Another attempt to help the right understand the change in wealth distribution

[Craig234]

The left says that concentration of wealth is at hugely problematic levels. Largest in the world among western democracies, mentions even Alan Greenspan is worried, and so on.

The right doesn't listen - they assume this is the left that in their misinformed opinion always wants to flatten the incomes to everyone having the same wealth, and ignores it.

So, here's a try to help them understand the situation a little better.

Article

From 1950 to 1970, for example, for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162, according to the Times analysis. From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000.

That's a *huge* change. It's concentrating wealth and power in the hands of very few like not since the height of the robber baron era and is on track to get much worse.

Now the right should ask themselves whether there can be too much concentration of wealth. Since that would give a very few people all of the ownership of wealth generation, all of the media, and huge power over the political system that requires money for candidates - money trumps democracy usually - and the 'masses' are forced to ever more fight over the scraps, just as in 1900 the average income was $10,000 adjusted for inflation before the concentration of wealth was shrunk and similar policies were enacted.

Yes, concentration of wealth can be too high. 'Incentives' for the wealthy have a point of diminishing and even negative return.

In terms of asking where that point is, right-wingers can next ask, with the $162 figure 1950-1970, was the US economy weak, unable to produce from underpaying the rich?

No, it wasn't; it was a boom economy overall, clearly incenting the rich enough.

So, now has their increase in wealth been used? We now since Reagan abuse the social security system by a regressive surplus tax of 50% of the usual payment, all of which is put into government spending that largely benefits the wealthy from these funds that mostly come from average Americans. They've run up the debt for yet more government spending benefitting them, paid for by the next generation of Americans. They're bankrupting the nation to squeeze the last bits of wealth out of fellow Americans.

And look at a couple of statistics:

- From 1977 to 1998, the top 5% of Americans went from owning 50% of the nation's wealth to owning 74% - that before the Bush policies helped them yet more.

That's a radical redistribution of wealth to the top, concentrated in the top sliver of that top 5%.

- Wages for 80% of Americans at the bottom are flat or down since 1981 after inflation.

The US has had strong productivity increases, and every penny of them after inflation has gone to the top.

It's not about jealousy. That's an argument from the wealthy's minions to try to get the average American to let the rich get away with this.

?The major issues that I see the United States has during this affluent period is the question of distribution of income. No society succeeds unless virtually all of its participants believe that it?s fair and gives people opportunities.? ? Alan Greenspan, Jan. 26, 2000, to Senate Banking committee (note that this was said while we still had the Clinton budget surplus)

"The income gap between the rich and the rest of the U.S. population has become so wide and is growing so fast that it might eventually threaten the stability of democratic capitalism itself."
Alan Greenspan, 2005

 

[StageLeft]

I'm inately against socialism as a whole and letting the free market do mostly what it will, but when rich get super ridiculously rich they are playing within artificial rules, as all of us are, so I can appreciate it may be beneficial to change some of them. I can't speculate as to what the figure would be, but certainly if it became increasingly harder to get rich once a person's personal wealth was at, say, $500 M, that may not be a bad thing necessarily. But then, what can really be done. We can complain, but they can go elsewhere and get super rich elsewhere.

I actually have no problem with somebody being so rich they make more in a minute than I do in a year but I do have a problem if they political system is so substantially at the behest of an elite few that the rest of us have little say and I think there is a tangible evidence to support such a worry. Sometimes it seems like politics in this country is a big joke and a game. People ostensibly have the power to do things but ultimately and practically speaking do not. We all complain about the same things over and over, like the increasing breadth of government and corruption and nothing gets done. It can be hard to stay optimistic. People still believe in the political system but often their faith flies in the face of a conflicting reality.

 

[borosp1]

Jim Webb disscused the issue of rober barons and too much concentration of wealth in the Democratic response to President Bush's State of the Union address:

http://www.youtube.com/watch?v=9Ht8sS91wVo

This was great speech by Webb.. Especially his points on the economy and robber barons .

