Distribution of Wealth III

 

Adventures of Robin Hood Theme

Robin Hood, Robin Hood,
Riding through the glen,
Robin Hood, Robin Hood,
With his band of men,
Feared by the bad, loved by the good,
Robin Hood! Robin Hood! Robin Hood!

Where is Robin Hood when you need him?

According to the Global Wealth Databook published by USB, the world has become wealthier but more inequitable in the distribution of that wealth. In 2000, that databook reported that the adult population of the 164 markets, mostly countries, was 3.8 billion and the wealth of those markets was 118 Trillion of US Dollars. In 2022, the most recent year reported, the adult population increased to 5.1 billion. a growth of 42 percent, but the wealth had increased to 450 trillion of US Dollars. Even adjusting for inflation, this is equivalent to $256 trillion in 2000 US Dollars, a growth of 117 percent.

The distribution of that wealth also became less equitable. The ratio of the mean to median wealth per adult is a good indication of the equitable distribution in each market. That index has been weighted by the size of the population of each market. On that basis the weighted Equity Index (the ratio of the mean to the median, weighted by the population for each market in 2000 is as shown below.

It changed to that shown below in 2022.

While the extremes in the smaller markets of Bahrain, Bahamas and Brunei dropped in the intervening years,  the total inequity increased, and the variance in in the distribution of wealth also has increased. The Equity Index in the United States changed from 4.7 in 2000 to 5.1 in 2022. This ratio of the mean to the median is NOT changed by restating in inflation adjusted dollars. It appears that as total wealth increased, this has been accompanied primarily by an increase in the variance of the distribution of that wealth.

Distribution of Wealth II

God Bless the Child

Money, you've got lots of friends
They're crowding around the door
When you're gone and spending ends
They don't come no more
Rich relations give crusts of bread and such
You can help yourself, but don't take too much

Mama may have, papa may have 
But God bless the child that's got his own, that's got his own
God bless the child, the child that's got his own 

How much wealth is enough to be your own? 

God bless the Swiss. I had the feared that the Global Wealth Databook published annually by Credit Suisse would be discontinued after Credit Suisse was taken over by UBS. In fact UBS has published the 2023 book. And this Databook has wealth information by country by year from 2000 to 2022. Thus it is possible to not only see how wealth is distributed among the population of a market, but it is also possible to see how this distribution has changed over time. For 2022, the book reports mean, median and total wealth and adult populations for 164 markets which are primarily countries ( Hong Kong SAR,  and Taiwan are reported as separate markets from Mainland China, despite China’s’ territorial claims; some markets are not reported because there is no data, e.g., Sudan, South Sudan, etc.). This means that at least for this year it is still possible to examine how wealth is distributed in most markets.

“Sadly” the United States, based on the ratio of the mean to the median wealth, has lost ground as the market/country with the most inequitable distribution of wealth in the world. https://dbeagan.blogspot.com/2022/04/distribution-of-wealth.html   

While Bahrain and the Bahamas are still the most inequitable counties, again they are very small markets. But the United States has lost ground to other small markets such Lesotho, Brunei, Suriname and even to the large market of Brazil. If the mean to median is weighted by the share of population, the United States has only the third most inequitable distribution of wealth after India and China. But this ranking is almost entirely because of the size of India and China’s populations. The Top 10 Most Inequitable Markets ranked by weighted inequality of wealth (mean divided by median) are

Market	Share of Adults	Share of Wealth	Weighted Mean /Median Wealth
India	18.1%	3.4%	0.80
Mainland China	21.7%	18.8%	0.60
United States	4.9%	31.1%	0.25
Brazil	3.1%	1.0%	0.16
Indonesia	3.6%	0.7%	0.13
Russia	2.2%	1.0%	0.10
Nigeria	2.0%	0.2%	0.09
Pakistan	2.5%	0.2%	0.06
Philippines	1.4%	0.2%	0.06
Bangladesh	2.1%	0.2%	0.05

where the mean wealth per adult that is closest to the median wealth per population remains Iceland. But this is not surprising in a country with arguably the oldest democratic body (the Althing)  and where almost everyone is related to everyone else on the island.

