So, I don't much of anything about economics. What are the main differences between the situations of an indebted country and an indebted private person?

I look at Greece, and it appears straightforward. That country sustained a massive public sector (in terms of bureaucracy, services and subsidies) on a huge increasing debt, until the bubble burst and now they've been in terrible trouble for years and have to resort to drastic austerity measures, which is still not enough to deal with the debt.

Or is Greece's situation caused by the banks (which I'm not even informed as to what this means exactly, I guess something to do with loans to both private persons and industries)? Greece having had a ridiculously inflated public sector is what our news seems to have focused on over the years that we've been following their crisis.

So with Greece, and now the talk and freshly announced austerity measures in my own country to curb "Finland living off of debt", it seems pretty similar to private indebtedness. On the other hand I keep hearing that an increasing debt is just how countries work and that it's both inevitable and natural. I also keep hearing that it's completely different from the concept of personal debt and that a large national debt isn't even necessarily a bad thing.

I'm not new to the concept of Google or anything, but with economics it appears to me that there's a lot of polar and contradicting takes on the mechanics of economy. This is also apparent in our political discourse, where the opposition to the recently elected government had the complete opposite view of what we should do. They supported continuing to increase the debt while the new government is all for austerity. Unsurprisingly w.r.t. these views, the opposition consists of our political left and the government of our political right.

The problem with economics is that there are always powerful groups of people who are either trying to destroy other groups, change how things work in their favor, or simply actively doing things to inflate the value of their assets, even though their true value is less. I doubt anyone is truly interested in the greater good.

Corrected that for you.

Agreed.

To paraphrase Jon`C, we could get off to a good start if we just started eating the rich.

Austerity is a crock of **** intended to make the rich richer at the expense of the poor.

How does dispatching the rich bring people out of poverty? Like, where exactly do you expect their fortunes to go? To charity? The government (because we all know just how great the governmet is at making proper use of funds)? Redistribution of wealth (in which case I believe the situation will default back to what it was in short order, I've seen how poor people make the stupidest decisions ever when they come into posession of extra money)?

The announced measures here in Finland seem to support this sentiment. They hit people living on subsidies the hardest, and wealthy people actually seem to get some tax cuts (to capital tax, for instance). They also announced a progressive income tax cut for all workers, but it's pretty meaningless if you want to decrease income gaps. Anyone earning 2000 euros for instance, so in the lower end (our mean gross income per month is around 3500 euros), gets a whopping 18 euro per month tax cut. This amounts to absolutely nothing in terms of increasing purchasing power for low-income workers, and in fact the effects on purchasing power for those people are surely negative because they also need the public services hit by austerity more than the higher-income workers.

Economic inequality allows the rich to exert extralegal influence upon the political system, subverting democracy and forcing decisions which are detrimental to society as a whole (such as austerity). Given that you are Mexican you should be acutely aware of the influence rich criminals can have upon a government. Wealth redistribution (i.e. "eating the rich") won't fund anything, it will simply prevent the richest 100 families from having the same influence as the poorest 40% of the public.

Rich people are hilariously stupid and bad with their money. There just aren't as many consequences because they have a hell of a lot more of it. Ain't nothing dumber than spending 10 grand a day on Louis Vuitton and Dom Perignon. Stop romanticizing the rich, they are not smart and they don't contribute anything.

In order to be good with money you need to earn money, which rich people never have, and you need practice with money, which poor people are never allowed to get. He only people who are good with money are the middle class which is why the rich have hunted them to extinction.

The big problem with economic disparity, and all of the ideas that rich people effectively deserve to be rich because hard work, etc... is that rich people don't get rich by working hard. They get rich by being greedy and screwing over other people. You cannot expect these people to do the right thing, because it's not in their nature to do so.

They blow large sums of money on frivolous things because their money came through nefarious means. They don't care, because there's no concept of needing to earn it back.

And they don't think about other people, because there's no way to get rich while also being conscientious of others anyway.

Jon and Antony, what you guys just posted is incredibly depressing. What's even more depressing is that it makes perfect sense and I don't see any of it being untrue.

I like to live by the Rules of Acquisition myself.

Rich people don't just get rich by screwing over people. In many cases it's a more passive kind of evil called rent-seeking.

So basically there are two kinds of income, profit and rent.

Profit is what you get through work, it's from selling things, such as goods and your own labor. Profit is good. Profit means our economy is growing and healthy, new goods are being made and bought, and money is circulating.

