Nick Hanauer: Inequality is bad for the rich

Check out this quite compelling TED talk from Nick Hanauer, an entrepreneur, investor, capitalist, and self-described plutocrat. Hanauer is a billionaire, but makes the case that trickle-down economics and rising inequality are especially bad for the rich.

One claim he makes:

Some inequality is necessary for a high-functioning capitalist democracy. The problem is that inequality is at historic highs today and it’s getting worse every day. And if wealth, power, and income continue to concentrate at the very tippy top, our society will change from a capitalist democracy to a neo-feudalist rentier society like 18th-century France.

And this, about trickle-down economics (which he addresses a few times in the talk):

[W]e need to put behind us the trickle-down policies that so dominate both political parties and embrace something I call middle-out economics. Middle-out economics rejects the neoclassical economic idea that economies are efficient, linear, mechanistic, that they tend towards equilibrium and fairness, and instead embraces the 21st-century idea that economies are complex, adaptive, ecosystemic, that they tend away from equilibrium and toward inequality, that they’re not efficient at all but are effective if well managed. This 21st-century perspective allows you to clearly see that capitalism does not work by [efficiently] allocating existing resources. It works by [efficiently] creating new solutions to human problems. The genius of capitalism is that it is an evolutionary solution-finding system. It rewards people for solving other people’s problems. The difference between a poor society and a rich society, obviously, is the degree to which that society has generated solutions in the form of products for its citizens.

It’s not often you hear these kinds of pleas from billionaires like Hanauer. I find him pretty persuasive.

Read more: Nick Hanauer: Beware, fellow plutocrats, the pitchforks are coming | TED

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Cheryl’s Birthday Problem and Information Filtering

I love seeing teasers about math and logic gain popular appeal! Here’s the math (specifically, logic) problem that the internet is talking about today:

Cheryl's birthday problem

You can get the full problem nicely presented on either The Guardian or The New York Times websites. A number of other sites are talking about it today, too. Just Google “Cheryl birthday problem.”

I spent some time with the problem and put together this response here. I know that various online outlets have discussed the answer as well; here are the respective solutions presented by The Guardian and The New York Times (don’t click those links until you think about the problem for yourself). But I think there’s a useful “information” framework to use in considering how to arrive at the answer. I discuss that framework at the end.

Spoiler alert — I’m going to discuss the birthday answer starting in the next paragraph.

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How much do you need to make in LA to afford the average apartment?

mattymcmatt / Pixabay

Answer: $33/hour, at least

And a home? According to a new report from KPCC:

The median home price in Los Angeles is $570,500, according to the real estate website,

But consider that the median income in Los Angeles is about half that: $49,497, according to census numbers from 2009-2013.

So it’s no surprise that Los Angeles has been rated as the most unaffordable city to rent in America by Harvard and UCLA.

via LA residents need to make $33 an hour to afford the average apartment | 89.3 KPCC.

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