What would happen if all the rich people left America?

[Algher]

@Zeriel

As I said, ten years. If that. That’s all it would take.

If the minor leagues are so shitty, then why do AAA ballplayers get moved up all the time?

If the seconds-in-command and VPs of industry are so shitty, what the hell succession plan does ANY company have in the event their CEO quits or retires?

To use a fantasy sports analogy, I think the depth chart the country collectively is using is far, far deeper than you give it credit for.

To continue to use the baseball example - if there is so much depth, why is it that the pennant goes to the team’s with the biggest payroll? If there is so much depth, teams should be able to field with less money a completely competitive team.

But they very rarely do.

Now, if we somehow retired everyone with an income of over $250k (lets use that instead of them just leaving), what positions would be empty?

Almost every surgeon, and most physician specialties, would be gone.
Every CEO, every Board member, every senior executive in large companies.
Hollywood would lose its producers, directors and almost all named actors.
The NFL would be empty.
Most partners in law firms would be gone.
Senior faculty in business and law schools would be gone.
Many tech companies would lose the top ranks of founders and engineers if you include stock based compensation in your calculation of income.

So your Pareto level people would be gone, just leaving the next generation.

[Hentor_the_Barbarian]

@Sam_Stone

I was with you until you brought up the ‘decade of failure’, which I assume is your way of bringing this back around to Bush and his policies. At that point, you lost me because it has absolutely nothing to do with what we’re talking about.

I just thought it was funny that you switched from conditional tense to future tense, as if your prediction were guaranteed to come true, and boy Bosstone will certainly have to atone for his sinful class warfare when that definite outcome happens.

Of course, that kind of thinking fits more with Ayn Rand, who can have her characters never make a false move, than it does in reality, where we really ought to judge predictive models and prognosticators on how well they’ve been able to do in the past.

[Hentor_the_Barbarian]

@Algher

To continue to use the baseball example - if there is so much depth, why is it that the pennant goes to the team’s with the biggest payroll? If there is so much depth, teams should be able to field with less money a completely competitive team.

But they very rarely do.

Now, if we somehow retired everyone with an income of over $250k (lets use that instead of them just leaving), what positions would be empty?

Almost every surgeon, and most physician specialties, would be gone.

This is bullshit. I’ve already posted these average salaries already, and you’re just wrong!

[Bosstone]

@Hentor_the_Barbarian

I just thought it was funny that you switched from conditional tense to future tense, as if your prediction were guaranteed to come true, and boy Bosstone will certainly have to atone for his sinful class warfare when that definite outcome happens.

It rather was a very “You’ll be sorry when you’re first up against the wall when the revolution comes” sort of statement, wasn’t it?

[Sam_Stone]

@Zeriel

As I said, ten years. If that. That’s all it would take.

Assuming you’re right, how far does the economy fall in the ten years it takes to get the new top 1% up to speed?

If the minor leagues are so shitty, then why do AAA ballplayers get moved up all the time?

What percentage of them get moved up, and of those, what percentage of them stay in the big leagues and make a career out of it?

Of course some of them get moved up - that’s the whole point of having a farm team. But if all of them were capable of being moved into the big leagues, you wouldn’t need a farm team - you could just recruit players that you would have recruited for the farm team straight into the top league. How successful do you think that strategy would be?

If the seconds-in-command and VPs of industry are so shitty, what the hell succession plan does ANY company have in the event their CEO quits or retires?

You’re confusing me. Companies have succession plans precisely because it’s not easy to replace top people. If they were just interchangeable, you could just wait for someone to retire and then pick a successor at random from your next tier.

But in fact, the top CEOS often groom their replacements for years, teaching them how to do the job, imparting their wisdom, and selecting candidates with similar work ethics and talent. And even then, the loss of a top CEO can sometimes cripple a company. Succession plans are created because CEOS do leave - that’s just a fact of life - and the company has to make plans for that day to the best of their ability. That doesn’t mean the CEO is easily replaceable.

To use a fantasy sports analogy, I think the depth chart the country collectively is using is far, far deeper than you give it credit for.

