Can there ever be too much income inequality?

[Quantum Windbag]

Here is what happens when there is too much income inequality....

Adherents of most historical models identify many of the same features of the Ancien Régime as being among the causes of the Revolution. Economic factors included hunger and malnutrition in the most destitute segments of the population, due to rising bread prices (from a normal 8 sous for a four-pound loaf to 12 sous by the end of 1789),[4] after several years of poor grain harvests. Bad harvests (caused in part by extreme weather from El Niño along with volcanic activity at Laki and Grímsvötn), rising food prices, and an inadequate transportation system that hindered the shipment of bulk foods from rural areas to large population centers contributed greatly to the destabilization of French society in the years leading up to the Revolution.

Another cause was the state's effective bankruptcy due to the enormous cost of previous wars, particularly the financial strain caused by French participation in the American Revolutionary War. The national debt amounted to some 1,000–2,000 million[citation needed] livres. The social burdens caused by war included the huge war debt, made worse by the loss of France's colonial possessions in North America and the growing commercial dominance of Great Britain. France's inefficient and antiquated financial system was unable to manage the national debt, something which was both partially caused and exacerbated by the burden of an inadequate system of taxation. To obtain new money to head off default on the government's loans, the king called an Assembly of Notables in 1787.

Meanwhile, the royal court at Versailles was seen as being isolated from, and indifferent to, the hardships of the lower classes. While in theory King Louis XVI was an absolute monarch, in practice he was often indecisive and known to back down when faced with strong opposition. While he did reduce government expenditures, opponents in the parlements successfully thwarted his attempts at enacting much needed reforms. Those who were opposed to Louis' policies further undermined royal authority by distributing pamphlets (often reporting false or exaggerated information) that criticized the government and its officials, stirring up public opinion against the monarchy.[5]

French Revolution - Wikipedia, the free encyclopedia

Can you tell me what caused the spike in income inequality since the 1970s?

 

[bigrebnc1775]

Capitalism without regulation is the Mafia.

The unregulated free market ran a Ponzi scheme....

A £516 trillion derivatives 'time-bomb' - Business News, Business - The Independent

Oh, and my life is fine. I made 100K this year.

If that's what you think it is then Chris you don't know what in the fuck you are talking about. Capitalism is free enterprise. the mafia is in the white house

Big REB to the rescue.

I'm two sheets in the wind and a liittle tired and chris makes it way to easy.

 

[The T]

If that's what you think it is then Chris you don't know what in the fuck you are talking about. Capitalism is free enterprise. the mafia is in the white house

Big REB to the rescue.

I'm two sheets in the wind and a liittle tired and chris makes it way to easy.

Matters NOT...

 

[editec]

Of course there can be too much wealth and income inequity.

History is replete with fallen nations and empires that ceased having the support of their people.

The USA is on that same path, right now.

Think I'm over reacting?

We have TWO populist movements right now, both exemplifying the discontent that the people are feeling for this system.


TWO anit-system populaist movements at the same time?

That's no good folks.

That's indicative of just how badly our masters are fucking things up.

 

[code1211]

What you propose is punishing the top performers out of the society and reducing the level of talent to the mid point of the continuum. There would be greater income equality because the top 3% would have left.

Is that what happened in the 1950s-70s? This is not unexplored territory, you know. We've been there before.

We were there, but "there" no longer exists.

You may have heard of WW2. It was in all the papers. During the period between 1941 and 1945, the USA bombed the rest of the world to rubble. Speaking economically, there was no "rest of the world" in the period between 1950 and 1970. There was only the USA and the USSR.

Even under the rock where you apparently reside, some other tid bits might have leaked in like the computer revolution, the rise of middle classes globally, renewal of the industrialization world wide and the fall of the USA ranking in educational achievement due to the competitive successes of the other countries.

The monopoly of the world's resources and wealth has slipped away and now the rest of the world is rising to a level of technological competence unknown during previous history. We are no longer a giant among cripples. We are competing with equals. This is good. However, being fat and sloppy like we were from 1950 to 1970 is no longer good enough to win.

