Wealth inequality-how it affects the economy

[The Rabbi]

He wasn't is why you can't recall it. In fact he was contemplating buying a business but hesitated given the anti business environment he thought Obama would bring.
And guess what? He was right.

You are hilarious!

The guy was a proven fraud, but Rabbi never read about that part.

How was he a "proven fraud"? Please post any of that.

 

[eagleseven]

In 1973, the top 10% held 49% of wealth; the bottom 90% held 51% of wealth. That means 37 years ago, middle- and lower-class citizens could afford to buy American, shop in small community stores, pay their bills and have savings accounts.

By 2005, the top 10% held 73% of wealth; the bottom 90% held 27% of wealth. That means that middle- and lower-class citizens can now only afford to buy cheap goods from China in giant big box stores that deal in volume, not quality, have difficulty paying their bills and saving at the same time.

This is not a Bush-bashing subject. It's a topic for discussion that big corporations run the economy now, and small businesses exist only to support them. There is no doubt about it.

Problem: You are measuring wealth, not income.

In 1973, your average American saved money for down payments. Saved money for retirements. Lived within their means, and thus were able to save money (and thus grow net worth). Nobody had McMansions, but nobody had $500,000 adjustable-rate mortgages.

In 2005, your average American was in debt, ie had a negative net worth. Wealth does not measure income, but rather net worth, and so those few who managed to have a positive net worth became increasingly richer than those in heavy debt.

---

For instance, my parents are in the top 10% wealthiest people in America. They have highschool educations, live in a modest one-floor suburban house, and saved that wealth on a blue-collar working man's salary. Now they are set for life.

You would demonize them because they're in the top 10%, but they got there through hard work and frugal living. They sure as hell don't want to spend their hard-earned money bailing out irresponsible idiots who are defaulting on their McMansions.

 

[Againsheila]

In 1973, the top 10% held 49% of wealth; the bottom 90% held 51% of wealth. That means 37 years ago, middle- and lower-class citizens could afford to buy American, shop in small community stores, pay their bills and have savings accounts.

By 2005, the top 10% held 73% of wealth; the bottom 90% held 27% of wealth. That means that middle- and lower-class citizens can now only afford to buy cheap goods from China in giant big box stores that deal in volume, not quality, have difficulty paying their bills and saving at the same time.

This is not a Bush-bashing subject. It's a topic for discussion that big corporations run the economy now, and small businesses exist only to support them. There is no doubt about it.

Problem: You are measuring wealth, not income.

In 1973, your average American saved money for down payments. Saved money for retirements. Lived within their means, and thus were able to save money (and thus grow net worth). Nobody had McMansions, but nobody had $500,000 adjustable-rate mortgages.

In 2005, your average American was in debt, ie had a negative net worth. Wealth does not measure income, but rather net worth, and so those few who managed to have a positive net worth became increasingly richer than those in heavy debt.

---

For instance, my parents are in the top 20% wealthiest people in America. They have highschool educations, live in a modest one-floor suburban house, and saved that wealth on a blue-collar working man's salary. Now they are set for life.

You would demonize them because they're in the top 20%, but they got there through hard work and frugal living. They sure as hell don't want to spend their hard-earned money bailing out irresponsible idiots who are defaulting on their McMansions.

Please, pay has not kept up with inflation for the middle and lower class workers. There in no excuse for the top 10% of our nation to hold more wealth than the bottom 90% combined.

BTW, I live in a smaller house than our family lived in in 1973. I have fewer kids than my parents did. We have saved for retirement, and we still will not have as much to retire on as my folks did. My parents were able to buy a brand new huge car and trailer and travel with the family up through Canada for over a month, 3 summers in a row. We can't even afford the car.

 

[The Rabbi]

Your quality of life far exceeds your parents'. When I grew up my parents had one air conditioner in their bedroom. My whole house is airconditioned. Add in computers, cell phones,etc etc and we have a much better standard of living.

 

[Mr Natural]

Your quality of life far exceeds your parents'. When I grew up my parents had one air conditioner in their bedroom. My whole house is airconditioned. Add in computers, cell phones,etc etc and we have a much better standard of living.

And that standard of living has come at a price. Most households these days need two income earners vs one back on the '50s and '60s.

