Wealth inequality-how it affects the economy

[The Rabbi]

\\so the fact that many ENRON executives got to walk away with their parachutes intact while COUNTLESS employees and retirees with utility company stock in their retirement portfolios were made PENNILESSS is OK with you?

Does the phrase "life is unfair" mean anything to you?
Investing involves risk. I am sorry people didnt dump their Enron stock when it was soaring. I personally looked at the stock and walked away from it. It tanked 6 months later.
The executives who worked for the company largely did so in good faith and ignorant of what was going on. Should they be punished for doing their jobs?

should the utilty company employees whose funded company retirements were completely wiped out be punished for doing THEIR jobs?

If their retirement funds were wiped out completely, isn't that punishment enough?
In any case, pension funds are guaranteed by the US Gov. But as mentioned, investment involves risk. Risk means you can lose your money.

 

[MaggieMae]

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.

Not only was it earlier proven last spring that the tape by the man posing as a client was heavily doctored, and aside from the fact that he has since been sued, the truth of the incident is that the ACORN employee took down the information and immediately called the police. Of course you wouldn't know that because Fox won't report on it. But Rachel Maddow did.

Rachel Maddow Exposes More Fox News Video Editing Fraud - wpparty.com

 

[The Rabbi]

[...]The executives who worked for the company largely did so in good faith and ignorant of what was going on. Should they be punished for doing their jobs?

Rabbi,

By way of simplified analogy:

You answer an ad for a salesman at Lay & Skilling Automotive Salvage, Inc., where you're told the job pays no salary but you get a 20% commission on everything you sell -- and Lay & Skilling sells at 25% below any competitor. Wow! So you go to work for Lay & Skilling, selling everything from used Lexus transmissions to used Ford headlights and in just one year you manage to earn $250,000.

One day the cops walk in, bust the operation and you are charged with participation in a criminal enterprise. You've been selling stolen goods. You say you didn't know. The judge says that doesn't matter. You were selling stolen goods. Property that belongs to other people. And now those people must be compensated. So those assets you've managed to accumulate during the time you worked at Lay & Skilling's chop shop must be seized and distributed among the victims of the criminal enterprise you participated in. Because you claim to be a schmuck who "didn't know" is nothing but a meaningless waste of the court's time. And you're lucky you're not going to prison with Lay & Skilling.

But in spite of the foregoing circumstances, the brokers at Enron walked away with the money they helped to steal from thousands of trusting investors who simply and legitimately didn't know they were dealing with a criminal enterprise.

Even if you're willing to believe that it never entered the mind of one who knows enough about the used auto parts business to make $250,000 in a year that some or all of those auto parts might be stolen, do you think it's fair that they be allowed to keep the fruit from a stolen tree?

Totally inapt analogy.
Anyway, someone who gets hired by a company, works according to his agreement and has no idea the company is doing anything illegal should suffer why? How about all the people who worked for AIG? Should some guy underwriting insurance policies have his salary docked because someone in the London office was dealing in insider trading?

 

[The Rabbi]

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

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

Not only was it earlier proven last spring that the tape by the man posing as a client was heavily doctored, and aside from the fact that he has since been sued, the truth of the incident is that the ACORN employee took down the information and immediately called the police. Of course you wouldn't know that because Fox won't report on it. But Rachel Maddow did.

Rachel Maddow Exposes More Fox News Video Editing Fraud - wpparty.com

Don;t take this the wrong way, but what drugs are you taking? Someone makes a statement about Joe the Plumber. I query it. And you respond with a link about the Acorn tapes.
Helloooo????

 

[MaggieMae]

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.

I'm not "demonizing" anybody. But I suspect that your family is hardly representative of the kind of wealth that has risen to be 70%. I'm sure there are a lot of millionnaires who are very nice people, not demons. The number of millionnaires increased in 2009 by 16%. My family also struggled, paid their bills and saved, but they were never members of the exclusive club of millionnaires who run our country.

America's millionaires rebound in 2009 - Mar. 9, 2010
When will you be a millionaire?
The Dow is up 61% in the past 12 months. But despite the market's rebound Walper said that the influential millionaires group, which controls about 70% of total U.S. assets and includes key corporate executives and small business owners, is still concerned about a prolonged economic downturn.

 

[MaggieMae]

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.

Only an air conditioner in your bedroom? Awww.... When I was growing up a room air conditioner cost around $300 (or more). My parents' idea of a luxury purchase was hardly for something like an air conditioner, but rather to make sure our teeth were straight. And I don't think you can include modern household conveniences as contributing to "standard of living" at all. We always thought our "standard of living" was just as good 40 years ago with dial phones and $.12 postage.

 

[MaggieMae]

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%.

