Wealth Gaps Are Large & Growing ...

[ERD50]

Sometimes true, but I think it's unfortunate that many folks today seem to assume that anyone suffering economic misfortune ...

I don't think SJ1_ implied that that story applied to 'anyone suffering economic misfortune'. But I do think it can explain a lot.

I've used this comparison before, but go and talk to a cross section of the top 10% of a high school graduating class, and then go talk to a cross section of the bottom 25% that should have been in that class (IOW, include drop-outs, those in half-way houses and detention centers, etc). Then tell me there would be any surprise that one group would acquire and grow significantly more wealth than the other group.

-ERD50

 

[Chuckanut]

I have sympathy for the people who are thrashing around in the rough water that the economy has created.... but I think that number is small compared to the number who make bad decisions....

+1

I have several 'acquaintances' who are obviously jealous of my retirement. They are older than me and will probably work until they are 70 since SS will be their only retirement income. One took 10 years off in his 40's to go back to school and travel. The other is the kind of person who says he "won't take any c#!p from anybody." As a result he switched jobs constantly and never amassed much savings or became eligible for a pension. He also drove fancy sport cars while I drove VW Beetles and plain Jane sedans.

They both were not willing to make the sacrifices that I, along with many people here, made to be financially secure. Now they grumble about my 'good luck' and how unfair life is.

My sympathy and my aid go to those hurt due to no fault of their own. The 'acquaintances" above basically took their retirement earlier in life and spent it. What did they expect?

 

[Gatordoc50]

I don't think SJ1_ implied that that story applied to 'anyone suffering economic misfortune'. But I do think it can explain a lot.

I've used this comparison before, but go and talk to a cross section of the top 10% of a high school graduating class, and then go talk to a cross section of the bottom 25% that should have been in that class (IOW, include drop-outs, those in half-way houses and detention centers, etc). Then tell me there would be any surprise that one group would acquire and grow significantly more wealth than the other group.

-ERD50

I believe that might be a problem with how our education system is set up. We spend a lot of time and effort and money and attention on the top ten percent. These kids need the least help. They need to be put in the self check out lane. Self paced curriculum with guidance as needed. We also need some tough love. Instead of drug testing welfare recipients which is a total crock, let benefits be dependent on their child's truancy up to a certain age.

 

[FUEGO]

Everyone around me that puts forth some modicum of effort seems to do really well.

You are always going to have a smallish wealthy upper class of elites, a big chunk of middle class with middling wealth muddling about, and a big chunk of the lower classes that will more or less get by but not always comfortably and not always for long.

We can move wealth around between the classes but I haven't yet seen an economic or political system that has effectively removed (in absolute terms) the overriding class structures. It must be a rule of natural law. Some immutable principle. Democracy, laissez faire, monarchy, despotism, fascism, state centric control, communism, socialism, benevolent dictators, genocidal dictators, totalitarianism.

All have tried, but so far the world hasn't seen a socioeconopoliticolegal system adequately capable of reaching some ideal egalitarian utopia. I think the biggest impediment to the institution of that utopia is that there is always some guy that wants to figuratively fill his Big Gulp cup at the gym's free coffee carafes. And in the mean time others are left paying the price.

Makes you wonder whether you ought to be the sucker brewing more coffee, or the one filling up your Big Gulp.

 

[Gatordoc50]

Everyone around me that puts forth some modicum of effort seems to do really well.

You are always going to have a smallish wealthy upper class of elites, a big chunk of middle class with middling wealth muddling about, and a big chunk of the lower classes that will more or less get by but not always comfortably and not always for long.

We can move wealth around between the classes but I haven't yet seen an economic or political system that has effectively removed (in absolute terms) the overriding class structures. It must be a rule of natural law. Some immutable principle. Democracy, laissez faire, monarchy, despotism, fascism, state centric control, communism, socialism, benevolent dictators, genocidal dictators, totalitarianism.

All have tried, but so far the world hasn't seen a socioeconopoliticolegal system adequately capable of reaching some ideal egalitarian utopia. I think the biggest impediment to the institution of that utopia is that there is always some guy that wants to figuratively fill his Big Gulp cup at the gym's free coffee carafes. And in the mean time others are left paying the price.

Makes you wonder whether you ought to be the sucker brewing more coffee, or the one filling up your Big Gulp.

