Summations Only

Your productivity is bullshit unless someone actually paid you for it - your employer or your customers. Spending, not investment, is what supports businesses. That's what productivity is - spending. Really? Does that make sense to you, that you can enrich yourself by going into debt? You don't have to be Suzy Orman to know it doesn't work like that.The capacity of the rich to lend makes economies liquid; it doesn't make them grow. Of course, illiquidity can be a drag on growth. Availability of capital is a necessary but not sufficient condition for economic growth. Just ask anybody with maxed out credit cards.

You had to be able to produce them to get capital, too. People invest in businesses, not in bright ideas. Anybody can have an idea. It's a simple question. Can you get rich by going into debt? That's what you're saying, after all, that the rich make the rest of us better off by loaning money to us.But have you ever known somebody for whom that has worked? When you're in debt up to your eyeballs with the bank and the credit card, who's getting rich and who's getting poorer?It's the same with a business. "Investment" means "debt", because the people who invest money in your business eventually expect to be paid back - with interest. Whether or not you've made any money. Just like Capital One doesn't care that you got laid off when the credit card bill comes due, investors don't care if your business is roaring or not when they come to get paid back. If you can't pay, they'll seize and sell off your business assets until they're made whole, and then where is your productivity? Necessary but not sufficient. Liquidity in an economy makes growth possible, but it doesn't make it happen.

I never said that anything happened to productivity except broad increases, which your graph shows. Why would I "guess again"? The money came from the appropriation by the top 5% of the results of a broadly-more-productive American worker. Straggler's graph and yours prove it. That's what I'm talking about - appropriation of broad increases in productivity by the American worker. Debt. 21% is a lot higher than 0%, or even 15%. What would I "guess again" about? Have we? Where? Your graph and Straggler's demonstrate that the money did come from productivity gains. Necessary but not sufficient. Investment provides liquidity, but liquidity won't by itself grow an economy; it will actually contract an economy because nobody can make a profit in a maximally liquid market.Investments have to be paid back - with interest. Debt primarily functions to transfer wealth to the lender from the lendee. That's why they lend.

But you didn't get rich because you got into debt; you indebted a company to you, and they paid you back with interest. It wasn't the money you borrowed that made you rich, it was the money you lent.In fact, all you did was move money from one company (your lender) to another (your borrower) in a leaky bucket, basically; you were the middleman. You didn't add value or create wealth in any sense; you just moved wealth from over here to over there and back, and kept a little bit for yourself.Ultimately that's all finance is - money being passed to the left, and the pile is a little smaller each time. No, it's about who is actually who is actually creating wealth and who is just moving it around. You can't base an economy on lending money, because eventually the money has to go back to where it started. It's just musical money chairs. You need to spend money to make money. You don't have to borrow it. The graph shows that the increase in wealth and income at the top 5% is the result of their efforts to appropriate the rewards of an increasing GDP that is primarily the result of broad increases in productivity among American workers. It's like putting in overtime to increase the company's profits, and then your boss - who didn't work any harder at all - cashes your paycheck for you. It's stealing. Sure. But moving money around in leaky buckets doesn't grow wealth. How could it? The money has to be paid back - with interest. How does that make you wealthy? That's only hypothetical value until someone buys the house. That's spending. It's the spending that makes you wealthier, not the mortgage.

I can tell just fine, which is why I'm wondering what on Earth is going on when you show me a line with an abundantly positive slope and tell me "it's flat."Turn your monitor right-side up, Percy. Productivity increased broadly, and the revenue was captured predominantly by the top 5% income groups. The data is abundantly clear on that.I guess everybody is a creationist about something.

Again, this is nonsense. The dollar might have been spent in Zurich. It might have been spent to someone of even higher material wealth.The spending of the rich is not, in and of itself, "trickle down." It may just as likely be trickle-up or trickle-out. And trickle-down economics, the subject of the thread, is the notion that increasing the wealth of the rich improves the economy. We've already shown how this is predicated on your mistaken assumption that the rich consume their income.

