"It’s Time for Major Wealth Redistribution — Yes, I Mean It."

[Loren Pechtel]

Same question I always ask. Sounds good, how exactly do you enact it and who sets how it is redistributed.

A worse case scenario was the Chinese Cultural Revolution.

The Russian and Chinese communist attempts at forcing an equality failed catastrophically. Large scale famine in both cases.

In practcal terms what is a quantifiable definition of redistribution? What is the endpoint? Without tat it will just be anoter slippery slope into the unknown.

The problem with progressives is they are never able to precisly articulate details. It ends up being political sound bites and propaganda.

Cambodia did the same thing and took it farther--and it was even worse.

 

[Loren Pechtel]

Here's a precisely articulated detailed idea: Highly progressive taxation using a formula that produces a smooth curve whereby increasing income leads to an increasing tax rate, such that the tax rate approaches 100% as taxable income approaches infinity.

By eliminating brackets, this approach eliminates bracket creep, eliminates poverty traps, and eliminates the upper bound on the rate of tax to be paid.

We don't need to eliminate brackets. My fix: Get rid of phaseouts etc. Instead, no dollar may be taxed at a rate more than 5% above your tax bracket. You are free to do a hypothetical calculation of your taxes at any value below your actual adjusted gross income, if that shows a marginal rate that's too high your taxes are reduced to that point.

The poverty trap is completely different and won't be solved this way but I would still apply the same principle to assistance payments, but with a higher percentage.

In a democracy, nobody should have sufficient wealth as to be able to singlehandedly dictate things that are properly a function of the government. If Elon Musk wants to explore Mars, his vote on whether to do so shouldn't carry any more weight than anyone else's. He can vote for candidates who will increase NASA's budget, and pay plenty of taxes so that they can do so without inflationary impact on the economy.

I don't see how that is inherently a government endeavor. There's also the fact that they are actually doing it, government is subject to political pressure and the money ends up in people's pockets rather than advancing mankind.

 

[Loren Pechtel]

When an HF-Trader sees an order to buy Acme Widgets for $90, he may leapfrog ahead to buy it for $89.99, resell it a few milliseconds later and make a penny profit (Never mind the details!). How do you think brokers can afford to give zero commission anyway? They aren't making you click on ads!

Zero commission trading happens because there's a slight difference between the buy price and the sell price.

Jumping ahead and buying it for $89.99 I believe would be illegal.

However, owning a pool of it in anticipation of demand, buying it for $89.99 when you can get it and selling it for $90 when someone wants it is perfectly fine.

 

[Loren Pechtel]

Has anyone suggested 'tearing down?'

The OP does. You just don't recognize the destruction you're asking for.

I think it is YOU who don't recognize the "destruction" that is asked for.
Reducing multi-billionaires to mere billionaires doesn't destroy anything of value. And if it enables millions of people to rise above the poverty line, it's well worth it.
Of course that is a big "if". IF, for instance, all it does is put billions into political action committees to enable them to spread Big Lies, then no - it's not worth anything.

Congratulations, you just killed Space-X.

Nothing of value?

 

[bilby]

Here's a precisely articulated detailed idea: Highly progressive taxation using a formula that produces a smooth curve whereby increasing income leads to an increasing tax rate, such that the tax rate approaches 100% as taxable income approaches infinity.

By eliminating brackets, this approach eliminates bracket creep, eliminates poverty traps, and eliminates the upper bound on the rate of tax to be paid.

We don't need to eliminate brackets. My fix: Get rid of phaseouts etc. Instead, no dollar may be taxed at a rate more than 5% above your tax bracket. You are free to do a hypothetical calculation of your taxes at any value below your actual adjusted gross income, if that shows a marginal rate that's too high your taxes are reduced to that point.

The poverty trap is completely different and won't be solved this way but I would still apply the same principle to assistance payments, but with a higher percentage.