Gufus vs Gallant?
Gallant says please and thank you and takes the cookie closest to him on the plate. Gufus grabs the biggest cookie.

 

[Chuckanut]

I believe that might be a problem with how our education system is set up. We spend a lot of time and effort and money and attention on the top ten percent. These kids need the least help.

I have to disagree at least when it comes to K-12.

No Child Left Behind gives schools and teachers points when a low achieving student can be made to pass the test. OTOH, if a high achieving student passes with an even higher score next year, the system does not care. All the law cares about is that the student jumps over the bar. How much he/she clears the bar by is not important, just that they get over it. Thus, most effort is put into helping the lower achieving students.

 

[Texas Proud]

I believe that might be a problem with how our education system is set up. We spend a lot of time and effort and money and attention on the top ten percent. These kids need the least help. They need to be put in the self check out lane. Self paced curriculum with guidance as needed. We also need some tough love. Instead of drug testing welfare recipients which is a total crock, let benefits be dependent on their child's truancy up to a certain age.

You must not know anybody in education..... with the No Child Left Behind law, education has been dumbed down... they teach to the test.. the test is now ALL that matters... the top 10% are put into GT classes, but really don't do much extra in them (my son just missed the GT level, but he is in the same class with them)...

Edit...
Saw that Chuckanut also posted about this... but I kept mine anyhow...

 

[Gatordoc50]

I have to disagree at least when it comes to K-12.

No Child Left Behind gives schools and teachers points when a low achieving student can be made to pass the test. OTOH, if a high achieving student passes with an even higher score next year, the system does not care. All the law cares about is that the student jumps over the bar. How much he/she clear the bar by is not important, just that they get over it. Thus, most effort is put into helping the lower achieving students.

I didn't know that. Thanks for that info. I also wasn't clear with my point. I think the bright kids should be self paced with guidance allowing them to reach levels not presented in the classroom. This will also allow the teachers to concentrate on those needing help. We are finding that even our best high school students are woefully unprepared for college. That is a function of the material not being presented to them in HS, not IQ.

 

[Gatordoc50]

You must not know anybody in education..... with the No Child Left Behind law, education has been dumbed down... they teach to the test.. the test is now ALL that matters... the top 10% are put into GT classes, but really don't do much extra in them (my son just missed the GT level, but he is in the same class with them)...

Edit...
Saw that Chuckanut also posted about this... but I kept mine anyhow...

Thanks. I'm not aware of what goes on the classroom. But I was very surprised when my son who graduated number 5 in his class couldn't test into college algebra. He had to take some prerequisites. I know he was in school. And I know the taxpayers spent a lot of money on him. As you say, he was getting a dumbed down curriculum.

 

[FUEGO]

I didn't know that. Thanks for that info. I also wasn't clear with my point. I think the bright kids should be self paced with guidance allowing them to reach levels not presented in the classroom. This will also allow the teachers to concentrate on those needing help. We are finding that even our best high school students are woefully unprepared for college. That is a function of the material not being presented to them in HS, not IQ.

I don't fully comprehend this post. Kids (bright and dumb) are free to pursue all kinds of self paced learning on their own. They do have to generally meet the requirements to graduate. Rarely does education get in the way of learning, but formal education by itself doesn't always lead to optimal learning.

In my case I try to let me kids learn as much as possible and supplement in areas where their formal schooling falls short. I had the epiphany that my kids' school is only partially responsible for educating my kids. When I questioned their kindergarten teacher about why they weren't giving out more homework, they kindly remarked that I was free to make up my own assignments for my own kids. I'm not sure why that never occurred to me before!

 

[Chuckanut]

I think the bright kids should be self paced with guidance allowing them to reach levels not presented in the classroom. This will also allow the teachers to concentrate on those needing help. We are finding that even our best high school students are woefully unprepared for college. That is a function of the material not being presented to them in HS, not IQ.

+1

 

[Gatordoc50]

I don't fully comprehend this post. Kids (bright and dumb) are free to pursue all kinds of self paced learning on their own. They do have to generally meet the requirements to graduate. Rarely does education get in the way of learning, but formal education by itself doesn't always lead to optimal learning.

In my case I try to let me kids learn as much as possible and supplement in areas where their formal schooling falls short. I had the epiphany that my kids' school is only partially responsible for educating my kids. When I questioned their kindergarten teacher about why they weren't giving out more homework, they kindly remarked that I was free to make up my own assignments for my own kids. I'm not sure why that never occurred to me before!

