wealth concentration

[ModerateRepZero]

thought I'd start a separate thread on the concentration of wealth given that it's off-topic from the executive compensation thread. for those interested in executive compensation :

http://forums.anandtech.com/me...=2265177&enterthread=y

to start off, yes I think that there's a problem when too much money ends up in the hands of too few individuals. the first thing is that generally speaking, I believe that most of the individuals took ample risks to accumulate their fortune and were rewarded accordingly. Warren Buffett's investing smarts and instincts allowed Berkshire Hathaway to acquire numerous companies that added immensely to its value and stock (although he did experience some problems such as General RE's first few years of unprofitability). Bill Gates may have engaged in monopolistic practices but he helped design and popularize intuitive and flexible software that millions of people use. I begrudge neither of these people the wealth that they've earned.

I'm less enthralled with people such as hedge fund managers, CEOs, etc. *in general* because their pay/compensation is tied less to their natural talent, skills, and performance than in being able to skillfully negotiate. A CEO who ostensibly claims to be compensated based on performance but who receives a golden parachute or who gets bonuses even when stock prices and other indicators decline is either lying or delusional. Heads I win, tails you lose is not a capitalistic free market.

But my interest is less on how people people can or are be compensated, but on what happens when personal or societal wealth gets concentrated amongst a small number of individuals/families etc.

Personally, I firmly believe that an excessive amount of personal wealth (beyond what is needed for basic needs and a comfortable existence), *tends* to corrupt individuals and the wealthy's offspring/descendants, making them lazy, materialistic, etc and be more concerned with money than in being able to contribute to society.

My other concern with wealth concentration is that the interests and desires of the wealthy differ from that more average or poorer folk. Putting money in an offshore bank account, buying a luxury jet instead of a regular car, hiring lobbyists to get tax breaks, etc. All this is perfectly legal, but is only benefiting a small segment of the economy....

 

[Craig234]

Originally posted by: ModerateRepZero
thought I'd start a separate thread on the concentration of wealth given that it's off-topic from the executive compensation thread. for those interested in executive compensation :

http://forums.anandtech.com/me...=2265177&enterthread=y

to start off, yes I think that there's a problem when too much money ends up in the hands of too few individuals. the first thing is that generally speaking, I believe that most of the individuals took ample risks to accumulate their fortune and were rewarded accordingly. Warren Buffett's investing smarts and instincts allowed Berkshire Hathaway to acquire numerous companies that added immensely to its value and stock (although he did experience some problems such as General RE's first few years of unprofitability). Bill Gates may have engaged in monopolistic practices but he helped design and popularize intuitive and flexible software that millions of people use. I begrudge neither of these people the wealth that they've earned.

I'm less enthralled with people such as hedge fund managers, CEOs, etc. *in general* because their pay/compensation is tied less to their natural talent, skills, and performance than in being able to skillfully negotiate. A CEO who ostensibly claims to be compensated based on performance but who receives a golden parachute or who gets bonuses even when stock prices and other indicators decline is either lying or delusional. Heads I win, tails you lose is not a capitalistic free market.

But my interest is less on how people people can or are be compensated, but on what happens when personal or societal wealth gets concentrated amongst a small number of individuals/families etc.

Personally, I firmly believe that an excessive amount of personal wealth (beyond what is needed for basic needs and a comfortable existence), *tends* to corrupt individuals and the wealthy's offspring/descendants, making them lazy, materialistic, etc and be more concerned with money than in being able to contribute to society.

My other concern with wealth concentration is that the interests and desires of the wealthy differ from that more average or poorer folk. Putting money in an offshore bank account, buying a luxury jet instead of a regular car, hiring lobbyists to get tax breaks, etc. All this is perfectly legal, but is only benefiting a small segment of the economy....

The problems with wealth concentration are enormous, and I won't do justice to them here.

One of the problems in the debate about wealth concentration is that the right has any idea only of one side of the issue - the problems from too little wealth concentration. They can argue all day why some should receive more than others, about how incentives are a crucial ingredient in the economy and they're right.