In a democracy, nobody should have sufficient wealth as to be able to singlehandedly dictate things that are properly a function of the government. If Elon Musk wants to explore Mars, his vote on whether to do so shouldn't carry any more weight than anyone else's. He can vote for candidates who will increase NASA's budget, and pay plenty of taxes so that they can do so without inflationary impact on the economy.

I don't see how that is inherently a government endeavor. There's also the fact that they are actually doing it, government is subject to political pressure and the money ends up in people's pockets rather than advancing mankind.

"Political pressure" is another way of saying "democracy".

One man deciding how mankind should advance is called "dictatorship", and is generally a bad thing. Even if occasionally the dictator chooses to do something you too would have supported.

 

[Loren Pechtel]

View attachment 32110

Even if his numbers are right his understanding is not.

The billionaires didn't make $1T during the pandemic, but I think I see where he's getting his numbers.

The Dow is up about 3% since before things blew up. However, it's up 50% over the worst of the oh-shit period in March. If you measure from that point I have no problem believing $1T in gains--but he's ignoring the nearly $1T in losses before that.

 

[Bomb#20]

We've been through it before, time and time again...and I pointed out over and over again that the main obstacle for workers improving their lot is a power imbalance between individual workers and management, that their pay often has nothing whatsoever with the market value of their labour or the wealth they help to generate for the company.

Management pay what they need to, be it minimum wage or rates sufficent to attract applicants in certain sectors .

Workers do better under collective bargaining, simple as that. They do better because they increase their leverage. In some cases from virtually zero leverage.

Yes, you keep saying that, over and over. But you never explain why a power imbalance implies "market value" means anything other than "what they get paid"; you never explain why a power imbalance implies that whatever it is you mean by "market value" is measurable rather than metaphysical; and you never explain why a power imbalance implies "the current wage is theft" rather than the more prosaic "the wage will go up if the workers vote for a union".

 

[DBT]

We've been through it before, time and time again...and I pointed out over and over again that the main obstacle for workers improving their lot is a power imbalance between individual workers and management, that their pay often has nothing whatsoever with the market value of their labour or the wealth they help to generate for the company.

Management pay what they need to, be it minimum wage or rates sufficent to attract applicants in certain sectors .

Workers do better under collective bargaining, simple as that. They do better because they increase their leverage. In some cases from virtually zero leverage.

Yes, you keep saying that, over and over. But you never explain why a power imbalance implies "market value" means anything other than "what they get paid"; you never explain why a power imbalance implies that whatever it is you mean by "market value" is measurable rather than metaphysical; and you never explain why a power imbalance implies "the current wage is theft" rather than the more prosaic "the wage will go up if the workers vote for a union".

Explaining the power imbalance between an individual worker and management is a no brainer.

If a business is able to freely draw from a pool of suitable applicants, the unemployed, an applicant or worker has no real bargaining power. The employer sets the pay rate, 'we offer x dollars per hour' on a take it or leave it basis.

What is the applicant or worker going to do, demand more?....ha, ha, sorry, goodbye. Is the manager going to grant extra pay out of the goodness of his heart? Rarely if ever happens.

Think about it. Try to imagine yourself in that position. it's called empathy and a basic understanding of how power structures work.

It's basic stuff. I explained it before. It shouldn't need repeating.

 

[Swammerdami]

The dialog between Bomb#20 and myself has veered into pure insults. It's pointless to continue, but Bomb's final sentence is hilarious so I'll share the joke ...

Um, [quickly works the numbers] you're saying the bid-ask spread on a $90.05 stock was 11 cents?!? Yippee!!! Let us all thank our lucky stars that HFT was invented, for making the market so liquid it has brought adequately diversified stock portfolios within easy reach of the common man.

It was YOU who pretended that this 9% increase in spread was a big deal, that it would damage the real economy. But now you're admitting that One Big Penny (which was me rounding UP to see your "case" in a favorable light) was an OVER-estimate. You didn't notice that your final lashing-out contradicted your own point??

Hilarious.

