yes I am irate. I read Stiglitz on inequality. « Economics Job Market Rumors

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Thread: 21 Goods vs 13 No Goods

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yes I am irate. I read Stiglitz on inequality.

Economist
e3d3

I'm not talking about the unemployed. Full-time employees are working less every year, while consuming more than ever.

http://research.stlouisfed.org/fred2/series/USAAHWEP

http://research.stlouisfed.org/fred2/series/PCEC96/

It's not just us. Virtually every developed economy or developing economy are seeing the same trends.

They're also enjoying more leisure time and have never worked less than at this point in time.
See, people aren't unemployed. They're enjoying leisure.
Also, do you even understand how budget constraints work?

10 years ago # QUOTE 4 Volod 1 Vlad !
Economist
e3d3

Here's Germany:

http://research.stlouisfed.org/fred2/series/DEUAHWEP

http://research.stlouisfed.org/fred2/series/DEUPFCEQDSNAQ?cid=32273

France:

http://research.stlouisfed.org/fred2/series/FRAAHWEP

http://research.stlouisfed.org/fred2/series/FRAPFCEQDSNAQ?cid=32272

South Korea:

http://research.stlouisfed.org/fred2/series/KORAHWEP?cid=32286

http://research.stlouisfed.org/fred2/series/KORPFCEQDSMEI?cid=32286

--------------------

Clearly, capitalism has done well for those countries.

10 years ago # QUOTE 4 Volod 1 Vlad !
Economist
8266

People who claim that the poorest Americans are worse off today than 10/20/30 years ago have not been looking at the data seriously.

It's true that salaries of the working class has stayed stagnant or even decreased. But that's coupled with huge increases in non-pecuniary benefits, leaving more of their income for daily consumption. If you use the right accounting method, it's almost impossible to see any particular good or service where the poor actually consume less today (except for things like tobacco).

Of course, some things have gotten more expensive. Healthcare has gotten a lot more expensive, but that's coupled with pretty sharp increases in technology (the only reason life expectancy didn't increase sharply is because Americans have been getting a lot unhealthier.) Higher education has also been getting more expensive, but private tertiary education is and has always been a luxury for the rich and the upper middle class. This does not affect the poorest 20-30% as much.

Now I get the fact that there's a lot of anger over the huge income gains by the rich compared to the poor. I'd love to find some way to change that too. But it's important not to underestimate how far we've come in this last few decades. Ultimately, the people want to know that their lives are getting better and their children's lives will get better. This is as much a factor in their subjective wellbeing as anything else.

10 years ago # QUOTE 9 Volod 0 Vlad !
Economist
bdff

You guys are really voting good on that random unlabeled shit graph that a blogger made and OP found on google?
How about this, read the f**king paper if you want to talk "academically" about it:
http://elsa.berkeley.edu/~saez/saez-UStopincomes-2010.pdf
There we go. Top 1% income did infact fall more proportionally - it fell three times more. However the top 1% have also recovered 13 times more so far; which makes it so that overall the lower 99% has lost a bigger proportion of their income through 2011 (i.e. the income share of the top 1% is higher now than it was pre-crisis).

Was going to rage about libtards, but lo and behold you posted a good source. Table 1 is pretty damning. Looks like the "recovery" really has been concentrated so far, but perhaps this is how the beginning of most recoveries is? I'll have to look at the data more.

10 years ago # QUOTE 0 Volod 0 Vlad !
Economist
8f49

Most of the wealth transfer of the past couple days has not been from lower-class Americans to upper-class ones, it's been from lower-class Americans to lower-class foreigners. So who gives a f**k, stop looking at national Gini and start looking at global Gini.

10 years ago # QUOTE 7 Volod 2 Vlad !
Economist
bdff

Most of the wealth transfer of the past couple days has not been from lower-class Americans to upper-class ones, it's been from lower-class Americans to lower-class foreigners. So who gives a f**k, stop looking at national Gini and start looking at global Gini.

And how would global Gini tell us anything about wealth transfers from lower income Americans to lower-income foreigners? In fact what would the point of a global Gini even be except for looking at how global income inequality is changing through time, but even then it's hard to come up with any sort of narrative or solution with that.

At least national Gini allows for comparison.

10 years ago # QUOTE 0 Volod 1 Vlad !
Economist
f3c2

In fact what would the point of a global Gini even be except for looking at how global income inequality is changing through time, but even then it's hard to come up with any sort of narrative or solution with that.

Because the libtard narrative is "more inequality means that the American rich are expropriating the American poor." Not only is this narrative wrong in no small part because the economy is open, but its policy prescriptions are perverse because they privilege the American poor over the non-American poor.

10 years ago # QUOTE 4 Volod 3 Vlad !
Economist
7444

Pictures do not parse. Formulas only

10 years ago # QUOTE 0 Volod 0 Vlad !
Economist
7444

Pictures do not parse. Formulas only

10 years ago # QUOTE 0 Volod 0 Vlad !
Economist
7444

Saez's work is great, but the following conjecture is unjustified:

"number of factors may help explain this
increase in inequality, not only underlying technological changes but also the
retreat of institutions developed during the New Deal and World War II - such
as progressive tax policies, powerful unions, corporate provision of health and
retirement benefits, and changing social norms regarding pay inequality. We
need to decide as a society whether this increase in income inequality is
efficient and acceptable and, if not, what mix of institutional and tax reforms
should be developed to counter it."

10 years ago # QUOTE 1 Volod 0 Vlad !
Economist
bdff

In fact what would the point of a global Gini even be except for looking at how global income inequality is changing through time, but even then it's hard to come up with any sort of narrative or solution with that.
Because the libtard narrative is "more inequality means that the American rich are expropriating the American poor." Not only is this narrative wrong in no small part because the economy is open, but its policy prescriptions are perverse because they privilege the American poor over the non-American poor.

