[1]: https://appam.confex.com/appam/2012/webprogram/ExtendedAbstr...
[2]: http://time.com/money/5054009/stock-ownership-10-percent-ric...
How? Keep in mind, I drive a car I bought for $1700 cash and I've restored and maintained it with my own hands.
Most people don't have the time, knowledge, tools, or space to maintain an older car, so a new car with a warranty is a smart move.
New cars are safer and more fuel efficient. They last longer than ever before. Not having a car is not an option for most Americans.
I don't see how a car payment is indicative of poor decision-making.
https://www.daveramsey.com/blog/the-truth-about-car-payments
> If you were to invest that (...) into a good mutual fund with a 12% rate of return, you would have over $100,000 in 10 years! At 20 years, you would have made $470,000. And at 30 years? That mutual fund would be worth $1.6 million!
Maybe I'm not savvy enough but I have not encountered mutual funds that will reliably sustain 12% over three decades.
Nevertheless, I haven't had a car payment for so long that I can't remember the last time I paid one. Trips to the mechanic are frequent and costly, but at least I'm not uselessly paying interest.
I'm surprised Ramsey can have a successful national brand saying little more than infinite variations on "spend less than you earn", but there he is, and I guess some people need to hear it like that.
If you must have a new car (we bought used fairly often, with good results), there are a dozen cars you can buy for around $15k, which works out to $270/mo with a 3.1% loan. I'm really stacking the deck here: I ignored cars that are too small, since I assume a family with children, I'm using a pretty high interest rate, and I'm ignoring used cars. Bear in mind that the _average_ payment means that it's ignoring the substantial amount of people who don't have kids and would be fine with a smaller car, or those with better credit who can get a better rate.
That being said, I don't know enough about the distribution of the discussed figure to say whether it makes sense in the way we're using it: $500 is the mean payment, not the median, so it would be a mistake to assume that there's an "average person" who pays $500. It's just as likely that some people have higher payments (that they can afford easily) and poorer people have lower ones.
>The average new car payment in America has crept above the $500 per month mark for the fist time, settling in at $503, according to a recent study by Experian.
and here's your statement:
>When the average car payment in America is around $500 a month
See the mismatch? This is not evidence that people (especially poor ones) are overspending on cars. It doesn't say anything about people without car payments, people with used cars, people who bought outright or even how many people exist in those categories. Besides I just put $500/month on a 5 year auto loan into googles calculator and I got a cost of $27,751. This isn't exactly an extravagant purchase for a new car.
Besides this notion that most people will ever be able to cut their expenses enough to "amass multiple millions of dollars in investments over their working career" is just painfully out of touch.
So, the American people don't have a spending problem, America has an education problem. (America has many education problems, really)
People only do what they know how to do. If you let a street worth of kids grow up on the street without giving them another opportunity, how are they gonna put food on their table? The ways they learned on the street. Same idea.
The manufacturers needed to make them last more than 100K because most of the manufacturers are closely if not directly tied to the financing, and if they wanted to make loans at high interest and 96mos they needed a car that would last at least long enough to cover the majority of new 65+ mo loans people are getting.
Instead, buy a used car for $5,000 to $10,000 and use it. Invest the rest. Hell, financing a car for $200 and investing the rest would be much better than financing $500 worth of car per month.
Poor people aren't financing cars for $500 a month. $500 a month is the average monthly cost for a new car loan. Poor people aren't financing cars for that much.
And its also not given that such a money, well gotten, has been produced by giving something in exchange, so it has removed tat money from less inefficient hands. It was still owned by someone, just changed hands.
Bastiat was right about something, using money as a measure of economics is just an invitation to confusion.