 

[ZiprHead]

Redistribution is not necessarily a case of 'tearing down' or making the rich poor. If done properly, productive work, fair pay for all, it is a means of improving society, the economy and the human condition. A positive thing. A building up.

You're tearing down the capital that drives innovation.

Wrong. Innovation in industry comes from profits. When profits are turned into innovation, they are no longer profits. Only taxation on profits at the end of the year would be increased.

 

[Bomb#20]

Yes, you keep saying that, over and over. But you never explain why a power imbalance implies "market value" means anything other than "what they get paid"; you never explain why a power imbalance implies that whatever it is you mean by "market value" is measurable rather than metaphysical; and you never explain why a power imbalance implies "the current wage is theft" rather than the more prosaic "the wage will go up if the workers vote for a union".

Explaining the power imbalance between an individual worker and management is a no brainer.

If a business is able to freely draw from a pool of suitable applicants, the unemployed, an applicant or worker has no real bargaining power. <snip> I explained it before. It shouldn't need repeating.

The Underpants Gnomes' business plan:

Gnome: Phase 1 is power imbalance. Phase 3 is workers are paid less than their market value.

Kyle: Sooo, what's phase 2?

Gnome: Phase 1 is power imbalance.

 

[Jarhyn]

Yes, you keep saying that, over and over. But you never explain why a power imbalance implies "market value" means anything other than "what they get paid"; you never explain why a power imbalance implies that whatever it is you mean by "market value" is measurable rather than metaphysical; and you never explain why a power imbalance implies "the current wage is theft" rather than the more prosaic "the wage will go up if the workers vote for a union".

Explaining the power imbalance between an individual worker and management is a no brainer.

If a business is able to freely draw from a pool of suitable applicants, the unemployed, an applicant or worker has no real bargaining power. <snip> I explained it before. It shouldn't need repeating.

The Underpants Gnomes' business plan:

Gnome: Phase 1 is power imbalance. Phase 3 is workers are paid less than their market value.

Kyle: Sooo, what's phase 2?

Gnome: Phase 1 is power imbalance.

Phase two is "apply leverage to imbalanced power structure"

I talk about symmetry, asymmetry, and leverage on these forums pretty regularly, and the cycle at play here.

At this point it seems like you are just willfully being obtuse.

 

[Bomb#20]

Gnome: Phase 1 is power imbalance. Phase 3 is workers are paid less than their market value.

Kyle: Sooo, what's phase 2?

Gnome: Phase 1 is power imbalance.

Phase two is "apply leverage to imbalanced power structure"

I talk about symmetry, asymmetry, and leverage on these forums pretty regularly, and the cycle at play here.

At this point it seems like you are just willfully being obtuse.

At this point it seems like you are just non-willfully being obtuse. That's still Phase 1. By what reasoning do you infer that symmetry, asymmetry, and leverage cause workers to be paid less than their market value? Help me out here. Do you even know what the phrase "market value" means?

 

[Jarhyn]

Gnome: Phase 1 is power imbalance. Phase 3 is workers are paid less than their market value.

Kyle: Sooo, what's phase 2?

Gnome: Phase 1 is power imbalance.

Phase two is "apply leverage to imbalanced power structure"

I talk about symmetry, asymmetry, and leverage on these forums pretty regularly, and the cycle at play here.

At this point it seems like you are just willfully being obtuse.

At this point it seems like you are just non-willfully being obtuse. That's still Phase 1. By what reasoning do you infer that symmetry, asymmetry, and leverage cause workers to be paid less than their market value? Help me out here. Do you even know what the phrase "market value" means?

Your mistake is assuming I care about your vaunted "market value".

You come to this under the mistaken assumption that some person has an absolute "market value." They do not.

First, and most importantly, people are not reducible to a market value. This is objectification of human lives. Stop it.

Secondly, market value is negotiable, and a product of leverage.

Let's take for example my own recent job search.

