Would you believe it? We\’ve some Ritchiebollocks this morning

The Walton family which owns this has seen its wealth grow so exponentially that they now have as much wealth as the bottom 48.8 million Americans combined,

Isn\’t that just shocking? A terrible indictement of all that is holy.

Except, well, there\’s a certain problem with this statistic.

You see, 25% of American households (which is not the same as the number of people) have no net wealth at all.

In 2009, roughly 1 in 4 (24.8%) of American households had zero or negative net worth, up from 18.6% in 2007, and 37.1% of households had net worth of less than $12,000, up from 30.0% in 2007.

48 million Americans is 16% of the population, 25% of households have no wealth at all…..I think we could say that these numbers are broadly the same.

So the net effect of this is that if you have no debts and a £5 note then you have more wealth than 48 million Americans.

Some of these people will indeed be those we traditionally think of as poor. Low wages, living in rented accomodation, perhaps a bit of credit card debt taking them into negative territory. Others would be those we really don\’t think of as poor. A recently graduated medical student (ie, after residency) might be earning $400,000 a year but be carrying at $500,000 debt. I wouldn\’t cry too much for that second.

So while the number is true it\’s entirely unsurprising and entirely irrelevant. Ritchie himself has more wealth that 48 million Americans. So what?

Here in the UK, ‘[t]he general work force’s share of the gross national product has shrunk by 12 per cent since the mid seventies.’

Bollocks.

The labour share of income has fallen by that much: although that mid-70s position couldn\’t have been maintained at all anyway. But the labour share is not the same as the general work force\’s share. Some of it has gone over to mixed income: the self-employed. They\’re general workforce but not part of the labour share.

The other major change is that taxes have risen: VAT and employers\’ NI. Which is the bit that they don\’t like to talk about, the way that it\’s government stealing the bread from the mouths of the working stiffs.

44 comments on “Would you believe it? We\’ve some Ritchiebollocks this morning

  1. personally, I don’t think the fact that a large chunk of people have zero or negative wealth is enough to render that statistic about the Walton’s wealth much less interesting.

  2. All these “the top 25% own x% of wealth and bottom 25% own y%” make one huge error – they fail to take account of age.

    Almost by definition a 20 year old has no financial wealth whereas most 70 year olds who have worked will have fairly considerable financial wealth just in their house alone.

    Most people over the course of their life start in the bottom 25% and move upwards.

  3. See Bethany’s comment on Ritchie’s site. Surprised he let it through moderation. His response to her point is laughable.

  4. His latest hobby horse is a wealth tax ( unworkable as laid out on various posts and comments on here about such a tax’s impact on asset prices). The blinding Damascene revelation that he seemd to have yesterday, going by the tedious dribbling he’s leaking onto my Twitter feed, seems to be “Hey! The rich have more money than the poor! Bloody hell! We must do something about that”

  5. @1
    But if the statistic is bollocks? A large number is not a statistic. A large number of stars in the galaxy may have planets. A large number of commentators on Tim’s site are not called Luis. Both of those dimensions are interesting.

  6. Check out Ritchie’s website and the entry Tim is mentioning (First entry on the website as of 11.55am UK time December 4th) ‘Wealth -and why we should tax it’ – Usual incoherent rubbish with no understanding of human nature or disincentives. Clearly in the pocket of his paymasters in the Non-Productive Public Sector. However, take a look at the ‘Flow Chart’ with ‘Ritchie’s thoughts on wealth’ – a garbled mess of incoherent ideas-much like most of his blog, and good evidence why Tim is so able to pick holes in his numerous fallacies.

  7. @6
    Bethany’s comment was pretty well saying the same as Tim.
    The House of Murph responds as follows:

    “I have a very strong sense that this is pedantry

    It is always possible to argue stats

    It is the messaging that is important”

    Thank you Mr Richard Murphy for personally validating the theory I’ve been pushing here for a while. None of his, or most of his pals’ outpourings are intended to add to the sum of human knowledge. Quite the opposite. They are purely intended to create a narrative. Hell, you can actually see it working in his comments section. People add strands themselves. You can put almost anything into it. Even stuff that directly contradicts other strands. The temptation is to invent some totally spurious load of nonsense, link to it & watch them all applaud it.
    You really cannot fight this thing by trying to refute every strand. it’s like that Greek Hydra myth. Even attempting to do so is counter productive because the attempts are being used as evidence to support it. Hence the demonic neolibertarian stuff.
    Needs different tactics.