Read the entire speech here:
http://www.huffingtonpost.com/2007/01/23/dems-respondjim-webb-_n_39418.html

Some quotes from Webb on the economy:
"When I graduated from college the average corporate CEO made 20X the average worker did. Today the average CEO makes 400X the average workers salary. In other words, it takes the average worker more than a year to make the money that his or her boss makes in one day. "

"Wages and salaries for our workers are at all-time lows as a percentage of national wealth, even though the productivity of American workers is the highest in the world. "

 

[Rainsford]

Originally posted by: Skoorb
I'm inately against socialism as a whole and letting the free market do mostly what it will, but when rich get super ridiculously rich they are playing within artificial rules, as all of us are, so I can appreciate it may be beneficial to change some of them. I can't speculate as to what the figure would be, but certainly if it became increasingly harder to get rich once a person's personal wealth was at, say, $500 M, that may not be a bad thing necessarily. But then, what can really be done. We can complain, but they can go elsewhere and get super rich elsewhere.

I actually have no problem with somebody being so rich they make more in a minute than I do in a year but I do have a problem if they political system is so substantially at the behest of an elite few that the rest of us have little say and I think there is a tangible evidence to support such a worry. Sometimes it seems like politics in this country is a big joke and a game. People ostensibly have the power to do things but ultimately and practically speaking do not. We all complain about the same things over and over, like the increasing breadth of government and corruption and nothing gets done. It can be hard to stay optimistic. People still believe in the political system but often their faith flies in the face of a conflicting reality.

See, but that's exactly the problem. Economists live in this fantasy world where "the free market" is such a vast and powerful thing that no matter how rich or powerful an individual or corporation may be, they can't "game" the market and thus must play by the same free market rules as the rest of us. But in the real world, the super-rich have an increasing ability to further enhance their wealth OUTSIDE of the free market. They play with the market and damage the market just as bad as socialism, only without the altruistic (if unrealistic) goal of making sure everyone is well off...their only goal is to make sure THEY are well off. If they did that through skill and intelligence, that's great, but after a certain point that's NOT how they do it. As much as we might admire the free market, there is NOTHING free market about using your power and influence to change the whole system to individually benefit you.

 

[cwjerome]

Originally posted by: Rainsford

Originally posted by: Skoorb
I'm inately against socialism as a whole and letting the free market do mostly what it will, but when rich get super ridiculously rich they are playing within artificial rules, as all of us are, so I can appreciate it may be beneficial to change some of them. I can't speculate as to what the figure would be, but certainly if it became increasingly harder to get rich once a person's personal wealth was at, say, $500 M, that may not be a bad thing necessarily. But then, what can really be done. We can complain, but they can go elsewhere and get super rich elsewhere.

I actually have no problem with somebody being so rich they make more in a minute than I do in a year but I do have a problem if they political system is so substantially at the behest of an elite few that the rest of us have little say and I think there is a tangible evidence to support such a worry. Sometimes it seems like politics in this country is a big joke and a game. People ostensibly have the power to do things but ultimately and practically speaking do not. We all complain about the same things over and over, like the increasing breadth of government and corruption and nothing gets done. It can be hard to stay optimistic. People still believe in the political system but often their faith flies in the face of a conflicting reality.

See, but that's exactly the problem. Economists live in this fantasy world where "the free market" is such a vast and powerful thing that no matter how rich or powerful an individual or corporation may be, they can't "game" the market and thus must play by the same free market rules as the rest of us. But in the real world, the super-rich have an increasing ability to further enhance their wealth OUTSIDE of the free market. They play with the market and damage the market just as bad as socialism, only without the altruistic (if unrealistic) goal of making sure everyone is well off...their only goal is to make sure THEY are well off. If they did that through skill and intelligence, that's great, but after a certain point that's NOT how they do it. As much as we might admire the free market, there is NOTHING free market about using your power and influence to change the whole system to individually benefit you.

The only reason -the only way- private business can "change the whole system" (exaggeration ignored) of the free market is through government manipulation.

For every tax, fee, regulation, and law government makes for business, there's an equivalent increase in the cozy relationship between the two and an increase in "unfair" business practices. It's a leftwing monster, and the prescription is just more of the same... a nice revolving doorway towards a complete socialistic economy.

