Much of that wealth consists of credit, and generally numbers in hard drives. Fallout from only a fraction of that wealth led to the 2008 financial crisis.
My bank account is a number stored on a server somewhere. Same with my retirement accounts and savings bonds. The value isn't stored in gold bullion or some other shiny metal or fancy gemstones. The numbers on the computers say that I have some level of purchasing power.
I don't care how rich someone is.
I do care that they use their money and connections, owning and operating the government for their own benefit. while claiming to be persecuted victims.
That someone with tens/hundreds/millions of millions of dollars feels persecuted because people talk about raising their taxes (oh noes!) while they actively use their money to get legislators to write laws that favor them, is ridiculous, and disgusting.
It's hard to hold onto a republic/representative democracy when the people with the money are doing their best to capture the government and use it as a tool for themselves.
This is really where the problem is. The wealth itself isn't the problem. It's the influence it can buy.
Our species is
terrible at responsibly handling concentrated power. It's a recurring theme throughout our history. Eras are punctuated by corrupt rulers and governments. It's a mistake we keep repeating across thousands of years.
Various government systems have been made with the intention of preventing power from concentrating in one place. You have multiple branches of government, there are concepts like "state rights," and there can be multiple political parties. But now we have people and organizations who have, independent of government, amassed such incredibly immense amounts of wealth that they can effectively bypass or even outright subvert those protections against concentrated power.
That is the problem.
Most of our history is a series of 1% owning the majority of the wealth. Spreading of wealth is a relatively recent event brought on by liberalization of markets and govts. No middle class has ever been built at the behest of a govt or king.
Wouldn't it be nice if we could break ourselves of that?
It's a family, and each generation will periodically hold a hand in an open flame just to see if it's still hot, and every single time they end up getting burned. Someone comes along and decides to put a cover over the flame to keep hands away from it. The next generation doesn't like being limited by such restrictions, so they remove the cover piece by piece until they can fit a hand through, and subsequently get burned.
As a group, we're being just as persistently stupid.
"Every other time power gets concentrated in a small group, things go to hell in a hurry. I know! Let's try it
again!"
What about the scientists who created all the drugs and technology you enjoy? You think all of them are getting rewarded like Gates or famous fantasy writers? We aren't a meritocracy in a true sense, where discoveries are rewarded by their originator in proportion to their importance. I'm sure you'll produce a handful of exceptions, because there always are, but exceptions they remain.
On the subject of systemic bugs in the human brain, there's another one: A bizarre obsession with fame.
Doctors or scientists or farmers produce goods and services which permit people to
live. We don't want to pay them much though, particularly farmers. But men who play with air-filled balls can get millions of dollars a year. People who pretend to be other people can receive tens of millions for a single movie.
Actually this has been done before through tax policy. When the maximum tax rate was 90%, the companies would reinvest as much as possible back into the business to avoid paying anything close to those rates. Guess what the company expands, and hires mores employees, and maybe pay out a little more to their employees.
My employer does this. There's some kind of tax incentive for purchasing new equipment, and the owner wants the business to survive long-term. He's not just some person hired to run the company, which is what you see in some multinationals, where they get someone to run the company, but the person is only really there to temporarily secure stock options, try to boost the stock price, then cash out before the company crashes and burns. This is his company. He started it, and he'll likely be involved there until he dies.
So every year, a nice bag'o'money shows up, and we're all tasked with finding equipment to buy to not only get those tax breaks, but also which will make the company profitable into the future.
Come on man...you're better than that.
You are saying its not possible for a lower middle class guy to become stinking rich? You're saying its not possible for a stinking rich guy to become lower middle class?
If I was making $30k/year I would honestly consider just not working and letting the government send me money, give me free food, free healthcare, free rent. But I make more than that so I work hard and try to increase my income even more..
Possible, but very improbable and exceedingly difficult. To stretch the spectrum a bit, someone living on $5/day in Bangladesh has a pretty shitty chance of making it to even the level of a $25k/year job. They weren't born into a chance where that opportunity even exists. Their meager income is entirely devoted to the basic necessities.
In the US, the cost of living is higher, and while the upper crust has seen its income constantly increasing as the cost of living continues creeping higher, the lower class hasn't seen their income keeping pace with the costs. A lot of the money keeps getting funneled to the top. You hear too often that companies are showing record profits, yet management there will tell the rank&file that there's no money left for raises.
They
can't take the risk of trying to do something to move themselves up because the loss would be catastrophic. Someone who already has a million dollars sitting around can risk $600k and lose it all. Don't worry, they still have $400k sitting in reserve.
Someone with $200 in the bank and is relying on the next paycheck to show up on time can't incur much risk.
...
Something must be done though. There have to be reforms to the tax code. Dividends need to be taxed at much higher rates. Estate tax should be institutided at 50% on the >$5M estates across the board. We could put that money towards infrastructure and education reforms that would benefit the rich and poor alike.
