Off Topic Poker Forums

medic2038 said:

I never argued capitalism was causing inflation.
I'm not even arguing that capitalism is failing. What I am saying is that the current model we're using now is unsustainable, and will cause capitalism to fail. When a few people have money, and everyone else is dirt poor capitalism can't function, that's called feudalism.

the data doesn't support this. people have more money now than 20 or 30 years ago and wages stagnate regardless of what % of national income the bottom 90% get (refer to original post itt).

Consumer spending absolutely does drive the economy. Production only increases when there's a demand for that product (or service). Which I why I argued the tax break falacy. Production is regulated (by a company) to ensure that their products are profitable.

This is a short and simple article.
http://conceptualmath.org/philo/status1.htm

economic drivers is more of a theoretical discussion and there are different schools of thought on this. it was bad on my part to claim fact when it was just an opinion.

that page on tax cuts to the rich is very interesting. but i seriously doubt a few hundred dollar tax cut to a middle class family is going to have a great effect on quality of life. as for these tax cut studies in themselves, i'm not sure what to make of it. correlation is not causation, but they seem to be implying as much (but i'll read it more carefully since i only scanned it).

Creating a new business is almost impossible right now in many areas, you need to have money first. As the old saying goes "you need to have money to make money". One of the primary reasons for small business failures is insufficient capital.

To use a service example:
[...]

this is beyond me i'm afraid.

I never said I wanted everyone to be rich, quite the opposite. However we do have an eroding middle class, and that's due largely to wage stagnation.

Overall quality of life IS going down however. People don't have savings, and are living paycheck to paycheck. To use myself as an example I was part of the working poor for several years. Believe me it's not a very good or healthy life. I also didn't spend myself into that situation, I just couldn't make enough money to get out of it.

Let's suppose for a minute that you don't have any savings (not a stretch for most people), and something breaks on your car. We can even say that the problem is on the cheaper end and the repairs will only cost $1000. Well you need reliable transportation to get to work, so you have a few alternatives.

by all current estimates, the US has a very high standard of living. and we can try to get a better picture of life in America through studies like this (http://en.wikipedia.org/wiki/Standard_of_living_in_the_United_States). i'm looking for more comparisons to the past tho since that's our purpose here i think.

or something like this in comparison to other industrialized countries:
http://www.mapsofworld.com/world-top-ten/world-top-ten-quality-of-life-map.html

but i don't understand what "inequality adjusted" means and if i agree with such a thing.

as for your hypothetical cost of living exercise, again, it's not really instructive to do this without a comparison if our focus is on whether life in America is worse than before. i would also argue some of the costs in there like needing a phone for work is odd since if someone needed a cell phone for work in the 80's, the costs would be through the roof.

Ok, I'll admit I didn't read every response in here and I've no formal education in economics, so if I'm asking a foolish question or something that's already been addressed, I apologize.

From what I'm reading above with people talking about ever-increasing wages and the size/value of a middle class, aren't we really talking about a consumer's buying power? If wages increase at the same rate as inflation, the average person isn't really 'making more' when it comes to buying power - that is, the ability to purchase more with the same amount of money.

When people talk about the 'middle class' it seems like people are talking about the group of people that are able to buy 'X'. Usually, X is defined as a nice house, a car, plenty of food, enough to raise kids/send them to college, and some left over for frivolities. If you can't afford to buy all of X, you're in a lower class. If you can afford lots more than X, you're upper class. This is why, at least when I look at it, people who make $100k in NYC can be just scraping by and wouldn't consider themselves middle class, but if you made that much money where I live in WV you'd easily be upper-middle class or more (there aren't a lot of genuine upper class - super rich - people in my area).

So when we're talking about wage stagnation, does the raw dollar value really matter? It seems like it's just a veil and a way to obscure the discussion over buying power.

those median income figures are adjusted for inflation btw (on the "asian power" graph, you can see it says "2010 dollars" on the upper left). but as for 2nd point, wow, great insight.

since buying power is relative to different regions in the country, we have to normalize costs or, more simply, use localized studies if they're out there. but then if we're only using localized studies, that doesn't really tell us the whole picture, does it? this might make a really good thesis for some Economics major...

