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  1. #51
    failed poetry slam career chubber's Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    But in fairness I'm pretty sure Bill Gates could give away 95% of his wealth and not be poor or even middle class.
    If he did that, people would be losing jobs. Most of his money is tied up in shares.

  2. #52
    pathwise dependent FDG's Avatar
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    Quote Originally Posted by chubber View Post
    If he did that, people would be losing jobs.
    Why. He could slowly sell the shares, get cash and then give it away. Yes, the shares would likely lose some value, but the companies would mostly survive.

    I'm not saying he should do it, especially since Bill Gates is now devoting his life to charity-like projects.
    ENTj 7-3-8 sx/sp

  3. #53
    darkened dreams labyrinthine's Avatar
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    Quote Originally Posted by chubber View Post
    If he did that, people would be losing jobs. Most of his money is tied up in shares.
    He could give the shares to the employees of his company.
    Step into my metaphysical room of mirrors.
    Fear of reality creates myopic morality
    So I guess it means there is trouble until the robins come
    (from Blue Velvet)

  4. #54
    ^He pronks, too! Magic Poriferan's Avatar
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    Quote Originally Posted by fia View Post
    He could give the shares to the employees of his company.
    Ooooo, like a labor cooperative.
    Go to sleep, iguana.


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    Quote Originally Posted by FDG View Post
    Why. He could slowly sell the shares, get cash and then give it away. Yes, the shares would likely lose some value, but the companies would mostly survive.

    I'm not saying he should do it, especially since Bill Gates is now devoting his life to charity-like projects.
    If the guy the built the company starts dumping his position in the company, that's a great way to create a run on the share price.

    The market is all about confidence, and I can't think of a better way to kill the share price than having the (?) majority shareholder/founder start unwinding his position.

  6. #56
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    Quote Originally Posted by fia View Post
    He could give the shares to the employees of his company.
    Like an Employee Stock Ownership plan?

    We already have those.

    People like their standard of living in this country, for that reason among many others, I don't anticipate any massive shakeup to our economic layout coming from a coffee house philosopher type.

    People want what credit, investing, and business development can do for them.

    Barring that changing, and companies coming up with some sort of extra-market black magic to fund their development the market is with us to stay.

  7. #57
    Member Umbriel's Avatar
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    If I was rich and wanted to do good for the world, I'd become Iron Girl. Not just throw money at people - how boring is that!

  8. #58
    Happy Dancer uumlau's Avatar
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    Let me start off by saying THANK YOU for a very thoughtful reply.

    Quote Originally Posted by Magic Poriferan View Post
    I don't want a question in response to a question. But to give this a very quick and simple answer, it is because I'm not offended by the fact that someone might suggest that I do what they consider the right thing. Maybe I will not agree with it, but the suggestion in and of itself is to be expected. But also, I'd rather not leave things to whether or not one agrees, I want an explanation for agreement or disagreement. "I just don't feel that way" is seldom if ever and acceptable answer to me.
    Note that when this kind of topic comes up, it usually isn't a "suggestion". In a political context, it can have the force of law. In a social context, there is an implied moral disapproval: that the person making the suggestion will be offended by the "I don't want to" answer, even though the "I don't want to" answer is completely legitimate.

    Perhaps if "I don't want to" were phrased as, "It's none of your business," would that be a more acceptable answer?

    If one really can't help but get angry at being told what to do by others, they must have horribly high blood pressure, because that's most of your life. It's not even like the OP who was being responded to was talking about law or taxes or anything. She was making a personal suggestion which, as I said, I took to be based on a moral and psychological position. So in regards to ceecee's response, it's not even about a potentially threatening thing like legal intervention. It was just a suggestion. I don't take your response to be hers, to be clear, but your response would mean her angry is entirely based on not wanting to be told what to do by others no matter what. If that is the case, I find it immature and uncontentious. Sometimes other people are right, sometimes people need more than you, sometimes there is such a thing as a social obligation. If a person can't handle that, they need to develop some more.
    Not "no matter what". There is a legitimate give-and-take in human affairs. But some things are out of bounds. The OP isn't giving financial advice, or saying that a particular charity could use more donations: those would be suggestions. The OP wrote, "I don't understand or admire rich people like this." She is explicitly disapproving of others' choices. She isn't "suggesting" anything.

