The graph can be found a little less than halfway down in this document.
That’s an insult to People.
First, Dick Dastardly, please stop quoting a page-long post in its entirety to add a three-line response. Just quote the relevant piece so we know what you’re referring to. Now, on to what you said to me…
Did you even bother to read what I wrote before you responded to it? I acknowledged that yes, the 1% who earn the highest pay earned a higher percentage of total pay last year than they did in 1980. BUT THAT WASN’T MY POINT.
You are arguing that the wealth is increasing NOW. You are cherry-picking a date 29 years ago to compare against, and ignoring the fact that over the last ten years, it has DECREASED. If you go back 80 years, it has also decreased. The one specific statistic you cited is fine. The conclusion you’re drawing from it is erroneous.
Yes. But you used those words to back your claim that the top 1% of earners made over a third of national income, which is patently false. You’re backtracking and trying to weasel out of your original claim by making a totally different claim that doesn’t support it.
And a mighty convenient typo it was, since it let you pick the most convenient numbers for the argument you were making at the moment. Nicely done.
Let me explain the real world to you.
If I’m saving sixty bucks a week for retirement, I’m going to have it deposited in my IRA account, or some reasonable equivalent thereof. They will put it into a good long-term investment, either accumulating until there’s enough to buy a particular bond or other specific investment, or dollar-cost averaging into a mutual fund or stock.
As others have pointed out, American Funds is hardly a “boutique,” but that doesn’t matter. Whether your retirement account is being managed by a banker or a brokerage house, they will have access to a wide variety of investments.
Lest you think that the guy dumping $60 a week into his account won’t get “real” investment advice, do a little compounding and calculate what that will look like in five years, ten years, twenty years (others have done the math for you at 40 years, but you refuse to accept it). The thousands turn into tens of thousands in a few years, and hundreds of thousands in a couple of decades. It’s real money, and you get a real return from it.
Oh, and your charts showing net value of shares over time are irrelevant. Do a little reading on dollar-cost averaging, and then do a little on compounded returns and reinvested income.
I’m going to type this slower, so maybe you’ll understand:
Property taxes are a tax on property. Compared to income taxes, they’re tiny. Income taxes represent tens of a percent of your annual income, while property taxes (for most people) represents tenths of a percent of your total assets.
Estate taxes are income taxes. When you inherit substantial sums of money, you pay taxes on it. They are not a tax on your existing property. You don’t pay estate taxes on your own property, no matter how wealthy you are or aren’t.
OK, nice and small. Look, here are too separate WSJ articles backing my claims up.
http://online.wsj.com/article/SB121677287690575589.html
See, I’m not cherry picking any dates or data, I’m simply quoting the numbers, you can see for yourself. And I’m not citing stuff from a psychologist, that’s IRS data which appears to be acceptable to the WSJ so maybe it’ll do for most reasonable people on an internet forum. I didn’t change to 30 from 40 to alter any argument, I’m making one consistent argument, I just made a typo. And property taxes are a tax on wealth. It doesn’t matter how big they are, just that they exist, so you claiming there are no taxes on wealth is incorrect.
If you don’t want to accept the numbers in these articles then there’s nothing more I can do.
They don’t back up your claims! You said:
Your first citation requires a subscription to read the full article, but the part that does show up refers only to “executives and other highly compensated employees,” with no claim that such people only constitute 0.1% of the population. Your second citation says:
That directly refutes your claim. You said that 0.1% made 33% of the money, and the Wall Street Journal says that 1.0% (ten times as many as you claimed) only made 22% (2/3 of what you claimed).
Thank you for providing me with the evidence to show you’re making stuff up.
So, then, the actual number of people who are grossly overpaid or simply possess wealth beyond avarice into absurdity, this number of people is actually considerably larger than Dirk has said.
And this is important, why? OK, so he’s wrong about how many people can be so defined. Big Hairy Ass Deal. Why should I care? Is there something impressively democratic in the larger number, am I expected to sigh contentedly and say"Well, economic justice is marching forward at a brisk pace, now the grossly wealthy are a much bigger demographic than before, and therefore, much more democratic that before. Huzzah!"
So long as the wealthy man can purchase more political power than his less advantaged fellow citizen, political equality has not been achieved, and that is the Holy Grail of democracy. If I am willing to admit than a man much less intelligent than myself is equal in the eyes of democracy, tell me why I should admit that a man who has more money deserves to be my superior?
Perhaps the liberals are right, perhaps the capitalist system can be tinkered with and adjusted to a point where it is wholly compatible with political equality, and hence, democracy. I remain skeptical and remain radical, but I’m willing to listen.
Would the Heritage Foundation exist without the sponsorship of the wealthy, or without the corporate sponsorship directed by corporate leaders who are either wealthy or damned determined to be. The Cato? American Enterprise? You think the average working man will donate to ensure that the cause of throttling unions is well represented? Think he will donate to endow a academic chair devoted to protecting the sacred primacy of property rights?
