You’re all poor now, says Bank boss

[Grumble]

Suck it up sunshine

[bjn]

And stay in your lane peasants.

[lpm]

We've been poorer than we realised for the last 15 years. It's just come in a rush on a single year, that's all.

There doesn't seem to have been a drop in consumerism, so the smug git is right that we plebs remain oblivious.

[IvanV]

We are collectively poorer. What he fails to acknowledge is the reasonableness of an attempt to redistribute the impact. Especially when it seems that many of the upper echelons of the income/wealth distribution have escaped largely unscathed, so far.

[El Pollo Diablo]

See, this is why everyone hates economists

[dyqik]

See, this is why everyone hates economists

It's called the Dismal Science for a reason.

[Grumble]

We are collectively poorer. What he fails to acknowledge is the reasonableness of an attempt to redistribute the impact. Especially when it seems that many of the upper echelons of the income/wealth distribution have escaped largely unscathed, so far.

Like bank bosses, you mean?

[noggins]

Lol bantz

[bjn]

We are collectively poorer. What he fails to acknowledge is the reasonableness of an attempt to redistribute the impact. Especially when it seems that many of the upper echelons of the income/wealth distribution have escaped largely unscathed, so far.

Surely there must be theories about the marginal utility of money itself? A pound to a pauper is much more important than a pound to a king.

[IvanV]

We are collectively poorer. What he fails to acknowledge is the reasonableness of an attempt to redistribute the impact. Especially when it seems that many of the upper echelons of the income/wealth distribution have escaped largely unscathed, so far.

Surely there must be theories about the marginal utility of money itself? A pound to a pauper is much more important than a pound to a king.

Indeed there are, and very well established. To the extent that you are supposed to take explicit account of it when appraising public spending in Britain. Guidance is set out in the Treasury Green Book, which is the manual on how to appraise spending proposals to show they are coherent and represent value for money. The book explicitly sets out how to put a monetary value on a change in income distribution, where a proposal has such an effect. It even specifies the value for the parameter that describes the marginal utility of income, which is sourced to the academic literature. And it is a academically plausible value. It is just the same parameter I chose, based on the exactly the same research I selected, when I needed such a value because earlier editions of the Green Book left that value unstated.

I have actually done a couple of appraisals that take explicit account of the income distribution, in part because those policies were being justified substantially for their income distribution effect, or in fact protecting against the negative distributional effect of another policy. But is quite rare actually to do so. But I think when you get into areas of policy that have the largest impact on income distribution, like tax and benefits policy, no such assessment would be done. Because the methodology would clearly suggest a large leveling up on incomes through redistribution which few politicians in this country have any intention of arguing for.

[IvanV]

See, this is why everyone hates economists

Are you calling that plague on the Chief Economist of the Bank of England who made the initial statement? Or on me for my response to it? Or on all of us for explicitly debating something you think shouldn't be talked about in this way?

[El Pollo Diablo]

Well, the Chief Economist guy mainly, but you're all thinking it deep down

[dyqik]

Well, the Chief Economist guy mainly, but you're all thinking it deep down

It's like the economic news headlines that seem to decry high wage inflation, due to low unemployment. Or articles about how the pension system is f.cked because people aren't dying early enough.

ETA: With my cosmologist hat on, I do need to remind you that by "living", you are hastening the heat death of the universe.

[IvanV]

Well, the Chief Economist guy mainly, but you're all thinking it deep down

I move mainly in the circles of policy/transport/energy/health type economists, and my experience is that few of them are like that. But I can suspect that city/bank type economists might be rather different.

I think it was once discovered in some research survey that the study of economics actually actively makes people more money-orientated than they were before studying it. Just so you can have that confirmation bias confirmed.

[Sciolus]

He's right that we're all poorer, but he's wrong that we should accept it.

It's also notable that he is blaming the current wave of inflation, when as LPM points out, we have had an unprecedented 15 years of economic stagnation.

Had the pre-crisis [2008] trend continued, the typical Brit would by now be 40 per cent richer.

That is truly extraordinary, and we know who's to blame, and the people to blame and their supporters are keeping very quiet about it.

[Grumble]

We are collectively poorer. What he fails to acknowledge is the reasonableness of an attempt to redistribute the impact. Especially when it seems that many of the upper echelons of the income/wealth distribution have escaped largely unscathed, so far.

Surely there must be theories about the marginal utility of money itself? A pound to a pauper is much more important than a pound to a king.

Indeed there are, and very well established. To the extent that you are supposed to take explicit account of it when appraising public spending in Britain. Guidance is set out in the Treasury Green Book, which is the manual on how to appraise spending proposals to show they are coherent and represent value for money. The book explicitly sets out how to put a monetary value on a change in income distribution, where a proposal has such an effect. It even specifies the value for the parameter that describes the marginal utility of income, which is sourced to the academic literature. And it is a academically plausible value. It is just the same parameter I chose, based on the exactly the same research I selected, when I needed such a value because earlier editions of the Green Book left that value unstated.

I have actually done a couple of appraisals that take explicit account of the income distribution, in part because those policies were being justified substantially for their income distribution effect, or in fact protecting against the negative distributional effect of another policy. But is quite rare actually to do so. But I think when you get into areas of policy that have the largest impact on income distribution, like tax and benefits policy, no such assessment would be done. Because the methodology would clearly suggest a large leveling up on incomes through redistribution which few politicians in this country have any intention of arguing for.

This episode of Volts considers the economics of US government policy, with a section on distribution.
https://overcast.fm/+oT_ljtISA