The New Rich

[haha]

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Originally Posted by timo2 All you have to do is declare yourself a victim of something. Or make up your own victim class. all it takes is the proper mindset! (apologies to actual victims of criminal activity)

I've got one! I'm a victim of the very annoying ideas afloat in the world today.

Somebody give me money!

Ha

[Options]

Read it. Wished I hadn't. What a ridiculous "article".

[anethum]

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Originally Posted by haha Something to consider is that the US has a much more heterogeneous population than any Scandinavian country. The bottom 20% of all earners in Sweden for example is a very different bottom 20% than that which is found in the US. I despair of anything other than political points ever coming from these random social sound bites. Someday we will be governed by computers, and iMO they will do a much better job of it. Ha

Here's another chart. Canada is perhaps more heterogeneous than the US these days, and Australia has had a huge influx of non-European immigrants in recent decades. Economic mobility in both of those countries is much less tied to the wealth of the parents than in the US. It's striking to me that even an old world country like France appears to have greater mobility now than the US.

(from the following website which uses 2011 data)
U.S. lags behind peer countries in mobility | Economic Policy Institute

[Meadbh]

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Originally Posted by anethum Here's another chart. Canada is perhaps more heterogeneous than the US these days, and Australia has had a huge influx of non-European immigrants in recent decades. Economic mobility in both of those countries is much less tied to the wealth of the parents than in the US. It's striking to me that even an old world country like France appears to have greater mobility now than the US.

Very interesting chart. Is the US becoming an "old world" country as far as social mobility is concerned?

[M Paquette]

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Originally Posted by Meadbh Very interesting chart. Is the US becoming an "old world" country as far as social mobility is concerned?

No, the goal is more a restoration of feudal forms and a caste system. The reduction in mobility is handy, of course, but this also needs the limiting of educational opportunities, which higher costs for higher education nicely implement. There's a bit of a feedback mechanism here where limiting education helps cap mobility. At some point we should be able to demonstrate that Demoist systems don't function well in this environment, and move further towards implementing the neo-reactionary's goal of moving all decisions for society into the hands of the aristocracy.

http://techcrunch.com/2013/11/22/geeks-for-monarchy/

It's good to have goals in life. This one is a bit more... unusual than most. (A cookie for the first person to spot the unspoken but likely incorrect assumption these neo-reactionaries are all making...)

[Tree-dweller]

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Originally Posted by W2R And especially, why we like to rank ourselves in terms of dollars income! I consider myself to be rich, in a sense, but my idea of what it takes to be rich has almost nothing to do with income. Having oceans of free time, more than the bare necessities, and feeling completely content with every aspect of life is where it's at IMO. I have that, and let the Donald Trumps of the world eat their hearts out.

Too true. It may have to do with where you came from. As a child of immigrants, having grown up in a very blue-collar neighborhood of a big city, my modest house in a close suburb makes me feel, well, comfortable. If I had grown up a scion of some industrial magnate, my modest house might mean I was a failure in some eyes (not mine). Up-arrow vs down-arrow, I guess.

[RobLJ]

Rich/wealthy obviously are those at the top of the pyramid, so those earning 250k a year clearly rank if you look at the income data, which places a household in the top 5%. Total wealth (net worth) is another matter and a larger fence to jump. The income measure conceals of course the American aristocracy (or rentiers or. . . ) who have enormous investment assets but no "income"--i.e., "carried interest." Or many here on FIRE. Andrew Carnegie and Bill Gates are the point at the top of the pyramid and apparently are what the American wealthy think of when they think of "rich" but somewhere in the top 5-10% qualifies in my mind. Due to a one-time bonus last year for DW, I think we snuck a nose in the camel's tent for at least one year, and I have no doubt that we are wealthy, even if we drive a Subaru.