You were on the ball more than I was. I assumed my son was getting the same education I was. The cream always rises but it took him a little longer to graduate due to the prerequisites.

 

[bUU]

Demonizing capital isn't helpful, and neither is demonizing labor.

The problem is that measures suggested to prompt a more balanced relationship are invariably characterized as demonizing capital. It's like nothing that helps reestablish the balance enjoyed in the 1990s or 1960s for that matter could be considered anything other than anti-capital.

Sometimes true, but I think it's unfortunate that many folks today seem to assume that anyone suffering economic misfortune today only did so because of their own bad and/or irresponsible decisions, and that if they just would have been responsible and made better decisions, they'd be wealthy and able to retire at 50. A lot of good, hard working and responsible people are desperately thrashing around in the water in this economy, trying not to drown. And a lot of people just can't seem to accept that; it's more convenient to just believe that if they are struggling, it *must* be because they screwed up and they made their own bed. It absolves us of feeling any responsibility to help out or accept any personal sacrifice.

Precisely. The modus operandi of the defense of overweighting the right-hand side of the scales is to characterize anything that would call for re-establishing that balance in a disparaging way.

So effectively the challenge here starts not with policy, but with perception - how to get both sides to acknowledge that there is an imbalance, and that the imbalance isn't due to scurrilous behaviors by those getting the short-end of the stick.

The first step to recovery is acknowledging that there is a problem.

 

[FUEGO]

But is there really a problem? I mean one that demands a solution? Or is it just a phenomenon, a fact? I think most agree that income/wealth inequality exists. Maybe "so what?" shouldn't be ruled out as a response to the "problem".

 

[ziggy29]

But is there really a problem? I mean one that demands a solution? Or is it just a phenomenon, a fact? I think most agree that income/wealth inequality exists. Maybe "so what?" shouldn't be ruled out as a response to the "problem".

I guess that was part of my point. *Is* there anything we can reasonably do about it? If there is, I think we should seek a solution. If there isn't, we may unfortunately have to watch the middle class die by a million paper cuts over a number of decades.

 

[bUU]

But is there really a problem? I mean one that demands a solution? Or is it just a phenomenon, a fact? I think most agree that income/wealth inequality exists. Maybe "so what?" shouldn't be ruled out as a response to the "problem".

It's a problem only because we don't yet have all our other ducks in a row. If lack of affluence didn't mean insufficient opportunity to advance (i.e., economic advancement tied to the ability to afford higher education, economic advancement tied to invest in one's own business, etc.), that would help. If lack of affluence didn't correlate so strongly with early death and chronic health issues, that would help. If lack of affluence didn't make the decision to have children into so much of a (dreadful) financial risk, that would help.

 

[FUEGO]

bUU, you seem to have identified the problem as wealth inequality while it sounds like the underlying concerns you have are adequate social programs and safety nets for the least advantaged (but please correct me if I have put unwanted words into your mouth).

I would have no problem framing the question as "What is the optimum level of social programs to promote equality of opportunity and access to health care and education, and how much of a safety net should we provide for the least advantaged".

The ultra wealthy aren't the problem, and in fact with progressive taxation, they look more like a solution to the real problems (equality of opportunity and adequacy of social safety nets).

 

[Texas Proud]

Thanks. I'm not aware of what goes on the classroom. But I was very surprised when my son who graduated number 5 in his class couldn't test into college algebra. He had to take some prerequisites. I know he was in school. And I know the taxpayers spent a lot of money on him. As you say, he was getting a dumbed down curriculum.

A tangent to the OP... but who cares...


That is one of the problems that I do have with our schools... we live in a highly rated school district... but when I talk to my son about what he is learning, I am surprised how little it really is.. he is smart... all grades except 1 over 95 avg... but still there are students who are failing...

 

[Texas Proud]

It's a problem only because we don't yet have all our other ducks in a row. If lack of affluence didn't mean insufficient opportunity to advance (i.e., economic advancement tied to the ability to afford higher education, economic advancement tied to invest in one's own business, etc.), that would help. If lack of affluence didn't correlate so strongly with early death and chronic health issues, that would help. If lack of affluence didn't make the decision to have children into so much of a (dreadful) financial risk, that would help.

