- This is totally counter to everything basic economics knows. Money like most things has a diminishing marginal utility. That is the basis for progressive taxation. Giving someone who makes $10 an hour an extra job or overtime could make a large difference in their lifestyle. A wealthy person has to make a huge increase in income to have any difference in their lifestyle. The marginal dollar is almost always a bigger deal to a poor person. I suspect that the correlation between working hard and being well off is backwards. People don’t work hard because they are rich, they are rich because they work hard. Empirical data back this up. Lookat the hours worked by people in different income brackets. People in the top brackets work more than twice as many hours per week as those in the bottom brackets.
- If you had read my link to the Krugman column in the previous post, you would have seen that this is not true. Private savings in this country has not gone up as income inequality has increased, it has gone down.
3.Meanwhile sales of things you consider out of the reach of middle class families have continued to go up. Attendance at MLB games is up 10,000 people per game in the MLB, 5,000 people per game in the NFL, 6,000 people per game in the NBA, even while all of these leagues have added new teams. Number of movie tickets sold per capita is currently the same as it was in 1986. The number of passenger miles traveled on airline flights has more than doubled in the past 30 years. Total number of new cars sold in the US per year went up by 4 million from 1982 to 2012. The only sectors in which prices have gone up relative to salaries are education and healthcare which are the two industries dominated by government.
It is harmful because, in places with high concentrations of rich people, those who are not-so-rich have a harder time making ends meet; finding affordable places to live and enjoying a relatively comfortable lifestyle that should be available to most people living in a developed nation in the 21st Century.
If I’m a consumer, having people around with unfathomable amounts of money raises the cost of living for me. The wider the gulf between my income (lower middle class) and the rich, the more painful it is for me to participate in an economy.
To take your subsequent analogy, one would not throw a Chinese peasant into a city in America, earning his/her Chinese peasant income and expect him/her to be able to survive. I am not suggesting that we are living in such an extreme level of income inequality, but we are somewhere on a spectrum; it is important for the poor and the wealthy to be able to participate comfortably in the same economy to buy goods (food, shelter, clothing, education, health care) that satisfy a communal standard of living.
I’m not talking about marginal utility. This isn’t about working longer hours, it’s about being motivated to move into the middle and upper class – upward mobility. When that seems impossible, productivity declines.
Give me a break… that just depends on how you define private savings. Are you actually denying that tons of money in the hands of the few has less chance of being spent than money in the hands of the many?
That is meaningless. If the attenders of all these events have changed from middle class to the small, privileged class, (who can now go to games and concerts a lot more often, now that those uneducated rubes can’t afford it, yay!) it is still bad for society.
Healthcare goes up astronomically because the whole insurance industry makes it a collusion scam. Insurance companies make more money when healthcare costs are high, not low, so we have completely removed capitalistic forces from the healthcare market when the majority of expenses are paid by insurance companies. IF those companies were truly competing with each other for the lowest premiums, we’d see better pricing in the market, but I have no doubt they collude to keep prices high. We need Teddy Roosevelt to come bust em up… unfortunately the ACA just makes the insurance companies stronger.
Education I do not know as much about, but I would bet prices have increased as demand for higher education increased. Do you think the govt is setting the tuition prices at these schools?
You’re right about the terminology; I can’t remember the last time I made that error.
Nehru and others of his governing circle were thoroughly frightened of allowing too much foreign economic penetration into their country, drawing on their experience with the British and Britain’s local satraps, who (among other things) dismantled Indian industries to prevent competition (Capitalism!) While in jail, Nehru did a lot of writing, including an analysis demonstrating that the parts of India that had been under British rule the longest were the poorest.
I’m not sure why Nehru’s fellow founder of the Non-Aligned Movement, Josip Broz Tito, never convinced (if he even tried) Nehru that the USSR wasn’t really as inspirational as it looked. Instead, devolving economic power to the workers themselves (workers’ councils, autogestion, etc.) was far more efficient. Yugoslavia, butchered in the Second World War, made a spectacular recovery. The neoliberal institutions didn’t like that one bit. Enter the IMF and NED…
In any case, in the US’s post-war boom era, among other times, weren’t tax rates much higher, without the ill effects neoliberals always trot out? Eisenhower (and Nixon) dismissed neoliberal ideas during their times in office.