Dirk tells me the patient is sick, his fever is 106 degrees, you furiously report that it is no worse than 104.
But the patient is still sick. Which is rather the point, don’t you think? Or don’t you?
Enough with the weak analogies and off-topic rants about the Heritage Foundation. I’m not even sure what your point is about that anyway. What, right wing think tanks are evil, and they are funded by the rich, and that’s good enough reason to take the money away from the rich, so they can’t fund right-wing think tanks? Do you think the rich do not donate equally or even more to lefty think tanks and causes?
If so, I have two words for you: George Soros.
Look, the underlying dispute here is that Dirk has spewed all kinds of nonsense and twisted arguments around and weaved and bobbed to try to show that the wealth of America is being gobbled up by the rich. They’re taking it all, leave ever-smaller bits of the pie for the poor.
The plain fact of the matter, as IRS data and plenty of other data shows, is that wealth is NOT increasing at the top. The percentage of wealth held today by the top 1% is below the median level of the past 80 years. INCOME has risen for the top quintile, but wealth has stayed relatively flat with variation probably caused by recessions, movements in stock prices, changes in inflation, etc.
Now to be clear, you might find trends of rising wealth if you subdivide the rich into smaller categories - we never looked at any of that kind of data. But the data we’ve been debating relates to the top 1%, and the data shows that the percentage of wealth they hold has been fairly stable over the past 80 years, fluctuating mostly around the 30% range.
Also, I’d point out that the share of wealth of the rich doesn’t seem to change much with tax rates - probably because the ratio of income vs wealth of the very wealthiest is fairly small. Raise taxes, and you’ll get their income, and with it perhaps their desire to work hard, but they’ll still be wealthy.
In addition, the left is continually claiming that the middle class is vanishing. The supposition is that the people who used to be middle class are being pushed down into the lower classes as all the money flows to the people at the top. This is not true either. Yes, the ranks of the middle class, as measured strictly by hard income limits, has gotten slightly smaller. But this is mainly because people in the middle class have moved UP to the upper class, primarily due to the increasing value of professional jobs.
However, if you measure middle class by definition, the ranks of the middle class are actually much bigger than they used to be. Because many of the people now in the ‘upper class’ income range are really still middle class (defined as having to work for a living and not being able to live a life of leisure), while people at the upper end of the ‘poor’ range are also really middle class (defined as having access to the basic comforts of modern life, home ownership, and having a certain amount of self-determination and having their kids be able to go to college).
The frustrating thing about this is that there are real problems to be addressed here, but you angry lefties are too busy frothing at the mouth with class envy and a desire to ‘get’ the rich that you misdiagnose every problem as the rich cackling evilly as they extort money from the poor, and focus on punishing them and hiking their taxes while leaving the real problems untouched or even making them worse.
So do you agree that the 1% making 22% of national income is correct?
In 2007, the top 1% earned 22.8% of all income, and paid 40.7% of all income taxes.
These numbers are widely available from the IRS and other sources, and aren’t really a subject of debate.
The rising income gap has some clear causes. For one thing, people with high school diplomas and lower have seen their incomes decline in real terms over the past 15 years, while people with any kind of post-secondary education have seen their incomes increase. The rising wealth gap is really between the educated and the uneducated.
Obama has actually done something in this regard that is smart - he’s focusing more educational funding on trade schools, community and junior colleges. It doesn’t take much education to get you out of the wage decline zone - statistically, an associates degree represents a huge jump in average pay. In 2003, people with high school diplomas earned about $37,000. People with an associates degree earned on average $57,000. And compared to the cost of 4-year college, an associates’ degree attained in a local community college is downright cheap - cheap enough that just about anyone can afford it.
It certainly appears to be.
But why? What are they doing that is worth all that much money, a thousand times more than a fire fighter, a teacher, a truck driver…
They invest the money, and that helps the economy grow? Well, then, they are pretty much irrelevant, aren’t they? Its their money that performs that labor, not they.
We value labor in that we demand it, we of our peculiar brand of Calvinist Christians, the Church of the Eternally Uptight. We insist that our people are not lazy, that he who does not work is a parasite, to be scorned. (This despite the fact that we almost never have enough to go around, yet we degrade people for circumstances entirely out of their control.)
But the wealthy are exempt, that strict morality does not apply to them, they are free to as much leisure as they can stand. By what right are they free from that morality? We don’t think of a rich layabout as a lazy bum, because he has money. So, really, the work ethic is no ethic at all, is it?
And, of course, we should demand that civic and political rights are strictly proportionate, that the wealthy man has no more power in the civic arena than his fellow citizen of whatever income. We’re working on that, its taking a lot longer than we thought.
