Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-07-2014, 12:44 PM   #21
Thinks s/he gets paid by the post
 
Join Date: Apr 2005
Location: Midwest
Posts: 1,573
Quote:
As a matter of philosophy, I believe that John Rawles' formulation is correct -- inequality is permissible (or just) if by permitting it we improve the plight of the least among us.
Exactly. We only permit The Rich to be rich and have their property if it is agreed that doing so is in aggregate best for all of us. To the extent it fails to be good for everybody the property rights and thereby forfeited.
__________________

__________________
razztazz is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-07-2014, 01:14 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Quote:
Originally Posted by marko View Post
Sorry, I just have a hard time buying into the "you can't win", the-system-is-against-you, victim mentality. Life isn't fair but it's not a zero-sum game, and I do believe that many (not all) can overcome and succeed.
This "can't win attitude" is so odd among a bunch of still young people who are very well off, and who don't have to work. And many of whom brag about how poor their parents and ancestors were. I sounds to me like the opposite of can't win.

I guess societies just get tired and self-immolate from time to time.

Ha
__________________

__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 06-07-2014, 01:42 PM   #23
Recycles dryer sheets
 
Join Date: Jul 2013
Location: Villa Grande
Posts: 259
When I glanced at the following sentence, I realized the article was a puff piece and not worth reading: "If an average physician today is unlikely to make it into the top 1%, then it seems pretty clear that crossling that line via income, savings, and investments will be impossible for nearly every American in the future." Um, yes, 99% of future Americans will not make it into the top 1%. Geez.
__________________
TimSF is offline   Reply With Quote
Old 06-07-2014, 01:57 PM   #24
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 10,157
Quote:
Originally Posted by marko View Post
Unfortunately, I can't find the statistic, but I saw somewhere that the "1%" who prevent anyone else from joining is a false argument. The data show that it is really a revolving door where you might be "1%" for four years and then fall off only to be replaced by someone else. Of course, the Waltons, Buffets and Gates are the exception
That may well be true; I don't know. But what I do know, from long observation, is that for most people what they believe to be true is more important than what is really true. That is why my post said ". . . the increasing appearance that . . ." It actually may be the case that most people who work hard enough and make wise choices can "overcome and succeed" (as you put it). I have serious doubts about that theory, but I'm sure you sincerely believe it. But knowing that you were right will be scant solace when the castle is going up in flames with you inside.

Let me give you some context for my remarks. The young wife and I have for a number of years now enjoyed a place among the top 1% in income and, more recently, in wealth.* Yet I was born to teenaged high school dropouts and grew up in poverty, living in a variety of trailer parks and cheap, often dilapidated apartments. I went to generally crappy public schools, sometimes several different ones in a single year, and was sometimes out of school for extended periods of time when my family moved around. I am the first in my family to go to college, and that was only possible because I joined the military. It has taken long years of very hard work, self-deprivation and wise choices to get where I am now. I am the example that validates your own belief, if you will.

At this point, I could easily sit back and condemn those who complain about rising inequality as whiners with a "victim mentality". After all, I made it here, why can't they? Yet I never forget that I have been incredibly fortunate along the way. I was born with abilities and interests that society values. People have helped me when they didn't need to. Opportunities have arisen at precisely the right time. Yes, I have made the most of them, but most people will never see those opportunities. For a poor kid, the path to success is a walk along a knife edge - one slip and it's all over. Kids born to wealthy families get many more opportunities to fail. There is a built in safety-net that catches them and sets them back on the path to a successful life.

I may be wrong, but I do see an increasingly self-contained world of the elite. They live separately, they work separately, they play separately, and they educate their children separately. It is an entirely separate reality, a gilded life where it is possible for a child to grow up and never know that poverty, illiteracy, hopelessness and despair are the norm for all too many people. Growing up like that, how could they not come to see themselves as normal, not privileged. And how could they not simply assume that if you don't have what they have, it must be because you are lazy, stupid or criminal. The better parents will ensure that their children see life outside the bubble and develop an appropriate appreciation for their own good fortune. But I have spent much time among them and have seen that all too many of those parents do not.

You don't have to apologize for being rich, Marko. I don't. But I do believe that mine is a path that most cannot follow. Looking around at our society today, it is my impression that social mobility is in fact dropping in the US, that more and more people are being squeezed out of the middle class, that the elite are becoming more and more distant, and that our government and our financial system are directly contributing factors. I think it is unhealthy for the economy and our democracy. Even setting aside any moral considerations, I care about inequality because when the flames come, they will burn the just and the unjust alike.