But they utterly fail at the other side. They don't understand the lack of incentives when everyone is turned into underincented labor so the few can keep more. They brush under the rug the systemic corruption that always happens when the wealth - and therefore the power - is too concentrated. They never knew or have forgotten our revolution was primarily over just such corruption, as the British nobility exempted its own for-profit business from taxation while using big taxes on colonists so they could not compete.

Not understanding those things, they do nothing to fix them, and leave the problem growing, only opposing the efforts to change it - supported by propaganda from the think tanks whose primary function is to put out persuasive information to get the American public to accept bad policies that benefit the wealth at their expense.

And few of them realize the inevitable conflict this road leads to between democracy - in which the people can eventually say 'enough is enough' and vote for change, as they did in the progressive era and with FDR - and the desire of the ever more powerful wealthy to be able to fleece the public with impunity. At some point that comes to a head, and if the wealthy are too powerful, democracy will lose. It's already happened in part with the massive corruption in the political system, which in part has led to all the pro-corporatocracy legislation in the last 10+ years - bills to allow media consolidation against the public interest (lest the media moguls turn on the politicians), the laws hugely restricting bankruptcy protections (where the leading cause is big medical bills) to benefit the credit idustry, massive turning of a blind eye to polluters, the deregulation Wall Street wanted so it could create its profitable schemes (and take the money and run, which it did), and much more.

The voices for the public - those like Dennis Kucinich - are marginalized; they're allowed to play, but are sidelined and unable to unite the public as they should, just as Japan had politicians passionately opposing the move to war before WWII who were marginalized and did not prevent that catastrophe.

Our nation has righted these wrongs when the public voted in better leaders; but we face new challenges in the level of organization, media, propaganda effectiveness of wealth.

The more the wealth is concentrated, the less able the public is to oppose the excesses. The human cost,s as our traditional dreams of all qualified Americans getting a free public education, of universal healthcare as first pursued by President Truman, of average workers being able to own their own home, are huge, all for the billionares to do what billionares mostly do, add to the wealth (even while some eventually give back as charity).

The wheels of our economic engine turn well when the wealth is more distributed, not too concentrated - and the same is true of our democracy functioning for the people.

 

[CADsortaGUY]

Originally posted by: Craig234
The more the wealth is concentrated, the less able the public is to oppose the excesses. The human cost,s as our traditional dreams of all qualified Americans getting a free public education, of universal healthcare as first pursued by President Truman, of average workers being able to own their own home, are huge, all for the billionares to do what billionares mostly do, add to the wealth (even while some eventually give back as charity).

"our"? Not here in reality land. UHC is not an "American Dream" no matter how much you'd like to claim it is. It may be a liberal's wet dream however...

Now as to the OP - Wealth concentration can be "bad" but it's not something new - it's been since the beginning of time. Some will always have more than others and some will never be able to acquire meaningful wealth. Yes, we will always be able to single out the most notable of the "rich" and say they live in excess...yada yada yada... but that doesn't mean that concentration is "bad". Rather, it means that some can and will "abuse" their wealth in the eyes of those who may not be as wealthy. There really isn't much you can or should do about concentration as any attempt at social engineering will likely not have the desired effect(see most all gov't social engineering attempts).

 

[Wheezer]

"concentration of wealth"

I thought communism was supposed to take care of that.

 

[OCGuy]

Originally posted by: Wheezer
"concentration of wealth"

I thought communism was supposed to take care of that.

Yea that is a communist buzz-word to demonize wealthy people. Here is a rough translation:


"I did not make the right decisions in life, so I am not compensated well for my skill set. Due to this lack of income, I do not have the ablility to save any sizeable amount of money."

 

[Jhhnn]

Originally posted by: CADsortaGUY

Originally posted by: Craig234
The more the wealth is concentrated, the less able the public is to oppose the excesses. The human cost,s as our traditional dreams of all qualified Americans getting a free public education, of universal healthcare as first pursued by President Truman, of average workers being able to own their own home, are huge, all for the billionares to do what billionares mostly do, add to the wealth (even while some eventually give back as charity).

"our"? Not here in reality land. UHC is not an "American Dream" no matter how much you'd like to claim it is. It may be a liberal's wet dream however...

