Let's all cry for the rich

[Ensign_Edison]

@Cosmic Relief

In a roundabout way, I can find some sympathy for these people (I’m all sympathetic like that). To a rug-maker in India, my life must look fantabulously opulent because I can afford a 3-bedroom house and a car, both with working air conditioning. He would probably think I could have my income cut by 2/3 and still be rich… all I have to do is lose the car, walk to work, wear used clothes, live in a 1-bedroom house, and cancel luxuries like air conditioning, internet service, and cell phones. Easy enough, right?

However, if I do this, fairly soon I’ll start looking and smelling like a homeless person…

You’re saying that people without extra bedrooms, brand new clothes, air conditioning, internet, cellphones, and cars are like homeless people…seriously? Speaks for itself. May the real world never trouble your precious heart.

[Evil_Captor]

@SenorBeef

The reality is that every additional dollar/resource/whatever you get is worth less than the last. Living off $5000 a year and getting bumped up to $50000 is a much bigger jump than $50000 to $95000 even though it’s the same 45k increase.

OK, that’s it in a nutshell. Very well put. Game over.

[SteveG1]

@Rhubarb

Wow, that’s really heartwrenching. :rolleyes: I may be laughing on the outside, but on the inside, I’m laughing a whole lot louder, with snorting and guffaws.

This sums it up for me too.

[Really_Not_All_That_Bright]

@Ensign Edison

You’re saying that people without extra bedrooms, brand new clothes, air conditioning, internet, cellphones, and cars are like homeless people…seriously? Speaks for itself. May the real world never trouble your precious heart.

Well, FWIW, where I live, if I didn’t have air-conditioning, I’d smell exactly like a homeless person.

[dactylic_hexameter]

Slight hijack, but…

To everyone arguing that CEOs don’t create jobs but only work to raise share prices (which therefore must be a bad thing):

Let’s say you owned 100 shares of stock, at $10 a share. The share price goes to $20. You just made $1000. What do you think you are going to do, now that you just made $1000? BUY THINGS. Or invest it, which lets companies BUY THINGS. Or put it in a savings account, which allows other people to borrow it for a cheaper rate, so that they can BUY THINGS.

What happens when people BUY MORE THINGS? The demand for goods/services increases, and in the long run firms hire more workers, thereby CREATING MORE JOBS.

CEOs don’t have to directly create jobs. By making money for their shareholders, they still boost the economy, leading to indirect job creation.

why is Econ 101 so hard to understand?

[rowrrbazzle]

It’s a tragedy. Poor Michelle Obama.

“I know we’re spending — I added it up for the first time — we spend between the two kids, on extracurriculars outside the classroom, we’re spending about $10,000 a year on piano and dance and sports supplements and so on and so forth…And summer programs. That’s the other huge cost. Barack is saying, ‘Whyyyyyy are we spending that?’ And I’m saying, ‘Do you know what summer camp costs?’”

[mswas]

@The Them

I don’t think the schadenfraude is misplaced at all.
xtisme, I don’t know your story, and can’t think of any reason to have anything in particular against you, but the cumulative effect of so many sniffy “they shouldn’t have borrowed money they couldn’t pay back” type comments floating around referring to those on the receiving end of the sub-prime mortgage crisis has had the effect on me of provoking severe gloating laughter at the assholes like poor mister $20m to $8m.

Didn’t this fuckhead, with all the resources in the world - money, education, information, connections - think to plan ahead? I’ll laugh even harder if he winds up on the street for real. Give him some much-needed perspective, it will. Not that that will ever happen; he’ll just be reduced to an “ordinary” house and a “normal” car, and flying coach.

As I understand it a lot of these rich people who are in dire straits also borrowed beyond their means. So it’s sort of the same thing writ large.

[Taber]

@dactylic hexameter

Let’s say you owned 100 shares of stock, at $10 a share. The share price goes to $20. You just made $1000. What do you think you are going to do, now that you just made $1000? BUY THINGS. Or invest it, which lets companies BUY THINGS. Or put it in a savings account, which allows other people to borrow it for a cheaper rate, so that they can BUY THINGS.

Of course, the buyer just lost $1000, which he would have been used to BUY THINGS anyway.

[Scumpup]

@dactylic hexameter

Slight hijack, but…

To everyone arguing that CEOs don’t create jobs but only work to raise share prices (which therefore must be a bad thing):

Let’s say you owned 100 shares of stock, at $10 a share. The share price goes to $20. You just made $1000. What do you think you are going to do, now that you just made $1000? BUY THINGS. Or invest it, which lets companies BUY THINGS. Or put it in a savings account, which allows other people to borrow it for a cheaper rate, so that they can BUY THINGS.

You only make the $1000 if you sell your stock. Otherwise, the increase in value is only a paper gain. As has been pointed out, the guy who bought the stock “lost” $1000 that he could just used to “buy stuff.” For somebody who wants to make sneering references to the rest of us not understanding economics 101, your own grasp seems shakey. Stock market trading doesn’t create wealth. Manufacturing and investing in upgrading the company creates wealth.

[Voyager]

@mswas

As I understand it a lot of these rich people who are in dire straits also borrowed beyond their means. So it’s sort of the same thing writ large.

True, but these guys are a bit better educated, can be assumed to understand financial concepts, and probably are skilled in reading and understanding complex contracts.

It’s bad if either a doctor or a high school dropout smoke, but you expect better of the doctor.

[Voyager]

@dactylic hexameter

Slight hijack, but…

To everyone arguing that CEOs don’t create jobs but only work to raise share prices (which therefore must be a bad thing):

Let’s say you owned 100 shares of stock, at $10 a share. The share price goes to $20. You just made $1000. What do you think you are going to do, now that you just made $1000? BUY THINGS. Or invest it, which lets companies BUY THINGS. Or put it in a savings account, which allows other people to borrow it for a cheaper rate, so that they can BUY THINGS.

What happens when people BUY MORE THINGS? The demand for goods/services increases, and in the long run firms hire more workers, thereby CREATING MORE JOBS.

CEOs don’t have to directly create jobs. By making money for their shareholders, they still boost the economy, leading to indirect job creation.

why is Econ 101 so hard to understand?

The big objection has been to CEOs getting massive salaries and bonuses for losing money for their shareholders. CEOs who consistently double their stock price don’t get a lot of flack.

But there is also a requirement to do better than the market. If every stock is doubling in price, Mr. CEO is not necessarily very competent, and is not creating stockholder value, since those reinvesting the money in other stocks are no better off.

Anyhow, the money spent is no doubt creating jobs in China, and the rise in stock price is not doubt the result of cutting jobs here.

[Measure_for_Measure]

@Scumpup

You only make the $1000 if you sell your stock. Otherwise, the increase in value is only a paper gain. As has been pointed out, the guy who bought the stock “lost” $1000 that he could just used to “buy stuff.” For somebody who wants to make sneering references to the rest of us not understanding economics 101, your own grasp seems shakey. Stock market trading doesn’t create wealth. Manufacturing and investing in upgrading the company creates wealth.

…which just goes to show you that Econ 101 actually isn’t especially intuitive.

Yes, there is indeed a difference between changes in asset prices (as represented by the stock market) and changes in productive capacity (which follows from purchases of plant and equipment or perhaps streamlining operations). Oddly enough, CEOs often get paid pretty while, regardless of their value added - empirically speaking, that is.

Better hit those books dactylic hexameter.