The 9.9% - The New American Aristocracy - Atlantic Article

[6miths]

An interesting and wide ranging article in The Atlantic - Gini co-efficients, Inter-generational Earnings Mobility, Healthcare Costs and Outcomes, College choices, The Great Gatsby... food for thought.


https://getpocket.com/explore/item/...american-aristocracy?utm_source=pocket-newtab

 

[MooreBonds]

An interesting and wide ranging article in The Atlantic - Gini co-efficients, Inter-generational Earnings Mobility, Healthcare Costs and Outcomes, College choices, The Great Gatsby... food for thought.


https://getpocket.com/explore/item/...american-aristocracy?utm_source=pocket-newtab

One thing that these "inequality" articles fail to factor in is globalization. Around 1980ish, companies in the US started to benefit more from globalization and trade.

So if a company is deriving profits (and wealth) from other countries, why is that wealth being acquired at the detriment of people who don't have the wealth in the US? It's not like an upper manager of an international firm is somehow 'taking' the wealth for their own from the bottom 50% in the US - they are deriving their wealth by making sales to firms and consumers overseas...which increases the value of the firm, and increases the value of the upper manager's household wealth.

 

[target2019]

Author is off the rails. Couldn't get through it all. I'm not in the ninepointnine, but know a few.

 

[unclemick]

I like Charles Murray's description of his 'Belmont' and 'Fishtown' as more informative.

heh heh heh - Meritocracy my can - sitting on my can while letting Mr B's Bogle's Folly carry on was the path to whatever part of the crust I can lay claim to. All the rest was marking time so time could work.

 

[daylatedollarshort]

Enjoyed the article. Thanks for posting.

 

[Amethyst]

The author seems to be engaging in that hobby known as "afflicting the comfortable." Somebody has to do it, I guess.

 

[RxMan]

There are so many things wrong with that article I couldn’t make it through very much of it before having my “that’s it, I’m done” moment. Though the worst part is I’m not surprised by any of it. I think that scares me the most.

 

[target2019]

After reading more of the article, what consistently comes across is that the author is ashamed/jealous of his Standard Oil grandfather and other family members. This is probably required to make his/her views and writing about the world appear more legitimate.

 

[bigcmagor]

Curious why the article wasn't penned three or more years ago. Surely the dynamic hasn't changed in this time. Get over it dude.

 

[BeachOrCity]

Great read

While long winded, this was a very informative article.

One of his conclusions: "The raging polarization of American political life is not the consequence of bad manners or a lack of mutual understanding. It is just the loud aftermath of escalating inequality."

I also appreciated the historical analogies to other period of escalating inequality that ended badly, namely the 1920's and early 1800s (where until reading this I had no idea that the 0.1% at the time owned 25% of all of the slaves; and the 9.9% owned all the rest).

Bottom line is he makes a good case that inequality always ends badly, and the 9.9% (which I would assume includes most everyone on this forum) are collectively the group who can do something about it and explains why it is in our children and grandchildren's interest that we do so.

 

[marko]

After reading more of the article, what consistently comes across is that the author is ashamed/jealous of his Standard Oil grandfather and other family members. This is probably required to make his/her views and writing about the world appear more legitimate.

Went to high school with a lot of kids like the author: From uber wealthy families with money so old it was made during the Civil War. ("Selling stale bread to Union soldiers" we used to mock.)

From my experience, they denigrate their roots and wealth not so much out of guilt but out of a need to want to fit in with the normal people. During the hippie days of the late '60's they were happily giving their family the one finger salute in public with their left hand while happily signing their trust fund checks with their right.

Not sure how relevant to this, but the WSJ had an article about American inequality a while ago: https://www.wsj.com/articles/the-myth-of-american-inequality-1533855113?mod=hp_opin_pos2

 

[target2019]

Can't get that link, marko.

The title elicited memories of a sociology textbook I read in the 70's. Things were unequal then as well as now. The statistics change, but the reality remains.

School for me in the big city back then was more homogenized. I can't recall any wealthy classmates. We all were at the same stratosphere. A major differentiator was the number of siblings. Ah, life was much simpler then.

 

[marko]

Can't get that link, marko.

Might be paywalled.
The essence is that American Inequality might be overstated (re: Gini coefficients) because:

But there are variations in how each nation reports income. The U.S. deviates significantly from the norm by excluding several large government transfers to low-income households. Inexplicably, the Census Bureau excludes Medicare and Medicaid, which redistribute more than $760 billion a year to the bottom 40% of American households. The data also exclude 93 other federal redistribution programs that annually transfer some $520 billion to low-income households. These include the Children’s Health Insurance Program, Temporary Assistance for Needy Families and the Special Supplemental Nutrition Program for Women, Infants and Children. States and localities directly fund another $310 billion in redistribution programs also excluded from the Census Bureau’s submission.

 

[GrayHare]

Interesting article. The author bases his article on a belief the US economy is a zero-sum game. He writes, "... it keeps alive one of the founding myths of America’s meritocracy: that our success has nothing to do with other people's failure." A free market is based on exchange of goods and service at prices that all involved parties feel benefit themselves. In a free market, no one is forced to sell their items or services at a price that causes them to fail. That means all parties gain.

 

[Amethyst]

The social safety net: full of holes and corruption though it probably is, still marks a rather significant difference from the "Gatsby era."

I think about this, because my Mother and her family, who immigrated from Ireland in 1929, fell into dire straits when my Grandfather died in 1932. There wasn't any safety net for them, and it's a wonder they survived...they even thought about going back to Ireland, except the older kids and my Nana had just become U.S. citizens, and didn't want to give that up.

