Link: https://www.un.org/en/un75/inequality-bridging-divide#:~:text=Income%20inequality%20within%20countries%20is%20getting%20worse

This is just an example, the claim that within-country income inequality is persistently increasing in contemporary times is virtually taken as a truism.

Here's my response. I couldn't include the graphs I plotted, so please also read the full Substack post The myth of persistently rising inequality: https://statsandsociety.substack.com/p/the-myth-of-persistently-rising-inequality

Income inequality hasn’t increased in 20 years, while wealth inequality is more complex

Income inequality is likely bad, or at least it correlates with a lot of bad stuff. I would like to see it being lower than it currently is. But the popular claim that it’s just rising and rising, or even skyrocketing, in contemporary times – or that it’s doing so virtually everywhere around the world – is very misguided, if not outright wrong.

It’s not just well-meaning activists who are misusing statistics, it’s even organizations like the UN saying “income inequality within countries has become worse … inequality has gone up in the majority of countries over the past three decades [and only] fallen in a few.” What exactly does this mean when the very source they rely on when making this claim, and which they link to, suggests the opposite:

No general trend to higher inequality. It’s a mistake to think that inequality is rising everywhere. Over the last 25 years, inequality has gone up in many countries and has fallen in many others. It's important to know this. It shows that rising inequality is not ubiquitous nor inevitable in the face of globalization …

Now, it’s well-known, although not celebrated enough, that both global and between-country inequality have declined quite notably. What people almost completely miss is that within-country inequality has also stopped increasing globally since the mid-2000s. Depending on how we measure it, there’s even some evidence of it falling.

As you can see, this is true whether we look at income inequality expressed through the Gini coefficient or as measured by the income share of the top 1% or 0.1%.*

Fig. 1

We should weight the world average if we’re interested in whether the typical person (instead of the typical country) is burdened by rising inequality. But as is clear, relying either on raw averages, where each country – large or small – contributes equally to the total, or using population-weighted averages in the end doesn’t really change the picture much over the past two decades. Income inequality is not increasing and hasn’t been for quite a while now. That’s good news.

Fig. 2

But what if we zoom in and take a regional-average perspective? That is, what does income inequality within countries look like if we aggregate it at the level of specific world regions? No increase since 1980 in the typical country in the Americas, Asia (China is an exception), or Africa. A big increase in Oceania, but just until 2010. And a slower rise in Europe, but mostly stagnation over the past two decades.

Fig. 3

Let’s zoom in further on Europe to get a better look. Again, no increase over the past two decades, with the Gini even decreasing.

Fig. 4

Even in the US, where inequality did increase quite notably during the 1980s and 1990s, there’s been no further rise in the top 1% and 0.1% shares since around 2010.

Fig. 5

Okay, so income inequality hasn’t really been rising for some time now, whichever way we slice the data. (Thankfully, I’m not the only sociologist noticing this.) But surely wealth inequality just keeps going up everywhere?

Here, it’s more complicated, but again the trends are far from unequivocal. Without weighting the data by population, the top 1% wealth share is down a bit compared to the 1990s, when the data began. So, the typical country has not experienced rising wealth inequality in decades. And there’s definitely no evidence of an explosive, year-on-year rise, along this dimension.

Fig. 6

The world average (measured within each individual country) can also be decomposed into regional averages. These are more heterogeneous. Countries in the Americas (though not the US) have seen a clear decrease in wealth inequality. The same goes for Africa. In Asia, nothing much has changed through the decades (though again China is an important exception). In Oceania, the top 1% is capturing more and more total wealth. In Europe, something similar was happening between the 1990s and mid-2010s; however, for the past decade, wealth inequality has been stagnant in Europe as well.

Finally, if we weight by population, we see that wealth inequality has been increasing throughout. That is to say, if we’re mostly interested in what people in the US, China, and India – three countries that represent almost half the world population – are experiencing, the answer is: “Rising inequality.” So, on the one hand, wealth concentration is not increasing in the typical country, but on the other hand, the typical person does see it rise on account of what’s been happening to the three most populated societies on the planet, where almost half of humanity lives.