 

[sandorski]

Originally posted by: cwjerome

Originally posted by: Rainsford

Originally posted by: Skoorb
I'm inately against socialism as a whole and letting the free market do mostly what it will, but when rich get super ridiculously rich they are playing within artificial rules, as all of us are, so I can appreciate it may be beneficial to change some of them. I can't speculate as to what the figure would be, but certainly if it became increasingly harder to get rich once a person's personal wealth was at, say, $500 M, that may not be a bad thing necessarily. But then, what can really be done. We can complain, but they can go elsewhere and get super rich elsewhere.

I actually have no problem with somebody being so rich they make more in a minute than I do in a year but I do have a problem if they political system is so substantially at the behest of an elite few that the rest of us have little say and I think there is a tangible evidence to support such a worry. Sometimes it seems like politics in this country is a big joke and a game. People ostensibly have the power to do things but ultimately and practically speaking do not. We all complain about the same things over and over, like the increasing breadth of government and corruption and nothing gets done. It can be hard to stay optimistic. People still believe in the political system but often their faith flies in the face of a conflicting reality.

See, but that's exactly the problem. Economists live in this fantasy world where "the free market" is such a vast and powerful thing that no matter how rich or powerful an individual or corporation may be, they can't "game" the market and thus must play by the same free market rules as the rest of us. But in the real world, the super-rich have an increasing ability to further enhance their wealth OUTSIDE of the free market. They play with the market and damage the market just as bad as socialism, only without the altruistic (if unrealistic) goal of making sure everyone is well off...their only goal is to make sure THEY are well off. If they did that through skill and intelligence, that's great, but after a certain point that's NOT how they do it. As much as we might admire the free market, there is NOTHING free market about using your power and influence to change the whole system to individually benefit you.

The only reason -the only way- private business can "change the whole system" (exaggeration ignored) of the free market is through government manipulation.

For every tax, fee, regulation, and law government makes for business, there's an equivalent increase in the cozy relationship between the two and an increase in "unfair" business practices. It's a leftwing monster, and the prescription is just more of the same... a nice revolving doorway towards a complete socialistic economy.

Untrue. There are many ways to change the "Market" without Government involvement. Government is not the enemy.

 

[Rainsford]

Originally posted by: cwjerome

Originally posted by: Rainsford

Originally posted by: Skoorb
I'm inately against socialism as a whole and letting the free market do mostly what it will, but when rich get super ridiculously rich they are playing within artificial rules, as all of us are, so I can appreciate it may be beneficial to change some of them. I can't speculate as to what the figure would be, but certainly if it became increasingly harder to get rich once a person's personal wealth was at, say, $500 M, that may not be a bad thing necessarily. But then, what can really be done. We can complain, but they can go elsewhere and get super rich elsewhere.

I actually have no problem with somebody being so rich they make more in a minute than I do in a year but I do have a problem if they political system is so substantially at the behest of an elite few that the rest of us have little say and I think there is a tangible evidence to support such a worry. Sometimes it seems like politics in this country is a big joke and a game. People ostensibly have the power to do things but ultimately and practically speaking do not. We all complain about the same things over and over, like the increasing breadth of government and corruption and nothing gets done. It can be hard to stay optimistic. People still believe in the political system but often their faith flies in the face of a conflicting reality.

See, but that's exactly the problem. Economists live in this fantasy world where "the free market" is such a vast and powerful thing that no matter how rich or powerful an individual or corporation may be, they can't "game" the market and thus must play by the same free market rules as the rest of us. But in the real world, the super-rich have an increasing ability to further enhance their wealth OUTSIDE of the free market. They play with the market and damage the market just as bad as socialism, only without the altruistic (if unrealistic) goal of making sure everyone is well off...their only goal is to make sure THEY are well off. If they did that through skill and intelligence, that's great, but after a certain point that's NOT how they do it. As much as we might admire the free market, there is NOTHING free market about using your power and influence to change the whole system to individually benefit you.

The only reason -the only way- private business can "change the whole system" (exaggeration ignored) of the free market is through government manipulation.

For every tax, fee, regulation, and law government makes for business, there's an equivalent increase in the cozy relationship between the two and an increase in "unfair" business practices. It's a leftwing monster, and the prescription is just more of the same... a nice revolving doorway towards a complete socialistic economy.

