

Top 1% = $368,238 (20.9% of income)
Top 0.5% = $558,726 (16.8% of income)
Top 0.1% = $1,695,136 (10.3% of income)
Top 0.01% = $9,141,190 (5% of income)>
click for larger chart


Does this matter at all to the conversation on inequality?

It sure seems we are quick to put blame on the weakest and least powerful among us. Why, I wonder?

[DSpencer]

Re: Hudson on the Piketty Phenomenon

Spencer this isn't much of an argument. Sure everything is relative but the poor living in the US have to live in the US and compete with wages here not the wages in China or India.

But I can agree that usually people who think something should be done are on the lower end (as it benefits them) but then again the people on the high end have benefited from FIRE policies for the better part of 30+ years, why would they complain?

Every leader of every country is "supposed" to enact policies that help their own citizens not the citizens of other countries.


[/COLOR]

You don't think workers in the US have to compete with workers in China or India?

My point is that someone who is "for equality" is not very convincing when they are only for the specific equality that benefits them.

If inequality is bad, then equality is good right? But is that what people REALLY want? Or do they just say that when it's convenient?

[DSpencer]

Re: Hudson on the Piketty Phenomenon

It costs at least 70% more to live in the U.S. than where the average world worker lives.

Which is why the study I quoted uses purchasing power parity dollars which equate nominal amounts into the equivalent purchasing power of $1 in the US.

I also specifically pointed that out in my original post so that people wouldn't have to read the article to realize that. All for nothing it appears.

[DSpencer]

Re: Hudson on the Piketty Phenomenon

Really, that's what you think? Ever consider how much more do these people take, spence, percentage-wise?

Does this matter at all to the conversation on inequality?

I have seen similar visuals before and never have I claimed inequality doesn't exist. However, I was trying to address the other questions posed by PoZ.

Simply saying "look how much money these rich people have, therefore we should institute a heavy tax on their wealth and give it to ourselves" is not a sound argument in my opinion.

[ProdigyofZen]

Re: Hudson on the Piketty Phenomenon

Simply saying "look how much money these rich people have, therefore we should institute a heavy tax on their wealth and give it to ourselves" is not a sound argument in my opinion.

But no one here is advocating that?

[Milton Kuo]

Re: Hudson on the Piketty Phenomenon

Which is why the study I quoted uses purchasing power parity dollars which equate nominal amounts into the equivalent purchasing power of $1 in the US.

I also specifically pointed that out in my original post so that people wouldn't have to read the article to realize that. All for nothing it appears.

Whoops. In my case, yes, it was all for nothing and I'm sorry for having a brain glitch that didn't see that. However, the article does say that PPP is not a very precise way of measuring things and there's going to be some hand-waving. Hand-waving by economists always lights up the "fiction" sign in my head. That said, even if PPP is an accurate way of measuring purchasing power across nations, it's my opinion that it's not good enough to say, "We here in the U.S. have a standard of living comparable to places like India and China if we factor in PPP. Good enough. There's no real reason to want any better."

Whatever happened to the ideal that had 1950's billboards in the U.S. proclaiming, "The highest standard of living in the world."? Are we also going to be content if our universities become comparable to other universities in typical countries of the world? Should Kennedy have said, "Let's not bother going to the moon because, heck, it's not like anyone is close to landing a man on the moon!"?

I hardly consider myself a liberal and I positively detest giveaways but it really bothers me that there are citizens in this country who want to earn a living but can only find work that pays about $8.00/hour. Yes, these people are unskilled but at $8.00/hour, they'll be hard-pressed to amass enough money to pay for everyday living expenses (rent, food, transportation, utilities) and still have the time and monetary resources to pursue additional training that will allow them to earn more money.

One of the things I like(d) about the U.S. is that even truly wealthy people can walk among regular people without much worry about getting kidnapped, robbed, or murdered. This is only possible in a nation where the regular people are generally well-off. If the U.S. continues on its road of impoverishing the vast majority of its population, it will end up being like South America where the wealthy live in concrete houses surrounded by concrete walls topped with barbed wire with armed guards patrolling the premises. If that should happen, who are the prisoners? The people inside the walls or the people outside the walls?

[Southernguy]

Re: Hudson on the Piketty Phenomenon

"If that should happen, who are the prisoners? The people inside the walls or the people outside the walls?"
The people inside de walls have the choice to give their richess away and live outside the walls.
The other bunch have no choice.

[llanlad2]

Re: Hudson on the Piketty Phenomenon

In fact there IS a particular relationship between a person's income and their value to society. It's called supply and demand. It's partially distorted in the case of government workers but even then there is usually some supply and demand relationship.
The people that take away your garbage are also critically important to ensuring you have a safe living environment. I dare say the service they provide is far more beneficial to society than a surgeon who can remove a brain tumor. However, the skills needed to drive a truck and throw garbage in it are far more common than those of a brain surgeon. For this reason society is willing to pay more for the skills of the surgeon.

This isn't a problem so much as it is a fact of life. The problem comes when people think they can suspend reality and that everyone will benefit as a result.

I agree with you there is a particular relationship between a person's income and their value to society. It's inverse. The more useful a person is to society the less they generally get paid. As for the supply and demand argument it doesn't really hold up. In some countries a surgeon earns 10x a manual worker whilst in others they may earn less. There was no shortage of people who could have been or wanted to be CEO of APPLE. Tim Cook could stay at home 365 days a year and Apple would still make billions-so why does he get paid 365 million dollars a year? I would have done it for far less. If he was taxed 90% on that it would be called "government robbery". Yet he along with the board are are allowed to rob the shareholders for their own personal gain and be respected for it?

[vt]

Re: Hudson on the Piketty Phenomenon

http://money.cnn.com/2013/12/30/tech.../tim-cook-pay/

Tim Cook took home $40 million in 2013, not $365 million. Though one could argue even $40 million was way too much. Figures should be backed up by documentation.

Business owners who sacrifice and build a business (often failing a couple of times along the way, including bankrupticies), plus create jobs also deserve higher pay.
Most can agree that certain corporate executives, hedge fund managers, etc. are paid way too much.

As for Doctors we've reviewed this before. Not only do they have 4 years of medical school, but in some cases 6 to 7 years of very low paid residency. They lose a decade or more to those with a bachelor's degree. They deserve higher pay and work harder than most people.

The problem with the Piketty's argument is that it treat anyone with an income of $250K as undeserving. We already taxes estates greater than $5 million at a high rate. There are people with higher incomes that deserve them and many who don't. There are those with higher net worth that use it for good and many who don't. How does one decide who does and who doesn't?

We've also discussed charity where some bequests have done much more than government programs, many of which enrich bureaucrats and lobbyist clients.

In high tax states incomes are already being taxed at over 50% above certain levels.

What befuddles many who are not wealthy, including myself, is why anyone with high income and/or net worth is attacked for success.

[vt]

Re: Hudson on the Piketty Phenomenon

Inequality was the highest during the early 2Oth century:






This is a good non-partisan study of inequality:

http://www.stanford.edu/group/scspi/...U_2014_CPI.pdf