I have a senior title, have been at my job for over the "entry level" number of years, am in a space where 99% of all applicants don't even know how to start to do the job, and am not out of work and starving. I am not vulnerable to leverage.

Now let's imagine some calculus changes: my company goes under. Suddenly I would NEED a job. Calculus changes and I lose all my leverage.

Nothing changed about me, merely my leverage changed.

Where I could previously demand 130, I can at best swing 110, probably less. I know between jobs, personally, I settled for 12/hr for the two weeks before I got hired.

Market value is itself a function of all asymmetries calculated to an absolute value.

Do YOU even understand what the phrase "market value" means?

Also, you seem to be having trouble counting: (create asymmetry), (leverage asymmetry), (profit) is three steps.

 

[Bomb#20]

The dialog between Bomb#20 and myself has veered into pure insults.

It has? I'm sorry then; I didn't intend to be insulting. Peace.

It's pointless to continue, but Bomb's final sentence is hilarious so I'll share the joke ...

Um, [quickly works the numbers] you're saying the bid-ask spread on a $90.05 stock was 11 cents?!? Yippee!!! Let us all thank our lucky stars that HFT was invented, for making the market so liquid it has brought adequately diversified stock portfolios within easy reach of the common man.

It was YOU who pretended that this 9% increase in spread was a big deal, that it would damage the real economy. But now you're admitting that One Big Penny (which was me rounding UP to see your "case" in a favorable light) was an OVER-estimate. You didn't notice that your final lashing-out contradicted your own point??

Hilarious.

I lost you. What did you round up? What did I overestimate? I assumed those were arbitrary sample numbers you made up for the sake of discussion; is there some real stock you were talking about?

In general, big and popular companies have much lower spreads than small and obscure companies; I did not mean to suggest that taxing HFT would significantly harm an investor in Apple, Inc.; I was just cautioning against overdoing it; and I was proving the causal connection between HFT and bid-ask spreads. The ratio you posted would be pretty normal for a major company in 2021, but it'd typically be a lot more for a small company, or for a major company in 2001. As I said before, I don't object to taxing HFT as long as it's done moderately and prudently. I wasn't lashing out at you; I was trying to bring the discussion back to my main point, which is that HFT is an overall benefit to society. Bid-ask spreads have dropped enormously in the last 20 years, largely due to HFT. A stock like your example, with its 0.1% spread, would have been unheard of in 2001; that was the point of my "Yippee!".

 

[Bomb#20]

At this point it seems like you are just non-willfully being obtuse. That's still Phase 1. By what reasoning do you infer that symmetry, asymmetry, and leverage cause workers to be paid less than their market value? Help me out here. Do you even know what the phrase "market value" means?

Your mistake is assuming I care about your vaunted "market value".

Your mistake is butting into a debate over an issue you don't care about. If you didn't mean to show how to get from Phase 1 to Phase 3, why did you pretend to be doing so?

You come to this under the mistaken assumption that some person has an absolute "market value." They do not.

Feel free to show where I assumed that.

First, and most importantly, people are not reducible to a market value. This is objectification of human lives. Stop it.

Your wife is not reducible to a beating target. Stop it.

Do YOU even understand what the phrase "market value" means?

Yes. It's DBT who doesn't. That's why he says the nonsensical things he says; that's why I challenge him on them.

Also, you seem to be having trouble counting: (create asymmetry), (leverage asymmetry), (profit) is three steps.

Oh for the love of god! If they break "Steal Underpants" up into "Sneak into bedroom. Find underpants. Pick up underpants. Sneak out of bedroom.", the gnomes will have described more than three steps; but they still won't have explained how to get to "Profit".

 

[Jarhyn]

Oh for the love of god! If they break "Steal Underpants" up into "Sneak into bedroom. Find underpants. Pick up underpants. Sneak out of bedroom.", the gnomes will have described more than three steps; but they still won't have explained how to get to "Profit".

WhY CaNt I HolD AlL ThEse LiMeS?!?

Dude, leveraging asymmetry is "profit", if you really want to get down to brass tacks.

