6 ms·

it's just wrong though, the reason why people are rich is that they have more income streams by producing more valuable things, not consuming less. It's a nice

it's just wrong though, the reason why people are rich is that they have more income streams by producing more valuable things, not consuming less. It's a nice idiom to have when you use labour to trade for income and your income doesn't increase by your efforts but the reason why people are rich is more based on their production than their consumption. The analogy makes sense for middle class folk though, but a rich person will stay rich regardless of what they buy as long as their production output is stil desirable.

CPLX 3y ago
The reason people are still rich is the same reason nobody would watch sports if they didn’t reset the score at the end of each game. “Today the New York Yankees will play the Montreal Expos. Our game begins with the Yankees having a score of 79,613 runs and the Expos having a score of 12,177 runs.” If this is how baseball worked how much energy do you think the Yankees would spend recruiting a hot new pitcher versus starting one of the owners kids?
- Terr_ 3y ago
  I'd like to add that those teams could have always been playing equally-well. This phenomenon happens even in simpler models, where it's easy to see that the eventual "winner" is only there through pure long-term luck, with zero distinguishing merit or intelligence etc.: > If you simulate this economy, a variant of the yard sale model, you will get a remarkable result: after a large number of transactions, one agent ends up as an “oligarch” holding practically all the wealth of the economy, and the other 999 end up with virtually nothing. > It does not matter how much wealth people started with. It does not matter that all the coin flips were absolutely fair. It does not matter that the poorer agent's expected outcome was positive in each transaction, whereas that of the richer agent was negative. Any single agent in this economy could have become the oligarch—in fact, all had equal odds if they began with equal wealth. In that sense, there was equality of opportunity. But only one of them did become the oligarch, and all the others saw their average wealth decrease toward zero as they conducted more and more transactions. To add insult to injury, the lower someone's wealth ranking, the faster the decrease. https://www.scientificamerican.com/article/is-inequality-inevitable/ https://www.scientificamerican.com/article/is-inequality-ine...
  - Kon-Peki 3y ago
    > I'd like to add that those teams could have always been playing equally-well. Depending on how you count things, the Yankees were founded in either 1901 or 1903, while the Expos were created in the 1968 baseball expansion and started playing in 1969. Without reseting the score for every game, there is simply no way for the Expos (now called the Washington Nationals) to ever have equality with the Yankees. (well, ok, it is possible but is just plain never going to happen). At the end of the last (American) football season, the Green Bay Packers beat the Chicago Bears, and in doing so passed the Bears for the most all-time wins in professional (American) football, which is the first time ever that the Bears did not have the most all-time wins. The Bears are one of the founding teams, and the Packers joined the league in the second season. If the Bears and Packers both won 0 games for 4 straight years, the New York Giants would catch up with both of them. But only if they won all 16 games every year. Then again, the Giants joined the league in its 5th year. Is there any reasonable situation in which a non-first-decade team manages to catch up? No: it would take a generation of spectacularly bad performance by all the old clubs while at the same time a newer club needs to be spectacularly good the entire time! That original analogy was so good :)
- mindslight 3y ago
  Wow, that's a hilariously spot on analogy! I'm ideologically predisposed against centralization (including that of government), but I've still got to acknowledge the extreme slashing of tax rates that took place over the last several decades. Not only the income tax, but also the estate tax. Take a look back at the historical rates for both, and they're shocking compared to what we consider "high taxes" today. These taxes were gutted under a pretend banner of limiting government, while government spending continued full steam ahead - including spending on mega subsidies to the financial industry by the federal reserve. Those taxes were all money that used to be recaptured by the government, now continually accumulating in private hands. The only reason we haven't had massive price inflation over the past several decades is that technological progress and outsourcing has made manufactured goods continually less expensive to produce. Instead the inflation has shown up in the "everything bubble", with asset prices mostly exempt from CPI, as ever-growing anti-productive wealth pools bid up ownership of our entire society.
drewbug01 3y ago
Is it really fair to say the rich “produce” anything? Having multiple income streams doesn’t at all imply you produce anything whatsoever - some people are born into money, some earned it in the past, every now and again someone wins the lottery. I’m not saying the wealthy never make anything of value, but rather that wealth is not necessarily correlated to “output” of any kind.
- dooraven 3y ago
  having multiple income streams means you've (the you here is broad, could mean your company, your family trust etc) produced something people find valuable yeah. Producing can mean many things here - like a podcast episode is a "production", a youtube video is a production etc. I don't dispute that many people are born into wealth, but over the past 20 years there has been more wealth produced in the world than ever before. There are more millionnaires and billionnaires than ever before, most of them were not born rich. You don't become rich by reducing your expenses, you become rich by making something people want and monetizing it.
  - dmvdoug 3y ago
    > having multiple income streams means you've (the you here is broad, could mean your company, your family trust etc) produced something people find valuable yeah Oh, dear. I can tell from reading your comments that it’s not gonna matter to try to argue with you, so I’ll just say that this is incredibly deeply profoundly naïve.
    - fallingknife 3y ago
      Insults instead of making a point. You're right to not argue because you would lose.
      - dmvdoug 3y ago
        The point is that it’s incredibly deeply profoundly naive. It’s not an insult. It’s odd that you took it as one, since it wasn’t even directed at you. But hey, you seem to have gotten some satisfaction out of whatever that puffery immediately above was, so I’m glad I could help you get that off your chest.
jonathankoren 3y ago
That’s not the point. The point is that at some point there’s a quality quantum jump. If you can’t afford it, you’re always paying more. It's the same thing about buying in bulk. Yes, buying cereal from the warehouse club is cheaper per unit, but you have to be able to afford the 10 pounds of cereal, and the membership fee, and afford a place where you can store the 10 pounds. If you can’t, you’re stuck paying more per unit. Or let’s take predatory check cashing places. No one should be lose 3% to 7% of their wages to literally cash a check, yet if you can’t carry the minimum savings amount, you can’t get a bank that won’t charge you a monthly “maintenance fee” (lol, like what “maintenance”are they doing? Polishing coins, and ironing bills?), so you lose 3% of your wages as a poor tax, whereas someone with a more lucrative job, keeps all of their take home pay.
- evancox100 3y ago
  IME Costco at least is not price competitive with typical grocery store private labels brands. Better quality? Sure, maybe, but they really don't compete at the "bagged discount cereal" price level AFAICT. In general Costco is usually 60% - 100% more expensive than my local HEB's HCF products. Maybe our Warehouse Stores are run very differently? Not sure. Been awhile since I've gone to Sam's, maybe they compete in that price range. And I just checked Chase, they charge $12 / month* for basic checking. (*Waived with just $500/month direct deposit, but let's ignore that.) If you're cashing more than $400/month, you should just sign up for it. ($400/month is deep, deep poverty level, like panhandling.) I'm sure there's people who don't get a real checking account and could benefit from it, but the reasons are probably more along thines of "ineligible to get a bank account" or math illiterate, not "too poor for the minimum balance requirements". The whole idea is just ridiculous. The main consumer good people get screwed over like this is housing, but that's 60% screwing over the other 40%, not the top 1% vs the 99%, so most people don't see themselves in those terms.
  - lotsofpulp 3y ago
    You would have to compare prices for Costco's Kirkland brand to HEB's proprietary brand. Also, Costco's goal is not to be the lowest price. Their goal is to be the lowest price relative to the quality, and their claim is they do the due diligence of providing a minimum level of quality for their products such that the customer will be more likely to be satisfied with the product than at other stores.
akomtu 3y ago
Kids of the rich don't need to produce anything. Very often, they inherit the sense of entitlement to the riches, and none of the desire to create anything. At best, they are immersed in the lazy loop of self-gratification; at worst they are scheming how to destroy things and grab as much as possible from the ruins.