You know, for a "leftwing monster", the right-wing seems awfully eager to keep it around...

Still, think harder. The free market is not magic, prices and value are determined by various factors. Control enough of those factors, and you can artificially manipulate the market in ways that are decidedly unfree. Think Wal-Mart operating new stores at a loss to drive smaller retailers totally out of business. Or Microsoft being able to keep selling truly spectacular crap because they control enough of the market to lock people into their products. It's out there, and more often than not the best way to preserve a real free market is for the government to step in and do a job that would be totally unnecessary in a perfect free market, but is all too necessary in what we've got now.

 

[nageov3t]

the solution is obvious... we need to pass more tax cuts for the rich.

 

[HombrePequeno]

Well I can tell you why the lowest quintile isn't making as much as they did in the 1970s. It's because we have moved from a manufacturing economy to a more service oriented economy. With our global economy our unskilled labor can't compete with other countries' labor that can do the exact same job for a third of the price. That's not because the rich are stealing their wealth, it's just because the labor pool is much larger for that area so there is going to be a downward pressure on wages.

Just because there is a higher concentration of wealth in the top 5% does not mean everyone else is worse off. The economy is not a zero-sum game. The vast majority of people are better off now than they were 30 years ago. You might point to Europe having better income equality than the US but if you look at the poorest 20% of the population in both areas they are pretty much the same.

I'm just not sure what your explanation is for this increased concentration of wealth into the top 5%. And how should we fix it? Should we just tax the rich more heavily? I think a better idea might be to just simplify our tax system so there aren't so many loopholes.

 

[Fern]

I'd say that this issue can be seen as stinging critism of government. How it's failed to "fix" this problem, rather made it worse.

Of course, for many the ironic answer will be to suggest even more government.......

Somebody wanna hunt up stats on this increase in the wealth of polititions during this period? Make it Dems please, we already know the Repubs are guilty.

Fern

 

[Gonad the Barbarian]

Just wanted to pop in to throw in my 2 cents and a couple of links.

The 2 cents:

Those numbers in the article are absolutely obscene. And if they are indeed accurate, they aren't evidence that free markets don't work, they are evidence that our market is far from free.

The two links:

http://www.transparency.org/policy_research/surveys_indices/cpi/2006

http://www.heritage.org/research/features/index/country.cfm?id=Unitedstates

An additional rambling:

I think the rankings from the Heritage.org are a bit misleading. They don't seem to weight the categories they average for the final score, and I think the categories the US scored lowest in are the ones that most inhibit a free market (with the possible exception of poor property rights).

 

[Jaskalas]

Topic Title: Another attempt to help the right understand the change in wealth distribution

I heard Karl Marx wrote an excellent book on this. The ideals therein are the eventuality on the road we?re trudging by your advocacy.

Stalin showed you how it ends, yet you complain about Patriot Acts while wanting the centralized power that it came from. I do not want either, find another way else I cannot a support you.

 

[ProfJohn]

Originally posted by: Craig234
- From 1977 to 1998, the top 5% of Americans went from owning 50% of the nation's wealth to owning 74% - that before the Bush policies helped them yet more.

umm during that 22 year period weren't Democrats in the White House for 10 of those years and in charge of congress for 18 of those years?

How can you call this a Republican problem when Democrats were in charge for almost half that perioud?

BTW: Craig do you know what stat they are using to determine 'wealth' and where can I find the raw data for myself?

 

[ProfJohn]

Originally posted by: Craig234
Article

From 1950 to 1970, for example, for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162, according to the Times analysis. From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000.

Sorry Craig, but your article is full of typical talking point type stuff that tell the story without any perspective.
For example

President Bush said during the third election debate last October that most of the tax cuts went to low- and middle-income Americans. In fact, most - 53 percent - will go to people with incomes in the top 10 percent over the first 15 years of the cuts, which began in 2001 and would have to be reauthorized in 2010. And more than 15 percent will go just to the top 0.1 percent, those 145,000 taxpayers.