This is a point for the Danes. Income compression there has been by lifting up the bottom. More people live comfortably, and there is less disparity.

i don't want this thread to become USA #1 type thread, but this is pretty relevant. what has all this socialism done to Denmark? for better and for worse.

The Happiest People (60 minutes segment)
http://www.youtube.com/watch?v=uvFqFppIoBA&feature=youtu.be&t=3m31s

yes, the data supports the fact that Americans as a group, the Median household income, has risen over time (tho i'm still at odds to understand how long this can go on, in my mind, there has to be some level of stable median income).

Oh, ok.
Then you are missing out on some important details. One, household income now includes multiple wage earners at a higher rate than the old days did. Two, it doesn't take into account inflation.

i would assume 2 parent homes from a generation ago were compared to 2 parent homes today and 1 parent homes from a generation ago were compared to 1 parent homes today.

Families have children too, with families now having less and waiting longer, which if unaccounted for could skew the data quite a bit.

don't see what you're getting at with the leaping vs climbing analogy. the fact is, the incomes are compressed in Denmark so that low skilled workers are overpaid and high skilled workers are underpaid. this is the road to equality of outcomes as warned of in Vonnegut's Harrison Bergeron.

Whether people are overpaid or underpaid is subjective, but what I am getting at is that it is much harder to leap 4 stairs than it it to walk up each one. There is nothing intrinsically better that Americans have to really struggle for upward mobility. It doesn't produce a net gain for them/us.

that's called an opinion. i can say it's bad that i only have $20 a week of discretionary income. but if we find that in 1975, a theoretical duplicate of my 2012 self still had $20 a week in discretionary income, nothing's changed and we have to conclude life just sucks, and it's not about America getting worse.

Of course. Calling anything bad is an opinion. If you didn't have a car a hundred years ago it would have a different impact on your life than if you didn't have a car now. That's what I'm talking about. A car is far more necessary now than then, yet you could conceivably live without it. Is it therefore a luxury? Most people would say no. Then how do you classify the spending on the car - discretionary or necessary?

Oh, ok.
Then you are missing out on some important details. One, household income now includes multiple wage earners at a higher rate than the old days did. Two, it doesn't take into account inflation.


Families have children too, with families now having less and waiting longer, which if unaccounted for could skew the data quite a bit.

+1 for content
-1 for style (why do you sound like Billy Madison whenever you make a good point?)

you're right that i'm not considering the change in multiple wage earners. that's a really good point. more research needed!

as for inflation, as previously mentioned, this data is already adjusted for it.

Whether people are overpaid or underpaid is subjective, but what I am getting at is that it is much harder to leap 4 stairs than it it to walk up each one. There is nothing intrinsically better that Americans have to really struggle for upward mobility. It doesn't produce a net gain for them/us.

this notion of it being easier to climb the income ladder is irrelevant since these are relative stratifications rather than absolute. for example, let's say a "lower middle class" for a Danish family means 50-60k income. but in the US, that same ladder could be 45-65k since the range is bigger. the fact that a Danish family can technically rise to the next level with only 61k income doesn't make them better off than a "lower middle class" American family making 61k income.

but how "easy" is it for a middle class Danish family to break into the upper class? from what i'm reading, nearly impossible. "don't even think about it," society says, "don't dream, don't try too hard, you wouldn't have made it anyway, relax, we'll take care of it for you." paternalistic, or just patronizing?

