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Old 10-15-2014, 10:09 PM
 
Location: Paranoid State
13,044 posts, read 13,822,556 times
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Fundamental to controversial economist Thomas Piketty is his assertion that the most powerful force pushing towards greater wealth inequality in the US since the 1970s is the gap between the after-tax return on capital and the economic growth rate.

The results of the survey of leading economists is telling.

BACKGROUND
The Initiative on Global Markets of the University of Chicago Booth School of Business regularly convenes a panel to explore the extent to which economists agree or disagree on major public policy issues. To assess such beliefs IGM assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.
First the results:



The responses weighted by each expert's confidence are more profound:



OK -- for the most party, they don't agree with Piketty. So who exactly are the experts in the panel?
  • Daron Acemoglu of MIT (John Bates Clark Medal 2005) Disagrees with Piketty ("Theoretically and empirically the case that r-g is a major determinant of inequality or even top inequality is weak.")(see http://economics.mit.edu/files/9834)
  • Joseph Altonji of Yale disagrees with Piketty
  • Alan Auerbach of Berkeley disagrees with Piketty
  • David Autor of MIT disagrees with Piketty ("Not clear yet if wealth inequality has risen in U.S: different data sources give different answers. Premature to identify cause of non-fact!")
  • Katherine Baicker of Harvard has no opinion
  • Marianne Bertrand of Chicago disagrees with Piketty
  • Raj Chetty of Harvard is uncertain
  • Judith Chevalier of Yale is uncertain ("There are certainly a host of other factors related to technical change, other government policies and globalization.")
  • Janet Currie of Princeton disagrees with Piketty ("Many other factors affect inequality including technological change, globalization, increasing returns to education, and others.")
  • David Cutler of Harvard strongly disagrees with Piketty
  • Angus Deaton of Princeton strongly disagrees with Piketty ("Maybe in the future, but right now it is high incomes that is increasing wealth inequality.")
  • Darrell Duffie of Stanford is uncertain
  • Aaron Edlin of Berkeley disagrees with Piketty
  • Barry Eichengreen of Berkeley disagrees with Piketty ("Don't find r-g a partiularly useful summary of anything (doesn't really capture role of technology, training, tax policy)")
  • Liran Einav of Stanford is uncertain
  • Ray Fair of Yale disagrees with Piketty
  • Austan Goolsbee of Chicago disagrees with Piketty <== this vote surprised me
  • Michael Greenstone of MIT disagrees with Piketty ("lower taxes on K surely play a role. i disagree based on "most powerful" phrase. more research is necessary")
  • Robert Hall of Stanford strongly disagrees with Piketty ("A glance at the biographies of the truly rich shows most came from upper middle class families. Good luck and some skill produced the wealth")
  • Oliver Hart of Harvard is uncertain. ("I would imagine there are many factors: labor-saving technology, globalization,the decline of unions,lower tax rates. ")
  • Caroline Hoxby of Stanford strongly disagrees with Piketty. ("Argument has poor theory & negligible empirics. Read pp7-9 of Acemoglu & Robinson. You need not even buy into their institutional arguments. See for more info http://economics.mit.edu/files/9834 ")
  • Hilary Hoynes of Berkeley agrees with Piketty
  • Kenneth Judd of Stanford strongly disagrees with Piketty
  • Steven Kaplan of Chicago strongly disagrees with Piketty ("Technology has been the primary driver.")
  • Anil Kashyap of Chicago disagrees with Piketty ("Argument nicely destroyed by Justin Wolfers (and many others). Too bad for the t-shirt makers") See http://users.nber.org/~jwolfers/pape...ts/Piketty.pdf
  • Pete Klenow of Stanford disagrees with Piketty See http://economics.mit.edu/files/9834 and http://web.stanford.edu/~chadj/inequality.pdf
  • Jonathan Levin of Stanford disagrees with Piketty ("Saez-Zucman: wealth inequality shot up post 1986. Big cause: savings creates 0.4% annual wealth growth for bottom 90%, 3.4% for top 1%.") See http://gabriel-zucman.eu/files/SaezZucman2014Slides.pdf
  • Eric Maskin of Harvard disagrees with Piketty ("Interest and growth rates are equilibrium phenomena--so even if they are important, there must be something deeper at work.")
  • William Nordhaus disagrees with Piketty ("Is this an inside joke? BEA estimates show little change in rate of return.")
  • Emmanuel Saez of Berkeley disagrees with Piketty ("Income and savings inequality increases are now fueling US wealth inequality. Down the road r-g will be central as predicted by Piketty")
  • Larry Samuelson of MIT is uncertain ("Many forces at work, both economic, social and political, making it difficult to identify one as most important.")
  • Richard Schmalensee of MIT disagrees with Piketty ("The rapid rise in very high labor incomes seems to be much more important in the US.")
  • Carl Shapiro of Berkeley disagrees with Piketty ("Perhaps technological change, globalization, and fiscal policy matter quite a bit?!")
  • Robert Shimer of Chicago disagrees with Piketty ("Trends in U.S. wealth inequality are accounted for by trends in income inequality. See Section 3 of Krugman's review of Piketty.) see Why We
  • Richard Thaler of Chicago is uncertain ("A bug in the system prevents me from stating that I am 100% sure that I don't know the answer to this question.")
  • Christopher Udry of Yale disagrees with Piketty ("Difficult claim to evaluate, because both the return and the growth rate depend on savings, and on the distribution of wealth.") see http://www.econ.nyu.edu/user/debraj/Papers/Piketty.pdf

