Bill and Melinda Gates on income inequality

[Possum Jenkins]

You don't just stumble upon $60 billion or whatever the hell he's worth. To get to that number you have to be cunning, cutthroat and have a strong drive to be rich as shit. And Gates has undoubtedly done that. Along with a bunch of illegal stuff.

That he throws around some guilt money is, I suppose, somewhat praiseworthy because it does help some people.

The problem with philanthropy, of course, is that it's subject to a single person's whims. So the money goes where that one person feels is necessary and whether that one person is feeling generous that month or that year.

So yeah, he's better than, say, the Waltons, but he's still much worse than a truly democratic society where absurdly people like him wouldn't exist.

 

[MikeHammer**]

So the taxes I pay on the goods I purchase don't contribute back to the overall economy simply because my check comes from Uncle Sam?

Of course it does.

Just as the kids buying stuff with their parents money contributes to the economy.

But it is not additional money when you take it from the parents and give it to the kids to spend just as it is not when you take it from the private sector and give it to the govt to spend. It is simply a redistribution of the existing money.

If gov't employees spending could build an economy Greece would be a leading economy.

 

[PolishHeadlock]

You don't just stumble upon $60 billion or whatever the hell he's worth. To get to that number you have to be cunning, cutthroat and have a strong drive to be rich as shit. And Gates has undoubtedly done that. Along with a bunch of illegal stuff.

That he throws around some guilt money is, I suppose, somewhat praiseworthy because it does help some people.

The problem with philanthropy, of course, is that it's subject to a single person's whims. So the money goes where that one person feels is necessary and whether that one person is feeling generous that month or that year.

So yeah, he's better than, say, the Waltons, but he's still much worse than a truly democratic society where absurdly people like him wouldn't exist.

 

[spamking]

This is actually quite complicated. Unless it is involved in production or a couple of other activities it doesn't but this has to be qualified. There are quite a few government functions that are absolutely needed for a well functioning economy but they don't directly grow the economy.

Taxes don't grow an economy but finance government. Taxes on one hand take away from some economic growth but the fact that are some tasks needed for economic growth to function well in an indirect way they contribute.

I have worked for the government and when I was there I was a tax rebater rather than taxpayer. I gave back some of the taxes that paid me back to the government. What I did created no wealth and I was paid by the wealth created by others then I gave some of that back in the form of taxes.

There are some activities by government that many including me should be done but they don't contribute to growth of the economy. I approve of them because I think they are a benefit but to say they contribute to the economy would be false.

It really depends on what the activity is. Building infrastructure can be a direct growth of the economy but this has to be qualified. If there is not enough invested infrastructure the economy could have benefited by greater government spending. If too much is invested in infrastructure it is a drag on the economy.

It really depends on the activity. In some areas it is cut on tried, in other areas there is disagreement among the people who make it their life's work to understand these things.

In a world with no subsidies the relative value of most things is easy to discern. This is one of the problems Bill Clinton's economist talks about in his government economics teaching.

The government uses what is called a cost benefit analysis but it is very qualitative on how much is the optimum amount. Since there are not market drivers for it they try and do what is called the least worst method. The least worst method is used in a lot of areas where it is impossible to know the right answer so it is an attempt at making a good guess. The merit government workers should be trying to make a good faith effort on this even though they know it is still a guess. The other weakness is politics often gets involved in much of it.

A part of government makes it easier for others to grow the economy, if the benefit it provides to growth is larger than what it takes out of the economy it is helpful. It is impossible to know the right amount.

A part of government is a pure drag on the economy no mater how you cut it. It does not mean that it should or shouldn't be done. These kinds of activities are impossible to quantitatively assign a value to. These can be dangerous areas because there are not any tools to guess what is the optimum amount. They are simply things that someone thinks the government should do.

There are some activities that in of themselves that are a drag on the economy and don't grow an economy but help prevent it from shrinking. Law enforcement would be one of these. Without law enforcement productivity would be taken away, no reason for someone to contribute the growth to the economy if it will be taken away by force by non-producers. Some form of security is needed to keep the economy from shrinking due to certain activities. It is deemed absolutely needed to have it in place even though it does not grow the economy, it protects the economy (thinking only of the economic aspect of law enforcement) It is impossible to know the right amount of law enforcement is optimum so we have to guess.

Again the taxes on government wages goes back to government so government workers are tax rebaters. That does not by itself mean it's a bad thing.

