Why are you afraid of if the “other” party wins?

[pp4me]

I remind you that when Obama was elected the Democrats were in control of both houses of Congress. Yet he had to exert every once of his political capital to get the Affordable Care Act passed by the barest of margins.

All you name above needs to be passed by majorities in both houses. Majorities that have to be confident that their votes will not jeopardize their re-elections. How likely do you find that to happen?

Vinny

People do seem to forget that the voters have the power to stomp on the brakes two years after a presidential election if they think things are getting out of control. That's exactly what happened with the passage of ObamaCare just as you are saying. The Dems lost 63 seats in Congress giving the Reps a majority in 2010.

Same thing happened with Hillary Care which led to the successful Republican "Contract with America". I believe it was during the State of the Union speech that year that Clinton famously declared that "the era of big government is over" (it wasn't, of course).

[doodle]

The way I look at it..One way or another the masses in society are going to eventually figure out a way to rebalance the growing inequality. In the past traditionally this was done through revolutions and people losing heads. In the 1930s revolution was averted and capitalism was saved by Roosevelt's new deal and the lucky timing of world war two for our nation. This pot has again been simmering away since the occupy and tea party movements during the last crash and that simmer occasionally reached a full boil at points in the last few months.

This isn't a great uprising by the poor working class.

The majority of the Antifa/BLM thugs who've been committing most of the vandalism and violence over the past several months aren't the downtrodden and oppressed. They're mostly middle-class white kids who live in their parents' comfortable basements rent-free, playing Call of Duty by day and rioting in black bloc costumes by night. The rest of them are college students -- usually transgender English Literature majors with purple hair.

How old are you, tortoise? Old enough I hope to understand that what we are seeing bubbling up in this country is nothing new throughout the sweep of history.

https://www.economist.com/open-future ... r-plague

IN AN age of widening inequality, Walter Scheidel believes he has cracked the code on how to overcome it. In “The Great Leveler”, the Stanford professor posits that throughout history, economic inequality has only been rectified by one of the “Four Horsemen of Leveling”: warfare, revolution, state collapse and plague.

So are liberal democracies doomed to a repeat of the pattern that saw the gilded age give way to a breakdown of society? Or can they legislate a way out of the ominous cycle of brutal inequality and potential violence?

I'm in a weird position with regards to what is happening. I'm an early millennial, successful..basically semi retired. Worked hard and was very focused on achieving financial freedom. I mostly worked hard jobs however...long hours, hard work, no windfalls, alongside people who were broke or scraping by. On the one hand I earned everything I made....but I had a lot of good fortune and luck along the way. Nevertheless, despite my relatively privileged position I find myself in, i'm angry at increasing disparity in our country between the haves and have nots. I believe that the enormous wealth that our society creates is the result of the collective hard work and effort of the people of our nation. Just like a championship winning team is the collective efforts of all the players. I'm not saying that a Michael Jordan shouldn't be paid more in fact Michael Jordan's salary of $33.14 million for the 1997-98 season was more than twice as much as the combined salaries of teammates Dennis Rodman, Scottie Pippen, Ron Harper and Toni Kukoč...some might say that was excessive but that pales in comparison to our country where the bottom 50% of our nation's holds only 1% of the wealth...and the bottom 80% owning less than 10% of wealth. This is a problem.

[Xan]

to our country where the bottom 50% of our nation's holds only 1% of the wealth...and the bottom 80% owning less than 10% of wealth. This is a problem.

Can you articulate what the problem is? Unlike previous situations where there's been war or revolution or plague, the bottom 90% of society is not actually starving. As long as everyone has enough, does it matter how much the rich have?

[doodle]

to our country where the bottom 50% of our nation's holds only 1% of the wealth...and the bottom 80% owning less than 10% of wealth. This is a problem.

Can you articulate what the problem is? Unlike previous situations where there's been war or revolution or plague, the bottom 90% of society is not actually starving. As long as everyone has enough, does it matter how much the rich have?

Sounds logical....too bad humans aren't too logical. It is the disparity that matters though as that is what breeds resentment. The same thing happens on a team where one star player makes all the money and lives in a mansion while the other players live in little 2 bedroom houses. When the team keeps winning championships and the star players salary keeps rising while the other players keep making the same thing eventually they are going to hate that star player. Humans have this inbuilt mechanism for perceived fairness. They can accept some level of difference but when the differences become too great...as in 80% owning just 7% of wealth then shit hits the fan.