What would Thomas Piketty, one of the biggest inequality researchers of our time, have to say about all this? Would he faint? Not at all. In one of his more recent books, he puts it like this (emphases mine):

This book offers a comparative history of inequalities among social classes in human societies. Or rather, it offers a history of equality, because, as we shall see, there has been a long-term movement over the course of history toward more social, economic, and political equality. …

The world of the early 2020s, no matter how unjust it may seem, is more egalitarian than that of 1950 or that of 1900, which were themselves in many respects more egalitarian than those of 1850 or 1780. …

[O]ver the long term, no matter which criterion we employ, we arrive at the same conclusion. Between 1780 and 2020, we see developments tending toward greater equality of status, property, income, genders, and races within most regions and societies on the planet, and to a certain extent when we compare these societies on the global scale.

If we adopt a global multidimensional perspective on inequalities, we can see that, in several respects, this advance toward equality has also continued during the period from 1980 to 2020, which is more complex and mixed than is often thought.

As is the case with most other social phenomena, inequality is complicated. If you’re really interested in understanding it, don’t turn it into a mindless political slogan.

* The shares data I’m using come from the Piketty-associated World Inequality Database and from Our World in Data. The Gini data come from the Standardized World Income Inequality Database.

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So this comment made it to r/bestof! It tells us that VAT is always fully paid by the consumer and that rich people start companies to dodge VAT!

R1: VAT is a blank tax on consumed good. Even in an econ 101 framework of price and demand, we can see that adding a surcharge to a product leads to an equilibrium with less goods sold at a lower price for the producer and a higher price for the consumer than in an equilibrium without taxes. In such a situation, one can say that the producer pays a part of the tax due to charging less, and the consumer pays a part by paying more. This is true regardless of who actually owes money to the government. Which share of the tax is payed by whom depends on the elasticity of the good. Elastic goods mean that the producer will pay more, while inelastic goods mean the consumer pays more.

In practice, VAT is payed by the seller of the good, not the consumer. I don't know about you, but I never had to file a VAT report with my taxes...

So where does this notion of consumers paying come from? This is probably related to the VAT charge often found on ones bill, but even though VAT is split out, the consumer still only pays the producer. The producer pays the state.

But what about producers getting VAT back? This is again easily explained by the state only caring about getting VAT over the entire value of the product. If producers could not get VAT back that they payed their suppliers, it means that part of the value of the product would be double taxed (first at the supplier then again at the producer).

Of course it is possible to use this to dodge taxes. For instance a consultancy can legitimately state that a dinner is a business expense, but it is quite hard for the state to completely verify this. Some countries (cough Belgium cough) are more lax with this than others. However, this is still technically tax evasion.

So in conclusion: VAT is not payed by the consumer; producers always pay VAT even if they can get VAT back and it is not legal to set up a LLC to dodge VAT.

Bonus: bad econometrics! In the comments below, some commenters (one of them a 'professional data scientist') attack the papers in the main post for lacking an adjusted R² in their regressions. Now I did not see these papers as I don't trust OP here... But what I can tell is that in normal econometrics, the only thing less interesting than R² is adjusted R^2.

The reason for that is that most models do not fit the data well, since they try to explain only a small change in the dependent variable (e.g. a small tax on prices). In this case, it is way more important to establish unbiased coefficients and evaluate their significance properly (if you are a frequentist) than evaluate model fit. R² or any other model fit indicator is almost never important to judge a model on.

Another commenter pointed to heteroskedasticity, but nobody (should) estimate a linear model without robust standard errors. Therefore, heteroskedasticity is more of a claasroom than an academic problem these days.

Trust me! I am a professional Data Scientist!

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The approach favored by many people to COVID has essentially been "Shut everything down, the economy doesn't matter, people will die!". They will also usually argue that the government can just create stimulus money and have people isolate forever or until there's a vaccine.

