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On September 23 2014 07:42 WhiteDog wrote:Show nested quote +On September 23 2014 07:22 JonnyBNoHo wrote:On September 23 2014 05:53 WhiteDog wrote:On September 23 2014 05:48 JonnyBNoHo wrote:On September 23 2014 05:26 WhiteDog wrote:On September 23 2014 05:21 JonnyBNoHo wrote:On September 23 2014 01:12 WhiteDog wrote:On September 22 2014 23:58 2primenumbers wrote:
Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud! You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising. Well he's not a fraudster, but the FT did poke some holes in his empirical data sets ( source). They're a bit picky, but still worthwhile noting. Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 ( source). As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant. The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work. About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets). You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics. FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to. The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent). From the paper, here's capital in France broken down by components. The increase is due to housing: + Show Spoiler +I'm not sure what point you are trying to make about financial assets. Are you trying to double count? "False but a good intuition" is still false. Piketty changed his data the day after and basically answered FT's critics. The paper you quoted consider that inequalities in housing are irrelevant - it's a point of view. The OFCE beg to differ here, in french. Here is a resume in english ( click). Just a point, for the paper you quoted, an increase in the value of housing is not relevant for inequalities. Take a second to think about it : if someone has a house in New York at 1 000 000 dollars value and that see an increase in value of say 10% per year for a decade, while another guy has house in a shitty city at 100 000 dollars value and see same increase in 10 % per year for a decade, do you think inequalities between the one that own the house in New York and the one that own the house in the shitty city did not increase ? The paper you linked think not : First, what inequality would there be if each household owned one painting and kept it throughout its lifetime? The wealthiest households might own a pricey Manet or Kandinsky. The poorest might own a painting by a local artist. Now, if the price of art increased uniformly, would this contribute to an explosion of inequality in the sense of a divergent and exponential accumulation of capital? The answer is clearly it would not That's a pretty particular view on inequalities... False because he couldn't refine doesn't mean he is completly false. Sorry if you wanted Marx to give you a "law" in an age where statistics were almost inexistant while even modern economy have no law at all. Piketty changed his data... because the FT is stupid? The paper I cited actually does consider housing to be relevant with regards to inequality. However, we would like to make it very clear that we do not deny that the rise in housing price has had real consequences on access to housing and inequality. At issue is not the role of housing on inequality. At issue is the role that house price valuation plays on the 'capital accumulation' story that Piketty writes about. If you do not understand what I mean, I can elaborate. Also, in your example inequality does not rise. The ratio between the $1,000,000 house and the $100,000 house is 10:1. Ten years later, the values are $2,357,948 and $235,795 respectively and the ratio between the two is still 10:1. FT is stupid, a minor data error changed a second later that has no incidence whatsoever on the core point of view of a book is not a valid critic. I don't know why you talk about a ratio. In the first scenario the difference between the two (the inequality in capital assets) is 800 000 $, in the second it's 2 000 000 $, that's a flat increase in inequalities. Again, that's considering the increase in house value is homogeneous between a shitty town and new york, and that everybody has a house. Now if you take into consideration revenu, and thus the amount of work to acquire a house, it's pretty clear. As you say they don't deny it. The OFCE respond to other type of critics coming from the paper, I'm just not going to bother playing a nitpick game with you on a book that basically state what everybody knows, which is that inequality have risen.
Sure it's a valid critique. Data should be as accurate as possible.
Each person receive proportionally the same increase in wealth, hence inequality didn't rise. All you're doing is inflating the numbers.
You seem to also be confused at the housing situation. Renting is a possibility, so you have to take that into account. What Piketty's data doesn't show is that as housing prices have risen, renting has become a better value. The value of owning a home isn't captured by the owner. Now, in theory, you could sell the house and go rent, and capture the value that way but that rarely happens in real life.
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Cayman Islands24199 Posts
rent to value ratio decreasing is usually a sign of lack of alternative safe investing opportunities. it's interconnected with capital returns
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On September 23 2014 08:01 JonnyBNoHo wrote:Show nested quote +On September 23 2014 07:37 IgnE wrote:
I guess you think that the iPhone is price inelastic? Link your estimates. Do they include the cost of mining and processing the materials? No, I don't think that iPhones are price inelastic. I don't think elasticity is relevant. There's room for Apple to lower the price if need be, and I don't think a marginal drop in US iPhone sales is particularly catastrophic. Would it suck for US consumers to have imports rise in price? Sure. But it would also help US workers to have our exports in higher demand. The estimates come from NYT journalist Charles Duhigg speaking on NPR. Materials are a small part of an iPhone's cost. You can see a cost breakdown from a few years back here.