One of the things that I keep coming back to is that we seem to focus on the short term....

Look at the long term.... there have been people in Europe for a couple of thousand years... no matter what happens in the near term, America will continue to exist.. and continue to be one of the top countries in the world... all this hand wringing about our current problems is just background noise....

 

[bUU]

bUU, you seem to have identified the problem as wealth inequality while it sounds like the underlying concerns you have are adequate social programs and safety nets for the least advantaged (but please correct me if I have put unwanted words into your mouth).

Not quite: Rather the problems are the problems; they are various and myriad; but wealth inequality is the common denominator for those suffering from the problems that are the context of this thread by definition, and safety nets are effective mitigating factors.

I would have no problem framing the question as "What is the optimum level of social programs to promote equality of opportunity and access to health care and education, and how much of a safety net should we provide for the least advantaged".

Why bother? Why not forge a clear understanding of the living conditions that you wouldn't mind being subjected to living under yourself, come to consensus about that with everyone else, and establish that as the floor. Work to foster an economy that provides sufficient access to such ("an edifice which produces beggars needs restructuring"), and in the meantime ensure safety nets provide that floor. There's no need to make it more complicated by adding a level of indirection, separating the analysis ("optimum level" presumably of spending on "social programs") from the impact. Just ensure the standard is satisfied, and also work to make the system such that it makes that standard its default output.

One of the things that I keep coming back to is that we seem to focus on the short term....

We live in the short term. Looking at, and working towards a difference with regard to, the long term doesn't obviate our obligation to the short term. In other words, you cannot making a good investment that will pay off very highly in the far future, if it means that your cash flow in the meantime is so low that you cannot pay your bills. Satisfying the short term is the minimum requirement; satisfying the short term and making things better in the long term is the objective.

 

[Texas Proud]

Why bother? Why not forge a clear understanding of the living conditions that you wouldn't mind being subjected to living under yourself, come to consensus about that with everyone else, and establish that as the floor. Work to foster an economy that provides sufficient access to such ("an edifice which produces beggars needs restructuring"), and in the meantime ensure safety nets provide that floor. There's no need to make it more complicated by adding a level of indirection, separating the analysis ("optimum level" presumably of spending on "social programs") from the impact. Just ensure the standard is satisfied, and also work to make the system such that it makes that standard its default output..

Well, for one my level of living conditions that I would not mind being subject to is pretty high... and I work my tail off to get there... I would hate to think that society would owe me this level of living condition... or anybody else for that matter....

Now, if you want to get down to a basic level.... I had two BILs (different families) who lived in poverty... one lived in a house with no floors, just the dirt... no running water, no electricity... he received a paid for education and did reasonably well...

Another lived in a small house paid for by his working mom and a deadbeat dad.... with 4 brothers... he has done quite well...

There are 6 siblings in my family... we lived in a house that had 1400 sq ft.... my dad made very little... we all worked at various jobs to have stuff...

None of these families had any welfare... what has happened in the last 40 or so years to make it where society owes people a minimum level of comfort

We live in the short term. Looking at, and working towards a difference with regard to, the long term doesn't obviate our obligation to the short term. In other words, you cannot making a good investment that will pay off very highly in the far future, if it means that your cash flow in the meantime is so low that you cannot pay your bills. Satisfying the short term is the minimum requirement; satisfying the short term and making things better in the long term is the objective.

I agree.... it does make sense to worry about how we will do.... but when people are talking about the 'decline' of America.... I just don't buy it... England has 'declined' as the #1 world power, but the people there are living quite well....

I don't see us dropping below #2 during any living persons life..... heck, even longer than that....

 

[bUU]

Well, for one my level of living conditions that I would not mind being subject to is pretty high...

Hence, the stated necessity of coming to consensus on the matter. The point is you shouldn't be asking, "How much will it cost?" when deciding a minimum standard. A minimum standard is based on what is minimally acceptable on a qualitative level. You set the cost based on that level, not the other way around. That's why there is so much contention with regard to this issue: Some folks insist on deciding what's reasonable based on what's inexpensive.

and I work my tail off to get there...