Finally, when workers have the power, who is sending whom to the gulag? States do that. And why would we be equally poor? The track record of workers’ power is thoroughly inspiring, despite the ferocious, vicious response this provokes from centers of power and privilege.
No, it wouldn’t be OK, because my money goes for things like food and transportation and clothing, not high-yield investments and offshore bank accounts. But it’s a moot point anyway, because so many jobs that provided income for me and other middle class folks have already been exported overseas. And nobody even bothered to ask us how we feel about it. The TransPacific Partnership promises to be another orgy of not asking. But thanks for bringing up the image of oligarchs asking how any middle class person felt about what they are doing. I love a good laugh!
Ok, here’s a part you are clearly not getting: I don’t WANT to tax Warren Buffett enough to affect his lifestyle, or any of the one tenth of one percent, even the motherfucking asshole Hunt Brothers, may they die of lengthy and painful terminal illnesses. They can all live as luxurious a lifestyle as they like, because most objects and services designed for a single individual are negligible in cost compared to their wealth. I specifically DON’T want to tax them enough to affect their lifestyle.
I just want to tax them enough that their greed games don’t hurt the rest of us, as they do now. And when the Walton family has more wealth than the bottom 42 percent of the American public, while a large percentage of the people who work in Walmarts have to go on food stamps to survive, greed games ARE being played, and people ARE being hurt. Argue around it all you like, buddy, cause there is no way around it. But it’s amusing to see you try.
His and Gates’ utilities beyond their immediate needs for luxury, are abstract things, not worth considering next to the needs of people who are hungry, homeless and out of work. Those are fundamental needs. Here’s a name that economists ignore to their peril: Abraham Maslow.
Bullshit. Our tax subsidies in the form of food stamps subsidize cheap labor for Walmart and their oligarchy buddies. If Walmart and other big corporations take those kind of subsidies, they are in absolutely no position to complain about taxation.
None of this makes any sense at all to me. The middle class may have slightly more aggregate wealth than the One Percent, but it’s spread a lot thinner, over millions of people. Plus, the market that is the middle class is the real source of economic success for the country as a whole, which is why allowing middle class incomes to stagnate as badly as they have makes no sense economically.
The rich, meanwhile, are hiding their money offshore. Clearly, if we make them haul it back in, hundreds, perhaps thousands, of Swiss and Caribbean bankers will be rendered poorer. (Sobs disconslately.) What was I thinking? It certainly is not helping the American economy out there.
The rich and our corporations have been there and done that already. See above.
Well they are also stupid, collectively. Else they would not be going after the wealth of the American middle class with such gusto.
I’m not trying to punish the rich, I’m trying to level the playing field. I’m trying to create conditions, that in the long term, will make the stupid, gravy-sucking bastards EVEN RICHER. Also, the middle class and the poor, my primary objective, but if we can get things swinging for the middle class, the rich will thrive along with them.
That’s not the question. The question is, is there a problem in the first place?
There will always be people who are more motivated than others and who will be more successful than others. And the ones in second place will always be jealous of the ones in first place. Some of them will do something about it and move into first place. The rest will sit and bitch and whine about how “it ain’t fair that others have got more money than I do”.
Dude, pay attention. No one is advocating that it’s unfair that they, personally, are not part of the One Percent. We’re advocating for people being able to feed, clothe and shelter themselves. If the driving force was envy we’d be asking for yachts, mansions and personal jets for everyone. Your weird little fantasy is not at issue here.
Income Inequality is bad because it essentially means you are creating a society where you have an Elite Ruling Class of Mega Rich at the top, an extremely tiny Middle Class (handfuls of shop owners etc.) and multitudes of working poor. Many would find this unjust.
