Financial Reform Bill Passed in SenateFollow

So as a broad question, if a choice comes down to life or liberty, which do you choose?

A liberal something, I've no doubt.

It doesn't have to do with mobility rather with the gap between rich and poor. A system with very good upward mobility will have a smaller range as there is less cost to the system when people move up, and so more people will move up. This system will also appear very good on this scale. A system with a very large gap and limited upwards mobility, will appear bad using the same scale. I know you don't agree with the metric used here, but you're also wrong in terms of what would be measured. Are you trying to insist that the US has better economic mobility then most other countries?


Edited, May 25th 2010 3:43pm by Xsarus

Yet you're unwilling to allow others the liberties they desire.

I would guess that it is primarily due to the fact that the liberty desired by some does not infringe on the liberties of others, where as the "liberties" desired by others infringe directly on the liberty of some.

So how do you reconcile this with your stance on abortion. If you you believe liberty is more important than life, how can you support the government taking away liberty from a woman to preserve the life of the fetus?

I don't want to turn this into an abortion thread. Mostly, I want to know more about how your statement of valuing liberty over life relates to many of your views. I don't know your stance on a draft in war time, but that that would seem to be another potential conflict.

I feel allowing people to form corporations infringes on my right to recoup my investment from the owners should it go belly up.

This is a common, but false, assumption. Remember, we're talking about relative population levels. Imagine we were to graph the economic status of the entire population, by ordering everyone by their total yearly earnings from left to right. Each percentile to the right earns more than the percentile to the left. So we'll always have an upward sloping line from the 1st percentile (earning the least) to the 100th percentile (earning the most).

The slope of that line is a measurement of the "gap between rich and poor". The steeper the line, the greater the gap. Still following me?

What you (and frankly, what a lot of social spending advocates) are arguing is that a shallow slope is better than a steep slope. That's the whole point about railing against a large gap between rich and poor. You state that upward mobility is greater in one with a shallow slope than one with a steeper slope. This seems reasonable because one assumes that the steepness of the slope somehow equates to "difficulty" gaining ground. So a system with less distance to go between rich and poor should result in greater mobility between those two ends, right?


Wrong. The graph shows us percentiles of population. It is presumably just as hard to go from being in the 20th percentile to being in the 80th percentile (relatively speaking) no matter what system we're using. That's because 60 percent of the population is between us and that higher mark, and they are trying just as hard to improve or at least retain their own position economically speaking as we are. It should be obvious that a steeper line is better, since it means that a smaller shift in percentile position results in a greater increase in economic fortune for each individual within the society.

The position you're supporting is like saying that it's better to be in a society where the poorest person lives in a pigpen, and the richest lives in a dirt floored hut (sans pig *****) because there's less distance to go. But that's simply not true and should be apparent to anyone who stops and actually thinks about it for a moment. In such a society, it would be just as hard to go from living in the pig pen to living in the dirt floored hut as it would be in ours to go from being homeless to living in a mansion. The only difference is that the gains for our effort are greater if the gap is bigger.


The common perception about this is just plain backwards. It's one of the things that annoys me to no end. Everyone talks about the "gap between rich and poor" and simply assumes that it's a bad thing. But it is demonstrably not only not bad, but it's a good thing. Assuming, of course, there's a reasonably sloped line along the way, you are always better off in a society with a larger gap than one with a smaller one. Always. More correctly, you are always better off in a society in which there is a more constant steeper sloping line than one with a shallow line (or even shallow section of line where you are economically speaking).


This assumes everything else is equal of course. Externally, we can say that one country is inherently wealthier than another, and that this affects the outcomes as well. But those factors are not as directly related to the gap between rich and poor as is usually assumed. In fact, I'd argue that over time, nations with a large gap (but with a constantly steeper line) will tend to produce results which are better across the board than nation with less gap and shallower lines. That's because of motivation. People work harder if they know that that handful of percentile increase in position will benefit them more. If the same amount of work nets me $100 a year in one system, but $10,00 a year in another, which one am I going to work harder in? Pretty clear, isn't it?




Except that there are very few countries with a "large gap" and limited upward mobility. It's possible that there are no such countries in the western world at all, but I suppose it's possible. Depends on what we call a "large gap". That condition can only occur if there is a small number of very very wealthy people, and they can't ever lose their wealth, and no one else can ever gain wealth similar to theirs. And while I suppose that may happen in some countries, it's most definitely not the case in the US. That sort of economic result normally requires significant government intervention to make it happen. Like a monarchy or something. Maybe Saudi Arabia might look like that. I'm not sure. It's not the US, and it's not the result of a "free market" system though...




Absolutely. Why would you think otherwise? Assuming by "upward mobility" you're talking about the relative ease of shifting one's economic fortunes relative to a starting point, then this is absolutely true. The proof of this is simply looking at the slope of that line. How much more does the median income earn than the minimum wage person? Remember, median means that half of the population makes more and half makes less, which inherently includes relative difficulty. So a steeper slope means greater upward mobility. This is doubly true if we're looking at the first half of that line (which is where that poverty measurement comes in). Relative poverty is often measured by comparing one's earnings to the median earnings of the whole. We actually label nations with a steeper slope as having greater relative poverty, but it's really measuring upward mobility and in the reverse direction. What is labeled as "bad" is actually "good".