I'll admit I don't know much about economics so please don't insult me if I sound ignorant (I'm just trying to learn), but given the disparity in increase between production and labor's income, why would we expect to see workers benefit from having exports in higher demand? I'm referring to a graph I saw earlier that looks like or might've been this: + Show Spoiler +
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On September 23 2014 08:27 Roe wrote:Show nested quote +On September 23 2014 08:01 JonnyBNoHo wrote:On September 23 2014 07:37 IgnE wrote:
I guess you think that the iPhone is price inelastic? Link your estimates. Do they include the cost of mining and processing the materials? No, I don't think that iPhones are price inelastic. I don't think elasticity is relevant. There's room for Apple to lower the price if need be, and I don't think a marginal drop in US iPhone sales is particularly catastrophic. Would it suck for US consumers to have imports rise in price? Sure. But it would also help US workers to have our exports in higher demand. The estimates come from NYT journalist Charles Duhigg speaking on NPR. Materials are a small part of an iPhone's cost. You can see a cost breakdown from a few years back here. I'll admit I don't know much about economics so please don't insult me if I sound ignorant (I'm just trying to learn), but given the disparity in increase between production and labor's income, why would we expect to see workers benefit from having exports in higher demand? I'm referring to a graph I saw earlier that looks like or might've been this: + Show Spoiler +
As a whole, production and labor's income rises together. The big difference shown in your graph, and others like it, is that inequality between highly paid labor and poorly paid labor has been increasing. (edit: production follows mean worker compensation, not median family income)
To a lessor extent capital grabbed a larger share of the income. One of the big explanations for that is all the cheap labor from China and others that came available. Should the cheap labor of China get 'used up', and should that theory be right (there are others), that trend will reverse. And it may be helpful with regards to labor inequality too.
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On September 23 2014 08:01 JonnyBNoHo wrote:Show nested quote +On September 23 2014 07:37 IgnE wrote:
I guess you think that the iPhone is price inelastic? Link your estimates. Do they include the cost of mining and processing the materials? No, I don't think that iPhones are price inelastic. I don't think elasticity is relevant. There's room for Apple to lower the price if need be, and I don't think a marginal drop in US iPhone sales is particularly catastrophic. Would it suck for US consumers to have imports rise in price? Sure. But it would also help US workers to have our exports in higher demand. The estimates come from NYT journalist Charles Duhigg speaking on NPR. Materials are a small part of an iPhone's cost. You can see a cost breakdown from a few years back here.
That chart has nothing about material costs. Just component costs. But you are implying that an increase of $65 would only result in a marginal drop in sales.
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Cayman Islands24199 Posts
price is set independent of cost. if apple has the magical power of charging 800 for an iphone at a point of maximizing revenue, they'll charge that, regardless of how much it costs to build. this is assuming we are not in a boundary condition where cost > revenue in some sense.
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On September 23 2014 07:57 Wolfstan wrote:Show nested quote +On September 23 2014 07:07 IgnE wrote:
I'm not really sure you realize how schizophrenic your own analysis is. "Social programs will ensure those who can't afford the necessities have them." Legislating overtime at 32 or 35 only encourages companies to shift more employees around for fewer hours. Many part-time low-wage positions give very little notice for shifts, some requiring employees to constantly be "on-call", as computerized shift calculations try to predict exactly how few employees are needed at a given time to deal with the expected demand. Try holding two of those "part-time" jobs when you are constantly on-call, or given at most a few days' notice for shifts at each one. Or trying being a parent. Have to pick your kid up from school? Trying to organize childcare? Tough. Legislating overtime at a lower hour count is designed to open the middle class jobs up to those underemployed in low wage positions. I've said time and again that those retail positions aren't meant for "lifers" they are meant for high school students. The middle class "non-bullshit" jobs are not demanding more manpower, but if hours 32-40 required higher input costs the 5-day employer could decide to pay overtime increasing income for the employee or run 2 shifts for the week increasing employment for the economy. The 7 day companies would have 2 full-time shifts instead of a full-time and a part time employee underemployed. The 2 job part time parent's situation would remain unchanged from how it is now. Historically, reduction of the workday when productivity increases has worked well to absorb less demand for labour to achieve production targets. The economy would adapt prices to keep the average housing, food, clothing, transportation expenses within the average household income.
32 hour workweeks would simply result in more people being paid 80% of the old salary. You increase employment by forcing employers to employ more people at less money.