I think stock schemes can work as an abstraction, but only when combined with other bylaws that grant clear powers to shareholders (like a bill of rights). I write a little about that in one of my speculative fiction stories on automated society here:
i... sure?
if i'm not an expert in using (and maintaining) that equipment (who also happens to own a space which is large enough and zoned for that equipment, and proximate to the customers or raw inputs for the equipment), owning the corporation that owns the equipment is better than owning the machinery, because it means i also employ people to run (and maintain) the semiconductor fabs and wire bending machines and shit (which have been located in cost effective places) for me, so i can go off and do the things i know how to do well.
> ...when you own a car you reap the benefits of cheap travel much more directly and in a very different way than getting a dividend check.
i also accept all of the risks and responsibilities directly. if i buy into a hypothetical publicly traded ride sharing company, i don't have to worry about any of that.
Can I? I've got no clue how to run a Kiva, I just know that somewhere, there's one making me a few pennies right now being run and maintained by people who know what they're doing.
A product/brand independent "means of production" type investment is an interesting idea. It still doesn't fix the fact that there are people who are just never going to have the resources to buy into such a thing, which I think is really the core of the issue.
Of course if you are a common stock holder you are at the bottom of the barrel as far as value goes. Preferred stock holders get all their money first, and then common share holder get what's left (at least in a liquidation).
There's plenty of blame to go around. You can thank all the NIMBYs and countless housing regulations that prevent cost effective shelter from being created.
It's within our technological power to create housing for a tiny fraction of what it costs today in SF: just look at the tiny house movement. Just imagine how much cheaper it would be if something like that was built but stackable. Housing, A potentially multi-trillion dollar industry, completely unassailable, very few companies or investors are investing in this, all thanks to: Regulation.
Regulations and land use policy hamstring developers, increasing costs endlessly. Instead of working against them, we should be working with them to streamline and reduce their costs and finding ways to create more competition between them, to ensure that people get the very lowest prices. It can be done. Places like Dallas are growing every bit as quickly as SF/bay area and can still create housing for 100$/sq foot. I suspect even lower prices are possible with the removal of regulation: which would finally allow humanity to innovate in this area, rather than creating yet more cat video apps.
This harmful idea that real estate is something that should go up and up forever is wrong: morally and economically. In a world that is progressing, things should be getting cheaper, even real-estate.
Right now, your options in SF are a 200$ tent under a bridge or a 2 million dollar condo. There, really ought to be more options between those two extremes.
Say, did you ever read or see "Ready Player One"?
https://www.drugabuse.gov/related-topics/trends-statistics/o...
https://www.npr.org/sections/health-shots/2017/12/21/5720803...
Don't get me wrong, I'm very aware that most moral systems have somewhat-principled reasons to prioritize those that are geographically closer to you. This is intended more to illuminate that side of the argument than as a full-fledged suggestion for how to set our priorities. But the claim being discussed here, that the future will wonder why we let people die in the streets, is still bizarre to me in the context that you're framing it in.
You argued that thinking globally is more important than thinking parochially, which is fine by itself. But it's totally unrelated to what toomuchtodo is saying unless we were taking global action in lieu of local action.
So I assumed you meant that, because it's critical to your comment being relevant.
If you didn't mean that, then your argument falls apart. toomuchtodo is not arguing for being parochial, they're arguing that we should be making it a priority to fight this problem at all.
https://www.theguardian.com/us-news/2017/mar/28/deaths-of-de...
“Is the US facing an epidemic of 'deaths of despair'? These researchers say yes”
I'll agree with you on the environmental issues, but I think we're well on the way to solving those too and largely via the same mechanisms, Chinese solar is close to pushing coal out of business on price. That's not to say there's no role for regulation in the environmental direction though, I certainly think there probably should be, but how to do so globally and fairly is a bit of a catastrophe.
Given the incredible amount of energy and resources being wasted by some of the richest countries this level of inequality is far from acceptable.
But I am even more afraid that our future descendants will live in the same rampant callousness and cruelty that we've created and perpetuated.
If they live in a better world than ours and look at us like savages, then I think overall things will have gone pretty well.