Te Conservative movement, however, has no problem with this and in fact recreating this type of society has been the aim of their policy since the seventies. Why? Because for all its faults, this type of Society is incredibly stable. A healthy and prosperous middle class gives people time to think and act and demand change. A society that has to work 13 hours a day just to keep them selves warm and feed dens’t have time for that.
The 1960s and the radicalization of the middle class terrified the Conservative movement and that was when they realized in order to create a Society that did not change, the Middle Class needed to go and every economic policy they have supported since was to this end.
The OP says as if it were fact that Middle Class incomes are rising steadily. This is untrue. Adjusted for inflation, they have not changed (or gone down) since 1980 while the wealthiest have grown by orders of magnitude.
This is mainly due to the Reagan Tax cuts. Taxes on the wealthiest were completely gutted (I will also note that Reagan, the Conservative Saint, had no problems at all raising the Social Security tax, a tax that is harsher on the poor). The Right will say this spurs investment. It does the exact opposite.
If a person knows the income he will make above, say $1 million, will be taxed at 70%, he may as well reinvest it into his business, or give it to charity or any number of things. When you cut that rate, he will just keep it and sock it away (as a percentage of Income, the wealthy save much more than any other bracket which is logical).
But that is a tangent, to answer the OP’s question: nearly everyone agrees some inequality is necessary but too much creates a society most people would not want to live in.
Right
You do realize that every single person who thinks Income Inequality is a problem knows this already. You NEED income inequality to drive the economy.
The question, the root question is: How much is too much?
Is there any level of income/wealth inequality that would bother you?
I didn’t know that income inequality was a new concern. Other than that, I’m not sure what your question is, 6Ate. You seem to understand the basic economics.
Is it just me, or does the Right seem to really miss having a ruling, nobility class?
What is there to miss? There is a ruling, nobility class in the US. Complete with dynasties. As in Bush dynasty, Gore dynasty, Kennedy dynasty, Cuomo dynasty, Clinton dynasty etc. etc. etc. See List of United States political families - Wikipedia
Unless you think that somehow being a politician is genetically predetermined, the fact that people like Chelsea Clinton, if they want it, are virtually guaranteed to be selected by their party and elected is proof that there is a ruling, nobility class. And “income inequality” has nothing to do with it.
It may not be, but the reason it is in the news is that the Democrats are going to make this an important part of the 2014 campaign, and Republicans are trying to react - partially by saying that taking away unemployment payment is good for the unemployed.
We can do a Laffer curve thing on this. I think we’d all agree that if everyone had exactly the same income, but fiat, the economy would tank because of lack of incentives. If one person had all the income the economy would tank because there would be no consumption (and he’d be busy burying the starved bodies.) So the optimum point is somewhere between.
As far as I can tell the right thinks the optimum point is just before those on the losing side rise up and put them up against the wall. (Or worse, vote them out of office.) But we could probably define something we want to optimize, some point where consumption is high enough for full employment and there is enough surplus capital to invest in improving productivity and increased production where needed.
We know we aren’t there now since high unemployment means reduced consumption and many companies can’t find productive uses for their profits, and thus sit on big piles of cash.
I don’t think anyone’s going to argue against the idea that people who make a million dollars deserve it. We’re not talking about the Bill Gates and Warren Buffetts. What we’re asking is what the Paris Hiltons and Kim Kardashians are contributing to society and why they have millions of dollars when other people don’t.
The Clinton dynasty? Are you saying Bill Clinton was elected President because of his powerful family background?
Come now . . . we shouldn’t start frothing at the mouth about Chelsea Clinton unless/until she actually, you know, decides to become a politician and run for office.
Also, I hardly think that a single offspring of a politician, or a small handful of extended family, or a husband and wife, count as “Dynasties.”
Hillary Clinton was. And Chelsea Clinton will be.
Why not? Do you think being an offspring of a politician (or a spouse) makes you more qualified to rule? 'Cuz if you don’t, there are an awful lot of electoral coincidences out there.
Those are pretty trivial questions. Paris Hilton and Kim Kardashian are not contributing much to society, and they have millions of dollars because they inherited them. Does that clear things up for you?