Of course. Calling anything bad is an opinion. If you didn't have a car a hundred years ago it would have a different impact on your life than if you didn't have a car now. That's what I'm talking about. A car is far more necessary now than then, yet you could conceivably live without it. Is it therefore a luxury? Most people would say no. Then how do you classify the spending on the car - discretionary or necessary?

who's talking about luxuries? and i think cars are a bad example since that's been necessary in America since the 50's with the flight to the suburbs. but it seems to me The American Dream in the 1950's was a cramped, little house without A/C. people today think the equivalent of that should be a 5 room mini-mansion in the expensive part of town ala Leave It To Beaver or some tv sitcom from that era.

it's my belief that today's level of discontent is caused by people thinking more luxuries are necessities and comparing it to a mythical past that lasted for 1-2 generations at most. furthermore, for the sake of argument, even if we both accept there was an unparalleled level of prosperity reached in America in the 1950's, i question whether that state was ever sustainable in the long run and that what we're seeing now is merely a regression to the norm and not a true decline in the sense we're in an end-stage.

iow, American ran good in the 50's (maybe because half the world was in shambles?).

Ever increasing income inequality being the reason for the economic crisis is pure gunk(so is most economics), all you will get pointed to by people making this claim is some sort of vague correlation between income inequality and real wage growth since 1970. There is plenty of other correlations one could pick out, the end of the gold standard also correlates perfectly with the slow down in the growth of real wages. Picking out correlations at your pleasure in an economy of billions of variables is just bad science.

Also looking at the top 20%, or top 1% as if it were some sort of permanent class makes no fucking sense:
http://www.youtube.com/watch?v=OfFpbcKUpIk&feature=relmfu

The war on vegetable gardens:
http://www.acting-man.com/?p=18735

Regulations are effectively killing small businesses, so big business are succeeding not just because of efficiency and economies of scale but because smaller ones are being killed off. Having a system of a few big corporations per industry and just a few big banks is an extremely fragile one. The part of the article covering the vegetable garden makes the blood boil.

+1 for content
-1 for style (why do you sound like Billy Madison whenever you make a good point?)

I don't know what that means, but thanks?

I don't always have time to write the most eloquent posts.

this notion of it being easier to climb the income ladder is irrelevant since these are relative stratifications rather than absolute. for example, let's say a "lower middle class" for a Danish family means 50-60k income. but in the US, that same ladder could be 45-65k since the range is bigger. the fact that a Danish family can technically rise to the next level with only 61k income doesn't make them better off than a "lower middle class" American family making 61k income.

I don't think that the ease of class mobility is irrelevant, at least when one is trying to move upward, or has had some event that dropped them down a class. But, I'm not sure how useful the statistic is. I'll have to think about it some more.

but how "easy" is it for a middle class Danish family to break into the upper class? from what i'm reading, nearly impossible. "don't even think about it," society says, "don't dream, don't try too hard, you wouldn't have made it anyway, relax, we'll take care of it for you." paternalistic, or just patronizing?

Sure, there's a downside to their system, although I too don't know what the actual probabilities are. Their system is designed to make comfortable the most people possible. There is no system that does not have downsides, the Danes have decided their downsides are worth making most of their population comfortable.

who's talking about luxuries? and i think cars are a bad example since that's been necessary in America since the 50's with the flight to the suburbs. but it seems to me The American Dream in the 1950's was a cramped, little house without A/C. people today think the equivalent of that should be a 5 room mini-mansion in the expensive part of town ala Leave It To Beaver or some tv sitcom from that era.

it's my belief that today's level of discontent is caused by people thinking more luxuries are necessities and comparing it to a mythical past that lasted for 1-2 generations at most.