Don't you see a problem with saying "the non-bullshit" jobs are "not demanding more manpower" while also claiming that the "bullshit jobs" are only supposed to be temporary in your opinion? Your views are inconsistent.
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On September 23 2014 08:53 IgnE wrote:Show nested quote +On September 23 2014 08:01 JonnyBNoHo wrote:On September 23 2014 07:37 IgnE wrote:
I guess you think that the iPhone is price inelastic? Link your estimates. Do they include the cost of mining and processing the materials? No, I don't think that iPhones are price inelastic. I don't think elasticity is relevant. There's room for Apple to lower the price if need be, and I don't think a marginal drop in US iPhone sales is particularly catastrophic. Would it suck for US consumers to have imports rise in price? Sure. But it would also help US workers to have our exports in higher demand. The estimates come from NYT journalist Charles Duhigg speaking on NPR. Materials are a small part of an iPhone's cost. You can see a cost breakdown from a few years back here. That chart has nothing about material costs. Just component costs. But you are implying that an increase of $65 would only result in a marginal drop in sales.
Materials will be a fraction of component costs. Materials are largely commodities traded at global market prices. Materials from the US won't be appreciably more expensive than from overseas.
Apple could increase the price by $0 if they wanted to, and still turn a profit. $65 is also the high estimate. The low estimate is $10.
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I'm just pointing out that I asked for a breakdown with material costs and you gave me one with component costs. Now you are just repeating yourself. Most materials in an iphone come from countries with very cheap labor.
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On September 23 2014 08:59 IgnE wrote:Show nested quote +On September 23 2014 07:57 Wolfstan wrote:On September 23 2014 07:07 IgnE wrote:
I'm not really sure you realize how schizophrenic your own analysis is. "Social programs will ensure those who can't afford the necessities have them." Legislating overtime at 32 or 35 only encourages companies to shift more employees around for fewer hours. Many part-time low-wage positions give very little notice for shifts, some requiring employees to constantly be "on-call", as computerized shift calculations try to predict exactly how few employees are needed at a given time to deal with the expected demand. Try holding two of those "part-time" jobs when you are constantly on-call, or given at most a few days' notice for shifts at each one. Or trying being a parent. Have to pick your kid up from school? Trying to organize childcare? Tough. Legislating overtime at a lower hour count is designed to open the middle class jobs up to those underemployed in low wage positions. I've said time and again that those retail positions aren't meant for "lifers" they are meant for high school students. The middle class "non-bullshit" jobs are not demanding more manpower, but if hours 32-40 required higher input costs the 5-day employer could decide to pay overtime increasing income for the employee or run 2 shifts for the week increasing employment for the economy. The 7 day companies would have 2 full-time shifts instead of a full-time and a part time employee underemployed. The 2 job part time parent's situation would remain unchanged from how it is now. Historically, reduction of the workday when productivity increases has worked well to absorb less demand for labour to achieve production targets. The economy would adapt prices to keep the average housing, food, clothing, transportation expenses within the average household income. 32 hour workweeks would simply result in more people being paid 80% of the old salary. You increase employment by forcing employers to employ more people at less money. Don't you see a problem with saying "the non-bullshit" jobs are "not demanding more manpower" while also claiming that the "bullshit jobs" are only supposed to be temporary in your opinion? Your views are inconsistent.
Yes, at first they would get 80% of the paycheque. The household budget would then be 20% less. 33% housing, 15% transport, 3% clothing, 12% food. Demand would go up as a greater quantity of people would be making 80% of well paying jobs as opposed to unemployment or minimum wage.
Bullshit jobs are temporary demographically, but permanent in necessity, people in the prime earning years of their life should not be in retail anymore wanting to be bumped up to "living wage". Those are for 15-24 year-olds to get spending money and workplace experience. We are currently wasting both demographics by underemploying our prime demographic and denying experience for our youth.
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Demand doesn't go up if the overall wages don't go up . . . 80% pay x 1.25 times as many workers still = the same total wages. Then you talk about underemployment and it's evils. Like I said, your analysis is schizophrenic.
