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This has been a long standing argument from a certain "trickle down" group in politics. And like the groups that promote austerity as a cure for economic woes,

by blunte 7y ago

This has been a long standing argument from a certain "trickle down" group in politics. And like the groups that promote austerity as a cure for economic woes, they have been proven wrong. The economy grows when people can afford to spend. (If this spending is based on credit as was largely the case during the Bill Clinton years, then there is a later cost to pay - no doubt.) But the fact remains that when people can afford to buy things, the economy grows. Better paid workers spend more money. People who cannot afford basic necessities actually do not blow their money on luxuries as is commonly promoted. Instead, they spend their money on housing, car gas and insurance (since there's been a perpetual movement against public transportation), and food. They're not out gambling and buying drugs in general. What is not in doubt is that better paid workers means not quite as well paid executives. If you look at the US history, executive pay is at or near the highest multiple relative to workers compared to any time. And while this is my speculation as I have not experienced living on 1 million dollars vs 100 million dollars (per year), I am inclined to believe that the difference in quality of life is not really terrible. Therefore, executive pay levels are not really a valid reason to suppress worker pay. We have not even ventured into the tax avoidance that has occurred in the last 40 years. Somehow corporations and executives (and workers!) managed to survive quite ok in the 1950s and 60s, even while corporate taxes were effectively much higher.

d357r0y3r 7y ago
> And like the groups that promote austerity as a cure for economic woes, they have been proven wrong. This is a strawman. Austerity isn't a cure, it's a consequence. If you spend too much and have too much debt, you can't borrow more to make the problem go away; you're just delaying the inevitable.
- FabHK 7y ago
  No, it's not a straw man. Austerity has very much been promoted as a cure; it was not an inevitable consequence of the economic situation. The debate is maybe best exemplified by the debate between Krugman ("against austerity") and Reinhart/Rogoff ("pro austerity"). > Nobel laureate Paul Krugman refused to back down in a dispute with Harvard University economists Carmen Reinhart and Kenneth Rogoff over a 2010 paper they wrote that’s been used to justify austerity in the U.S. and Europe. https://www.bloomberg.com/news/articles/2013-05-28/krugman-feud-with-reinhart-rogoff-escalates-as-austerity-debated https://www.bloomberg.com/news/articles/2013-05-28/krugman-f... https://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion https://www.theguardian.com/business/ng-interactive/2015/apr...
  - andymockli 7y ago
    To add to your links: https://contrakrugman.com/ https://contrakrugman.com/
    - FabHK 7y ago
      Thanks. It's good to challenge your views, so I'll listen in a bit. However, I must say that as an ex-libertarian (that left the creed because of its serious flaws) I am apprehensive about the neutrality of a show hosted by Tim Wood, a "Rothbardian anarcho-capitalist and paleolibertarian" (Wikipedia) that's received fellowships from the Institute for Humane Studies (funded by the Scaifes, Kochs, etc.). EDIT to add: https://en.wikipedia.org/wiki/Thomas_Woods https://en.wikipedia.org/wiki/Thomas_Woods https://en.wikipedia.org/wiki/Institute_for_Humane_Studies https://en.wikipedia.org/wiki/Institute_for_Humane_Studies
      - CharlesColeman 7y ago
        > I am apprehensive about the neutrality of a show... I'd also assume any show that bills itself as "Paul Krugman's column refuted, week after week!" is more of an ideological security blanket than real intellectual engagement or critique.
        andymockli 7y ago
        I'd personally categorize Paul Krugman as an idealogue. You might think the same of Bob Murphy and Tom Woods, but the aim was to offer a counterpoint to Krugman's ideas. I believe you'd find the intellectual engagement and critiques within the podcast, not the subtitle.
        CharlesColeman 7y ago
        > I believe you'd find the intellectual engagement and critiques within the podcast, not the subtitle. No, I doubt it. If they think they can refute [1] like clockwork future columns they've never seen, it's almost certain they're just rehashing dogmas for the faithful. I have better things to spend my time on than that. [1] a very strong word, by the way
bassman9000 7y ago
What is not in doubt is that better paid workers means not quite as well paid executives. Something to back this, other than personal experience/opinion, would be nice. A = better paid workers B = better paid executives Your point seems to be that A => ¬B. Which, even if statistically accurate, seems a bit weird as a causation.
- scarejunba 7y ago
  True. It comes from a zero-sum game view of the company. But there are true inefficiencies that may be solved by A that make B actually more likely. For instance, if A causes lower attrition and therefore training costs, it _may_ cause sufficient higher productivity across the board for every organization as a worker gets skilled and stays in his job for longer. And that increased productivity may manifest as better company performance. It is plausible that we could have A & B. I didn't even consider the time-axis myself (implicitly assuming zero-sum) so that's a good objection.
- mdszy 7y ago
  What possible reason could you have for writing it this way and not just saying "Your point seems to be that better paid workers leads to worse paid executives..."
  - bassman9000 7y ago
    Not being a native speaker, probably not being as fluent as you in English, and not wanting to misunderstand that the OP made more complicated than needed, IMHO.
microcolonel 7y ago
> ...from a certain "trickle down" group in politics... Far as I'm aware, "trickle down" is a pejorative association made by people who disagree that supply-side factors are the primary determinant of economic growth; and not an actual group of actual people.