* Probably. There is some debate about the proper "entry point" for the 1%. This is an interesting discussion about that issue. How Much Money Does It Take To Be In The Top 1% of Wealth and Net Worth in the United States
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 06-07-2014, 03:07 PM   #25
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,709
Quote:
Originally Posted by Gumby View Post
They live separately, they work separately, they play separately, and they educate their children separately.
s[/URL]
Well put and points taken, but I don't see how it is any different from any other time in history.

I just see a growing zero-sum resentment toward the wealthy along the lines of: "if you're rich, you made it on the backs/at the expense of the poor".

We've gone from an aspiration society to one of envy. I dunno...the very first time I saw a guy in a Rolls Royce, I said: "Man, I want to be him someday"...now people throw rocks at the car!
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 06-07-2014, 03:09 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,327
And on a related note,

"The rich are going to keep getting richer all over the world, pretty much just as French economist Thomas Piketty describes in his bestselling book Capital In The Twenty-First Century, stock market strategists at Bank of America Merrill Lynch wrote in a new report. But don't despair, the bank added, there are several ways for investors to profit from the trend."

"The U.S. has some of the highest inequality in the world, and it's rising."

Big Bank Explains To Rich People How To Profit Off Inequality

(I added the bolded part. This isn't socialist envy and bitterness towards the wealthy from Occupy Wall Street types. This is simply the reality according to Bank of America Merrill Lynch analysts.)

I think the current issue isn't so much wealth inequality, but the degree of it. We're reverting back to pre-1930s depression levels, like in the chart on the top right of this page -

http://robertreich.org/post/82938136466
__________________
daylatedollarshort is offline   Reply With Quote
Old 06-07-2014, 04:55 PM   #27
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,370
There's lots of bad math in that Who Rules America link. The Soviets tried forced economic equality, how well did that work out?
__________________
GrayHare is offline   Reply With Quote
Old 06-07-2014, 05:11 PM   #28
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,423
Been on vacation the past two weeks and my portfolio has risen about 17x the amount I'll probably end up spending on this trip, not counting the business class award ticket that I redeemed. (yet I get slightly perturbed when I think the taxi driver may be padding the fare for a short ride by 1 or 2€ and I wait to get bottled water at the supermarket rather than pay 1 or 2€ at some cafe)

So while I've been more fortunate than many, there's no denying the real rich have way more money than they know what to do with. When they throw $19 billion at whatsapp, $2 billion at the LA Clippers, these transactions have no relationship to the expected returns on that capital.

They are figuratively burning that money.

Doesn't make me mad, just makes my jaw drop. Don't think there will be a storming of the Bastille, even if the billionaires become even more tone-deaf or stupidly taunting like Marie Antoinette.
__________________
explanade is offline   Reply With Quote
Old 06-07-2014, 05:24 PM   #29
Thinks s/he gets paid by the post
 
Join Date: Apr 2005
Location: Midwest
Posts: 1,573
Quote:
Originally Posted by GrayHare View Post
There's lots of bad math in that Who Rules America link. The Soviets tried forced economic equality, how well did that work out?
Nobody says we have to try that. Try something else. Feudalism was tried before and that sucked too. That's where all this "Propertarianism" is going. Only without any "Noblesse Oblige". And all the hand-wringing about how we shouldn't do anything about maldistributed wealth because it's "communist" or that's how the System works, or somehow All Natural and we have to be "forced" to accept it is just cheer leading for the Feudalists.
__________________
razztazz is offline   Reply With Quote
Old 06-07-2014, 05:57 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,337
Quote:
Originally Posted by GrayHare View Post
The Soviets tried forced economic equality, how well did that work out?
The Soviet comment is straw man, IMHO. Far more relative to the discussion would be look at modern democracies such Germany, the Netherlands, or Sweden. I am not suggesting that we duplicate their systems, just that they are a more realistic comparison. After all, we could just as easily look at older versions of England which had child labor, debtor's prisons, and work houses. Or, we could look at our own country (USA) and see unsafe working conditions, child labor, company stores and company housing, just to name a few injustices.

I am a free market, capitalist at heart. But, for that to work we must have a level playing field. The current situation with the FCC's leadership is one example of how the playing field has been tilted in favor of the big business interests.

One last thing, while we may be a free market economy, we are not a free market society. Everything is not measured in dollars.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 06-07-2014, 05:59 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,438
I do think that wealth inequality is higher in the US than elsewhere. However, that is not because the 1% blocks the lower group from entering their rank. In fact, I think opportunity to get well is better in the US than in many other countries. Please let me explain further.

Taleb in his books explains the phenomenon of "Winner Takes All" in the modern age economy. Apple invented the smartphone, and cornered the market for a while. That gave Apple management and its employee share holders great wealth in a much shorter time than a typical employee at a typical tech company to accumulate. The same thing happens with sports players and entertainers. The winner takes all. Who gives them that money but the world-wide consumers?

