The real class warfare and who's losing

[fskimospy]

So you acknowledge that concentration of wealth is increasing, right?

And that's good... because?

Most new research shows that increasing inequality is bad not only for the average citizen, but bad for the country as a whole as it retards economic growth. So basically, these policies that are overwhelmingly benefiting the rich are not only screwing the poor over, but basically the country as a whole.

This isn't really rocket science, an extremely small portion of the population has received the overwhelming majority of the products of increased economic productivity that the nation as a whole has generated. Assuming that the purpose of any economic system is to generate the greatest well being for the largest number of people possible through the mobilization of economic resources, this is pretty terrible.

 

[blackangst1]

So you acknowledge that concentration of wealth is increasing, right?

And that's good... because?

No, I acknowledge that what Craig said is a lie:

It's ironic when you consider that the increased of concentration of wealth DECREASE opportunity for the 99%.

The fact is, if that were true, there wouldnt be in increase of millionaires. If what he said WERE true, we would see a decline of millionaires. Because of, you know, decreased opportunity.

edit: and to clarify my post...I think more people becoming wealthy is a good thing. Having wealth in and of itself is not a bad thing for anyone. Using that wealth, or having the opportunity to use that wealth for political gain is. Hopefully you're intelligent enough to understand the difference.

 

[blackangst1]

It's true, those at the top can do great in these times - we will see an 'increase in millionares'. It's the rest of the population paying for that that's the problem.

How the hell do you reconcile that with the lie you told earlier about decreased opportunity? Do you understand what an increase in millionaires means? It doesnt mean the wealthy got wealthier, but rather more people became wealthy.

 

[fskimospy]

No, I acknowledge that what Craig said is a lie:


The fact is, if that were true, there wouldnt be in increase of millionaires. If what he said WERE true, we would see a decline of millionaires. Because of, you know, decreased opportunity.

That's not really true at all, it can simply mean a system that is skewed towards a few getting very large incomes with most people getting no benefits at all. (as appears to be the case) If you can show that the MEDIAN wealth of the country is increasing, THAT would refute Craig's idea that opportunity is going down.

If you have a system where 1% of people are millionaires and that goes to 2%, that can be viewed as an increase in opportunity. If the requirement for that 1% increase in millionaires is that everyone else gets screwed over, that's hardly increased opportunity by any reasonable measure.

 

[blackangst1]

That's not really true at all, it can simply mean a system that is skewed towards a few getting very large incomes with most people getting no benefits at all. (as appears to be the case) If you can show that the MEDIAN wealth of the country is increasing, THAT would refute Craig's idea that opportunity is going down.

If you have a system where 1% of people are millionaires and that goes to 2%, that can be viewed as an increase in opportunity. If the requirement for that 1% increase in millionaires is that everyone else gets screwed over, that's hardly increased opportunity by any reasonable measure.

I would agree with that. However, Ive seen nothing to show the majority of the new millionaires got that way by screwing anyone.

 

[fskimospy]

I would agree with that. However, Ive seen nothing to show the majority of the new millionaires got that way by screwing anyone.

It doesn't actually matter if they screwed anyone, I'm just saying that your argument that an increase in millionaires shows increased opportunity is not sound.

Here's a better example, comparing two lotteries:
Lottery 1 pays 1 person a million dollars, and 1000 people $10,000. That lottery has a total value of $11 million. Lottery 2 pays 2 people a million dollars and 1000 people $100. That lottery has a total value of $2.1 million dollars.

Lottery 2 is clearly a worse deal for the total group despite doubling the number of millionaires, representing decreased opportunity. And yes I know that our economy is not a lottery, but as it relates to the number of millionaires equalling some sort of improved opportunity the point is valid.

 

[blackangst1]

It doesn't actually matter if they screwed anyone, I'm just saying that your argument that an increase in millionaires shows increased opportunity is not sound.

Here's a better example, comparing two lotteries:
Lottery 1 pays 1 person a million dollars, and 1000 people $10,000. That lottery has a total value of $11 million. Lottery 2 pays 2 people a million dollars and 1000 people $100. That lottery has a total value of $2.1 million dollars.

Lottery 2 is clearly a worse deal for the total group despite doubling the number of millionaires, representing decreased opportunity. And yes I know that our economy is not a lottery, but as it relates to the number of millionaires equalling some sort of improved opportunity the point is valid.

I guess we view it differently. I have no problem with that. I would like to comment on an earlier post from you though in this same vein:

Assuming that the purpose of any economic system is to generate the greatest well being for the largest number of people possible through the mobilization of economic resources, this is pretty terrible.

