Warren Buffet speaks common sense; alarms most Republicans

[Dauphin]

In the latter case, if QE is causing the price rise it can only be doing so by directly increasing poor people's incomes.

Or increasing the population of (poor) people.

[Aeson]

You are double-counting the inflation here.

No, I'm simply pointing out how even if poor people's incomes do increase, they aren't the only ones spending more for food as you were suggesting would be the case.

Yes, they pay more, nominal spending increases, and the real price of food (as a portion of e.g. wages) remains the same! i.e. it is no more difficult than before for people to buy food.

This is bull****. (Though thank you for finally admitting your arguments that middle class and rich won't pay more for food.)

You are still ignoring reality to pretend that everything goes up 1:1. People working minimum wages do not see any increase in their incomes unless minimum wages are increased because they are set nominally already. Even if it's changed in response, the increase is only going to be indexed to something some politicians pull out of their asses in most cases... and in the poorer places in the world the laws are often ignored anyways. Yet everything they have to buy increases in price. They are worse off because of it. People who aren't protected by minimum wage are in much the same boat. People don't say, "OMG, prices are up, I better pay my sweatshop workers more!"... at least not until they're striking (assuming they are in a situation where they can't just replace the workers or jail those who strike.)

These are the world's poor people. They have very little leverage to get any of the nominal increase. Yet you are saying that prices can only increase because these people have more money... it's laughably naive of you.

[Kuciwalker]

God damn it Aeson you are just dumb. SOMEONE HAS TO SPEND MORE MONEY ON FOOD FOR THE PRICE TO RISE. INFLATION DOESN'T HAPPEN BY maGIC. SOMEONE GETS MORE MONEY AND SPENDS IT ON STUFF. IF AS YOU POSIT THE POOR ARE NOT GETTING MORE MONEY THEN IT MUST GO TO THE MIDDLE CLASS AND/OR RICH, NEITHER OF WHOM ALLOCATE MUCH OF THEIR MARGINAL DOLLAR TO FOOD. ERGO FOOD PRICES WILL NOT RISE.

Note well that I said MARGINAL dollar. Ceteris paribus if you give a rich or middle class person an extra dollar he is unlikely to increase his food consumption by one dollar.

[Kuciwalker]

"Visitors found this page by searching for: Nick Rowe" that's actually kind of cool.

[Aeson]

u mad?

SOMEONE HAS TO SPEND MORE MONEY ON FOOD FOR THE PRICE TO RISE.

No.

IF AS YOU POSIT THE POOR ARE NOT GETTING MORE MONEY THEN IT MUST GO TO THE MIDDLE CLASS AND/OR RICH, NEITHER OF WHOM ALLOCATE MUCH OF THEIR MARGINAL DOLLAR TO FOOD.

If the middle class and/or rich are getting more money, food prices can rise to capture part of it. Pretending that food prices rising can only happen because of poor with more money is just ridiculously stupid on your part.

[Tupac Shakur]

God damn it Aeson you are just dumb.

QFT

[Dinner]

Aeson, he's talking about the price curve on a graph of aggregate supply vs aggregate demand. In other words he's not breaking it down by how the price changes effect different social classes and instead is just talking about total supply vs total demand with the resulting price curve.

[Aeson]

Aeson, he's talking about the price curve on a graph of aggregate supply vs aggregate demand. In other words he's not breaking it down by how the price changes effect different social classes and instead is just talking about total supply vs total demand with the resulting price curve.

No, he's breaking it down by social class and saying that only the poor can pay more for food. He is using this to pretend that increased food prices are good for the poor. He is also ignoring the effect of agricultural inputs on price.

In Kuci's world if you gave every middle class person a billion dollars (freshly printed) food prices would not rise... which is so ludicrously retarded an assertion that even Drake agrees with it.

[RGBVideo]

this entire thread.

@ me for taking it seriously.

[DaShi]

is right.

[KrazyHorse]

Scott Sumner has begun to channel me...

http://www.themoneyillusion.com/?p=10700

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

Under a more rational measure, Buffett's effective tax rate was more like 98%...

[Fake Boris]

The article you linked is ridiculous...

[KrazyHorse]

Given your level of economic understanding, I take that as validation. Thanks!

"Income" as currently defined by the US tax system is a a meaningless concept from any sane economic point of view.

[Fake Boris]

Yes, and if we were to tax Warren's real earnings instead of nominal, would that change anything to the fundamental point he's trying to make?

EDIT: + he seems to think the market as a whole doesn't take into account inflation! Wow.

[Fake Boris]

And this:

Even worse, taxes on capital income represent double taxation, as the money was first taxed as labor income, and then taxed again as capital income.

Never mind that Berkshire is a HOLDING.