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On September 23 2014 08:59 IgnE wrote:Show nested quote +On September 23 2014 07:57 Wolfstan wrote:On September 23 2014 07:07 IgnE wrote:
I'm not really sure you realize how schizophrenic your own analysis is. "Social programs will ensure those who can't afford the necessities have them." Legislating overtime at 32 or 35 only encourages companies to shift more employees around for fewer hours. Many part-time low-wage positions give very little notice for shifts, some requiring employees to constantly be "on-call", as computerized shift calculations try to predict exactly how few employees are needed at a given time to deal with the expected demand. Try holding two of those "part-time" jobs when you are constantly on-call, or given at most a few days' notice for shifts at each one. Or trying being a parent. Have to pick your kid up from school? Trying to organize childcare? Tough. Legislating overtime at a lower hour count is designed to open the middle class jobs up to those underemployed in low wage positions. I've said time and again that those retail positions aren't meant for "lifers" they are meant for high school students. The middle class "non-bullshit" jobs are not demanding more manpower, but if hours 32-40 required higher input costs the 5-day employer could decide to pay overtime increasing income for the employee or run 2 shifts for the week increasing employment for the economy. The 7 day companies would have 2 full-time shifts instead of a full-time and a part time employee underemployed. The 2 job part time parent's situation would remain unchanged from how it is now. Historically, reduction of the workday when productivity increases has worked well to absorb less demand for labour to achieve production targets. The economy would adapt prices to keep the average housing, food, clothing, transportation expenses within the average household income. 32 hour workweeks would simply result in more people being 80% of the old salary. You increase employment by forcing employers to employ more people at less money. Don't you see a problem with saying "the non-bullshit" jobs are "not demanding more manpower" while also claiming that the bullshit jobs are only supposed to be temporary in your opinion? Your views are inconsistent.
Yeah the whole 'low wage jobs are supposed to be temporary' never made sense to me.. I mean can't we all just look at how many jobs there are vs how many people and see that inevitably, regardless of work ethic and education, there will be people destined for significant chunks of their life (if not the whole thing) in low wage jobs?
The whole mentality of anyone can get rich is a bullshit lottery pipe dream, a real goal is consistently increasing the quality of life for everyone (particularly those around the middle). The vast mass of people would rather give up any shot (If you aren't already well off you don't have much of a chance anyway) at being a billionaire to be ensured that every future non-billionaire would have more to go around.
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On September 23 2014 09:19 IgnE wrote:
I'm just pointing out that I asked for a breakdown with material costs and you gave me one with component costs. Now you are just repeating yourself. Most materials in an iphone come from countries with very cheap labor.
Yeah I don't have the materials breakdown, but as I pointed out, the materials breakdown is irrelevant to the discussion. If you think you have some info that's relevant to the discussion - show it.
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On September 23 2014 08:26 oneofthem wrote:
rent to value ratio decreasing is usually a sign of lack of alternative safe investing opportunities. it's interconnected with capital returns
I think you can only make that connection with with commercial properties. Owner-occupied homes are as much a consumption good as they are a capital good.
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On September 23 2014 09:22 IgnE wrote:
Demand doesn't go up if the overall wages don't go up . . . 80% pay x 1.25 times as many workers still = the same total wages. Then you talk about underemployment and it's evils. Like I said, your analysis is schizophrenic.
So what? Those that want to work go from 0 or 20 hours a week to 40 and those at 40 get a day off while total wages remain the same. Those industries that need 40 hours a week will pay more for hours 33-40. Those people that want to climb the social ladder will get another day to separate themselves. Win-Win-Win for everyone. And STILL the middle class budget will be the same ratios. 1/3 shelter, 1/3 other needs, 1/6 wants, and 1/6 savings.
Edit: Hmmm maybe the France's failure with the workweek refutes my point, ok then, 40 hours makes the most sense then. Until some other jurisdiction figures out how to accommodate the economic shift from labour to capital I guess we're stuck with what works. Any ideas that I could read up on?
Communism confiscating wealth and income failed in Eastern World. Socialism attacking wealth and income failing in France and Venezuela. Social capitalism seems to work best in Scandinavia and Canada, which is kind of my position lol.
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Cayman Islands24199 Posts
On September 23 2014 09:45 JonnyBNoHo wrote:Show nested quote +On September 23 2014 08:26 oneofthem wrote:
rent to value ratio decreasing is usually a sign of lack of alternative safe investing opportunities. it's interconnected with capital returns I think you can only make that connection with with commercial properties. Owner-occupied homes are as much a consumption good as they are a capital good.
housing itself is consumption but when we are talking about rental property it is not consumption for the owner of the house, hence the renting part.
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On September 23 2014 10:24 Wolfstan wrote:Show nested quote +On September 23 2014 09:22 IgnE wrote:
Demand doesn't go up if the overall wages don't go up . . . 80% pay x 1.25 times as many workers still = the same total wages. Then you talk about underemployment and it's evils. Like I said, your analysis is schizophrenic.