It is now easier for a US company to declare its base to be off shore than it is for me to move from Indiana to Minnesota.

Where we are IS unexploered territory. That you can't see this is all the more reason to examine it. Your take on the current situation is simply wrong.

If you are trying to reach any particular goal, you need to know where you are, where you are going and what you will need to make the trip. You are not in posession of any of these.

 

[Full-Auto]

Of course there can be too much wealth and income inequity.

History is replete with fallen nations and empires that ceased having the support of their people.

The USA is on that same path, right now.

Think I'm over reacting?

We have TWO populist movements right now, both exemplifying the discontent that the people are feeling for this system.


TWO anit-system populaist movements at the same time?

That's no good folks.

That's indicative of just how badly our masters are fucking things up.

TWO anit-system populaist movements at the same time?

Please explain this because in my view it doesnt match reality. The Tea party worked through the system.

 

[code1211]

Both those statements are untrue. The employees of the rich actually produce those things; the rich simply enjoy the fruits of other people's labor, and the reason why ordinary people are suffering is because real wages have declined while the cost of living has increased. It's entirely attributable to increasing shares of the national wealth going to a tiny minority at the top.

And that statement is garbage.

Ordinary people are suffering because they don't have the links or the interest in starting up businesses to compete for that wealth. Seems many are simply not interested.

Additionally, our lovely government has made it more difficult to start businesses. I just purchases a mattress and had to sign all kind of form on fire retardants in the mattress....more regulation.

If you want to get the wealth spread out, stop using government to protect the rich.

Bullshit.

Ordinary people are suffering because Wall Street ran a $516 trillion dollar derivatives Ponzi scheme that destroyed the world economy.

Just to clarify, are saying that "Wall Street" did this with no input from the rest of us? No even one private citizen took out a second on the inflated value of his home, nobody took a loan that was too big because he thought he could get something for nothing?

The truth is that this mess occurred because everyone was trying to cash in trying to get something for nothing.

If we as a general population were not morons, this would not have happened regardless of what "Wall Street" was doing.

Has anything that has ever happened in your life ever been your fault?

Have you lived entirely free of any responsibility and always been the victim?

Is any part of your life the result of your own planning, work and sacrifice?

What is it in our world today that makes anyone think that their life is the result of the work and sweat of others?

 

[Full-Auto]

And that statement is garbage.

Ordinary people are suffering because they don't have the links or the interest in starting up businesses to compete for that wealth. Seems many are simply not interested.

Additionally, our lovely government has made it more difficult to start businesses. I just purchases a mattress and had to sign all kind of form on fire retardants in the mattress....more regulation.

If you want to get the wealth spread out, stop using government to protect the rich.

Bullshit.

Ordinary people are suffering because Wall Street ran a $516 trillion dollar derivatives Ponzi scheme that destroyed the world economy.

Just to clarify, are saying that "Wall Street" did this with no input from the rest of us? No even one private citizen took out a second on the inflated value of his home, nobody took a loan that was too big because he thought he could get something for nothing?

The truth is that this mess occurred because everyone was trying to cash in trying to get something for nothing.

If we as a general population were not morons, this would not have happened regardless of what "Wall Street" was doing.

Has anything that has ever happened in your life ever been your fault?

Have you lived entirely free of any responsibility and always been the victim?

Is any part of your life the result of your own planning, work and sacrifice?

What is it in our world today that makes anyone think that their life is the result of the work and sweat of others?

I really believe you need to add to that, government. The ones that opened the door. The ones that bragged about forcing banks to issue sub primes.

 

[Douger]

Income inequality is one of the biggest threats to any society. The higher the income inequality the bigger the threat of the collapse of society.

"over 80 % of the world population lives on less than 10 US$/day.;[7] over 50 % of the world population lives on less than 2 US$/day;[8] over 20 % of the world population lives on less than 1.25 US$/day [9]"

International inequality - Wikipedia, the free encyclopedia

 

[bripat9643]

If they want jobs why are they demanding that the government forgive all debt? If they want jobs why are they asking the government to raise taxes?

They want government jobs. They have degrees in social work.