    That disapproval can arouse anger for a couple of reasons: the OP's ignorance of her target's (Buffet's) actual charitable activities, and her putting herself in a position of judging others (which would be bad enough without the ignorance).

    So ....
    Now, what I actually wanted to know from ceecee is exactly what I asked, because if her family is facing some of those issues, then there's nothing stranger about her being angry, and if she's facing this issues, I would then investigate why and how someone in a $200k household was facing those problems. It would be something for me to consider.

    "I don't wanna! Leave me alone!" is not something for me to consider.
    The anger isn't against a "suggestion", it's about the implied value judgment. Even here, you're assuming that the value judgment is correct. You are saying that ceecee has to prove herself to you. No, she doesn't have to prove herself to anyone. That's the point. You are not in a position to judge her, and it is arrogant of you to imply that you are.

    First thing you need to do is distinguish monetary wealth from real wealth, because I think a lot of what is wrong here is based on equivocating the two.
    "Equivocation" implies intentional obfuscation, not simply conflating two similar ideas. Do you intend to mean the "lying" aspect, here?

    If not, then we are in agreement. Money is just a measure. Wealth is the actual stuff that money measures. If one is talking about cash/credit spending money, that kind of money is sort of a "potential wealth."

    Because they value of monetary wealth is strictly attributional, it ends up being effectively zero sum in the long term. I cannot make society wealthy by claiming to just produce more money, or more credit, out of thin air. It's a just a place holder for the exchange of other things.
    Exactly.

    Those others things are real wealth. Real wealth is the stuff like the actual cell phone, the actual antibiotics. Unless you want to be pedantic about physics, in this area we make something from nothing for all intents and purposes, because we change potential within the earth (and increasing extents in space) into something usable for our purposes. But at this point all transactions of real wealth are pegged to monetary wealth, and there's really no other way to do it in a societies as big and complicated as the ones we have today.
    Agreed.

    So, the production of real wealth is dependent on the distribution of monetary wealth.
    Sort of. It's way more complicated than that. The production of real wealth is also dependent on the distribution of real wealth. You can't make money off of a cell phone network if people don't have cell phones. You can't make money off of gasoline if people don't have cars.

    So far is isn't in disagreement with you. The most important thing you said that was right, is that there is an optimal distribution of wealth (and I mean monetary wealth) for producing more real wealth.
    Not just monetary wealth.

    So where you are wrong, is that thinking currently rich people have a lot of money because they produced real wealth optimally,
    Not necessarily "optimally". That which is optimal or most efficient depends on the boundary conditions one assigns to the problem. For example, in the case of a car trip, if time is critical, optimizing for gas mileage can be counterproductive.

    or that the optimal thing to do would be to let the people who already have money get more,
    It isn't about "letting" people get more. If they're still creating real wealth, it's impossible for them to NOT get more. Remember, money is just the counter.

    or that there is a relationship between inequality and prosperity.
    I thought you believed there was a negative correlation between the two?

    On the last detail, I have already mentioned that you are wrong. If you actually crunch the numbers, you will find indicators of prosperity to correlate with the gini index, an inequality measure. To be precise, since a lower gini is more equal, there is a negative correlation. GDP PC, for example, correlates with low inequality. So does employment rates. So do social mobility measures (though all of those are a bit sketchy). So do most advancement or quality of life measures such as literacy, life expectancy etc... Just for one of these, you can do the GPD PC thing your self. Go to CIA, or IMF, or WB, and grab the two figures from all countries and throw them into an Excel sheet or something and correlate them. If you don't want to do that, even a cursory glance of the 10 lowest gini countries and the 10 highest gini countries will show you.
    Read up on what the Gini counts and doesn't count: http://www.hoover.org/publications/p...article/123566

    In summary, Gini calculations usually are based on pre-tax wage income. When you look at actual consumption (where the poor measurably consume twice their income), the Gini is way lower. In other words, the Gini implies that redistribution is needed while ignoring all of the redistribution that is already occurring. Another strong downward force on lower-income wages is health benefits (where they're offered, of course). Total compensation includes a health plan, and that health plan takes a much larger share of a low-income worker's compensation than a wealthier one.