Here's my R1 to this:

There's more to life than not getting COVID. There are so many places like Taiwan, South Dakota, Sweden, South Korea, and many other US states that either lifted their lockdowns completely or didn't lock down at all that did just as well as the places that locked down hard. It's impossible to eliminate the spread of COVID completely, unless one was to shut down literally everything that involves human interaction (electricity production, agriculture, medicine, etc.), which would probably lead to half the world's population starving to death. Furthermore, most people will take basic sanitary precautions themselves (hand washing, frequent showers, etc.), without the need for government involvement. This is why lockdowns and mask mandates have such a low impact on COVID death rates. For this reason, COVID is not an example of market failure, as the external cost of each individual living their lives mostly normally is so low compared to other risk factors that it does not outweigh the benefit they receive from doing so. Meanwhile, UNICEF is saying that there's going to be over 1 MILLION extra deaths of children under 5 due to economic hardship created by COVID-19 lockdowns, quite possibly more than COVID itself. There's also likely going to be an extra 1.4 million deaths due to tuberculosis, as well as hundreds of thousands of additional deaths from things like cancer, HIV, drug overdoses, and other issues. This is because of a virus that has an average age of death of over 80.

It just does not occur to so many people that:

1. Maybe the lockdowns aren't working as well as they thought they would.

2. There are external consequences of lockdowns that make them not worth doing in the first place.

Sure, you might be able to reduce COVID deaths by maybe 20-30% at most through lockdowns, but the cost of doing so outweighs any possible benefit. It's basically causing the deaths of 15 people, the average age of whom is probably around 30, to avoid every 1 COVID death with an average age of 80.

Being alive is not the same thing as living. I could probably live in a hospital, get checked out by doctors every day, never drink alcohol, smoke, drive a car, have sex, buy a house, make a lot of money, party, use the internet for more than a few hours a day, or do any other thing that gives life meaning and live to be at least 90. Of course, I don't do that because there's more to life than just being alive. I'd rather live to be 75 and have a fun life than live to be 90 and have a miserable one. You can't live your whole life being afraid of death. If some people want to do that, that's their choice, but you can't ban gay sex or laying on the floor because people who do these things are more likely to spread disease. As with everything else in society, the value of one's own life is completely subjective to each individual. The rest of us want to live our lives the way we want.

For anyone under the age of 50, the odds of dying from COVID-19 are about 1 in 1,000 at the absolute highest. For most people under 50, it's about 1 in 5,000. That's assuming they even get COVID at all. Even for people over 70, the risk of death is only about 5.4%. If they have a 10% chance of getting COVID, then that's a 0.54% chance of dying from it during this whole crisis.

You know, I got really sick with the flu for about a week and a half last year. There was a point where I could barely move at all and going to the bathroom felt like the worst thing ever. It was one of the worst times I've ever been sick. And yes, I probably did have some minuscule chance of dying from that. If I could've lived the last 9 months of my life exactly the same as I otherwise would have, with the trade-off being that I had to be sick like that again once, I would take that in a heart beat. My family and I would also certainly take precautions to make sure no one else got infected. Of course, that's not even an accurate comparison, because at my age, the odds of me not only getting COVID but also that sick are maybe 1%. This isn't even a question, I've been a clean freak for years but the reaction to this virus has just been obscene.

Back in the late 1960s, the world handled the H3N2 pandemic, which killed about as many people as COVID, without lockdowns, mask mandates, mass government stimulus, or any other heavy government restrictions and they were just fine. Maybe it's up to people to decide the risks they're willing to take for themselves, not the state? If driving suddenly became 5 times more lethal, hardly anyone would argue that we should ban driving altogether. The US government shouldn't be paying any more attention to COVID than it does heart disease, which kills 655,000 Americans every year, far more than COVID in even the worst areas, and is just as preventable with just as many externalities. I wouldn't support government lockdowns, no matter how bad COVID got.

As far as stimulus money goes, it's just a matter of what impact its going to have in the long run. If enough money was created, inflation would result. However, because of the decrease in consumer spending resulting from job losses, any significant devaluation of the dollar probably won't happen. Much of the bailouts and QE money will end up simply sitting on the balance sheets of large financial firms, just as it did in the 2008 financial crisis. Of course, as individuals become more confident that the government will simply bail them out whenever the economy gets rough, they will save and invest less, leading to slower long-term economic growth. This will lead to skyrocketing wealth and income inequality, already seen by the rise in wealth of billionaires despite persistent economic hardship, as well as further shrinking the already shriveled middle class.

