Re: Is economy good or bad? article link
- From: royls@xxxxxxxxx
- Date: Fri, 02 Dec 2005 05:46:31 GMT
On Mon, 21 Nov 2005 14:09:53 -0600, "Jim Blair" <jeb@xxxxxxxx> wrote:
><royls@xxxxxxxxx> wrote in message
>news:437de5e6.9447951@xxxxxxxxxxxxxxxxxxxxxxxx
>> On Thu, 17 Nov 2005 15:32:35 -0600, "Jim Blair" <jeb@xxxxxxxx> wrote:
>>
>> ><royls@xxxxxxxxx> wrote in message
>> >news:437b7626.21864798@xxxxxxxxxxxxxxxxxxxxxxxx
>> >> On Tue, 15 Nov 2005 15:18:14 -0600, "Jim Blair" <jeb@xxxxxxxx> wrote:
>> >>
>> >> ><royls@xxxxxxxxx> wrote in message
>> >> >news:43795812.56762493@xxxxxxxxxxxxxxxxxxxxxxxx
>> >> >> On Mon, 14 Nov 2005 12:53:53 -0600, "Jim Blair" <jeb@xxxxxxxx>
>wrote:
>> >> >>
>> >> >> >I suggest that when people read about Bill Gates or any of the
>> >millions
>> >> >of
>> >> >> >"not rich" who became rich,
>> >> >>
>> >> >> You misspelled "thousands."
>> >> >
>> >> >I still think that millionaires are "rich", and there are now about
>8.9
>> >> >million of them in the USA.
>> >> >Note that there were 1.5 million of them in 1988.
>> >> >
>> >> >http://oregonstate.edu/Dept/pol_sci/fac/sahr/nummil.htm
>> >>
>> >> The income from $1M, invested conservatively, does not buy an affluent
>> >> lifestyle, so that's not enough to make you rich.
>> >
>> >That income gets you about $50,000 a year. Perhaps not "affulent', but I
>say
>> >comfortable.
>>
>> ?? It is completely average. If you are comparing it to a two-earner
>> household's income, it is _below_ average. Furthermore, that 5%
>> return is _before_ inflation. The real return is more like 2%.
>>
>> Give it up, Jim; I have demolished you on all these claims too many
>> times before.
>>
>> >And of course you have the option of spending some of that
>> >million.
>>
>> Irrelevant.
>
>So you claim that the typical millionaire in the US is "completely average"
>while the median wealth in 1998 was $60,700.
No, as you know very well, I claim -- correctly, of course -- that the
income from $1M is equivalent to a completely average wage.
>But having that extra million
>to spend is "irrelevant"?
It's irrelevant in the sense that if he spends it to finance an
affluent lifestyle, it is no longer available to yield income to
support that lifestyle in the future. My original definition of
"rich" was the ability to finance a distinctly affluent lifestyle
without either working or dipping into capital.
>I bet most people would not consider an extra million dollars to be
>irrelevant to their material wellbeing.
Most people would not consider $10K irrelevant, either. But it sure
is irrelevant to the rich.
>> >The subjects in the study averaged several million in assets.
>>
>> The median respondent had just a few million. So, if you obtain a
>> sample with a few billionaires who inherited and a thousand $1M-aires
>> who did not, on that basis you can claim the rich earned all their
>> money, even though most of the money is in the hands of those who did
>> not earn it?
>
>In a world where half of the population lives on a few dollars a day, and
>half don't have access to clean water, you say a millionaire in the US is
>not rich, but "just average?
Right, because the standard of living is so high in the USA. Most
working people are going to make well over $1M in their careers, so
it's just not that notable. Take the same amount of money to
Bangladesh and it will make you rich.
>> >> Secondly, Stanley and Danko's "research" was totally unscientific: the
>> >> sample was self-selected, ....
>> >
>> >As is any survey.
>>
>> Garbage. It is not difficult to use known population characteristics
>> to improve the representativeness of a sample. Stanley and Danko
>> simply chose not to, because they did not want their sample to be
>> representative.
>
>So cite a study that does? How would you study millionaires? Or the "rich"
>however defined?
I would use the known population characteristics. For example, wealth
is distributed according to an inverse exponential function, so it is
possible to find the exponent, and then edit the sample to match the
upper tail of the distribution in wealth.
>But you claim to "refute" Stanley and Danko by assuming that their subjects
>made their millions by having their parents buy them a house which they
>then they sold decades later--but didn't spend the gain on another house.
It refutes them because there is nothing in their research to say the
case is otherwise.
>> >> "What about the house your wife's parents gave you when you got
>> >> married?"
>> >>
>> >> "That was only worth about $50K! Today I'm a millionaire!"
>> >>
>> >> "But you sold that house 30 years later for $750K...."
>> >
>> >But the value of the primary residence is not included.
>>
>> Too bad that is irrelevant. _All_ the (_untaxed_!!!) capital gains
>> from the sale of _all_ their previous primary residences are included,
>> unless spent on the current one. So if the majority of the sample
>> sold their houses for unearned millions in land value gains and moved
>> to a cheaper place in Arizona, you claim they earned all their money?
>
>I agree that if all (or even most) of the subjects in Stanley and Danko's
>study had just sold a house given to them by their parents 40 years ago, and
>moved into a tent, or a cheap house anywhere (are there cheap houses
>anywhere these days?), THEN the claim that they made their million by
>founding a company would be deceptive.
>
>Any evidence that this is the case? Or do you "refute" them by assumption?
That is the fallacy of High Redefinition, basically a strawman
argument.
-- Roy L
.
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