Brains?

 

If I Only Had A Brain

I could while away the hours
Conferrin' with the flowers,
Consulting with the rain;
And my head I'd be a scratchin'
While my thoughts are busy hatchin'
If I only had a brain.

Does the Scarecrow already have a brain?

In the movie The Wizard of Oz, the Scarecrow demonstrates that he has a brain, but he is given a diploma to prove that he has a brain.

"Oh No, Scarecrow!  Math from the Wizard of Oz     by JW Gaberdiel

At the end of The Wizard of Oz, the Scarecrow receives a diploma and then immediately says,

“The sum of the square roots of any two sides of an isosceles triangle is equal to the square root of the remaining side.” https://www.youtube.com/watch?v=DUCZXn9RZ9s

This is unfortunate.  It sounds a lot like the Pythagorean Theorem: 

“The sum of the squares of the legs of a right triangle is equal to the square of the hypotenuse.”

However, Scarecrow’s version is wildly and devastatingly different from Pythagoras’ version. "

https://www.metro-arts.org/ourpages/auto/2015/5/14/58561904/Scarecrows%20Math%20from%20The%20Wizard%20of%20Oz.pdf

Actually neither is correct.  Gaberdiel assumes that the Scarecrow was talking about a triangle on a Euclidean, flat, surface.  What the Scarecrow should  be saying if the surface is hyperbolic is

 “The product of the hyperbolic cosines of the legs of a right triangle is equal to the hyperbolic cosine of the remaining side."

The squares, square roots, and the Pythagoras’ Theorem for right triangles only apply on Euclidean, flat, surfaces.  It is true because on a flat surface, cos(c)=cos(a)*cos(b), where a, b, and c are the sides of a right triangle,  and this is equivalent to Pythagoras Theorem.  On a spherical surface, such as the Earth, the formula is cos(c/R)=cos(a/R)*cos(b/R) where R is the Radius of the special surface.  When a, b, and c are very small compared to R , i.e. as R goes to infinity, the limt is cos(c)=cos(a)* cos(b), which is Pythagoras’ Theorem.  But as any airplane pilot will confirm, a Great Circle Distance is not solved using Pythagoras’ Theorem.  If the surface is hyperbolic, not spherical, then Pythagoras’ Theorem is also not correct.  The correct formula is cosh(c)=cosh(a)cosh(b). The Scarecrow may have been given a diploma, but to be correct he also needed to get an imagination, the component that makes a function, and the surface it is on, hyperbolic.

Warehouses

 

A Horse In Striped Pajamas

Look there daddy, do you see?
There's a horse in striped pajamas
No, that's not what it is at all
That's an animal people call a zebra
I see, but it still looks like a
Horse in striped pajamas to me

Is a warehouse store like Costco a warehouse or a store?

This sounds like a silly question, but it is not.  If you are looking at that warehouse store from the perspective of a user, then whether it is a warehouse, or a store, is immaterial to you.  You are a customer of that warehouse store, not a competitor. If you are looking at that warehouse store from the perspective of a producer then that warehouse store has no intention of using the goods that it purchases from you. They are only a customer, not a competitor.  From the perspective of a user they are a seller, and from perspective of a receiver, they are a re-seller. 

This makes a difference in economics and other modeling.  Are you calling that warehouse store a  warehouse industry, whose function is to store goods until the user needs them, or are you calling them  a wholesaler, whose function is to compete with other retail stores.   I can get it for you wholesale.  The Bureau of Labor Statistics which uses the North American Industrial Classification System classifies them as wholesalers, not as warehouses.  So you might call them a warehouse, but someone might call them wholesalers.  They are both, if you don’t expect them to behave like a horse that is getting ready to sleep, then it is just a name, not the function. And a rose by any other name would smell as sweet!

Both Sides Now

 

Ten Thousand Voices

Ten thousand kisses
Ten thousand tears
Ten thousand wishes
Ten thousand years

Ten thousand years sounds like a long time.