Now as to the OP - Wealth concentration can be "bad" but it's not something new - it's been since the beginning of time. Some will always have more than others and some will never be able to acquire meaningful wealth. Yes, we will always be able to single out the most notable of the "rich" and say they live in excess...yada yada yada... but that doesn't mean that concentration is "bad". Rather, it means that some can and will "abuse" their wealth in the eyes of those who may not be as wealthy. There really isn't much you can or should do about concentration as any attempt at social engineering will likely not have the desired effect(see most all gov't social engineering attempts).

Hogwash. the tax policy of the New Deal kept wealth concentration in check for decades, until enough of the public slurped down the deception of trickledown voodoo to allow the immense concentration of wealth we've seen over the last 30 years. Taxcuts at the top allow accumulation of capital to facilitate offshoring, which increases profits, which leads to more offshoring and which demands governmental deficits as a masking ploy. When middle class earning power falls, extend credit to keep the looting spree going, allow financial institutions huge leverage to accomplish that while inflating the price of real estate to create a basis for lending...

When it all falls down, the middle class has fewer assets and lower earning power to carry them through rough times, and a credit rating that's meaningless when there's no lending...

The guys at the top? Sittin' pretty, owning the govt, with vastly expanded worldwide assets and the national loyalty of a pack of hyenas...

 

[Starbuck1975]

I prefer concentration of wealth to government redistribution of wealth.

When it all falls down, the middle class has fewer assets and lower earning power to carry them through rough times, and a credit rating that's meaningless when there's no lending...

The middle class has also over extended itself in abusing credit to achieve the illusion of wealth.

 

[spidey07]

Originally posted by: Starbuck1975
I prefer concentration of wealth to government redistribution of wealth.

When it all falls down, the middle class has fewer assets and lower earning power to carry them through rough times, and a credit rating that's meaningless when there's no lending...

The middle class has also over extended itself in abusing credit to achieve the illusion of wealth.

Also the middle class is only shrinking because they are moving up. I don't see wealth concentration as bad. You can always make a better product or service and be one of them. That's the great thing about liberty.

 

[Jaskalas]

There are great problems associated with the concentration of wealth within our own government, let alone the private sector.

Oh, you?re going to tell me it?s more accountable than the private sector? Then tell me if you approved wasting that $7.38 Trillion last year. What are you going to do to hold them accountable, I?d really like to know.

 

[Craig234]

Originally posted by: Wheezer
"concentration of wealth"

I thought communism was supposed to take care of that.

No one here is discussing eliminating the concentration of wealth; we all favor some. Some of are discussing the *excessive*, *extreme* concentration of wealth you are blind to.

 

[Craig234]

Originally posted by: Starbuck1975
I prefer concentration of wealth to government redistribution of wealth.

When it all falls down, the middle class has fewer assets and lower earning power to carry them through rough times, and a credit rating that's meaningless when there's no lending...

The middle class has also over extended itself in abusing credit to achieve the illusion of wealth.

I didn't. I have no debt, but I opened a statement a moment ago showing my non-cash investments in our nation's stock market down a third in the last year. I paid for something.

Stocks traded on Wall Street, home to the same people who made trillions with schemes, in the financial industry that has been receiving 30% of all profit in our nation. lately.

But you do like to 'blame the victim' (not meaning me but middle America), no matter how ignorant, how harmful the policies you are fed to defend are, don't you?

 

[LumbergTech]

Originally posted by: Ocguy31

Originally posted by: Wheezer
"concentration of wealth"

I thought communism was supposed to take care of that.

Yea that is a communist buzz-word to demonize wealthy people. Here is a rough translation:


"I did not make the right decisions in life, so I am not compensated well for my skill set. Due to this lack of income, I do not have the ablility to save any sizeable amount of money."

There is some truth to that, but making the right decisions is not a simple thing, look at bill gates..he dropped out of college to maximize his wealth..this would of course not work for many others..MOST others..there is no clear path to success ...there isn't some magic blue print that guarantees that you will do well..its a bunch of crap to even pretend that if you do "the right thing" that you will be rewarded

most often time the "right" thing is not rewarded at all

 

[Craig234]

Originally posted by: spidey07

Originally posted by: Starbuck1975
I prefer concentration of wealth to government redistribution of wealth.

When it all falls down, the middle class has fewer assets and lower earning power to carry them through rough times, and a credit rating that's meaningless when there's no lending...

The middle class has also over extended itself in abusing credit to achieve the illusion of wealth.

Also the middle class is only shrinking because they are moving up. I don't see wealth concentration as bad. You can always make a better product or service and be one of them. That's the great thing about liberty.

1. The middle class is shrinking because they're moving down.

2. Excessive wealth concentration is bad. You don't see that, then you don't see an oligarchy where 1% of people own 99% of wealth, the rest poor, as bad.

3. Excessive wealth concentration inhibits the creation of better products and services; inhibits the ability of the public who would buy them to pay for them.

4. Excessive concentration of wealth hugely reduces the average person's liberty. Increasing the average person's wealth increases liberty.

5. The right balance is when productivity is incented and rewarded, while the wealth is distributed enough for that to happen and the for welfare of the nation.

 

[Starbuck1975]

I didn't. I have no debt, but I opened a statement a moment ago showing my non-cash investments in our nation's stock market down a third in the last year. I paid for something.

The stock market doesn't guarantee returns...it is a glorified form of gambling...the only way to protect yourself from an economic downturn is either make safe investments with a smaller return, or diversify.

But you do like to 'blame the victim' (not meaning me but middle America), no matter how ignorant, how harmful the policies you are fed to defend are, don't you?

Yet it is quite acceptable to play the victim.

 

[Craig234]

Originally posted by: Starbuck1975

I didn't. I have no debt, but I opened a statement a moment ago showing my non-cash investments in our nation's stock market down a third in the last year. I paid for something.

The stock market doesn't guarantee returns...it is a glorified form of gambling...the only way to protect yourself from an economic downturn is either make safe investments with a smaller return, or diversify.

You can't actually discuss a topic, you just make random non-sequitor comments.

I did not say the market guarantees a return. Rather, Pointed out the falsehood you made in saying that people in the middle class who were affected by the problems I discussed were hurt because they had over-extended their credit. I pointed out you were wrong and you responded with irrelevant cliches and even got them wrong. Diversifying reduces both risk and opportunity but is no guarantee against losses. Even a diversified portfoloio in and out of stocks would be very likely to suffer in the current situation.

But you do like to 'blame the victim' (not meaning me but middle America), no matter how ignorant, how harmful the policies you are fed to defend are, don't you?

Yet it is quite acceptable to play the victim.

Another idiotic non-sequitor. It's pointed out you are defending terrible and harmful policies, and the best you can do is make another irrelevant cliche.

 

[JSt0rm]

Originally posted by: Ocguy31
"I did not make the right decisions in life, so I am not compensated well for my skill set. Due to this lack of income, I do not have the ablility to save any sizeable amount of money."

umm...The idea being that huge empires of wealth aren't built up over several generations thereby making it impossible for anyone else to get ahead. This is the reason for death taxes. You still have the ability to earn as much as you want and be taxed accordingly.

 

[JSt0rm]

Originally posted by: CADsortaGUY
"our"? Not here in reality land. UHC is not an "American Dream" no matter how much you'd like to claim it is. It may be a liberal's wet dream however...

CAD - We already have UHC. Its the worst kind. People get so sick that they go to the hospital racking up huge debt that they default on. The hospitals then raise the price of everything to cover the uninsured. Please don't tell me this is the best way. What is your (the neocons) suggestion for changing the system? enlighten me please.

 

[bozack]

Originally posted by: Craig234
Another idiotic non-sequitor. It's pointed out you are defending terrible and harmful policies, and the best you can do is make another irrelevant cliche.

Totally Subjective Craig, the fact is that not everyone is in favor of government oversight and regulation to this degree and are more open to a truly "free market system"...whereas there are the socialists like yourself who would rather have maximum salary caps and massive regulation.

Personally if given the choice I would rather be a part of the top 1% than bitch about how unfair it is not to be them...

 

[Capitalizt]

Concentration of wealth is only bad when it comes about through theft, fraud, or violence.