I'm just saying, if you're going to increase the amount of wealth you own on any kind of meaningful basis, it has to be by permanent transfers of wealth from other people to you. Going into debt doesn't make you any wealthier, because you have to give it back. Usually with interest, so when you do give it back, it takes a bunch of your wealth with it. That's making you poorer, not richer. No, you wouldn't. You could spend the money you already have.You're conflating two entirely separate financial transactions - the money you borrow from counterparty A, and the money you lend to counterparty B. Only one of those transactions actually made you money, and that was the money you lent, not the money you borrowed. If you had only lent your own money, you would have made even more of a profit because you wouldn't have had to pay interest on it. It absolutely did. Your leveraged investment (that's what it's called when you invest borrowed money) didn't create any money; you simply transferred money from the customers of the business back up the bank and kept a little bit along the way.Lending doesn't create money and it didn't create any wealth in this instance; you indebted yourself to the bank at one interest rate, you indebted a company to you at a higher interest rate, you paid the bank from the interest on your investment, and the company either took the hit in profits or raised prices on its consumers. Ultimately, your wealth came from spending, not from debt. But they didn't make money by being in debt; they lost money by being in debt. They made money because people spent money on their business, and they were able to increase the amount that their customers were spending on them, either by finding additional customers or increasing prices. If they'd done exactly the same thing without having to go into debt with you, they would have made even higher profits yet.Now, of course, you have to spend money to make money, as the saying goes (see how it all comes back to spending, not debt?) and if the business didn't have the money to spend, then they did have to borrow it. Not having access to capital - illiquidity - is a restraint on the growth of an economy. But it's just as likely that the business might have taken your investment and then failed to raise any profits at all with it. The presence of your investment didn't cause an increase in their profits, it only allowed an increase in their profits. Spending, ultimately, was the source of their profits and yours. Not debt. Sure, but it's wealth that came entirely from spending. Not debt.

Well, ok, let's do that:Not even close to flat. What am I missing, here?

Reagan's term only began in 1981, which means that even if the first thing he did in office was cut taxes, it wouldn't take effect until 1982 (tax law changes usually take effect for the next year) and therefore the results would not be apparent until 1983. So there's no defensible "focus" on 1981, since economic conditions in that year would reflect the Carter Administration's policies. Again, this appears to be the "slope blindness" you earlier referred to. Productivity consistently rises throughout the entire range of the graph, it's as plain as day, and that's the point - broad increases in the productivity of the American worker which before 1970 were equitably distributed among all income classes began to be captured almost completely by the top 5%.Your graph, again, amply demonstrates my point: I'm not sure if you're deliberately misrepresenting me at this point, or I've genuinely failed to communicate with you.The increasing income of the rich represents the increasing rewards of productivity that they've been able to capture, not in and of itself the increase in productivity - which has always been increasing. Your own data incontrovertibly demonstrates it. They didn't wait, they were prevented. Those restrictions were lifted with the predictable result that the middle class suffered. Your graphs show "trickle-up" in action - an enormous transfer of wealth from the middle class to the already-wealthy.Edited by Admin, : Reduce image width.

Sure, let's do that:Not seeing the flatness, here. Productivity in 1983 is up from where it starts in 1977.The increase in productivity is consistent throughout the graph. Obviously there are small flat periods - statistical noise, it's hard to estimate productivity - but I don't see how that's relevant. Over a short enough time period you can get statistical noise to say anything you want it to say. Except that it did not. Except that there were. Workers "working harder" is what produces technology improvements, process improvements, etc. Paris Hilton was not responsible for the introduction of computers in the workplace or the widespread adoption of email. Why should she enjoy the lion's share of the reward?I'm surprised to see your pushback on this, I guess. That the top 5% have largely appropriated the productivity gains of their workers is a nearly-universal conclusion among sociologists and economists. You're going to need more evidence to dissuade me from the consensus than telling me that a slanted trend is horizontal. I have eyes, I can see.