Video concerning the ever increasing wealth disparty in the US

[werepossum]

I agree that this is probably the better way to go; however, this does not mean I think that how things are in the States is how it should be. Some employers treat their employees fairly, alot do not. That is one of the major reasons why you have such a disparity of wealth distribution. Note that I said one of the reasons. The problem here is that what this comes down to is a moral issue. Is it right for employers to not pay their employees what they are worth? I would say no. Of course part of the problem is that idea of getting paid what you are worth or getting paid "a fair share" is nebulous. So, aside from minimum wage, it is up to the employer to define these. This does not mean that the employer will define these in a morally right way, but what can you do? Nothing really. We have to depend on the employers and those who control the money to divvy it up fairly. Our society is morally bankrupt though- that is why you see the disparity growing. There really is nothing that can be done. it is just an ugly fact that must be endured. I suppose if any of us are in the position to pay people, we can take that opportunity to do a morally good deed and pay them well. I wonder how many of us would if given the chance...

By definition a man is worth what another will pay him and what he will accept, and if he feels he is worth more then he is free to take a second job or to become his own boss. Employers are not responsible for "divvying up money fairly"; employers enter into a willing contract with an individual for a sum and in conditions the employer is willing to offer and the employee is willing to accept. You have - we all have - the chance to pay people what they are worth. You can start a company, provide a product or service people want and are willing to purchase, and pay your employees as much as you wish. Similarly you can tell the waitress "You're worth more than you are making, here's a twenty dollar tip." No one is stopping you from doing these things.

And personally I stopped listening to Reisch forever when he demonstrated he cannot identify common household hand tools.

Great posts as always, Fern.

 

[Lemon law]

No we miss the point. Its all well and fine to cite examples of the ambitious hard working folks going from middle class to rich.

But where does their income come from and to answer myself, it comes from customers.

Kill off the customer and there is no answer, you can have a world beater product, but if the customer at the base of the food chain has no money to buy the product, it hurts everyone with a vicious downward cycle typical of the great depression.

As business lays off workers there are fewer customers to buy the product, which results in more layoffs and fewer customers. And in such a climate, fewer businesses will invest in new enterprises that could create the jobs to have more customers.

Once the lower part of the food chain breaks, all will hurt as those at the top have to run faster than humanly possible just to make less than before.

 

[blackangst1]

I'm sure bankers getting bonuses while 17.5% of Americans are unemployed or under-employed will help solve this problem.

I know this was sarcasm, but are you insinuating theres a problem with poeple being unemployed? Or getting bonuses? Or maybe its you think banker's bonuses should be tied to unemployment?

 

[blackangst1]

No we miss the point. Its all well and fine to cite examples of the ambitious hard working folks going from middle class to rich.

But where does their income come from and to answer myself, it comes from customers.

Kill off the customer and there is no answer, you can have a world beater product, but if the customer at the base of the food chain has no money to buy the product, it hurts everyone with a vicious downward cycle typical of the great depression.

As business lays off workers there are fewer customers to buy the product, which results in more layoffs and fewer customers. And in such a climate, fewer businesses will invest in new enterprises that could create the jobs to have more customers.

Once the lower part of the food chain breaks, all will hurt as those at the top have to run faster than humanly possible just to make less than before.

There will always be customers. Of something.

 

[Gonad the Barbarian]

All the /threaders are completely ignoring the fact that the other half of your earning potential, besides the labor one can supply, is the demand for such labor.

 

[rchiu]

Yes, and heredity conditions also affect your earning potential. Buffet himself said many times he was lucky to be born in the USA - had he been born in Africa, he'd probably be running after Cheetas now. So whats the deal?

Ultimately most people within the US economy can get a decent living, even if they are in the bottom echelon. They can consume, reproduce and if they have good family and financial planning, live without too many worries. Sure there's the odd recession, but many rich people lost everything too.

I agree. Having been to many different countries, countries like Japan where Gini index is one of the lowest, and developing countries like Philippines with higher Gini index, I prefer the US system where anyone from any income group can still make it to the top with good planning and hardwork, and the top is different enough from the rest to give people enough incentive to aim for it.