Several economists on the panel didn't vote for some reason.
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Old 10-16-2014, 09:20 AM
 
Location: State of Denial
111 posts, read 134,559 times
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For the life of me, I just do not understand how any intelligent person believes anything that comes from Pinketty. He is a classic liberal "let's start with the conclusion want I & back into it" kind of pseudo-intellectual.
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Old 10-16-2014, 10:38 AM
 
5,252 posts, read 4,656,604 times
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Let's begin with a look at economics from a view that includes a tad bit of humor. All of the jokes surrounding the field of economics generally poke fun at the erroneous assumptions, poor cognitive skills, and most of all the notion that economics, as practiced today can serve those with an agenda just fine. This little ditty seems spot on when considering that most of what passes for economics doesn't really matter, and is simply BS of one sort or another.

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?


What DOES seem to matter is the greater picture of the truth of a nations overall financial health, and that would not be one that reflects an egalitarian construct in any nation's economy that I can think of. Oh yeah, there are those Euro nations that seem to have a greater spread of the collective wealth, but there system still includes a fair amount of class stratification, and even in those countries that couch themselves as the friend of the common man there is a fair amount of inequitable factors in their system that serves the upper classes exclusively.

I think we've all had enough of the charts and graphs that are the magic tools of the classically trained economist, BUT, and this is where the rubber meets the road, NONE of these tools has ever served the interests of the majority, they simply provide a foundation for a self serving rationale for those who ARE being served by said charts and graphs..

As o'l Bob Dylan pointed out in some good lyrical terms, "you don't need a weatherman to tell which way the wind blows." And as the comedian Dick Gregory once said, "just look in your wallet if you think you aren't being screwed". Most people, most of the time, have got a pretty good handle on the fact of this imbalance in our inequitable system. Just the fact that we have seen many historic bloody labor battles being fought over this lop sided system says a lot.

Drive through any large city and see if you can spot the manifestation of this lack of BALANCE, not EQUALITY. It is the upper class and their media pals that have couched the question as one of equality, why? Because it is ludicrous on it's face and therefore discredited as a valid observation. BUT, that in no way negates the fact of a pi$$ poor spread of the benefits derived from the sweat of the laboring classes.
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Old 10-16-2014, 01:15 PM
 
Location: NYC
5,191 posts, read 4,647,472 times
Reputation: 7941
Quote:
Originally Posted by jertheber View Post
Let's begin with a look at economics from a view that includes a tad bit of humor. All of the jokes surrounding the field of economics generally poke fun at the erroneous assumptions, poor cognitive skills, and most of all the notion that economics, as practiced today can serve those with an agenda just fine. This little ditty seems spot on when considering that most of what passes for economics doesn't really matter, and is simply BS of one sort or another.

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?


