Updated: "Who Rules America - An Investment Manager's 2014 Update on the Top 1%"

[CaliforniaMan]

Quote:

Originally Posted by Letj There is no poverty in America. The poor has the everyday material comforts that everyone else has - tv, cable, refrigerator, in door cooking and plumbing, warm homes, adequate healthcare, etc. In addition all their basic needs are met. To appreciate how lucky the so called poor in America is, one has to only spend one minute in a developing country. It's why immigrants from those places are breaking the door down to come here.

We have quite a few friends and acquaintances in this situation. They come from SE Asia, and are considered poor by U.S. standards. But once they get here they start petitioning to get other family members to join them here. They work much harder here than in their home country and contribute a lot to the economy. None seem to want to go back.

[daylatedollarshort]

Quote:

Originally Posted by Letj There is no poverty in America. The poor has the everyday material comforts that everyone else has - tv, cable, refrigerator, in door cooking and plumbing, warm homes, adequate healthcare, etc. In addition all their basic needs are met. To appreciate how lucky the so called poor in America is, one has to only spend one minute in a developing country. It's why immigrants from those places are breaking the door down to come here.

You don't think there are poor in Detroit, Appalachia or Oakland or homeless in most majors cities?

47 million were uninsured in the U.S. in 2012, and without insurance health care for anything but minor illness is unaffordable for the very poor. We have had more uninsured in the U.S. than the entire population of Canada.

What about all of the families that live in high crime areas? Are they there because they want to be and not because they can't afford to live anywhere else?

There are still many countries where it is okay to beat women with a stick. If a woman left to go to a country where she couldn't vote but wouldn't get beaten by a stick, would you say she had it good? Just because people want to immigrate here does not mean we can't do more to help the poor. It just means we may not have as horrible poverty as other countries. Just that some countries are worse is not a particular high hurdle for baseline social services in the U.S.

[Chuckanut]

Country to country cultural comparisons are often difficult.

When I was studying for my teaching credential we had a required class on how to deal with 'minorities' - people of color, women, and the disabled. (Yes, women are not a minority, but the theory was they were treated like a minority.)

The main teacher was a Mexican-American man, a very bright, former serviceman. At one point he emphasized that many MA females were shy around men and that male teachers had to take that into account and not assume that they were stupid or apathetic. They just didn't see themselves as active, vocal participant in the class. Especially with a male teacher.

The lady who taught the 'woman' part of the class was adamant that we challenge ALL female students including the shy MA students. Our job was to break the stereotype and get them involved even if it made the girl uncomfortable. In my review of the class I suggested they get together and figure out what we were supposed to do.

Adjusting for cultural differences is difficult with the exception of extremes. Nobody should be beaten or killed for disobeying her husband. But, if one culture wants its females to cover their hair because they are afraid their daughters will end up like certain female pop stars , who can say they are wrong?

One lesson from the class always stuck with me. No matter whatever your race, gender or nationality, there was one minority group any of us could always become part of , sometimes suddently - the disabled.

Good discussion.

[longranger]

This thread could now merge nicely into the current thread asking if members of the forum feel guilty about their fortunate circumstances in FIRE. It could equally well be titled is life even remotely fair and does it matter as long as I am in a favorable position? Intuitively most of us must know in our gut that #1 life is definitely not fair, #2 people who are successful over time feel that they totally deserve their affluence.

Yes it is true that many first world economies define poverty by criteria that are ludicrous to residents of a third world country. Residents of western democracies with safety nets are indeed fortunate on average. SO WHAT!!!!! What we are really discussing here are how those realities make us feel. Then we try to better understand the causes and our own individual positions in this economic hierarchy. Many of us feel empathy for those that are in a bad way. Very few feel guilt or responsibility for the less fortunate.

Any attempt to have the discussion proceed onto ways to solve "problems", which we each perceive as differently as the concept of fair, are difficult to find common ground on. So back to square one IMHO.

One last note regarding the upper 0.1%. I am not even close to that level of wealth but have several friends that are. Their perceptions of what is fair and attitudes towards others are as heterogeneous as any of ours. Just the human condition I suppose.

[marko]

Quote:

Originally Posted by explanade Cheapest foods are high-calorie, high-fat, processed and sugar-rich. BMI by socioeconomic brackets would probably decline towards the top.

"Times have changed, and now the poor get fat"
(Elton John, "The Bitch is Back")

[Totoro]

Quote:

Originally Posted by haha Numerous studies show that a majority of people would rather have less themselves, if they nevertheless had more than their neighbors, than have more with neighbors who had even more.

Best way to feel rich is to have poor friends and live in a poor area I fall prey to that thinking every so often, no stranger to character flaws. Trying to stamp it out though.

Human nature indeed.

[haha]

Quote:

Originally Posted by Totoro Best way to feel rich is to have poor friends and live in a poor area I fall prey to that thinking every so often, no stranger to character flaws. Trying to stamp it out though. Human nature indeed.

I don't think it is a character flaw, it just is typical human nature. On the other hand, I love living in a rich area. I see nice landscaping, some beautiful old mansions, nice well kept cars, often pretty women and none of it costs me anything to view at least. I did go down a bit in neighborhood in order to get a larger condo than where I was renting. Still, overall I get lots of no-cost amenities. (Costs me no extra beyond probably higher RE tax and of course higher capital outlay to buy.)

I also live near a university. Beautiful landscaping, fountains, sculpture and all paid for by students and US government underwritten loans and alumni contributions.

Ha

[explanade]

Generational wealth worked with monarchies for hundreds of years.

Now were those societies better economically? They were if you lived in the castle and collected from the serfs.