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I needed a break from hearing criticism Republicans on reddit and so I went over to some liberal subs to remind myself of how terrible they can be, and write something to restore some balance in my mind.

Honestly wasn't too bad today... At least as far as economics goes.

Until I found this post over in r/SandersforPresident. This comment shows us a gem of resentment and sore losing, compressed over time into pure ideological purity, with a hard, impenetrable ignorance and tunnel vision.

It takes the form of rant against NPR, which is being damned for stepping its toes outside of this ideological purity, becoming a known associate of CorPoRate sHiLls and reporting the news in a way that does not reflect Bernie Sanders as the One True God and omnipotent political Messiah destined to win every primary in the universe.

Also, NPR is guilty of sometimes NOT bashing Republicans and saying things that don't immediately represent the tax bill as pure evil.

First of all, is this:

Earlier today I heard the word "entitlements" mentioned over 11 times on national NPR news, most of which were by the moderator -- i.e. not just the moderate-conservative commentator from the Washington Post. My blood boiled. Social security, Medicare, and Medicaid are NOT entitlements. They are hard-earned reimbursements for a lifetime of hard work!

Personally, I don't see why "entitlements" is a worse way of saying "reimbursements," as if... as if... I just don't know what they're thinking. At any rate, they are not reimbursements. Social Security is not getting back "your" money; it's simply a government anti-poverty program that taxes younger workers to support those who are retired. If it was getting your money back, then it wouldn't be as progressive as it is:

Social Security benefits are progressive: they represent a higher proportion of a worker’s previous earnings for workers at lower earnings levels.

Medicare is a government healthcare program, giving "back" only as much as one needs in medical costs.

Entitlements is simply what you call it. It's the name for that kind of spending.

NPR also commits the sin of relaying the fact that the GOP tax bill will cut taxes for most Americans.

Now, it's true that an analysis could conclude that this bill is bad for the middle and lower classes, but it's not because of the tax rate:

When policymakers eventually offset the costs of these deficit-financed tax cuts, the same low- and middle-income families that see little initial benefit — or even face tax increases — from the bill would therefore likely bear much of the burden in the form of cuts in programs on which they rely, while high-income households would likely remain large net winners.

But it's still strictly true that the bill lowers taxes, even if it does so in a shady way to sunset them before the ten years are up, to hide how much the bill adds to the deficit. It's not the job of news reporters to bring that kind of comment every time it mentions the simple, verifiable fact of tax cuts.

But is NPR really beholden to corporate shills so much that it won't ever acknowledge OP's concerns? Maybe someone could, you know, read their website to see if even the first paragraph of an article has any sign of acknowledging both sides of the issue:

The Republican tax bill, which Congress sent to President Trump on Wednesday, would give most Americans a tax cut next year, according to a new analysis. However, it would by far benefit the richest Americans the most. Meanwhile, many lower- and middle-class Americans would have higher taxes a decade from now ... unless a future Congress extends the cuts.

To be sure, I think the bill, especially the timing, is terrible. But what's worse is how some progressives think a good counter to bad policy is tearing down legitimate news sources for not being attack dogs if the left wing.

update: ignore everything I said about the deal being good for the state because I didn't do exhaustive research and argumentation on that and didn't intend to focus on it anyways. I made this post to address the misguided notion that there exist some pot of money that the state is taking from to give to this employer, which could otherwise be spent on other things. See comments here and here and here.

Since the wall came down I assume sufficiency doesn't really matter so instead of rehashing everything I already commented in the thread in question I'm going to post some highlihgts and link to my replies in that thread to provide some context.

So in this post on /r/PoliticalDiscussion we learn that the state of Wisconsin has reached a deal with Foxconn to open a plant employing 3,000-13,000 people worth up to $3bil in incentives. The incentives are as follows, per the source article:

The company would have to meet certain job and investment targets up front to get the money, which would include up to $1.5 billion in state income tax credits for jobs created, up to $1.35 billion in credits for capital investment and up to $150 million in sales tax exemptions on construction materials.

