And maybe it's the richest 10% who have a subscription to the WSJ and can afford to read this article... It's paywalled and it looks like the WSJ is blocking archive tools.
The subtitle says "The highest-earning 10% of Americans have increased their spending far beyond inflation. Everyone else hasn’t." The underlying assumption is that increased spending powers the economy. Low income people are much more likely to spend an extra dollar that they get (see the top-left figure on p 50 of [1]). So, what should we do? Do redistribution down to the low-income people, who will spend it, and that consumption will end up in the pockets of high-income people in the form of increased share price of assets held by high income people. Sure, we could do too much redistribution, but the US would benefit from more.
The bigger we grow the pie, the bigger the disparity between top and bottom, because those at the top of it have capture most of the gains. So the only ones with an interest in growing the economy are the top few percent. Everyone else turns out to be at their relative best with the current size, or figuring out how to take away mismatch.
> because those at the top of it have capture most of the gains
Only if you ignore consumer surplus. It's the mistake everyone makes.
Consumer surplus could easily be multiple times the amount of revenue of tech companies.
Consumer value to "those at the bottom" almost by definition exceeds the amount they spend - the question is by how much?
From the top tech stocks I definitely use an iPhone (AAPL), YouTube and Gmail (GOOGL), DuckDuckGo (MSFT), and a tiny tiny amount of WhatsApp (META). The value to me would easily be many thousands per year, yet I only pay hundreds per year. So I would guess my personal consumer surplus is easily greater than 10x my spending. My business depends on other tech companies (the value for which would be on top of my figure). I don't know what tech stocks I use indirectly. My sister has Starlink (because she's rural).
Disclosure: Much less than 10% of my total assets are retirement savings in US shares: AMD (bet against Intel), BRK.B (hedging market), BKNG (bet for them because I've used them and against AIRBNB which I've had poor experiences), MA (US exposure and maybe because they've been marketing me well recently - but I'm not really sure why I've chosen them).
It does get a bit more tricky to guess at producer surplus (maybe approximated by profits?).
Those have value, sure. We exchanging here are in the upper percentages already. I use US-based tech, and it's cool.
You are talking about technical advances that lower the price of services and enable the production of goods, all well and good.
Can you explain how those close the gap? The wealthiest enjoy those just as much as the rest of us, while their accumulated control of resources is greater than the accumulated control of resources for the less wealthy. Real wages have declined for most while all the goodnesses you describe have been introduced.
https://archive.ph/fn2kx
[citation needed]
And maybe it's the richest 10% who have a subscription to the WSJ and can afford to read this article... It's paywalled and it looks like the WSJ is blocking archive tools.
The subtitle says "The highest-earning 10% of Americans have increased their spending far beyond inflation. Everyone else hasn’t." The underlying assumption is that increased spending powers the economy. Low income people are much more likely to spend an extra dollar that they get (see the top-left figure on p 50 of [1]). So, what should we do? Do redistribution down to the low-income people, who will spend it, and that consumption will end up in the pockets of high-income people in the form of increased share price of assets held by high income people. Sure, we could do too much redistribution, but the US would benefit from more.
[1] https://www.paecon.net/PAEReview/issue95/Roth95.pdf
The bigger we grow the pie, the bigger the disparity between top and bottom, because those at the top of it have capture most of the gains. So the only ones with an interest in growing the economy are the top few percent. Everyone else turns out to be at their relative best with the current size, or figuring out how to take away mismatch.
> because those at the top of it have capture most of the gains
Only if you ignore consumer surplus. It's the mistake everyone makes.
Consumer surplus could easily be multiple times the amount of revenue of tech companies.
Consumer value to "those at the bottom" almost by definition exceeds the amount they spend - the question is by how much?
From the top tech stocks I definitely use an iPhone (AAPL), YouTube and Gmail (GOOGL), DuckDuckGo (MSFT), and a tiny tiny amount of WhatsApp (META). The value to me would easily be many thousands per year, yet I only pay hundreds per year. So I would guess my personal consumer surplus is easily greater than 10x my spending. My business depends on other tech companies (the value for which would be on top of my figure). I don't know what tech stocks I use indirectly. My sister has Starlink (because she's rural).
Disclosure: Much less than 10% of my total assets are retirement savings in US shares: AMD (bet against Intel), BRK.B (hedging market), BKNG (bet for them because I've used them and against AIRBNB which I've had poor experiences), MA (US exposure and maybe because they've been marketing me well recently - but I'm not really sure why I've chosen them).
It does get a bit more tricky to guess at producer surplus (maybe approximated by profits?).
Do you happen to depend on any US technology?
Those have value, sure. We exchanging here are in the upper percentages already. I use US-based tech, and it's cool.
You are talking about technical advances that lower the price of services and enable the production of goods, all well and good.
Can you explain how those close the gap? The wealthiest enjoy those just as much as the rest of us, while their accumulated control of resources is greater than the accumulated control of resources for the less wealthy. Real wages have declined for most while all the goodnesses you describe have been introduced.
How are journalists to get out of the lower earnings percentile if not paid by their employers?