4 ms·

It has begun, just not in America. American unskilled labor isn't competitive except for jobs that are difficult or impossible to offshore (e.g. construction, l

It has begun, just not in America. American unskilled labor isn't competitive except for jobs that are difficult or impossible to offshore (e.g. construction, landscaping, agriculture), so American capital trickled into emerging markets instead. China, for example, has experienced a massive trickle-down of Western capital.

jdhn 8y ago
I never thought of it this way. Thanks for making me look at trickle down in a different light.
- closeparen 8y ago
  Trickle-down refers to a belief about the relationship between taxes and growth, not what the parent is using it to mean.
  - rco8786 8y ago
    Care to explain why you think I’m using it incorrectly?
jhayward 8y ago
China, for example, has experienced a massive trickle-down of Western capital This is not the effect that the term "trickle-down", or "supply-side" economics refers to. Trickle-down economics is a fallacious concept that says if you make rich people or corporations even richer, they will in turn re-invest their riches in things that employ wage-earners. There is no empirical support for this concept, and much empirical evidence that the reverse is true - a vibrant economy requires most of the economic activity to be enriching the lower/middle class wage earners. The massive flow of capital to e.g. China is simply wage arbitrage combined with structural disadvantage, e.g., no worker safety protection, environmental protection, etc costs.
- chibg10 8y ago
  What empirical evidence are you referring to that says rich people aren't investing their money? And if it is the case that they are indeed investing, where do you suppose China's investment-centric economy is getting capital from? Who do you suppose is paying Chinese workers manufacturing goods for American corporations? If you leave out unskilled workers (whose share of capital went offshore), wage growth among skilled American laborers has been very high... which is also what you'd expect from trickle-down.
  - jhayward 8y ago
    > where do you suppose China's investment-centric economy is getting capital from? From the Chinese central bank, which has massively expanded the economy through low interest rates and easy credit. Wealthy people are are investing their windfalls, but not in production, but rather in rent-seeking FIRE assets. Those assets do not create middle- and lower-class wage jobs, in fact they suck income out of those classes. > wage growth among skilled American laborers has been very high You will have to support this with more than just an assertion. The wages for skilled trades, for instance, have not nearly kept up with inflation. Skilled manufacturing, same. Some of the professional categories, like software development, have seen some growth - but the outliers in SF/NY are outliers, not the median nationwide. Doctors net less, lawyers are mostly destitute unless they are in the 10% who make it in biglaw, and so on and so on.
    - nwienert 8y ago
      Can you cite the Chinese low interest rates? The BLR is 4.3% according to this[0] is there something else going on? [0] https://tradingeconomics.com/china/bank-lending-rate https://tradingeconomics.com/china/bank-lending-rate
      - jhayward 8y ago
        China started to rein in the massive debt economy earlier this year. Current rates are not indicative of the past, and official rates don't reflect the enormous "shadow banking" industry that has been at the heart of the debt boom.[1] [1] https://www.ft.com/content/45bd8052-59dc-11e8-bdb7-f6677d2e1ce8 https://www.ft.com/content/45bd8052-59dc-11e8-bdb7-f6677d2e1...
adventured 8y ago
That's incorrect. It has begun in America. Just not in the manner some would like. The bottom has seen a dramatic improvement, the middle class has not. The inflation adjusted per capita income transfer for welfare programs has nearly tripled since 1979. The US welfare state has massively expanded over 30 and 40 years. The rich are paying for that social safety net expansion. The top 20% pay 87% of all income taxes in the US. Nobody ever wants to talk about these facts because it's unpopular and deflates the propaganda. US poverty is near an all-time low. Homelessness is at an all-time low. The poor now have near universal healthcare coverage. The US spends more on welfare programs as a share of GDP than what Australia and Canada do. It'll surpass Switzerland on that metric within a couple of years. The US has a lower homelessness rate than Canada or France and a poverty rate as low as those.
- jhayward 8y ago
  > The poor now have near universal healthcare coverage If the rest of the unfounded assertions above are as incorrect as this one, we should completely disregard this comment. In many republican-controlled states, for instance, it is impossible for a non-disabled male living in poverty to obtain health coverage.
- nickthemagicman 8y ago
  This is such a biased propaganda-ish statemet. The top 20% pays more taxes because they make 80% of the money and own 80% of the assets in the country. That's how it's SUPPOSED to work. As a PERCENTAGE of their income they pay much less that the middle and lower class. The poor have universal health care? WAT. Cant even justify this with a response. The US spends more on welfare programs as a share of GDP than what Australia and Canada do...but we're behind like 20 other countries. Bizzare cherry picking there. https://en.m.wikipedia.org/wiki/List_of_countries_by_social_welfare_spending https://en.m.wikipedia.org/wiki/List_of_countries_by_social_...