    If your hypothesis were correct then this would not be the case. In fact, I recall it was you who once postulated that there would be a negative correlation between employment rates and wealth equality, so I went and did the numbers and found the opposite to be true. That actually set me on the path to look at all the others and find that equality correlated with all of them. So there's kind of an amusing irony there.
    I'd need hard numbers to even venture down this path.

    One thing that a lot of people don't realize about statistics is that in spite of all the numbers and calculations, they're opinions. The statistician chooses what to measure and what not to measure. These choices can drastically change one's results, several examples of which are explained in the paper I linked above. I'm not saying that you should agree with the differently measured statistics, but that you should be aware that the argument is rarely about the numbers being legit, but about the assumptions going into those numbers.

    See, even though monetary wealth can allow one to produce real wealth, that neither means they will nor does it mean monetary wealth will go to those most likely to make into real wealth. That disparity is one of the great obstacles for any society to address.
    Few people put monetary wealth in their mattresses any more. In general, that monetary wealth is in investments. Even a savings account earns an interest rate because the bank lends that money. It doesn't matter who you are: if you have extra cash wealth in a bank, it isn't just sitting there, it's going through the economy and creating (and destroying) wealth.

    The optimal distribution of wealth, first of all, will have an approximate floor and ceiling. There is a certain amount of many in one spot that is excessive, ceases to be spent, and as result is just stagnant and wasted.
    As I point out above, it isn't stagnant or wasted. You're paying attention to the money, the counters, not the wealth creation/destruction within the overall flow of the economy.

    Furthermore, a society of starving, illiterate, homeless people who cannot do jobs or buy products, is not going to accomplish anything.
    I'm not sure which argumentative fallacy this is. Maybe if it's a new one we get to make up a Latin name for it?

    Furthermore, the optimal distribution of wealth likely has more to do with organizations than people. There is probably no one person who is useful Bill Gate;s money. Individuals aren't that productive. Organizations are.
    That's why Gate's money is in Microsoft stock and other investments, not in his mattress. The organizations in which he invests are already using that wealth (both monetary and real).

    A CEO and an investor are the two people these days who get super wealthy. Does their contribution to production of real wealth match their share of monetary wealth? Not even close by any stretch of the imagination. The investor only provides some money which will do nothing on its own,
    This implies to me that you don't understand how investing works, or even why it exists. Investors manage risk. The owners of the companies in which they invest can't afford to bear all of the risk. Investors take on some of that risk, and hold the companies accountable. Well-managed companies attract more investors. Poorly-managed companies lose investors.

    and the CEO allegedly but often doesn't manage a company to be more effectual.
    How do you know? This is a very hand-wavy assertion.

    There appears to be little relationship between the success rate of business and the size of a CEO's income.
    While such assertions require numbers, I'll let that slide for now. CEO's income is dependent upon the demand for their skills. The board of the company doesn't lightly spend its money in this regard.

    What they do is meaningless without the hordes of laborers, researchers, developers, marketers, etc... who will get paid no where close to as much.
    What happens is that the CEO (and other people at that level) aggregate the efforts of the hordes of workers. The workers aren't just doing random things - their efforts are organized into patterns. That results in higher pay because if a CEO can demonstrably optimize things to create more wealth (as measured by profit) - things that wouldn't happen with some other CEO, for example - then the value that CEO brings in can be very large indeed.