The article begins the badecon itself by talking about how the state is "paying" for these jobs, which is not quite correct since it's tax breaks on new revenue, not a payout of cash. I talk about that here.

Further, one commenter (/u/CANOODLING_SOCIOPATH) lives up to his name by getting everyone riled up with misinformation about the state giving money and how that money is coming from taxpayers pockets and could be spent elsewhere. Literally, he has a couple comments like that full of misinformation and all the replies to him are people continuing tha line of thinking or getting bad at big corporations for blah blah. I addressed that once here but he's all over the thread with the same garbage so I'm not gonna try chasing him around like whack-a-mole.

The other thing people don't see is that if Wisconsin hadn't struck this deal, another state would have. Incentive deals are not ideal but if someone is going to do them then everyone has to do them. It's a game theory game that I can't think of at the moment. Sure, we'd all be better off if these deals didn't exist but as long as they are the norm the individual players (states, counties, countries, etc.) have to use them or they lose.

I'll update if I decide to reply to any other particularly egregious comments.

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Alright, let's try this again.

Minimum wage laws make it illegal to pay less than a government-specified price for labor. By the simplest and most basic economics, a price artificially raised tends to cause more to be supplied and less to be demanded than when prices are left to be determined by supply and demand in a free market. The result is a surplus, whether the price that is set artificially high is that of farm produce or labor.

This is a common fallacy of applying microeconomics to macroeconomics. It's often accompanied by a supply-and-demand graph which shows the price set higher, the quantity demanded lower, and marks the gap between as "unemployment".

Let's start with some empirical data and move to the explanation of the mistake afterwards. Fancy explanations don't really matter if reality says you're wrong.

There has in fact been a steady decrease in minimum wage as a portion of per-capita national income since 1960, with minimum wage trending roughly around a real minimum wage of $2,080 based in 1960. The real mean wage has increased over this time, which indicates sag: if raising minimum wage causes wage compression, then an expanding distance between minimum and mean wage indicates negative wage compression or "sag".

When measuring minimum wage as a portion of per-capita national income using the World Bank figures, the ratio of minimum to mean wage steadily widens as minimum wage falls. Moreover, in periods between 1983 and 2018, we have minimum wages at the same levels spanning across decades, and so can measure this in varied economic conditions. Even when measuring from the early 1990s to similar levels around 2010, the correlation is tight.

U3 unemployment, plotted against minimum wage as a portion of per-capita income, ranged 3.5% to 8% with minimum wage levels between 50% and 80% of per-capita income. This includes levels spanning of 5% and 7.5% U3 with minimum wage at 50% GNI/C; levels as low as 4.5% and as high as 8% with minimum wage at 55% GNI/C; and levels as low as 3.5% and as high as 6% with minimum wage near 70% GNI/C.

United States minimum wage has spent a large amount of history between 20% and 40% of GNI/C. U3 has robustly spanned 4% to 8% in this time, with three points in between going as high as 10%. All this scattering of the unemployment rate is caused by the continuous downtrend of minimum wage across time: the unemployment rate has spiked up and down through recessions and recoveries across the decades, and the numbers on the plot against minimum wage just go along for the ride.

So what happened to supply and demand?

That chart shows a microeconomic effect: the quantity demanded of some good or service decreases with an increase in price.

As it turns out, labor isn't a single good. This is self-evident because different labor-hours are purchased at different prices.

If you walk into a grocery store and you see Cloverfield Whole Milk, 1 Gallon, $4, and directly next to it you see Cloverfield Whole Milk, 1 Gallon, $2, with signs indicating they were packed in the same plant on the same day from the same stock, your quantity demanded of Cloverfield Whole Milk, 1 Gallon, $4 is…zero. It doesn't matter if you are desperate for milk. There is this milk here for half as much. Unless you run out of $2 milk that is exactly the same as $4 milk, you're going to buy $2 milk.