[doodle]

It's a weird feature of how our economy functions. Those people at the extreme ends of the distribution take the overwhelming majority of the rewards. Usain bolt is probably only a couple milliseconds faster than the slowest runner but he earns millions while the rest sleep in their mothers basements. The difference between a pga tour pro and a club pro is a few strokes. Our economy is more like a team though than an individual sport. A great player like Michael Jordan is enough to put a team over the top and win championships...the problem is how to deal with all the other players giving it their all everyday? Are they replaceable, maybe...but it's not like the success of the Chicago bulls is because Michael Jordan gave 90% of the effort and the others only contributed 10%. I don't know the best way to deal with this but if we don't and the team starts going at each other's throats they aren't going to win any more championships anymore....that's for certain. Michael Jordan can't do it by himself.

[Tortoise]

How old are you, tortoise? Old enough I hope to understand that what we are seeing bubbling up in this country is nothing new throughout the sweep of history.

I'm not a vampire, so unfortunately I'm not old enough to have witnessed the "sweep of history" first-hand.

(Seriously, though, I'm 41. I'm assuming you're 38-40 since you refer to yourself as an "early millennial"?)

Nevertheless, despite my relatively privileged position I find myself in, i'm angry at increasing disparity in our country between the haves and have nots.

You seem to have an unusual fixation on the idea of economic inequality. Marxism, I guess. That's fine.

I don't doubt that economic inequality has played a part in many revolutions past. If people's living conditions deteriorate beyond a certain point, they will become restless and seek to overthrow those whom they perceive to be their oppressors.

The Occupy Wall Street movement definitely seemed to be rooted in the idea of economic inequality. The fact that big banks and corporations were bailed out while the average person was not was indeed outrageous, so I understood the motivation. I didn't agree with a lot of the Occupy protesters' actions, but I understood their motivation.

But it seems like the protests and riots we've been seeing in the U.S. this year aren't rooted in economic inequality. They began as a reaction to supposed racial discrimination by police, then gradually broadened into a protest of traditional American culture and institutions in general. As I pointed out in my previous post, most of the rioters aren't even poor or black. They're largely middle-class white teens and 20-somethings. They don't live in squalor. They live in Mom's basement eating food from her well-stocked fridge.

I see the root of the current unrest as decadence, not economic inequality. America has become the victim of her own success. As the nation became increasingly successful, Americans gradually abandoned the core values that formed the foundation of that success. Those core values used to unify the diverse segments of our society, so as we abandoned them, friction and strife was the inevitable result. Americans no longer all agree on what's most important in human life.

[WiseOne]

Well in truth there is a large group of Americans who have seen their living standard decline. That's the real problem, not "income inequality". If you're a solid, high school educated factory worker earning a good wage and enjoying a solidly middle class standard of living with home ownership, retirement savings, college for the kids and all the rest of it, what do you care how much Bill Gates makes?

Of course, this guy is either unemployed or forced to work at McDonald's, because there aren't any factory jobs left and at age 45 or so, it's a bit much to ask him to learn software engineering. Plus he'd have to compete with all those H1b's from India who are willing to work for peanuts just for the chance to get into the US.

See anything wrong with this picture? Hint, it's not the income inequality itself, it's the factors that led to it. That's why I'm interested in Trump's worldview. He's the only candidate in either party so far who has managed to identify the real problem, which leads to real solutions that aren't the "Robin Hood" approach that everyone else takes. If they care at all, which by and large they don't.

[doodle]

Well in truth there is a large group of Americans who have seen their living standard decline. That's the real problem, not "income inequality". If you're a solid, high school educated factory worker earning a good wage and enjoying a solidly middle class standard of living with home ownership, retirement savings, college for the kids and all the rest of it, what do you care how much Bill Gates makes?

Of course, this guy is either unemployed or forced to work at McDonald's, because there aren't any factory jobs left and at age 45 or so, it's a bit much to ask him to learn software engineering. Plus he'd have to compete with all those H1b's from India who are willing to work for peanuts just for the chance to get into the US.

See anything wrong with this picture? Hint, it's not the income inequality itself, it's the factors that led to it. That's why I'm interested in Trump's worldview. He's the only candidate in either party so far who has managed to identify the real problem, which leads to real solutions that aren't the "Robin Hood" approach that everyone else takes. If they care at all, which by and large they don't.

How do we get back to that without massive inflation?

[vnatale]

Stipulating all you say is true....how many of those things can Biden do on his own? Does he not need the support of both parts of Congress?

I remind you that when Obama was elected the Democrats were in control of both houses of Congress. Yet he had to exert every once of his political capital to get the Affordable Care Act passed by the barest of margins.