It is impossible to cover this subject in a post or a thread but takes years of study and after years of study you still have not scratched the surface of it.

The private sector creates direct value in the economy but all parts of private sector is not beneficial. The domestic activity that the private sector is the value of the economy. Without a functioning government the private sector would no be productive. This does not mean all parts of government is involved in a functioning economy. Most of government is an economic drag but definately not all of it. Just because a part of government is an economic drag does not mean it shouldn't be done.

The danger is too much government is a drag on the economy, too little government and the economy does not function even if the government does not create real growth directly.

I keep mentioning Bills old economics adviser because it is more palitable to some. In the same text book he wrote on government economics he stated Government agencies have an incentive to grow in size even if not needed. The private sector has an incentive to increase profits.

The reason the private sector has an efficiency advantage is it's profits are tied directly to the work it does. It can efficiently (from a productivity measure) make a bunch of things no one wants (inefficient from an economic measure). It has an incentive to not make these mistakes. A private sector business without subsidy has an incentive to try and produce the right amount and right things that people want in order to make a profit. They make there living trying to serve others. Government activity generally is not tied to the activity they do. A government agency can blow it's budget but it's revenue remain unchanged. A private sector company has hints to start doing less of what people don't want and switch to doing move of something else. Enough mistakes and the company that was actually bad for the economy is bankrupt and is no longer wasting resources. All of this gain is because most businesses have their income directly related to the activity they do. The government has a disconnect between what it does and its revenue.

When people say a government should be run as a business this is false. A government can't and should not run like a business because it is not one. It has to operate on cost benefit analysis using the least worst model to determine how much of it to do. Some parts of government it is impossible to do a cost benefit analysis on.

I might have to come back and try and read this when I'm not distracted. :wink:

I hope you didn't spend a ton of time writing that . . . :icon_lol:

 

[spamking]

Of course it does.

Just as the kids buying stuff with their parents money contributes to the economy.

But it is not additional money when you take it from the parents and give it to the kids to spend just as it is not when you take it from the private sector and give it to the govt to spend. It is simply a redistribution of the existing money.

If gov't employees spending could build an economy Greece would be a leading economy.

But ultimately the jobs my kids get are a result of this redistribution of existing money . . . which leads to growth in the economy.

 

[sickc0d3r]

Gov't jobs do not add to the economies wealth though. They spread the wealth made in the private sector to gov't friends.

Think of it this way. Two parents work and have five kids that don't work.

They find themselves short income and so to turn their 5 kids into wage earners the parents give them all jobs and pay them from their own income.

The kids are now doing better but the family is not as no new wealth was created. It was just the income from the parents spread around.

Same for gov't jobs. It is the income (taxes) taken from the private jobs (parents) and redistributed to the gov't jobs (kids). No new wealth was created, it was simply some taken and reallocated from those who created it.

But the parents, knowing times are hard now and thinking long term, hired the kids to do some home repairs while the parents are at work. The kids replaced the old AC unit, rewired the house, replaced some inefficient windows, and installed solar panels. The savings on the home electric bill became a net benefit. As a bonus, the kids used that money to help finance their education, and after earning a trade school certificate, they went out into the private sector and got a "real" job. Oh, and the money they spent for the rest of their lives went mostly to local private businesses, which translated to disposable income in the hands of their parent's customers.
The parents understood that human capital is marketable and that efficient infrastructure saves money and increases the availability of resources.

 

[MikeHammer**]

But ultimately the jobs my kids get are a result of this redistribution of existing money . . . which leads to growth in the economy.

there is no net gain. It does not cause growth.

You can take the parents money and give it to the 5 kids and also beyond that 5 cousins.

Each of them will spend that money in different areas then the parents might have. It may cause redistribution benefits to other people in other areas. But it is not growth nor new money.

It would be like an ex wife taking her alimony money and moving to another state. She may buy stuff and employ people with that alimony money but it is not new money. It is not growth. It is simply redistribution.

 

[spamking]

there is no net gain. It does not cause growth.

You can take the parents money and give it to the 5 kids and also beyond that 5 cousins.

Each of them will spend that money in different areas then the parents might have. It may cause redistribution benefits to other people in other areas. But it is not growth nor new money.

It would be like an ex wife taking her alimony money and moving to another state. She may buy stuff and employ people with that alimony money but it is not new money. It is not growth. It is simply redistribution.