I wouldnt assume thats the purpose of the American economic system, nor ever was. I would say the purpose is to give everyone the opportunity for economic well being. Of course, not everything is equal in ANY society, and great economic success does involve a fair amount of luck. But I think overall, using this crude example, if someone had a world changing idea to build or develop something, America would be the best place to insure success. And I think the proof lies in that the majority of the Forbes 400 list, for example, is made up of self made people, and not inherited, etc. Same can probably be said of the new millionaires. America has more millionaires than any other country, by far. More than the 2nd and 3rd place countries combined. If it were because of mostly political favor, there are countries where your money can buy far more than it does here.

 

[Moonbeam]

I guess we view it differently. I have no problem with that. I would like to comment on an earlier post from you though in this same vein:


I wouldnt assume thats the purpose of the American economic system, nor ever was. I would say the purpose is to give everyone the opportunity for economic well being. Of course, not everything is equal in ANY society, and great economic success does involve a fair amount of luck. But I think overall, using this crude example, if someone had a world changing idea to build or develop something, America would be the best place to insure success. And I think the proof lies in that the majority of the Forbes 400 list, for example, is made up of self made people, and not inherited, etc. Same can probably be said of the new millionaires. America has more millionaires than any other country, by far. More than the 2nd and 3rd place countries combined. If it were because of mostly political favor, there are countries where your money can buy far more than it does here.

Derivatives are virtual products and add no value other than to make Wall Street rich. They create them with one hand and make millions betting they will fail. They insure the regulators don't interfere by bribing the parties. Time for them to die.

 

[blackangst1]

Derivatives are virtual products and add no value other than to make Wall Street rich. They create them with one hand and make millions betting they will fail. They insure the regulators don't interfere by bribing the parties. Time for them to die.

I agree for the most part. Whats that got to do with my post?

 

[fskimospy]

I guess we view it differently. I have no problem with that. I would like to comment on an earlier post from you though in this same vein:

It's not really here or there whether or not you have a problem with it (although I have a HUGE one), it is to point out that when you said that an increase in millionaires was equal to an increase in opportunity, such reasoning was not sound.

I wouldnt assume thats the purpose of the American economic system, nor ever was. I would say the purpose is to give everyone the opportunity for economic well being. Of course, not everything is equal in ANY society, and great economic success does involve a fair amount of luck. But I think overall, using this crude example, if someone had a world changing idea to build or develop something, America would be the best place to insure success. And I think the proof lies in that the majority of the Forbes 400 list, for example, is made up of self made people, and not inherited, etc. Same can probably be said of the new millionaires. America has more millionaires than any other country, by far. More than the 2nd and 3rd place countries combined. If it were because of mostly political favor, there are countries where your money can buy far more than it does here.

No, the purpose of every economic system is absolutely to mobilize resources, not provide opportunities to people. Providing opportunities may be the best way to mobilize those resources, but that's definitely not the fundamental purpose. You appear to be confusing a means with an end.

 

[blackangst1]

It's not really here or there whether or not you have a problem with it (although I have a HUGE one), it is to point out that when you said that an increase in millionaires was equal to an increase in opportunity, such reasoning was not sound.




No, the purpose of every economic system is absolutely to mobilize resources, not provide opportunities to people. Providing opportunities may be the best way to mobilize those resources, but that's definitely not the fundamental purpose. You appear to be confusing a means with an end.

No, I appear to be disagreeing with you. Im not confused at all.

 

[fskimospy]

No, I appear to be disagreeing with you. Im not confused at all.

I guess, I've just never thought of opportunity as an end. Opportunity is the way we motivate people to create the economic ends that we want, as you can't eat opportunity after all.

 

[blackangst1]

I guess, I've just never thought of opportunity as an end. Opportunity is the way we motivate people to create the economic ends that we want, as you can't eat opportunity after all.

I agree with you about opportunity being a motivator. It is not the responsibility of the government to make sure everyone succeeds. Afterall, success means different things to different people, thus having that responsibility would be fail at the get-go. I also dont necessarily think opportunity is an end. There are times when it is the government's responsibility to intervene on the people's behalf to try its best to equalize the playing field as best it can (i.e. Affirmative Action when it was created, although I think it needs to be disbanned now...different thread though).

That said, I viciously disagree that in order for someone to have succeeded financially someone had to been stepped on. Do the Bill Gates and Michael Dells of the world profit on other's labor? Absolutely. But then so does the small business owner with one employee. I dont see anyone getting too upset over that. John Doe employs two people at his coffee stand at $7.50 an hour and he's living the American dream. WalMart employes millions at $7.50/hour and theyre evil. Where's the cutoff? 10 people? 100? 10,000?