All you name above needs to be passed by majorities in both houses. Majorities that have to be confident that their votes will not jeopardize their re-elections. How likely do you find that to happen?

Vinny

Vinny,

If I am tracking you correctly, your defense of Biden is that it doesn’t matter what his agenda is, doesn’t matter what he promises, doesn’t matter what plans he’s outlined, because he won’t be able to follow through anyway, so we should vote for Biden because all of our fears of what he might do, which are based on what he’s promising to do, are unjustified because he can’t do them anyway.

Is that your stance or did I misunderstand?

My stance is that just because those are his positions it is far from certain that any of them come to fruition. Am I incorrect in assuming that your stance is that if he is elected then all his positions come to fruition? That may be an exaggeration of your position. But not far if taking literally what you wrote.

Vinny

[vnatale]

My stance is that just because those are his positions it is far from certain that any of them come to fruition. Am I incorrect in assuming that your stance is that if he is elected then all his positions come to fruition? That may be an exaggeration of your position. But not far if taking literally what you wrote.

Vinny

What difference does it make? We can't predict with any accuracy what he will or won't be able to do, with or without the help of congress. So it's best not to elect someone with crazy fringe ideas that would be disastrous just in case.

For me, it's the difference between expressing / recognizing the probably reality versus expressing what might seem like a somewhat paranoid view.

Which way expressed affects the discussion.

Vinny

[Kbg]

Well in truth there is a large group of Americans who have seen their living standard decline. That's the real problem, not "income inequality". If you're a solid, high school educated factory worker earning a good wage and enjoying a solidly middle class standard of living with home ownership, retirement savings, college for the kids and all the rest of it, what do you care how much Bill Gates makes?

Of course, this guy is either unemployed or forced to work at McDonald's, because there aren't any factory jobs left and at age 45 or so, it's a bit much to ask him to learn software engineering. Plus he'd have to compete with all those H1b's from India who are willing to work for peanuts just for the chance to get into the US.

See anything wrong with this picture? Hint, it's not the income inequality itself, it's the factors that led to it. That's why I'm interested in Trump's worldview. He's the only candidate in either party so far who has managed to identify the real problem, which leads to real solutions that aren't the "Robin Hood" approach that everyone else takes. If they care at all, which by and large they don't.

WiseOne rang the bell on this observation...personally I think this is the tragedy of Trump. He was absolutely on to something in 2016 and assembled an outstanding team that could have made some excellent progress in this area. But then, well, he’s just himself. Watching him in 2016 it was apparent, and crystal clear about 6mos into 2017 that he really has zero leadership skill and a complete inability to form a team with non family members.

[doodle]

Well in truth there is a large group of Americans who have seen their living standard decline. That's the real problem, not "income inequality". If you're a solid, high school educated factory worker earning a good wage and enjoying a solidly middle class standard of living with home ownership, retirement savings, college for the kids and all the rest of it, what do you care how much Bill Gates makes?

Of course, this guy is either unemployed or forced to work at McDonald's, because there aren't any factory jobs left and at age 45 or so, it's a bit much to ask him to learn software engineering. Plus he'd have to compete with all those H1b's from India who are willing to work for peanuts just for the chance to get into the US.

See anything wrong with this picture? Hint, it's not the income inequality itself, it's the factors that led to it. That's why I'm interested in Trump's worldview. He's the only candidate in either party so far who has managed to identify the real problem, which leads to real solutions that aren't the "Robin Hood" approach that everyone else takes. If they care at all, which by and large they don't.

WiseOne rang the bell on this observation...personally I think this is the tragedy of Trump. He was absolutely on to something in 2016 and assembled an outstanding team that could have made some excellent progress in this area. But then, well, he’s just himself. Watching him in 2016 it was apparent, and crystal clear about 6mos into 2017 that he really has zero leadership skill and a complete inability to form a team with non family members.

Agree entirely. In fact, what's worse is that his personality actually undermines many of his good policy ideas. He is his own worst enemy.

[doodle]

I still don't see how we ever get back to the America of yore though. That ship has sailed I think. We are moving into unchartered waters especially with the increasing importance of the information economy and automation. Capitalism will have a lot of disruptive events to deal with over the next few decades. Hopefully moderate sane voices will prevail and we don't cut off our nose to spite our face in the process.

[Kbg]

I find this board excessively negative, sometimes to the point where I seriously think of leaving it.

Humans are highly resilient. optimists with a positive vision of the future and a plan to get there have pretty much driven historical advancement.

99.9% of all past humans most likely would trade places with us in a nanosecond.

