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Interesting video
Old 03-06-2013, 08:22 AM   #1
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Interesting video

Has anyone seen this video on wealth inequality? Interesting.

https://www.youtube.com/watch?featur...v=QPKKQnijnsM#!
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Old 03-06-2013, 08:43 AM   #2
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I stopped half-way through. Without definitions it really is meaningless. Who is in their 'group'? Households, workers, every man, woman, child? How do they measure 'net-worth'? Does it include your home? That could put many young middle-class families with a home/mortgage at negative net-worth, compared to some low-income person with a few possessions, but no debt.

I also had a problem with all the judgmental terms - one distribution is 'good' or 'bad'. Who's to say?

How does age factor into this? A middle class person could have a negative NW while young, and accumulate a sizable NW as they age. But they are still middle class. Is that 'not fair'?

-ERD50
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Old 03-06-2013, 08:55 AM   #3
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Quote:
Originally Posted by pb4uski View Post
Has anyone seen this video on wealth inequality? Interesting.

https://www.youtube.com/watch?featur...v=QPKKQnijnsM#!
Have not watched the video, but I did see a contrarian blogpost about it by Cullen Roach (Pragmatic Capitalism) PRAGMATIC CAPITALISMThe Pareto Principle and Wealth Inequality - PRAGMATIC CAPITALISM
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Old 03-06-2013, 01:11 PM   #4
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Originally Posted by ERD50 View Post
I stopped half-way through. Without definitions it really is meaningless. ....

-ERD50
I agree that I would have liked to seen numbers and more details, but the lack thereof doesn't bring it to meaningless IMO. Also, including such detail that you and I might want/enjoy would probably bore most others. I thought it was a reasonably well done "intro" to the extent of wealth inequality and was more factual than judgmental.
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Old 03-06-2013, 02:06 PM   #5
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I agree that I would have liked to seen numbers and more details, but the lack thereof doesn't bring it to meaningless IMO. Also, including such detail that you and I might want/enjoy would probably bore most others. I thought it was a reasonably well done "intro" to the extent of wealth inequality and was more factual than judgmental.
Fair enough - maybe I should have said "meaningless enough to me to not encourage me to watch the whole thing"? The problem with videos is that it is hard to get the detail in w/o getting in the way. With a document format, that can be done in a sidebar or footnote or something, so as not to bore those who don't care or already know, or interfere with the main message.

It's interesting to think about 'wealth' versus 'income'. We hear about these celebrities or sports stars that have colossal incomes, and end up in bankruptcy with no wealth at all. Does that mean we need to re-distribute wealth to them, or are they 'rich' due to the income, and they should be a source for re-distribution?

And don't forget, if we discuss 'wealth', do we include pensions? A $40,000 COLA pension at age 65 is roughly $1,000,000 of 'wealth'. Would that change the shape of the curve? I don't think one can really separate the details from the message, unless there is a specific message one is trying to convey, and details might be an 'inconvenient truth'? I'm not saying that is the case with this video, just a general observation/concern.

MichaelB's link was interesting for the Pareto aspect. Looks like Fed Income Tax fits this pattern also:

National Taxpayers Union - Who Pays Income Taxes?

Quote:
Percentiles Ranked by AGI; AGI Threshold on Percentiles; Percentage of Federal Personal Income Tax Paid

Top 10% $112,124 70.47%
Top 25% $66,193 87.30%
Roughly 80/20. So if the top 20% are paying 80%, is there really an 'unfair' distribution?

It gets complicated, and is hard to discuss w/o Porky jumping in, so I will try to stop there.

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Old 03-06-2013, 03:54 PM   #6
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As I recall, the video didn't provide or imply any view on fairness, but contrasted what people think wealth distribution is, what they would ideally think it should be and what it really is. Wealth is much more concentrated than people think, and what they think is more concentrated than what they would ideally like it to be.

They also addressed both wealth and income IIRC. One thing that was striking is the relationship between CEO pay in relation to average worker pay today compared to decades ago, nothing new, but interesting nonetheless.
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Old 03-06-2013, 07:38 PM   #7
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I am absolutely sure that I won't watch it. My interest in wealth inequality is moderate at most. It seems to me that what counts is people's absolute standard of living, not how it compares to some billionaire or even garden variety affluent millionaire. I live in a mixed neighhhborhood, and the only people I ever see who could rationally be called poor are the older people who have lost their homes and are on the streets, or the mentally ill or alcoholics or the unfortunate people who are homelss from job loss or illness, and do not have any hook that can get a social agency interested in their well being. Or perhaps they just do not know the ropes, or are too proud to play the angles.

There is a large age and income tested facility on my route to get groceries. Some of the residents hang out on the sidewalk and smoke and chat, and I pass some time with them. They all really like their apartments, and they are living as singles or couples on much less than any budget that I have ever seen mentioned here. Their rents are capped at some % of their income or I believe some much smaller % of the mean income in Seattle, whichever is less. One old guy asked me, how else could I live in this neighborhood in the middle of town for $450/month? He hated the low end market rate apartment he lived in farther out before he found out about this. Most of these people are pleasant, but occasionally there is a radical who hates the wealth generators who pay the taxes that give him his nice digs. Once I hear about the 1% I am on my way to my groceries or a cup of coffee or anything to get me way from this idiot.

These polemics just piss me off. When I read how even Mother Teresa was a fraud, that challenged my already moderate interest in do-good projects.