Talking about spending is a logical progression. It is interesting that you claim the discontent of people is caused by them thinking of luxuries as necessities while dismissing the car example because it is a bad one for you. That's what I was getting at. Is a cell phone a luxury or necessity? Does it provide the owner with some advantage over the person without one? technological advance usually comes about because of: someone identifies a need that was previously unfulfilled, someone creates a product that provides a benefit over the current level of technology, or someone creates a product that does something useful that no other product does. By nature, this leads new technologies to become necessities. We may be wasting the internet on a forum, but there's so much usefulness to it, that one is severely disadvantaged without it. Luxury becomes necessity. Once it becomes necessity, then the associated costs eat into previously disposable income, meaning that earning more and spending more still holds people back from being able to save or work their way up the economic ladder. There is no net gain when necessities are added at a comparable rate to the growth in income as a whole.

furthermore, for the sake of argument, even if we both accept there was an unparalleled level of prosperity reached in America in the 1950's, i question whether that state was ever sustainable in the long run and that what we're seeing now is merely a regression to the norm and not a true decline in the sense we're in an end-stage.

Sure, all things end. No one is suggesting society should always be rich (although that would be nice). And I don't necessarily think income inequality is a cause and not effect of America declining. That is, it is the system that created the inequality that is the cause of decline, not the fact of the inequality (though obviously you can't have the one without the other).

Asia > America FOR GROWTH

Sure, there's a downside to their system, although I too don't know what the actual probabilities are. Their system is designed to make comfortable the most people possible. There is no system that does not have downsides, the Danes have decided their downsides are worth making most of their population comfortable.

not every single Dane decided this. one group decided the other group's fate. i don't know where i'm going with this however... i guess i'm arguing anarcho-capitalism. but since i wouldn't advocate that knowing the dangers of capitalism even in regulated markets (externalities again), and i'm hypocritically sitting here telling the Danes how they should live while saying imposing one group's will on another is wrong, i guess just let the Danes do their own thing.

[ed: i don't know why i started a new thread. this really does belong back in the Obamacare thread]

By nature, this leads new technologies to become necessities. We may be wasting the internet on a forum, but there's so much usefulness to it, that one is severely disadvantaged without it. Luxury becomes necessity. Once it becomes necessity, then the associated costs eat into previously disposable income, meaning that earning more and spending more still holds people back from being able to save or work their way up the economic ladder. There is no net gain when necessities are added at a comparable rate to the growth in income as a whole.

if you take this argument to the extreme [extreme-debate robot arm!], progress and technology itself will eventually bankrupt everybody. and we can see this is absurd as it would have happened already or people 200 years ago would have been much richer than today.

if you take this argument to the extreme [extreme-debate robot arm!], progress and technology itself will eventually bankrupt everybody. and we can see this is absurd as it would have happened already or people 200 years ago would have been much richer than today.

Unless maybe people's wages don't stagnate.

Good read so far...

Disposable income for Danish households in 2010.

Below 100.000 DKK
25 333

100.000 - 199.990 DKK
153 179

200.000 - 299.999 DKK
245 204

300.000-399.999 DKK
347 583

400.000-499.999 DKK
448 465

More than 500.000 DKK
706 382

http://money.cnn.com/2012/08/01/news/economy/poor-income/

but since the highest averge tax rate calculated for US figures is 20.3% while Denmark has 25-50% tax rates, i don't understand where these Danish disposable income figures are coming from. are government benefits being added in? if so, why do high income earners get $20k in benefits? also, the US calculator seems high as i don't think it's subtracting social security, medicare and state taxes.

The list showed you the number of households in each interval.

484565 households had between 400.000 and 499.999 DKK after taxes.

The list showed you the number of households in each interval.

484565 households had between 400.000 and 499.999 DKK after taxes.

oh, that makes a lot more sense. nevermind... back to the drawing board.

Disposable income for Danish households in 2010.

Below 100.000 DKK 16,483.07 USD
25 333 (1.3%)

100.000 - 199.990 DKK 16,483.07 - 32,801.31 USD
153 179 (8%)

200.000 - 299.999 DKK 32,801.31 - 49,284.39 USD
245 204 (12.7%)

300.000-399.999 DKK 49,284.39 - 65,767.46 USD
347 583 (18%)

400.000-499.999 DKK 65,767.46 - 82,250.53 USD
448 465 (23.3%)

More than 500.000 DKK 82,415.36 USD
706 382 (36.7%)

~1926200 households