  8. @ 9. Totally agree . Any suggestions on tactics? Any ideas why the CBI and IoD are so quiet and why most businesses seem to have no backbone to engage or why the Big 4 are so shy (other than fear of putting their heads above the parapet)?

  9. Look, sorry, but this really has to be said.
    As was pointed out on another thread, these guys are winning. Their opposition are behaving as if there’s some sort of Queensbury Rules in place. The shining light of truth will conquer all. I put it down to too much public schooling & rugby. You try that nonsense in a pub fight, you get creamed.
    Fight dirty.

  10. @9
    You’re missing how it works. The Labour Party et al let these thugs do the running & reap the benefits without getting their hands dirty. Any part of it goes wrong they can always tut tut. Deniability.
    There’s no corresponding thugs doing the running in the other direction. It’s attack by flower arranging.

  11. Oh, rubbish. The likes of Ritchie are eventually self-refuting, and the system we have in this country is such that no-one can make any significant changes on the sort of time-scale we’re talking about. There’s no need to ‘fight’ him, just to wait – and in the meanwhile get on with the things we do which are actually economically productive…

  12. However, take a look at the ‘Flow Chart’ with ‘Ritchie’s thoughts on wealth’ – a garbled mess of incoherent ideas-much like most of his blog, and good evidence why Tim is so able to pick holes in his numerous fallacies.

    What’s missing from his brainstorm is what he wants to achieve by a wealth tax. There is who and what but no why. He has a section called “how will we know if it has succeeded” with things like “change in Gini?” but change in Gini isn’t his objective, it’s a performance indicator.

    The overall impression is one of grabbing more money for the sake of it, and because he is jealous of wealth, than something with just cause.

  13. Since Ritchie managed to spunk £380K in cash to buy his Norfolk pad, I consider him wealthy.

    With the missus being a GP, no mortgage and his quaker lifestyle along with being a “successful entrepreneur”, there’s a good pile of cash too.

  14. His mind-mapping demonstrates his belief in a binary world where ‘the poor’ can only become richer if ‘the rich’ become poorer.

    That’s why his focus is constantly on what more can be taken, not what can be fixed to increase its efficiency so everyone benefits.

    He, his supporters, and his paymasters simply want someone else to pay for stuff they want, but can’t afford, themselves. It’s the usual envy wrapped up as economic policy.

    Current economic conditions mean that the number of those that pay are diminishing whilst those that expect to receive are growing. That is why he and his views are in the ascendency.

    How and when that gets reversed is anyone’s guess. Government’s are supplementing the difference between what they are spending, and what they can screw out of taxpayers, by borrowing. Greece is just an extreme example of what happens when the costs of playing this game finally become so high that it is no longer possible to keep both sides of the equation happy. Unless there is suddenly a solution that nobody is aware of yet, it seems likely that most Western nations will go through some degree of Greece’s problems at some point.

    Perhaps that is the point at which Ritchie and his ilk finally get exposed for demanding things which either the nation can’t afford, or the remaining taxpayers refuse to pay (By leaving).

    Of course the only way to overcome this is by demanding the UK (and others) adopt the US system of taxation irrespective of residency. Now who is calling for that I wonder ?

  15. I sense blokeinspain is right. Labour simply let the wackos rant on and attempt to create discontent. They don’t have to believe the nonsense, as long as it encourages people not to vote for the incumbent government.

    The real danger is if Ritchie at some point gets the reward he feels he deserves, which is to actually influence the policy of a government.

  16. @BiS#11: the brother of a good friend of mine was in his younger days a renowned pub brawler, and I once asked his advice on what to do in a fight, should the occasion arise (it hadn’t up til then and fortunately hasn’t since either). And his advice was ‘Get the other bloke on the floor as quick as you can, and put the boot in to make sure he doesn’t get up’.

    I’m not sure if this helps in this case, but I thought I’d lob it in……………………not sure what the intellectual equivalent of ‘putting the boot in’ would be.

  17. Throwing mud. First to throw can drown the opponent – and any response just looks like more mud, not the actual facts they are.

    Drown the public regarding tax and wealth. Dose of envy helps. Media lap it up. And reality doesn’t get a look in.