 

[Truthmatters]

So did any of you actaully answer the OPs question?

 

[Truthmatters]

Bill Mayer asked Grover Norquist that question. It took Grover a full 30 seconds of hemming and hawing to kind of answer it. Grover said yes, but he wasn't sure how much that could be.

Then Grover proceeded to lie again and again, but Bill pulled out a cheat sheet that his staff put together to counter the lies. He left Grover sputtering.

Later, Ron Christie was lying. The guys on the panel were all over him until Christie brought up some bill to work on America's infrastructure that Ron said Republicans support, but Democrats opposed. Bill said he hadn't heard of the bill so he couldn't argue. Then he said too often Republicans bring something up Bill can't argue about because he never heard of it,, then Bill has his staff investigate it and almost always finds out the Republican was full of shit and lying. I'm surprised when they aren't.

Grover Norquist and Ron Christie. What a couple of fools. Seriously.

People are protesting because they want jobs, not money, JOBS!

Christie said Obama should be in Washington working with Republicans, not turning America against the Republicans. As if they would work with Obama? Seriously?

Is there any point of wealth concentration that is too high to sustain our society?

 

[bripat9643]

Is there any point of wealth concentration that is too high to sustain our society?

It's a stupid question. It's like asking "is it possible to have too much rain?" Obviously, the answer is "yes." 1000 inches a year would be too much. However, the laws of nature preclude such a thing from happening. It would also be bad if one man had all the wealth and everyone else had none. However, the laws of economics preclude such an outcome.

The question in the OP is the same as asking "would it be bad if the laws of economics were no longer in force?"

 

[Harry Dresden]

Of course there can be too much wealth and income inequity.

History is replete with fallen nations and empires that ceased having the support of their people.

The USA is on that same path, right now.

Think I'm over reacting?

We have TWO populist movements right now, both exemplifying the discontent that the people are feeling for this system.


TWO anit-system populaist movements at the same time?

That's no good folks.

That's indicative of just how badly our masters are fucking things up.

its also indicative that we havent had a leader yet this Century...

 

[Listening]

The question in the OP is the same as asking "would it be bad if the laws of economics were no longer in force?"

Are the laws of economics still in force ?

I think so.

Do we live in a place where we have free markets ?

I am not so sure.

You go back to the Presidents move to save GM. How is that blind ? It isn't. He didn't save the litte guys. Nature took care of them (symbolically speaking). But nature was after GM and we intervened. That isn't the situation in a free market.

Now, the libs are screaming that GM is profitable and making money. But the GM stockholder got screwed and who made out ????? Not the American people.

And if GM had been allowed to crash, it's place would have been taken by others who could have then invested and made a good return. We never got that chance. Instead, our tax dollars were utilized to try and buy President Obama's re-election.

Unbelievable.

 

[Listening]

Is that what happened in the 1950s-70s? This is not unexplored territory, you know. We've been there before.

Not in a global economy. So yes it is unexplored territory.

It is hysterical that you people will reach for any kind of assoication you can to soak the rich.

Making the super rich pay taxes at the same rate as the rest of us is not "soaking the rich."

The top 4% have gotten 80% of the after tax income increase in the last 30 years.

Why not spell out what percentage of income tax they pay ?

Let's hear it.

Surely, the top 4% are not even paying 4% of the income tax...right ?

So how much is it.

And how much is the bottom half paying ? Please say it loud and clear.

If you are jeolous of their income....then start a business and go after some of it.

 

[Dragon]

It's a stupid question. It's like asking "is it possible to have too much rain?" Obviously, the answer is "yes." 1000 inches a year would be too much. However, the laws of nature preclude such a thing from happening. It would also be bad if one man had all the wealth and everyone else had none. However, the laws of economics preclude such an outcome.

The question in the OP is the same as asking "would it be bad if the laws of economics were no longer in force?"

So what you're saying is that no concentration of wealth that can actually happen can ever be too much, is that right?

Again, we should test this by observation, so we should establish criteria for determining what would constitute "too much." Otherwise, all you're doing is begging the question.

