Things you have recently learnt

rick_chasey

TheBigBean said:

rick_chasey said:

So in the UK you need to earn roughly at least £160,000 to be in the top 1% of earners.

In California you need to be earning at least $844,000.

Are you suggesting that the US isn't at the forefront of socialism?

It's properly blown my mind how bit the chasm is.

briantrumpet

rick_chasey said:

TheBigBean said:

rick_chasey said:

So in the UK you need to earn roughly at least £160,000 to be in the top 1% of earners.

In California you need to be earning at least $844,000.

Are you suggesting that the US isn't at the forefront of socialism?

It's properly blown my mind how bit the chasm is.

Well, given the median wage in the US is comparable, I guess that the wage inequality must be enormous there.

rick_chasey

Median isn't comparable..?! it's getting near to double the UK median? UK median is what, £28k, US median is $56k...

pblakeney

rick_chasey said:

Median isn't comparable..?! it's getting near to double the UK median? UK median is what, £28k, US median is $56k...

I think people on here regularly forget how low the UK median is.

surrey_commuter

rjsterry said:

surrey_commuter said:

rjsterry said:

And still neither of you can say *why* you think ~4% is the same default level for wildly different economic situations. Why is it 4%, and not 6 or 3 or 10. If you think there is some equilibrium state then that suggests a mechanistic relationship with other measures: what evidence do you have for this?

I have never used the term “default level” and I have always talked about long run interest. Like the long run rate of growth it can go up and down or even get permanently reduced.

Anyway the BofE does not want it too low because they can not cut them in a recession and they don’t want them too high as raising them in a recession could do to much damage.

I believe my learned friend sees 4% as on the low end of “normal” and historically I would probably tend to agree with him. My own hunch is that people need to get used to that and the new normal could be in the 3-4% range but without external shocks we won’t see that for 5 years

I think the bold bit is probably fair at the moment. Until things change again.

I think claiming data from the 18th and 19th centuries (which actually trends downwards) shows that rates 'should' revert to 5% or whatever is statistically unfounded and seeing something that isn't there. It's just drawing a line across a graph - seeing a pattern where there is none.

I would ignore anything before the '60s and upweight the more recent data

BofE independence to GFC it averaged about 5%.

I think if you assumed that was mortgage rate in 5 years time you woul not be far out

Jezyboy

briantrumpet said:

rick_chasey said:

TheBigBean said:

rick_chasey said:

So in the UK you need to earn roughly at least £160,000 to be in the top 1% of earners.

In California you need to be earning at least $844,000.

Are you suggesting that the US isn't at the forefront of socialism?

It's properly blown my mind how bit the chasm is.

Well, given the median wage in the US is comparable, I guess that the wage inequality must be enormous there.

Bear in mind how crap the exchange rate is!

rick_chasey

https://twitter.com/peston/status/1679786859080163330?s=46&t=Q7O5dnx-0MXQv9qE3vz1vg

Not that rich, my friend.

briantrumpet

rick_chasey said:

https://twitter.com/peston/status/1679786859080163330?s=46&t=Q7O5dnx-0MXQv9qE3vz1vg

Not that rich, my friend.

Is everything now going to be benchmarked against the top 1% of earners in the US?

briantrumpet

If you go by 'median wealth', the UK comes out 11th, the US 21st, in this list.

https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult

briantrumpet

But if you go by 'mean wealth' the US comes in at 3rd, the UK at 16th. Inequality much?

rick_chasey

briantrumpet said:

If you go by 'median wealth', the UK comes out 11th, the US 21st, in this list.

https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult

Lol I'd genuinely love to see this stat taking real estate out of the wealth calculation, just for sh!ts and giggles.

briantrumpet

rick_chasey said:

briantrumpet said:

If you go by 'median wealth', the UK comes out 11th, the US 21st, in this list.

https://en.wikipedia.org/wiki/List_of_countries_by_wealth_per_adult

Lol I'd genuinely love to see this stat taking real estate out of the wealth calculation, just for sh!ts and giggles.