CPLX 3y ago

The reason people are still rich is the same reason nobody would watch sports if they didn’t reset the score at the end of each game. “Today the New York Yankees will play the Montreal Expos. Our game begins with the Yankees having a score of 79,613 runs and the Expos having a score of 12,177 runs.” If this is how baseball worked how much energy do you think the Yankees would spend recruiting a hot new pitcher versus starting one of the owners kids?

Terr_ 3y ago
I'd like to add that those teams could have always been playing equally-well. This phenomenon happens even in simpler models, where it's easy to see that the eventual "winner" is only there through pure long-term luck, with zero distinguishing merit or intelligence etc.: > If you simulate this economy, a variant of the yard sale model, you will get a remarkable result: after a large number of transactions, one agent ends up as an “oligarch” holding practically all the wealth of the economy, and the other 999 end up with virtually nothing. > It does not matter how much wealth people started with. It does not matter that all the coin flips were absolutely fair. It does not matter that the poorer agent's expected outcome was positive in each transaction, whereas that of the richer agent was negative. Any single agent in this economy could have become the oligarch—in fact, all had equal odds if they began with equal wealth. In that sense, there was equality of opportunity. But only one of them did become the oligarch, and all the others saw their average wealth decrease toward zero as they conducted more and more transactions. To add insult to injury, the lower someone's wealth ranking, the faster the decrease. https://www.scientificamerican.com/article/is-inequality-inevitable/ https://www.scientificamerican.com/article/is-inequality-ine...
- Kon-Peki 3y ago
  > I'd like to add that those teams could have always been playing equally-well. Depending on how you count things, the Yankees were founded in either 1901 or 1903, while the Expos were created in the 1968 baseball expansion and started playing in 1969. Without reseting the score for every game, there is simply no way for the Expos (now called the Washington Nationals) to ever have equality with the Yankees. (well, ok, it is possible but is just plain never going to happen). At the end of the last (American) football season, the Green Bay Packers beat the Chicago Bears, and in doing so passed the Bears for the most all-time wins in professional (American) football, which is the first time ever that the Bears did not have the most all-time wins. The Bears are one of the founding teams, and the Packers joined the league in the second season. If the Bears and Packers both won 0 games for 4 straight years, the New York Giants would catch up with both of them. But only if they won all 16 games every year. Then again, the Giants joined the league in its 5th year. Is there any reasonable situation in which a non-first-decade team manages to catch up? No: it would take a generation of spectacularly bad performance by all the old clubs while at the same time a newer club needs to be spectacularly good the entire time! That original analogy was so good :)
mindslight 3y ago
Wow, that's a hilariously spot on analogy! I'm ideologically predisposed against centralization (including that of government), but I've still got to acknowledge the extreme slashing of tax rates that took place over the last several decades. Not only the income tax, but also the estate tax. Take a look back at the historical rates for both, and they're shocking compared to what we consider "high taxes" today. These taxes were gutted under a pretend banner of limiting government, while government spending continued full steam ahead - including spending on mega subsidies to the financial industry by the federal reserve. Those taxes were all money that used to be recaptured by the government, now continually accumulating in private hands. The only reason we haven't had massive price inflation over the past several decades is that technological progress and outsourcing has made manufactured goods continually less expensive to produce. Instead the inflation has shown up in the "everything bubble", with asset prices mostly exempt from CPI, as ever-growing anti-productive wealth pools bid up ownership of our entire society.

