The 9.9% - The New American Aristocracy - Atlantic Article

[travelover]

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

I don't know how it will end, but when Joe Average feels that the system is rigged and he isn't getting a fair shake, really ugly things can happen. I see it here and in European politics where scapegoating of minorities, immigrants, and refugees is on the rise. When enough voters just want to blow the whole thing up, it is an opportunity for manipulation by demagogues and other democracy crippling actions to take place.

 

[Dtail]

I don't know how it will end, but when Joe Average feels that the system is rigged and he isn't getting a fair shake, really ugly things can happen. I see it here and in European politics where scapegoating of minorities, immigrants, and refugees is on the rise. When enough voters just want to blow the whole thing up, it is an opportunity for manipulation by demagogues and other democracy crippling actions to take place.

+1 Hitler was the extreme example, but wonder how many steps behind we are.

 

[Running_Man]

A little background on the author, he was a consultant for business years ago, got fired, sued won millions in the lawsuit. Used that money to write a book to condemn business consulting and went into business as a consultant himself, his model was be nice to employees.

Goes back to school with his millions to get a philosophy degree and his daughter is ready to graduate high school. In general the author suffers from a reverse case of Pollyanna, "If you look for the bad in people expecting to find it, you surely will". His paper is a long winded potpourri of musings that is interesting at the local pub with no actionable thoughts of his own.

 

[pj.mask]

Good article, thanks for posting. I enjoyed the perspective without all the prescriptive. Matches what I see in my peers although I can’t relate to generational wealth myself. What blows my mind most is seeing people who earn 3-5x less than me thinking they got it made and it is the poor people who want everything for free. Meanwhile I’m watching money fall into the laps of people making 3-5x more than me.

It just seems like the workers who would most benefit from equality are against it because they have this mentality that the poor are getting *their* tax money. Meanwhile I got a $8/h tax cut and because I save most of my money - will be less impacted by current tariffs.

 

[omni550]

We had a thread on this a year ago.

http://www.early-retirement.org/forums/f27/are-you-the-9-9-a-92146.html

omni

 

[HI Bill]

I'm in the 9.9%, but could have just as easily been in the bottom 50%. Had I not gone to college, obtained a couple of degrees, found continuous employment from 1985 to the present, and had chosen to spend everything, not saving up to half my income. I started slow and late, but through some level of fortune, hard work, willingness to relocate multiple times, willingness to work hard and take on increasing levels of responsibility, I pushed my way from nothing (except for having educated, loving parents who paid for most of my college) to where I am today. No silver spoon or old money here.

Sorry, but I'll just stick to the ideals espoused in "The Millionaire Next Door".

 

[corn18]

Meh. This forum demonstrates that you can live well and save for a comfortable retirement on modest incomes. I don't feel compelled to help whiners.

 

[RAE]

It just seems like the workers who would most benefit from equality are against it because they have this mentality that the poor are getting *their* tax money.

Yep, I have been saying the same thing for years. I have several friends (who do not make much money themselves) who believe that most of the blame for their financial struggles can be placed on government programs to help people in poverty ("my tax dollars wasted on people who don't deserve the money"). Yet, if you actually compare the tax dollars spent on all those programs to the various massive corporate welfare programs, it's not even close. Then, add in exploitation of the tax code by mega-corporations to enable them to avoid most taxes, and you can begin to see why we have a major problem with wealth inequality in this country. And it's not going to change anytime soon, because wealth buys political influence.

 

[aja8888]

I'm using HNL Bill's story for me with a few changes in red.

I'm in the 9.9%, but could have just as easily been in the bottom 50%. Had I not gone to college, obtained a couple of degrees, found continuous employment from 1973 to the present, and had chosen to spend everything, not saving up to half my income. I started slow and late, but through some level of fortune, hard work, willingness to relocate multiple times, willingness to work hard and take on increasing levels of responsibility, I pushed my way from nothing (while having poor and alcoholic, parents who couldn't pay for any of my college) to where I am today. No silver spoon or old money here.

 

[zippy2020]

....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

That WSJ article is penned by Phil Gramm, who touted financial deregulation and helped kill Glass-Steagall Act, which separated commercial banks from Wall Street. He also inserted a key provision into the 2000 Commodity Futures Modernization Act that exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission.

You know, like those credit-default swaps which took down AIG? And all that resulting chaos? Thanks a lot, Phil. Like he has any credibility with my family or friends, who almost all (except for Spouse and me) had to work another 3-7 years to afford retirement after their portfolios and RE assets tanked.

 

[daylatedollarshort]

For those that do not think wealth inequality is an issue, is there any point where it would be too much? What if one person owned 99% of the assets in the U.S and rest had to live on the 1% leftover?

 

[corn18]

[youtube]F5wZ28PTnoM[/youtube]

 

[GrayHare]

For those that do not think wealth inequality is an issue, is there any point where it would be too much? What if one person owned 99% of the assets in the U.S and rest had to live on the 1% leftover?

At that extreme, the 99% owner will be the source of almost all spending, tax revenue, and loans. For everyone else, I don't know that things would differ much from today. This assumes the money is counted honestly, and corruption remains low.

 

[daylatedollarshort]

Oxfam says 26 people own as much as the bottom 50% worldwide (3.8 billion people). If this is not an issue for some of you, at what point (if any) do you think it would be an issue?

 

[HI Bill]

I'm using HNL Bill's story for me with a few changes in red.

