patrick.net

For any intelligent discussion on this, one needs to read this:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

Inequality of wealth isn't the problem per se, inequality of productive opportunity -- j o b s -- is.

The country I guess can be divided into quintiles -- top 20% doing good, next 20% doing OK, the middle not doing so well, next doing poorly and getting worse, and the bottom 20% as screwed as it always is.

I like commenting here because I am free to wheel out my hobby horse every chance I get, since the proprietor is one of the few people on the internet who shares my appreciation of this issue -- land economics and Georgist thought.

Congress could pass a law tomorrow taxing away land value and rents, and it would solve all of our problems, since all of our problems in the end are coming from way too much investment in land values and the predation upon others via landlordism.

But this will not happen in a million years. Sadly, everything else is just rearranging the deck chairs.

I have my suspicions that were are too heterogenous and geographically extensive a society for the Eurosocialist model to work here. Perhaps Canada's, but, again, the population of Canada is less than California.

My general thing with economics and social policy is that everyone should have access to that which is necessary to become and remain a productive member of society, without regard to ability to pay.

So this basically extends to health care (including dental), local transportation, education, housing, child-care.

We as a society don't do any of these things particularly well, either efficiently and/or effectively in the first place.

The great wealth inequality here is part of the drag on the economy, but just liquidating the wealthy is not enough, LOL.

We need to focus on the fundamentals of WEALTH PRODUCTION in this country, and what it means to be an American in this world. This is the 21 century but ~40% of this country seems determined to re-live the 1800s with all its horrendous mistakes.

This explains the GINI coefficient.

http://weakonomics.com/2010/01/26/the-gini-coefficient-income-inequality-around-the-globe/

It is now higher here than in Thailand for what it's worth.

cheers.

Here is another perspective from the Atlantic Wire.

http://www.theatlanticwire.com/opinions/view/opinion/Does-Inequality-Cause-Financial-Crises-6210?source=patrick.net#ReadMorePage

I was hoping this discussion would draw other informed opinions, but I have still learned a good amount.
cheers.

American in Japan says

I was hoping this discussion would draw other informed opinions

interested in some uninformed opinions? a little laughter? Let me know...

There is an aspect of so called redistribution that I never hear anyone else talking about.

That is, that under a much more progressive tax system, better spending decisions would be made. Yes progressivity of the tax code is to a degree independent of whether the budget is balanced, but at least under these circumstances we would know that we weren't literally finanancing low tax rates for the rich with borrowed money.

There is a sort of catch 22 though. Consider this.

We have proven that lowering taxes will not force the government to reduce spending to levels of revenues. They just borrow (or "print" ).

IF it was the other way around, if taxes were high and if the only way that taxes could be lowered (on the powerful decision makers who also happen to be high income), were to cut spending in key areas, then and only then can decisions such as reducing military spending be made.

But people will get in to a chicken versus egg argument, that will prevent us from ever being in that situation. At least not until after all other possibilities have been exhausted and our situation deteriorates substantially. It is sad.

I'm sorry to hear that nothing ever seems to work out for you, but wanting to take from other people that have, because you are plumb out of ideas on how to better your self. Is not only a sin, but is a Crime against Democracy.

But since we're leaning Commie Fascists, I rather, seize the wealth from the hapless foreigners that came here to make their fortunes, or those that brought their Wealth with them from the old country. That way you keep Bubba and Scooter happy while you destroy the underlying principals of democracy.

Tenouncetrout says

But since we’re leaning Commie Fascists, I rather, seize the wealth from the hapless foreigners that came here to make their fortunes, or those that brought their Wealth with them from the old country. That way you keep Bubba and Scooter happy while you destroy the underlying principals of democracy.

I'm not sure if we lean toward Commie Fascists. At least not Commie. Our government does have a tendency to go all Fascist on us lately though.

The rise of 401Ks and other defined contribution plans has helped the rich greatly. We are encouraged to put our retirement savings "into" stocks, and pension funds do it for us whether we like it or not. But it's not really savings, because somebody at the other end of the transaction must sell you that stock, and that somebody is very likely to be a rich executive or other highly compensated employee with extremely generous stock grants. Companies can dilute their stock constantly with these grants, without affecting the stock price much, because there is a constant firehose of money from the middle class. The stock market, and the encouragement of it being a "savings" vehicle is one of the most efficient transfers of wealth to the top ever created, but hardly anybody notices the dynamics of this.

MarkInSF says

Companies can dilute their stock constantly with these grants, without affecting the stock price much, because there is a constant firehose of money from the middle class. The stock market, and the encouragement of it being a “savings” vehicle is one of the most efficient transfers of wealth to the top ever created, but hardly anybody notices the dynamics of this.

This is a good point, and I think the boomers are going to get a surprise when they hit the withdrawal age. That is currently those born in 1950 now, but peak boomer year was 1955, so 2015-2030 is going to be the period maximal 401k drawdown.

Tenouncetrout says

I’m sorry to hear that nothing ever seems to work out for you

Don't know if this is addressed to me, or whether it's some kind of projection, because you obviously don't know anything about how things work out for me.

There is kind of cool symmetry between you and I. Neither one of us is capable of understanding what the other one posts. But that's where the similarity ends, because I don't think that hardly anyone understands most of what you say. Have a little pride in your communication skills, man.