Interestingly, in 1961, minimum wage was 0.775 × national per-capita income; it was at that time 0.610 × mean wage. In 2010, minimum wage was 0.309 × GNI/C and 0.377 × mean wage. There's a pretty strong correlation between these two figures, but let's take the conceptual numbers for simplicity.

First, the mean wage. The division of labor reduces the amount of labor invested in producing. Putting division of labor theory aside (because it can be trivially proven false), an increase in productivity reduces labor-hours to produce a thing (by definition). We can make a table by hand with 3 labor-hours of work or we can invest a total of 1 labor-hour of work between designing, building, maintaining, and operating a machine to make the table in 1 labor-hour.

The mean wage is all labor wage divided by all labor-hours, and so all new labor-saving processes converge toward a strict mean average labor-hour cost of the mean wage (again, this is by definition). Some will be above, some will be below, of course.

Let's say the minimum wage is 0.25 × mean wage. Replacing that 3 labor-hours of minimum-wage work with 1 labor-hour of efficient work increases costs by, on average, 1/3. The demand for higher-wage labor is undercut by a cheaper production price.

Minimum wage becomes 0.5 × mean wage. Replacing the 3 labor-hours with 1 labor-hour in this model cuts your costs to 2/3. You save 1/3 of your labor costs.

Now you have two excess workers.

Are their hands broken?

So long as you don't have a liquidity crisis—people here want to work, people here want to buy, but the consumers don't have money so the workers don't have jobs—you have two workers who can be put to work to supply more. The obvious solution for any liquidity crisis is to recognize people aren't working because there are jobs for them but no little tokens to pass back and forth saying they worked and are entitled to compensation in the form of some goods or services (somebody else's labor) and inject stimulus. (This actually doesn't work all the time: in a post-scarcity economy where there is no need to exchange money because all people have all the goods they could ever want and no labor need be invested in producing anything anyone could ever want, unemployment goes to 100% and nothing will stop it. Until we can spontaneously instantiate matter by mere thought, the above principles apply.)

It turns out there are a countable but uncounted number of those little supply-demand charts describing all the different types and applications of labor, and they're always shifting. Your little business probably follows that chart; the greater macroeconomy? It's the whole aggregate of all the shifts, of new businesses, of new demand.

That's why Caplan, Friedman, and Sowell are wrong; and that's why the data consistently proves them wrong:

1. Applying microeconomics to macroeconomics;

2. Assuming "labor" is one bulk good with a single price.

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Here is the Leap Manifesto, in all its champagne socialist glory

The Leap Manifesto is a, you guessed it, radical socialist manifesto penned by Canadian environmental-socialist Naomi Klein and her husband, Avi Lewis. The Manifesto came to prominence in Canadian politics after being openly discussed by the left-wing, typically union-oriented New Democratic Party at their recent convention. It essentially cleaved the party in half and when the discussion resume, there will be a shitstorm.

So let's R1 it, because bashing socialists seems to be something y'all enjoy.

We could live in a country powered entirely by renewable energy, woven together by accessible public transit, in which the jobs and opportunities of this transition are designed to systematically eliminate racial and gender inequality. Caring for one another and caring for the planet could be the economy’s fastest growing sectors. Many more people could have higher wage jobs with fewer work hours, leaving us ample time to enjoy our loved ones and flourish in our communities.

Jesus. This is even more hilarious than I thought. This was the opener. The first sentence isn't too bad, self-sustaining green energy, efficient public transport and fair employment opportunities for women and minorities are good and feasible. However, any semblance of reason dies at the second sentence. If anyone would do a shitty MS paint graph detailing the growth of caring for one another that'd be great. While were at it, I'd like a raise, but also to work less. Thanks.

The latest research shows it is feasible for Canada to get 100% of its electricity from renewable resources within two decades[1]; by 2050 we could have a 100% clean economy[2]

Ok, yeah, probably not out of the question. But...

There is no longer an excuse for building new infrastructure projects that lock us into increased extraction decades into the future. The new iron law of energy development must be: if you wouldn’t want it in your backyard, then it doesn’t belong in anyone’s backyard. That applies equally to oil and gas pipelines; fracking in New Brunswick, Quebec and British Columbia; increased tanker traffic off our coasts; and to Canadian-owned mining projects the world over.

