Silly/Odd News Stories from around the World

[willx]

^ Both yes and no.

In the example we're talking about --
1) Rich person moves to Singapore and brings their money with them
2) Rich person spends $1 (or maybe like $1,000) on a robot dog

Then, that $1 or $1,000 flows through the economy as previously predicated. There's no net loss to Singapore because that $1 or $1,000 of spending wasn't taken out of the economy somewhere else. If it becomes a taxation debate then that's another issue completely and depends on the Keynsian multiplier and the "Rich Person" marginal propensity to consume or basically after-tax income elasticity.

Re: Charity -- don't get me wrong, I believe in charities and donate to them regularly in surprising sums because I get the author's first point (basically the world isn't fair and circumstances matter) -- but it doesn't "trickle-down" or to the extent that it does not employ people at multiple levels of the supply chain, the more apt description is that it "trickles down" less rather than none-at-all.

(EDIT: Well, that and I didn't make the assumption on whether that contribution to charity would've otherwise been spent in the economy would have otherwise had a large trickle-down effect vs. it going through the charity system could therefore be viewed as comparatively negative vis-a-vis the alternatives, but let's just assume that anyone that donates money to charity would've otherwise not spent it as it is most likely completely discretionary anyways)

[Anh_Minh]

But what's the difference between a rich person buying a robot dog for themselves, and buying it for an orphan in an act of charity? Isn't it the same? Doesn't it, in fact, employ more people (because charities employ people too)?

[AnimeFan188]

2 donkeys suspected in man's death in Hungary:

"Hungarian police say two donkeys apparently pulled a man from his motorcycle,
dragged him 55 yards and bit and trampled him to death."

See:

http://news.msn.com/world/2-donkeys-...ath-in-hungary

[willx]

Originally Posted by Anh_Minh

But what's the difference between a rich person buying a robot dog for themselves, and buying it for an orphan in an act of charity? Isn't it the same? Doesn't it, in fact, employ more people (because charities employ people too)?

Well, yeah, that works for a rich person buying a robot dog for charity -- my point was it falls apart if instead of "consuming" (ie. buying a product) that money otherwise went into donations that left the consumption sector.

Basically if charities didn't accept robot dogs but only accepted like canned goods or actual cash. Then it would basically it boil down to the fact that money is being directed to one "supply chain" versus another, which I mentioned before. And as we all know, charity involves .. well, charity. There are volunteers and many parts of the chain that are "not for profit" and therefore are not "earning an income" which is basically what this hole discussion is about. Charities are designed to (but often fail at) basically getting the "donation" from the top and handing it to those "in need" at the bottom at the least cost. Which is great from a social standpoint.

Business however, is conducted, at "least cost" but balanced with "profit maximization" which means that everyone along the chain should be earning wages, profits, etc. So basically in the "supply chain" where money is spent rather than donated, every individual is there because they "want to make money" and "have things they want to spend money on" which is part of the money velocity effect of trickle down.

tl;dr (but in slightly more nuanced language) -- They would be the same if and only if the same sort of consumption could be done privately or via a charity and would not induce/reduce future behaviour. Basically if the multiplier of each $ being thrown down each particular path was the same. The initial statements however are not true in reality as the historical multiplier for each $ donated to charities is low as that money is typically not immediately spent (charities fund-raise typically for the long-term and build up charitable trusts to earn interest) and volunteers for the charities don't earn wages that they would then need to spend immediately for their own basic needs (trickle down trickle down).

[Ithekro]

Basically "tickle down" is the idea of putting more money into the economy at all levels and has nothing to do with social needs. The idea being that the money invested from the top generates either product or income the farther it goes towards the consumer, so that the comsumer and workers will be able to put money into the system again so profit can be maintained at all levels.

Charity provides goods and services to those that need it, but the "profit" is limited. If the food stuffs are purchased with donated funds, then the market gets those profits, but if the supermarket donated the food directly, it is at best a tax write off. No profit is made. No one in the system gains money, and therefore no one spends money to add to the economy.

Is that sort of what you are getting at willx?

[willx]

^ Mostly.

The main points of clarification are:
1) "Social need" can be a contentious term. We're talking about something silly like "robot dogs" but it doesn't need to be conspicuous consumption, it could be simply like .. a lawnmower. The idea that the market has produced a good that there is demand for argues there was a "social need" for it.
2) The idea that near or close to the consumer isn't the primary concern as there is typically ancillary business beyond simply the depth of the supply chain. Direct to customers still generates ancillary business and produces cheaper products for consumers. It's about profit and wages.
3) My point on charities was about profit, yes, but also wages. Again, volunteers don't earn wages and don't need to spend them. An average worker will spend >80% of their wages on essentials making sure that money stays in the economy.

[Ithekro]

Charities are non-profit, but that doesn't mean people work for free. I worked for a non-profit for a while. I was paid for my time. I was in maintenance, so my job was keeping the place running and such. For a local charity event I think I might have been the only person there getting paid (overtime) for being there...while wearing a "Volunteer" shirt (as requested by my superiors). I technically volunteered to work that day, but was getting overtime for it.

[willx]

^ Yes, but there are some people that operate as volunteers that are unpaid. I know, I've done unpaid volunteer work. I'm not saying everyone works for free, but there are some people that do.

[Irenicus]

And there are a ton of people working for Walmart collecting welfare.

Look, will, you claim finance as your domain, *I* claim nonprofit (just for a bit; I'll give it back). I'm in the field. You're wrong. That's not how it works. Not anymore.