I'm in the 9.9%, but could have just as easily been in the bottom 50%. Had I not gone to college, obtained a couple of degrees, found continuous employment from 1973 to the present, and had chosen to spend everything, not saving up to half my income. I started slow and late, but through some level of fortune, hard work, willingness to relocate multiple times, willingness to work hard and take on increasing levels of responsibility, I pushed my way from nothing (while having poor and alcoholic, parents who couldn't pay for any of my college) to where I am today. No silver spoon or old money here.

+1! You've been working continuously for 46 years? Time to retire!

 

[aja8888]

+1! You've been working continuously for 46 years? Time to retire!

I did. Last few years were mixed part time until I sold the business. Had a big setback in 1992 going through a costly California divorce. But all is good now!

 

[unclemick]

42 years of compounding index funds and counting.



heh heh heh - 'God Looks After Drunkards, Fools and The United States of America'.

And those who buy index funds early as they can and often as they can and above all - "Stay the Course."

From a really cheap SOB to 9.9% swell o mundo in under 50 years. Practically overnight.

 

[RobLJ]

I have been watching wealth inequality grow, steadily and inexorably, since the 70's to the point that the amount of wealth owned by the 3-.1% rivals the 20's.

To many posters, apparently, this is not a problem; to most Americans it explains their reality for the last 30 years, including the carving out of the middle class and the inability of wage workers to make it. I suspect the politics of increasing inequality for another 20 years will not have a good end, but I suppose y'all can somehow convince me that it's all OK (since I'm doing good, after all).

https://www.thestreet.com/politics/income-inequality-in-america-14927750

I apparently am hanging on to a 12% lifestyle although it is decreasing since I semi-retired. No matter; I never expected more than a 50-60%ile lifestyle. But I submit it is a huge issue. I was one of the lucky ones, although I suppose I earned everything by pulling the bottoms of my Levis up past my underwear.

 

[Winemaker]

Stanley Druckenmiller, the hedge fund king, was on CNBC yesterday. During his interview, he said that the only time in history where the wealth inequality was the smallest was during the 2008-9 Great Recession, because the wealthy had lost so much value in their reale state, stocks and bonds. But it only makes sense that if you have bought something of value, that it's value would fluctuate over time, but you have to be able to purchase something of value.

Someday, my beanie babies will be worth something.

 

[marko]

Oxfam says 26 people own as much as the bottom 50% worldwide (3.8 billion people). If this is not an issue for some of you, at what point (if any) do you think it would be an issue?

IMO using a global measure is an unfair position. Would you go up to a homeless person in the US and say "Stop complaining and be happy. There's 98% of the people in world worse off than you." ?

I tend to worry about things that I can actually do something about.

Abstracts like this make me say "what's it got to do with me?".

 

[Amethyst]

I think this is because corporate welfare is hard to see, while the "people who don't deserve the money" (so-called) are more visible, and can be interacted with.

Yep, I have been saying the same thing for years. I have several friends (who do not make much money themselves) who believe that most of the blame for their financial struggles can be placed on government programs to help people in poverty ("my tax dollars wasted on people who don't deserve the money"). Yet, if you actually compare the tax dollars spent on all those programs to the various massive corporate welfare programs, it's not even close. .

 

[Popeye]

For those that do not think wealth inequality is an issue, is there any point where it would be too much? What if one person owned 99% of the assets in the U.S and rest had to live on the 1% leftover?

I guess it is fair to ask the opposite question. How much should the top say 10% “be allowed” to own? We are always hearing stats and had bad they are, but what should they be? Are we looking for government intervention until everyone has the same wealth? Until I hear the end goal, I worry about that too.

 

[pj.mask]

I guess it is fair to ask the opposite question. How much should the top say 10% “be allowed” to own? We are always hearing stats and had bad they are, but what should they be? Are we looking for government intervention until everyone has the same wealth? Until I hear the end goal, I worry about that too.

I think appropriate tax law would limit increases and inheritance. I don’t think our system is set up for limiting wealth. Just unfortunate that many of the very rich people benefit from (low income programs to support their workers paid minimum wage, infrastructure to run their corporation, etc - primarily paid for by the middle class taxes)

Instead I got a 16% tax cut on my 1% income.

 

[Popeye]

I think appropriate tax law would limit increases and inheritance. I don’t think our system is set up for limiting wealth. Just unfortunate that many of the very rich people benefit from (low income programs to support their workers paid minimum wage, infrastructure to run their corporation, etc - primarily paid for by the middle class taxes)

Instead I got a 16% tax cut on my 1% income.

I’ll agree that our system is not set up for limiting wealth and to me that is a good thing. I don’t see the pie as fixed but rather as something that can get bigger meaning potentially more for many if not all.

I also worry about loosely defined terms like corporate welfare. It seems this term was created around a few egregious policies and used until accepted as a bad thing. Now so many things get piled into that category. Folks may scream when a company gets a tax break to move into a struggling area. But without it, they locate their business somewhere else and you get Detroit scenarios. So is it really such a bad thing in this case?

Look at GE. They get demonized for the taxes they pay, or don’t pay. But they are really hurting right now. If they were forced to pay large taxes while having huge losses, what would happen? They would cut costs even more than they have to do now. More layoffs, more cost cutting, etc. they close facilities and we see stories on the communities decimated when the GE plant closes. In many ways I see these businesses as part of a strong infrastructure.

 

[RAE]

I think this is because corporate welfare is hard to see, while the "people who don't deserve the money" (so-called) are more visible, and can be interacted with.

Yes, that is exactly right.