They make a point that eventually the other countries' economies would shrink and won't be able to afford those benefits, but also the US doesn't have those benefits even now.
Anyone can elucidate me?
I'm curious why you care that some people have more money than you do? If you want mo' moolah:
1. upgrade your job skills
2. minimize spending (like get a roommate, eschew restaurant food, buy a used car)
3. invest the money you save
If you really want to make big money:
1. start your own business
What I'm asking is more, what conclusion should I take from the article?
Consider, on the other hand, the software industry. Essentially zero regulation. Yet the software, very high quality software, tends to be free!!!
Why is it that the most regulated, subsidized, and interfered with industries are the most expensive, while the least regulated, unsubsidized, free market industries are the most productive with the lowest prices?
I didn't blame the free market, we talked about inequality nobody mentioned free market. That inequality is partially fueled by the unfree regulatory capture, things would be more equal if some regulations were removed.
Wow, you sure misunderstand me. Free markets result in the greater good. Socialism does not. Hence, I prefer free markets.
This is why I find the article confusing. At first, it paints a picture of the US as incredibly productive, which should mean that the average citizen's quality of life, and maybe even up to the 99th percentile, would be better than in other developed countries. But then it claims that the average quality of life in the US is actually worse (as in struggling workers and high cost of living).
So, I’m left wondering... Why do we care so much about the country’s productivity if it doesn’t improve the average person’s life? In fact, if it’s making things worse for the majority, what’s the point?
The only way I can make sense of this is by looking at the distribution of gains. The graph that would explain this would have extreme outliers at the very top, where all the productivity gains are concentrated. This isn’t just inequality in the typical sense of some people having more than others. It’s an extreme form of inequality where almost all the benefits go to the tail end, leaving the majority worse off despite the country’s overall productivity.
At least, that’s the only explanation that makes sense to me. But at the same time, I don't just believe this, that's why I'm failing to reconcile the contradiction in the article. What's the conclusion you take from the article?
P.S.: I don’t mind other people being richer than me as long as it’s mutually beneficial, or if their wealth has no impact on me, good or bad. Most people likely feel the same. The problem arises when someone’s wealth comes at the expense of others. For example, Kings and Emperors in the past were resented because their wealth and power actively held others back and were built off the labor of the masses. On the other hand, I don’t mind someone like Bill Gates being wealthy because his success indirectly benefited me, I have a comfortable job in part because of the industry he helped create.
Oh, and check this out:
https://www.seattletimes.com/business/developer-martin-selig...
That's gotta hurt!
But inequality is not a problem. People wanting to make it big come to the USA. That's why the USA has the biggest, most successful, companies that drive the US gdp forward.
Inequality is only a problem for people who are envious.
But I get your point, inequality isn't a problem in itself, but seeing your money go to rich people for no good reason does feel very bad even if the problem is the corruption and not the inequality.
> seeing your money go to rich people for no good reason
Anyone can buy stocks and get their share. For example, NVDA. If you'd bought some, you'd have made quite a lot of bank, and made your friends unhappy with you because of the money you unfairly made for no good reason.
I know many ordinary schlubs who became multimillionaires by simply buying NVDA, MSFT, AMZN, AAPL, etc.
Or when you have to pass by homeless tent cities in your downtown. Or when you are the victim of crime because the kid pulling a gun on you is envious because their family is poor and you're rich.
Extreme inequality brings social strife in multiple layers, if you're individualistic you might not care for it but for a society it fosters resentment and erosion of social cohesion.
But I don't think you care about that in general.
This is the conventional wisdom, but I can't think of a revolt in a free market country.
> But I don't think you care about that in general.
My reading of history is that free markets bring the greatest prosperity to the greatest number of people. No other economic system comes close.
Cutting other people down to size because you're envious just makes things worse. It produces economic stagnation, and the demand for "equity" is endless and endlessly makes things worse.
It doesn't end well.
Be careful what you wish for.
Keep in mind that the most prosperous companies are in America and bring that prosperity to Americans and are the envy of the world.
Lmao
This works well for companies because they can get higher margins. This works well for the people with money but other people are being left out. And with increasing inequality the number of people left out goes up.
Basically we are creating a world designed for the top x percent of people. And they are creating laws that favor themselves.
The big money is targeting where the customers are - the middle class. That's why VW got so big. Why Ford and GM and Chrysler made so much money. Selling cars to the middle class. Tesla has also moved down market for the same reason.
How's Rolls Royce, Bentley, and Jaguar doing? Case closed.
Take a look at the size of government over time. Where do you think the money comes from to pay for that?
If you look at real incomes over time, they've been stagnant since the dawn of time; or at least as far back as we have kept track.
There was once wage growth because wages started from zero. It wasn't that many years ago that people didn't sell labor, only things. As we have transitioned into a labor economy, wages started to become a larger portion of one's income. To the point that nowadays more or less 100% of the average person's income is from wages.
So, with incomes and wages now being effectively equivalent, there is no room for wages to grow further. To do that now, incomes would also need to rise, and that has never happened.
Productivity has continued to rise since, but on the back of automation, not as a result of humans becoming even more productive laborers.
This isn't true for the US. The chart that purports to show this is misleading. Essentially, there are problems with the usual chart: the two lines are indexed to different inflation measures, and the wages line excludes certain highly compensated occupations which have been experiencing significant earnings growth (probably because these occupations are where the productivity growth is happening).
Edit: Actually, even more issues. https://x.com/AwayBerk/status/1483564925213683719
Nothing "crazy" about it.
The "unintended side effects" of government policies are nearly always the result of ignoring the LoS&D or pretending it doesn't exist.
Supply and demand is a framework you can use to write your hypothesis in. It's not a law that predicts things.
You ask why I care about income inequality? It's because I want more happiness in my community.
I'm pretty sure that in my case that would be a fast way to lose a lot of money, but YYMV, I guess.
80% of people who start a business lose money on it. Hence, making a lot of money on a business is quite unusual, not the norm.