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You may want to think about that a minute, because it really isn't possible for the median to be skewed. The median is literally the average person; half are higher and half are lower. The US *mean* is skewed by a small number of super rich.
Math itself is objective, but how it’s applied is highly subjective. Here we have a paramount example. Do we suppose that it’s natural and proper to be wealthy, whereas the poor are dumb and pathological outliers? Then of course our reckoning ought to exclude the poor. Median (or mean) calculation of net-worth should for example only include persons with a nonnegative net worth. Or maybe on the contrary we think that the wealthy are rapacious bounders who don’t deserve to be counted? Then we should concoct some scheme that excludes them in turn.
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Originally Posted by Pub-911
Wrong is wrong. The key to being corrected less frequently will lie in not being wrong so often.
That depends entirely on who’s doing the judging. Sometimes the key to “being corrected less frequently”, is to religiously ape the consensus. Four legs good, two legs bad. Until, of course, two legs better.
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Originally Posted by Pub-911
In the wilds of messy real world data for instance, normal distributions are not what's normal.
That depends entirely on who’s doing the judging. Sometimes the key to “being corrected less frequently”, is to religiously ape the consensus. Four legs good, two legs bad. Until, of course, two legs better.
There is no qualitative judgment being made here at all. As the average is necessarily less than four, all those persons who have a total of four arms and legs have greater than the average number. That's about as cut and dried and valueless a statement as one could make, and it is actually a good way of illustrating how incomplete the understanding of simple statistical matters truly is among society at large.
You may want to think about that a minute, because it really isn't possible for the median to be skewed. The median is literally the average person; half are higher and half are lower. The US *mean* is skewed by a small number of super rich.
The median is literally the median person; there are many kinds of averages.
To put a little more detail on it, the calculation of the median person includes children, old people, recent immigrants, students, housewives, and so forth. The median full-time adult worker who has had some time to build wealth - say, over 40 years of age - is doing much better than the median *person*. I realize that the long list of people who are not adult mid-career workers are people too, but most of them have time to increase their wealth, are supported by somebody, or are supported (temporarily, since nobody lives forever) by Social Security and other sources of income.
To put a little more detail on it, the calculation of the median person includes children, old people, recent immigrants, students, housewives, and so forth.
It's household net worth though, so children and housewives are not separate. And old people are certainly not dragging down the average. I don't know how many students at school are considered a household. Not many I'd wager, rather they are claimed as dependents.
It's true that many people have a negative net worth, but if that is so common that it drags down the median isn't that viable info regarding the typical person's wealth?
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Originally Posted by ohio_peasant
Do we suppose that it’s natural and proper to be wealthy, whereas the poor are dumb and pathological outliers? Then of course our reckoning ought to exclude the poor. Median (or mean) calculation of net-worth should for example only include persons with a nonnegative net worth.
If the poor (or people with negative net worth) were "pathological outliers" then there'd be no reason to exclude them from the median. Either way would hardly make a difference.
This is not true in the majority of the country. It is only in a few areas, that homes have gone out of whack in relationship to people earning the median income for their area and above.
According to Warren Buffett, the U.S. economy is on an inevitable upward trajectory for decades into future, at minimum. The reason for this is that our nation has the greatest entrepreneurs and innovators that the world has ever known and it will continue to have them.
We are pretty much guaranteed a 2% annual GDP growth rate, and this will continue indefinitely - short of a nuclear attack on this nation, which is unlikely. It doesn't matter whether there is a Republican or Democrat administration in the White House. Buffett predicted that the stock market would rally regardless of whether Trump or Clinton won the election.
The richest Americans today are many times richer than the richest Americans were 30 years ago. And 30 years from now, they will be much richer still. This means that the gap between the rich and poor will widen even more dramatically than it has. So, the government must step in to help the poor.
Do you agree with Buffett's assessment about the U.S. economy? Why or why not?
It depends on what we do when automation takes jobs. We might have a growing and prosperous economy or one where the wealthy own the robots and everyone else is poor. It depends on us what kind of economy we want.
Math itself is objective, but how it’s applied is highly subjective. Here we have a paramount example. Do we suppose that it’s natural and proper to be wealthy, whereas the poor are dumb and pathological outliers? Then of course our reckoning ought to exclude the poor. Median (or mean) calculation of net-worth should for example only include persons with a nonnegative net worth. Or maybe on the contrary we think that the wealthy are rapacious bounders who don’t deserve to be counted? Then we should concoct some scheme that excludes them in turn.
I also think cultural values here play a strong role. Let's face it. Americans don't value deferred gratification. You don't get wealthy or stay wealthy if you're into instant gratification. Thanks to the media, advertising, and government enabling, we've been bombarded with millions of messages that essentially say more spending = more happiness--and we believed it. Government likes it that way because a populace that lacks self discipline is much easier to control and manipulate.
Delaying gratification doesn't make burger flippers wealthy when The Rent Is Too High.
Delaying gratification doesn't make burger flippers wealthy when The Rent Is Too High.
It can improve their financial situation, and possibly make them wealthy some day.
For example a burger flipper who always makes the easier choices that take less effort, like sitting in front of a computer posting 30,000 times instead of learning new skills that would improve their marketability. It's much easier to convince themselves that it is impossible to learn anything but they are just fooling themselves because they don't want to make the hard choice that takes commitment and won't show immediate results.
It's much easier to convince themselves that it is impossible to learn anything but they are just fooling themselves because they don't want to make the hard choice that takes commitment and won't show immediate results.
Granted, nearly any individual can get of the bottom rung of the ladder if they have enough determination. The issue is that our society is making this increasingly difficult and costly, and once you get off that bottom rung there is little security. In other words after a substantial investment, the long term results are iffy as well.
I know an awful lot of people with college degrees (some PhDs) who are not earning a living doing anything related to their education.
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