So the jobs my kids ultimately get is just further redistribution of my money from my government job?

Say what?

How can two additional workers not = some level of growth or new money?

I'm not actually paying them at this point . . . they're out of school and working on their own.

 

[MikeHammer**]

But the parents, knowing times are hard now and thinking long term, hired the kids to do some home repairs while the parents are at work. The kids replaced the old AC unit, rewired the house, replaced some inefficient windows, and installed solar panels. The savings on the home electric bill became a net benefit. As a bonus, the kids used that money to help finance their education, and after earning a trade school certificate, they went out into the private sector and got a "real" job. Oh, and the money they spent for the rest of their lives went mostly to local private businesses, which translated to disposable income in the hands of their parent's customers.
The parents understood that human capital is marketable and that efficient infrastructure saves money and increases the availability of resources.

Sure if the kids actually do jobs that the parents would pay others to do because they would not do it themselves then yes.

That is not the case with gov't in the vast majority of cases.

The proper analogy for gov't in most cases is them mandating that you must allow the kids to do the dishes and pay them for it when the parents did the dishes and paid no one for it prior. It is pure, forced redistribution.

 

[djacobox372]

"philanthropy is part of how we deal with those inequities"

Great idea, so lets give all the money (power) to 1% of the people and then rely on them to decide who they want to help and who they don't.

What a great way to run a democracy.

It's great that the Bill and Milenda Gates foundation spends 50 billion a year on helping whoever they deem worthy, but perhaps they shouldn't be the only ones to decide who's worthy.

 

[MikeHammer**]

So the jobs my kids ultimately get is just further redistribution of my money from my government job?

Say what?

How can two additional workers not = some level of growth or new money?

It isn't like I'm no longer working . . .

Use my example above and hire your 5 kids. You then have 5 additional workers all getting pay. Why is that family not getting richer and richer if additional workers = new money and growth?

By your logic any families with a large number of relatives unemployed should get the few employed relatives to simply hire their family members and watch the money grow for their family as more and more employed people means more and more wealth. It does nto work that way.

If your kids work outside gov't then they can start contributing to growth where you did not.

 

[MikeHammer**]

"philanthropy is part of how we deal with those inequities"

Great idea, so lets give all the money (power) to 1% of the people and then rely on them to decide who they want to help and who they don't.

What a great way to run a democracy.

what, you think philanthropy should not be part?

And do you realize that the 1% is basically just a way to say the 1st world.

This 1% is being used in a very disingenuous way as most of the middle class that has worked 20 years and paid down a mortgage would be part of the 1%. it requires only $800k net to be in the top 1% which you would expect to typical school teachers to have after 20 years of saving and paying down a mortgage.

 

[spamking]

Use my example above and hire your 5 kinds. You then have 5 additional workers all getting pay. Why is that family not getting richer and richer if additional workers = new money and growth?

I understand that if I'm the one paying them there is no new money. I never said otherwise.

I said the financial support I provide my kids will ultimately lead to them being able to contribute new money to the economy. Therefore in the end MY contribution does in fact lead to new growth and new money.

By your logic any families with a large number of relatives employed should get the few employed relatives to simply hire their family members and watch the money grow as more and more employed people means more and more wealth. It does nto work that way.

Where the heck did I say that? I never said I was their employer the entire time they were working/getting paid.

If your kids work outside gov't then they can start contributing to growth where you did not.

Ok dude . . . none of my money contributes to anything. Whatever.

 

[SpidermanISGOAT]

Yeah the 1% the media talks about is really more like the .5% or less

Many Doctors, Lawyers and regular Financial people are in the 1% but are not the people flying around in Jets, multiple homes across the world, and are not the ones who own giant private corporations, or bank roll political campaigns.

Clear difference between a Doctor making +300k a year and a Koch Brother, OIL CEO, or Bank CEO

 

[OldGoat]

Use my example above and hire your 5 kids. You then have 5 additional workers all getting pay. Why is that family not getting richer and richer if additional workers = new money and growth?

By your logic any families with a large number of relatives unemployed should get the few employed relatives to simply hire their family members and watch the money grow for their family as more and more employed people means more and more wealth. It does nto work that way.

If your kids work outside gov't then they can start contributing to growth where you did not.

It's because the left are too dumb to understand that productivity, not money, is what produces wealth. Money is just a tool to facilitate trade and helps with wealth creation, but does not directly create wealth.