Of course, the rich will find ways around all of this. None of the reforms will work.
Honestly, I have no idea what the solution to this is. I will say that, on a personal level, I would advise people that money can only get you so far in life. It's great to want to do well, but don't spend your life pursuing great wealth at the cost of being happy.
And once they are in a position where they have a good amount of influence, they become firmly entrenched. It's an outgrowth of our aversion to losses. (The magnitude of the good feeling from receiving $50 is less than the pain of having $5
taken from you. Our ancient primate brains blow it out of proportion, and some part of your mind translates the theft of resources to "This person is trying to kill you. Defend yourself at all costs.")
That's why prevention is preferable. That's why it works better to have things like 401k investments taken out before you get the paycheck, rather than after: It's already gone, so it doesn't always
feel as bad as having the money there in front of you and then having to send some of it away.
.....like the billionaire bankers who risked the entire monetary system of the United States for their own personal financial enrichment..... and then accepted a government bailout funded by the middle class American worker drones when it blew up in their faces
And then continue pursuing more risky ventures, since they know that they're "too big to fail," and the government will be there to throw money at them. If you've got a kid who likes to jump off of rooftops, but he knows that there'll always be someone there with a net to catch him, is he ever going to stop jumping? No. He'll be looking for taller buildings.
Christ, people complain about anyone on Welfare who abuses the system? These people are billionaires who are begging for a financial safety net as if they're $10 away from poverty.
I'm confused. Are you saying that the wealthy 1% consume as much food as the 99%? That they own as many cars as the 99%? That they occupy as many homes as the 99%? That they use as much internet bandwidth as the 99%?
What are these resources they're consuming?
More that they hoard and
control the supply, while still complaining that they don't have enough, and also exerting powerful influence over the source of the resources to ensure that they keep getting more. Power play.
You seem to speak of the wealthy as if they were somehow separate from US government...
Government of the people for the people by the people?
How about:
Government of the rich for the rich by the rich.
LOL
Uno
This is where it is certainly
not a representative government. Some of these people may not even know what it's like to live on less than a 6-digit family income. Others could have forgotten, or else glossed over memories of the past. "Yeah, I remember growing up 50 years ago on a poor family farm. It wasn't so bad." While conveniently forgetting the times when their dad had to work 16hr days, the delightful smell of pig pens, or a family member losing an arm to a piece of farming equipment. You know, those "good old days" that everyone talks about. Despite those good old days always being so wonderful, we seem to keep doing what we can to make things better. I'd think that if those days were so good, we'd do what we could to
prevent progress.
The resource example in a room makes little sense imo. There is not a finite amount of wealth in the world. It grows, contracts, and switches hands. Also in this mythical room where wealth is finite. If 1 person owns 50% of the wealth what does that get them anyways? A pile of mythical wealth? Cant eat it, cant drink it. Have to purchase a real resource with that wealth if they want to survive.
Really? Wealth can be infinite?
It ends up getting tied to some tangible thing at some point. Why else would you want it in the first place? You can buy power and influence, buy services, or buy physical goods. I don't make money because I like seeing a number on a computer screen get bigger. That's what computer games are for. (And even then, the tangible benefit is the fun of playing the game.)
I can't buy an infinite amount of stuff, nor will I live for an infinite amount of time, nor is the planet itself infinite in size. Yes, it is limited.
The question I always ask - which usually gets ignored - is about the end effect of inequality. If I get an answer at all, it's usually a snarky answer such as "Boohoo, Richie Rich can't buy another gold plated yacht." But then on the flip side, what would the middle and lower classes have with a smaller wealth disparity that they don't have now? Would lower disparity result in less offshoring? Would the lower class suddenly become investors? Would they become entrepreneurs and start new companies? What do see as the end goal of reducing wealth disparity? More plastic stuff for everyone?
The end effect of inequality, the real problem, is control over other people.
If someone buys a GE microwave, it's because they want to warm up food, not because they want to help GE
buy government favors.
If those with a lot of wealth, and thereby access to special treatment, also control the factors of production, they have an enormous amount of control over people. Example:
Aluminum and copper. Goldman Sachs owns warehouses that shuffle around aluminum. Three banks also wanted to buy 80% of the copper on the market. These banks are
also free to trade in commodities markets. So they have the warehouses, they have the goods, and they can see shifts in consumption as it's happening
and they can make trades based on that information. I'm sure that'll benefit society at large.
Another example of power disparity or concentration: A monopoly in business. We (allegedly) have laws which are there to prevent this because of the problems it can cause.
Types of monopoly:
- They keep prices high and enrich themselves considerably that way. This can be risky though, since the high prices can mean that others will find it sufficiently profitable to try to enter the market.
- They keep prices low. The short-term revenue might not be as good, but no one will bother trying to enter the market when they simply have no chance of turning a profit, thus securing the monopoly's position long-term.
- The ideal mix: Keep prices high most of the time, but when a competitor does show up, drop prices to push them out of business and then raise prices again.