If only he knew the literature

30% of families in the USA have no net wealth

Yep. But then someone who knew the literature would point out that:

The second key result of our analysis involves the dynamics
of the wealth share of the bottom 90%. Since the bottom half of the
distribution always owns close to zero wealth on net,

And knowing the literature would mean that this was not a surprise, wouldn’t it?

Note that wealth distribution numbers are calculated without taking account of all the things we do to equalise wealth. Does the existence of Medicaid make poor Americans richer? Yep, it sure does. Have we included this? Nope.

13 comments on “If only he knew the literature

  1. Some people have more than others.

    Some people make more than others.

    So let’s overturn Western Civilization.

  2. I think all of Spud’s socialist pathologies come from the fact that *he* has not been as economically successful, or as respected, as he thinks he deserves. Which is ironic, seeing as that he has been extremely well remunerated these last years, judging from his published accounts, despite being of little intellect, knowledge or capability.

  3. @abacab

    “*he* has not been as economically successful, or as respected, as he thinks he deserves.”

    Bang on. When he was the great entrepreneur he claims to have been, he was actually just the hired help accountant hanging onto the coat tails of others. He saw them making the cash and he was always out early before the big money. Probably having pissed everyone off as we know is his style.

    You can feel his distain even if you go back to his 2006 CV where he states for one position “The company was sold to Yahoo in 2005 for £28 million (most of which benefited the venture capitalists)” – Ritchie was out 6 years before when turnover hit £200K but you can feel it still grates!

    http://www.t*xresearch.org.uk/Documents/RichardMurphycvJuly2006.pdf

  4. More bullshit from Berkeley.

    The methodology is remarkably – and obviously – flawed, and only an economist could miss the flaws…

    The data used isn’t age adjusted.
    The data used doesn’t differentiate by employment status.
    The data used doesn’t accurately measure wealth.
    The data doesn’t reflect the effects of tax evasion.
    The data doesn’t accurately measure non-tax income (a part of which, as Timmy mentions, is governmental transfers)

    So the 20 year old student with a part time job waiting tables is being compared with a 60 year old office worker with a full time job. And therefore there will be inequality… Lots of it. Student has little income, probably some debt, and no assets to speak of. Office worker has 35+ years of employment, is in peak earning age range, and has had those same 35+ years to amass assets. As Timmy has pointed out a million times, this is meaningless because it is comparing apples to oranges.

    Beyond that, I’d strongly suggest using tax data to estimate individual wealth via the capitalization of taxable income simply doesn’t work well enough to be meaningful. It is too imprecise to reflect reality to any acceptable degree.

    And trying to use estate tax returns to gauge net wealth is ridiculous. It simply tells me that the authors don’t understand the functions estates serve. Trying to use an asset remainder at end of life to determine wealth inequality is stupid and misleading.

    So what we got here is a couple of French commies at Berkeley trying to use shit economics to get to a conclusion that was predetermined. It’s worth noting that one of these assholes worked with Piketty, and the other specializes in “tax havens”. You tell me just how concerned these two are with intellectual rigor (or honesty).

    Fortunately for me, college was mostly about wine, women and song. If I’d walked out of dear old Mother Miami with only the BSBA in Economics I received, I’d be looking back at those years with a deep sense of regret.

  5. For Murphy and literature on economics, like Louis XIV

    “l’etat, c-est moi” – eg

    The Joy of Tax
    The Courageous State
    Dirty Secrets

  6. If only he knew the literature anything

    …he wouldn’t be such an inexhaustible source of fun.

  7. You’d have thought that society could have a group of people who knew the research that had been done on their specialist subject.

    We could group them together in learned institutions, perhaps called “universities”, and we could give the most learned people titles to indicate their knowledge, perhaps “professor”.

    Or we could just scavenge such institutions’ wealth and reputation to reward our useless, clueless friends.

  8. @abacab

    “*he* has not been as economically successful, or as respected, as he thinks he deserves.”

    To be fair he he appears to have made a tidy living telling people what they wanted to here. The problem is he believes his own bullshit whereas the real specialists in that field, management consultants, know exactly what they are doing.

  9. Anyway, as we’re talking about the USA, wealth and taxes, this is off topic but quite an interesting case of the revealed preferences of lefties.

    From this week’s Economist an article discussing the tax cuts bill and specifically the limiting or the amount of State taxes that cab be set aside against Federal taxes:

    DEMOCRATS usually lament efforts by the rich to avoid paying taxes. Yet the bill President Donald Trump signed into law on December 22nd may spur Democratic-leaning states to concoct such schemes. The reform capped at $10,000 the deduction, from federally taxable income, of state and local taxes (the “SALT” deduction). As a result, those who pay large local levies are likely to pay more federal tax in 2018. The change is particularly bad for high-earners living in big houses in states like New York and California, which impose high taxes. These states—which tend to see the reform as Republicans shaking down their political opponents—may yet put up some resistance.

    Individuals and states alike are thinking about how to circumvent the new cap. In late December, huge queues formed at tax offices in places such as Fairfax County, Virginia—the third-richest county in America—as residents sought to prepay their property taxes for 2018. They hoped to deduct the early payments on their federal tax returns for 2017, before the cap came into force. But the IRS mostly scuppered these hopes when, on December 27th, it said that only taxes that had been “assessed” before the end of 2017 would be deductible. Those prepaying estimates of their 2018 taxes will be out of luck.

    Some fear that if neither of these strategies works, high-earners may take a more rudimentary route to tax avoidance: relocation.

    I expect the silence from the usual tax campaigners to be deafening.

  10. I think all of Spud’s socialist pathologies come from the fact that *he* has not been as economically successful, or as respected, as he thinks he deserves.

    Envy is one of the two wellsprings of modern socialism. The other being laziness. Murphy may not be lazy, but he certainly makes up for it in the enviousness department.

  11. @noel

    “Richard Murphy says:

    December 13 2017 at 1:07 pm
    I have a strong bias towards markets that work well

    I am a chartered accountant and serial entrepreneur

    What really irritates me are people who argue that rentierism (which is what is going on in Boeing) is market capitalism when it is not”

    Jesus Wept.

  12. A serial entrepreneur whose companies house records show a rag-tag collection of directorships of failed companies most of which consisted of just him.

    Pompous blowhard.

  13. Oh, for Pete’s sake, will no-one point out that the numbers for “the bottom 10% (or 30% or 50%)” include all those who have negative net assets – such as Donald Trump on a bad day when he was worth minus two $billion so massively, horrendously, distort the nubers for the genuine working poor.

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