If you give each person in the world a trillion US dollars the wealth of the world has not changed one tiny bit. If each person in the world got a shovel or a tv the wealth increase in that case would be measurable.

Additionally, the left are too dumb to understand that when you break the link between social behavior and reward you are in essence rewarding anti-social behavior. That has a bigger negative impact on the ability of a society to create wealth in the future then the transfer of purchasing power that may stimulate some production, by the wealthy and productive, in the present.

Actually the left understand that completely, but they'd rather have the short term political power that pandering to the unproductive provides than have a stronger more efficient nation in the future.

 

[MikeHammer**]

I understand that if I'm the one paying them there is no new money. I never said otherwise.

I said the financial support I provide my kids will ultimately lead to them being able to contribute new money to the economy. Therefore in the end MY contribution does in fact lead to new growth and new money.



Where the heck did I say that? I never said I was their employer the entire time they were working/getting paid.



Ok dude . . . none of my money contributes to anything. Whatever.

Your missing a key point here.

Again lets look at the ex moving to a new state and taking her alimony with her.

Yes if she spends her ex husbands money in a new state it will certainly add to the growth there. But that money would have been kept and spent in the prior state. Thus it is redistributed wealth and not additional.

If you, as a gov't worker take money from the private sector and redistribute it to your kids and others again that is not new wealth. It is redistributed. It would have been spent, loaned out and other wise used in the private sector and thus spurred growth and instead it was taken by gov't and redistributed...and yes your kids can contribute to growth by getting jobs in the private sector with it. But again that is not net growth because if the gov't did not take it and give it to you, then it would have got deployed elsewhere causing growth. No one disputes that money being deployed via the private sector is far more efficient then money being taken by gov't and then redeployed.

Sorry but the gov't taking money from the private sector is simply a reallocation of wealth and typically a drag on productivity. it is not creating new wealth. Again Greece should be the best economy in the world if it worked that way.

 

[OldGoat]

http://en.wikipedia.org/wiki/Minimum_wage

You win votes by doing things the masses want to here. Truth be damned. There is a lot of agreement and disagreement to the follow on effects of this but secondary effect is often more powerful than primary effect. This does not solve the problem. The problem can be improved by fixing the balance of payments issue.


"If a higher minimum wage increases the wage rates of unskilled workers above the level that would be established by market forces, the quantity of unskilled workers employed will fall. The minimum wage will price the services of the least productive (and therefore lowest-wage) workers out of the market. …The direct results of minimum wage legislation are clearly mixed. Some workers, most likely those whose previous wages were closest to the minimum, will enjoy higher wages. This is known as the "ripple effect". The ripple effect shows that when you increase the minimum wage the wages of all others will consequently increase due the need for relativity.[37] Others, particularly those with the lowest prelegislation wage rates, will be unable to find work. They will be pushed into the ranks of the unemployed or out of the labor force. Some argue that by increasing the federal minimum wage, however, the economy will be adversely affected due to small businesses not being able to keep up with the need to subsequently increase all workers wages"

This part was to try and get the attention of some people. It is actually very complicated. It no matter what is the best way to address the problem. I remember when almost no one paid the minimum wage, it was hard to get paid that little.

One complication is all the noise from multiple sources but the balance of payments has a rational affect on domestic employment and wages but everyone seems to be against event trying to fix that problem. In fact there is energy in the population devoted to making the problem worse. Both Obama and right wingers have said this is a problem though they might not always agree on how to address the balance of payments issue. The problem is it seems like when anyone tries to address it people somehow think its bad.

In a global economy it leads to a drag on productivity. The reason being is that each nation has a heterogeneous population. Our lowest 25% (in intellect or talent) do not compete with our top 25% for jobs. They compete with the lowest 25% in other countries. And in a global market if you don't have international wage and environmental standards those jobs to the extent that it's possible are going to be done offshore or with illegal immigrant labor. Notice that the party that supports MW turns a blind eye to the wage depression of illegal immigrant labor. Why? For votes. Future and present.

Same with minimum wage. By handing out goodies with no expectation of performance, productivity, behavior, or education we devalue those concepts in the minds of the recipients and their broods.

This isn't a blanket condemnation of public spending or complete praise for private spending. Building a bridge with proper oversight and accounting helps the nation more than another 40oz of your favorite beverage being produced, sold, and consumed. But the motivations for the decisions each sector make is what needs close examination. And buying votes for power is more insulated from proper feedback then producing goods for dollars.