And while I’m glad to see that there are statistics to show that the absurd imbalance of great wealth has declined somewhat, so far as we are concerned, that’s just a good start. Much more to be done. The lesser set of statistics is an improvement to not very good from wretched.
Democracy is more than merely a governmental system, it is a moral commitment. If you are not prepared to make such a commitment to equality amongst citizens, you should find a governmental philosophy more to your liking. One of the authoritarian varieties, perhaps, that are so often popular with the rich and powerful, throughout history.
But if there’s any powerful resistance to that equality of political power, to minimize the impact of money on our political arena, who is it that is most resistant to such change? If a rich man is following his self-interest, which political party is he most likely to donate to and support?
And if this is how it is, and conservatives resist change, how then does a conservative resist change while supporting justice, when justice demands change?
Don’t pay them then. You’re free to pay more money to teachers, firefighters, and truck drivers, if you wish.
Not accurate, for basic macroeconomic reasons. You’re talking about the role of venture capital. An economy requires investment in new business and industry to sustain itself and grow. That investment comes with risk, as not all businesses ideas are good ones than can succeed. A wealthy individual who funds unviable businesses becomes a poor individual. One who funds potentially successful businesses becomes wealthier. New jobs and economic growth result. Those who are good at telling the difference (and make no mistake, attempting to do so is serious work) are a source of capital for the engine of growth.
This is why Russia was still producing the same model of cars designed in the 1960s without change. They stagnated and failed.
This is pretty basic economic stuff, and I’ll be happy to tell you about it, but I’m not going to argue it with you.
You’re not really serious are you?
Robert’s research is hardly noncontroversial. It just so happens that he is the hear of a firm that is exactly the sort of “boutique with one or two offices” that you earlier railed against.
In most wirehouses there is something called a “chinese wall” between research and product. This means that research analysts cannot have a financial interest or dealings with the companies they are analyzing, lest their research be tainted by self-interest.
Research affiliates in the product design business. They design products and write research to show why that product is a good investment. Nothing wrong with that. All companies that design product do so.
One needs to view this research critically as it is not independent research. Remember that Phillip Morriss Scientists would argue that tobacco was good for you?
Same concept.
Two issues come readily to mind when I look at Arnott’s argument:
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He chooses an atypical bond index to get his results. This is stacking the deck. You don’t selectively choose indexes to provide the result you wish.
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The 40 year time period is a rather odd way to disprove the equity premium when there is 126 years of good data available. The five percent pretty quickly reappears when you venture past 40. Again, you don’t select your time periods to produce a specific result.
A quick review of their product affiliates shows a distinct fixed income orientation. He designs product and writes research primarily for bond houses.
None of this suggests that his points are not well-received by me. You have to buy stocks at the right time and pay the proper price for them or you likely to underperform. Hardly a startling revelation.
None of this contradicts the basic point that the mutual funds I’ve shown you have outperformed over the last 40 years and produced the results, and the growth of assets in “the real world” that you have denied as possible.
Nah, of course not, its just that typing gives me boner.
So if the data set that we get the 22%/top1% number from is correct then so is my claim that the share of national income the top 1% make has doubled since 1980. I’m glad we agree!
So long as you agree that despite income increasing at the top, wealth has stayed relatively constant.
Again, once you come to terms with those two seemingly contradictory facts, you might be able to start trying to figure out why this is, without carrying the baggage of class envy with you.
Well, I say its disgust and revulsion, you say its envy. By what magic do you peer into another’s heart and take inventory? If you really could do that, your typing would be done for you by disciples.
Maybe because we love our country & want to see it governed well. Imagine that.
You really think we can’t afford both?
Yeah. Sure. 'Cos you know, we private citizens don’t have any ability to defend our womenfolk from Canadians.
If we need a huge military to keep the Canucks off our women, & a we have to sacrifice the general welfare to keep that huge military, WHY THE HOLY FUCK ARE WE IN SOUTHWEST ASIA!!! We need those boys to defend against Canada, eh?
But yeah, I forgot that piece of European history: When France instituted socialized health insurance, they massively cut the military, & Spanish totally invaded & took all their wimmins. or There I Go Lying Again.
You also know nothing about Russia today.
Duh, tovarich! Knyeshna horrorshow!
Someday, perhaps, you’ll have a chance to spend some time and read what everyone else is writing. On that auspicious day, it will be worthwhile arguing with you.
In the meantime, I’m sick of explaining over and over and over that you picked one statistic that is correct, and made a completely false extrapolation from it. You refuse to acknowledge that the top 1% of earners in the country make less than ten years ago, meaning the number that matters so much to you is declining in the current decade, even though it went up in the 1980s and most of the 90s.
You don’t understand the numbers, you don’t understand investment, you don’t understand the difference between earnings and wealth, you don’t understand the difference between taxes on income and taxes on wealth, you don’t understand logic, and you can’t deal with math.
But, yes, your 22%/1% number is by golly correct. You can cut and paste.