Equitable Growth

I love Piketty for bringing the data, but it's clear that r incorrectly lumps together land and capital. R can be decomposed into returns to land (rent) and returns to capital, and the former is much more pernicious. https://equitablegrowth.org/land-rather-than-capital-the-long-run-oppr…

Idk. It's about time rich people got to pay for the wealth they enjoy on the back of the USA. It's not free to send multiple carrier groups into the south china sea/SE asia region when we're forcing TikTok to sell itself to us you know? And we've also seen a complete and utter reduction of the middle class over the last 40 years, resulting in a much richer 1% and poorer 50% https://equitablegrowth.org/the-distribution-of-wealth-in-the-united-s… The other aspect here is that the people with wealth have seen it increase at a fairly linear rate. They can handle a small tax on it just fine. and it's about time they start directly paying for a service that the rest of us have.

Top 1% of income is a red herring too - Top 1% of wealth is what everyone is focused on. Top 1% of household wealth is more like $10M in net worth. Almost nobody earning $500k will ever amass $10M in net worth due to income taxes (vs. capital gains for those with substantial wealth) and living expenses. It really is a separate stratosphere. https://equitablegrowth.org/wp-content/uploads/2019/03/table1-1.png

I guess I would start here, and then use that as a jomping off point. https://equitablegrowth.org/hourly-piketty-paul-krugman-gattopardo-eco… Part of what makes this problem hard, is if Piketty is really right, we don't necessarily know what policies we should be following. It's unclear how we change the equation at this point. Piketty seems to think that tax hikes on the rich might work. But that is really just a theory.

There is no correlation between austerity and debt reduction: http://equitablegrowth.org/2015/06/28/must-read-christian-odendahl-no-… https://news.ycombinator.com/item?id=9796611 In other words, austerity doesn't work.

What you describe in your last paragraph and what I’m describing are actually very very different things. These types of loans are absolutely used as part of tax avoidance strategies employed by net worth individuals of a certain asset class. It is unlikely anyone on HN is doing this successfully if at all. As I repeatedly indicated it’s used successfully by people in a certain asset class, and it’s part of a broader strategy regarding how wealth is managed for the individuals that are able to take advantage of this. I also linked several articles on how these things work, here’s another that talks about the tax loophole specifically: https://equitablegrowth.org/closing-the-billionaire-borrowing-loophole… I did not say it’s the only way people live off their wealth though. That is something I never stated or indicated Now as far as the rates go I wish I could find the article that that talks about it from earlier this year, but yeah if you really are super high net worth you aren’t paying 7%, but even if we take that off the table for the sake of argument, if you expect to net more than interest paid by a significant enough margin the loans still make sense, and for the class of folks I’m talking about they will almost always be able to outpace the rate by a significant margin

Mainly because USA developed multiple geographic clusters where software developers are in high demand (Bay Area for consumer tech, New York for finance etc.) and the funding ecosystem is both deep-pocketed and culturally supports paying for talent. Traditionally European VCs and founders both operated under the assumption that startups need to save money rather than spend to get the best. And consequently those startups don’t grow into big companies that would pay for talent. It’s worth noting that the meteoric rise of Bay Area software engineer salaries is a fairly new phenomenon. In the mid 2000s, salaries were actively suppressed by a wage cartel that included Steve Jobs. The companies paid out a $324M settlement to employees [1]. Mark Zuckerberg is often said to have been the crucial CEO who broke the cartel. Facebook started paying higher salaries and hiring aggressively from Google and others who had been suppressing wages. [1] http://www.equitablegrowth.org/aftermath-wage-collusion-silicon-valley…

Search for Jared Diamond (polymath author of many great books) on agriculture as a mistake, e.g. https://equitablegrowth.org/agriculture-the-worst-mistake-in-the-histo… https://www.discovermagazine.com/planet-earth/the-worst-mistake-in-the… Agriculture made us a lot unhealthier and shorter in stature (monoculture/unbalanced diets), and it also lead to massive power imbalances -- modern people spend more of their lives working. This is a very mainstream observation -- it's also supported by Sapiens, the popular human history book of the last 5 years (recommended by Obama, Gates, etc.). David Graeber's recent book argues that many early human societies purposely avoided agriculture, and then got "trapped" into the inequality of agriculture. The argument is that there is enough for everybody, but agriculture leads to power imbalances, which make most people's lives miserable. It's true that they were more miserable say in the 1500's in Europe than today. We have "recovered" from Europe of the 1500's, but that doesn't mean that this is the best time ever!