Sorry that it's all The Guardian but they had a series that I happened to remember, and I think that publication has a good enough reputation:
https://www.theguardian.com/society/2017/dec/15/america-extr...
https://www.theguardian.com/commentisfree/2013/may/21/seques...
https://www.theguardian.com/world/2017/dec/01/un-extreme-pov...
Of course, if we find the slightest mistake or hyperbole (if there even is any) in an article or comment about the plight of the poor we can discuss THAT instead and dismiss the entire thought. Another form of bike-shedding, instead of using good faith for the discussion use every tiny opening of the "opponent" to sidetrack the discussion and to dismiss the issue.
So, where are the people of the masses of dying in the streets? None? Even in San Francisco they look shabby but very much still alive? Well, case closed I guess.
If future historians look at any part of this with confusion, it'll be the part where we ignore mental health and think dumping cash/housing/whatever on a person will solve everything.
It's weird seeing someone writing this in a thread about how Amazon exploits its workers for profits (ie. in part for its shareholders).
There are structural problems in our society that cannot be solved with new technology.
Is it though? Correct me if I'm wrong, but doesn't stock only generates value if it increases in price (or the company decides it wants to pay dividends), and not directly from the productivity of robots?
To put it a bit more clearly, your stock only makes you money if Amazon keeps growing. Let say Amazon were to reach a theoretical maximum size: profits and value stop growing. It would still generate massive amounts of money but would it be obliged to give you a cut of it?
No, I think you have it incorrect. As long as revenue > costs and internal expenditures, you make money by dividends. That's the whole reason we buy stocks. Price growth is ultimately just a projection of the belief in higher future dividends.
I'd just like to point out that if you believe in roughly efficient markets, if your enterprise maintains its value, if you amass a pile of cash, that will be reflected in your share price.
The dividends come directly out of that share price whenever issued. You can theoretically amass a pile of money that would make Smaug blush, and this will increase your share price to reflect. But that cash isn't being reinvested, it's only going to increase linearly with respect to that cash position. Which is why in many circumstances investors frown upon it.
There are also stocks with high dividends, which are paid out based on profit and not by the stock increasing in value.
This is obviously ignoring the fact many people either make horrible financial decision or are too poor to invest in stocks.
I'd like to retort this because I think it's important to have a bit of perspective here:
1. Population growth doesn't imply market growth.
If I sell polio treatment, my market are the number of people with polio, which thankfully hasn't been correlated with population growth.
2. Market growth doesn't imply revenue growth.
Competition.
3. Revenue growth doesn't imply profit growth.
Say, for example, I run a company building cheap computers for the children of low-income families. As I move into new countries and expand my revenue I might want to, instead of increasing profits, make my computers cheaper so more children have access to them.
2 and 3 are usually not true when companies are trying to maximize profits, but I don't think 1 should be at all rare.
Anyway, this is besides where the discussion was meant to go, but thought I'd share.
The revenue is used somehow. The board decides how. And shareholders elect board members.
Thus, if growth stalled, but there was excess revenue, the board would need to decide where it goes. It could be used to help growth revive, by using it to invest in future prospects, it could choose to use it towards employee compensations, maybe if it believes its required to retain talent, or it could choose to give it to shareholders as dividend.
If the board does make decisions the shareholders don't like, they can eventually be booted out and replaced by a new one.
This isn't a new problem you are talking about. Stocks have worked like this since they have existed.
Go take a look at any major company that "stopped growing" but is still making money, and see how it works.
Amazon needs to do better, but working class Americans also need to do better with their finances so they don't spend themselves into awful situations like this. Ultimately the idea that the average working class American will never be able to afford stock is just a fairy tale peddled by Marxists. The average working class American is more than capable of amassing a multi million dollar net worth by retirement by making wise decisions and investing, instead of crapping away all their income on things they don't actually need.
http://uk.businessinsider.com/how-high-income-and-low-income...