    If some party implements any of the crazy ideas and it backfires, others can always be blamed. Neoliberals, poor staff performance, capitalists buying people and so on. Ignoring reality.

  18. ‘@ 9. Totally agree . Any suggestions on tactics?’

    Abolish the licence fee. That would pretty much do it.

  19. ‘I sense blokeinspain is right. Labour simply let the wackos rant on and attempt to create discontent. They don’t have to believe the nonsense, as long as it encourages people not to vote for the incumbent government.’

    The trouble is that this government either doesn’t know what it believes, or believes much of what Murphy writes. Surely we haven’t forgotten ‘sharing the proceeds of growth’?

    I know someone who was high up in Cameron’s circle (he has since left to do something more productive with his life) and I was forever badgering him to get cameron to take on the Labour lie that ‘it’s all down to the bankers’, because once that sucker got going it was obviously never going to stop. He tried, but politicians are politicians.

    You still hear it now: the banks are to blame for the collapse in living standards… somehow they were never responsible for the rise.

  20. Seem to have a remarkable concurrence here so I’ll just address Dave’s point.
    “Oh, rubbish. The likes of Ritchie are eventually self-refuting, and the system we have in this country is such that no-one can make any significant changes on the sort of time-scale we’re talking about. There’s no need to ‘fight’ him, just to wait – and in the meanwhile get on with the things we do which are actually economically productive…”
    I’ll presume you’re not on Team Murphy so:
    It doesn’t matter if Richie’s garbage is self refuting. Think of what a paper does. Big headline on the front page. Retraction’s in with the gardening adds, page 22. The damage is done. it’s part of the folklaw.
    ” the system we have in this country is such that no-one can make any significant changes on the sort of time-scale we’re talking about”
    They’ve been doing this since I was going Cream concerts. How long do you want to give them? The tactic’s called the ratchet. They used to teach this stuff in pub back rooms, to the comrades. Probably still do. Load of lies & fuss till you get a result. That’s now occupied territory. Now the defense. Try & reclaim the ground & the shroud wavers & the poor poor baybeez brigades move in. Yer attackin’ the disadvantaged, inya!!! Ratchet has now moved one notch. For good. Repeat ad infinitum.

  21. Warwickshire Lad
    ‘@ 9. Totally agree . Any suggestions on tactics?’

    Easy. Use Murphy’s. They’re tried & tested. Change the narrative. Write a new one.

  22. BIS – the question wasn’t mine, it was John K’s.

    My answer was to scrap the BBC, if that were possible, because it’s the idiot Humphrys and Jim Naughtie et al who really set the agenda.

  23. BIS>

    Think George Galloway – these types end up hoist by their own petard. Almost no-one actually listens, despite all the noise.

    If they’ve been banging on along the same lines since the seventies, it seems there’s nothing to worry about because they’ve been completely unsuccessful. I know how the technique is supposed to work, but it doesn’t actually work as advertised. You can whip up initial hysteria, but everyone dismisses it as more of the same crap we always hear from these types.

  24. @27 Dave – but not always. Hitler got elected with a landslide spouting odious nonsense that appealed to the majorities prejudices counter to all facts. (Just developing my own narrative by the way).

  25. Dave, you are having a laugh. Most people do not want to hear the bullshit Galloway talks. Most people do want to hear the bullshit Murphy talks. That’s the difference.

  26. By the way, I’m interested in the fact that Google and Amazon are not caving in.

    I would be highly interested in the answers to these two questions:

    1. Which organisation is held in higher esteem – Google/Amazon or the UK government?

    2. Which organisation is better able to communicate with UK voters – Google/Amazon or the UK government?

    I have never understood why Shell (etc) don’t have big stickers on all their fuel pumps pointing out that 70% (or whatever) of the price of the gallon of petrol you’re buying is going to keep quango bosses and able-bodied but idle bastards in their handsome emoluments and dole money. I think Google and Amazon might be better at that.

  27. John K>

    Hitler wasn’t elected with a landslide. He seized power with a coup having gained a modicum of electoral success. In any case, he didn’t use the same tactics – or rather, he didn’t just use them, but backed them up with terror and military power.

    If Ritchie had an army, I’d be more worried. And if he was a genius like Hitler undoubtedly was despite being completely evil.