Yes, wealth is concentrated, but a big part is because we as consumers allow it. We give them our money, in exchange for that hot iSomething, a movie or a ball game ticket out of our free will.

The wealth inequality is higher in the US than in other developed countries because we so far have the lead in innovation to crank out products, entertainment, gadgets for the gullible mass market. As much as I do not care for some industries that turn out products that I personally do not spend money on, I would rather see a US company doing that than a European, Japanese, or Chinese one. It's just for selfish reasons, as I live here.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 06-07-2014, 06:15 PM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 6,337
Quote:
Originally Posted by NW-Bound View Post
I do think that wealth inequality is higher than in the US than elsewhere. However, that is not because the 1% blocks the lower group from entering their rank.
The 1% may not be deliberately blocking others from succeeding, but the barriers to success are more difficult to overcome, IMHO. One good reason is that higher education has become a financial burden for many students and their parents.

When I was a young man I could get a very good college education at the local state university. All I had to do to afford it was live at home (thanks mom and dad!) and work part time for a bit above the minimum wage at that time. I was able to pay for my car, my college fees and books, and have some spending cash to take a young lady on a date. I graduated with NO COLLEGE LOANS TO PAY BACK.

Today, that same education would cost about $14,000 a year at the local state university. Even working full time during the summer and part time during the school year (15-20 hours a week) I could not earn that kind of money. And then, I have the car and the girls on top of that!!

IMHO, the high cost of post high school education has tilted the playing field and made it more difficult for young people to work themselves into a better position. Not that it can't be done, but it is much more difficult.

At the same time that the state has cut back on funding for the state universities, a certain MegaCorp has extracted 8 billion dollars in tax concessions to keep it's business in the state. So, maybe the 1% is at least partly responsible.
__________________
The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 06-07-2014, 06:40 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,438
I agree with you about the ridiculous cost of higher education today. My children went to my alma mater, and when I took them to visit the school before their attendance, I could barely recognize it. There were so many new buildings. What were all those for? And when I went to school, classes were small and were taught by professors. Now, students were taught by graduate assistants, by watching TV, or on the Web. What's the higher tuition money for? My sister teaches at the same university. I can say that the higher tuition does not translate into higher pays for the instructors.

Some blame the excess money available for tuition pumps up the price, and I think there's quite a bit of truth to that. But putting the cost aside, it is harder now for college graduates to get good jobs. Again, it's the phenomenon of "winner takes all". Apple, Google, and the like can only hire so many employees, so many good programmers or engineers may not get their chance. Well, they may make a good living as my son does now (a ME), but he is not going to get to the 1% with his current job at a smaller engineering corporation.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 06-07-2014, 07:07 PM   #34
Recycles dryer sheets
 
Join Date: May 2013
Posts: 119
Some data that might be of interest on this topic:

Piketty's data comparing wealth inequality in the US and Europe is here (pdf). It clearly shows that the US has, since about 1960, become much less egalitarian than Europe.

As for social mobility in the US (NY Times link), it appears it isn't getting worse but it's also not improving. An interesting factoid: the odds of escaping poverty in the most mobile European countries are twice as high as those in the US.
__________________
Fred123 is offline   Reply With Quote
Old 06-07-2014, 07:20 PM   #35
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
One of the most interesting breakdowns I've seen used "econophysics", what one gets when physicists used to looking at large systems (trillions of vibrating molecules, for example) look at an economy.

It turns out that for most folks, living more or less paycheck to paycheck, perhaps saving for and then spending that savings in retirement, the distribution of economic activity looks like a thermal system's distribution of molecular thermal energy, with people and income replacing molecules and energy. For these folks, some 97% of the population, there is a Boltzmann-Gibbs probability distribution of money and income.

What about that other 3% or thereabouts? Income there follows a Pareto power law, which in turn appears to be associated with spending only a portion of income and investing the rest, removing that portion of income from the 'thermal equilibrium' economic activity represented by the Boltzmann-Gibbs distribution.

The dividing line may be where the industrial strength savers live, accumulating more than they will reasonably spend over their lifetimes.

http://online.kitp.ucsb.edu/online/c.../Yakovenko.pdf
__________________
M Paquette is offline   Reply With Quote
Old 06-07-2014, 07:41 PM   #36
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by NW-Bound View Post

Taleb in his books explains the phenomenon of "Winner Takes All" in the modern age economy. Apple invented the smartphone, and cornered the market for a while. That gave Apple management and its employee share holders great wealth in a much shorter time than a typical employee at a typical tech company to accumulate. The same thing happens with sports players and entertainers. The winner takes all. Who gives them that money but the world-wide consumers?