Rent, on the other hand, is when you extract from an economy by virtue of a privileged position within that economy. Rather than work for your economic gains, you are charging others a fee for your own existence. Residential rent is a relatively inoffensive version of this. More offensive versions are bribery, the fruits of lobbying, and monopoly abuse. The rich don't get richer by working hard or being superior, they get rich by extracting rents from the economy and reinvesting that wealth in further rent generation.

In the long run advanced/highly unequal capitalist economies become dominated by the preservation, commoditization and expansion of rent generation. This is what we call finance.

And what of those who have gained wealth by investing and managing correctly their businesses over the last few decades, and, assuming the trend continues, will continue to grow and prosper? What of those who are starting their own businesses today, and, say in 30 years, will have grown several more times and reach a higher financial status? Are they evil simply because either by luck or intelligence have come to acquire more wealth than you? Because they are also rich or will become rich, and if they share the same label, they must share the same crimes. Maybe you only consider those with dozens or hundreds of millions to be rich, so the rest are a higher level of middle class?

None of these people actually exist.

Name one fortune created since decolonization that was created through hard work and not through an attaboy from finance for creating a new store of wealth.

sfgoldg01 how do you feel about the unicorns and pegasi profiting from the labors of the earth ponies? Because as long as we're discussing childish fantasies we might as well go whole hog.

J.K. Rowling

You sure about that?

To my knowledge, J.K. Rowling made her fortune (at least initially) writing the Harry Potter books. I'd be interested to hear how you think she doesn't apply.

Her net worth is less than 6% of the estimated market value of the HP brand, which she wholly invented herself. If that isn't an attaboy for a store of wealth I don't know what is.

So great on her for creating something wonderful that people enjoy and making a lot of money from it, but 94% of it ended up owned by Wall Street.

But to answer your original question, Kroko: talking about government debt in terms of household debt is a rhetorical technique of the right to conflate public goods investment with irresponsible credit card debt. It's just one of the many ways the rich lie to you to get you to vote for something harmful.

The entire talk is purestrain bull****. Rich people love government debt, a lot, it's why austerity conservatives have packed on more debt as a class than any other popular political movement in the past century. However, there's a lot of fear there. High inflation over the 20th century wiped out a lot of wealth. So they like govt debt, but they don't want the principal spent on anything that might help people and heat up the economy, and they want a neutral monetary policy to simultaneously protect their real market revenue and their real/financial assets from depreciating. Basically austerity conservatism is about riding the razors edge of what helps only the hyper-rich while trying in vain to stay out of the forever-chasms on either side.

End the fed, vote Ron Paul 2008

So she's not rich because she could have been richer?

On a tangent, how much of that percentage should she have? Should she be making all the money that would go to the people who produce the movies? Build the theme park attraction? Craft the merchandise? 6% of everything HP-related seems an awful lot to me, wherever you got that number from in the first place.

I never said she wasn't rich, I said the product of her economic activity was first and foremost the creation of yet another store of wealth for the very rich. Track the discussion plz

I mean, you ostensibly work in tech, so I'm surprised that anything I'm saying is even controversial for you. Unless you're one of those starry eyed SF nitwits who thinks their **** app is changing the world at a 100 million first round valuation

Dude, the general point is that if you're going to talk about people getting rich as a result of JK Rowling writing the Harry Potter books, in the grand scheme of things, Rowling is pretty low on the list of people you can talk about. Yes, she got rich, but a lot of people who were already rich became much moreso.

And I love the "wherever you got that number from in the first place" bit. You don't like the idea of acknowledging the sad fact of the matter, so you make this kind of passive aggressive jab suggesting that, man, even if everything you are saying makes sense, I still don't think it's true. It's a pretty adorable form of denial.

For ref: I think it's instructive that JK Rowling took 6% instead of ending up with a gigantic steamroller media empire like Walt Disney, which he built up with a lot less IP to work from. But I'm sure that's just because she wasn't aggressive or ambitious enough* and not because the modern global economy is punishing and structured against new wealth formation and real GDP growth.


(* This is sarcasm. She was, she negotiated for a share of the film profits. The amount she took is almost unheard-of. The fact that we don't have Rowlingland despite this says pretty much everything you need to know.)

But hey, Jack Dorsey made it big by working hard and selling products. Well, I mean, two weeks of work, and his company has never and will never make any money and is mid-implosion because they have no goods market position, and really every cent he made was from buying four letters for rich people to park their money under. But he made it big and that's what's important I guess??


hey u guys, check out my new app. it's like tinder for dog breeders. ipo's next week!!! unless google corp dev emails me first!!!!

