So what does it mean to “care” about the health of American society?
I care about the disparity of wealth as it pertains to upward mobility. An income gap is a bad thing when it’s the result of systemic biases, not when it’s the result of personal commitment.
Starting a business tends to require getting various loans and licenses. When those licenses are available equally there is the potential for upward mobility. When you have to shell out hundreds of dollars for bribes to dozens of local officials, you end up with systemic issues. If you have to be part of a the royal family to get a liquor license, you have systemic issues. The US still doesn’t have those problems.
As far as I can tell, the rich are getting richer because they are the ones taking risk and generating wealth. Two concepts that are unpopular on this message board at the moment. The poor are getting poorer because they are trying to avoid risk and are waiting to get paid by someone else.
Look at the phrase “job security.” What the hell is that? I hear people over and over again demanding job security. It can’t exist, because there is no security for the guy paying them. How do you expect to have a steady income punching out bits of plastic, if the factory owner doesn’t have a guaranteed sale?
One of the worst things France did to their economy was try to create job security. They put in systemic policies that made it harder to fire people. Sounds great in theory, sounds like an easy win for politicians running during a bad economy. But a few years later unemployment shot up because businesses couldn’t justify the risk of hiring someone they weren’t allowed to fire.
So what set out as a well meaning policy to “care” about the working class cycled around and made life worse. Protectionist policies have the same sorted history of trying to prop up a domestic industry only to make everyone’s life worse.
The problem with this line of thinking is that there isn’t a way to “help” the middle class. But it’s very nature the middle class is a **transitory **position on the way from being poor to being rich.
To have people in the middle class requires allowing poor people to get rich. It should seem obvious but it’s a point that is often overlooked. But how do you have a system that favours poor people getting rich? You either allow people to get richer, or you don’t. So a system that allows poor people to get richer will also allow rich people to get rich people to get richer.
With brings us to the other side of the problem, how do you combat the wealthy? What restrictions do you put on the wealthy to slow them down? But more importantly, how do you put restrictions on the wealth that don’t turn around and hurt the upper middle class that you claim to care about?
The US tax code puts all of these negatives into practice. The top income bracket of 35% is set on what I consider a very low income, I believe in around $250k. But that’s not actually “the rich.” That’s a family with two professional income earners. They are the ones that get hit hardest when income taxes go up on “the rich.” Meanwhile, the truly rich are able to “game” the system created to tax them and lower their effective tax rate.
Meanwhile, good natured individuals try to set up tax credits and favourable tax policies for the lowest income brackets. But the result is a huge barrier getting from the $20k to $30K, oddly enough precisely what would let poor people become middle class. There are so many social programs and tax credits for people making less than $26k that they are richer being poor. There is a segment of the population that devotes their efforts to staying in that zone of high social programs. They avoid getting married, earning overtime, or getting a pay raise because it will push them out of the lower end.
I more understandable visual reference is to think children’s sports: There are going to be naturally skilled players that excel and dominate. And there will be kids that suck. How do you alter the rules so that the weak kids get to score, while at the same time preventing the rich kids from scoring. But at the same time provide an environment that the bulk majority what to be involved in?
You guys are arguing over a snapshot in time. The income disparity is caused by financial policies that are still in place. Since Reagan, the position of the poor and the middle class has degenerated. It is bad on a global sense. But it is in the process of getting worse and worse. Trickle up is live and well right now.
[QUOTE=gonzomax]
Since Reagan, the position of the poor and the middle class has degenerated.
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Do you have a cite to back this incredible statement up with? Not showing a widening of the gap between the super rich and the poor, mind, but showing that over that period of time, in adjusted dollars, that the poor and middle class make actually or effectively less than they made before that period? Because I’m calling bullshit on this one and want to see you actually back up one of your inane statements with some facts.
I don’t think this is the expectation of most people in this thread or, for that matter, of most people in the middle class. Most of the middle class people I am familiar with, including myself, are not looking to leverage their higher salaries as a way to join the wealthy/investing class, but looking ultimately to get promoted to the same kind of “job” work (as opposed to “investing/entrepreneurship” work) and get paid incrementally more money for it all their life.
That is, the kind of middle class that is the high end of the working class, rather than the kind you seem to be describing, which would be more like junior/beginning members of the wealthy/investor/entrepreneur class. I’m not saying these latter don’t exist, my father’s one of 'em, but they’re not what most people think of.
http://www.chrismartenson.com/forum/wealth-gap-and-collapse-us/24520 The policies and the belief system had to be put in place. They do not work the next day. It takes time to pickpocket millions of people a little at a time. Trickle up does not work and fundamentally changes what kind of a country we are.
[QUOTE=Zeriel]
If gonzo had cited “since the Clinton era”, he’d essentially be right.
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If he had also put in ‘has been pretty flat since the Clinton era, with an over all slight negative change due to several wars, 9/11 and the dot com and housing bubble busts’ then I’d agree…it has been relatively flat during that period. But that’s not what he said…he said that since Reagan’s presidency that the poor and middle class have degenerated (presumably this means that their income and purchasing power over that time frame has decreased)…which is incorrect.
That’s true…there have been dips in the past due to large scale events, and we are in the midst of one of those large downturns right now due to the housing bust and the other downward effects on the economy. The overall trend, however, has been up, and there is nothing that indicates that this overall trend will stop now.