by blunte 7y ago

d357r0y3r 7y ago

> And like the groups that promote austerity as a cure for economic woes, they have been proven wrong. This is a strawman. Austerity isn't a cure, it's a consequence. If you spend too much and have too much debt, you can't borrow more to make the problem go away; you're just delaying the inevitable.

FabHK 7y ago
No, it's not a straw man. Austerity has very much been promoted as a cure; it was not an inevitable consequence of the economic situation. The debate is maybe best exemplified by the debate between Krugman ("against austerity") and Reinhart/Rogoff ("pro austerity"). > Nobel laureate Paul Krugman refused to back down in a dispute with Harvard University economists Carmen Reinhart and Kenneth Rogoff over a 2010 paper they wrote that’s been used to justify austerity in the U.S. and Europe. https://www.bloomberg.com/news/articles/2013-05-28/krugman-feud-with-reinhart-rogoff-escalates-as-austerity-debated https://www.bloomberg.com/news/articles/2013-05-28/krugman-f... https://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerity-delusion https://www.theguardian.com/business/ng-interactive/2015/apr...
- andymockli 7y ago
  To add to your links: https://contrakrugman.com/ https://contrakrugman.com/
  - FabHK 7y ago
    Thanks. It's good to challenge your views, so I'll listen in a bit. However, I must say that as an ex-libertarian (that left the creed because of its serious flaws) I am apprehensive about the neutrality of a show hosted by Tim Wood, a "Rothbardian anarcho-capitalist and paleolibertarian" (Wikipedia) that's received fellowships from the Institute for Humane Studies (funded by the Scaifes, Kochs, etc.). EDIT to add: https://en.wikipedia.org/wiki/Thomas_Woods https://en.wikipedia.org/wiki/Thomas_Woods https://en.wikipedia.org/wiki/Institute_for_Humane_Studies https://en.wikipedia.org/wiki/Institute_for_Humane_Studies
    - CharlesColeman 7y ago
      > I am apprehensive about the neutrality of a show... I'd also assume any show that bills itself as "Paul Krugman's column refuted, week after week!" is more of an ideological security blanket than real intellectual engagement or critique.
      - andymockli 7y ago
        I'd personally categorize Paul Krugman as an idealogue. You might think the same of Bob Murphy and Tom Woods, but the aim was to offer a counterpoint to Krugman's ideas. I believe you'd find the intellectual engagement and critiques within the podcast, not the subtitle.
        CharlesColeman 7y ago
        > I believe you'd find the intellectual engagement and critiques within the podcast, not the subtitle. No, I doubt it. If they think they can refute [1] like clockwork future columns they've never seen, it's almost certain they're just rehashing dogmas for the faithful. I have better things to spend my time on than that. [1] a very strong word, by the way

bassman9000 7y ago

What is not in doubt is that better paid workers means not quite as well paid executives. Something to back this, other than personal experience/opinion, would be nice. A = better paid workers B = better paid executives Your point seems to be that A => ¬B. Which, even if statistically accurate, seems a bit weird as a causation.

scarejunba 7y ago
True. It comes from a zero-sum game view of the company. But there are true inefficiencies that may be solved by A that make B actually more likely. For instance, if A causes lower attrition and therefore training costs, it _may_ cause sufficient higher productivity across the board for every organization as a worker gets skilled and stays in his job for longer. And that increased productivity may manifest as better company performance. It is plausible that we could have A & B. I didn't even consider the time-axis myself (implicitly assuming zero-sum) so that's a good objection.
mdszy 7y ago
What possible reason could you have for writing it this way and not just saying "Your point seems to be that better paid workers leads to worse paid executives..."
- bassman9000 7y ago
  Not being a native speaker, probably not being as fluent as you in English, and not wanting to misunderstand that the OP made more complicated than needed, IMHO.

microcolonel 7y ago

> ...from a certain "trickle down" group in politics... Far as I'm aware, "trickle down" is a pejorative association made by people who disagree that supply-side factors are the primary determinant of economic growth; and not an actual group of actual people.