If you are looking at the dollar value of the tax cut then of course the rich are going to get the biggest pie. They make and pay the most.
But if you look at percentage of income paid in taxes you will find that the poor are getting the biggest benefit. I don?t have time to search for the figures, but if you find them for yourself you will see that since the Bush tax cuts went into effect the threshold at which people don?t pay ANY taxes has gone up quite a bit. So someone who was paying $500 a year in taxes in 2000 is not paying any taxes now.

Go find the figures and you will also see that the ?rich? are paying a larger share of all taxes than they did under Clinton. And yet this is passed off as being ?unfair? because they got a larger tax cut in monetary terms? (Maybe we should repeal all of Bush?s income tax changes and watch them complain when the ?poor? have to start paying taxes again.)

EDIT: Here are some rough figures for you from the IRS. In 1992 the bottom 50% of paid 5% of all income taxes, in 2004 the bottom 50% only paid 3.3%.
The average tax rate paid by the bottom 50%: 1992 4.3% 2004 only 2.9%. That is a 25% drop in their tax rate. Contrast that to the average rate paid by ALL tax payers: 1992 12.9% 2004 12.1%. So all tax payers got about a 7% cut in their tax rates, but the bottom 50% got a 25% drop in their rates.

 

[HombrePequeno]

Originally posted by: ProfJohn

Originally posted by: Craig234
Article

From 1950 to 1970, for example, for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162, according to the Times analysis. From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000.

Sorry Craig, but your article is full of typical talking point type stuff that tell the story without any perspective.
For example

President Bush said during the third election debate last October that most of the tax cuts went to low- and middle-income Americans. In fact, most - 53 percent - will go to people with incomes in the top 10 percent over the first 15 years of the cuts, which began in 2001 and would have to be reauthorized in 2010. And more than 15 percent will go just to the top 0.1 percent, those 145,000 taxpayers.

If you are looking at the dollar value of the tax cut then of course the rich are going to get the biggest pie. They make and pay the most.
But if you look at percentage of income paid in taxes you will find that the poor are getting the biggest benefit. I don?t have time to search for the figures, but if you find them for yourself you will see that since the Bush tax cuts went into effect the threshold at which people don?t pay ANY taxes has gone up quite a bit. So someone who was paying $500 a year in taxes in 2000 is not paying any taxes now.

Go find the figures and you will also see that the ?rich? are paying a larger share of all taxes than they did under Clinton. And yet this is passed off as being ?unfair? because they got a larger tax cut in monetary terms? (Maybe we should repeal all of Bush?s income tax changes and watch them complain when the ?poor? have to start paying taxes again.)

EDIT: Here are some rough figures for you from the IRS. In 1992 the bottom 50% of paid 5% of all income taxes, in 2004 the bottom 50% only paid 3.3%.
The average tax rate paid by the bottom 50%: 1992 4.3% 2004 only 2.9%. That is a 25% drop in their tax rate. Contrast that to the average rate paid by ALL tax payers: 1992 12.9% 2004 12.1%. So all tax payers got about a 7% cut in their tax rates, but the bottom 50% got a 25% drop in their rates.

Those numbers mean as little as Craig's numbers really. Of course the rich paid more, they've made much more since 1992. For the average tax rate, there is the possibility that the poorest 20% made less money in real terms in 2004 than they did in 1994. I'm not 100% sure if that's the case (my current computer doesn't have the numbers readily available) but it is always a possibility.

 

[ProfJohn]

Originally posted by: HombrePequeno
Those numbers mean as little as Craig's numbers really. Of course the rich paid more, they've made much more since 1992. For the average tax rate, there is the possibility that the poorest 20% made less money in real terms in 2004 than they did in 1994. I'm not 100% sure if that's the case (my current computer doesn't have the numbers readily available) but it is always a possibility.

I am almost 100% sure that is not the case.
You can findGo here, it is an excel sheet from the IRA
There you can see the income rates for the bottom 50% and you will see they are higher now than in 1992. Although they were lower in 2004 than in 2000. There was a huge income spike in 2000 due to the dot com mania, and then the following year there was a huge drop off and we are just starting to get back to the 2000 income levels.

 

[ProfJohn]

Craig, please explain how we correct this situation?
The rich make to much, the poor make to little, how do you fix it?