As I said earlier, I disagree that accumulated wealth in general is soooo bad for society. But, I do agree, its how you use that wealth that determines whether or not you're a good guy or a bad guy...to put it loosely. Here's another crude example. Joe Schmoe invested $300k in the stock market, and years later hits the millionaire list. Now all of a sudden he's part of the elite who dont give a shit about the little guy and is looking to take advantage of him instead. Now take John Doe who invests $30k and years later has $100k. He used the same principles to get that new wealth, yet he's one of the good guys. It just doesnt make sense. There are plenty of middle or lower income people who take advantage and screw those under them as there are the rich. But somehow being rich makes them more evil.

Just doesnt make sense all this class envy.

 

[Engineer]

John Doe employs two people at his coffee stand at $7.50 an hour and he's living the American dream. WalMart employes millions at $7.50/hour and theyre evil. Where's the cutoff? 10 people? 100? 10,000?

It's not the fact that Walmart is evil because they employ people at $7.50 an hour (and push them to government assistance as they do), it's the fact that they PUSH their suppliers to offshore to cheapen their products for more profit as much as possible. They are no different than the very people who offshore for more profit because they push for it. Pushing good paying jobs offshore just to make MORE profit. Millions lose their good paying jobs, end up on government assistance and then people sit and bitch about them on the government tit and simply say "Hey, that 47% needs to get off their ass and get a better paying job so they can pay their fair share" type of shit.

If some of these people at the top don't start trickling down a little more, I suspect that there are going to be far bigger issues than just some piss poor Wall $treet protests....

But hey, I've got mine..fuck em.....until there are enough of them that the tables are turned.....

The "haves" better be hiring a few of the "have nots" as personal protection as the rest of the "have nots" are starting to get restless and tired of waiting....

 

[the DRIZZLE]

I guess we view it differently. I have no problem with that. I would like to comment on an earlier post from you though in this same vein:


I wouldnt assume thats the purpose of the American economic system, nor ever was. I would say the purpose is to give everyone the opportunity for economic well being. Of course, not everything is equal in ANY society, and great economic success does involve a fair amount of luck. But I think overall, using this crude example, if someone had a world changing idea to build or develop something, America would be the best place to insure success. And I think the proof lies in that the majority of the Forbes 400 list, for example, is made up of self made people, and not inherited, etc. Same can probably be said of the new millionaires. America has more millionaires than any other country, by far. More than the 2nd and 3rd place countries combined. If it were because of mostly political favor, there are countries where your money can buy far more than it does here.

Independent of the issue of whether the government's goal should be to maximize total welfare, there is a question of the much of the benefit should go to the "winners". Do you really want a complete winner take all system even under the assumption that the winners all earned it through hard work? The system needs to provide opportunity at different levels.

 

[blackangst1]

It's not the fact that Walmart is evil because they employ people at $7.50 an hour (and push them to government assistance as they do), it's the fact that they PUSH their suppliers to offshore to cheapen their products for more profit as much as possible. They are no different than the very people who offshore for more profit because they push for it. Pushing good paying jobs offshore just to make MORE profit. Millions lose their good paying jobs, end up on government assistance and then people sit and bitch about them on the government tit and simply say "Hey, that 47% needs to get off their ass and get a better paying job so they can pay their fair share" type of shit.

With the exception of their branded products, the decision to offshore work is not Walmart's.

/OT

Lets say you become COO of a Fortune 500 company who has a large share of labor overseas. How do you go about bringing it back? Just do it? What exactly would you say to shareholders who would experience diminished returns due to higher expenses? Fuck you I did it? Of course, you wouldnt be COO very much longer. It's not that easy. It's like prohibition. It's near impossible to reverse whats been done and still remain viable.

The decision to offshore is ultimately the company's to make; however, IMHO those decisions are made based on regulation here in the states. Also IMHO it's absurd to expect a company to bring jobs back on their own (although it IS happening). It's the government's by ways of things like tariffs.

 

[Engineer]

With the exception of their branded products, the decision to offshore work is not Walmart's.

/OT

WalMart lays the law down to these suppliers that if they don't lower their costs down to "Chinese produced levels", it won't sell at WalMart, period. They don't make the decision but they lay it out there in such a way that there is no other choice if you want to sell your products at Walmart......

"The Age of WalMart".....

 

[SamurAchzar]

Independent of the issue of whether the government's goal should be to maximize total welfare, there is a question of the much of the benefit should go to the "winners". Do you really want a complete winner take all system even under the assumption that the winners all earned it through hard work? The system needs to provide opportunity at different levels.