Plus like you said, even the bottom income group gets enough social service that they are much better off compare to even the middle income group in developing countries.

Right now the US government is so left leaning that I would be more concerned about all the socialist agenda that tries to destroy wealth just to make everyone more "equal".

 

[Fenixgoon]

i haven't watched the video, but i want to ask this question:

while the income gap (in absolute numbers) has been increasing, what about the quality of life provided by said income?

sure, that bazillionaire can have 50 different houses. as a "middle class" person, what luxuries, if any, are you afforded, and how does that compare to 10/20/30/40 years ago?

in a way, i'd make the analogy of cars:

cars are more expensive today than they were 50 years ago (larger income gap than before)

however, a car today has a hell of a lot more in it than a car of 50 years ago (standard of living has risen considerably, despite the wealth disparity)

so i'm curious whether the wealth disparity is as disastrous as some people make it sound? like i said, i didn't watch the video yet, i just figured i'd ask a question first.

 

[Jhhnn]

All the /threaders are completely ignoring the fact that the other half of your earning potential, besides the labor one can supply, is the demand for such labor.

That's entirely too advanced a concept to fly on this forum. The usual ravers will never figure it out, not in a dozen lifetimes. They idea that anybody can get rich is automatically extended to the idea that everybody can do it, simultaneously.

Doesn't work that way. They mistake mobility within a system for well-being of all those in it, while ascribing more mobility to it than actually exists. They're dreamers and dupes, destined to become debt slave suckas. And they'll admire those who've screwed 'em the hardest every bit of the way.

 

[Farang]

That was very good, I liked his point at about the 52 minute mark. Once the separation gets to a certain degree, there is sort of a permanent class system where each class sees no chance of moving it the other so policy decisions become more of competitions rather than opportunities to find common ground. I think we can see evidence of this in the increasing bitterness in Washington.

 

[Gonad the Barbarian]

Fenixgoon, the first video just touches on this. The second video takes an in depth look at the state of the middle class family of today vs. the middle class family of 50 years ago. Basically after everything is inflation adjusted households are just one bathroom or bedroom better off today at the increased expense of having both parents in the workforce as opposed to just one 50 years ago.

 

[jackace]

I think what the OP is alluding to is the system should be fair to all, and the system should not reward and benefit those at the top more then it rewards and benefits those at the bottom. The problem is we live in a capitalistic society. Capital (aka money) is power and control, and those who have the capital have the power and control. That's just how it is in this type of society.

 

[piasabird]

I've got news for you. Money does not make you happy. It may make life easier in some respects, but it is not the answer to all of life's problems. Don't worry, Be happy; but plan for the future.

 

[blackangst1]

I've got news for you. Money does not make you happy. It may make life easier in some respects, but it is not the answer to all of life's problems. Don't worry, Be happy; but plan for the future.

Nope it doesnt. But it does buy one of the most valuable things we have: time. And opportunity.

 

[JS80]

Free market! The poor are lazy! Socialism!!1!

income disparity! let's make EVERYONE poor!

 

[sandorski]

That was very good, I liked his point at about the 52 minute mark. Once the separation gets to a certain degree, there is sort of a permanent class system where each class sees no chance of moving it the other so policy decisions become more of competitions rather than opportunities to find common ground. I think we can see evidence of this in the increasing bitterness in Washington.

Yup. The second Vid is also very good and everyone should watch.

 

[Jhhnn]

income disparity! let's make EVERYONE poor!

How lame. There was a time not so long ago when paying big taxes on big incomes was rightfully regarded as a privilege...

 

[jackace]

How lame. There was a time not so long ago when paying big taxes on big incomes was rightfully regarded as a privilege...

Yeah the top tax bracket at one time was something like 90%.

 

[PokerGuy]

How lame. There was a time not so long ago when paying big taxes on big incomes was rightfully regarded as a privilege...

