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Ray Dalio: The Two US Economies: The Top 40% and the Bottom 60%

34 points by uptown 9y ago

deleted 9y ago
[deleted]
tabtab 9y ago
Both political parties have a different take on a solution. The right will probably claim that tax-cuts and deregulation will stimulate the economy and "float all boats", while the left will probably claim that taxing the rich will create more money for post-high-school education to help lower-income families climb the economic ladder and compete in the world economy, and provide more social programs, which also generate service jobs. As far as "deregulation", the devil's in the details, but the left generally believe such often leads to pollution and health risks, noncompetitive oligopolies and monopolies, and financial crashes. The right believes this to be an exaggeration.
- EliRivers 9y ago
  Both political parties That's a significant part of the problem right there.
- CryptoPunk 9y ago
  >> As far as "deregulation", the devil's in the details, but the left generally believe such often leads to pollution and health risks, noncompetitive oligopolies and monopolies, and financial crashes. The right believes this to be an exaggeration. There is also the argument that regulations primarily create oligopolies and walled gardens that exacerbate income inequality. This is part of a larger argument that state intervention in the market is primarily motivated by private interests, and serves their interests. The FDIC would be one such example: http://www.nber.org/papers/w22223 http://www.nber.org/papers/w22223
nugget 9y ago
My first day of grad school, a very well-known history Professor asked us what two groups have existed in every civilization since the dawn of time - his answer - "the rich and the poor".
- convolvatron 9y ago
  i think the evolving difference is that the rich used to want to exploit the poor for their labor increasingly they just want most of them to quietly go away
georgeecollins 9y ago
I don't think the people in the bottom 60% really care about this because they are becoming increasingly segregated physically. I have relatives that probably fit in the upper end of that bottom 60%, although like almost all Americans they consider themselves "middle-class". They don't really see the difference in income and opportunity between "middle class" in their part of the country vs. other parts, like San Francisco. It all seems fair to them, because they face the same choices as almost everyone around them and everyone they know.
- CryptoPunk 9y ago
  >>I don't think the people in the bottom 60% really care about this because they are becoming increasingly segregated physically. This is an important point. A high Gini coefficient is associated with higher crime rates when it is present in more integrated communities. Physical segregation between income groups (like one sees between countries in a region) reduces the crime-boosting effect of income inequality within that community.
- tabtab 9y ago
  Re: "I don't think the people in the bottom 60% really care about this because they are becoming increasingly segregated..." If they can get a decent income to raise a family under "civilized" conditions, I generally agree. Factory jobs usually provided that, but they are drying up without a clear alternative replacing them, at least in certain areas. There are "low skill" jobs like fast food or Uber driving, but it's difficult to raise a family on that. It looks like either socialism and/or subsidization of higher education will be needed. These may require taxing the rich. Automation and offshoring are eating into mid-skill careers. (They may eventually eat into more levels.) I don't buy the right's "float all boats" theory, except under a short-term boom cycle.

34 points by uptown 9y ago

deleted 9y ago

[deleted]

Both political parties have a different take on a solution. The right will probably claim that tax-cuts and deregulation will stimulate the economy and "float all boats", while the left will probably claim that taxing the rich will create more money for post-high-school education to help lower-income families climb the economic ladder and compete in the world economy, and provide more social programs, which also generate service jobs. As far as "deregulation", the devil's in the details, but the left generally believe such often leads to pollution and health risks, noncompetitive oligopolies and monopolies, and financial crashes. The right believes this to be an exaggeration.

EliRivers 9y ago
Both political parties That's a significant part of the problem right there.
CryptoPunk 9y ago
>> As far as "deregulation", the devil's in the details, but the left generally believe such often leads to pollution and health risks, noncompetitive oligopolies and monopolies, and financial crashes. The right believes this to be an exaggeration. There is also the argument that regulations primarily create oligopolies and walled gardens that exacerbate income inequality. This is part of a larger argument that state intervention in the market is primarily motivated by private interests, and serves their interests. The FDIC would be one such example: http://www.nber.org/papers/w22223 http://www.nber.org/papers/w22223

nugget 9y ago

My first day of grad school, a very well-known history Professor asked us what two groups have existed in every civilization since the dawn of time - his answer - "the rich and the poor".

convolvatron 9y ago
i think the evolving difference is that the rich used to want to exploit the poor for their labor increasingly they just want most of them to quietly go away

georgeecollins 9y ago

I don't think the people in the bottom 60% really care about this because they are becoming increasingly segregated physically. I have relatives that probably fit in the upper end of that bottom 60%, although like almost all Americans they consider themselves "middle-class". They don't really see the difference in income and opportunity between "middle class" in their part of the country vs. other parts, like San Francisco. It all seems fair to them, because they face the same choices as almost everyone around them and everyone they know.

CryptoPunk 9y ago
>>I don't think the people in the bottom 60% really care about this because they are becoming increasingly segregated physically. This is an important point. A high Gini coefficient is associated with higher crime rates when it is present in more integrated communities. Physical segregation between income groups (like one sees between countries in a region) reduces the crime-boosting effect of income inequality within that community.
tabtab 9y ago
Re: "I don't think the people in the bottom 60% really care about this because they are becoming increasingly segregated..." If they can get a decent income to raise a family under "civilized" conditions, I generally agree. Factory jobs usually provided that, but they are drying up without a clear alternative replacing them, at least in certain areas. There are "low skill" jobs like fast food or Uber driving, but it's difficult to raise a family on that. It looks like either socialism and/or subsidization of higher education will be needed. These may require taxing the rich. Automation and offshoring are eating into mid-skill careers. (They may eventually eat into more levels.) I don't buy the right's "float all boats" theory, except under a short-term boom cycle.