To wave a hand and dismiss the entirety of Europe's wage policy as 'different in many ways' is disingenuous. What Europe represents is a systemic approach to wage inflation at the low end; but this is also true for other countries with strong minimum wage guarantees (like Japan). Every-time they've been put in place in this systematic way it's led to greater economic mobility, greater employment rates and a lowering of the burden on social welfare systems; whilst having little demonstrable impact on long-term economic growth, and in fact, there's recent evidence to suggest they have net positive impacts on growth[0][1][2][3] What Seattle represents is a small isolated experiment within larger state, regional and federal contexts that effected its outcome. That's not to dismiss it's value, far from it, but to take as it some kind of definitive evidence is to weigh a grain of sand against a beach of contradictory evidence. [0]: https://equitablegrowth.org/working-papers/distributional-minimum-wage… [1]: http://www.lse.ac.uk/business-and-consultancy/consulting/assets/docume… [2]: https://assets.publishing.service.gov.uk/government/uploads/system/upl… [3]: https://www.nber.org/papers/w25434

I'm not the only one with access to data though, if you're wanting to hold to your beliefs unless someone does the legwork for you and attempts to force it on you, I think your bias will overcome. Here is a source to begin anyway. The middle class (especially upper middle) saw their share of income drop, but the bottom 50% increased. https://equitablegrowth.org/u-s-income-data-for-2024-shows-the-top-10-…

This is consistent with the observation that the top 10% have captured a disproportionate share of GDP growth over the past few decades. https://equitablegrowth.org/new-data-reveal-how-u-s-economic-growth-is… "The past three economic expansions have largely benefitted the top 10 percent. In each, the top decile received between 47 percent and 59 percent of all income growth in the expansion."

Much of this is an antitrust problem. The inputs to farming, especially seeds, fertilizer and machinery, are controlled by monopolies and near-monopolies. There have been too many mergers. On the sell side, there's monopsony or near-monopsony, with very few big buyers.[1] Farmers are caught in the middle, with little pricing power on either side. There's not much question about this. There are antitrust cases, but with weak penalties and weak enforcement. [1] https://equitablegrowth.org/competitive-edge-big-ags-monopsony-problem…

> Absolute economic mobility matters much more The US does poorly on this metric too: https://i.imgur.com/eYHUysQ.png [1] https://i.imgur.com/vLz5iUz.png [2] (Note that the x-axis is "birth year.") [1] https://equitablegrowth.org/wp-content/uploads/2021/04/042821-WP-Trend… [2] https://www.aeaweb.org/articles?id=10.1257/app.20200631

I wonder why Silicon Valley companies had to collude on salaries... https://equitablegrowth.org/aftermath-wage-collusion-silicon-valley/

The "Ugh, Capitalism"[0] articles always seem to assume that capitalism started in the last 20 years or so. Which is obviously false. If the company lost its culture of safety that's definitely bad, but of course that culture developed under capitalism in the first place. How does a constant factor (capitalism) explain a change? The finance industry is a much larger part of the US economy than it has been in the past [1], which does seem like a problem and likely the cause of many of these issues. I'm not sure about the right solution, but it's definitely not to end capitalism. [0] https://www.infinitescroll.us/p/ugh-capitalism [1] https://equitablegrowth.org/the-rising-financialization-of-the-u-s-eco… Figure 1

https://equitablegrowth.org/u-s-income-and-wealth-inequality-are-no-lo… > In states like Texas minimum wage is still $7.25/hr and many places pay just that. > How do you reconcile your numbers with that? 'Assistant Commissioner for Regional Operations Stanley W. Suchman noted that the 196,000 workers earning the federal minimum wage or less made up 3.1 percent of all hourly paid workers in the state. Nationwide, those earning the federal minimum or less accounted for 2.3 percent of the hourly paid workforce.' And that's only those paid hourly, not salaried.