Are you trying to argue that existent wealth is just redistribution of old wealth?

Yes, most businesses need loans to get started. But deciding where to successfully allocate resources is a pretty non-trivial problem, especially for new ventures. That's a pretty important economic service.



No it doesn't. Rowling is an author first and foremost. Disney was a businessman. Rowling gave away a huge percentage of her money and continues to focus on less lucrative writing. Her charitable givings alone could have built Disneyland. Disney spent an entire lifetime building Disney to what it became, and had the advantage of working in a brand new industry.

Rowling made a massive amount of money because she was able to take advantage of the massive infrastructure of an established industry. She basically had to do some negotiation and sign on a dotted line. Yes, she paid a big cut to the production company, but they also poured a massive amount of their own resources, creativity and expertise into it. She owned the IP. She didn't do the majority of work on the movies. Disney may have grabbed a lot of market-share, but the total market was a hell of a lot smaller. Disney straight up built much of the market.

Compering Rowling hiring an agent to Disney building a media empire and shaping an industry over the course of an entire career is pretty ridiculous. You really think a one hit wonder author is at all comparable to an ambitious father of an industry?

No. I am saying the benefits of economic growth over the past century have disproportionately added to old wealth.

[/QUOTE]Yes, most businesses need loans to get started.[/quote]Investment.

and if equity still traded on the fundamentals, finance might have a vested interest in efficient allocation of resources, and then you might actually have a good point

disney was a cartoonist

the fact that Rowling chose to be a philanthropist instead of a captain of industry does not change the fact that she was given a tiny percentage of ownership over her own work no matter how hard you try to convince yourself otherwise

she's made about $1bn total. nowhere close to enough to build Disneyland.

this is my point, the economic conditions no longer exist for there to be a new Walt Disney. I accept your concession.

Sure the system is rigged, but that just means it'll be that much better when I win

Sorry guys I'm just done pretending that we have a chance of getting ahead in life other than the narrow hope of labor market arbitrage. But if yall aren't tired of being temporarily embarrassed billionaires I guess that's okay

I'm not saying the current systems is perfect. I'm saying it's an inherently hard problem to solve. Pointing out that a system involving a lot of people has perverse incentives is like pointing out that water gets things wet.




Annnnd an entrepreneur and a businessman. This is pretty common knowledge. Maybe look at http://en.wikipedia.org/wiki/Walt_Disney? Rowling on the other hand is quoted as wishing to she could go back to a time where she can just write in the coffee shop without being asked for an autograph.


No. Just because you write a book doesn't mean that you should own all possible proceeds from every aspect of it. Aside from all the risk and overhead taken on by her various publishers, the amount of effort and creativity that went into the movie franchise is vastly larger than the number of hours that she will live. Actors, animators, cinematographers aren't just chumps doing grunt work. They all had to do a ton of creative work to make the film adaptation possible. Belittling the contribution of everyone who made the franchise possible is stupid. Rowling was lucky enough to write a book that got really popular. That doesn't morally entitle her to all of the profits from everyone's effort.



I got a bad source on this originally.



So your big point is that it takes a lot more upfront cash to dominate an established major industry than it does to get in at the beginning and grow with it over a lifetime? That's stupid, but I guess you can join Microsoft in complaining about that, since they can't seem to understand that this isn't a realistic expectation either.

It's so cute that Obi thinks he's going to be rich someday.

I won't be rich, and I don't care. I'm very happy with my current standard of living.

It's dumb as hell to dismiss someone one by cramming them into some smug cliche.

Christ, Obi_Kwiet. This is pretty simple.

Writers don't actually get rich. Publishers do.
Directors don't actually get rich. Producers do.
Singers don't actually get rich. Record label executives do.
Athletes don't actually get rich. Franchise owners do.

You can go on about how oh man, so many people had to work so hard to make the Harry Potter movies, and it's just so crazy to think that Rowling should get all of that money and bla bla bla. You're well on your way to earning a gold medal in the Missing The Point Olympics, dude. It's not that the revenue generated should all go to the person who did the core work. That's like suggesting that Lebron James should get all of the money from ticket sales to Cavalier games, which is nuts. The other players get paid, the team trainers get paid, the people who sell hot dogs and beer get paid, etc... But the person who gets paid the most is the team's owner, and he doesn't even play the ****ing sport that people are paying to watch.

The person who does the actual thing doesn't get rich. The person who facilitates them doing that thing is the one who just gets more rich.

