Financial Reform Bill Passed in SenateFollow

Not surprisingly, you're the first one to "get it".



Correct. Which is why I mentioned a couple times earlier that it matters what the slope of the line is near where you are economically. Obviously, a system in which the first 80 percentiles worth of people is nearly flat, with an steep shift upwards after that point is "bad", since it provides little opportunity for most of the population. I'll also point out, however, that the top of the end point of that final section of the line doesn't really matter much to the 80% of the population who isn't there. It's not the "gap" between rich and poor that matters, but the slope of the line near whereever you are.


My point with regard to the "relative poverty" measurement, is that it specifically calculates poverty relative to the median income. So it's really just measuring the slope of the line of the first 50 percentiles of the population. Since that's precisely the section we want to be relatively steep instead of shallow, we end out coming to the exact opposite conclusions about the quality of a given economic system by using this measurement and assuming that an increase in "relative poverty" is bad and should be avoided.


Does that make sense? It's one of those very ironic things that measurements like this are used to convince that bottom half of the economy that the kinds of economic systems which would directly benefit them the most are the ones they should condemn. The whole "gap between rich and poor" thing is a total red herring and is meaningless to the overall calculation. But it does get people who don't know any better to become angry and think they're being robbed, so it works as political rhetoric.

What's sad is how many people hurt their own economic fortunes because they follow this sort of garbage thinking...

Is the slope in the US steeper along the first 50% or shallower than say France, or Spain, or Italy, or Germany, or the UK? Isn't that what we're really talking about? Do systems which take active steps to address poverty actually end out simply shallowing up the line in the first half of the population when it matters the most?

I think they do. Hence, the irony...

Efficiency has pretty much always been created by either paying less people more, or by paying people less. Either way your depressing the start of the curve. Not that efficiency is bad, because it can lower the cost of stuff and give the depressed curve more buying power. It 'can' but it doesn't always, and can easily just lead to an increased slope at the top.

I think you're referred to some numbers at one point in the thread, I'd be interested in seeing some if you have any links handy. Economic data etc, especially if it uses the kind of analysis you prefer, It'd be nice not to have to hunt for it.

I think the only reason people have been able to ignore the zero sum game is because we've found new groups of people to exploit for cheap stuff.

Edited, May 26th 2010 5:13pm by Xsarus

If I build a machine that allows a single person to bale 100 bales of hay in the same time and with the same effort that it would take him to bale 1 before, and can run that machine for a cost over time which is less than the difference in productive gain, then I have increased actual real efficiency, without reducing the amount I'm paying anyone.

So, just to sum up, if you build a machine that produces 100 bales of hay in the same time that it took 1 person to produce 1 bale of hay, but still pay that 1 person $20/hr and the machine costs $1500/hr to run, you've simply made more profitable hay! Until the 99 unemployed former hay balers kill you for food.

Fuck you're bad at math.


I'll poke around and see what I can find. I'm honestly more interested in the theory. We can certainly pore over numbers if you want, but is anyone doubting that industrialization increases efficiency on a massive scale? Ergo, the assumption about the effect of wages made earlier is false. We don't need to look at numbers to noodle this out, do we?

Economists do. People who develop theories to explain facts then test them and look at the results do.

You should stay as far away from actual data as possible. You don't understand it, and it just puts you in the sad position of coming with wilder and wilder excuses why the data doesn't fit what your theory predict.

Or as I like to call it: "Wednesday"

Edited, May 26th 2010 7:14pm by Smasharoo

Lol. Sure Smash. I call this one the "attack the other guy for not understanding the subject matter cause I don't have any other response" tactic. You do it well, too!

I'm not attacking you, sport. I know you don't understand, but discussing anything along these lines with you is pretty much functionally identical for me to discussing motivational speaking with an autistic child. When I bother to do it, it's really for the people reading who are capable of understanding, not for you. I know you can't understand it, that's not the point.

You need to move beyond thinking this is a discussion. It isn't. There are things we can discuss, movies, books, sports...you know, things that require no training or education and are largely complete matters of opinion. Things that involve data and real world outcomes we can't. When I reply to you, it's just to clarify the more obvious mistakes you make.

I hope we're clear now.

Hey, you're the one making a value judgment based on a (really bad) example. I'm not arguing one way or the other on "is it good or bad for a wide spread between the poorest member of society and the richest member?".

Basically, I don't give two shits about the whole mobility concept at this point.

I'll give a different variation of what I'm asking, on the off chance that you're not going to go onto a wild tangent complaining about the question:

Society Examples A and B have the same population, average income and total income (that way we're not getting into a debate of "you're looking at raw numbers, not ratios"). For that matter, the bottom end is earning the same amount in both cases - $2,000 a year. Example A has a single person way out at the top end, earning $20 billion a year. For Example B to be functionally equivalent to Example A, how many people at the top end earning $2 billion a year would it need to have instead?