Yeah, perhaps at a time when DC wasn't wasting everone's money, redistributing it to their cronies and the lazy and otherwise using it to enrich themselves.

 

[Fern]

Reich explicitly addresses specific limits to financial mobility later in the lecture. He also does not conclude that increasing taxes on the wealthy is some silver bullet solution. In fact if he mentions it at all it's only in passing because I don't remember him even doing so. I can't believe you spent the time to write all that out but were too impatient to even finish the video you are arguing against.

And attacking his data? Really? This was from 2005, there have been scores of articles and data since then that only reinforce his numbers.

This is one of the better articles in describing the top 1% It's from 2000, and Riech's numbers are from 2002, so pretty close.

The One Percenters aren't what you'd expect-guys who name their houses, or trace their roots back to the first-class cabin on the Mayflower, or know what quail eggs taste like. In fact, most seem pretty ordinary. The typical top-1-percent taxpayer is about 48 years old and works an average of 44 hours a week, according to the Census Bureau and the Internal Revenue Service (which knows a thing or two about rich people).

About a third of the 1.18 million One Percenters are executives or managers, another third are professionals, and about 10 percent are in sales. About 8 percent are jobless, which means they're most likely wealthy retirees.

How much do you have to make per year to be a One Percenter? $10 million? $5 million? $1 million? Not even close. Try $208,000-which, if you think about it, is well within reach of a lot of folks..

http://www.capmag.com/article.asp?ID=853

The other 15-20% are probrably some kind of business owner - construction, retail, auto dealers etc.

$208,000 put's you in the top 1%? There's a LOT of people who go up and down in that group. Capital gains counts towards that number, so there's a pretty large group that will from time-to-time find themselves in the top 1%

BTW: Since you've listened to +1 hr of video, pls explain how they can track year-to-year that it's the same people in that category (or even what percentage). Or even where they said they did. It's a crime to disclose personal tax return information, so I don't believe the data is available. I'd also like to know where they came up with the "wealth" data. We don't have a means to track that, we'd need a 'wealth tax return' like some other countries have (but we don't so I wonder where they got it?)

Also, did he offer a reason why the the top 1% started making so much more thn the others starting in the late 70's? I've got a guess, and it has nothing to do with mobility, or a lack thereof.

Fern

 

[werepossum]

Fenixgoon, the first video just touches on this. The second video takes an in depth look at the state of the middle class family of today vs. the middle class family of 50 years ago. Basically after everything is inflation adjusted households are just one bathroom or bedroom better off today at the increased expense of having both parents in the workforce as opposed to just one 50 years ago.

The second parent has to work to pay all the taxes that are used to raise our living standards. Government (at all levels) takes your money, uses half to three-quarter of it just in handling it and giving it out, then gives a small part of it back to you and expects gratitude. Luckily we can borrow more money so it all works out. /sarcasm

 

[jackace]

Also, did he offer a reason why the the top 1% started making so much more thn the others starting in the late 70's? I've got a guess, and it has nothing to do with mobility, or a lack thereof.

Isn't that about the same time the tax rate for the top tax bracket was lowered from ~90% to something like ~50%.

 

[Fern]

Isn't that about the same time the tax rate for the top tax bracket was lowered from ~90% to something like ~50%.

The rates were dropped in 1981 (actually we had several big tax law changes during the 80's). But I don't think that's the reason for the change in earnings for the top 1%.

Prior to '81, the top rate was 70%, but for earned income (wages, self-employment income and the like) it was limited to 50% But contrary to what many on left believe, people didn't really pay those high rates in most cases because there were zillions of deductions etc. Those deductions were eliminated when the rates were dropped and so the net effect was very little (I was working as tax CPA back then too). In fact, if you look at charts of federal income tax revenue during those years you'll see it actually increased pretty good after the rate dropped and the deductions were serverly reduced.

http://www.usgovernmentrevenue.com/...tack=1&size=l&title=&state=US&color=c&local=s

(If the chart isn't showing the proper year etc you can change options just below it)

No, I think some other influence, where those at the very top started making really big money, is what started bending the curve more.