How can you possibly say such a thing and expect not to be criticized? You omit what your father did for a living and how he kept his job/business afloat. You ignore the fact that not everyone has the same exact set of personal circumstances that your own family did (does). That comment is absurd.

 

[MaggieMae]

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

The numbers originally posted are not reflective of "minimum wage."

That said, my opinion of Thomas Sowell is that he has backed himself so into a corner of being a high profile black journalist/author that I often wonder how often he cries himself to sleep at night.

 

[The Rabbi]

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

The numbers originally posted are not reflective of "minimum wage."

That said, my opinion of Thomas Sowell is that he has backed himself so into a corner of being a high profile black journalist/author that I often wonder how often he cries himself to sleep at night.

Thomas Sowell is black? Who knew?

 

[MaggieMae]

How 'bout all of you whinny little bitches that are complaining about wealth inequality just take the money you make every year in excess of what's considered the poverty line, donate it to the charity of your choice, move to the ghetto, and...

Hey Jeremy, grow up and stop being so gullible. With regard to your signature, the comment attributed to Michelle Obama was MADE UP by Laura Ingraham (who, like so many others, was once a sane person but lost her marbles when a black man became president).

 

[Jeremy]

"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

The numbers originally posted are not reflective of "minimum wage."

That said, my opinion of Thomas Sowell is that he has backed himself so into a corner of being a high profile black journalist/author that I often wonder how often he cries himself to sleep at night.

Thomas Sowell is black? Who knew?

I think MM need to explain what the **** his skin color has to do with anything.

 

[MaggieMae]

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.

.

good point....>


Which is a Better Measure of Societal Inequality: Wealth or Income?

Looking at the distribution of wealth and looking at the distribution of income gives the researcher two quite different views of the amount of inequality in American society. Which economic measure -- wealth or income -- should be emphasized?


Alan Greenspan, chairman of the Federal Reserve Bank, make the case for wealth:
"Ultimately, we are interested in the question of relative standards of living and economic well-being. We need to examine trends in the distribution of wealth, which, more fundamentally than earnings or income, represents a measure of the ability of households to consume."


from>
Wealth Distribution

Well I don't think it's rocket science to figure out that when a CEO of a company earns 600 times what his workers do that his INCOME plays a huge part in his WEALTH.

 

[MaggieMae]

What would be "fair" wealth inequality in the eye of the lib? Or is the only answer the complete elimination of wealth inequality all together, (ie. true, noncorrupted communism)

Total Equality! Nothing else!

1.The Declaration of Independence memorializes the proposition that all men are created equal. At the time, the ambiguity of the phrase allowed even slave holders to find it informing.

2. But, clearly, the document was understood at the time not to promise equality of condition- even to white male Americans! Equality, as an abstract, was modified by the American idea of reward according to achievement, and a reverence for private property.

3. But the concept has been modified with the growth of modern liberalism, and the ‘egalitarian’ impulse that fuels it. Here we witness the constant expansion into areas in which equality of sorts is seen as desirable and/or mandatory. The intuitive de Tocqueville actually remarked that Americans loved equality more than freedom!

a. The principle of equality prepared men for a government that “covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, guided…Such a power stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd….The evils that extreme equality may produce are slowly disclosed; they creep gradually into the social frame; they are seen only at intervals; and at the moment at which they become most violent, habit already causes them to be no longer felt.” Alexis de Tocqueville, “Democracy in America,” volume 2.

4. Under the new definition, an exact similarity of material wealth or income should be the goal of ‘social justice.’
The above essentially from Robert Bork, "Slouching Toward Gomorrrah"

a. The desire for equality of income or of wealth is, of course, but one aspect of a more general desire for equality. “The essence of the moral idea of socialism is that human equality is the supreme value in life.” Martin Malia, “A Fatal Logic,” The National Interest, Spring 1993, pp. 80, 87

Total equality? Only a rabid Bircher/Borker would believe that and find some obscure articles to "prove" it. What is wrong is that there is no longer a LEVEL playing field.

 

[Jeremy]

How 'bout all of you whinny little bitches that are complaining about wealth inequality just take the money you make every year in excess of what's considered the poverty line, donate it to the charity of your choice, move to the ghetto, and...

Hey Jeremy, grow up and stop being so gullible. With regard to your signature, the comment attributed to Michelle Obama was MADE UP by Laura Ingraham (who, like so many others, was once a sane person but lost her marbles when a black man became president).

As soon as you drop the "criticizing the president = racism" bullshit. Than maybe I'll consider taking advice to "grow up" from a race baiting piece of shit like you.

