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I'm an American and I can talk about the same things, nearly word for word (Jobseekers allowance notwithstanding) and feel exactly the same way. Something is w
by Aloha 4y ago
I'm an American and I can talk about the same things, nearly word for word (Jobseekers allowance notwithstanding) and feel exactly the same way.
Something is wrong with the economy, not just in the UK, but in America and probably a bunch of other countries. Where is the prosperity, if its there, why is it not more widely shared? is it a single cause, or is the cause manifold?
I have some ideas as to the answers to these questions (and its not capitalism is bad), but I too am just an engineer, not an economist. The unrest that propels populism is real. It's clear the status quo isnt working for the majority.
- stjohnswarts 4y agoThe system is rigged against middle class on down because the government is bought and paid for by the 0.1% so that it's trickle up economics.
- notch656a 4y agoForced sharing of prosperity (in form of transfer payments / taxes) is at a much higher non-wartime rate (% gdp) vs say 100 years ago (in the US). If you want to use our parents (and before) proportion of transfer of prosperity, we should lower it significantly.
- arcticbull 4y agoForced sharing is a silly way of referring to taxes which are fees assessed for collective services. Nobody builds anything alone and is a benefactor of all sorts of common goods, services and infrastructure. To say otherwise is to prefer the bootstraps narrative to reality. Top marginal tax rate in the mid 1900s was 70-90% and the estate tax was actually assessed without exempting the first $14M or whatever it is. It’s all a social construct and we collectively set the rules.
- notch656a 4y ago
- arcticbull 4y agoForced sharing isn’t an accepted term or even one that is worth using in discourse. Transfer payments benefit society which in turn benefits the best off too. They benefit from them.
- Aloha 4y agoThis only seems to account for direct social spending, not indirect - which much of the cold war was, that large peacetime military, its transfer payments from the government to rural america. Also, when I say shared prosperity, I dont mean transfer payments, nor do I mean forced sharing, I mean why are so few benefits of our greater productivity seen by the majority (bottom 2/3rds), why has the standard of living fallen in real terms for the bottom 50% of the country? why do we feel poorer?
- notch656a 4y agoMedian real personal income has risen significantly in the past 1-2 generations. It looks like the common man in the US is doing quite well compared to our ancestors. If we're looking at voluntary trade of wealth, rather than forced sharing, that seems to be doing quite well! https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N >why has the standard of living fallen in real terms for the bottom 50% of the country? >Right, but again, I'm not talking transfer payments, or forced sharing, if I'd meant to speak to transfer payments, I would have said transfer payments, not 'shared prosperity'. Do you think those at the bottom are getting most of their income from transfer payments or are they getting it from voluntary trade and charity? The people at the bottom are living off of transfer payments (forced sharing). -----------replies [since mine are spent]-------- >which makes the actual situation very clear: real median personal income has lagged substantially behind real GDP per capita ever since 1975 or so. Perhaps the median worker is being 'robbed', but another explanation is merely the median worker isn't where the majority of the value creation gains have been located for the past ~50 years.
- Aloha 4y agoThere is effectively no cash welfare in the United States. Those who are getting cash income at the bottom of the scale are getting it because of disability or age. Because there is no cash welfare, people are indeed earning their money mostly by performing work.
- jandrewrogers 4y agoThe effective tax rates when the marginal rates were 70-90% were not much different than they are now. Cherrypicking marginal tax rates while ignoring deductions against those rates is misleading and deceptive.
- Aloha 4y agoWhy are you comparing to 100 years ago - thats a non-sensical one, even my great-grandparents were minors 100 years ago.
- notch656a 4y agoFine, go back 20, 30, 60 years. Practically take your pick. If you look at say federal transfer payments as percent GDP they were way lower. https://fred.stlouisfed.org/graph/?g=jU5N https://fred.stlouisfed.org/graph/?g=jU5N And we all know anyone talking about the standard of the bottom is looking exactly at transfer payments. That's how those at the bottom survive. We shouldn't try to trick the reader by saying "I'm not talking transfer payments."
- Aloha 4y agoRight, but again, I'm not talking transfer payments, or forced sharing, if I'd meant to speak to transfer payments, I would have said transfer payments, not 'shared prosperity'.
- BobbyJo 4y agoHow would you define "shared prosperity" then? How would we compare it to some other time or place?
- Aloha 4y agoMore good jobs for everyone. Largely, in my adult life, I've seen management and shareholders pots grow, and labor stay the same. When the pie grows everyone ought to get a little bigger piece of it. Meanwhile, rent, price of a used or new car, college education, homeownership and medical costs have grown unabated - and generally faster than inflation.
- Red_Leaves_Flyy 4y agoProfit sharing is probably the term we’re looking for here.