Keep in mind this is just from a single decision the average person is making.
Serious question, I am not financially knowledgeable but I know you'd never get 10% interest in a savings account (for example).
Blaming any problem of this magnitude on individuals is not reasonable.
There's a systemic pressure toward overspending through advertising, etc., and we've created a society where many people make an amount of money, that, if spent "wisely", procures a stressful and unfulfilling existence.
Clearly Marxism is not the right solution: our system isn't inherently and completely broken, but it needs adjustment. I think Piketty has the right idea. A progressive tax on capital would do a lot to equalize this inequality — if we could ever amass the political will to implement it — though it wouldn't correct our current situation where everyone is constantly manipulated to think they'll be happy if only they buy this one more object.
This is just anecdotal, but I see this a LOT. The stubborn insistence that blame is paramount in any discussion and that the world should be made fair before action can be taken to improve one's life is a pretty substantial barrier to said improvement. Sometimes the deck is stacked, and working on unstacking the deck can happen in parallel with reacting to the world as it is now. Out of college, I had friends who made half as much as me and spent twice as much; income aside, we were both exposed to pretty much exactly the same environment, and somehow we made purchasing decisions that were completely swapped from what you'd expect. As the parent comment said, "Amazon needs to do better" too, but putting personal behavior outside of the realm of control of the individual isn't helping anyone, it's harming them.
I agree with your general point that simply wishing that people would do better for a behavorial issue at this scale is unlikely to do much, but I don't think that's implied by the GP comment's suggestion. There have been successful campaigns to cause large-scale behavioral shifts before[1], and recognizing personal choice as a potential mechanism of improvement doesn't mean we can't approach the problem in an intentional, structural manner.
Just an aside, but in all of this I'm taking on faith the power of advertising that the HN community at large seems to consistently think that we're helpless before; this has never been my experience; I don't care much about ads, I don't see any mechanism in which they could drive my purchase decisions, etc etc. To wit, I buy the cheapest option (that I haven't already tried and disliked) for cheap items and extensively research medium to high priced ones. There's no question that brand advertising affects my level of brand awareness, but it's _really_ not difficult at all to remove that factor from your purchasing decisions. If anything, my prior would be that all the people who blindly purchase based on brand awareness are shifting the value prop towards brands that are _less_ well-known, since theoretically they need to compete on something else (price, features, quality, whatever).
[1] Spend any time with Europeans and you'll appreciate how impressive the American anti-smoking campaign was.
I find it silly to blame individuals (if only they would do better!). The law of large numbers applied to these cases guarantees that there is a systemic issue, not an individual one — however — I think this sort of "you all should do better!" campaign can be a perfectly viable solution to a systemic issue in some cases, if it can effectively shift enough mindsets to turn a cultural tide.
Blame is a ridiculous concept when talking about large-scale social dynamics, and effectively shuts down the search for any systemic adjustment that would constitute a fix.
> Blame is a ridiculous concept when talking about large-scale social dynamics, and effectively shuts down the search for any systemic adjustment that would constitute a fix.
I agree with you. Frankly, I rarely find the concept of blame to be all that useful for improving matters. For an example from the other side of the politically-coded spectrum, terms like "victim-blaming" are most often used as thought-terminating clichés, selectively applied to avoid having to justify one's point. For example, telling women not to dress provocatively when going out and telling tourists to keep their passport close to them and watch their bags are both just as "victim-blaming" as the other, but only one of these is given that label. (FWIW, the reason I disagree with the former and agree with the latter is that being able to dress as one pleases is a lot more core to my conception of fsirly fundamental rights than being able to avoid paying attention to one's belongings).
What you're getting at is that there are many people right now who are too poor (and are going to be too poor) to ever own any part of the robots.
This century's great debate is forming up to be whether or not we should give them some anyway even though they can't "earn" it for whatever moving value of earn society is currently accepting.