Go pretend to not know how to carry limes somewhere else.

 

[DBT]

Yes, you keep saying that, over and over. But you never explain why a power imbalance implies "market value" means anything other than "what they get paid"; you never explain why a power imbalance implies that whatever it is you mean by "market value" is measurable rather than metaphysical; and you never explain why a power imbalance implies "the current wage is theft" rather than the more prosaic "the wage will go up if the workers vote for a union".

Explaining the power imbalance between an individual worker and management is a no brainer.

If a business is able to freely draw from a pool of suitable applicants, the unemployed, an applicant or worker has no real bargaining power. <snip> I explained it before. It shouldn't need repeating.

The Underpants Gnomes' business plan:

Gnome: Phase 1 is power imbalance. Phase 3 is workers are paid less than their market value.

Kyle: Sooo, what's phase 2?

Gnome: Phase 1 is power imbalance.

So you didn't understand what was said. Or even willing to. I'm not surprised. That, right from the beginning, a job applicant needs to impress the manager in order to get the job, their success being in the hands of the manager, whom they must please because the manager holds the cards and makes the decision, which the applicant/supplicant cannot alter, does not need explaining.

 

[Jayjay]

There is an idea that I bumped into recently, that coordinated market economies like the Scandinavian countries are actually only able to afford their social systems because there are liberal economies like the USA that are doing all the "hard" innovations on their behalf. It's much easier being a follower than a leader. If the United States were to enact same kind of programs, it would crash not only the economic output of Americans, but also those in the countries that are piggy-backing on its success.

Which is almost certainly bollocks. Growth in the US economy, all OECD economies and the global economy were all markedly higher during the co-ordinated market Bretton-Woods era of low inequality when the US economy was much more like the European social democracies.

Maybe. But back then the world economies were much more protectionist, and much less interconnected than now. Not to mention that everyone was recovering from WW2. Anyway, I found the original article that introduced the idea. Excerpt:

We can’t all be like the Nordics, can we?

The main result of this theoretical investigation is that, in the long run, all countries tend to grow at the same rate, but those with cuddly reward structures are strictly poorer. Notably, however, these countries may have higher welfare than the cut-throat leader; in fact if the initial gap between the frontier economy and the followers is small enough, the cuddly followers will necessarily have higher welfare because of the greater social insurance that their institutions provide. Thus, our analysis confirms the intuition that all countries may want to be like the Nordics with a more extensive safety net and a more egalitarian structure.

Yet the main implication of our theoretical framework is that we cannot all be like the Nordics! Indeed it is not an equilibrium choice for the cut-throat leader, the US, to become cuddly. As a matter of fact, given the institutional choices of other countries, if the cut-throat leader were to switch to such cuddly capitalism, this would reduce the growth rate of the entire world economy, discouraging the adoption of the more egalitarian reward structure. In contrast, followers are still happy to choose an institutional system associated to a more egalitarian reward structure. Indeed, this choice, though making them poorer, does not permanently reduce their growth rates, thanks to the positive technological externalities created by the cut-throat technology leader. This line of reasoning suggests therefore that in an interconnected world, it may be precisely the more cut-throat American society, with its extant inequalities, that makes possible the existence of more cuddly Nordic societies.

 

[Harry Bosch]

The Underpants Gnomes' business plan:

Gnome: Phase 1 is power imbalance. Phase 3 is workers are paid less than their market value.

Kyle: Sooo, what's phase 2?

Gnome: Phase 1 is power imbalance.

So you didn't understand what was said. Or even willing to. I'm not surprised. That, right from the beginning, a job applicant needs to impress the manager in order to get the job, their success being in the hands of the manager, whom they must please because the manager holds the cards and makes the decision, which the applicant/supplicant cannot alter, does not need explaining.

Yes, it would greatly empower workers if instead they were evaluated on their ability to watch spongbob and eat bonbons all day. After all, what good company would want employees who were "impressive" at their job!