The thinking here seems to be that there’s a finite number of top positions (like there is in a sports league), and there are plenty of people waiting to fill those positions equally well if they are emptied. But that’s not the case. There are many openings for top people out there that go unfilled. There are many companies hamstrung by poor management. There are absolutely a lot of companies in Silicon Valley that are hobbled by the fact that the best programmers are snatched up by the sexy companies, and the ones the second tier of companies have to hire are simply not as good.

In other words, the number of top positions out there is a function of how many top performers there are. The numbers are constrained by supply, rather than the numbers being fixed and the supply unlimited.

In general, there is always room for excellence. If a new Wayne Gretzky were born today, he could find his way into the NHL, and he wouldn’t be displacing the best player currently in the game - he’d be displacing one of the weaker ones. The fact that every NHL team isn’t full of Gretzkys would indicate that players at that level are actually in rather short supply. The fact that there are so many lemons in the business world would indicate that there’s actually a shortage of Jack Welches and people like Steve Jobs.

But of course, the fact that such people earn millions of dollars should be the evidence you need to understand that there is a shortage of them. People don’t just hand huge salaries to other people out of charity. They pay them what they have to pay to get their services, and if those services were not rare, the pay for them would not be high.

[Algher]

@Hentor_the_Barbarian

This is bullshit. I’ve already posted these average salaries already, and you’re just wrong!

You should try looking at more sources for your data - the numbers you had were way too low based on my experience, and I found some that were quite higher.

http://www.medscape.com/features/slideshow/compensation/2011

Medical specialty

[Sam_Stone]

@Hentor_the_Barbarian

I just thought it was funny that you switched from conditional tense to future tense, as if your prediction were guaranteed to come true, and boy Bosstone will certainly have to atone for his sinful class warfare when that definite outcome happens.

Of course, that kind of thinking fits more with Ayn Rand, who can have her characters never make a false move, than it does in reality, where we really ought to judge predictive models and prognosticators on how well they’ve been able to do in the past.

You know, sometimes I don’t think we even speak the same language. I have no idea where you’re getting all this from, or why Ayn Rand has entered the discussion. My sole argument was that the top 1% of the population provides a hell of a lot more than 1% of its productivity, and therefore you would lose a lot more than you would predict if you think that all these people are interchangeable and losing the top 1% would be no different than losing the middle 1% or the bottom 1%.

As for Bosstone getting a flavor of, “come the revolution, you’ll be first against the wall”, that’s just bizarre. No one’s issuing any threats here. It’s more like, 'I think you’ll miss them when they’re gone." And even that isn’t a threat - it’s a response to the question posed by the OP in this bloody thread.

[Hentor_the_Barbarian]

@Sam_Stone

… if you think that all these people are interchangeable and losing the top 1% would be no different than losing the middle 1% or the bottom 1%.

Nobody is arguing that everyone is interchangeable. You’re simply introducing strawmen here.

[Bosstone]

@Sam_Stone

You know, sometimes I don’t think we even speak the same language. I have no idea where you’re getting all this from, or why Ayn Rand has entered the discussion. My sole argument was that the top 1% of the population provides a hell of a lot more than 1% of its productivity, and therefore you would lose a lot more than you would predict if you think that all these people are interchangeable and losing the top 1% would be no different than losing the middle 1% or the bottom 1%.

Well, I don’t think there’s any arguing that, if only because there is so much wealth currently concentrated in the top 1%. The differences we have are based on whether or not their wealth is proportional to their contributions, whether concentrating so much wealth in the upper 1% is healthy, and whether or not those people are actually indispensable/irreplaceable (ie, would it destroy the country if we lost the top 1%). The first two aren’t really germane to the thread, so I’m happy to drop that line of argument.

As for Bosstone getting a flavor of, “come the revolution, you’ll be first against the wall”, that’s just bizarre. No one’s issuing any threats here. It’s more like, 'I think you’ll miss them when they’re gone." And even that isn’t a threat - it’s a response to the question posed by the OP in this bloody thread.

You’re right, maybe that wasn’t the best analogy. But it was sure as hell condescending, especially since right now reality tracks better with my POV than yours.