[Kriegsspiel]

to our country where the bottom 50% of our nation's holds only 1% of the wealth...and the bottom 80% owning less than 10% of wealth. This is a problem.

Can you articulate what the problem is? Unlike previous situations where there's been war or revolution or plague, the bottom 90% of society is not actually starving. As long as everyone has enough, does it matter how much the rich have?

Sounds logical....too bad humans aren't too logical. It is the disparity that matters though as that is what breeds resentment. The same thing happens on a team where one star player makes all the money and lives in a mansion while the other players live in little 2 bedroom houses. When the team keeps winning championships and the star players salary keeps rising while the other players keep making the same thing eventually they are going to hate that star player. Humans have this inbuilt mechanism for perceived fairness. They can accept some level of difference but when the differences become too great...as in 80% owning just 7% of wealth then shit hits the fan.

Yup. It’s known as Kantian fairness and doodle is spot on.

"Envy almost certainly operates efficiently only as regards nearby neighbors. It is not directed toward the distant rich. Hence, at a time when the individual's real income is rising, the fact that unknown New Yorkers or Texans are exceedingly wealthy is not, probably, a matter of prime urgency."
- John Kenneth Galbraith, The Affluent Society.

Poor fella couldn't foresee the internet and social media.

[doodle]

to our country where the bottom 50% of our nation's holds only 1% of the wealth...and the bottom 80% owning less than 10% of wealth. This is a problem.

Can you articulate what the problem is? Unlike previous situations where there's been war or revolution or plague, the bottom 90% of society is not actually starving. As long as everyone has enough, does it matter how much the rich have?

Sounds logical....too bad humans aren't too logical. It is the disparity that matters though as that is what breeds resentment. The same thing happens on a team where one star player makes all the money and lives in a mansion while the other players live in little 2 bedroom houses. When the team keeps winning championships and the star players salary keeps rising while the other players keep making the same thing eventually they are going to hate that star player. Humans have this inbuilt mechanism for perceived fairness. They can accept some level of difference but when the differences become too great...as in 80% owning just 7% of wealth then shit hits the fan.

Yup. It’s known as Kantian fairness and doodle is spot on.

"Envy almost certainly operates efficiently only as regards nearby neighbors. It is not directed toward the distant rich. Hence, at a time when the individual's real income is rising, the fact that unknown New Yorkers or Texans are exceedingly wealthy is not, probably, a matter of prime urgency."
- John Kenneth Galbraith, The Affluent Society.

Poor fella couldn't foresee the internet and social media.

Certainly changed the game.

I find this board excessively negative, sometimes to the point where I seriously think of leaving it.

Humans are highly resilient. optimists with a positive vision of the future and a plan to get there have pretty much driven historical advancement.

99.9% of all past humans most likely would trade places with us in a nanosecond.

While I agree with the last statement I also think we are in an exceptional uncharted period of human advancement. I'm not as optimistic as you regarding humans unfortunately and it remains to be seen how long we last as a species. After all, we are a very new addition to this planet some 2-3 million years ago and relative to cockroaches at around 300 million years have a long way to go to cement our viability. An interesting fact many don't know is that nine species of humans used to exist...only we survived and many times came very close to extinction ourselves. The average lifespan historically of a civilization is around 300 years. The world system of nation states itself is only a few hundred years old..less than that in some areas of the world. And our history while full of incredible advancements and reasons for optimism is also full of periods of intense suffering and devastation. So, while I admire our cleverness as a species I fear that it sometimes gets us into a lot of trouble

[doodle]

While our political melee and racial issues are concerning and a manifestation of our dysfunction as a species...I'm much more concerned about our ability to cope with climate change. Ironically it's not even a Black swan event. We have known for quite sometime that this is going to present challenges. I also think that we are on track to see the more extreme timeline of IPCC predictions. Classical civilizations had issues with barbarians at the gates...our big challenge will be ecological I think.

Optimism is great...but pessimism also plays an important role in keeping the species alive. Have to keep your eyes on the horizon and open for oncoming threats

[Xan]

You don't have to capitalize the "Black" in "black swan". It isn't an African-American swan.

[Mountaineer]

You don't have to capitalize the "Black" in "black swan". It isn't an African-American swan.

Damn autocorrect!

The swans forgive you! Nice to know you are human and not a Biden replicate.

[Smith1776]

Black swans matter.

[jhogue]

While our political melee and racial issues are concerning and a manifestation of our dysfunction as a species...I'm much more concerned about our ability to cope with climate change. Ironically it's not even a Black swan event. We have known for quite sometime that this is going to present challenges. I also think that we are on track to see the more extreme timeline of IPCC predictions. Classical civilizations had issues with barbarians at the gates...our big challenge will be ecological I think.