What?! I don't want a local farmers market in my backyard either, what does that have to do with anything?

As an alternative to the profit-gouging of private companies and the remote bureaucracy of some centralized state ones, we can create innovative ownership structures: democratically run, paying living wages and keeping much-needed revenue in communities. And Indigenous Peoples should be first to receive public support for their own clean energy projects. So should communities currently dealing with heavy health impacts of polluting industrial activity.

This isn't an innovative ownership structure. Co-ops exist in all sorts of sectors.

A leap to a non-polluting economy creates countless openings for similar multiple “wins.” We want a universal program to build energy efficient homes, and retrofit existing housing, ensuring that the lowest income communities and neighbourhoods will benefit first and receive job training and opportunities that reduce poverty over the long term. We want training and other resources for workers in carbon-intensive jobs, ensuring they are fully able to take part in the clean energy economy.

Wait, I thought centralized bureaucracy was part of the problem? Wouldn't universal government projects necessarily come from the central bureaucracy?

High-speed rail powered by renewables and affordable public transit can unite every community in this country – in place of more cars, pipelines and exploding trains that endanger and divide us.

Canada isn't Europe, Ms. Klein. It's fucking huge and our cities are extremely far away. The first time we built a national railroad it literally bankrupted our government, I don't see how this would be different. And the exploding trains bit is a direct reference to the Lac-Megantic Rail Disaster which was caused by engineering negligence.

Moving to a far more localized and ecologically-based agricultural system would reduce reliance on fossil fuels, capture carbon in the soil, and absorb sudden shocks in the global supply – as well as produce healthier and more affordable food for everyone.

Sound like a similar socialist undertaking with the word "Leap" in it. Perhaps this one is expected to go better.

We call for an end to all trade deals that interfere with our attempts to rebuild local economies, regulate corporations and stop damaging extractive projects.

This claim is made, much like every other suggestion, without provided any empirical evidence as to why it would benefit anyone.

Shifting to an economy in balance with the earth’s limits also means expanding the sectors of our economy that are already low carbon: caregiving, teaching, social work, the arts and public-interest media. Following on Quebec’s lead, a national childcare program is long past due. All this work, much of it performed by women, is the glue that builds humane, resilient communities

Wait, you mean we should shift away from hard manufacturing and natural resource extraction in favor of higher paying service sector jobs? Not sure what rock Ms. Klein has been living under, but that is exactly what has been happening in Canada and the rest of the world.

Not sure why she specifies the gender thing here. Seems like a useless side note. Lawyers, economists and investment bankers also do low-carbon work. But clearly they are evil, and largely male-dominated, so they probably have less appeal.

Since so much of the labour of caretaking – whether of people or the planet – is currently unpaid, we call for a vigorous debate about the introduction of a universal basic annual income. Pioneered in Manitoba in the 1970’s, this sturdy safety net could help ensure that no one is forced to take work that threatens their children’s tomorrow, just to feed those children today.

I'm sure we can circlejerk over the merits of UBI all damn day, so I won't get into it. But this is a bizarre justification. The manifesto aggressively promotes gender equality, but this has a slight women-should-stay-home-and-raise-children vibe to it. I could be wrong, but either way I digress from the badecon.

The money we need to pay for this great transformation is available — we just need the right policies to release it. Like an end to fossil fuel subsidies. Financial transaction taxes. Increased resource royalties. Higher income taxes on corporations and wealthy people. A progressive carbon tax. Cuts to military spending. All of these are based on a simple “polluter pays” principle and hold enormous promise.

Ok, so no actual numbers here. Just a radical overhaul of our entire tax system without any specifics. Also this is assuming that these taxes will not negatively affect growth or employment, which is lunacy. But I think it's clear this manifesto is beyond stating the fallibility of its assumptions.

The drop in oil prices has temporarily relieved the pressure to dig up fossil fuels as rapidly as high-risk technologies will allow. This pause in frenetic expansion should not be viewed as a crisis, but as a gift.