Troy says

This is a good point, and I think the boomers are going to get a surprise when they hit the withdrawal age. That is currently those born in 1950 now, but peak boomer year was 1955, so 2015-2030 is going to be the period maximal 401k drawdown.

I wish people would wake up to the fact that a privatized "investment-based" retirement system is not even mathematically possible if the worker to retiree ratio is around 3:1. Not if a standard of living (including decent medical care) is to be maintained. There are simply are not enough true vehicles of savings, unless you believe in the miracle of bubble valuation of assets. Their must be direct generational transfer payments.

Troy says

Cold Fusion

If this is real, but it can not be understood by current science then it must therefore not be real. Weird. You would think the results could just be verified or not.

About recessions, it's just economists definition that says what, two or 3 consecutive quarters of negative GDP growth. We all know we are still in deep trouble. Super low interest rates QEN, fed buying up bad securities.
Who posted the link recently from Harvard review about unproductive growth ? From Egypt thread.
http://blogs.hbr.org/haque/2011/02/egypts_revolution_is_coming_to.html

Yes, if the third 100K you make is taxed higher than your second 100k, ooooooh, forced wealth redistribution.

Tenouncetrout says

That can’t be no more fucked up[...]

Stop it! Your writing is hurting my brain. Please put the pipe down and PAY ATTENTION TO WHAT YOU WRITE! Crikey, you litter up the thread with incoherent ramblings that make NO FRIGGEN SENSE.

I read this forum because there are good posters who know more about these issues than I. As demonstrated by their ability to state their position and then back it up. You, however, function as a wrench thrown in the cogs. Not because of your differing opinion,

BUT BECAUSE YOU WRITE LIKE A DRUNK.

Here is an idea, after you write something, try to read it. If you fall asleep, don't post it when you wake up.

/ignore

Tenouncetrout says

That can’t be no more fucked up, than talking about forced wealth redistribution from hard working American people.

I've got nothing against people that earn their wealth through hard work, or building businesses having low tax rates.

Inherited wealth, passive income, and income from exploiting a broken corporate governance system (executives of company A are on the board of company B, and they scratch each others back) that give executives huge slices of companies, has nothing to do with "hard work".

I'm with Troy on this one.

This nation needs an honest discussion about how to solve problems with unemployment. Our system is in my opinion fairly well setup for feudalism, not democracy. And I'm not sure why lately as a nation we've been regressing to live-out 18th century all over again.

ChrisLA says

Historically:
When Russians went through a revolution, it wasn’t because Lenin’s party had a great marketing slogan. It was because a few rich owned entire country, all of its land and its means of production, while the rest were starving and dying on the streets. It is not an exaggeration either. It was because rich treated the poor like total disposable dirt. People were simply sick of that system and revolted.

Interesting take on the "revolution." The people that you claim "revolted" were duped into believing all that "workers of the world unite " nonsense. It's an interesting anomaly of human nature that indicates the need to believe in a "cause," even when it is an obvious nonsensical fraud. Lenin believed in and ruthlessly practiced violence as a means of enforcement for his "ideals." His lust for violence is very well documented in his writings and speeches. All those that even slightly opposed him were rounded up and shot in the back of the head while they looked into an open grave where dozens of other victims lay. Literally tens of thousands perished in this manner. When Lenin had his most unfortunate stroke and eventually went on to his eternal reward, Stalin seized power and advanced the workers' cause by eventually murdering an estimated 40 million of his countrymen, using creative means such as forced famine, forced labor camps (in which the people were underfed and overworked, etc.) and mass executions. Numerous accounts exist in which Stalin would have people murdered simply because he didn't like the look on their face. I find it incredibly interesting that you would mention the "people that were falling over dead in the streets" under the evil "rich" elite, but fail to mention the mass murder in the millions that came after. Is there a reason you failed to mention that fact?

Troy brought a very interesting point here earlier in this post.

>Inequality of wealth isn’t the problem per se, inequality of productive opportunity — j o b s — is.

Another link on GINI:

http://www.wealthandwant.com/themes/Gini_Lorenz.html

(Thanks Troy for the lead).

Ni modo.

0utside Party .. says

The free market republic system we have now would work perfectly

Hey Capt Conservative . . . 19th century -- look into it sometime

it did not "work perfectly" -- the Progressive Era of ~1900 - 1920 came in direct response to all its crap.

Do you think Americans even have an approximate idea of how unequal it actually is? You'd be wrong:

From here:

http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

Ni modo.

How much did you give up to make the top bracket wealthier?

outside--

Who is you people? Who on this thread wants communitarianism?

I would prefer to have a well regulated free market.

Vicente says

How much did you give up to make the top bracket wealthier?

Ni modo.

Troy says

Congress could pass a law tomorrow taxing away land value and rents, and it would solve all of our problems, since all of our problems in the end are coming from way too much investment in land values and the predation upon others via landlordism.

Can you explain this concept with a bit more detail? How would this work to spread the wealth?

Troy is on to something here, some details need to be filled in but... Everyone who is interested please read the site he mentioned:

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

I think that rather than a dream wish, this is an ideal that most Americans would be willing to have, sacrifice and all.
I would like to see the survey in detail though.

There also needs to be a distinction of "rich" here. Are we talking about people with massive net worths (over $10,000,000) usually because of inherited money) or very productive individuals with high salaries (not all well paid people are so productive however, look at the CEO of Chrysler).