[Sam_Stone]

@Bosstone

Well, I don’t think there’s any arguing that, if only because there is so much wealth currently concentrated in the top 1%. The differences we have are based on whether or not their wealth is proportional to their contributions, whether concentrating so much wealth in the upper 1% is healthy, and whether or not those people are actually indispensable/irreplaceable (ie, would it destroy the country if we lost the top 1%). The first two aren’t really germane to the thread, so I’m happy to drop that line of argument.You’re right, maybe that wasn’t the best analogy. But it was sure as hell condescending, especially since right now reality tracks better with my POV than yours.

How so? Just what about reality as you see it indicates that the top 1% are dispensable? I think you’re reading a hell of a lot into current events based on your political inclinations.

Let’s assume that the rich don’t deserve all of their wealth. So maybe they aren’t responsble for 38% of America’s productivity. How much do you think they’re worth? 20%? 10%? Whatever that number is, that’s the hit to productivity America would undergo, even ignoring the exact dispensation of their wealth. I happen to think that it’s close to what their share of national income is right now (not wealth). By and large, I don’t think there are a lot of people out there drawing huge salaries who are not earning at least a significant fraction of those salaries.

[PigArcher]

@Sam_Stone

I realize that this question highlights a fundamental difference between left and right - the left generally believes that the rich are undeserving of what they have, that they got where they are because they are the lucky ones who floated to the top of the system, that people are all the same, that rich people have no special abilities that justify them earning much more than others, etc.

Since I’ve never met anyone on the left who believes this, I stopped reading at this point.

[Voyager]

@Hentor_the_Barbarian

Excellent point. The only additional thought I had had was on the specific point of the speed of bricklayers. Aren’t the older bricklayers going to be making more than the younger? Now, some element of speed of bricklaying is in the techniques, to be sure, so the older and higher salaried guy has the advantage there (presumably), but a good bit of it is also physical strength and stamina.

I suppose a larger point is that we probably have very, very few bricklayers making 250K. Although I’m starting to get the impression that conservatives would anticipate a good number of them. All the top scientists making 250K? Not by a long shot.

Joe the bricklayer probably thinks he’ll be making it soon.
There are certain jobs where turnover is built in, like waiting and fast food work. For all other jobs, any kind of turnover is painful. You’d be in bad or worse shape if an equal number of people making $100K a year vanish. I bet an older bricklayer is better at brick selection, conservation of mortar, and splitting bricks just right the first time than the younger one, while the younger one might be able to work longer.

[Damuri_Ajashi]

@Shodan

How would the federal government react to a drop in income tax revenues of around 40%? (cite). This does not include capital gains taxes.

Why would income tax revenues drop by 40%? Are you under the impression that securitizing mortgages or collecting rent is a rare talent? BTW I think income taxes include capital gains taxes.

Of course a lot depends on how they would “take their money with them”. Dumping all their stock holdings at once would probably crash the market unless the exchanges shut down. I doubt you could sell a lot of high-end houses at once - they would probably sit there unsold. There would be less impact on semi-regressive taxes like Social Security and Medicare, but the rich would not be available to tax to recover the Social Security funds that have been spent, so I am guessing Social Security would collapse or be radically cut back.

Why wouldn’t other people become rich? After the Revolution it was a matter of a year or two before other people became rich and took the place of the exiled Loyalists. Sure it wasn’t every single rich person that was expelled but a lot of them were.

I would say it probably would be rather dicey times for a decade or two, until and unless we develop some more geese to lay golden eggs for us.

You call them golden geese because you think they are the ones that create value, I call them wolves because they are the ones that capture value.

[Damuri_Ajashi]

@Shodan

As well as doctors, engineers, and Obama and his entire cabinet. Even for me, I don’t think that’s a fair trade.

Regards,
Shodan

I happen to think $250K is too low a threshhold but anyhoo:

doctors:People with Jobs as Physicians / Doctors Salary | PayScale

Architecture and engineering:http://www.bls.gov/oes/highlight_2010.htm

etc..

Like I said, I think 250K is too low a threshhold and I certainly think that there are some veryhighly compensated folks who aren’t simply capturing value but creating it. However there is no reason to believe that the disappearance of the rich would lead to people forgetting how to create wealth.