Earlier in the 20th C., Mr. A's Mother and Grandmother also endured dire times. I am a big supporter of the social safety net.

Might be paywalled.
The essence is that American Inequality might be overstated (re: Gini coefficients) because:

But there are variations in how each nation reports income. The U.S. deviates significantly from the norm by excluding several large government transfers to low-income households. Inexplicably, the Census Bureau excludes Medicare and Medicaid, which redistribute more than $760 billion a year to the bottom 40% of American households. The data also exclude 93 other federal redistribution programs that annually transfer some $520 billion to low-income households. These include the Children’s Health Insurance Program, Temporary Assistance for Needy Families and the Special Supplemental Nutrition Program for Women, Infants and Children. States and localities directly fund another $310 billion in redistribution programs also excluded from the Census Bureau’s submission.

 

[Another Reader]

When I got out of high school in 1971, the population of California was 19 or 20 million. If you got out of high school with a 3.0 GPA that year you would probably get into a UC campus somewhere. It cost $200 a quarter to attend, and people were bitching about the recently imposed $100 tuition fee. 15 kids in my graduating class applied to Stanford. 5 got in, 5 were waitlisted, and 5 were rejected.

The population of California today is over 40 million. Stanford is more widely regarded as an elite school. The size of the freshman class at Stanford hasn't changed. The only new seats created in the UC system are at the less that prestigious UC Merced. We have a huge number of immigrants from crowded countries like India competing for all of those seats, where the competitive behaviors described in the article have been practiced since the Brits arrived.

What's going on is a natural result of competition that results from too many people chasing the same thing. There is not enough of whatever to go around. Shrug.

 

[marko]

The social safety net: full of holes and corruption though it probably is, still marks a rather significant difference from the "Gatsby era."

Earlier in the 20th C., Mr. A's Mother and Grandmother also endured dire times. I am a big supporter of the social safety net.

I wasn't being critical of the safety net. Merely quoting the WSJ article that says that how the US calculates Gini (per OP article) could be overstating American inequality.

 

[LOL!]

Curious why the article wasn't penned three or more years ago. Surely the dynamic hasn't changed in this time. Get over it dude.

The article appeared about a year ago in The Atlantic and was probably written in the year or two before that, so your curiosity is curious.

 

[bigcmagor]

The article appeared about a year ago in The Atlantic and was probably written in the year or two before that, so your curiosity is curious.

If you read the section of the article on resentment, it's clear the author wrote the piece after the 2016 election and presented his view on the outcome, which was anything but supportive.

 

[GrayHare]

The article is well-written IMO but falls into the trap of criticizing without offering much beyond vague solutions such as "the government should do something". If the author thinks a solution to his complaints can easily be implemented, he needs to watch The Wire to see how interwoven the problems are.

 

[Amethyst]

No worries - I understood you and agreed with you

I wasn't being critical of the safety net. Merely quoting the WSJ article that says that how the US calculates Gini (per OP article) could be overstating American inequality.

 

[LOL!]

I just read elsewhere once again about the Pareto Principle
"Originally, the Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only 20% of the population."

And if one only looked at that wealthy 20% of the population, 80% of its wealth belonged to the top 20% (or 4% of the total population of everyone). And if one looked at that 4%, then 80% of its wealth belonged to the top 20% (or 0.8% of total).

So as mentioned in https://betterexplained.com/articles/understanding-the-pareto-principle-the-8020-rule/ "Life Isn't Fair"

I don't think things are going to change any time soon.

 

[RAE]

I'm not sure why the author focuses on the 9.9%, when his own graph shows that the percentage of wealth held by the top 9.9% has been declining for years (since at least 1970 or so). In contrast, the percentage of wealth held by the top 0.1% has been on a steady increase, especially since about 1985 or so. When the top 0.1% control as much wealth in the country as the bottom 90% (as is the case now), I don't see how anyone can argue that we don't have a serious problem with wealth inequality in this country. I was reading elsewhere recently that the 400 richest Americans now have more wealth than the bottom 61 percent of the population. That can't be good for the country, and if this trend continues, I doubt that it is going to end well.

 

[marko]

No worries - I understood you and agreed with you

Thanks!

 

[MooreBonds]

I'm not sure why the author focuses on the 9.9%, when his own graph shows that the percentage of wealth held by the top 9.9% has been declining for years (since at least 1970 or so). In contrast, the percentage of wealth held by the top 0.1% has been on a steady increase, especially since about 1985 or so. When the top 0.1% control as much wealth in the country as the bottom 90% (as is the case now), I don't see how anyone can argue that we don't have a serious problem with wealth inequality in this country. I was reading elsewhere recently that the 400 richest Americans now have more wealth than the bottom 61 percent of the population. That can't be good for the country, and if this trend continues, I doubt that it is going to end well.

Factor in the "value" of Social Security, and all of the various other programs that transfer cash via welfare, Medicaid, and various other social programs. Then re-run the numbers. I dare say that adding just a few trillion here and there to the bottom 50% will do quite a bit in propping up those %ages, especially compared to the 1930s/1950s.

And as I mentioned in my previous post - if ______ (pick your favorite multi-national, US-based company) doubles sales and profits by selling overseas, and its market value doubles, are the bottom 50% "harmed" because the executives earned more wealth by increasing their portfolio values, even though the wealth of the bottom 50% hasn't changed?