With all due respect, what he’s describing isn’t just econ 101, it’s been econ 101 for almost a century. If you really don’t understand the concept at this level, then you shouldn’t be entering a discussion on economics.
Yes, which is why it is implied that such statistics work on average or mean measures, rather than comparing the exception in the USA to the rule in Sweden. Yeah, if you live in a rich neighborhood and make enough money to put yourself firmly in the top 20% of households (or top 2% of individual filers) in the USA, then your healthcare and school may very well be better than the average in Sweden. That shouldn’t come as a huge surprise to anyone, given how good things are for people with a lot of money in the USA. The problem, however, is everyone else. The people who can’t live in the posh neighborhoods with the good schools and afford expensive health insurance that won’t fuck them over when something serious actually comes along. The vast majority of the country for whom Sweden’s system is a gigantic step up. And that’s not even getting into higher education.
Err, yes it is ? In terms of quality of life and what you do with your day, going from 14k to 87k changes a hell of a lot more than going from one million to five or ten.
Oh, they can seek all right :).
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So his ground breaking thesis is that it’s easier to make money when you already have money, and those with money use it to drive out competition, protect their privilege, and maintain the status quo? Well, I guess it’s nice to get in down with charts and everything.
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I would have to agree that it seems rather self-evident. But it’s interesting the kind of vitriol or outright denials this “duh, ya think, Sherloque ?” thesis garners from pundits and the econ press.
It’s a big change in quality of life, but not that hard to reach. I used to make about 18k now I make 45k and it’s not inconceivable that I could make 87k in a few years. 150k, I doubt that’ll ever happen, but that’s what it takes to reach the top 10% in the US. So naturally our mobility looks worse, but that’s only because there’s a much higher bar to clear.
My exact same skills in Sweden would get me into the top 10%, but in terms of absolute dollars it’s the same thing. But it looks better in the mobility statistics because Sweden makes their rich people poorer. Which doesn’t actually help anyone.
A better question is, “If you have mad skills and there’s a lot of demand for your skills, do you toil away for a middle class lifestyle in Scandinavia, where most of your money goes to other people, or do you come to the US and achieve your dreams?”
If you’re a rock star or an actor, chances are you come to the US. Yngwie Malmsteen lives less than five miles from me. This despite the fact that his market is primarily in Europe these days. Who wants to pay all those taxes?
Seems like that would be harder in Sweden, where the best you can ever strive for is under six figures and where most people don’t work.
At least in the US, if you have a talent, that talent might get you rich. And even if you aren’t immensely talented, six figure incomes are fairly common here.
I have yet to meet anyone in the US who worked hard at not being poor and failed. I do meet people who decided that for various reasons being poor is way easier than working at not being poor and picked the easy way.
In the US, for an average person, if you don’t want to be poor, you don’t have to be. Not everyone will become rich. But not being poor is a very achievable goal.
Yep, as long as you’re not mentally ill, disabled, or live in a depressed area and don’t realize there are other places. I have a cousin in La Center, KY. Can’t find work, they are on welfare. Um, come here to South Florida, I’ll house you, teach you how to fix computers, help you find work.
Nope, staying in La Center, KY. No hope, but the monthly check and food stamps gets them by.
How did the middle class arise in almost every upper income (and many middle income) nations if this is the natural trend of growing inequality driving down the standard of living among all but the wealthy?
Western middle class may be household incomes of 30k+, developing world middle class nations may be 5-30k in household income. But it seems to happen all over the world.
So how do they manage to tie these two concepts together? Was the growth of the global middle class in both developed and middle income countries due to government intervention in the market? I thought it was due to nations moving up the value chain until wages started hitting a decent level.
There are predictions that the global middle class will double to 4 billion people by mid century. And I don’t think that figure includes OECD middle class.
I think it might be you who needs to brush up on his Econ 101. Even according to Keynes, fiscal stimulus only works when there is an artificial demand gap, such as fear causing excess savings.
The reason the fiscal stimulus may work is because productive capacity is greater than demand, and not because of fundamentals but because of a temporary panic or balance sheet issue or something else that irrationally suppresses purchasing. In that case, the government borrows money and spends it, or gives it to the people to spend.
The value of fiscal stimulus is not universal. If the economy is at full capacity and capital is being appropriately invested, then taxing money to spend just moves it from one use to another. It will harm the economy instead of helping it by causing misallocations of resources.
So no, “Duh, Keynes” is not a valid response to every concern over taxing and spending.
‘Fiscal stimulus’ has become the Left’s Laffer Curve - the very limited principle that gets applied universally as way of convincing yourself that you can have your cake and eat it, too.
Let’s try a little thought experiment. In Plan A, the typical worker has a job radius of R. In Plan B, the radius is 2R, for roughly 4 times the area to cover.
In Plan A, there will be “cherry” jobs that a sub-optimal employee gets because he happens to live close enough, while there are better workers a few miles farther away.
In Plan B, the less-qualified guy doesn’t get the job, the better-qualified guy does.
The first-order effect here is pretty much zero-sum: one guy gets a better job, one gets a worse job, in either case. But in Plan B, the better-suited employee gets the job. Ideally, this makes him more productive, benefiting the economy as a whole.
But it’s the third order effects that end up being more significant. With a wider pool of potential employees, starting any business is easier, and there’s a wider area of locations that are favorable for starting a business.
More competition isn’t better for the guy who would have had the cherry job he’s not quite qualified for. But it’s better for everyone else. More potential employees vying for the same job lowers wages, but more employers vying for employees raises them. Redrawing the boundaries doesn’t change the sum on this game except to the extent that it encourages more employers to exist.
No doubt there are more illustrative thought experiments. This is off the top of my head and no doubt has flaws, but I hope it illuminates things a bit.
By increasing the available commuting range, mass transit assures that any given worker’s labor has more available bidders. Are you going to stand behind your claim that bringing more bidders into an auction does not exert upward pressure on prices?
Presumably he infers it from the numbers. Admittedly, he failed to account for the fact that some people make decisions that are contrary to the facts on the ground; thus, it is possible that some (now severely disappointed) people did go into the civil service for the money.