I didn't mean narrative as in "tell me a story about what's happening with all your ideological ideas". Maybe I used the wrong word, I meant as in what is actually happening. I imagine it's hard to really know what is happening when the global Gini changes.

It's like looking at the US Gini without ever looking at any other countries. The statistic loses a lot of its value.

10 years ago # QUOTE 0 Volod 0 Vlad !
Economist
7444

Something interesting about Saez's work (which I think a lot of people using his data to advocate for policy change ignore/or are ignorant of) is the definition of income. It includes "wages and salaries, pensions received, profits from businesses,
capital income such as dividends, interest, or rents, and realized capital
gains". This is due to data limitation (income is taken from tax data), but it should be clarified this may either amplify or dampen their findings. For example, health insurance benefits people receive from work. Also, it excludes transfer payments (which is appropriate, but advocates often think this is even after transfer payments). Compensating differentials, etc.

10 years ago # QUOTE 2 Volod 0 Vlad !
Economist
0d52

I'm not talking about the unemployed. Full-time employees are working less every year, while consuming more than ever.
http://research.stlouisfed.org/fred2/series/USAAHWEP
http://research.stlouisfed.org/fred2/series/PCEC96/
It's not just us. Virtually every developed economy or developing economy are seeing the same trends.
They're also enjoying more leisure time and have never worked less than at this point in time.
See, people aren't unemployed. They're enjoying leisure.
Also, do you even understand how budget constraints work?

Are you sure that's full time employees only and are you sure that they are voluntarily working less? I would guess it includes a lot of people with part time jobs who would like to be working in full time jobs but aren't able to find one.

Also your consumption graph is not breaking consumption down by group, which is what we're talking about. Nobody is suggesting that overall consumption hasn't increased. What people are saying is that consumption of the bottom 80% or so has not really increased. I don't know if that's true or false, but that's what they are saying and your graph doesn't address it at all.

And consumption didn't fall as much during the recession since there's been consumption smoothing when possible (digging into retirement accounts, taking social security early, etc) - so people may be worse off than consumption data would hint at.

10 years ago # QUOTE 0 Volod 3 Vlad !
Economist
3fff

The reason we've been trained generally to avoid or rail against inequality issues is that inequality complaints are rooted in rich-steal-from-poor logic. And that's not a correct way to view economic growth. But if you believed that about trade, you'd be f**king furious too. Trade isn't zero sum -- that point needs to get hammered on over and over again until the man in the street stops believing it. YOu don't get growth from transfers and rent capture etc. You get it from technology. Another point we need to hammer on. All of this other crying and pedantry in data sets just distracts from the real, fundamental arguments here. Once you take zero-sum away from people, they have no basis for ethical outrage.

Second, CPI is biased upward -- see the Boskin Commission reports. So even if the middle American has had a "real" income that's flat -- she's gained 1% a year in quality, approximately. That's a 40% increase in real income for all of these people alleged to be languishing. The intermediate macro point about a car being different in 1970 than today when constructing the basket isn't a small f**king point. It's a *huge* point about technological increase -- increase that we will never be able to accurately measure, because there's so much of it, and it explodes-more every year.

Third, what we really need to point out to people in the popular press is that when the size of the pie starts growing slower, people turn to attacking the size of each other's slices. And that's where this ninny-binny punditry about inequality is coming from.

10 years ago # QUOTE 5 Volod 1 Vlad !
Economist
3fff

And inequality is only a problem if you believe social mobility doesn't exist, which it's not clear it doesn't. If you believe the tide doesn't raise all ships, inequality is a huge problem.

Inequality is not a huge problem. And I'd rather not live in a world where everyone is the same. Egalitarianism is a six year old's ethics: "he got a bigger piece than me."

10 years ago # QUOTE 3 Volod 4 Vlad !
Economist
6053

Pictures do not parse. Formulas only

10 years ago # QUOTE 0 Volod 0 Vlad !
Economist
0d52

fffa, why would any individual care if the pie is bigger if they are getting a smaller slice?

I think this is the point that needs to be hammered into every single person that studies welfare effects of economic reform -- just because there is overall growth doesn't mean there aren't people who are worse off. Trade is a perfect example of where there are winners and losers -- hence it's 100% rational for a lot of the people who oppose free trade to do so.

And for what it's worth, I don't think you understand zero sum games. You can decompose free trade policy into two games for instance. The first where you decide whether to do free trade or not. The second one where, conditional on free trade, there is a zero sum game over who captures the gains from free trade using transfers if necessary.

10 years ago # QUOTE 2 Volod 8 Vlad !
Economist
8058

Name one significant thing that the average American is consuming less of compared to 15 years ago. I dare you.

Vegetables and books.

10 years ago # QUOTE 2 Volod 2 Vlad !
Economist
8266

Trade is a perfect example of where there are winners and losers -- hence it's 100% rational for a lot of the people who oppose free trade to do so.

In most cases of increased free trade, the winners are the vast majority of Americans (including the vast majority of the working class) and the losers are a small minority of workers in a particular industry.

I guess it makes sense for an automobile worker to oppose free trade for the automobile industry. But is there really anyone who could rationally oppose free trade in GENERAL? The welfare gain from each particular industry's free trade adds up quickly, and I imagine there's nobody that's really much worse off in the end.

Not to mention that the vast majority of middle-class Americans and intellectuals claim to care about the poorest workers the most - and the poorest workers are those in developing countries, who gain a lot from less protectionism in the U.S.. It's very, very difficult to find a coherent rationale for why an intellectual might be against free trade in general.

10 years ago # QUOTE 7 Volod 4 Vlad !

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yes I am irate. I read Stiglitz on inequality.

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