I hope blackangst1 forgives me if I answer instead - I certainly don't want to fuck around with someone bearing that nick, or birth given, name - anyway, a fundamental mistake here is the premise that the economical system in US is built towards welfare. The economical system should be viewed as a byproduct of personal freedom, just like the rights derived from the constitution. No one has an inherent right to tax the winners just because they win, and give the proceeds to those who were left behind for whatever reason. However this is taken for granted in modern societies and I also agree with it to some extent.

See, with personal freedom comes great responsibility for one's life, a responsibility that's simply not understood by most people who let themselves slip into the social support network, funded by those that worked to produce and succeed. Not even the most hardcore progressive can deny that if we had less Octomoms and more Sergey Brins everyone - EVERYONE - would be better off. Wealth is not something finite; it's only as large as the combined product of all producers.

I simply can't tolerate excuses. I had my goals set in life very early, I don't come from a wealthy family (we got by fine, certainly not rich), I hold no formal education whatsoever and I work very hard, every day, towards my very ambitious goals. I will accept no excuse for why am I the exception, and not the norm, and likewise I will not want to fund the general public if I do become successful. I won't accept handouts either, I'll just keep on working. There's no lack of opportunities.

Look at the Fortune 500 list and tell me there's something wrong with our system; other than the Walton heirs, nearly everyone is self-made. What they make is their own business and I expect that they are allowed to keep it. It's not for anyone to decide "that's enough for them" and take the rest. If anything, companies like Apple, Google, Oracle, Microsoft and Facebook drove the GDP up, not at the expense of anyone. On the contrary, we're all richer and more productive and live an easier life because of these companies. Their shareholders are billionaires. What moral premise gives us the right to take any of their money?

 

[fskimospy]

I agree with you about opportunity being a motivator. It is not the responsibility of the government to make sure everyone succeeds. Afterall, success means different things to different people, thus having that responsibility would be fail at the get-go. I also dont necessarily think opportunity is an end. There are times when it is the government's responsibility to intervene on the people's behalf to try its best to equalize the playing field as best it can (i.e. Affirmative Action when it was created, although I think it needs to be disbanned now...different thread though).

That said, I viciously disagree that in order for someone to have succeeded financially someone had to been stepped on. Do the Bill Gates and Michael Dells of the world profit on other's labor? Absolutely. But then so does the small business owner with one employee. I dont see anyone getting too upset over that. John Doe employs two people at his coffee stand at $7.50 an hour and he's living the American dream. WalMart employes millions at $7.50/hour and theyre evil. Where's the cutoff? 10 people? 100? 10,000?

As I said earlier, I disagree that accumulated wealth in general is soooo bad for society. But, I do agree, its how you use that wealth that determines whether or not you're a good guy or a bad guy...to put it loosely. Here's another crude example. Joe Schmoe invested $300k in the stock market, and years later hits the millionaire list. Now all of a sudden he's part of the elite who dont give a shit about the little guy and is looking to take advantage of him instead. Now take John Doe who invests $30k and years later has $100k. He used the same principles to get that new wealth, yet he's one of the good guys. It just doesnt make sense. There are plenty of middle or lower income people who take advantage and screw those under them as there are the rich. But somehow being rich makes them more evil.

Just doesnt make sense all this class envy.

Economic research indicates that EDIT: excessive accumulated wealth is bad for economic growth, so in that respect EDIT: excessive accumulated wealth in general is bad for society. (to be clear, obviously someone needs to accumulate wealth, but the sort of wealth aggregation that is going on in America today is very likely a significant drag on growth)

As for your example, I'm not aware of any person who thinks that people are bad simply for the act of being rich. It's a common diversionary argument for people who don't want to address the actual complaints about our system. The complaint is not that people are wealthy, it is that economic gains for society are being distributed in a grossly distorted manner that is unrelated to actual contributions. In the last economic growth period, the top 1% of Americans received 66% of the increase in income. Things like that are what people don't like, because there's no way in hell that 1% of America created 2/3rds of the increased value. That is evidence that our system isn't functioning very well in how it rewards certain types of work, and people are rightly pissed off about it.

 

[blackangst1]

I hope blackangst1 forgives me if I answer instead - I certainly don't want to fuck around with someone bearing that nick, or birth given, name - anyway, a fundamental mistake here is the premise that the economical system in US is built towards welfare. The economical system should be viewed as a byproduct of personal freedom, just like the rights derived from the constitution. No one has an inherent right to tax the winners just because they win, and give the proceeds to those who were left behind for whatever reason. However this is taken for granted in modern societies and I also agree with it to some extent.

I agree, and well said, especially the bolded. I largely agree with the rest of your post as well.

