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This all seems irrelevant when the poorest 80% of Americans own about 7% of the nation's wealth. The top 1% owns 40% of the wealth. This statistic by itself wou

by evilos 6y ago

This all seems irrelevant when the poorest 80% of Americans own about 7% of the nation's wealth. The top 1% owns 40% of the wealth. This statistic by itself would not be an existential problem if the poor weren't struggling to survive. But they are. And so it is. 12% of all Americans are below the poverty line, which for a single person is less than 12k USD a year. See pg10 for 40% net worth figure: https://www.nber.org/papers/w24085.pdf https://www.nber.org/papers/w24085.pdf

ChrisLomont 6y ago
Ha - I figured you'd cite a paper by Edward Wolff. All such wild claims trace back to him, despite dozens of economists in this space, and mostly because he defines wealth as not including houses, nor in retirement benefits, which is where the vast majority of Americans hold a lot of wealth. I've seen no other economist do it that way and still call it "wealth." Most would call it financial assets or something. The math is simple. "Rich value" / "poor value", if you can make "poor value" shrink even a little, causes the expression to blow up. This is his game. Every single time I've chased down the source of claims like these, they go back to this person, which is why I know his name and his shell game. Aha - scanning through his paper, there it is on page 6: "I also use a more restricted concept of wealth, which I call “financial resources” or FR. This is defined as net worth minus net equity in owner-occupied housing (the primary residence only)." He does this in each and every paper for decades now. His usual trick, done by pretty much no one else, to make the values more outrageous. Go read some other economists. As to wealth owned, it's nearly irrelevant to the average person if the top found companies and own incredible value in stock, since that value was not seized from the average person, and without the company, the average person would not be given that money. It's stock assets - completely made up as the value of a company. When Zuckerberg files an IPO and sells, say, 50% of Facebook and keeps 50%, if some buyer pays 1B for 1%, that makes FB worth 100 * 1B = 100B. Zuck just made 50 billion. If tomorrow during trading FB drops to 100K for 1%, then Zuck just lost around 50B. This money which is his wealth did not come from people when the price climbs just like it does not suddenly go back when the price drops. Now look at the Forbes 400 - majority of them first gen, their wealth is in stock in a company they founded, and the rest are almost exclusively 2nd gen with stock in a company their parents founded. The value of the company is a measure of how much their customers value them. These people are rich by owning something that people highly value. That is it. So it seems like petty jealously to worry about wealth in stock funny money, since it wasn't taken from you. And the evidence is that the US enjoys amoung the highest, if not the highest, amount of disposable income for any country on the planet. Our poor are rich by world standards. >if the poor weren't struggling to survive Here's what the poor own: [2] A lot of it is the reasons I posted in another answer in this thread: poverty includes college and grad students (not yet earning) and retired (well to do, low income since retired). This makes up a lot of those listed by Census as in poverty. The poor in the US are not poor by any other country, and after tax transfers, are bringing in pretty good money. >12% of all Americans are below the poverty line, which for a single person is less than 12k USD a year. For the US, poverty line is defined as (usually) 1/3 median income, so as all people get richer, so does the poverty line. For example, that line puts a person in poverty in the US at about to 85th percentile for world income. These incomes also are pre-tax transfer: they don't include values given via tax and welfare systems. The US spends around $60K per person in poverty on welfare programs. Last I could find numbers this averaged like $40K in transfers to a poor family per year. Also this line includes students, grad students, both classes have not yet earned, but will. It also includes old retired people that can have millions in assets, but no income, so now they're below the income poverty line. Both of these groups make up a big part of that 12%. Also it's a static snapshot - people ten to accumulate wealth as they age [1]. Median wealth for under 35 is $11K. For 65 and up it's over $200k. So a lot of those poor young people make some decent money, and eventually retire back to the poverty line, but with wealth amassed. For example, Turkey median income is ~$4000 USD in PPP equivalent. But they're not all dying from hunger. [1] https://www.nerdwallet.com/article/finance/average-net-worth-by-age https://www.nerdwallet.com/article/finance/average-net-worth... [2] https://www.heritage.org/poverty-and-inequality/report/air-conditioning-cable-tv-and-xbox-what-poverty-the-united-states https://www.heritage.org/poverty-and-inequality/report/air-c...
- evilos 6y ago
  You were so close. On page 6 as you mention he defined his FR term, but he also defined 'net worth' explicitly including real estate and housing. In fact it's the first thing on the page so I don't know how you missed it. And the original quote used net worth, not FR. He also gives a figure for FR, which is even higher at 46% vs 40% for net worth (owned by top 1%). So it seems you are not well versed in this man's research at all.
  - ChrisLomont 6y ago
    >So it seems you are not well versed in this man's research at all. Enough to know that most all of his claims are always at the outer bounds of research. He is an outlier, and nearly every time someone cites some inequality quote that is supposed to make it seem outrageous, the source is Wolff. As such, I rarely dig through every sentence of his papers, since when I do, and compare them to the outstanding literature, I find at every turn his calculations are done to maximize inequality. No other researcher I've seen in this field obtain his claims. Here [1] for example is another source that replaces Wolff's 46% with 39%. Here's the Minneapolis Fed with [2] the same value under 40% (and they make the interesting point that even with the 1% completely removed, that the next 9 % still has a large amount - so do we torch them next after the 1% is handled?) There are ample others even lower. To paraphrase you, "it seems you're not well versed in the research in this field." If you were, you'd not cite Wolff as evidence. I'll leave it to you to discover why Wolff is an outlier. You may as well quote the rare atmospheric scientist that claims there is no global warming or Dr. Wakefield on vaccines causing autism if you're this willing to believe things that suit your agenda without looking at the broader field. [1] https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality https://www.cbpp.org/research/poverty-and-inequality/a-guide... [2] https://www.minneapolisfed.org/institute/working-papers-institute/iwp9.pdf https://www.minneapolisfed.org/institute/working-papers-inst...