 

[Againsheila]

Your quality of life far exceeds your parents'. When I grew up my parents had one air conditioner in their bedroom. My whole house is airconditioned. Add in computers, cell phones,etc etc and we have a much better standard of living.

No air conditioner. We do have computers.....but then we don't get television anymore. Analog was so much better than digital. At least with analog, when the picture wasn't perfect, you could still see it and hear it.

The only difference I can see is the computers and cell phones.....and of course, the fact that our stuff today doesn't last like it did in the 70's. We're on what, our 6th washer in 20 years? But then again, with Andrew, we are always doing laundry. We've gone through 4 dryers in the same time period, 4 dishwashers (and yes, we had one of those in 1973) 3 stoves, 2 refrigerators and 3 freezers. My parents still had their first freezer that they bought in the 60's when they passed away, my brother has it now. How is this better than that?

I think I'd trade the computers and cell phones for freezers and washing machines that last 30 years.

 

[eagleseven]

Please, pay has not kept up with inflation for the middle and lower class workers. There in no excuse for the top 10% of our nation to hold more wealth than the bottom 90% combined.

If my parents, with a high school education and single income, could make it into the top 10% of Americans, there is no excuse for those 90%.

BTW, I live in a smaller house than our family lived in in 1973. I have fewer kids than my parents did. We have saved for retirement, and we still will not have as much to retire on as my folks did. My parents were able to buy a brand new huge car and trailer and travel with the family up through Canada for over a month, 3 summers in a row. We can't even afford the car.

Granted, many people were seriously hit during the recent market crash, and so many who were saving responsibly were screwed. Also, many choose to pay outrageous college costs, taking a serious chunk out of potential retirement savings.

Still, how would you compare your cost-of-living to your parents'? Did they have cable, video rentals, cellphones, air conditioning, internet subscriptions, etc? Also, is your neighborhood as expensive as your parents'?

 

[PoliticalChic]

In 1973, the top 10% held 49% of wealth; the bottom 90% held 51% of wealth. That means 37 years ago, middle- and lower-class citizens could afford to buy American, shop in small community stores, pay their bills and have savings accounts.

By 2005, the top 10% held 73% of wealth; the bottom 90% held 27% of wealth. That means that middle- and lower-class citizens can now only afford to buy cheap goods from China in giant big box stores that deal in volume, not quality, have difficulty paying their bills and saving at the same time.

This is not a Bush-bashing subject. It's a topic for discussion that big corporations run the economy now, and small businesses exist only to support them. There is no doubt about it.

Those who are so eager to return to the old ways of doing business, keep it small and simple, need to understand how impossible that has become when large corporations now set the stage for pricing, wage and benefit structure, and the myriad other management tools they employ in order to run an economy that is no longer affordable for small businesses to compete.

"Government" isn't the only villain in allegedly suppressing small businesses. How often does the army of U.S. Chamber of Commerce lobbyists descend upon Washington to advocate for keeping a small business competitive with big business?

"Intellectuals often make the mistake of basing political analysis on clichés that misrepresent reality. [Thomas] Sowell shows, for instance, how debates about income distribution in the United States have been distorted by a preoccupation with statistical categories.

a. Journalists and academics alike endlessly repeat that the rich are getting richer while the poor are getting poorer. What these discussions ignore is that people move with some frequency from category to category over time. Only 5 percent of Americans who were in the bottom quintile of income earners in 1975 were still there in 1991. Only 25 percent of the “super-rich” in 1996 (the top 1/100th of 1 percent of income earners) remained in that category in 2005.

b. Over half of the poor earning at or near the minimum wage are between the ages of 16 and 24. As Sowell wryly notes, “these individuals cannot remain from 16 to 24 years of age indefinitely, though that age category can of course continue indefinitely, providing many intellectuals with data to fit their preconceptions.”

c. Abstract talk about “inequities” in income distribution presupposes a social problem, where strictly speaking one may not exist at all. Sowell’s analysis helps us understand why intellectuals so often call for government to promote economic redistribution."

An Independent Mind by Daniel J. Mahoney, City Journal 18 June 2010

 

[eagleseven]

And that standard of living has come at a price. Most households these days need two income earners vs one back on the '50s and '60s.