- systemvoltage 4y agoYeah, things are about to get worse. The newer generation wants equality of outcome and wealth (aka communism). They're enamored by income equality and climate which is just a complete subjectivism take over. You can do no little and you can always do more. We're here to shame you. Asian countries have adopted what worked in the west: Capitalism and lifting people out of poverty at an unprecendented rate. Those that complain about inequality are totally ok with not comparing themselves to someone in Bangladesh. To them, you look like a multi-millionaire. The hypocrisy is so blindingly bright, it is unbelievable. None of the current zeitgeist has any reason, rationality and logic. It is subjectivism and post-modernism in its worst form. Biting off the hand that feeds them.
- mindslight 4y agoThe "newer generation" is reacting this way because there is no political alternative being offered. Speaking in terms of the US, where is the party that advocates fiscal responsibility? Not fake "fiscal responsibility" where the Fed gives away trillions of dollars in "loans" to the financial industry while politicians run interference by making a show about legislative spending, but actual fiscal responsibility that respects the inherently-distributed economy. It's been outside the Overton window since the everything-bubble was kicked off by the ending of the gold standard.
- deleted 4y ago[deleted]
- notch656a 4y agoThere are folks running for office that advocate for significantly less spending by the government as well as balanced fiscal discipline. People don't tend to vote for them.
- soco 4y agoWhy bother talking about them? They stand zero chances to be elected, not having one of the two parties behind them. I repeat, zero chances. Zero.
- w1nst0nsm1th 4y agoBecause we live again in a new Gilded Age, with its monopolies, robber barons, regulatory capture, and corruptions. If you want to understand these days, you have to understand the Gilded Age, the rise of Unions, the New Deal, the G.I bill, the rise of the middle classe post WW2 until the end of the 70s, when reagan started to reverse the course engaged by FDR in the 30s, gutted every regulation intended to protect workers, envirronement, gutted union coercitive power, deregulated financial system with its new credit offering allowing to compensate diminished real purchase power of middle class salaries, slashed taxes on highest tiers of population and corporation, slashed public service. The subprime crisis is a direct consequence of this... For a short introduction in the matter, I suggest you to watch the last episode of season 33 of The Simpsons.
- Aloha 4y agoThe decay started earlier than Reagan it's not just the vacuousness of supply-side economics, if you asked me to pick a date, it'd be 1971.
- w1nst0nsm1th 4y agoMaybe more like 1973 : the first energy crisis.
- Aloha 4y agoI've pondered that, but why did the energy shock kill everything? Prices came down, even with stagflation, things got better.
- anonAndOn 4y agoReagan was warming up for the presidency in his second term as CA governor in '71.[0] [0]https://en.wikipedia.org/wiki/Governorship_of_Ronald_Reagan https://en.wikipedia.org/wiki/Governorship_of_Ronald_Reagan
- Aloha 4y ago
- xvedejas 4y agoI have suspected for a while that the single biggest cause is our lack of a national Land Value Tax (LVT). After all, Henry George predicted a century ago that continued technological progress and wealth creation would also lead to poverty unless there is a sufficient LVT. Until then, whether you or your family holds land is going to be a primary factor in whether you benefit from our societal progress.
- Aloha 4y agoI think both Georgism and Modern Monetary Theory are both interesting ideas, I'm not sure how applicable either is to reality however. (Even if I want MMT to be true and correct)
- preommr 4y agoFeels like there's a very obvious answer that covers the majority of the answer and everything else is quibbling over the small remaining sliver. The UK and other western countries were a global power because colonialism. Then WW2 happened and the US was mostly unscathed while also prioritizing long term growth through a stable democracy which led to high quality of life until the rest of the world caught up. We can talk about immigration, austerity, trade policy, etc. But these will only move the needle slightly. The overwhelming advantages that these countries experienced won't happen again until there's another major disruption.
- shouldtack 4y agoHow far back in history do you stop counting advantages? What about the Ottomans, the Romans, the Egyptians? Did they not also use wars and slavery for their own gain?
- deleted 4y ago[deleted]
- bryanlarsen 4y agoWages for low income Americans have increased substantially in the last year. https://www.pnas.org/doi/10.1073/pnas.2204305119 https://www.pnas.org/doi/10.1073/pnas.2204305119
- cpursley 4y agoSo has inflation.
- bryanlarsen 4y agoThe growth in wages at the low end has outpaced inflation.
- Red_Leaves_Flyy 4y agoWhich is outpacing wage growth like a cheetah versus a sloth.
- tb_technical 4y agoHave you been paying attention to the trend of the last 60?
- bryanlarsen 4y agoThat's why this is so exceptional.
- tb_technical 4y agoA substantial increase one year cannot undo sixty years of wage stagnation. We have to keep going.
- bryanlarsen 4y agoExactly. Today's economy (in the US) is in a really good place. Moderate inflation, very low unemployment, decreasing inequality. Yet the narrative is that the economy is in the crapper. The powers that be want to go back to the glory days of low inflation, high unemployment and increasing inequality. That's what we'll get if the fed continues to raise rates.