The wealth inequality is higher in the US than in other developed countries because we so far have the lead in innovation to crank out products, entertainment, gadgets for the gullible mass market.
If all the top 0.1% were smartphone inventors or entertainers, that would make sense. But the data I've seen says that most of them are people who control capital. They either work in finance or they are CEOs or other top execs.

The finance people didn't give us smartphones. They gave us mortgage backed securities that gullible investors bought, and that brought the economy down when the truth came out.

The CEOs get paid to make the big decisions, but it seems they get paid the big bucks whether or not their decisions work out.

Yeah, there are some people in that high bracket who somehow made our lives better. But, I have a sense that too many of them are just skimming.
__________________
Independent is offline   Reply With Quote
Old 06-07-2014, 08:26 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,438
Quote:
Originally Posted by Independent View Post
The finance people didn't give us smartphones. They gave us mortgage backed securities that gullible investors bought, and that brought the economy down when the truth came out.
Yes. I am not well versed in this area, but would think better laws can protect us here.

Quote:
The CEOs get paid to make the big decisions, but it seems they get paid the big bucks whether or not their decisions work out.

Yeah, there are some people in that high bracket who somehow made our lives better. But, I have a sense that too many of them are just skimming.
Yes. I agree on both points, but wonder if any has suggested a feasible solution. I do not think heavy taxes on all high earners to "punish them" equally will work well.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 06-07-2014, 08:40 PM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,327
Quote:
Originally Posted by Independent View Post
If all the top 0.1% were smartphone inventors or entertainers, that would make sense. But the data I've seen says that most of them are people who control capital. They either work in finance or they are CEOs or other top execs.

The finance people didn't give us smartphones. They gave us mortgage backed securities that gullible investors bought, and that brought the economy down when the truth came out.

The CEOs get paid to make the big decisions, but it seems they get paid the big bucks whether or not their decisions work out.

Yeah, there are some people in that high bracket who somehow made our lives better. But, I have a sense that too many of them are just skimming.
Robert Shiller has some good thoughts on this -

"Are too many of our most talented people choosing careers in finance – and, more specifically, in trading, speculating, and other allegedly “unproductive” activities?

In the United States, 7.4% of total compensation of employees in 2012 went to people working in the finance and insurance industries. Whether or not that percentage is too high, the real issue is that the share is even higher among the most educated and accomplished people, whose activities may be economically and socially useless, if not harmful."

Read more at Robert J. Shiller on the unproductive financial workforce. - Project Syndicate
__________________
daylatedollarshort is offline   Reply With Quote
Old 06-08-2014, 07:44 AM   #39
Recycles dryer sheets
gunnychapman's Avatar
 
Join Date: Oct 2013
Location: Huntsville
Posts: 62
This is an interesting debate we have going on here. Allow me to make an observation; regardless of the side one takes in this debate, most of us are members of the ER community. That most likely is due to us being able to work and succeed in this economy. I'm not sure how many total members there are on ER, but I am sure we come from all walks of life and economic situations. I for one am a pick myself up by my boot straps guy. I do not think I could be where I am if I didn't live in this country, working and succeeding in this economy.
__________________
gunnychapman is offline   Reply With Quote
Old 06-08-2014, 08:53 AM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,288
Quote:
Originally Posted by gunnychapman View Post
This is an interesting debate we have going on here. Allow me to make an observation; regardless of the side one takes in this debate, most of us are members of the ER community. That most likely is due to us being able to work and succeed in this economy. I'm not sure how many total members there are on ER, but I am sure we come from all walks of life and economic situations. I for one am a pick myself up by my boot straps guy. I do not think I could be where I am if I didn't live in this country, working and succeeding in this economy.


I will disagree to a bit on this... I worked in the UK for a little over a year and I would say that you can do the same thing there.... and I met people from NZ and Australia who said you could do it there... I have also met people from Canada who have made it on their own... by 'their bootstraps' if you will...

I suspect that it is the same in a number of other EU countries... think Germany, Norway, Sweden...

Sure, we have a big economy which give more chances to more people... but we are not the only place where you can make it....
__________________

__________________
Texas Proud is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Investment manager fees cashflo2u2 FIRE and Money 9 01-11-2008 10:04 PM
Nothing Wrong With America That Can't Be Fixed By What's Right With America Danny Other topics 12 02-18-2007 12:06 AM
America's top cash crop is... Nords Other topics 13 12-22-2006 11:04 PM
Investment Manager fees oldcrowcall FIRE and Money 2 04-15-2004 11:08 AM
investment manager fee oldcrowcall FIRE and Money 4 04-15-2004 07:28 AM

 

 
All times are GMT -6. The time now is 08:22 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.