Barring poverty, your personal wealth is proportional to your ability to delay gratification.

 

[Againsheila]

Please, pay has not kept up with inflation for the middle and lower class workers. There in no excuse for the top 10% of our nation to hold more wealth than the bottom 90% combined.

If my parents, with a high school education and single income, could make it into the top 10% of Americans, there is no excuse for those 90%.

BTW, I live in a smaller house than our family lived in in 1973. I have fewer kids than my parents did. We have saved for retirement, and we still will not have as much to retire on as my folks did. My parents were able to buy a brand new huge car and trailer and travel with the family up through Canada for over a month, 3 summers in a row. We can't even afford the car.

Granted, many people were seriously hit during the recent market crash, and so many who were saving responsibly were screwed. Also, many choose to pay outrageous college costs, taking a serious chunk out of potential retirement savings.

Still, how would you compare your cost-of-living to your parents'? Did they have cable, video rentals, cellphones, air conditioning, internet subscriptions, etc? Also, is your neighborhood as expensive as your parents'?

No, I live one block away from where my parents lived and the neighborhood has gone downhill. We were the last in the neighborhood to get color tv, but one of the first to get cable. no air conditioning. WE don't have air conditioning. Cell phones and internet weren't invented yet. But even before cable we could get channels 4,5,7,9, 11, 22 and sometimes 12. Now with our tv, no cable, we can barely get anything.

The schools were better, the neighborhood was better, the appliances were better, they were paid better, they were better able to save for retirement AND take the family on extended vacations. My husband makes good money and I end up making my own laundry detergent to save money. Nope, this is not better than then, it's different and in many cases worse. Crime is worse, appliances and cars don't last as long. Energy is through the roof...

 

[The Rabbi]

Your quality of life far exceeds your parents'. When I grew up my parents had one air conditioner in their bedroom. My whole house is airconditioned. Add in computers, cell phones,etc etc and we have a much better standard of living.

And that standard of living has come at a price. Most households these days need two income earners vs one back on the '50s and '60s.

Yes, better quality things generally cost more than worse quality ones.
But it is true that the inflation of the late 1970s made the one income household rarer.

 

[Dante]

Your quality of life far exceeds your parents'. When I grew up my parents had one air conditioner in their bedroom. My whole house is airconditioned. Add in computers, cell phones,etc etc and we have a much better standard of living.

people on limited and fixed incomes, and some people on welfare have air conditioned houses. the standard of living is only better because of progress in technological innovation and cheap labor. Quality of live is subjective. And many people who grew up poor are living better than their parents ever did -- all over the world as well as here in the good old USA.

The baby boomers parents lived in a time of economic expansion. A bubble does not go on forever. Wake up to reality. You think you are comparing apples & oranges, when in reality you are comparing apples and engine blocks.

--

the sky is not falling. The Rabbi's hysteria is a symptom of a spoiled brat.

 

[eagleseven]

No, I live one block away from where my parents lived and the neighborhood has gone downhill. We were the last in the neighborhood to get color tv, but one of the first to get cable. no air conditioning. WE don't have air conditioning. Cell phones and internet weren't invented yet. But even before cable we could get channels 4,5,7,9, 11, 22 and sometimes 12. Now with our tv, no cable, we can barely get anything.

The schools were better, the neighborhood was better, the appliances were better, they were paid better, they were better able to save for retirement AND take the family on extended vacations. My husband makes good money and I end up making my own laundry detergent to save money. Nope, this is not better than then, it's different and in many cases worse. Crime is worse, appliances and cars don't last as long. Energy is through the roof...

I'm from Cleveland...you don't need to explain urban decay, trust me. And my last apartment had 30-year-old plumbing and kitchen appliances. Our education system still generally sucks.

If your family is in construction, or a similar recession-decimated sector, I can understand why you're pessimistic. The old ways of making money no longer work...and new ways of making money are not readily available. But new ways will appear, given time.

I don't believe our decline needs be permanent.

 

[Againsheila]

No, I live one block away from where my parents lived and the neighborhood has gone downhill. We were the last in the neighborhood to get color tv, but one of the first to get cable. no air conditioning. WE don't have air conditioning. Cell phones and internet weren't invented yet. But even before cable we could get channels 4,5,7,9, 11, 22 and sometimes 12. Now with our tv, no cable, we can barely get anything.