You're confusing what you want with what you wouldn't mind settling for. Imagine if, heaven forbid, a family member was kidnapped and it took every penny you had to pay the ransom, what would you do then? What would be that level, then?

what has happened in the last 40 or so years to make it where society owes people a minimum level of comfort

I'm not talking about comfort. I'm talking about basics. Life. Health. And so on. Have standards changed over the last 40 years or so? Surely. We've become a less barbaric society. Heck, when I was born, people of color couldn't sit at the same counter as me in many places. Also, keep in mind this chart when thinking about why standards have changed over the last 40 years or so:
http://static4.businessinsider.com/...sted-wages-have-been-flat-for-fifty-years.jpg

I agree.... it does make sense to worry about how we will do.... but when people are talking about the 'decline' of America.... I just don't buy it...

Let's look at that chart again:
http://static4.businessinsider.com/...sted-wages-have-been-flat-for-fifty-years.jpg

We talk about that chart by saying that the wealthy have greatly benefited from substantial growth in productivity (which is true), while the workers in the country have experience "flat" wages. That's actually not true: Wages have actually gone down in real terms. The people who are effectively living on that dark line are experiencing an America in decline. It is remarkable that that America in decline exists side-by-side with the America that is doing so well. And for those of us lucky enough to get a good bit of what's dripping off of that grey line, it may be hard for us to see the reality of living on that black line.

 

[anethum]

There was a recent thread that cited the following article titled "How We Pay Taxes: 11 Charts"
How We Pay Taxes: 11 Charts - Derek Thompson - The Atlantic

I found the last chart startling, and I believe it says a lot about the growing concentration of wealth. According to that chart (based on 2011 tax data), 55.5% of the benefit of the lower tax rate on LT Capital Gains & Qualified Dividends goes to the top 0.1% of taxpayers! And another 19.6% goes to the next top 0.9% of taxpayers. Thus 75.1% of that tax break benefits the top 1% of taxpayers. Lest someone say that LTCG have traditionally been taxed at a lower rate than wages, the low LTCG rates that the US has had since 2003 haven't been this low since 1941.

As for the US becoming "like Europe". Well, there are a lot of different countries in Europe, each with its own policies. I believe that the US would be smart to emulate some of the policies of some European countries. For example, the way that unemployment and job training are handled in Denmark seems to work much better than how they're handled in the US as well as most other European countries.

Americans should be concerned that there is now more social mobility in France than in the US. In other words, if you're born into a poor family in France, you've get a better chance of moving into the French middle class than you've got in the US.

IMO, the biggest reason why all Americans should be concerned about the sharp increase in the concentration of wealth in the past couple of decades (aside from the obvious moral reasons) is that if this concentration continues and keeps getting worse, it will inevitably result in serious social unrest. There's no telling what form that might take.

 

[Mulligan]

When I think of the wealth gap I always think of this guy in the cube next to me yrs. ago. We both graduated the same time and we both pretty much made the same salary. I had around 10 homes and banked my salary, he was broke and 30-40k in Credit Card debt.
If they took my money and gave half to him so we both had the same amount of money, in 5-10 years I would be banking my salary and he would be broke.
AMEND

You and my father would get along real well. He repeatedly says, if you confiscated all of the wealth from the rich and distributed it to the masses, they would have it all back in ten years. His thinking was those people would use what they had left to invest and recover their wealth, while the recipients would just burn through it. Kind of like what the lottery winners generally do.

 

[Midpack]

Sometimes true, but I think it's unfortunate that many folks today seem to assume that anyone suffering economic misfortune today only did so because of their own bad and/or irresponsible decisions, and that if they just would have been responsible and made better decisions, they'd be wealthy and able to retire at 50. A lot of good, hard working and responsible people are desperately thrashing around in the water in this economy, trying not to drown. And a lot of people just can't seem to accept that; it's more convenient to just believe that if they are struggling, it *must* be because they screwed up and they made their own bed. It absolves us of feeling any responsibility to help out or accept any personal sacrifice.

Maybe so, but I think it's clear there's a mix of both. I sincerely wish I knew what the mix is between hard working/responsible 'victims' and 'screw-ups.' Is it 50/50, or some lopsided mix - I've searched many times, without finding anything? I know folks in both camps personally, but that doesn't give me any sense of which camp is larger, if either.

Those who speak only of victims may be just as misguided as those who speak only of 'screw-ups.'

I'd be more than happy to help out the victims, and equally unhappy to help out the 'screw-ups.'

I have sympathy for the people who are thrashing around in the rough water that the economy has created.... but I think that number is small compared to the number who make bad decisions...

+1.