Let the Good Times Roll! Or, Tonight We're Gonna Party Like It's 1929

[Dinner]

pchang you are refrencing Medi-Cal which is the California state medical system which the Federal Medicaid was modeled after. Medi-Cal tends to be a little more generous then Medicaid.

[Kuciwalker]

Those who only rely on their job to live are increasingly unlikely to save and amass capital.

Depends on the job...

[Spiffor]

Originally posted by Lawrence of Arabia
remmeber, just because that the labor share decreases doesnt mean that capital share is increaseing.

WTF are you on about?

and in a capitalistic society, anyone can own capital, all you have to do is buy stocks.

Not "everybody". Try "those who can afford it".

There's an increasing amount of people who don't have money after paying the necessities, and who have absolutely no financial future. I've met enough of them to know they aren't just marginal amount of losers of something.

[Spiffor]

Originally posted by Kuciwalker
Depends on the job...

Highly-skilled jobs can indeed continue to make good money, and actually better money than before.

Lower-skill jobs are increasingly under pressure. And I'm not talking about McJobs, but also plenty of mid-level jobs, which are skilled, but where the pool is large enough than no individual is indispensable.

[Lawrence of Arabia]

WTF are you on about?

you can read this if you like

http://72.14.253.104/search?q=cache:YXdAMP0QIX8J:www.clevelandfed.org/research/PolicyDis/No7Nov04.pdf+what+is+the+labor+share+of+income&hl=en&ct=clnk&cd=1&gl=us&client=safari

Second, for labor’s share as computed by the Bureau of Labor Statistics, a fall in labor’s share does not necessarily imply a rise in capital’s share; indirect taxes and subsidies constitute a wedge between these two series. Consequently, a fall in labor’s share could be associated with a rise in capital’s share, but it could also be due to a rise in the share of indirect taxes less subsidies. However, we find that the share of indirect taxes less subsidies does not vary much.

[Lawrence of Arabia]

Not "everybody". Try "those who can afford it".

There's an increasing amount of people who don't have money after paying the necessities, and who have absolutely no financial future. I've met enough of them to know they aren't just marginal amount of losers of something.

there are many stocks valued at less than a dollar. 90% of people can afford that. there are also mutual funds, which interesting buy-in features. so thats not true at all. there is not an increasing number of people who cannot afford the necessities. there is no proof of that whatsoever.

[Spiffor]

Yes, thank you. There's indeed a very small part of the value-added that goes to those specific taxes. Those taxes haven't varied much.

The large decrease of labor's share has gone somewhere, and not to these taxes. Now tell me, where could have they possibly gone?

[Spiffor]

Originally posted by Lawrence of Arabia
there are many stocks valued at less than a dollar. 90% of people can afford that. there are also mutual funds, which interesting buy-in features. so thats not true at all. there is not an increasing number of people who cannot afford the necessities. there is no proof of that whatsoever.

There's the explosion of rent, and of housing value (well, the craze has finally come to an end in the US, but it is still going very strong in Europe).

Many people are strangled by their ridiculous rent or mortgage.

As to the "less than one dollar shares", you can't expect to have any significant income from them if you buy only a few. If your capital is to develop enough in your lifetime for it to become a serious source of income, you need to invest/save a good amount of money regularly. Not putting 5€/$ a month in the piggy bank.

[Lawrence of Arabia]

The large decrease of labor's share has gone somewhere, and not to these taxes

really? maybe not in the US but europe and its huge TVA must be sucking up some of this.

There's the explosion of rent, and of housing value (well, the craze has finally come to an end in the US, but it is still going very strong in Europe).

why? d'une part not enough construction et d'autre part because people are willing to spend that much to live there. so in fact they bring it on themselves partly. i should know, half my monthly expenditures are on rent, big deal, i chose to live this way, i coulda lived way in the suburbs but didnt want to.

investing in the stock market is not supposed to make you rich du jour au lendemain, its supposed to make you money in 5, 10 years.

[pchang]

Thant's not really the point

Originally posted by Oerdin
pchang you are refrencing Medi-Cal which is the California state medical system which the Federal Medicaid was modeled after. Medi-Cal tends to be a little more generous then Medicaid.

The real point is that society as a whole has decided upon certain definitions. In many cases Kid has his own definitions for things. When Kid derides the rest of us for using the general standards instead of his own, that's just silly.

[Vanguard]

Originally posted by Kidicious


The economy doesn't work like that. Food is plentiful.