by evilos 6y ago

ChrisLomont 6y ago

Ha - I figured you'd cite a paper by Edward Wolff. All such wild claims trace back to him, despite dozens of economists in this space, and mostly because he defines wealth as not including houses, nor in retirement benefits, which is where the vast majority of Americans hold a lot of wealth. I've seen no other economist do it that way and still call it "wealth." Most would call it financial assets or something. The math is simple. "Rich value" / "poor value", if you can make "poor value" shrink even a little, causes the expression to blow up. This is his game. Every single time I've chased down the source of claims like these, they go back to this person, which is why I know his name and his shell game. Aha - scanning through his paper, there it is on page 6: "I also use a more restricted concept of wealth, which I call “financial resources” or FR. This is defined as net worth minus net equity in owner-occupied housing (the primary residence only)." He does this in each and every paper for decades now. His usual trick, done by pretty much no one else, to make the values more outrageous. Go read some other economists. As to wealth owned, it's nearly irrelevant to the average person if the top found companies and own incredible value in stock, since that value was not seized from the average person, and without the company, the average person would not be given that money. It's stock assets - completely made up as the value of a company. When Zuckerberg files an IPO and sells, say, 50% of Facebook and keeps 50%, if some buyer pays 1B for 1%, that makes FB worth 100 * 1B = 100B. Zuck just made 50 billion. If tomorrow during trading FB drops to 100K for 1%, then Zuck just lost around 50B. This money which is his wealth did not come from people when the price climbs just like it does not suddenly go back when the price drops. Now look at the Forbes 400 - majority of them first gen, their wealth is in stock in a company they founded, and the rest are almost exclusively 2nd gen with stock in a company their parents founded. The value of the company is a measure of how much their customers value them. These people are rich by owning something that people highly value. That is it. So it seems like petty jealously to worry about wealth in stock funny money, since it wasn't taken from you. And the evidence is that the US enjoys amoung the highest, if not the highest, amount of disposable income for any country on the planet. Our poor are rich by world standards. >if the poor weren't struggling to survive Here's what the poor own: [2] A lot of it is the reasons I posted in another answer in this thread: poverty includes college and grad students (not yet earning) and retired (well to do, low income since retired). This makes up a lot of those listed by Census as in poverty. The poor in the US are not poor by any other country, and after tax transfers, are bringing in pretty good money. >12% of all Americans are below the poverty line, which for a single person is less than 12k USD a year. For the US, poverty line is defined as (usually) 1/3 median income, so as all people get richer, so does the poverty line. For example, that line puts a person in poverty in the US at about to 85th percentile for world income. These incomes also are pre-tax transfer: they don't include values given via tax and welfare systems. The US spends around $60K per person in poverty on welfare programs. Last I could find numbers this averaged like $40K in transfers to a poor family per year. Also this line includes students, grad students, both classes have not yet earned, but will. It also includes old retired people that can have millions in assets, but no income, so now they're below the income poverty line. Both of these groups make up a big part of that 12%. Also it's a static snapshot - people ten to accumulate wealth as they age [1]. Median wealth for under 35 is $11K. For 65 and up it's over $200k. So a lot of those poor young people make some decent money, and eventually retire back to the poverty line, but with wealth amassed. For example, Turkey median income is ~$4000 USD in PPP equivalent. But they're not all dying from hunger. [1] https://www.nerdwallet.com/article/finance/average-net-worth-by-age https://www.nerdwallet.com/article/finance/average-net-worth... [2] https://www.heritage.org/poverty-and-inequality/report/air-conditioning-cable-tv-and-xbox-what-poverty-the-united-states https://www.heritage.org/poverty-and-inequality/report/air-c...

evilos 6y ago
You were so close. On page 6 as you mention he defined his FR term, but he also defined 'net worth' explicitly including real estate and housing. In fact it's the first thing on the page so I don't know how you missed it. And the original quote used net worth, not FR. He also gives a figure for FR, which is even higher at 46% vs 40% for net worth (owned by top 1%). So it seems you are not well versed in this man's research at all.
- ChrisLomont 6y ago
  >So it seems you are not well versed in this man's research at all. Enough to know that most all of his claims are always at the outer bounds of research. He is an outlier, and nearly every time someone cites some inequality quote that is supposed to make it seem outrageous, the source is Wolff. As such, I rarely dig through every sentence of his papers, since when I do, and compare them to the outstanding literature, I find at every turn his calculations are done to maximize inequality. No other researcher I've seen in this field obtain his claims. Here [1] for example is another source that replaces Wolff's 46% with 39%. Here's the Minneapolis Fed with [2] the same value under 40% (and they make the interesting point that even with the 1% completely removed, that the next 9 % still has a large amount - so do we torch them next after the 1% is handled?) There are ample others even lower. To paraphrase you, "it seems you're not well versed in the research in this field." If you were, you'd not cite Wolff as evidence. I'll leave it to you to discover why Wolff is an outlier. You may as well quote the rare atmospheric scientist that claims there is no global warming or Dr. Wakefield on vaccines causing autism if you're this willing to believe things that suit your agenda without looking at the broader field. [1] https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality https://www.cbpp.org/research/poverty-and-inequality/a-guide... [2] https://www.minneapolisfed.org/institute/working-papers-institute/iwp9.pdf https://www.minneapolisfed.org/institute/working-papers-inst...