Would you agree that, if increased concentration of wealth resulted in slower economic growth, that would mean the concentration was too high? Never mind whether you think this could ever actually happen; we'll find out whether it did or not by observation. IF it did, THEN would that be too much concentration of wealth?

By the way, it is certainly possible for too much rain to fall for a given purpose, such as growing a crop. So I'm not sure that was a very good analogy for you to use. But never mind that.

 

[Listening]

So what you're saying is that no concentration of wealth that can actually happen can ever be too much, is that right?

Again, we should test this by observation, so we should establish criteria for determining what would constitute "too much." Otherwise, all you're doing is begging the question.

Would you agree that, if increased concentration of wealth resulted in slower economic growth, that would mean the concentration was too high? Never mind whether you think this could ever actually happen; we'll find out whether it did or not by observation. IF it did, THEN would that be too much concentration of wealth?

By the way, it is certainly possible for too much rain to fall for a given purpose, such as growing a crop. So I'm not sure that was a very good analogy for you to use. But never mind that.

It won't happen in a free market

And the idea of testing it by observation is not a good one. You can show a correlation between rape in Phoenix and the sale of ice cream in Phoenix. Never mind there is no relationship. Libeals need a better argument than....well if these two things happened at the same time (i.e. the economy boomed under Clinton) then there must a be cause and effect.

That is simply foolish.

You need to prove the relationship between the two. Not just say "Well look....".

 

[Dragon]

It won't happen in a free market

Why not? And what is "it"?

And the idea of testing it by observation is not a good one. You can show a correlation between rape in Phoenix and the sale of ice cream in Phoenix. Never mind there is no relationship.

You could show such a coincidental relationship ONCE. But if it occurred repeatedly that increases or decreases in the sale of ice cream correlated with increases or decreases (or vice-versa) in the rate of rape, then that would mean there IS a relationship.

Let's say that in U.S. economic history since the country was industrialized (a process completed roughly in the 1890s), we had some four decades when income gaps were high and increasing, then another four decades when income gaps were much narrower, and then another three decades in which they widened again, and economic growth accelerated during the middle decades and then slowed down again in the later three.

Let's further say that, among nations at the present time, a statistically overwhelming correlation can be shown between low GINI coefficients and the strongest economies, so that almost all countries with narrow income gaps are the richest countries and almost all countries with wide ones are the poorest countries.

Would that be enough of a correlation for you to show something beyond coincidence?

You need to prove the relationship between the two. Not just say "Well look....".

I have a perfectly sound theoretical explanation for WHY narrow income gaps result in better economic performance, too, but I thought I'd save that for when there's something agreed upon to explain.

 

[Listening]

It won't happen in a free market

Why not? And what is "it"?

And the idea of testing it by observation is not a good one. You can show a correlation between rape in Phoenix and the sale of ice cream in Phoenix. Never mind there is no relationship.

You could show such a coincidental relationship ONCE. But if it occurred repeatedly that increases or decreases in the sale of ice cream correlated with increases or decreases (or vice-versa) in the rate of rape, then that would mean there IS a relationship.

Let's say that in U.S. economic history since the country was industrialized (a process completed roughly in the 1890s), we had some four decades when income gaps were high and increasing, then another four decades when income gaps were much narrower, and then another three decades in which they widened again, and economic growth accelerated during the middle decades and then slowed down again in the later three.

Let's further say that, among nations at the present time, a statistically overwhelming correlation can be shown between low GINI coefficients and the strongest economies, so that almost all countries with narrow income gaps are the richest countries and almost all countries with wide ones are the poorest countries.

Would that be enough of a correlation for you to show something beyond coincidence?

No.

Good grief.

The united states economy is a huge and highly complex animal. Trying to relate one variable to an observation is not possible. In economics, the one phrase you read in text books all the time is "...all else being constant". Some that is never the case in real life. During those four decades we have wars and shifts in social norms that need to be factored in as well as advances in technology and the impact of emerging markets (other countries).

So even repeated cycles (and in Phoenix....it happens every summer so it does happen time and time again) does not prove a thing.