Well, that's just what a monopsony is. Setting minimum wages can cause higher employment in a monopsony model and that's pretty basic theory too. https://equitablegrowth.org/understanding-the-economics-of-monopsony-h…

That's a theory that only models certain market conditions. In practice there is an information asymmetry (contrary to the presuppositions of the Nash Equilibrium) and often the employer side has a small number of companies so coordination is easier. Check out this settlement from the 2000s in Silicon Valley[1]. This involves highly desired, well educated employees so imagine how it is in other fields. In my own experience I've had several prospective employers at conferences say that they were interested in poaching me but mentioned that they were wary to start a poaching war. They knew the CEO of my company and were conscious of the fact that he would likely make an effort to respond in kind. The Nash Equilibrium is an interesting concept but reality is complex and messy. [1] https://equitablegrowth.org/aftermath-wage-collusion-silicon-valley/

"When recessions hit, firms lay off young and low-income workers first" Why make a guess when data already exists? https://equitablegrowth.org/the-most-exposed-workers-in-the-coronaviru…

This comment reminds me of a concept I've just heard of: financialization. When assets in the real economy are owned by securities markets and directed by professional managers. https://equitablegrowth.org/the-rising-financialization-of-the-u-s-eco…

When I learned about early education a long time ago, the argument was not about boosting short term cognitive abilities, as in this study about IQ tests, but long term socioeconomic improvement (i.e. we heard about changes in graduation, employment and crime). https://equitablegrowth.org/wp-content/uploads/2021/09/playfair-2021-0…

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.” — J M Keynes http://www.equitablegrowth.org/the-general-theory-of-employment-intere…

Is there a specific metric you're thinking of? My understanding is that income inequality is at an all-time high, and I'd be very surprised if it were worse 10 and 20 years ago. Examples: https://equitablegrowth.org/eight-graphs-that-tell-the-story-of-u-s-ec…

It’s not funny and it has been reported on, but you seem unwilling to see it (wonder why). Eg https://equitablegrowth.org/womens-history-month-u-s-womens-labor-forc…

First thing, it will not happen overnight (if it ever happens at all). I mean, let's be honest, the US is still a massive market so there is no doubt that it still has a lot of tricks in its books to maintain a lead. But the thing is, being the major dominant currency actually comes with drawbacks: https://equitablegrowth.org/reserve-currency-privileges-costs/ So potentially, the US dollar losing its role as the dominant currency may actually come with benefits for everyday Americans.

Labor mobility is actually declining https://equitablegrowth.org/declining-u-s-labor-mobility-is-about-more…

Actually, American geographical mobility has declined significantly in the last twenty years with little end in sight. Obviously there are multiple factors but the significant difficulty of renting and finding a job in most place has to be one significant part. This article talks about the consequences but that there has been a decline is a given. https://equitablegrowth.org/the-consequences-and-causes-of-declining-g…

Yep, the hidden fact of student loans is that the ones struggling to pay it off most often aren't the ones with $100k+ in student loans. Those usually graduated from a mid to top tier school with a marketable degree, and won't have many issues paying the loans. The ones struggling usually have lower amounts, and got leo-marketability degrees from for-profit or low-tier schools. http://fortune.com/2015/12/01/student-loan-delinquent/ https://equitablegrowth.org/an-introduction-to-the-geography-of-studen… But this doesn't mean that there isn't a problem. There is one, it is massive, and it is bad for society.

According to old (2014-2015) measurements, to be in the 1% you need to be pulling in at least $455k a year[1], $1.4M on average[2]. It’s probably even higher today. That’s way way beyond the typical “professional at the height of his career.” 1: https://www.investopedia.com/news/how-much-income-puts-you-top-1-5-10/ 2: http://equitablegrowth.org/research-analysis/u-s-top-one-percent-of-in…

First, the article was discussing the top 0.01% not the top 1%. So your factoidlette is off by a factor of 100 or if you prefer, two magnitudes. Second, even at that level of apples and oranges, the top 1% got 21.2% of the income in 2014. http://equitablegrowth.org/research-analysis/u-s-income-inequality-per…