 

[MaggieMae]

What would be "fair" wealth inequality in the eye of the lib? Or is the only answer the complete elimination of wealth inequality all together, (ie. true, noncorrupted communism)

That's impossible, the whole liberal system relies on there being poverty and inequality, to remove such an important part of the system would be catastrophic as then there would be virtually no need for tax or social welfare. As for the realistic and pragmatic (non liberal approach) that is creating jobs, having low tax and providing all the basic needs and services rather than wasting all the money and resources on celebrities, Al Gore Films, and fashion.

Sigh...you can always tell the ones who lean toward the television with rapt attention whenever one of the Fox "journalists" is speaking, i.e., Glenn Beck. And then it becomes gospel truth.

 

[Jeremy]

What would be "fair" wealth inequality in the eye of the lib? Or is the only answer the complete elimination of wealth inequality all together, (ie. true, noncorrupted communism)

That's impossible, the whole liberal system relies on there being poverty and inequality, to remove such an important part of the system would be catastrophic as then there would be virtually no need for tax or social welfare. As for the realistic and pragmatic (non liberal approach) that is creating jobs, having low tax and providing all the basic needs and services rather than wasting all the money and resources on celebrities, Al Gore Films, and fashion.

Sigh...you can always tell the ones who lean toward the television with rapt attention whenever one of the Fox "journalists" is speaking, i.e., Glenn Beck. And then it becomes gospel truth.

The usual liberal brain fart and diversion... run back to Fox news criticisms. My question was fair and honest. And I would LOVE to hear your answer. What would "fair" wealth inequality be? Do you have percentages you would like to throw out to us?

 

[PoliticalChic]

The numbers originally posted are not reflective of "minimum wage."

That said, my opinion of Thomas Sowell is that he has backed himself so into a corner of being a high profile black journalist/author that I often wonder how often he cries himself to sleep at night.

Thomas Sowell is black? Who knew?

I think MM need to explain what the **** his skin color has to do with anything.

Aside from the obligatory implication that 'black' is a factor one way or another in the figures, and/or the hinted left-wing smear that any black who does not toe the party line is not authentic, you need to incorporate into your thinking...if 'change' is a possibility beyond your candidates' bumper stickers, ...the huge rebuttal of your postition that, in American society, folks do not remain in set castes.

Folks move in various ways from one economic stratum to another. How? See the following...

This from Roger Cohen, in the NYTimes:

“I lived for about a decade, on and off, in France and later moved to the United States. Nobody in their right mind would give up the manifold sensual, aesthetic and gastronomic pleasures offered by French savoir-vivre for the unrelenting battlefield of American ambition were it not for one thing: possibility.

You know possibility when you breathe it. For an immigrant, it lies in the ease of American identity and the boundlessness of American horizons after the narrower confines of European nationhood and the stifling attentions of the European nanny state, which has often made it more attractive not to work than to work. High French unemployment was never much of a mystery.”
http://www.nytimes.com/2009/03/04/opinion/04iht-edcohen.2.20587034.html

 

[MaggieMae]

Well, no. that isn't true either.
Here's the NY Times:
http://www.nytimes.com/2006/10/23/business/24enroncnd.html

Imagine the cost of years of expensive criminal and civil litigation in addition to the fines.
No, Skilling is not a wealthy man at this point.

Nope, and a few others were wiped out too. But most of the Enron executives walked and got to keep their bank accounts.

OK. And? They worked for a company. People in the company including top management were corrupt. Do you expect everyone at Enron should have gone to jail?
The people who perpretrated the fraud were jailed and fined and today are hardly wealthy people. So talk of how the rich got that way by screwing everyone else is merely class envy and based on falsehood.

Enron screwed all of its employees and you're feeling sorry for the ones who did it because now they're in the poor house?

 

[MaggieMae]

I ran across this when I was looking for some figures on how much the average Enron employee lost. There is a shockingly accurate dissertation by David Brooks related to income inequality and how at the time of the Enron scandal, the American people gave a collective ho-hum. His letter also timely details that the midset of Americans isn't about to change (and predictably, it hasn't).

Please read:

frontline: bigger than enron: the politics of enron | PBS

 

[The Rabbi]

Nope, and a few others were wiped out too. But most of the Enron executives walked and got to keep their bank accounts.

OK. And? They worked for a company. People in the company including top management were corrupt. Do you expect everyone at Enron should have gone to jail?
The people who perpretrated the fraud were jailed and fined and today are hardly wealthy people. So talk of how the rich got that way by screwing everyone else is merely class envy and based on falsehood.

Enron screwed all of its employees and you're feeling sorry for the ones who did it because now they're in the poor house?

The only one I feel sorry for is you because your brain clearly isn't functioning. You drop in posts that are wrong, poorly argued, and make no sense and then when called on it you ignore the question.