That indeed would be interesting, but it doesn't undermine the notion that 1) the UK is relatively wealthy, and 2) the the US has deep, deep inequality, even from the perspective of the UK. Just because some extremely wealthy people in the US have managed to screw the system to their own advantage doesn't, per se, make it a wealthy country.

rick_chasey

Lol brits get so defensive when Americans do well for a change.

Relax. American economy is *magic* on a macro level. Accept and move on.

shirley_basso

yes but wage inequality isn't a macro thing, so why bring it up and conflate the two?

briantrumpet

rick_chasey said:

Lol brits get so defensive when Americans do well for a change.

Relax. American economy is *magic* on a macro level. Accept and move on.

Not getting defensive at all, just bemused by the fact that you think a few very high earners are the main criterion of a rich nation. I'm not arguing that the US isn't appearing to have turned things around (well done them), and that there are problems with the UK. I'm surprised that you're not calling out the vast hideous inequality in the US, which appears to be worse even than the UK.

rick_chasey

shirley_basso said:

yes but wage inequality isn't a macro thing, so why bring it up and conflate the two?

I'm not conflating the two.

It goes like this.

I post an interesting thing about 1% wages.

People whine that american economy blah blah.

I then point out the american economy is still lit.

You complain I'm conflating the two > i'm not.

briantrumpet

I was commenting on the "Not that rich, my friend" comment. I was assuming that you were meaning that the UK isn't as 'rich' as the US. In global terms, the UK isn't poor, by a long chalk.

What's your definition of a rich country?

briantrumpet

rick_chasey said:

People whine that american economy blah blah.

Who's whining?

rick_chasey

briantrumpet said:

I was commenting on the "Not that rich, my friend" comment. I was assuming that you were meaning that the UK isn't as 'rich' as the US. In global terms, the UK isn't poor, by a long chalk.

What's your definition of a rich country?

It's a flippant comment that the UK is getting poorer, relatively speaking (and probably absolute, tbf) than the rest of the world. Wouldn't read that much into it.

There's a lot of complacency in UK public discourse on the economy.

(I suspect it's because, for large swathes of the population who don't work and have paid off the mortgage, the economy isn't really something that has an impact on their lives, but anyway).

rjsterry

TheBigBean said:

Assumptions:
1. Deflation is bad
2. High inflation is bad
3. Lending money should provide real returns

As a result of 1 and 2, the BoE targets inflation of 2%. As a result of this and 3, interest rates should be higher than 2% with 4% seeming sensible.

Exactly, so a product of current inflation management policy and nothing to do with 'historic norms'.

briantrumpet

rick_chasey said:

briantrumpet said:

I was commenting on the "Not that rich, my friend" comment. I was assuming that you were meaning that the UK isn't as 'rich' as the US. In global terms, the UK isn't poor, by a long chalk.

What's your definition of a rich country?

It's a flippant comment that the UK is getting poorer, relatively speaking (and probably absolute, tbf) than the rest of the world. Wouldn't read that much into it.

There's a lot of complacency in UK public discourse on the economy.

(I suspect it's because, for large swathes of the population who don't work and have paid off the mortgage, the economy isn't really something that has an impact on their lives, but anyway).

OK.

I genuinely found the contrast between median and mean wealth for the US surprising. And I also think that the potential for extremely high salaries in the US is not necessarily only (arguably) marking a 'successful' economy, but is also evidence of an economy that is overly-weighted for the benefit of the already-wealthy. And it might well be that weighting that has given the US Trump: someone who the rich know will help them even more, while bullshitting the poor that he'll help them. The same dynamic was the driver behind the success of the Brexit campaign: the unholy alliance of the poor and the very wealthy hoodwinked by populism. They are both outcomes of inequality.

rick_chasey

On whatever average you want to use, they earn materially more than Brits

briantrumpet

rick_chasey said:

On whatever average you want to use, they earn materially more than Brits

As you might say, take out the top 1%, then see what the average wages are. Then add in health insurance. I don't know for sure, but I suspect that the difference isn't as great as you are making out.