The schools were better, the neighborhood was better, the appliances were better, they were paid better, they were better able to save for retirement AND take the family on extended vacations. My husband makes good money and I end up making my own laundry detergent to save money. Nope, this is not better than then, it's different and in many cases worse. Crime is worse, appliances and cars don't last as long. Energy is through the roof...

I'm from Cleveland...you don't need to explain urban decay, trust me. And my last apartment had 30-year-old plumbing and kitchen appliances. Our education system still generally sucks.

If your family is in construction, or a similar recession-decimated sector, I can understand why you're pessimistic. The old ways of making money no longer work...and new ways of making money are not readily available. But new ways will appear, given time.

I don't believe our decline needs be permanent.

Well, at least now you admit there is one.

 

[MikeK]

You need to let go of your class envy and anger.
How wealthy are the people from Enron? Skilling is in jail or broke. So are most of them. Ditto with Madoff, he is bankrupt and in jail. How wealthy are they again?
In any case those are hardly reflective of the broader American culture or the wealthy in this country.

I won't call you a master of specious argument because your arguments are hardly masterful. But they are indeed specious, duplicitous and a bit desperate.

Because Skilling and Madoff are in jail you suggest that neither of them managed to acquire vast fortunes by ruining the lives of tens of thousands who earned their money honestly only to be stolen by these conniving bastards. And because Skilling and Madoff got caught and are in jail are you suggesting that the damage done by them didn't happen? And are you suggesting that there aren't similar examples which as yet are not uncovered?

How about the bastards at Goldman Sachs? Or do you believe their maneuvering comes under the category of "hard work?"

The United States economy has been brought to the brink of collapse by a category of white collar criminals who managed, mainly by bribery of our legislators, to have protective regulations removed and then take advantage of the vunlerability. And anyone who would envy this class of greedy thieves is beneath contempt. But maybe you are incapable of understanding that.

 

[Toro]

Most corporations and millionaires don't pay their fair share of taxes.

They either evade taxes via lobbies, simply don't pay them, or move their operations overseas.

the point of a corporation is to disburse profits to owners employees and shareholders.....they in turn pay the taxes on the profits.....

since when is 33% on a million not a fair share .... how much would you like them to pay ....

In the example of Exxon/Mobil, whose profit last year was around $47 billion and whose taxes were zero -- I'd say a 90% tax bracket is appropriate.

What would you suggest?

I would suggest something far, far less than 90%.

 

[Toro]

You need to let go of your class envy and anger.
How wealthy are the people from Enron? Skilling is in jail or broke. So are most of them.

Most of them are still pretty wealthy because most of them weren't paid in stock.

A friend of mine from college ran a big division at Enron and was a candidate for President when Skilling resigned. They nailed him on an insider trading charge and he spent a few years in jail but he still walked away with millions.

 

[eagleseven]

Well, at least now you admit there is one.

Have you read any of my recent Economy subforum threads?

 

[Barb]

That's a problem how?
Most of the wealthy in this country are in fact small business owners. Sorry to interrupt your class envy orgy.

Surely you jest. If the small business owners are so wealthy, then why the hell won't they start hiring? Instead we hear the daily whine that they're too "scared" of what's gonna happen. As Barb said, HORSESHIT.

Does being wealthy have anything to do with hiring? Isn't hiring a business decision based on projected return on the employee's labor?
Or do you think hiring someone is an act of charity that the wealthy ought to do just because there are people who need a job and they have plenty of money? This is what the Obama Administration apparently believes.

And Barb is clearly full of shit herself as I posted her contradictory comments and asked her to pick one. She hasn't been back.

I'm so sorry my need to sleep for the graveyard shift disturbed you so.
I posted the contradiction, AND explained it, dumbass. But okay, if I explained it more clearly in the original you wouldn't have gotten so strung up on a detail in the second post.

 

[eagleseven]

In the example of Exxon/Mobil, whose profit last year was around $47 billion and whose taxes were zero -- I'd say a 90% tax bracket is appropriate.

What would you suggest?

I would suggest something far, far less than 90%.

Yeah, I don't feel like paying $10 for a gallon of gas.