Generation Wealth

[1-31-18]

Is the question of wealth today any different than before. The Rockellers, Carnegies, Fords and Rothschilds. There has always been a concentration of wealth. Is it worse today. I'll bet it depends on the eye of the beholder and how the statistics can be bent.

Yes, it is worse, or rather more extreme. Anecdotal observations are irrelevant. Data matter. Google “Gini coefficient” and you’ll see the data.

 

[Souschef]

Well, after Chris Farley did his "trailer down by the river" speech on SNL, we jokingly refer to our home that way.
It is a new 1400 sq ft manufactured home near the Santa Clara River. It is certainly much less assuming than the home of the author of "Millionaire Next Door".
What you do not see are the 2 paid for cars in the driveway.

 

[ERD50]

Yes, it is worse, or rather more extreme. Anecdotal observations are irrelevant. Data matter. Google “Gini coefficient” and you’ll see the data.

I was familiar with the term, and thought I was aware of the limitations, but to be sure, I did as you asked and googled it (from wiki):

The Gini coefficient is a relative measure. Its proper use and interpretation is controversial.[52] It is possible for the Gini coefficient of a developing country to rise (due to increasing inequality of income) while the number of people in absolute poverty decreases.

And to me, that's a big flaw. Yes, there are some very sad cases of people with mental disorders and addiction issues, who just won't accept help, or fall through the cracks, but in general, the poor today are far ahead of the poor of the past. So I'm just not so certain that that sort of inequality is a good measure of anything.

Maybe because I'm just not a "keep up with the Jonese's" type - I don't care too much if someone else is far better off, as long as I'm comfortable. And from a humanitarian view, I'm far more concerned that the lower class have enough to be comfortable, than I am with how rich the rich are.

-ERD50

 

[target2019]

FRED has the GINI
https://fred.stlouisfed.org/series/SIPOVGINIUSA
Not sure why that is extreme. But it certainly has changed in my lifetime. I'm thankful that we have enough to spend enough.

 

[1-31-18]

Facts are stubborn things. I don’t know how to “drag” literature into this blog, but I’m looking at some right now that shows income inequality is higher in the US today than it has been at any point since the Great Depression. And the net worth of the top one tenth of one percent is about the same as for the bottom 90 percent. I consider that “extreme.” Others, I suppose, may not.

But then it’s also the case that the bottom 50 percent pay no income taxes. I find that extreme, too.

 

[B0bL0blaw]

Facts are stubborn things. I don’t know how to “drag” literature into this blog, but I’m looking at some right now that shows income inequality is higher in the US today than it has been at any point since the Great Depression. And the net worth of the top one tenth of one percent is about the same as for the bottom 90 percent. I consider that “extreme.” Others, I suppose, may not.

But then it’s also the case that the bottom 50 percent pay no income taxes. I find that extreme, too.

Just as long as we're all clear that you're choosing your words carefully to not count payroll taxes (SS and Medicare taxes), state and local income taxes, and property and sales taxes.

 

[Denverite]

Well, here is the late Thomas Stanley's house (author of Millionaire Next Door).

Assuming that is the same house, he discussed in his "Stop Acting Rich" book how he bought it. It was during a "down time" in real estate in the 1980s and his friends in the real estate field told him "now is the time to buy." He bought the land, hired his own contractor to build it and claims to have saved 40% compared to the price from a developer.

His neighbors in that area apparently viewed him as something of an anomaly. They tended to be more consumption oriented than he. Imagine that.

Even though his message was getting repetitive, I wish he was still with us. Both his books and blog are great.

 

[Walt34]

When things get too out of balance, the peasants revolt. We'd be foolish to ignore this part of history.

Perhaps. Like many others I'd never heard of any of those people either. But I do think a distinction is that the standard of living for poorer people (at least in the U.S.) is higher than ever before in the past IF they take advantage of all the social programs out there to help them. (Disregarding for the moment the ones with mental issues that keep them from participating. That's a separate issue.) They'll have enough to eat, have a roof overhead, heat in the winter and likely A/C in the summer, at least where I come from. I think that standard of living is unlikely to spark riots no matter how rich the richest get.

That wasn't the case 100+ years ago. People did in fact starve, did freeze in the winter, and did die from heat exhaustion because they didn't have money. That will spark riots.

 

[marko]

But I do think a distinction is that the standard of living for poorer people (at least in the U.S.) is higher than ever before in the past IF they take advantage of all the social programs out there to help them. They'll have enough to eat, have a roof overhead, heat in the winter and likely A/C in the summer, at least where I come from. I think that standard of living is unlikely to spark riots no matter how rich the richest get.

Unless folks start rioting because they can't have the same yacht that the rich have.

But agreed; 100 years ago it was a different story.

 

[Dash man]

Unless folks start rioting because they can't have the same yacht that the rich have.



But agreed; 100 years ago it was a different story.

Is it? Look at Venezuela.

 

[Walt34]

Unless folks start rioting because they can't have the same yacht that the rich have.

But agreed; 100 years ago it was a different story.

Is it? Look at Venezuela.

I think he was referring to the U.S. now.

But yes, what is happening in Venezuela has a good chance of starting riots if it hasn't already.

 

[marko]

Is it? Look at Venezuela.

I was replying to a post that said "at least in the US". As far as I can tell, the Venezuela riots are mainly about lack of food and medical supplies.
Not something I expect to see here in the US any time soon.