I wonder to what extent the growth in household income prior to 1996 was a result of more and more mothers getting into the workplace? This would have had a dramatic upward pressure on HOUSEHOLD income even if INDIVIDUAL wages were falling or stagnant. Perhaps INDIVIDUAL income levels is a better demarcator of the economic status of workers than households.
The whole point of the thread, mind you, is that the current downturn (when coupled with the increasing GINI coefficient) is NOT a temporary situation. Not saying that I agree or disagree, but I think you’re begging the question by assuming this is a temporary glitch and nothing indicates otherwise.
I looked for such a chart, and couldn’t find one with sufficient resolution to make any kind of coherent statement (that is, all I can find are either IRS AGI charts (which are not what we’re talking about) and census once-a-decade charts).
[QUOTE=Zeriel]
The whole point of the thread, mind you, is that the current downturn (when coupled with the increasing GINI coefficient) is NOT a temporary situation. Not saying that I agree or disagree, but I think you’re begging the question by assuming this is a temporary glitch and nothing indicates otherwise.
[/QUOTE]
Sure, but even a cursory look at the graph you linked too shows that such downturns are fairly common (and if you posted further back in time you’d see more and more radical such downturns followed by upward trends). What are the indications that this time it’s special or different than all the other times we’ve had ups and downs in income?
If only 1 out of 100 people generate wealth, how much wealth will they generate if the other 99 people disappear? If he does answer, which he won’t, here’s what he will say: Bill Gates would have created MS-DOS and he would be fabulously wealthy, all by himself, with no one to sell his operating system to. If msmith isn’t saying that then he isn’t even coming close to addressing the consequences of his own argument.
I, for one, would like to know of any economist who says wealth is only generated by 1 in 100 people. I bet that would even make Ludwig Von Mises shake his head in shame. I can understand why someone who wrote such a comment would want that monkey off their back, and quickly.
If you have people working for you then I own controlling stock in the SDMB.
Explain to me something - why would any working class person be interested in listening to you at all, if you think they don’t generate wealth and are little more than crop-eating locusts?
I want you on MSNBC, Fox and CNN. We’ll put you right there next to Paul Ryan. You’ll do more to recruit anti-globalists than I could ever dream of doing.
[QUOTE=Le Jacquelope]
If only 1 out of 100 people generate wealth, how much wealth will they generate if the other 99 people disappear? If he does answer, which he won’t, here’s what he will say: Bill Gates would have created MS-DOS and he would be fabulously wealthy, all by himself, with no one to sell his operating system to. If msmith isn’t saying that then he isn’t even coming close to addressing the consequences of his own argument.
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Probably because you are misreading what he’s saying, would be my guess. I doubt msmith said that Bill Gates could have built Microsoft all by himself, merely that if Bill Gates hadn’t built Microsoft then all those 10’s of thousands of people who work or worked for Microsoft wouldn’t have had jobs working for Microsoft, and all the wealth generated by Microsoft wouldn’t have been. Someone else might have created another company LIKE Microsoft, and 10’s of thousands of workers might have potentially worked there instead, and the wealth generated by this alternative Microsoft might have been just as high…but without that other guy there still wouldn’t have been a company for those workers to work at. Companies don’t just spontaneously come into existence, ready to provide employment…someone has to actually do the donkey work of building them, finding the markets, and building the business. Without that someone there is no company for all those workers to work at. Without the workers there is no one to do the work. They sort of need each other. The difference, though, is that while a lot of people could work at Microsoft, there are a limited number of people who could actually BUILD such a company up from scratch.
Of course, you won’t see any of this since I’m on ignore, and even if msmith explains all this to you I doubt you will bother to try and grasp it, so it’s probably a waste.
Good question. There have been some discussions earlier in the thread, mostly relating to the Gini coefficient changes being different now.
I’d be interested to see the same graph further back in history too–answering the question of “what was average income doing when the Gini coefficient was perceived higher in history, such as in the Gilded Age” would go a long way here.
Here is a nice article including charts for XT showing how the gap has been instituted. The wealthy and corporate taxes keep dropping. Before Reagan corporations were over 30 percent of the taxes collected. It is now under 6 1/2. The wealthy get their taxes cut and have loopholes to avoid more.
So the cost of the government falls more and more ion those with less means.
Yeah? Well if you have controlling stock in the SDMB, then I am going to short the stock. And after it falls, I will be the one owning a controlling stake.
You and Cecil better start learning Mandarin.:eek:
You are 100% wrong on the above statement. The reality is that you and every other middle class worker a saving for the eventual day in which you can stop working and live off your investments.
Now, who else lives off their investments, could it be
–wait for it–
the wealthy/investor class??? Our concept of retirement is to save enough to stop working. A point at which they will own capital in the form of real estate, and have acquired millions in wealth.
And just because most people achieve middle class and are content to stay there doesn’t change the reality of what I wrote. You’ll notice that it’s a choice, and not the government putting a cap on income.
We’re still left with the balance of how to allow people to get richer, but then some how put the breaks on it so that *other people * don’t feel left out. And we’re also left with the problem of how to stop rich people from getting richer without hurting the groups we pretend to care about.
[QUOTE=gonzomax]
Here is a nice article including charts for XT showing how the gap has been instituted. The wealthy and corporate taxes keep dropping. Before Reagan corporations were over 30 percent of the taxes collected. It is now under 6 1/2. The wealthy get their taxes cut and have loopholes to avoid more.
[/QUOTE]
Thanks for the cite. Did you notice that the first chart in your cite contradicts your assertion? What are your feelings on that assertion now that you’ve provided data that contradicts it??
