3 ms·

This could be true, but I find it more likely that the original poster simply doesn't understand what he's talking about. For example, take your thought experim

This could be true, but I find it more likely that the original poster simply doesn't understand what he's talking about. For example, take your thought experiment, and modify it such that Gold, Inc. pays out all $10 in compensation and dividends, and grows its balance sheet by $0. Now, we have $10 in debt-fueled spending, $10 in increased personal income, and the original poster is still wrong.

gjm11 16y ago
I fail to see how your criticisms indicate that I simply don't understand what I'm talking about, though of course that's always possible. Aggregate personal income is typically roughly proportional to GDP. GDP has grown quite a bit over the last decade, which suggests that aggregate personal income has too. The population hasn't grown much over that time, which suggests that mean personal income has also grown quite a bit. (More quantitatively: US GDP growth has been something like 40% per decade recently, US population growth more like 10%, so mean income has grown by about 30% over that period.) If median income goes down and mean income goes up, that typically indicates that richer people are gaining while poorer people lose. (It doesn't have to; imagine, e.g., that everyone below the median income jumps to $1/year below the median. Result: the median stays the same while the mean goes up. This is not at all what typically happens, though.) If the growth in aggregate personal income has been slower than that in GDP, that indicates that businesses' profits are growing faster than what they pass on to their employees. That translates in the not-much-longer term to more money for the owners of the businesses. Who are, surprise surprise, on average substantially wealthier than median. So, again, more gains for the wealthy than for the not-so-wealthy; so, again, increasing inequality. What any of this has to do with the bizarre notion that when you buy gold the money gets eaten by a golden rock god, I'm not sure. (I can kinda see how you might have got the impression that yummyfajitas thinks that, but immediately after making the golden-rock-god comment it seems like you start speculating on how I probably have no clue what I'm talking about. Highly mysterious, but I'm probably just being dim.)
- oconnore 16y ago
  I don't think cynicalkane was responding directly to you.
- cynicalkane 16y ago
  I mistakenly thought both posts made by Mr. yummyfajitas were made by two different people. Sorry about the confusion.
  - gjm11 16y ago
    Aha, understood. I hadn't appreciated that, and hence thought that when you said "the OP" you meant me rather than yummyfajitas. Sorry for getting confused.

gjm11 16y ago

I fail to see how your criticisms indicate that I simply don't understand what I'm talking about, though of course that's always possible. Aggregate personal income is typically roughly proportional to GDP. GDP has grown quite a bit over the last decade, which suggests that aggregate personal income has too. The population hasn't grown much over that time, which suggests that mean personal income has also grown quite a bit. (More quantitatively: US GDP growth has been something like 40% per decade recently, US population growth more like 10%, so mean income has grown by about 30% over that period.) If median income goes down and mean income goes up, that typically indicates that richer people are gaining while poorer people lose. (It doesn't have to; imagine, e.g., that everyone below the median income jumps to $1/year below the median. Result: the median stays the same while the mean goes up. This is not at all what typically happens, though.) If the growth in aggregate personal income has been slower than that in GDP, that indicates that businesses' profits are growing faster than what they pass on to their employees. That translates in the not-much-longer term to more money for the owners of the businesses. Who are, surprise surprise, on average substantially wealthier than median. So, again, more gains for the wealthy than for the not-so-wealthy; so, again, increasing inequality. What any of this has to do with the bizarre notion that when you buy gold the money gets eaten by a golden rock god, I'm not sure. (I can kinda see how you might have got the impression that yummyfajitas thinks that, but immediately after making the golden-rock-god comment it seems like you start speculating on how I probably have no clue what I'm talking about. Highly mysterious, but I'm probably just being dim.)

oconnore 16y ago
I don't think cynicalkane was responding directly to you.
cynicalkane 16y ago
I mistakenly thought both posts made by Mr. yummyfajitas were made by two different people. Sorry about the confusion.
- gjm11 16y ago
  Aha, understood. I hadn't appreciated that, and hence thought that when you said "the OP" you meant me rather than yummyfajitas. Sorry for getting confused.