Adults Are Talking with Andrew Heaton | Ep 3 

I patron both the Political Orphanage and We’re Not Wrong, but this is the time that he has been the most definitive and persuasive about a conflicting interpretation of economic outcomes. All of that while still drifting into zoning and markets. This is his lane, lol!

I don't know if they opened a 2nd location or what, I'm only familiar with the Snuffy's off route 40. 😛

America needs to know!

Yes, We need to Know!!!

Yeah, but Phil Gramm is contradicted by the concensus of economists in determining wealth transfers via hyper-inflated priced services when comparing to the individual who gets to make the consumer choice of what to spend money on. In Gramm's perspective the $25,000 per capita spent on Medicare and Medicaid is the transfer from the taxed to those who receive the services, but the Medicare budget is not from the general fund but rather from the payroll taxes - the middle 50% is paying for those services for the former working and the the bottom 20%, just as their (middle 50%) income taxes are the lion's share of the federal government's discretionary spending which is like 85% department of defense. In both instances the taxes of employed people are going towards the profits of the companies that are held by the investors, either the health care providers, insurance companies or the military contractors. Regardless of the labor costs of these industries, the owners won't be the ones that will see a cut in their own income they'll just provide less services at the same price or increase the price for the products that are paid for by the employed class of Americans who the source of transfer. Phil Gramm acknowledged that OECD economists and others don't calculate wealth transfer the way he does, probably because the way he calculates it is the only way to rationalize the extraction of wealth from the w2 and 1099 employees and blame them for why they aren't keeping up financially as well as previous generations have when measuring wages against wages rather than apples and oranges that he prefers.

@@Sean__F There's a reason I said Medicaid and SNAP, not Medicare and Social Security. But it also doesn't matter because the point isn't to track a dollar from A to B. It's to increase the total for each person by benefits and decrease it by taxes. So if you think the payroll tax is overly burdensome on lower incomes, it's still wrong to count their income as if they didn't pay it.

@@notme222 but Medicaid, SNAP, and EITC simply isn't enough to make Phil Grahmm's case that there's this massive wealth transfer from the top to the bottom that makes up for the stagnate wages, only Social Security and Medicare can make up that math, as well as the employee benefits in the form of defined cost retirement and the hyper inflated price for health insurance, but that's to prove that oranges are apples and ignore the wages to wages (apples to apples) comparison. Wages have stagnated and the compensation argument requires dollars diverted from the employee's pockets and kept in the top quintile but ignore the direction of were money is going to bolster the case that wealth is NOT being concentrated at the top. Wealth is being funneled up and the convoluted argument that money in the form of medical costs (that go to unnecessary middlemen in the insurance sector -- no other OECD economy has an equivalent sector sopping up so much of their GDP) is counted as a transfer to the employed class of the economy as a heterodoxic article of faith. "Compensation hasn't stagnated, because the escalating price of health care is filling the gap of the total compensation above and beyond the stagnated wages, so those employees should be basking in their wealth that they can still go bankrupt if they catch a diagnosis of expensive illness. Why are they complaining about how much wealth is being extracting from them? We are counting each dollar that incur in health services towards their wealth, isn't that how humans experience personal well-being?"

@@Sean__F Thanks for the thoughtful reply. I think accurate data is its own justification and failure to count transfer payments is wrong regardless of the conclusion. I also think you have a good point about how increasing prices of healthcare aren't necessarily indicative of higher value received. But that's also why inflation is divided out. To wit, Patrick Boyle has a new video out called "Are you in the 1%"? It's excellent in many ways but among them is a discussion of the PCE vs CPI deflators. This is another area where accuracy is important regardless of what conclusion it supports. I find the insurance company complaints to be a boogieman. It's far from the most profitable industry, and what we've seen in the last 15 years is not more players seeking a cut of these profits but instead a closing down of offerings - including government-funded non-profit insurance companies. I can certainly buy that it's inefficient, simply by observing how many assistants doctors need to handle billing. But that doesn't amount to wealth transfer. The very wealthiest people, the 0.001%, have non-functional assets. Elon Musk isn't rich from skimming money off insurance claims. He has shares in a company that he has owned for 20 years. You can say that's "hoarding wealth", but it's a weird definition of hoarding since he owns fewer shares now than he did before. It's just that people really want them. If you multiply his 13% of Tesla by the company's $10b profit for 2023, he made $1.3 billion pre-tax. Which sure is a lot of money for one person, but that's $4 per US citizen. Which is earned by selling the most advanced cars ever invented. Hardly a drain on the economy from the world's richest man. I think you are justifiably unhappy with the US healthcare system. And it is relevant that health expenses as a percent of GDP have gone up so much. (From about 5% in 1960 to over 15% today.) But it's a mistake to come at that as "wealth transfer" when there's so much more to it. And the fact here is that as long as it remains expensive, having someone buy it for you is a form of income.

@@notme222 As regards to the thoughtful reply, I think Heaton attracts a more civilized netizen than other internet personalities. I appreciate the reciprocity in openminded inquisitiveness. It's not my mistake to come at it as "wealth transfer" but Phil Gramm's mistake when explaining why total compensation for employees is keeping up with inflation and there's no wage stagnation in the US for the past 4 decades. I disagree with that take, and of the belief that wages should be compared with wages, while roping in total compensation (wages that started out as the lion's share + retirement, health care, and other forms of nonfungigible funds that employees can't use to make consumer choices yet far out pacing wage growth) is used to distract from the actual wealth inequality from transfers from employed and retired people to those owning the means of production (ie shareholders of all industries not just the insurance industry). The insurance industry isn't getting the bulk of the wealth just the conveyance for the wealth in the opposite that Gramm's claimed wealth transfer occurs. Stagnating wages is an accurate description for the past 50 years unless you put the packaging/misdirection of all the other compensation that don't contribute to the individual's personal finance; microeconomics there's brazen wage stagnation but macroeconomics there's an upward trend for compensation that keeps up with the GDP growth. Heaton explains away the wealth/income stagnation with an analogy about 2nd graders having height stagnation with classes keeping to the same height - but this is not analogous to an aging population nor when comparing age cohorts (ie 30 year olds in 1990 vs 30 year olds in 2020) the trends are not in favor of continuing with the neoliberal experiment of privatizing everything but a return to social democratic capitalism of New Deal/Great Society era but without the same built-in racism of the mid-20th century, though this might not be enough to overcome the profit maximization that has replaced the profit motive and local business interests that were part of the community that their business decisions affected 60-70 years ago.

Flargle bargle indeed

Yeah, i think she got all the pieces.

Ms. Unger-Satron isn't much of an advocate for the working class as far as economics goes, but she'll die on the hill to let them hold onto any cultural distraction from getting material benefit from the means of production. I didn't really know what Cultural Marxism was, but I think that I've got a good idea of it now.