site banner
PaperclipPerfector  1yr ago (text post)   29605 thread views

Culture War Roundup for the week of October 2, 2023

This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.

Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.

We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:

  • Shaming.

  • Attempting to 'build consensus' or enforce ideological conformity.

  • Making sweeping generalizations to vilify a group you dislike.

  • Recruiting for a cause.

  • Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.

In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:

  • Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.

  • Be as precise and charitable as you can. Don't paraphrase unflatteringly.

  • Don't imply that someone said something they did not say, even if you think it follows from what they said.

  • Write like everyone is reading and you want them to be included in the discussion.

On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.

11
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

All this to say: What the fuck do we do about the fact that owning shit and renting shit is just flat out better in every way than doing shit or making shit?

How do you solve it without the revolution? Is that question even coherent?

Income inequality goes up over time when there's not a major economic downturn or war. The U.S. has now gone a (nearly unprecedented in history) 75 years without either of those things happening. As you point out, all that's needed to be rich is to invest your money and not be a fuckup for 1.5 generations and let compound returns do the rest.

How to solve it without a revolution? Bring back the business cycle.

We haven't had a recession in 15 fucking years. And interest rates were kept artificially low for 14 of those years. With no substantial downturns, anyone with leveraged investments cashed in. TQQQ (the triple-levered NASDAQ fund) is up nearly 100x since inception in 2010. Speculators won out big time. To prevent inequality from growing too high, we need to flush speculators regularly. People who make bad bets need to lose badly.

High interest rates for a long period of time (a decade at least) would flush the speculators and lower income inequality to tolerable levels. Sadly, I don't think it's possible with the governments debt being what it is.

Income inequality hasn't been increasing once you account for taxes and transfers. https://johnhcochrane.blogspot.com/2021/04/inequality-mirage.html?m=1

Thanks. That's a great pushback to the standard narrative and I think it's largely true. My guess is that it this would not apply if we look at wealth inequality.

As I've brought up before on this forum, people are often confused about inequality due to the fixation on income. The top 1% of income changes every year due to windfalls. I believe that something like 7% of earners will be in the top 1% in one year during their life. Meanwhile, an heiress with a $75 million net worth might never appear in the top 1% by income since it's all in tax-sheltered investments. The heiress is rich. The plumber who sells his practice and makes $600,000 at the end of his career is not.

The rise in wealth inequality is due to low financial volatility and low interest rates.

Income inequality I'm not sure about, or it might not even exist net transfers.

Here's more on the problems with how we think about inequality. https://www.themoneyillusion.com/income-and-wealth-inequality-data-nonsense-on-stilts/

How does this relate to the discussion at hand specifically? Not a criticism, just want to move the discussion forward for people who are reading along.

I'm just making a more general point that a lot of the arguments that say that income inequality is really high are wrong.

Does this have to take the form of recessions as they have been in the past? They tend to do a lot of harm to productive economic activity, even if they disproportionately culling bad investments. An ideal economy should just have some rate of creative destruction that doesn't strike fear into everyone's hearts. I have no idea what the difference between here and there is, though.

In an idealized world this is how Keynesian economics work.

The government makes sure that there's a stable money supply, it keeps its fingers out of most businesses, but takes steps to boost aggregate demand during downturns (as failing businesses go under) to 'smooth out' the business cycle so that there's never any point where EVERYONE is feeling the pinch at the same time.

And interest rates were kept artificially low for 14 of those years.

I see this claim a lot, and it's based on a misunderstanding of what the Fed actually does. If the Fed tries to lower interest rates below the natural rate of interest and hold them there, we get inflation. Now, not after 14 years.

What the Fed actually does is help markets clear faster by targeting the natural rate of interest, i.e. the rate at which the amount of money people want to lend is equal to the amount other people want to borrow. This results in savings being efficiently channeled into investments. If the Fed sets rates too high, there are excess savings that don't get borrowed, causing a recession. If the Fed sets rates too low, it causes inflation.

The fact that inflation was unusually low in the 2010s tells us that the Fed was more or less correctly targeting the natural interest rate, or even a bit above it; the natural interest rate may have actually been negative in the early 2010s.

The huge spike in inflation in 2021 was not the chickens coming come to roost after 14 years of artificially low interest rates. It was the result of a sharp increase in the money supply that made the early rounds of QE look like anthills, combined with excessive stimulus, and pandemic savings burning holes in the pockets of middle-class consumers.

You say rates should be as low as possible without causing inflation. I say they should be as high as possible without causing unemployment. Who's right? The Fed has a lot of room to make decisions based on vibes, not just their dual mandate. Reminder me again why they lowered rates in 2019 into record low unemployment?

But yes, I was oversimplifying and lumping QE/QT in with interest rates.

As long as it is due to a high savings rate and not a low demand for capital, a low interest rate is good because it increases asset prices, making us richer, and makes more potential investments profitable, expanding the capital stock, which increases productivity and the demand for labour, raising incomes.

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats