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The wealth distribution resembles the intelligence distribution.
invite response
2012 Jun 12, 8:03am 9,548 views 22 comments
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EconPete - now you did it - you better head for the hills. The lib's will be attacking any second now!!
I agree with many of these points. Except the main point that networth and intelligence are always directly related.
I think $$ intelligence that increases your networth is one kind of intelligence. But someone who lives in their mom's basement for 20 years, working a menial job, with no life but to play video games all night therefore spending no $$ and living rent free has a large networth but is not intelligent. This guy is pathetic, not intelligent.
Same goes for the type "B" personality brilliant engineer that has a wife that has a spending problem and runs the relationship and puts them into debt. The engineer is simply a pussy, not stupid.
Gosh, this argument is so Ayn Rand.
What about the 50% of kids born out of wedlock, raised by single mothers in our country? Immigrants that can't get a legal job? Disabled or handicapped that can't hold a job without a massive support system?
Families with 2 earners can usually weather the storm and find ways to save. Single parents really can't, has nothing to do with intelligence. Try keeping a job when you're the only one that can stay home when your child is sick.
Those without insurance get socked by crazy bills at rates that HMOs would never pay. One medical problem and they are immediately bankrupted. Has nothing to do with intelligence.
Support marriage in this country and provide some sort of universal health care and poverty will drop to nil and savings and educational outcomes will improve. Has nothing to do with intelligence.
$10,000 a year in LA might cover the cost of living out of your car. What kind of nonsense is this?
Seriously. The federal poverty line is ~22,000 and I don't see how anyone could live on that, never mind a family of 4, and certainly not in the coastal cities. Maybe if you pack 3-4 families in an apt, which people do.
This is one of a steady stream of uninformed posts on blogs and forums.
"The reason that people in our country are poor is mostly their own fault." All I have to say is WOW. Get educated. Please.
Gosh, this argument is so Ayn Rand.
What about the 50% of kids born out of wedlock, raised by single mothers in our country? Immigrants that can't get a legal job? Disabled or handicapped that can't hold a job without a massive support system?
Families with 2 earners can usually weather the storm and find ways to save. Single parents really can't, has nothing to do with intelligence. Try keeping a job when you're the only one that can stay home when your child is sick.
I agree intelligence is not what it takes. I think discipline is a better word.
Your counterexamples are not so good.
1) Having children is not a right. If you can't afford children then you should forgo them. If through some unfortunate circumstance a mother finds herself single whether through the death of her husband or her ex shirking his duties then I have sympathy. But there are a lot of single mothers who didn't think things through before they got pregnant. It is not society's responsibility to pick up the tab when people are irresponsible with their sex organs.
2) If you are an illegal immigrant then you have fewer legal rights than a citizen. That's how it has always worked. You are not entitled to a job in a country whose laws you have broken.
3) Disabled people who are willing but otherwise unable to work is a tricky issue. For one their condition is probably not their fault so they can't be the only one held responsible for supporting themselves. However if they are unfit for work then they should not work - I would rather they received some sort of stipend from the government. However there is one flaw in this argument, mainly that it's hard to fake being a single mom and doesn't make a lot of sense, and it doesn't make sense to fake being an illegal immigrant, but it's not so hard to fake disability and collect SSDI. Why did the number of people collecting SSDI increase by 22% since 2007? Was the recession a traumatic event that disabled people? If the recession had not occurred would the increase have been the same?
http://www.bloomberg.com/news/2012-05-03/disabled-americans-shrink-size-of-u-s-labor-force.html
FNWGMOBDVZXDNW
2012 Jun 12, 1:20pm
Net worth shows an individuals worth to society as a whole
Damn if only society could have traded Albert Einstein for another Paris Hilton, we would all be so much better off.
PockyClipsNow
2012 Jun 12, 2:15pm
OK next the libs will have us doing INTELLIGENCE REDISTRIBUTION - watch for it! (If it were possible, it would be on they wish list! The closest they can come is free college for certain types of peoples. BTW all parents complaining about cost of college should have just married a certain type of person...total free ride for all kids...)
Repubthug
2012 Jun 12, 2:30pm
Net worth shows an individuals worth to society as a whole
Damn if only society could have traded Albert Einstein for another Paris Hilton, we would all be so much better off.
On the money!
OK next the libs will have us doing INTELLIGENCE REDISTRIBUTION
How naive. Both parties have fleeced us and redistributed wealth . . . to the upper 1%. Party politics is a red-herring. While people are flinging poo about "libs vs. cons", the Fascists are taking it all away from us, right from under our noses.
Very compelling article... until one remembers that 90+% of the top 1% are INHERITED WEALTH
I guess they were smart enough to CHOOSE THEIR PARENTS WISELY :))
EconPete - now you did it - you better head for the hills. The lib's will be attacking any second now!!
Absolutely amazing. There wasn't a single word in the post about liberal or conservative. Nothing, nada, none. I'm stunned that every single thing you encounter is twisted around to being some kind of paranoia about liberals. You live in a very dark, ugly, and strange world abe.
freak80
2012 Jun 13, 3:17am
What about the 50% of kids born out of wedlock, raised by single mothers in our country?
They should have been aborted. Duh. This is America...you are only 5/5's human if you have the power to assert you are 5/5's human.
leo707
2012 Jun 13, 3:48am
Damn if only society could have traded Albert Einstein for another Paris Hilton, we would all be so much better off.
Tenpoundbass
2012 Jun 13, 4:03am
Bravo Econ Pete.
Great post.
I remember in the 80's(when the banks paid people to save money).
People on meager incomes, still managed to save up money and buy land, and have a nest egg, and other investment irons in the fire.
These people weren't in debt, they saved up and paid cash for every thing. They were good a managing their money, and knew how to make what little meager money that had work for them and pay them. It took discipline, way too much discipline for the instant gratification generation's liking.
Tenpoundbass
2012 Jun 13, 4:11am
But someone who lives in their mom's basement for 20 years, working a menial job, with no life but to play video games all night therefore spending no $$ and living rent free has a large networth but is not intelligent. This guy is pathetic, not intelligent.
NO that guy is being judged.
with no life
What in the hell is that supposed to mean. Are you saying some NASCAR frequenting, NRA card carrying member, Clan rally organizer would be worth more as a human being in your book. Because he has a "life".
Or do you quantify having a "LIFE" by the quantity cafe lattes they consume at Starbucks during the televised POTUS SOTU?
What if said recluse was a Mensa society member and was just disgusted by the political rhetoric from both parties and chose to just stay home so he doesn't have to deal with such people? Perhaps he thinks those people are goofy idiots he'd rather not associate with, and wished they would get a life?
HeadSet
2012 Jun 13, 6:30am
Excellent post Econ Pete
But I must concur with the poster who cited "discipline" as the relevant cause. We all know of households, for example, that have an $80k income where one consumes sensibly and has savings, while another lives lavishly resulting in high debt and high interest payments.
For those posting "Paris Hilton" and "The 1% having inherited wealth", note that those folks are outliers. The rest of us fall well within the scope of Econ Pete's discussion. Invalidating Econ Pete's point by citing "Paris Hilton" et al, is like calling Harvard a diploma mill based on Ted Kennedy's experience.
HeadSet
2012 Jun 13, 6:58am
Net worth shows an individuals worth to society as a whole.
Disagree. That would be your paycheck that correlates your economic value to society. Note I said "economic value," not value as a person.
Of course, I'm talking about the paycheck correlation as it applies to the vast majority. I agree there are exceptions such as nepotism, political connections, or being an heir.
What in the hell is that supposed to mean. Are you saying some NASCAR frequenting, NRA card carrying member, Clan rally organizer would be worth more as a human being in your book. Because he has a "life".
Or do you quantify having a "LIFE" by the quantity cafe lattes they consume at Starbucks during the televised POTUS SOTU?
I am simply pointing out that obsessively INTROVERTED people by personality type and personality type alone, (not intelligence) can have behavior characteristics that as a secondary effect, will result in a high networth.
My no life statement is simply my opinion on someone that obsesses over one single thing in their life to the detriment of other aspects of a well balanced life full of friends, family, and experiences.
You folks should read Malcolm Gladwells "Outliers - The story of success".
Most high net worth people got there from being at the right place, right time AND right skills for that particular moment in history.
Not their IQ, intrinsic value to society, or any other bunk.
I remember in the 80's(when the banks paid people to save money).
People on meager incomes, still managed to save up money and buy land, and have a nest egg, and other investment irons in the fire.
These people weren't in debt, they saved up and paid cash for every thing. They were good a managing their money, and knew how to make what little meager money that had work for them and pay them. It took discipline, way too much discipline for the instant gratification generation's liking.
This statement seems contradictory. In the parentheses, you mention the banks paying people to save, but then you go onto personal spending habits.
This is exactly the divide and conquer thinking that keeps bankster-bootlicker's in power. Your first arguement is correct, namely that the game has been rigged so you can't save. Wages stagnate, while inflation drives up the prices of the basics, food, gas, healthcare,etc. This leaves less money to save. However, savings rates are in the toilet and can't even match inflation, so saving actually costs money. That is why people ran to housing and purchasing goods and services. At least with that stuff, you could get the practical and entertainment value before the value was lost. Saving destroyed value by virtue of monetarist scheming by the FED (run by banksters, which is why I referenced bankster-bootlickers).
Until we restore true market value to everything in the marketplace, no amount of personal discipline will keep people financially secure. Politicians just want you to blame yourself, not their campaign contributors, so they say you're lazy and a spendthrift if inflation beats your savings rate, while your wages stagnate.
freak80
2012 Jun 13, 2:06pm
This is exactly the divide and conquer thinking that keeps bankster-bootlicker's in power. Your first arguement is correct, namely that the game has been rigged so you can't save. Wages stagnate, while inflation drives up the prices of the basics, food, gas, healthcare,etc. This leaves less money to save. However, savings rates are in the toilet and can't even match inflation, so saving actually costs money. That is why people ran to housing and purchasing goods and services. At least with that stuff, you could get the practical and entertainment value before the value was lost. Saving destroyed value by virtue of monetarist scheming by the FED (run by banksters, which is why I referenced bankster-bootlickers).
Amen to that. Well put!
Top 1% = 40%
Bottom 40% = 2%
This means that if the top 1 percent gave up just 2% of their share of the countries net worth they could double the bottom 40%'s net worth! The problem lies only partially in the income distribution. What is more important is the distribution of disposable income. If a family lives on $10,000 a year, they essentially have 0 disposable income. It is kind of hard to acquire wealth with 0 potential to save.
Most people are poor not because they have such low incomes that they cannot save money. Only a minority of the population lives on less than $10,000 income a year. The reason that people in our country are poor is mostly their own fault. People are so busy living outside of their means that they get caught up voluntarily giving money to banks and insurance companies their whole lives.
If people didn't serve their ego before their financial security maybe there wouldn't have had a housing bubble. People also need to realize that when they spend their money, because of the distribution of income and wealth, it will more than likely end up in the pockets of the wealthy. This means the U.S. must restore savings as a value, because how else can someone become wealthy if they don't save? This country focuses too much on income and not enough on net worth. Net worth shows an individuals worth to society as a whole.
People can be poor regardless of income if they live outside their means, and people can be wealthy only if they are smart enough to save. The beauty about net worth is that it puts otherwise unquantifiable values into quantifiable measures. The man with $30,000 income who has amassed $100,000 net worth is financially more valuable than the million dollar income earner who has a net worth of -$150,000. This illustrates that wealth is not as tied to income as it is the overall intelligence of the individual and their ability to control their ego.
Thus society gets a very simple relationship; an individual is smart enough to save their disposable income and they are wealthy, or they are stupid and don't save what’s left over after subsistence and are poor. The same people who may argue that "well, the value of subsistence grows with income." are the same people who are not intelligent to have a positive net worth. By definition subsistence is bare minimum, lets say $10,000 a year, therefore most everyone can cut back on consumption to become successful. The only problem is that most people don't value being successful more than they value serving their own greedy, gluttonous desires. For these unfortunate reasons, intelligence has more to do with wealth than income.
#housing