[Malcolm2]

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Originally Posted by Meadbh I'm not sure if this is exactly the information you were looking for, Danmar, but here is the Wikipedia entry on the Gini Coefficient. List of countries by income equality - Wikipedia, the free encyclopedia Since the 1970s, Canada's Gini (after taxes and transfers) has risen from 0.304 to 0.324. The US Gini has risen from 0.316 to 0.378. This suggests that income inequality is rising, particularly in the US. When it comes to upward mobility, the data are mixed, but it appears that being the son of a father who is in the bottom 20% of all earners makes it more difficult to be upwardly socially mobile in the US than in Scandinavia. Prosperity & Upward Mobility by Country

I believe this data is just meaningless. Not useful to compare a country of 315 million people to Canada that has only 34 million.

Far more budding businessmen and others are still trying to immigrate to the U.S. from around the world than to Canada, or any other first world country. Go to a third world country and walk around to where the Embassies are. The Embassy with the longest line for visa applicants will be the American.

By the way, "income equality" is at odds with Capitalism. We are a Capitalist country and have been since the beginning. Thats a good thing.

[Rusa]

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Originally Posted by ERD50 The nerve of those people! Don't they realize they are just making others feel bad? They need to knock off this hard work, planning, and education stuff - it just leads to inequality, and we can't have that! -ERD50

Well said.

[haha]

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Originally Posted by anethum Here's another chart. Canada is perhaps more heterogeneous than the US these days, and Australia has had a huge influx of non-European immigrants in recent decades. Economic mobility in both of those countries is much less tied to the wealth of the parents than in the US. It's striking to me that even an old world country like France appears to have greater mobility now than the US. (from the following website which uses 2011 data) U.S. lags behind peer countries in mobility | Economic Policy Institute

I won't trade soundbites with you. Whatever you want to believe, go ahead and believe.
These things are complex, and it is my opinion that the only purpose of any of these charts, statements, whatever is political. It is hard to know what a carefully designed medical study shows, how much less certain is some grand social pronouncement made off some questionable observations.

Ha

[Malcolm2]

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Originally Posted by imoldernu I guess I don't get it... Am not very smart about money... I don't have much in politics here though, so it's innocent... Edit: Anyway... Here's the logic I was looking at, to come up with the comment... .................................................. ............................................... In 1963, the top marginal tax rate for a single person filing separately was 90% on amounts over $200,000, so THAT tax on the $1 million would be 90% of $800,000 or $720,000. Assuming that the taxed individual was taxed at 50% for the first $200,000 ... $100,000.... That would leave the net income after taxes $1,000,000 minus $720,000, minus $100,000 for a total after tax income of $180,000. 50 years later... In 2013, the top marginal tax rate for a single person filing separately is 39.6% on amounts over $400,000, so THAT tax on the $1 million would be 39.6% of $600,000, or $237,000. Assuming that the taxed individual was taxed at 30% for the first $400,000, $120,000... That would leave the net income after taxes $1,000,000 minus $237,000, minus $120,000 for a total after tax income of $643,000.

Of course in both cases the person EARNED the $1M. Never actually belonged to the government, or those that didn't work for it right?

Few people actually paid taxes at 90 percent in 1963.

The standard of living and mortality for all Americans is vastly better now than in 1963.

Our various economic booms would have likely never happened it the tax rates were not reduced.

Government spending as a percent of GDP was about 30 percent in 1963, now its 40 percent.

Taking from others to excess so the government can dole it out with political aims is not a recipe for success.

[photoguy]

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Originally Posted by Malcolm2 I believe this data is just meaningless. Not useful to compare a country of 315 million people to Canada that has only 34 million. Far more budding businessmen and others are still trying to immigrate to the U.S. from around the world than to Canada, or any other first world country. Go to a third world country and walk around to where the Embassies are. The Embassy with the longest line for visa applicants will be the American.

I'm not sure why the comparison to Canada is not meaningful. Canada and the US are very similar culturally (as much as two countries can be) and both have a large percentage of the population as immigrants (canada is 20%, US at 14%). The net migration rate is slightly higher for canada (~5.5/1000) than the US (~3.6/1000).

If the US can't be compared to Canada, then what countries should it be compared with?