jdhn 8y ago

I never thought of it this way. Thanks for making me look at trickle down in a different light.

closeparen 8y ago
Trickle-down refers to a belief about the relationship between taxes and growth, not what the parent is using it to mean.
- rco8786 8y ago
  Care to explain why you think I’m using it incorrectly?

jhayward 8y ago

China, for example, has experienced a massive trickle-down of Western capital This is not the effect that the term "trickle-down", or "supply-side" economics refers to. Trickle-down economics is a fallacious concept that says if you make rich people or corporations even richer, they will in turn re-invest their riches in things that employ wage-earners. There is no empirical support for this concept, and much empirical evidence that the reverse is true - a vibrant economy requires most of the economic activity to be enriching the lower/middle class wage earners. The massive flow of capital to e.g. China is simply wage arbitrage combined with structural disadvantage, e.g., no worker safety protection, environmental protection, etc costs.

chibg10 8y ago
What empirical evidence are you referring to that says rich people aren't investing their money? And if it is the case that they are indeed investing, where do you suppose China's investment-centric economy is getting capital from? Who do you suppose is paying Chinese workers manufacturing goods for American corporations? If you leave out unskilled workers (whose share of capital went offshore), wage growth among skilled American laborers has been very high... which is also what you'd expect from trickle-down.
- jhayward 8y ago
  > where do you suppose China's investment-centric economy is getting capital from? From the Chinese central bank, which has massively expanded the economy through low interest rates and easy credit. Wealthy people are are investing their windfalls, but not in production, but rather in rent-seeking FIRE assets. Those assets do not create middle- and lower-class wage jobs, in fact they suck income out of those classes. > wage growth among skilled American laborers has been very high You will have to support this with more than just an assertion. The wages for skilled trades, for instance, have not nearly kept up with inflation. Skilled manufacturing, same. Some of the professional categories, like software development, have seen some growth - but the outliers in SF/NY are outliers, not the median nationwide. Doctors net less, lawyers are mostly destitute unless they are in the 10% who make it in biglaw, and so on and so on.
  - nwienert 8y ago
    Can you cite the Chinese low interest rates? The BLR is 4.3% according to this[0] is there something else going on? [0] https://tradingeconomics.com/china/bank-lending-rate https://tradingeconomics.com/china/bank-lending-rate
    - jhayward 8y ago
      China started to rein in the massive debt economy earlier this year. Current rates are not indicative of the past, and official rates don't reflect the enormous "shadow banking" industry that has been at the heart of the debt boom.[1] [1] https://www.ft.com/content/45bd8052-59dc-11e8-bdb7-f6677d2e1ce8 https://www.ft.com/content/45bd8052-59dc-11e8-bdb7-f6677d2e1...

adventured 8y ago

That's incorrect. It has begun in America. Just not in the manner some would like. The bottom has seen a dramatic improvement, the middle class has not. The inflation adjusted per capita income transfer for welfare programs has nearly tripled since 1979. The US welfare state has massively expanded over 30 and 40 years. The rich are paying for that social safety net expansion. The top 20% pay 87% of all income taxes in the US. Nobody ever wants to talk about these facts because it's unpopular and deflates the propaganda. US poverty is near an all-time low. Homelessness is at an all-time low. The poor now have near universal healthcare coverage. The US spends more on welfare programs as a share of GDP than what Australia and Canada do. It'll surpass Switzerland on that metric within a couple of years. The US has a lower homelessness rate than Canada or France and a poverty rate as low as those.

jhayward 8y ago
> The poor now have near universal healthcare coverage If the rest of the unfounded assertions above are as incorrect as this one, we should completely disregard this comment. In many republican-controlled states, for instance, it is impossible for a non-disabled male living in poverty to obtain health coverage.
nickthemagicman 8y ago
This is such a biased propaganda-ish statemet. The top 20% pays more taxes because they make 80% of the money and own 80% of the assets in the country. That's how it's SUPPOSED to work. As a PERCENTAGE of their income they pay much less that the middle and lower class. The poor have universal health care? WAT. Cant even justify this with a response. The US spends more on welfare programs as a share of GDP than what Australia and Canada do...but we're behind like 20 other countries. Bizzare cherry picking there. https://en.m.wikipedia.org/wiki/List_of_countries_by_social_welfare_spending https://en.m.wikipedia.org/wiki/List_of_countries_by_social_...