    I want to optimize the distribution of wealth for producing the most real wealth, and that's precisely why it can't stay the way it is.
    You want to equalize it according to your personal value system, not optimize it to be the most effective. You a priori believe that inequality is not optimal. I'm not saying that you are wrong (though I do disagree). I am saying that you aren't making your case as to why it is more optimal. Most of your arguments indicate to me that you misunderstand things like the role of investment in the creation of wealth, all of which would have to be cleared up before returning to this core assertion.

    Do you really think the people who got all the money out of these inventions were the ones really responsible for them?
    I would say that they figured out how to create/distribute these inventions to be enjoyed by the masses. Bill Gates created his fortune mostly by having IBM cede him some legal rights, and he leveraged the heck out of them. And because that in turn let OEM companies create clones of PCs, the PC technology evolved way faster than its proprietary competition, such as Apple. Steve Jobs didn't create wealth by inventing cell phones or mp3 players: he created wealth by envisioning the iPhone and figuring out how to distribute it widely very quickly.

    The people getting the wealth are those that have provided the most value to consumers, with inventions new enough that there was a huge untapped market to fulfill.

    As a total aside, I'm glad you showed me Metcalfe's law. I've never seen it. But I did independently invent when I was 19, including the formula n(n - 1)/2 except that I used G for group instead of n (I also drew diagrams like that). I was doing it for sociological purposes. But I said to myself that there was no way I was the first person to come up with it, so I always wondered when I'd find its current application. So thank you for showing me at last.
    You're quite welcome. It totally explains the scale of things we're talking about in a large economy.

    I don;t think putting a ton of money in some guy's hands are the reason were have cell phones. Not even close.
    You're mixing up cause and effect. A guy got a ton of money in his hands because he figured out how to provide all of those cell phones.

    Actually distributing wealth, particularly in the form of investing it in endeavors like eduction and R&D and building infrastructure and things like that give us these technologies.
    What do you think companies like MS and Apple DO with their money? Sit there dry-washing their hands, laughing evilly? "Mwahahahah!" This is what companies do with profit.

    Now, it's entirely possible that without Jobs, Apple loses its vision and just sits on its iPhone/iPad cash cow for a while. It's really big, so it might take several decades of such malinvestment to make Apple disappear (or more likely get new investors with vision to turn things around). But once it becomes clear that Apple is a bad investment, that investment money will be redirected elsewhere.

    If we just gave a bunch of stipends to people, that would be stupid. If we invest it in public utilities, we'd create vastly more wealth than leaving it in the hands of the super rich.



    Some and excessive are vague. As far as I'm concerned we are no where close to redistributing enough for the purposes of real wealth production.
    Read that paper I linked and get back to me.
    An argument is two people sharing their ignorance.

    A discussion is two people sharing their understanding, even when they disagree.

  9. #59
    pathwise dependent FDG's Avatar
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    Quote Originally Posted by DiscoBiscuit View Post
    If the guy the built the company starts dumping his position in the company, that's a great way to create a run on the share price.

    The market is all about confidence, and I can't think of a better way to kill the share price than having the (?) majority shareholder/founder start unwinding his position.
    Man, I know about this stuff and that's why I placed the adverb "slowly" right at the start - exactly to avoid a run on the share price. So yeah, you're right, but that would only happen if he tried to sell everything in a couple of months, while if he reduces his position over 4-5-6 years, it generally won't (excepting insider information on his idea).
    ENTj 7-3-8 sx/sp

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    Quote Originally Posted by FDG View Post
    Man, I know about this stuff and that's why I placed the adverb "slowly" right at the start - exactly to avoid a run on the share price. So yeah, you're right, but that would only happen if he tried to sell everything in a couple of months, while if he reduces his position over 4-5-6 years, it generally won't (excepting insider information on his idea).
    I think the market would get wind of it sooner rather than later regardless of the lengths Billy boy went to to cover his tracks.

    You are right though that unwinding the position more slowly would mitigate (some amount) of the damage caused from the move.

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