Pross

You’ve also got to include the extra days they work as paid holidays are much fewer. Not sure how average working weeks compare.

TheBigBean

rjsterry said:

TheBigBean said:

Assumptions:
1. Deflation is bad
2. High inflation is bad
3. Lending money should provide real returns

As a result of 1 and 2, the BoE targets inflation of 2%. As a result of this and 3, interest rates should be higher than 2% with 4% seeming sensible.

Exactly, so a product of current inflation management policy and nothing to do with 'historic norms'.

You haven't reached the same conclusion as me based on the assumptions.

TheBigBean

rick_chasey said:

On whatever average you want to use, they earn materially more than Brits

Life expectancy.

First.Aspect

rick_chasey said:

On whatever average you want to use, they earn materially more than Brits

It shouldn't be a surprise that a country with a large population and proportionally much more space and vastly more natural resources is wealthier. So is Canada. So is Australia. So is NZ I believe. Should be fairly obvious that the UK peaked really quite sone time ago. What is more worrying is rhat we are lagging behind our neighbours now as well.

Word of advice though RC, from reading your posts, if your Gant chart to Success, which I imagine you have a copy of on the fridge, bathroom door and your office wall, doesn't pan out, it's going to eat you up from inside unless you get a bit more phlegmatic about things.

pblakeney

First.Aspect said:

rick_chasey said:

On whatever average you want to use, they earn materially more than Brits

It shouldn't be a surprise that a country with a large population and proportionally much more space and vastly more natural resources is wealthier. So is Canada. So is Australia. So is NZ I believe. Should be fairly obvious that the UK peaked really quite sone time ago. What is more worrying is rhat we are lagging behind our neighbours now as well.

Word of advice though RC, from reading your posts, if your Gant chart to Success, which I imagine you have a copy of on the fridge, bathroom door and your office wall, doesn't pan out, it's going to eat you up from inside unless you get a bit more phlegmatic about things.

That peak was probably when we had Canada, Australia and NZ. 😉

First.Aspect

pblakeney said:

First.Aspect said:

rick_chasey said:

On whatever average you want to use, they earn materially more than Brits

It shouldn't be a surprise that a country with a large population and proportionally much more space and vastly more natural resources is wealthier. So is Canada. So is Australia. So is NZ I believe. Should be fairly obvious that the UK peaked really quite sone time ago. What is more worrying is rhat we are lagging behind our neighbours now as well.

Word of advice though RC, from reading your posts, if your Gant chart to Success, which I imagine you have a copy of on the fridge, bathroom door and your office wall, doesn't pan out, it's going to eat you up from inside unless you get a bit more phlegmatic about things.

That peak was probably when we had Canada, Australia and NZ. 😉

And an ample supply of cheap labour, I hate to say.

First.Aspect

Okay, bit more context. I just looked up top 1% in the US. Googled answers varied from about $400k to about $600k or higher, but it isn't clear which of the more eye watering stats are actually household incomes.

In the UK, it's actually £200k, which a month or two ago was about $220k, and now is about $260k - showing the hazards of comparing just by currency values. I know there are data that try to adjust based on local purchasing power. If you've been to the US recently, you'll see that prices are quite high for a lot of goods, so I'd say £200k pa. here is analogous to about $300k there, all in all.

It is a big difference, nonetheless.

But RC is comparing apples and pears. These averages vary by about a factor of 3 from state to state. Comparing California's top 1% to our UK wide top 1% is a bit like comparing the top 1% of earners in London with the national average. In just the same way, most Californians live in the Bay Area or LA, both of which are quite extreme wage and cost bubbles.

I hope this makes everyone happier, that the top 1% in the US are only about twice as well off as the top 1% here, and the median only about 30% better off. Yay.