[samclem]

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Originally Posted by Malcolm2 By the way, "income equality" is at odds with Capitalism. We are a Capitalist country and have been since the beginning. Thats a good thing.

Here's a problem: Quite apart from any humanitarian issues, when people "at the bottom" believe neither they nor their children have a chance of getting "to the top", then there is violence and disorder that no amount of police power can put down. And that type of thing usually isn't good for anybody (including those at "the bottom," but especially those "at the top"). I am >definitely< a believer in capitalism and the free market, but these economic systems can only survive if they continue to meet the needs of the society in which they are practiced. It is counterintuitive and a bit ironic, but a limited amount of redistribution (of opportunity, not just wealth) is among the means of assuring this happens. It's a small "tax" on "pure" capitalism that, in the real world, has proven necessary to allow these economic systems to exist. A hungry person is not a rational person, and a person with "nothing to lose" threatens the wealth and wellbeing of everyone around him.


This has more to do with "economic mobility" than "income equality", but some of the issues overlap.

[Dwhit]

I guess I don't see why income equality is such a desirable goal. Shouldn't the goal be to find the system that produces the highest benefits for the most people? A village of hut dwellers in the jungle probably has very high income equality, but that does not make their village necessarily the best place to be.

The west has typically tried to organize in the most competitive manner that could lead to the most scientific and economic advances. One could certainly question if this really provides the most happy life, but it does seem to provide the most prosperous.

Income equality sounds like a measure to keep the mobs happy so others can continue their efforts to advance.

[jollystomper]

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Originally Posted by Dwhit I guess I don't see why income equality is such a desirable goal.

"From each according to his ability, to each according to his needs" (or something like that)

[haha]

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Originally Posted by Dwhit I guess I don't see why income equality is such a desirable goal. Shouldn't the goal be to find the system that produces the highest benefits for the most people?

That was the old goal. Get with new program. If some guys are short and some tall, generally easier to shorten the tall guys than to lengthen the shorties.

Ha

[samclem]

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Originally Posted by Dwhit Income equality sounds like a measure to keep the mobs happy so others can continue their efforts to advance.

Yes, to a degree it is. If not "income equality" then at least assuring that the majority of people think they have sufficient equity in the present system that they don't want to try something else.
At the worst, the mobs take to the streets and destroy property, drive up security costs, etc. Or, just as damaging, they use their vote to have the state do the taking and re-appropriating to their benefit (we have zero constitutional protections against this in the US). So, yes, to some extent, the idea is to provide enough material goods and chance for individual improvement in their situation that a majority of the people either make a decision to stick with a merit-based economic system, or at least are not sufficiently motivated to grab a torch or vote for a collectivist.
Rather than continue on this line, it's probably best to suggest we all observe what is happening and see if this idea is working, if it needs to be tweaked, or if it should be abandoned for other measures. But any "other measure" that depends on changing human nature is bound to fail.

[Midpack]

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Originally Posted by Malcolm2 By the way, "income equality" is at odds with Capitalism. We are a Capitalist country and have been since the beginning. Thats a good thing.

Like most things, there's a balance. And to see the argument break down, you only have to take it to the extreme to see it. If 90% of the countries wealth was in one family, would you still see capitalism as working well? The economy would be a complete roller coaster dependent on one family.

Or better yet, how did unequal wealth actually play out when income inequality was arguably even more distorted than now?

The Main Causes of the Great Depression

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The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade. The maldistribution of wealth in the 1920's existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920's kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the maldistribution of wealth, caused the American economy to capsize.

No one is arguing for unbridled redistribution, but there are consequences for unbridled capitalism as well.

[Sarah in SC]

Speaking of income inequity...someone sent me this story about monkeys the other day.

Two Monkeys Were Paid Unequally: Excerpt from Frans de Waal's TED Talk - YouTube

Awesome.

[Midpack]

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Originally Posted by Sarah in SC Speaking of income inequity...someone sent me this story about monkeys the other day. Awesome.

Hilarious!!!