Alright, if food is plentiful then why does someone who earns minimum wage have to spend 40% of his income on it? Why isn't it 10%? Or 5%? Or some trivial amount?

Food is not "plentiful". In theory, the economy should grow exactly enough food to feed everyone and no more. Growing more food then we need would be a waste of money.

Obviously reality is rather more complicated than this. Growing food industrially generates economies of scale that allow competitive strategies to dominate food production and pricing. So it can be profitable to make more food than you can sell in an attempt to drive other producers out of business.

But that is really beside the point. The key point is that food production is an economic activity. It behaves more or less like any other economic activity. I will return to the question of food production later, once I have answered another part of your post.

There are some scarce goods and services, but the main reason for that is simply capitalism - the necessity for something to be relatively profitable for it to be produced.

There is always some resource that is in limited supply. Frequently that limiting resource will be labour. But in our modern economy, oil, energy and certain commodities can also sometimes limit production of both food and luxury items.

But whatever that limiting resource happens to be, it will be subject to bids from people who want to make food and from people who want to make Greyhound-skin tuxedos. If the people who want to make Greyhound-skin tuxedos can sell their product for 100 times as much profit as people who want to make food, then clearly most of the limiting resources will go to them.

When people become rich, they simply have more money to bid against you for limited resources.



Now that we have established this, let's apply it to the question of food production:

I said before that the economy should grow exactly enough food to feed everyone and no more.

But this not really true, is it? The economy will only grow this amount of food if it is the most profitable way to use the labor it takes to farm it. If it is more profitable to use that labor to build McMansions, then the economy will build McMansions. Which means that the economy will grow less than enough food to feed everyone as soon as that is the most profitable path.

Rising income inequality makes it much more profitable to make stuff for the rich than the poor. This raises the possibility of mass hunger coming about almost instantly if a price spike should turn thin food profit margins negative.

Indeed, when the rich consume things that the poor can't afford it helps the economy along and makes things better for the poor.

Only if it decreases the rich person's share of the economy and increases the poor person's share. Otherwise it doesn't help. It just increases the economy's incentive to make more of that stuff that the poor can't afford.

[LordShiva]

Originally posted by Lawrence of Arabia
and in a capitalistic society, anyone can own capital, all you have to do is buy stocks.

Not even. If public social security schemes started investing in stocks, then all citizens would benefit from the inexorable advance of technology and productivity

[Spiffor]

Originally posted by LordShiva
Not even. If public social security schemes started investing in stocks, then all citizens would benefit from the inexorable advance of technology and productivity

Call me old fashioned, but I prefer taxing them.

State capitalism has quite an ugly head.

[Vanguard]

Cleaning up a few minor older posts.

Free market economics is not a zero-sum game.

This is not an argument. It is a slogan. I answer with a slogan of my own:

"Freedom isn't Free!" (Shakes fist defiantly)

And the definition is circular. As long as you continue to change the definition of poverty to mean "doesn't have everything most people have" you will have "poverty," even if every lives like Bill Gates, just some don't have their own spaceship.

Lol. The government defines poverty as a certain amount of money and you don't like that. I define poverty to mean the economic state of the bottom x percent of the population and you don't like that. Then I define poverty as a certain number of calories measured in potatoes and you don't think that is any good either.

Ok. Fine. Whatever.

You define poverty then. As if it matters. As long as the definition of poverty means anything like "poor", then the results will be the same. Knock yourself out. Enjoy.

The size of the economy is not a constant.

Who cares? If somebody else has more money than you then they can always outbid you, regardless of how much the economy grows.

The "poor" today live better than 19th century kings.

Others have handled this, so I really don't need to. So I'll just say

NO THEY DO NOT!.

'Nuff said.

If KH invents a nuclear fusion reactor that provides cheap, environmentally friendly electricity, and becomes a multibillionaire off of it, am I worse off?

No. But that's because his invention of such a reactor would be unlikely to decrease your share of the economy. Instead it would decrease the share of sheiks and people who own other power plants.

They would be worse off.

If you are right, wealthy people are the enemies of the poors.

Correct.

Smokey says: Remember, only YOU can prevent rich people!

Wealth Danger Today:
High

I would like to start a petition for Vanguard to change his username. It is too jarring for me to see his posts when I associate the name with John Bogle

I've been using this name for a long time. Why don't you petition them to change their name?

[Kuciwalker]

This is not an argument. It is a slogan.

No, it's a basic (and true) assumption about the free market, one of those that underlies our economic science. You are making the common fundamental error of assuming that the size of the metaphorical pie is fixed.