  28. “If they’ve been banging on along the same lines since the seventies, it seems there’s nothing to worry about because they’ve been completely unsuccessful….”
    Unsucessful?
    Look at the shit we’re in. And to them, this isn’t a bug, it’s a feature. It was never ever about £p (£sd when they started) It’s about control. When you have control, the money’s irrelevant. If they’re telling you how you should spend every penny of it, it’s no longer money any more.

  29. @ Warwickshire Lad

    “By the way, I’m interested in the fact that Google and Amazon are not caving in.”

    It’s early days. Plus, of the three of them I’d say that Starbucks are skating on the thinnest bit of ice. Their schemes are based around ‘debatable’ transfer pricing, whereas the other two are straight-up Single Market business.

    Or, maybe, Google and Amazon enjoy market dominance that Starbucks can only dream of, and are not at risk of UKUncut turning up and running crèches and theatre groups in their key real estate.. so they don’t feel that they have much to worry about.

  30. @TTG: Or may be Starbucks have been quite clever? Adding back the royalties going forward still leaves them with UK losses and lots carried forward losses so no additional UK tax and a claim to reduce their Dutch bill at low rates. Overall a group saving and hopefully the press off their back.

  31. Sign of the times.

    He’s a chartered accountant but they let him bring the profession into disrepute. He’s a sewer spouting shit every time he opens his mouth.

    Mind you, they’re not having a good record. CAs make up most of the auditing profession, but they definitely got the “true and fair view” with the banks wrong for 10 years and I believe they’re still getting it wrong.

    But no comebacks for any of them. I wonder why?

  32. @ John K

    Possible.. but that would seem daft. If they make a big deal out of changing how they do things, but then proceed to continue paying no tax, it will be another PR nightmare. And let’s be in no doubt.. anything that they offer to do will for PR reasons… hell, they’ll probably take any tax paid out of the marketing budget!

  33. “Thank you Mr Richard Murphy for personally validating the theory I’ve been pushing here for a while. None of his, or most of his pals’ outpourings are intended to add to the sum of human knowledge. Quite the opposite. They are purely intended to create a narrative. ”

    Very true. If they actually believed what they wrote, Murphy, Willy, Polly etc. wouldn’t still be trying to flog their books on Amazon.

    The irony being that if someone buys them through The Guardian, not only to they pay twice the price, but none of their money ends up as corp tax. At least a little of it gets paid when Amazon get their business.

  34. I stopped listening to Radio 4 some time ago, but decided to tune in this morning for no particular reason.

    Lo and behold, Murphy was on there AGAIN . They were talking about transfer pricing.

    Didn’t catch the beginning of the interview, but the other person being interviewed with Murphy (by Evan) was an accountant of some kind, who (to use R4′s words) “helped people avoid tax”.

    I couldn’t believe it when, at the end of the interview, Evan said to this woman, “When you look back on your life when you retire, will you be proud of what you’ve done?”.

    She gave some kind of weak answer like “it’s nice that we have a business-positive culture in this country”.

    What’s awful is that not only do they have Murphy on there on a regular basis, but they choose opposition for him who can’t argue back. It would be hilarious if they actually got someone on there who answered “Yes I’m proud of helping to reduce people’s tax bills – and I’d do it again!”. Their heads would explode.

  35. anon,

    It’s basically due to living in a country whose primary social ideology is moralism. All societies have morals, but moralsm describes a predominant state, in the same way that all countries have armies, but not all would be described as militarist.

    So basically economic and political argument in the current UK is based upon moralism; as such getting somebody to go on the wireless and be proud of reducing their tax bill (or rendering said service for others) is like trying to find someone who’ll go on the wireless and be proud of wanking. Everyone does it, but nobody will admit to it in public.

  36. @41: Or just respond, “I have no moral difficulties with the tax advice I have given. ”

    That goes to the heart of the issue. There is no universally accepted moral position on the tax avoidance debate. (As an example of the range of views, yesterday’s Radio 4 Today Programme said TUI’s use of brought forward losses to shelter current year profits was obviously highly contentious. Anyone else think there’s a moral issue here?). That’s why we need codified detailed tax laws.

  37. Sigh. You lot may get off on the lady trying defend filth. But then you love it. Filth.

    I worked with the kinds of her for decades.

    Absolutely no intelligence other than arse.

    I’m talking about the Today prog.

    I am actually genuinely surprised that some of you would be supporting her.

    Obviously the twonks here will say any old bs to get timbles’ back-rub.

    Seriously? You like him? Go back to school.

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