This is why people who are not already rich cannot become rich. Sure, you can start out as a poor high school kid with an awesome jump shot and the ability to dunk over Paul Bunyan, and you might make your one hell of a lot of money as a result, but in the grand scheme of things, you aren't the one who got really made it big off of your abilities. That guy is white, and sits in an air conditioned booth above everyone else, and doesn't even watch the ****ing game.

You want a really good example? We'll stick with sports because of the fact that it's just the most familiar way for someone to go from zero to hero financially in a really short period of time. And we'll go with the NFL, just because it's the most popular sport in America.

Aaron Rodgers is the highest paid player in the NFL currently, and he's making about $22 million every year. He makes $22 million every year because there is quite possibly no one else on the planet who can do what he does as well as he does. Whether you like it or not, he's a skilled laborer, performing a trade that is very difficult to be good at, and for some goddamn reason millions of people like me will watch him do it every Sunday in the fall each year. So, we can just skip the whole to do about whether athletes should make the money they make, that way I don't have to think about hanging myself because you're incapable of processing the idea that people like things that you don't.

Now, all that being said, Rodgers makes a hell of a lot of money, because he's really good at something that very few other people can do. Roger Goodell, on the other hand, is the league's commissioner. He's just... well, honestly, it's hard to tell what he actually does most of the time. He like, hands out punishment to players who do things that he thinks are wrong, and he calls out the names of the first 32 guys who get drafted each year... and hell, otherwise he just kind of acts as a mouthpiece for the owners. His real, actual job is to speak for the owners of the league's teams. I guess this is a really worthwhile job, because he makes double what Aaron Rodgers does every year.

So yeah, there's a guy in the NFL who is potentially one of the greatest players of all time, making the most money any NFL player has ever made.

And the guy wearing the suit who is in charge of that guy's job makes twice that, and no one is even really sure what the **** he actually does at work every day.

The point is, god dammit, that you don't get rich no matter how good you are at something. You might make lots of money, but you're just making someone else rich. The money you make is, and always will be, an amount that they don't care to lose, because you're making them so much ****ing more than that.

Oh and we can take that one order of magnitude higher, because technically speaking, Roger Goodell works for the owners.

There's not really any way to tell how much money these *******s make, because the vast majority of them are white collar criminals.

Hint: They all make probably about 10x what Roger Goodell does. And they don't actually do anything either.

Like I said above, the best way to reason about this is in terms of rent.

You are not allowed access to the mass football market unless you play for the owners of the NFL. The difference between what the public would pay Aaron Rogers and the amount that he is paid is the economic rent extracted by the team owners using their privileged position in the economy.

You are not allowed access to the mass film market unless your movie is made and distributed by an MPAA member. The difference between what Rowling made and her share had the films been independently developed is the rent extracted by the major film studios from their privileged position in the film industry.

The industries in question would get along just fine without the rentiers. But we're stuck with them extracting outsized shares of literally all economic activity. Overfinancialization is an enormous economic problem, it's not difficult to see or understand how it crowds out real (goods) activity.

What's amazing about the example of sports teams is that it's really terrific at pointing out just how little of a contribution these people actually make.

You could argue that without a rich white guy owning the team, they wouldn't have a place to play. Of course that completely falls apart when you realize that the owners don't actually pay to build the stadium. That **** is paid for by the city's taxpayers. So the taxpayers foot the bill for this ridiculous stadium because, holy ****, my favorite sports team needs an awesome new facility to play in for the next ten years or so until the owner extorts the funds to build a new stadium under threat of moving the team to a new city who will do just that. It's not just that they don't actually do anything, it's that they actively seek out ways to avoid any financial burden whatsoever, despite being able to afford it.

This system exists in Hollywood, too. Wanna shoot the climax to the Avengers in New York, because you know, it's set in New York? Hell no. Too expensive to shoot there. We'll shoot in Detroit, because the city is quickly becoming what it looks like in Robocop and they'll bend over backwards for us in every possible way, including completely eliminating any tax burden we would have had. Does this actually help the city in any way? **** no. But man, it CREATES JOBS... for six weeks. Then the Avengers makes 1.4 billion dollars or whatever the ****, and executives at Disney get way richer, Detroit gets jack ****, and Robert Downey Jr has to threaten to quit because the guy who plays Captain America only made $200,000 in comparison to Downey's $35 million.

To Downey's credit, everyone did get a really significant raise as a result of his threat to quit playing Iron Man. Well, except for the people of Detroit. For the sequel they went ahead and shot in Bangladesh, South Africa, South Korea, and out in the middle of nowhere fog realms of rural England. I'll let you guess why.