So what? Those that want to work go from 0 or 20 hours a week to 40 and those at 40 get a day off while total wages remain the same. Those industries that need 40 hours a week will pay more for hours 33-40. Those people that want to climb the social ladder will get another day to separate themselves. Win-Win-Win for everyone. And STILL the middle class budget will be the same ratios. 1/3 shelter, 1/3 other needs, 1/6 wants, and 1/6 savings. Edit: Hmmm maybe the France's failure with the workweek refutes my point, ok then, 40 hours makes the most sense then. Until some other jurisdiction figures out how to accommodate the economic shift from labour to capital I guess we're stuck with what works. Any ideas that I could read up on? Communism confiscating wealth and income failed in Eastern World. Socialism attacking wealth and income failing in France and Venezuela. Social capitalism seems to work best in Scandinavia and Canada, which is kind of my position lol.
You have no idea what you are talking about. You keep bringing up this idiotic budget split, as if workers having their hours slashed from 40 to 32 per week can just pay their landlords less, buy less food, pay less insurance, etc. You also seem to be operating under the delusion that to get a certain job all you have to do is want it.
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On September 23 2014 11:01 oneofthem wrote:Show nested quote +On September 23 2014 09:45 JonnyBNoHo wrote:On September 23 2014 08:26 oneofthem wrote:
rent to value ratio decreasing is usually a sign of lack of alternative safe investing opportunities. it's interconnected with capital returns I think you can only make that connection with with commercial properties. Owner-occupied homes are as much a consumption good as they are a capital good. housing itself is consumption but when we are talking about rental property it is not consumption for the owner of the house, hence the renting part.
Yes, but we're mainly talking about owner-occupied housing, and the implied rent-to-value from owner-occupied housing.
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A complaint filed with the Federal Election Commission on Monday accuses Walmart of flouting campaign finance law with a program that encourages employee contributions to its political action committee by making matching donations — for double the amount — to a charity set up to help Walmart workers in financial distress.
The Federal Election Campaign Act, enacted in 1972, prohibits corporations from directly donating to federal candidates, political parties or PACs, although employees and stakeholders are free to do so. The law also forbids reimbursements to employees for PAC donations.
Nevertheless, in the late 1980s, the FEC declared it legal for companies to make matching contributions to charities in exchange for employee PAC contributions, providing an incentive for workers to financially support corporations’ political agendas and elect company-favored candidates. Still, the three groups filing the complaint — campaign finance watchdog organizations Common Cause and Public Citizen and Our Walmart, an employee advocacy group — say Walmart has gone beyond the parameters of the programs approved in the past.
Walmart’s matching program, started in 2004, is unique in that it uses a 2-to-1 ratio when making matching donations to the Walmart Associates in Critical Need Fund, launched in 2001 to “provide monetary support to associates or their dependents when they experience extreme economic hardship due to situations outside of their control, including natural disasters.”
Moreover, whereas other corporations that have adopted the practice allow employees some choice in which charity receives the in-kind contribution, Walmart has designated a nonprofit that benefits its own associates and is completely under the company’s purview.
“The program undercuts the voluntary nature of [political] contributions,” said Stephen Spaulding, policy counsel for Common Cause. “It’s meant to induce contributions to the Walmart PAC because It goes to benefit Walmart employees who are facing hard times.”
Source
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On September 23 2014 09:42 JonnyBNoHo wrote:Show nested quote +On September 23 2014 09:19 IgnE wrote:
I'm just pointing out that I asked for a breakdown with material costs and you gave me one with component costs. Now you are just repeating yourself. Most materials in an iphone come from countries with very cheap labor. Yeah I don't have the materials breakdown, but as I pointed out, the materials breakdown is irrelevant to the discussion. If you think you have some info that's relevant to the discussion - show it.
After listening to that podcast which only mentions at the end the $10-65 range off-handedly and looking at that graphic you linked I am still skeptical that these numbers are exact. The graphic says the average sale price of an iphone is $536. Do people really pay that much for an iphone? Aren't people paying between $200-300 for them? Is the average sales price for all iphones being between $500-$600 (as seen in the graphic and as seen in a google search for "average iphone sales price") the actual compensation to apple for each iphone? Or just those purchased separately without a plan? If only those without a plan are counted what percentage of iphones does that count as? If it's all iphones does that mean that the price is subsidized by carrier payments to apple in exchange for contracts (if thats the case then apple's profit margins are substantially padded by network monopoly margins)? When you originally said $65 that seemed like a lot to me based on what I assumed most people pay, i.e. $200-300.
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EPT![[image loading]](https://dl.dropboxusercontent.com/u/72070179/Capital%20France.PNG)
![[image loading]](http://voices.washingtonpost.com/ezra-klein/productivityincome.jpg)
