Hacker News Reader

Comment by lorax | Hacker News Reader

Oxfam carefully picked the dates they used to make the gain as large as possible. They used November 2023 compared to March 2020. What happened in March of 2020? The stock market dropped from 3380 (Feb 10) to 2304 (March 16). For the end date, if they had used Oct 30 instead of November, the S&P was at 4358. The Using the numbers I just gave, the gain would only be 29%, not 114%. That's a huge difference. (As you probably suspect, I also carefully picked the dates I used to minimize the gain.)

View on HN

Yeah, Oxfam have been pushing a bunch of similar misleading claims using the same trick, such as arguing that people across the world lost vast amounts of pay during the pandemic even as the rich got richer by a vast amount and insinuating this was money that was somehow redistributed from one group to the other. Of course, this is just using the fact that share prices anticipate future changes in the economy to measure from close to the bottom of the pandemic-induced drop, which happened right around when the pandemic was first declared and it was just starting to affect people, and there is no actual mechanism by which money could be transferred in such a fashion. The money lost in pay was essentially destroyed; people didn't work, didn't produce things, and the real global economy of stuff available to purchase shrunk by if anything much more than that (due to furlough, unemployment, inputs other than labour, etc). The increase in wealth of the super-rich similarly was not transferred from anywhere, it was just the valuation of things they already owned going up due to the price shares were trading at increasing. This didn't mean an equal sum of money was somehow transferred into the stock market to do this.

I also see very innocuous reasons for selecting those dates: for instance if you want to show what happened "since COVID hit us" this is indeed the fully correct choice.

But irrespective of the dates chosen, even your carefully selected counter-data shows a 30% increase in wealth for the richest in about 2 1/2 years. Even those of us dabbling in stocks must find this increase mind-boggling, also as it continues a seemingly indefinite trend. The rich are getting richer, whether it's by 30% or 100% in 2 years it is damaging to our societies and means millions more continue to suffer as resources are used for private enrichment at a level that does not even bring these rich anything beyond vanity value.

> Even those of us dabbling in stocks must find this increase mind-boggling

No, those of us invested in tech stocks have also seen large double digit returns this year alone.

> if you want to show what happened "since COVID hit us" this is indeed the fully correct choice.

It's not though. The stock market dropped 30% from Feb-March 2020, and then recovered it's Feb value by Aug 2020. The Feb-Aug "increase" is really a recovery.

One could certainly write about how the rich were not impacted nearly as much by the pandemic (and recovered faster) and many people have, but that's not the focus of this report.

"it is damaging to our societies"

Why though? Assuming the poorest in the world are getting better (Which they are) how is this damaging? Nobody clearly states this and the few studies I've found are easily rebutted.

The stock market dropped 30% from Feb-March 2020, and then recovered it's Feb value by Aug 2020. The Feb-Aug "increase" is really a recovery. Endpoints are always a little arbitrary but this was really egregious.

My own end-dates, picked for convenience rather than ideology[0]: S&P500 Jan 2 2020 close: 3,257 S&P500 Jan 2 2024 close: 4,742 Increase: 1,485, which is 45% up from 2020, annualized that's ~9.7% (1.45^0.25). That's actually the historical norm.

There's a lot more in this report than just that one headline stat, but one does wonder about the reliability of everything else as well (and I can't fact-check everything). If we assume the worst they do is cherry-pick endpoints that means graphs could be trustworthy, but basically any numerical text statement (of which there are many) is unreliable.

[0] I guess I can't prove this but I picked the dates while only having an approximate idea of the numbers.

Correct me if I’m wrong, but they also seem to adjust for inflation when talking about the poor getting poorer “in real terms” but didn’t do the same for the rich people getting richer.

For comparison, can we see how much Joe and Jane Averages' wealth has increased in that lesser timeframe?

Still ,the gap is staggering.

The Guardian is pretty left wing so they're not going to look too closely at the numbers if they say what they want them to say. These kind of articles always imply that it's some kind of zero sum game which irks me because that's so clearly not true.

And so is Oxfam. Oxfam always pumps out propaganda like this, year after year.

Oxfam does PR but they are first and foremost a charity feeding and providing shelter and healthcare to millions around the world. Maybe the perspective they take is influenced.by their staff watching people suffer and die from preventable deaths each year.

I would love to hear someone sa similar thing about Coca Cola or Kellogg's "Oh they pump out all this propaganda".

Lots of people do say that about industry as a whole or about specific sectors of industry.

Why is it not true? Sure stock value is more or less theoretical but this is not all stock. Any euro or dollar going towards Amazon or Tesla shareholders does not feed back into the local economy and cannot support roads, kindergartens and retirement homes.

It's clear that people who don't understand financial theory should not be making policy decisions. Wealth is not 0 sum. You use these words "roads, kindergartens and retirement homes" to elicit a emotional response to try and manipulate opinion. I see this often and it is frustrating, but it's what good politicians do when they can't use facts.

JUST AN EXAMPLE: Tesla is in the S&P 500. Teachers pension funds invest heavily in the market.

https://www.barrons.com/articles/pension-bought-tesla-schwab...

Reply on news.ycombinator.com