 

[imported_Shivetya]

Originally posted by: Craig234It's not about jealousy. That's an argument from the wealthy's minions to try to get the average American to let the rich get away with this.

If not jealousy its about those who bust their ass versus those who sit on it.


The day we start punishing people for getting and being rich is the day America as the founding fathers created ends.

 

[Gonad the Barbarian]

Originally posted by: Shivetya

Originally posted by: Craig234It's not about jealousy. That's an argument from the wealthy's minions to try to get the average American to let the rich get away with this.

If not jealousy its about those who bust their ass versus those who sit on it.


The day we start punishing people for getting and being rich is the day America as the founding fathers created ends.

We are doing that now with our current tax system to everyone except those at the very top. Just look at capital gains taxes vs. earned income taxes. The article even touches on another point with the alternative minimum tax. The system is stacked against people getting rich if they aren't already rich.

 

[sandorski]

Originally posted by: Shivetya

Originally posted by: Craig234It's not about jealousy. That's an argument from the wealthy's minions to try to get the average American to let the rich get away with this.

If not jealousy its about those who bust their ass versus those who sit on it.


The day we start punishing people for getting and being rich is the day America as the founding fathers created ends.

How about we make Wages = degree of Ass Bustedness of a Job?

Do you think Bill Gates would still be Wealthy? Would the Drive Thru order taker still be Minimum Wage?

 

[palehorse]

blah blah blah please give more of your money to those who have not earned it blah blah blah.

 

[dmcowen674]

Originally posted by: Craig234

That's a *huge* change.

It's concentrating wealth and power in the hands of very few like not since the height of the robber baron era and is on track to get much worse.

Now the right should ask themselves whether there can be too much concentration of wealth.


It's not about jealousy. That's an argument from the wealthy's minions to try to get the average American to let the rich get away with this.

?The major issues that I see the United States has during this affluent period is the question of distribution of income. No society succeeds unless virtually all of its participants believe that it?s fair and gives people opportunities.? ? Alan Greenspan, Jan. 26, 2000, to Senate Banking committee (note that this was said while we still had the Clinton budget surplus)

"The income gap between the rich and the rest of the U.S. population has become so wide and is growing so fast that it might eventually threaten the stability of democratic capitalism itself."
Alan Greenspan, 2005

That's OK, let the radical righties continue destroying the country hording money and power.

History always repeats itself and they will be dealt with when the time is right.

That time will be when enough people are negatively affected to band together to fight the greedy bastages.

 

[piasabird]

So basically you want to be a communist?

Without competition there is no innovation!

 

[blackangst1]

Originally posted by: dmcowen674

Originally posted by: Craig234

That's a *huge* change.

It's concentrating wealth and power in the hands of very few like not since the height of the robber baron era and is on track to get much worse.

Now the right should ask themselves whether there can be too much concentration of wealth.


It's not about jealousy. That's an argument from the wealthy's minions to try to get the average American to let the rich get away with this.

?The major issues that I see the United States has during this affluent period is the question of distribution of income. No society succeeds unless virtually all of its participants believe that it?s fair and gives people opportunities.? ? Alan Greenspan, Jan. 26, 2000, to Senate Banking committee (note that this was said while we still had the Clinton budget surplus)

"The income gap between the rich and the rest of the U.S. population has become so wide and is growing so fast that it might eventually threaten the stability of democratic capitalism itself."
Alan Greenspan, 2005

That's OK, let the radical righties continue destroying the country hording money and power.

History always repeats itself and they will be dealt with when the time is right.

That time will be when enough people are negatively affected to band together to fight the greedy bastages.

So the poor and unfortunate are going to start doing what exactly...raiding expensive mansions and demanding their fair share of someone elses earnings?


edit: let me remind you since you seem to be either blind or unaware...the radical left has about as much money as the right...you might want to find another scapegoat...

 

[dmcowen674]

Originally posted by: piasabird
So basically you want to be a communist?

Without competition there is no innovation!

We already have "Communism".

What competition, what innovation?

Every Industry has been handed to a select one or two giant Corporations.

That sounds like Corporate Communism to me.