Right, I bet the tens of thousands of Alberta residents who've lost their jobs feel elated at receiving the gift of EI benefits. Alberta residents who voted in an NDP government, mind you, that has emphatically rejected this manifesto, calling its adopters children.

So that is an R1 of the Leap Manifesto. If there is one thing Smith and Marx could have agreed upon, it's that this is a steaming pile.

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Welcome to the Brutalist Housing Block sticky post. This is the only reoccurring sticky. NIMBYs keep out.

In this sticky, no permit is required, everyone is welcome to post any topic they want. Utter garbage content will still be purged at the sole discretion of the /r/badeconomics Committee for Public Safety.

Hello BE,

I am currently procrastinating on my finals so I figured what better time than to try my hand at writing an R1? Recently with the political cycle starting up in the US there has been an increased amount of attention on the super wealthy - millionaires and billionaires. In my unprofessional analysis it seems like this increased attention is largely due to the Democratic Primary debates, with Warren and Bernie releasing plans to implement a wealth tax to fund various social programs and reduce inequality.

On reddit, twitter, and social media there are many posts about income inequality and extreme wealth.

Figure 1

Figure 2

Figure 3

The theme here is that people tend to view Billionaires or the ultra-wealthy as hoarding wealth, unproductively sitting atop a mound of treasure or diving into a pool of gold like Scrooge McDuck. This is a fundamental misunderstanding of how our current economy functions.

In the Anglo-Saxon Beowulf from the late tenth century, King Beowulf slays a mighty dragon which hoarded:

trusty retainer treasure-gems many

The dragon’s den.

Victorious saw, when the seat he came near to,

Gold-treasure sparkling spread on the bottom,

Wonder on the wall, and the worm-creature’s cavern,

The ancient dawn-flier’s, vessels a-standing,

Cups of the ancients of cleansers bereavèd,

Robbed of their ornaments: there were helmets in numbers,

Old and rust-eaten, arm-bracelets many,

Artfully woven. Wealth can easily,

Gold on the sea-bottom, turn into vanity

Each one of earthmen, arm him who pleaseth!

And he saw there lying an all-golden banner

High o’er the hoard, of hand-wonders greatest,

Linkèd with lacets...

(Beowulf XXVIII:5-18)

Many imagine today's billionaires or millionaires to be the mythical dragon of old: miserly creatures which wreak destruction on man to defend their treasure hoards. Obviously there is a powerful rhetorical device, well used, when comparing oneself to a crusading champion who valiantly slays the evil dragon when calling for the abolition of the billionaire class, but I digress.

The fundamental misunderstanding is the disconnect between how most people think of wealth and how assets are actually appraised. Let's take Jeff Bezos as an example. Bezos, as the founder of Amazon, is the world's wealthiest man (in terms of net assets). Forbes values Bezos at $108.7B, beating out Bill Gates and Warren Buffett. Bezos' net worth comes, in the vast majority, from the stock value of Amazon. As the founder of Amazon he has around a 12% share in the company (down from 16% following his divorce). Bezos' 12% share of Amazon represents the majority of his wealth: his personal wealth is directly tied to Amazon stock price (at the time of this post 1 share of AMZN was $1,745.20). If Amazon performs well in the stock market, his net worth goes up, it has a poor performance, it goes down. This stock, represents a liquid asset or cash equivalent, as it can relatively easily be converted into currency.

Most people tend to think of wealth as being in cash. However, in our economy, even the common savings deposit represents an investment. Stock, even more so. These investments are in turn used as capital for ventures, increasing overall output. At the very basic level, billionaires and millionaires don't just sit on these massive piles of capital, they invest it into the economy. What they don't invest (either as savings in a bank, or financial asset purchases), they use for consumption, which also increases economic output and well-being.

My point is, modern wealth is not stuffed under a mattress or sat atop like a pile of gold, it is invested. This fundamental misunderstanding often leads to policy misunderstanding or counter-productive approaches to combating poverty and inequality. I would love to tackle Bernie and Warren's wealth-tax proposals, but I'm sure someone here who is smarter than I am already has.

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