Tuesday, September 23, 2014

Poor timing, Thomas

So, if r>g, then why does an insurance firm in Germany say that;
German insurance group Allianz has found the world is getting richer again. The rise of the middle class is pivotal.
Rather than the horror show we've been told to expect from M. Piketty;
Adjusted for population growth factors, almost half a billion people worldwide succeeded in rising to the middle-income category, defined by Allianz as citizens owning between 5,300 and 31,800 euros.
Researchers at the insurance group pointed out that this middle class doubled in Latin America since the year 2000. Over the same period, it even tripled in eastern Europe and grew sevenfold throughout Asia.
Thanks to the triumph of capitalism over socialism. Or, the opposite of what Capital in the Twenty-first Century has it. A book way too boring to be read in its entirety, but the conversation between Piketty and Russ Roberts--linked to above--is anything but. If only for the logical gaffes in Piketty's claims, which include a near pure example of the Broken Window Fallacy.

Another being;
...if anything I think top managers are getting even more nontaxable perks like, you know fancy jet or big officers or fancy cars or beautiful hotels and restaurants today than what they did in the 1960s or 1970s. So the view that there was as much inequality in the 1960s than you have today but that people were getting it through fancy cars where at least today they are just getting cash but they have become very virtuous regarding nontaxable perks and fancy jets, I think this is just wrong.
 In the 1960s and 1970s cars didn't come any fancier than a Rolls Royce. Which clogged the streets of London and were so obvious that Milton and Rose Friedman used them as an example, in their best-selling Free To Choose, of the distortionary effect of high tax rates on capital income.

Listen to the Friedmans' discussion of that in this 1976 tape. The subject of the excessive number of Rolls Royces on the streets of London, begins about 13:30.

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