drewbug01 3y ago

Is it really fair to say the rich “produce” anything? Having multiple income streams doesn’t at all imply you produce anything whatsoever - some people are born into money, some earned it in the past, every now and again someone wins the lottery. I’m not saying the wealthy never make anything of value, but rather that wealth is not necessarily correlated to “output” of any kind.

dooraven 3y ago
having multiple income streams means you've (the you here is broad, could mean your company, your family trust etc) produced something people find valuable yeah. Producing can mean many things here - like a podcast episode is a "production", a youtube video is a production etc. I don't dispute that many people are born into wealth, but over the past 20 years there has been more wealth produced in the world than ever before. There are more millionnaires and billionnaires than ever before, most of them were not born rich. You don't become rich by reducing your expenses, you become rich by making something people want and monetizing it.
- dmvdoug 3y ago
  > having multiple income streams means you've (the you here is broad, could mean your company, your family trust etc) produced something people find valuable yeah Oh, dear. I can tell from reading your comments that it’s not gonna matter to try to argue with you, so I’ll just say that this is incredibly deeply profoundly naïve.
  - fallingknife 3y ago
    Insults instead of making a point. You're right to not argue because you would lose.
    - dmvdoug 3y ago
      The point is that it’s incredibly deeply profoundly naive. It’s not an insult. It’s odd that you took it as one, since it wasn’t even directed at you. But hey, you seem to have gotten some satisfaction out of whatever that puffery immediately above was, so I’m glad I could help you get that off your chest.

jonathankoren 3y ago

That’s not the point. The point is that at some point there’s a quality quantum jump. If you can’t afford it, you’re always paying more. It's the same thing about buying in bulk. Yes, buying cereal from the warehouse club is cheaper per unit, but you have to be able to afford the 10 pounds of cereal, and the membership fee, and afford a place where you can store the 10 pounds. If you can’t, you’re stuck paying more per unit. Or let’s take predatory check cashing places. No one should be lose 3% to 7% of their wages to literally cash a check, yet if you can’t carry the minimum savings amount, you can’t get a bank that won’t charge you a monthly “maintenance fee” (lol, like what “maintenance”are they doing? Polishing coins, and ironing bills?), so you lose 3% of your wages as a poor tax, whereas someone with a more lucrative job, keeps all of their take home pay.

evancox100 3y ago
IME Costco at least is not price competitive with typical grocery store private labels brands. Better quality? Sure, maybe, but they really don't compete at the "bagged discount cereal" price level AFAICT. In general Costco is usually 60% - 100% more expensive than my local HEB's HCF products. Maybe our Warehouse Stores are run very differently? Not sure. Been awhile since I've gone to Sam's, maybe they compete in that price range. And I just checked Chase, they charge $12 / month* for basic checking. (*Waived with just $500/month direct deposit, but let's ignore that.) If you're cashing more than $400/month, you should just sign up for it. ($400/month is deep, deep poverty level, like panhandling.) I'm sure there's people who don't get a real checking account and could benefit from it, but the reasons are probably more along thines of "ineligible to get a bank account" or math illiterate, not "too poor for the minimum balance requirements". The whole idea is just ridiculous. The main consumer good people get screwed over like this is housing, but that's 60% screwing over the other 40%, not the top 1% vs the 99%, so most people don't see themselves in those terms.
- lotsofpulp 3y ago
  You would have to compare prices for Costco's Kirkland brand to HEB's proprietary brand. Also, Costco's goal is not to be the lowest price. Their goal is to be the lowest price relative to the quality, and their claim is they do the due diligence of providing a minimum level of quality for their products such that the customer will be more likely to be satisfied with the product than at other stores.

akomtu 3y ago

Kids of the rich don't need to produce anything. Very often, they inherit the sense of entitlement to the riches, and none of the desire to create anything. At best, they are immersed in the lazy loop of self-gratification; at worst they are scheming how to destroy things and grab as much as possible from the ruins.