People do strategic philanthropy, impact investing, long term projects (nonprofits fight very, very hard to try to turn donors away from the "operating ratio" myth). They are *not* soup kitchens wasting away giving people fish [well, smart soup kitchens have sustainability strategies]. They teach them to fish, they incubate projects that may become awesome new innovations on fishing rods that will never survive the short term business without that protective wing (in that sense they're venture capitalism, except they don't really expect money back so call it venture philanthropy). And maybe they work on environmental advocacy so the river doesn't get polluted to shit and all the fish die and the fishermen starve.

There are all sorts of revenue streams for nonprofits beyond charity anyway, some of them quite creative [remember the distinction that nonprofits are *not* bound to not collect revenue from clients for services provided; they just can't pay that off to shareholders]. Take Goodwill; they're taking donations of things that would (usually) end up in a landfill or donated in the old model rather ineffectively; instead, they created a massive retail operation that is actually just a front to fund their real purpose: get people back to work. The retail business became a machine that basically funded a sophisticated welfare system, in a sense, which allow a portion of the disadvantaged populations of the United States -- the so-called poor that the Market often finds difficult to profit from -- and aim for the really important economic value of getting them back into the market proper. Incredible economic role, you could even think of it crudely as a "sweeper." Governments used to play that role, even if not too effectively. Funny thing, market radicals fucked that gig up.

And that volunteer stuff? Volunteers *produce.* At least in the GDP sense. They do not add to consumption, but that's just fine, we have more than enough consumption, and hopefully their "production," though that's hard to define with the nonsense added to GDP like lawyering services and all, will through some magical process benefit the most needy, right where every dollar goes back to consumption instead of staying up in endowments, investments, unused savings, or outsourced financial wizardry where the US government will be lucky to see a dime.

The thing you're right is that there are endowments which have the money "sit there" earning interest and paying out, say, 5% per year or less. Except that kind money is not in most direct services nonprofits (those spend just about every coin they get, probably much more effectively than many businesses given the impact of money at the economic level of their clients). They are usually in Foundations -- donors -- or universities and hospitals -- huge institutions with a particular interest in very long term sustainability. Otherwise nonprofits are far too pressured by the immense needs of their clients (caused by the tragic failures of the dear Market) that they often, to their own detriment, have to cannibalize reserves during economic downturns to handle both the decline in giving and the massive increase in constituent needs.

You want people to stop being "ignorant" of finance, fine, I ask you in return to throw that charity nonsense out the window. The US nonprofit sector -- largest in the world by far -- is not that.

[NoemiChan]

Originally Posted by AnimeFan188

2 donkeys suspected in man's death in Hungary:

"Hungarian police say two donkeys apparently pulled a man from his motorcycle,
dragged him 55 yards and bit and trampled him to death."

See:

http://news.msn.com/world/2-donkeys-...ath-in-hungary

Did they succeed to make a confession?

[ganbaru]

Japanese climber, 80, becomes oldest atop Everest
http://hosted.ap.org/dynamic/stories...05-23-01-48-38

For Philadelphia bicyclist, a cat is his co-pilot
http://hosted.ap.org/dynamic/stories...05-23-03-19-57

[willx]

Originally Posted by Irenicus

-Snip-

Thank you, that was very enlightening with regards to how non-profits currently operate, but still does not adequately address my comment above, which was in turn a response to charitable donations and economics.

My point was if money was directed to charity in lieu of private consumption it would have a comparative negative impact on trickle-down economics and that was that. If goods or assets that are otherwise not being used get donated, that's different. If donations did not proportionately reduce consumption, that's different. I also never claimed that volunteers did not produce - yes, volunteers produce, so do normal workers - but volunteers do not earn wages that flow back through into the economy.

I make no claim on knowing the non-profit sector inside out, nor do I feel anything in particular about the trade-off between private consumption and charitable donations, I was just pointing out the misunderstanding demonstrated by the author about economic concepts.

EDIT: People still seem to be inferring personal statements from this -- highlighting for further emphasis

[Ledgem]

Originally Posted by willx

My point was if money was directed to charity in lieu of private consumption it would have a comparative negative impact on trickle-down economics and that was that.

The two aren't mutually exclusive. Charities aren't investment firms; they put the funding given to them toward products and services. When it comes to "trickle-down economics" variety and quantity are the way to go, and it seems that most charities accomplish that.

[aohige]

Something like what Bill does with his foundation is massively positive investment.

[ganbaru]

Ferris wheel ride world record broken in Chicago
http://hosted.ap.org/dynamic/stories...05-20-15-23-23

[andyjay729]

Is Japan's White House equivalent haunted?

[MrTerrorist]

^Maybe the PM knows his term won't last long so why bother moving in?

[maplehurry]

Originally Posted by willx

I also never claimed that volunteers did not produce - yes, volunteers produce, so do normal workers - but volunteers do not earn wages that flow back through into the economy.

Well, not everyone work for charity for free, so in a sense, charity trickle down less just as a sweat shop or outsourcing (in which the workers were paid less on average) trickle down less when compared to an American industry.

[ganbaru]

Vatican marks anniversary of the 1972 attack on Michelangelo’s Pieta
http://blogs.reuters.com/faithworld/...angelos-pieta/

[SaintessHeart]

Market Pulse: Beware Japan, but buy Italy and Spain - ING (4:46)

May 27 - Japan-led volatility may still drive European markets this week but stay long peripheral euro zone bonds, says ING. Plus, Fiat jumps 4% on Chrysler reports and Bertelsmann's €3 bln spending spree.

Reuters need to report faster.