 

[the DRIZZLE]

I hope blackangst1 forgives me if I answer instead - I certainly don't want to fuck around with someone bearing that nick, or birth given, name - anyway, a fundamental mistake here is the premise that the economical system in US is built towards welfare. The economical system should be viewed as a byproduct of personal freedom, just like the rights derived from the constitution. No one has an inherent right to tax the winners just because they win, and give the proceeds to those who were left behind for whatever reason. However this is taken for granted in modern societies and I also agree with it to some extent.

See, with personal freedom comes great responsibility for one's life, a responsibility that's simply not understood by most people who let themselves slip into the social support network, funded by those that worked to produce and succeed. Not even the most hardcore progressive can deny that if we had less Octomoms and more Sergey Brins everyone - EVERYONE - would be better off. Wealth is not something finite; it's only as large as the combined product of all producers.

I simply can't tolerate excuses. I had my goals set in life very early, I don't come from a wealthy family (we got by fine, certainly not rich), I hold no formal education whatsoever and I work very hard, every day, towards my very ambitious goals. I will accept no excuse for why am I the exception, and not the norm, and likewise I will not want to fund the general public if I do become successful. I won't accept handouts either, I'll just keep on working. There's no lack of opportunities.

Look at the Fortune 500 list and tell me there's something wrong with our system; other than the Walton heirs, nearly everyone is self-made. What they make is their own business and I expect that they are allowed to keep it. It's not for anyone to decide "that's enough for them" and take the rest. If anything, companies like Apple, Google, Oracle, Microsoft and Facebook drove the GDP up, not at the expense of anyone. On the contrary, we're all richer and more productive and live an easier life because of these companies. Their shareholders are billionaires. What moral premise gives us the right to take any of their money?

Where did I say progressive taxation is the answer? The fact is government sets the rules of the game and right now the rules are allowing those at the time to grow wealthier while the pie is staying the same or shrinking. Taxation is just one of the rules. For example, do you think companies should be allowed to have monopolies because they won?

To directly answer your question the shareholders should be taxed at at least the same rate as a person who works for a living but they presently are not. On what moral principal does an investor pay a lower tax rate than a laborer?

 

[the DRIZZLE]

I agree, and well said, especially the bolded. I largely agree with the rest of your post as well.

Do you think the government should build roads? Roads don't increase personal liberty, but they clearly increase the general welfare.

 

[rchiu]

Derivatives are virtual products and add no value other than to make Wall Street rich. They create them with one hand and make millions betting they will fail. They insure the regulators don't interfere by bribing the parties. Time for them to die.

lol what? Why don't you take some basic finances courses before you make comments like that. Things like currency swap is used by any company with international deals to reduce fx exposures.

You know, there are actually some concerns and challenges with this increasing US income gap. But because all the idiots with no ideas what they are talking about, politicians inventing catchy phrases like 99% vs 1%, the real problems are being distorted, there are more demonizing certain income class than defining rational solutions. There are idiots without any economic, financial backgrounds all of the sudden think they have solutions to some of the most challenging economic and social issues.

Yeah, go on with your OWS and the 99% vs 1% BS. History has proven that sudden and dramatic change in economic and social policies brought by mob mentality (go read all the revolutions) does not end well.

 

[HomerJS]

A few things might help bring CEO to average worker pay in line.


Truth in advertising. If CEO to average worker compensation was easily accessible...

I need to buy a camera and I narrow it down to 3. I might tend to gravitate towards the company that treated there average workers better. 150 to 1 vs 500 to 1. Mandate that info be easily accessible.


CEO pay must be approved by shareholders. End the cronyism of pay approved by board members that sit on multiple boards and scratch each others back.

 

[Phokus]

lol what? Why don't you take some basic finances courses before you make comments like that. Things like currency swap is used by any company with international deals to reduce fx exposures.

You know, there are actually some concerns and challenges with this increasing US income gap. But because all the idiots with no ideas what they are talking about, politicians inventing catchy phrases like 99% vs 1%, the real problems are being distorted, there are more demonizing certain income class than defining rational solutions. There are idiots without any economic, financial backgrounds all of the sudden think they have solutions to some of the most challenging economic and social issues. http://forums.anandtech.com/forumdisplay.php?f=24

Yeah, go on with your OWS and the 99% vs 1% BS. History has proven that sudden and dramatic change in economic and social policies brought by mob mentality (go read all the revolutions) does not end well.

For those in power. See: The guillotine.

But because all the idiots with no ideas what they are talking about

This coming from you? Oh that's rich, you think rising CEO pay is due to natural market forces rather than collusion between executives and the interlocking networks of BoD's.