Optimism is great...but pessimism also plays an important role in keeping the species alive. Have to keep your eyes on the horizon and open for oncoming threats

doodle:
Before you give in to environmental despair, you need to read Julian Simon's The Ultimate Resource, a serious study of the role of human innovation in history.

Simon was an academic, but became popular when he made a bet (and won) against Paul Ehrlich, author of the very popular, but now totally discredited book, The Population Bomb. Basically, Ehrlich adhered to a theory of resource depletion: Simon believed human imagination is the greatest of all natural resources. They bet on the future prices of five natural resources. Ehrlich lost the bet, and lost very badly.

[doodle]

While our political melee and racial issues are concerning and a manifestation of our dysfunction as a species...I'm much more concerned about our ability to cope with climate change. Ironically it's not even a Black swan event. We have known for quite sometime that this is going to present challenges. I also think that we are on track to see the more extreme timeline of IPCC predictions. Classical civilizations had issues with barbarians at the gates...our big challenge will be ecological I think.

Optimism is great...but pessimism also plays an important role in keeping the species alive. Have to keep your eyes on the horizon and open for oncoming threats

doodle:
Before you give in to environmental despair, you need to read Julian Simon's The Ultimate Resource, a serious study of the role of human innovation in history.

Simon was an academic, but became popular when he made a bet (and won) against Paul Ehrlich, author of the very popular, but now totally discredited book, The Population Bomb. Basically, Ehrlich adhered to a theory of resource depletion: Simon believed human imagination is the greatest of all natural resources. They bet on the future prices of five natural resources. Ehrlich lost the bet, and lost very badly.

Possibly...I could be wrong. Would be great if I was. Timeline does matter though....humans often work with too short of a time scale being that 100 years seems so long to us but is the blink of an eye really. Peak oil has come and gone. With new extraction technology it is clear that if we burn all the hydrocarbons we are capable of economically extracting we are probably going to melt both poles. Risky behavior can generate big wins but also big losses. I prefer the slow and steady approach.

[Kbg]

Well notionally this board is primarily about a financial methodology so let’s go somewhat relevant.

Loss aversion/endowment effect

Loss aversion is the tendency for people to strongly prefer avoiding losses than obtaining gains. Closely related to loss aversion is the endowment effect, which occurs when people place a higher value on a good that they own than on an identical good that they do not own. The loss aversion or endowment effect can lead to poor and irrational investment decisions, whereby investors refuse to sell loss-making investments in the hope of making their money back.

The loss-aversion tendency breaks one of the cardinal rules of economics; the measurement of opportunity cost. To be a successful investor over time you must be able to properly measure opportunity cost and not be anchored to past investment decisions due to the inbuilt human tendency to avoid losses. Investors who become anchored due to loss aversion will pass on mouth-watering investment opportunities to retain an existing loss-making investment in the hope of recouping their losses.

Generally it is a better bet to be forward looking than backward looking. Optimism is generally forward looking, pessimism is rearward looking.

[vnatale]

Well notionally this board is primarily about a financial methodology so let’s go somewhat relevant.

Loss aversion/endowment effect

Loss aversion is the tendency for people to strongly prefer avoiding losses than obtaining gains. Closely related to loss aversion is the endowment effect, which occurs when people place a higher value on a good that they own than on an identical good that they do not own. The loss aversion or endowment effect can lead to poor and irrational investment decisions, whereby investors refuse to sell loss-making investments in the hope of making their money back.

The loss-aversion tendency breaks one of the cardinal rules of economics; the measurement of opportunity cost. To be a successful investor over time you must be able to properly measure opportunity cost and not be anchored to past investment decisions due to the inbuilt human tendency to avoid losses. Investors who become anchored due to loss aversion will pass on mouth-watering investment opportunities to retain an existing loss-making investment in the hope of recouping their losses.

Generally it is a better bet to be forward looking than backward looking. Optimism is generally forward looking, pessimism is rearward looking.

Adding to your excellent description above...I've many times read that people "feel" twice the pain from a loss than they do joy from the equivalent gain.

Vinny

[Xan]

"The Undoing Project" by Michael Lewis deals with this. We handle losses by "undoing" them in our head: "if X had been different, then that would have changed the outcome". And there are interesting discussions of what exactly constitutes a "loss": for example, it can be "losing" something you don't have yet but that you expect with some degree of certainty. Highly recommended.