The three cases I stated are equivalent to answers of "ten", "more than ten", and "less than ten", respectively.

So you're not going to explain in clear English how someone else making more money hurts you? Why not just admit that you can't support your position and be done with it? It would be more honest...


And since I'm heading out, let me leave one more simple example that even the dumbest brainwashed liberal should understand:

Let's imagine that a woman owns a bakery and has three employees. The four of them together can make 5 pies a day (it's just an example, deal with it). At the end of each day, the owner gets two pies, and each of the employees gets one.

After a period of time, the owner uses the extra pies she's been getting to buy new/better pie making equipment (whatever that is). As a result, the four of them together can now make twice as many pies (10) each day for the exact same amount of effort. Now, we could divide these pies along the same 2:1 ratio, giving the owner 4 pies and each of the workers 2 pies, but the owner figures that since she's the one who saved up to buy the new equipment that she should reap the rewards. Thus, each employee still gets the one pie they always got, but now she gets 7 pies instead of just two.


What just happened? The "gap between rich and poor" in this example went from 2:1 to 7:1. The owner is making 3.5 times more relatively speaking than her employees compared to what she was making relative to them before the introduction of the new pie-making technology. But are the workers worse off? No. They make exactly the same amount of pies for the same amount of labor. They didn't get cheated.


This is the principle I'm trying to get people to understand. Just because the relative earnings between the rich and poor change does not mean that the poor are worse off. Absent the increased pie-making rate, that assumption would be correct. But once you add that into the equation, it's not only quite possible for that gap to increase dramatically without harming the poor person at all, but it's virtually guaranteed to happen. Clearly, the industrial revolution has had a labor amplifying effect. Hopefully, no one disputes this. Thus, the same sort of condition as that in the bakery example has been in effect for the last century or so. Simply pointing to the increase in that earnings gap tells us *nothing* about whether the "poor" are better or worse off.


I could similarly have used an example in which as a result of the introduction of the new equipment each worker got 1 and a third pies each day, and the owner got 6. This would result in a situation in which each worker is measurably better off as a result of the pie-making improvements, yet the ratio of rich to poor has grown. Clearly, it's wrong to simply assume that an increase in that gap alone means anything negative for the working class in a society. You have to actually look at wages, cpi, inflation, and quality of obtainable goods to make any sort of sane assessment of improvement or loss in any given segment of the population over time.

And frankly, I think it's hard to argue that working class people in the US have become worse off over time during the last century. Anyone who wants to take up that position is free do to so though. I just hope you have more than just ego-bashing to support it.

Not entirely true. You're forgetting that industries increase. You're looking at it as a factory which used to hire 1,000 people, will now employ only 100, but you should be looking at it as that 1000 workers can now run 10 factories instead of just one.

By the argument you're making we should have something like 75% unemployment from losses in farm workers alone over the last century. But what actually happened is that new jobs were created to take advantage of the increased and more efficient labor pool. That's a good thing all the way around.



You tell me. The fantasy you're spinning doesn't happen in the real world, so I'm not sure how the story ends inside your own head. Do you understand that as the productive efficiency of the labor pool increases, the value of a person's labor also increases? Do you honestly think that a profit driven industry (any industry) would just let a bunch of labor sit idle?

What people do may change, but as long as we don't cripple the gains from employing people, employers will continue to find ways to employ people. It's why a hundred years ago 75% of the people worked on farms, and today only like 1% do. Magically, jobs were found for those people displaced by automated farm equipment. It's like a miracle or something! ;)

Ok. Honestly, the last post for me. I swear!

[quote=MDenham]My position is, and has been since the beginning of this thread, "I haven't seen a useful means of converting the income distribution to how successful a society is. Can someone actually come up with one, or is this just a bunch of metaphysical **********************

I agree. There is no way to "come up with one", which is why I hold the position that we shouldn't try. Let the process of people buying and selling things sort itself out naturally. Maybe pass some laws to prevent abusive outcomes, but not much else. This is precisely why I reject the idea that we should place any value at all on the distribution of earnings in a society. No one can explain why there's a virtue to having a "more equitable" distribution in the first place, so it seems beyond absurd to spend time and effort attempting to "fix" the problem.

Well, at least finally we get somewhere reasonable.

I apologize for pissing in your Cheerios a few minutes ago; the computer is rebooting at random (for certain values of random such that "I'm trying to post" is true).

Goddamn it, Debian.

Edited, May 27th 2010 9:17am by Kavekk

Smashed,



How's that hope and change working out for you?