 

[Craig234]

Originally posted by: bozack

Originally posted by: Craig234
Another idiotic non-sequitor. It's pointed out you are defending terrible and harmful policies, and the best you can do is make another irrelevant cliche.

Totally Subjective Craig, the fact is that not everyone is in favor of government oversight and regulation to this degree and are more open to a truly "free market system"...whereas there are the socialists like yourself who would rather have maximum salary caps and massive regulation.

Personally if given the choice I would rather be a part of the top 1% than bitch about how unfair it is not to be them...

You wouldn't destroy your credibility so utterly if you did not lie in your posts about others' positions.

You ignorantly throw out 'socialist' as name-calling when my views don't match the meaning of the word as you use it. You say I'm for salary caps; I have said the opposite.

You throw out words like 'massive' regulation to cloud the lack of anything but mush in your comments. Are you for zero regulation? For 1000 times as much as we have now?

Somewhere betweeen? Then you have to define "massive", becuase I'm not for "massive" regulation. I'm for adding regulation that's missing that we need, and removing regulation that's wasteful or misguided - pretty much like any typical American. The issue lies in discussing the specific regulation - something you completely fail to do in yor blather.

Your closing comment is just as bad in another way. It's too vapid to say much about, yet immoral and shortsighted at the same time.

You think maybe Warren Buffet likes being in the top 1% as he speakd out for social justice on behalf of the 'average American', as he worries about their welfare?

Wanitng to make good money and wanting society to treat the poor well are not mutually excluive. You might also see Robert Kennedy, in my sig, for another example.

It's the moral midgets who fail to have any concern about society's welfare while pursuing their own interests - whether they're selfish and successful, or the sort of incompetent wannabees who oppose their own interests hoping that fighting for the wealthy will rub off somehow - who are the problem. IMO we need people to not look at only their own needs but society's more broadly, and if you disagree with that as you clearly do from your comments, I think you lack values and are bad for the society.

If you want to be part of the top 1%, there's a right way and a wrong way to go about it. A right way is to try to do things like ensuring there are no unfair roadblocks to people getting there; wrong ways include crime and selfish actions that *unfairly* advantage you. Whether you are in it or not, you have moral obligations to the other 99%, too. Not worrying about that would change 'the American dream' into the American tyranny filled with 1% very rich and the masses suffering miserably.

Oh, you didn't mean that. Well then learn to say what you mean better, because that's what you said. You sound like the worst sort of selfish petty wannabe rich in the post.

You could serve well as the antonym for noblesse oblige, if you have any noblesse.

 

[Craig234]

Originally posted by: Capitalizt
Concentration of wealth is only bad when it comes about through theft, fraud, or violence.

Wong.

I don't care if it comes about from the entire nation holding a new woodstock and while on acid voting to give 90% of the nation's wealth to a sweet girl - it's a problem.

It's a problem because it deprives many people of a standard of living they'd otherwise enjoy, it desprives the economic system of incentives for productivity, it threatens the political system of our democracy because the excessive narrow concentration of wealth leads to disproportionate power for the few in direct conflict with 'one person one vote', it leads to the destruction of an 'owenrship culture and reduces entrepreneurism, among other problems having nothing to do with how the wealth got concentrated.

 

[XMan]

The only issue I take is the concept that wealth is a finite resource. It's not, not anymore. The days of royalty hoarding gold in the palace are long gone.

 

[Craig234]

Originally posted by: XMan
The only issue I take is the concept that wealth is a finite resource. It's not, not anymore. The days of royalty hoarding gold in the palace are long gone.

It is finite. It changes over time, but is never infinite. At any one time, there is a certain amount of wealth, distributed a certain way.

For example, there's only so much beachfront in California. That is part of the wealth. It might be used for public beaches, or many smaller homes, or a few massive properties.

 

[XMan]

I'm sure Bill Gates, Sergey Brin, Steve Jobs, etc., would disagree with you.

 

[Craig234]

Originally posted by: XMan
I'm sure Bill Gates, Sergey Brin, Steve Jobs, etc., would disagree with you.

I'm sure they would not, because they don't have a fundamentally wrong view of wealth.

Which of them would say that they have, or that there is, infinite wealth?