[Zeriel]

@Sam_Stone

In general, there is always room for excellence. If a new Wayne Gretzky were born today, he could find his way into the NHL, and he wouldn’t be displacing the best player currently in the game - he’d be displacing one of the weaker ones.

Right, but that weaker one that got displaced was, right up until that moment, NHL-caliber.

There’s not a huge dropoff in quality between the bottom guy in the major leagues and the top guy who didn’t quite make the cut, just an incremental one. And new superstars appear every few years.

Regarding the idea there’s a fixed number of slots at the top? That’s absolutely true, unless you’re talking about inventing new industries out of whole cloth. There are only so many products that can compete in a given market space, and the next Bill Gates might well be sitting down in a garage somewhere now waiting for Microsoft to stumble just a hair so he can push HIS new operating system up. Losing Bill Gates to the USS Galt’s Gulch is the opportunity he needs to jump his personal plan ahead a few years.

[Damuri_Ajashi]

@Shodan

Do you mean Buffett? We were discussing what would happen when Buffett and everyone else like him suddenly disappeared, along with all the taxes they pay as well as their assets. I suspect that will have a much greater impact than simply when he dies. Because it is happening all at once.

What’s he gonna do? Take a bunch of dairy queens with him?

At best, we have a serious medium-term problem.

That sounds like an unfounded opinion.

All the while trying to run a federal government that has taken a major hit to its revenues.
That’s a fair point, but keep in mind that this is a median. And it depends if we count only salaries, or gross income.

Why would revenues take a hit? Does the fact that the Walton family disappear mean that walmarts stop selling things?

[Bosstone]

@Sam_Stone

How so? Just what about reality as you see it indicates that the top 1% are dispensable? I think you’re reading a hell of a lot into current events based on your political inclinations.

Not quite accurate. What I see in reality is that concentrating wealth into a small percentage of the population is good only for the wealthy and bad for the stability of the country. Decentralizing wealth (I’m happy to call it redistributing if you want that rhetorical point) more so than we’re doing now (I’m not in favor of some bullshit idea like capping everyone at $50,000/yr, just smoothing the curve a little) would not be unduly harsh on the people who now hold the wealth and it would be vastly healthier for the country. I believe this tracks better with reality because the other way is hurting the hell out of us.

You came along and said that when the 1% disappear and the wheels of society grind to a halt, then I’d want to moderate my ideas on class warfare. (Which to me seems like calling a small push a violent attack, but I digress.) That led into the tangentially related conversation (though ironically more on topic than the conversation it was a tangent of) about just how indispensable that 1% is, which isn’t the belief that necessarily tracks with reality. I think I could keep a company going in an emergency, and I do think things would be confused but recover after a while, but in reality I have no clue just how things would shake out in general.

[Damuri_Ajashi]

@Lemur866

The other side of the equation is exactly the same as asking what would happen if the top 1% just dropped dead tomorrow. Note that this would be 3 million people. If we had a war or a plague or a disaster that killed 3 million people at random, it would be a horrible shock to the economy. But one that killed the top wage earners would be much much worse.

Good point. We would have to replace those 3 million folks with other folks but the function they served before the Galtian rapture would be quickly assumed by others.

[gonzomax]

Of course America is where they make their money and own the politicians who give them legislation to protect it from taxes. Why would they leave? Where could they go where they own everything?
If they left, somebody would take their place. They would do as good or better a job and make a lot less money.
Owners and execs die off and get replaced regularly and the company rarely misses a beat.
They love to sell to the little people how important and irreplaceable they are, but that is almost never true. Family owned companies often flounder if they don’t get new and better management.
In South America a lot of companies were closed by the management or owner slating they could not make money. The workers cleaned up and restarted the factories and made a lot of money .

[Damuri_Ajashi]

@Bryan_Ekers

Yeah, but enforcement issues will have to be worked out. President Obama (who earns $400,000/year) will be gone, leaving the issue to Vice-President Biden (who has to scrape by with a mere $230,700).

Except Biden would immediately become Presidnet and start earning 400K/year.