What DOES seem to matter is the greater picture of the truth of a nations overall financial health, and that would not be one that reflects an egalitarian construct in any nation's economy that I can think of. Oh yeah, there are those Euro nations that seem to have a greater spread of the collective wealth, but there system still includes a fair amount of class stratification, and even in those countries that couch themselves as the friend of the common man there is a fair amount of inequitable factors in their system that serves the upper classes exclusively.

I think we've all had enough of the charts and graphs that are the magic tools of the classically trained economist, BUT, and this is where the rubber meets the road, NONE of these tools has ever served the interests of the majority, they simply provide a foundation for a self serving rationale for those who ARE being served by said charts and graphs..

As o'l Bob Dylan pointed out in some good lyrical terms, "you don't need a weatherman to tell which way the wind blows." And as the comedian Dick Gregory once said, "just look in your wallet if you think you aren't being screwed". Most people, most of the time, have got a pretty good handle on the fact of this imbalance in our inequitable system. Just the fact that we have seen many historic bloody labor battles being fought over this lop sided system says a lot.

Drive through any large city and see if you can spot the manifestation of this lack of BALANCE, not EQUALITY. It is the upper class and their media pals that have couched the question as one of equality, why? Because it is ludicrous on it's face and therefore discredited as a valid observation. BUT, that in no way negates the fact of a pi$$ poor spread of the benefits derived from the sweat of the laboring classes.
This is very well said. I think the ideal is to have a system where the wealthy still feel like they got their just rewards for their efforts and cleverness while the standard of living for the general masses are raised. We don't want a system that is completely equal. That doesn't work because it saps motivation and we tried it in the form of communism and it failed. But you can't tell me the way we have it now where the obscenely wealthy continue to add to their wealth which in turn enables them to change the rules of the game in their favor while those who subsist on meager pay are only staring at bleaker futures for their kids is fair. There does exist a happier medium between these two extremes but vested interests (IE wealthy people) insist the current way is best and fair.
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Old 10-16-2014, 01:36 PM
 
16 posts, read 19,349 times
Reputation: 43
What does it matter? Economics is not a real science.
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Old 10-16-2014, 03:32 PM
 
5,252 posts, read 4,656,604 times
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Quote:
Originally Posted by Adhom View Post
This is very well said. I think the ideal is to have a system where the wealthy still feel like they got their just rewards for their efforts and cleverness while the standard of living for the general masses are raised. We don't want a system that is completely equal. That doesn't work because it saps motivation and we tried it in the form of communism and it failed. But you can't tell me the way we have it now where the obscenely wealthy continue to add to their wealth which in turn enables them to change the rules of the game in their favor while those who subsist on meager pay are only staring at bleaker futures for their kids is fair. There does exist a happier medium between these two extremes but vested interests (IE wealthy people) insist the current way is best and fair.
Yes, I don't believe many would argue the point of equality being anything but a strawman, but, the wealthy and powerful get that way from a systemic kind of taking, be it the taking by government to give to those who are deemed as "to big to fail", or the outright taking from workers by industry simply because they control the way in which our labor laws are created and carried out.

The "system" we operate under generally speaking is succumbing to the gravity of greed not motivation, any system that pretends to have a more egalitarian spread of benefit usually ends up just like the one we have in America. It has to be the intent of a system that determines the outcome, ours is working as it was intended to.
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Old 10-16-2014, 04:58 PM
 
6,940 posts, read 9,657,287 times
Reputation: 3153
Most don't.
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Old 10-16-2014, 09:24 PM
 
5,347 posts, read 7,183,527 times
Reputation: 7158
Excessive inequality is a symptom of the real issue, not the metric we should be focusing on. However it's a nice, simple, populist-enraging metric that enables people to rationalize jealousy. I'm so tired of talking about income inequality. It's a problem but not THE problem.
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Old 10-16-2014, 10:48 PM
 
323 posts, read 427,785 times
Reputation: 183
if you agree you are a socialist!
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Old 10-16-2014, 10:53 PM
 
323 posts, read 427,785 times
Reputation: 183
in thailand one-tenth of 1% control 46% of the wealth.


You socialist do realize inequality has grown under obama.
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