Ha
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Old 03-06-2013, 09:21 PM   #8
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Interesting. Thanks for posting.
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Old 03-06-2013, 09:52 PM   #9
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Originally Posted by pb4uski View Post
As I recall, the video didn't provide or imply any view on fairness, but contrasted what people think wealth distribution is, what they would ideally think it should be and what it really is. Wealth is much more concentrated than people think, and what they think is more concentrated than what they would ideally like it to be.
Well, I listened (multi-tasking a bit) to the whole thing. Maybe you need to listen again, I know I heard "fair" and "fairness" more than once. And certainly a flatter curve was referred to as 'better'. Why not just present numbers and let people decide for themselves?

As far as it being different from what people think - I bet that holds true for many, many things. How many people could accurately describe the national debt in terms of GDP, or know the difference between debt and budget deficit, or come close to knowing what % of oil we import and from where, or the difference between a 'zero tail-pipe emission vehicle' and a 'zero pollution vehicle'? I'm not surprised there is a gap between what people think and the reality. Is there really anything important to derive from that in this case? Do we take action based on a knowledge gap?

At any rate, I have no idea what the 'proper' or 'ideal' distribution is - I would have declined to answer such a question. Have you spent any time with a group of top 5% High School students? I have and there are some pretty impressive kids in that group. Why should anyone be surprised, or think in terms of 'fairness' that they go on to accumulate significantly more wealth/income than the bottom 50% of their population, which is going to include drop-outs, kids with problems, kids who end up in jail, etc. Would you want to tell them that you want to cap their earnings, regardless how hard they work or study or apply themselves? Not me.


Quote:
They also addressed both wealth and income IIRC. One thing that was striking is the relationship between CEO pay in relation to average worker pay today compared to decades ago, nothing new, but interesting nonetheless.
Many of us have commented on this before. I do think the relationship of CEO and the BOD who sets their pay is improper and likely does not reflect their true 'open market' value. I don't know what to do about it, but the big groups who own those companies in their funds have more power on that than you or I do. Why didn't they pick a top football pro from a team to feature - they make a lot more than the average fan of that team?

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My interest in wealth inequality is moderate at most. It seems to me that what counts is people's absolute standard of living, not how it compares to some billionaire or even garden variety affluent millionaire.
Ha
Agreed. Much more important.


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It gets complicated, and is hard to discuss w/o Porky jumping in, so I will try to stop there.

-ERD50
I failed!


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Old 03-07-2013, 12:26 AM   #10
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I thought it seemed biased in the producers idea of fairness and did not watch the whole thing. I would share Haha's moderate interest in the subject and none at all in what "most people think it is or should be" on a whole host of politically-charged topics.
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Old 03-07-2013, 12:46 AM   #11
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(sigh)... I struggle with this topic since, as children of immigrants who came to the U.S. without much, DW and I were raised with the "study, work hard, and don't worry about what others have" philosophy... and now that we are doing well, it almost feels guilty at times that what we have achieved was due to it being "taken unfairly" from others who have not done as well. We are very sympathetic to the plight of others with both our time and money. However, I have to admit a sense of frustration exists due the perception that the growth of our wealth/income/net worth/whatever one wants to call it has been "unfair".
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Old 03-07-2013, 06:22 AM   #12
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It was only 6 minutes of my life and I am retired so I watched the whole thing.

I think ERD raises an super important point things like pension really need to be counted, but virtually every discussion ignores transfer payments and pensions, which really skews the distribution.

So just for fun lets see how big these transfer payments are. The average SS payment is $1,230/month, the per capita Medicare expenditure is $10,400 (number are a year or two out of date). This means the average senior has an income of bit over $25K just from the government, with a full COLA. Looking at TSP annuity calculator I see that COLA annuity for $25,160/year for a 65 year old is $575,000. Of course the value drops for older seniors, but there is things like spousal SS benfits, SDI, Medicad for senior in nursing homes etc. So lets call it $400K in wealth for everybody 65 and older in the country. Now senior are wealthier on average (using traditional measurements) but still I think that the $400K is pretty evenly distributed across the income quintuples all the top get more than the bottom.
There ~45 million folks get SS/Medicare so that is $18 Trillion dollars worth of wealth.

Now lets add in wealth for the various transfer programs targeted almost exclusively at the bottom 20%. We spent $80 billion on food stamps last year. How much wealth would you need to generate $80 billion a year, at using a 25x multiplier another $2 trillion. Add another $1 trillion in subsidized and often forgiven student loans (the top 20% gets very little of these loans). Add in Medicad, the subsidized housing HaHa spoke and host of other programs and it is pretty easy to get to $25 trillion worth of wealth that is transfer payment, at least 5 trillion of that is for the poorest 20%.

Next lets add the annualized value of the Federal, state, local, and private pension plans, this has to be at least 10 trillion and maybe as much as 20 trillion. Most of this wealth is owned by folks in the middle.

According to wiki total wealth peaked at 465 trillion, the stock market is back to 2007 levels but the housing hasn't so lets say is it $60 trillion, ignoring all the things I discussed. This means that for every $1 in wealth, in stock, bonds, gold,real estate etc there is at least $.50 and maybe $.75 in shadow wealth that represent income to various people. This shadow wealth is probably distributed pretty much evenly across the country. My wild ass guess is that people perception of how the "real wealth" is distributed is probably much closer to reality than the charts the video showed.
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Old 03-07-2013, 08:25 AM   #13
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Issues of "fairness" notwithstanding, a shrinking middle class doesn't bode well for the future, IMHO. We need jobs for the others, i.e. those not Type-A, A-list, over-achievers, etc., for economic and social stability.

Not exactly sure how we get there...
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