Especially when you have a propaganda apparatus that specializes in appealing to the emotions of the populace to manipulate the way they think and you have a school system that seems designed to go out of it's way to hinder logical and critical thought.

 

[MikeHammer**]

Yeah the 1% the media talks about is really more like the .5% or less

Many Doctors, Lawyers and regular Financial people are in the 1% but are not the people flying around in Jets, multiple homes across the world, and are not the ones who own giant private corporations, or bank roll political campaigns.

Clear difference between a Doctor making +300k a year and a Koch Brother, OIL CEO, or Bank CEO

Many school teachers, plumbers, and bank tellers with a decent pension plan are in the 1% after a couple decades work and savings.

That is what so many people do not understand. The 1% is compromised mostly of the middle class of the 1st world. With the growing population trends in the 3rd world compared to the 1st world the top 1% of wealth will eventually contain anyone who has any savings whatsoever.

 

[spamking]

Your missing a key point here.

No . . . I've acknowledged that my simply paying my kids out of my own pocket adds nothing. That's not what I've ever even argued in the first place.

Yes if she spends her ex husbands money in a new state it will certainly add to the growth there. But that money would have been kept and spent in the prior state. Thus it is redistributed wealth and not additional.

How is the example I mentioned anywhere in the same ballpark as this one?

If you, as a gov't worker take money from the private sector and redistribute it to your kids and others again that is not new wealth. It is redistributed.

I never said it was new wealth . . . I said the end result of that redistribution leads to them getting "real jobs" and making new money from their new employer.

It would have been spent, loaned out and other wise used in the private sector and thus spurred growth and instead it was taken by gov't and redistributed...and yes your kids can contribute to growth by getting jobs in the private sector with it. But again that is not net growth because if the gov't did not take it and give it to you, then it would have got deployed elsewhere causing growth.

So my funding of my kids education that aids them in obtaining a private sector job doesn't count as net growth in your eyes because the ultimate source of their ability to get that job was funded by my Federal paycheck?

Yet if that exact same job was given to someone else who wasn't the child of a Federal employee you're saying it would count as net growth because the source of funding came from a different pot?

No one disputes that money being deployed via the private sector is far more efficient then money being taken by gov't and then redeployed.

I've not once argued anything related to efficiency . . . I've got almost 20 years of Federal service in and I can definitely discuss inefficiency in government. Drives me nuts.

Sorry but the gov't taking money from the private sector is simply a reallocation of wealth and typically a drag on productivity. it is not creating new wealth. Again Greece should be the best economy in the world if it worked that way.

I don't live in Greece . . . don't really care about what would've/could've been for Greece.

Did Obama's ARRA not put some form of life back into the economy? Or was it just another drag on productivity?

 

[MikeHammer**]

No . . . I've acknowledged that my simply paying my kids out of my own pocket adds nothing. That's not what I've ever even argued in the first place.




How is the example I mentioned anywhere in the same ballpark as this one?



I never said it was new wealth . . . I said the end result of that redistribution leads to them getting "real jobs" and making new money from their new employer.



So my funding of my kids education that aids them in obtaining a private sector job doesn't count as net growth in your eyes because the ultimate source of their ability to get that job was funded by my Federal paycheck?

Yet if that exact same job was given to someone else who wasn't the child of a Federal employee you're saying it would count as net growth because the source of funding came from a different pot?



I've not once argued anything related to efficiency . . . I've got almost 20 years of Federal service in and I can definitely discuss inefficiency in government. Drives me nuts.




I don't live in Greece . . . don't really care about what would've/could've been for Greece.

Did Obama's ARRA not put some form of life back into the economy? Or was it just another drag on productivity?

I'll make it as easy as possible to follow.

Lets pretend for simplicity that your pay from your government job is taken directly from me.

We each have one kid and we pay for their life needs with our earnings. Yours come from me.

Yes you having a kid and spending my money and your kid eventually working outside government and contributing does have some benefits.

But are they additional benefits or redistributed benefits?

IF the gov't did not take my money and give it to you then I would have been able to be more productive with the same amount money. I maybe have 2 kids instead of one and have more to spend in the economy.

So we end up with the same amount or more benefits if the gov't does not take my money and redistribute it as the money is almost always better directly spent without the drag or loss associated with gov't spending.