Kinda makes you think someone has an agenda, doesn't it?

Edited, May 25th 2010 5:54pm by gbaji

To show people the truth. What do you think the agenda is of people who spend huge amounts of effort convincing you that increased upward mobility in an economy is actually increased poverty? Think about it...

Um... You realize that's the same thing I did, just with 10% increments, right?

We're also really only looking at a choice between 1 and 2, since 3 can't possibly occur in the scenario you've outlined. If we've broken the population up by income, and divided them into 10% blocks, then there's no way for average income and total income not to rise at relative rates. It's kinda mathematically required.

What you're really asking is the same thing I presented. Is a flat line (no difference between the bottom 10% and the top 10%) better than a line with a slope (each 10% has more than the previous 10%). Obviously, 2 is the correct answer.


My point is that you don't even have to look at number 1. Economic systems collapse long before they get to a completely flat line and no system has even even gotten close. It's a stupid goal, yet it's one that some people seem to think is wonderful. Presumably, those are the same people who don't realize that Utopia was an example of how *not* to build a society.


I presented the more relevant point: That a steeper line is "better" than a shallow line. Everything else being equal, this is always the case.

Edited, May 25th 2010 6:33pm by gbaji

Always, eh?



Oh, so not always at all.



Depends what you need to live. If you need to work a hundred hour week to live off the former but only a ten hour week to live off the latter, you will almost certainly work harder in the former; working a hundred hours a week is preferable to dying, but not to being slightly poorer and working, say, sixty hours.

And, uh, you're aware there's nothing constant about the American line's slope, right? It's a distorted exponential shape.

Anyway, let's address your claim that one is always better in a society where there is a bigger difference between the rich and poor, so long as everything else is equal.

1) An increase in the disparity relative to GDP growth, as has been happening in the US for decades, leaves any individual that stays in a low percentile progressively worse off each year - of course, this also applies to the poor (that percentile) as a whole.

2) If everything else is equal, including GDP, someone in the 10th percentile will start much better off if the gap is smaller. If they stay where they are in both scenarios, they will remain better of. If they climb a great deal in both, they may end up worse off in the end in the one with the smaller gap. It is possible for them to climb significantly and be better off, however.

3) Very large gaps make it harder to climb in that those born in the lower percentiles will find it harder to climb because they are crippled by poor nutrition resulting in poor education and stunted development.



You're arguing that increasing the number of people in poverty, by increasing the gap between the wealthiest and least wealthy, increases upward social mobility (and that this is good). Unless you believe that increasing the gap will somehow not increase poverty. I'm er... I'm not sure how you're going to go about arguing that, but good luck.

As for the people you're trying to think about, perhaps they're just as sure as you are (that you are) that they're telling the truth? I'm not sure why you can't accept that people can disagree with you without being brainwashed or pushing some shadowy agenda.

Edited, May 26th 2010 2:44am by Kavekk

No. You're just arbitrarily doing something that makes no sense. I was very clear. I'm talking about percentiles of the population. Not of the earnings themselves. That's a "strange" way to do the calculations, btw. What do you think you're measuring there?



Wrong. We're talking about population distribution and how much they earn. As I pointed out earlier, the reason you do it this way is because we want to know how income is distributed across the population, not just relative to other incomes. By doing it my way, we have a clue how much more you can earn by moving "upward" within the economic spectrum

Since there are 20 people in this list, every 2 of them represent 10% of the population, so we just add them up this way:

1st: 0 + 0 = $0
2nd: 1,000 + 6,000 = $7,000
3nd: 7,000 + 8,000 = $15,000
4th: 14,000 + 17,000 = $31,000
5th: 19,000 + 22,000 = $41,000
6th: 31,000 + 33,000 = $64,000
7th: 54,000 + 92,000 = $146,000
8th: 158,000 + 395,000 = $553,000
9th: 680,000 + 1,040,000 = $1,720,000
10th: 2,000,000 + 15,000,000 = 17,000,000


That's how you divide a population into percentiles. And that's what I'm talking about. What this means, is that by moving from the 30th percentile to the 60th, you more than quadruple your earnings. By moving from the 10th to any other range is a massive increase (starting from 0 afterall). A modest increase from the 10th percentile just to the 20th, more than doubles your earnings.


That's what I was talking about. We're all taught that a "steep" progression of income is bad, but it's actually good because it means that a modest shift within the population results in a significant increase in economic result.

Contrast that to a shallower range and you'll see that the benefits of shifting position aren't as good. Let me reiterate that it's just as "hard" to shift X percentiles upwards within any economy regardless off the economic system you are in. The same rules apply to everyone, so looking at percentiles of population rather than resulting earnings provides us useful data, while you're measurement does nothing except make it appear as though having a higher top end is "bad".


I'm still not sure why you think that makes sense.



Nope. You're just doing really silly math. What does your method of presenting the data tell us?



Except that was the assumption I was operating under dork. How about you explain why you'd calculate the way you want to? It makes no sense. All it does is show up the income discrepancy between groups of people. Which I suppose is great, but the question I'm asking is whether that's actually a problem. Why does it matter if the top person makes 100,000 times more than the bottom person? Isn't it more important to ask how hard it is for me to make a living for myself? Why should I care how much more someone else makes?

Edited, May 26th 2010 3:56pm by gbaji