In Europe, they  think that 100 miles is a long distance and 100 years is a short time.  In the US, we think that  100 miles is a short distance and 100 years is a long time.  But Europeans are also very intolerant of people not in their group, the Irish and the British for example, or the Poles and the Russians.   I am the grandchild of immigrants from Europe.  They left Europe to get away from intolerance.  So pick your poison, the group that lives a long time but thinks people from far away are bad, or the individual who lives a very short time and thinks people from far away are not so bad.  

 IMHO the problem today is that people like MTG, Matt Gaetz, Jim Jordan, etc., think only about the short term AND that people from far away are bad.  The worst of both worlds. I would prefer to think about the long term AND that people from far away are good.

Cycles

 

The Circle of Life

It's the circle of life
And it moves us all
Through despair and hope
Through faith and love
'Til we find our place
On the path unwinding
In the circle
The circle of life

Life isn’t a straight line up. Life isn’t a straight line down. Life is a circle, a cycle.

Humans tend to view things as a straight line. When things are getting worse, think they will get even worse, which also means that things were better in the past, MAGA. If things are going good, we think they will continue to be that way forever,

The truth is that life is a cycle. You just have to not be hasty, and allow the cycle to complete itself. Our persective can change how we view thingss.  To a toddler, next Christmas seems like forever.   A senior citizen might say instead, is it Christmas again already? The fact is, it is always a year between Chistmases.  It did not take less time, your perspective just changed.  

If the cycle is very long you might miss the fact that it is a cycle.  If the cycle is very short, it might look like there is no cycle, that things just happen. But if there is life, you can be sure the cycle is there. Even if the cycle is in your imagaination, dreams.

Dumb and Dumber?

 

Epistle to Dippy

Rebelling against society,
Such a tiny speculating whether to be a hip or
Skip along quite merrily.
Through all levels you've been changing
Elevator in the brain hotel
Broken down a-just as well-a
Looking through crystal spectacles,
Ah, I can see I had your fun.
dumb dumb dumb, dumb dumb dumb dumb dumb

So Dippy, are you dumb, or dumb like a fox?

The most convincing lies sound true. Such as “the enemy of my enemy is my friend.”  You can use simple math to prove this is not true. Let “=” be friendship and “<>” be enmity. Let a be you, b be your enemy, and c be the enemy of your enemy. The enemy of my enemy is his enemy is true, b<>c. My enemy is my enemy, is true, a <>b. But the enemy of my enemy is my friend, a=c, is not true. The enemy of your enemy might be your friend a=c, but they could also be your enemy a<>c.

Similarly tax brackets, which are MARGINAL tax rates are not EFFECTIVE tax rates. A 99% marginal tax rate is not a 99% effective tax rate, any more than acceleration is speed. Prior to Reaganomics in 1979, the highest tax bracket was 70% but the effective tax rate was 37%.  In 1981 after the Reagan tax cuts, the highest marginal tax rate was 50% and the highest effective tax rate was 32%. In 2023, after the most recent Job and Tax Cuts Act, the highest marginal tax rate was reduced to 37% and the effective tax rate was 29%. You can have policy debates on what the marginal tax rate or the effective tax rate effective rate should be, but you should not confuse the two. Was this an example of being dumb, or being dumb like a fox?

A Flat tax rate on income, where the marginal tax rate is always equal to the effective tax rate of income, not households, is implictly assuming that the variance of income in every household is zero, which means that every household has the same income. Sounds rather communistic that way, doesn’t it?

It is true that an absolute has a mean/median/mode which is abosute zero, but this does not mean that an absolute has no variance, σ². In this case determinism is really 0 ± σ and randomness is (x<∞) ± σ. It is NOT determinism is 0 ± 0 and randomness is x ± σ. Making your mean/median/mode equal to zero and your variance zero does not make you an absolute. It only makes the look like you are pretending to be an absolute. The only question is did you unintentionally claim to be an absolute, in which case you could be corrected, or did you intentionally lie about being an absolute and can not be corrected. You can be shown to be lying, but you might still lie.