I've long followed professional sports. Back in the 70's and 60's (and before) it really didn't pay all that well. It was only after cable TV came about that they started making the real big bucks. Cable TV requires a lot of content, and it allowed more games to be televised. Same thing with golfers and other professional sports. And TV is what pays, not the gate.

How much you think Walter Cronkite made? Not much, but a sportscaster like Jim Nance (know who he is?) now makes multi-millions a year.

How many people on TV shows back before cable made a million a year? Not many, but look at the cast of the "Friends", they were each making a million per show.

Before cable there was no "Hanna Montana" making uber millions per year. A lot of people in the entertainment industry now make ungodly amounts of money. That bends the curve.

Back in the late 70's not many people invested in stocks. I was in university back then studying accounting & finance, I remember you could buy a seat on the stock exchange for $100K. How many 10's or 100's of millions would it be now?

I don't know why, maybe (new) cable business news type shows empowering people with finacial info, but around that time stock investing started becoming popular. Now there's another area where some seriously huge amounts of money started being made. Some people started making 10's or 100's millions per year. That'll put a dent in the curve.

But none of this has anything to do with "mobility". The people that cable has put in the top 1% weren't there before, and in 99% of times won't put their kids up there after they're done. (Well, I suspect some of their kids might be there if they get a huge inheretence, but this goes back to my earlier compaint about gutting the estate tax which should drastically limit this.)

And I still assert Reich is citing data that doesn't support his conclusion. In fact, the one has nothing to do with the other

Fern

 

[Gonad the Barbarian]

This is one of the better articles in describing the top 1% It's from 2000, and Riech's numbers are from 2002, so pretty close.



http://www.capmag.com/article.asp?ID=853

The other 15-20% are probrably some kind of business owner - construction, retail, auto dealers etc.

$208,000 put's you in the top 1%? There's a LOT of people who go up and down in that group. Capital gains counts towards that number, so there's a pretty large group that will from time-to-time find themselves in the top 1%

BTW: Since you've listened to +1 hr of video, pls explain how they can track year-to-year that it's the same people in that category (or even what percentage). Or even where they said they did. It's a crime to disclose personal tax return information, so I don't believe the data is available. I'd also like to know where they came up with the "wealth" data. We don't have a means to track that, we'd need a 'wealth tax return' like some other countries have (but we don't so I wonder where they got it?)

Also, did he offer a reason why the the top 1% started making so much more thn the others starting in the late 70's? I've got a guess, and it has nothing to do with mobility, or a lack thereof.

Fern

I'm not wasting any more time with you unless you watch the whole damn thing. Reich's comments on limited financial mobility are later in the video. And good lord all you have to do is google "economic inequality data" if you have issue with Reich's data. And here's another tip, the census follows a lot of things the IRS doesn't, and the second video really demonstrates just how specific the government can get. And no one is arguing that rich people don't work hard or don't deserve to make a lot of money.

 

[Gonad the Barbarian]

The second parent has to work to pay all the taxes that are used to raise our living standards. Government (at all levels) takes your money, uses half to three-quarter of it just in handling it and giving it out, then gives a small part of it back to you and expects gratitude. Luckily we can borrow more money so it all works out. /sarcasm

The video clearly demonstrates just why that second spouse has to work if you'd bother watching it.

 

[Zebo]

Excellent video thanks.

I watched whole thing and it's true globalization and technology has replaced/displaced people and their wages and driven large portions of society into service economy thus collapsing those wages too visa vi supply and demand. This phenomena is world wide but nothing is being done policy wise to address this and we are still operating under old models widening the gap. Societal collapse or what he calls 'snap' won't happen as the government pays the bare necessities for the truly impoverished. The only question remains is how much longer can the government pay with growing underclass, shrinking middle and and operating under old paradigms of low taxes on the richest income e.g. cap gains. How much longer will foreigners lend us money to pay for the impoverished among other things. "snap" will happen when the protection money is no longer paid.