[target2019]

Hard to comment on so many interesting thoughts in this thread. I'll go back and re-read "The Birth of Plenty: How the Prosperity of the Modern World was Created Paperback" by William J. Bernstein.
Certain to raise more questions than it answers, but might help gain better perspective on wealth and prosperity. The issue won't go away, for sure.

[GTFan]

While you're at it pick up this one to see how we got where we're at, but I don't think you'll like the outcome.Who Stole the American Dream? - Wikipedia, the free encyclopedia

[NW-Bound]

With the advent of the Web and the ease that anybody who wants to can write a blog to tell their life story, I have found several interesting stories. It started when I was researching and reading RV'er blogs, particularly those of full-timers. Then, I found accounts of people who live in cars. It makes for very interesting reading, as I always wonder how people end up in situations like that. And quite often, it was by choice.

There was this story of a woman who lived in her car. She had been working at a small remote mountain town where jobs were scarce and did not pay much. She did not like to move to a more populated place where it would be easier to find work, preferring to be closer to nature in that small town. So, she lived in her car, and camped out in the wood. She worked a bit here and there for spending money. She wrote that she rather had her life that way, then spent time in a job just to pay rent and to have a "regular" life but less time for herself.

I did not detect an envy from her for a "rat race life" that she detested. Is she any different than us who want to ER, and forgo the fancy stuff we can get if we continue to spend time in a cubicle like most people do?

Now, I did not know about this woman's education, but her writing was interesting enough for me to read. She is a lot poorer than many immigrants who do not speak English well, let alone being able to write. But she lives her life the way she wants.

And then, any country will have hard-core drug addicts who simply cannot hold any job, or people with mental problems, or criminals.

I am not saying all poor people are like the above examples, but we can never have zero poverty, the same way economists say we can never have zero unemployment. There are always some people quitting their job out of boredom, moving to a new place and looking for a job that they like, etc... The utopia that we all like to see does not exist.

[mpeirce]

Quote:

Originally Posted by Totoro While I fully agree many VC funds produce rather crappy outcomes in terms of adding value to society the last few years, there are some good examples

The trouble is that it's pretty much inherent in the system that there will be some really bad VC funds and lots of failed VC funded ventures. Often there are cycles too, where VC ventures seem stupid for a while, then we cycle back to generating some really excellent companies from VC funding. Economic game changers that generate lots of wealth - and not just for the people currently on top.

I know a few folks who think the VC approach is just so broken and unfair. I see the successes as well worth the many failures.

Most countries don't have a VC culture. It's truly one of the US's (and a very few other countries) secret sauce.

[Totoro]

Quote:

Originally Posted by mpeirce Most countries don't have a VC culture. It's truly one of the US's (and a very few other countries) secret sauce.

I've seen many business not start, fail, or go nowhere because of lack of access to VC capital, supporting networks and entrepreneurial spirit here in Europe. There are some little oases and government initiatives, but they lack power. The still fragmented market isn't helping either.

The world owes a great deal to mr. Fairchild, he started this whole crazy thing with semiconductors

Hopefully China will rise soon as an alternative.

[jetpack]

Quote:

Originally Posted by MooreBonds The other fact that always gets ignored is that the "top x%" is never a lifetime membership. People enter/leave various income and net worth categories all the time. The top x% in 2009 is not the same membership as the top x% in 2011 or in 2014 or in 2020.

To me, that's the most important thing. There is a lot of social mobility in this country. I grew up dirt poor, meager assistance from the government. Now, I've just made it to the 1%. Someone had to move out of the top for me to come in.

[Bestwifeever]

Quote:

Originally Posted by jetpack To me, that's the most important thing. There is a lot of social mobility in this country. I grew up dirt poor, meager assistance from the government. Now, I've just made it to the 1%. Someone had to move out of the top for me to come in.

Nobody really had to leave--you and 99 other people were born to expand the pool. Like a stock split .

[marko]

Quote:

Originally Posted by MooreBonds The other fact that always gets ignored is that the "top x%" is never a lifetime membership. People enter/leave various income and net worth categories all the time. The top x% in 2009 is not the same membership as the top x% in 2011 or in 2014 or in 2020.

That's the stat I had referred (inelegantly) to.

People try make it sound like there's some conspiratorial ruling class who lock the doors behind them..."you can't win, they've stacked the deck against you".

I saw this quote earlier today:
"The rich get richer, the poor get benefits and the middle class pays for it all".

[haha]

Quote:

Originally Posted by marko That's the stat I had referred (inelegantly) to. People try make it sound like there's some conspiratorial ruling class who lock the doors behind them..."you can't win, they've stacked the deck against you". I saw this quote earlier today: "The rich get richer, the poor get benefits and the middle class pays for it all".

If by rich you mean people who are earning $1-3mm, these people pay a huge amount of tax. It's just that the political and braying classes want more.

Ha

[longranger]

Absolutely on point HA. The aggregate tax US workers pay should cover all our expenses and start paying the deficit down immediately. Of course that naively assumes that tax dollars are used wisely.

Infinite layers of expensive counterproductive regulations, corporate loopholes, entitlement funds that have been diverted from their intended pupose etc.. suck out so much money that we have to continue deficit spending. People paid high salaries as you pointed out are the most severely impacted.

[Texas Proud]

I think that it is funny that there is so much talk of the rich getting richer and the poor getting poorer.... like the rich just had it handed to them... that it was not earned by them....


Look at the list of the richest people in America... the vast majority of them created their own wealth.... even going back to when I was younger... Gates, Buffet, Ellison.... and now the people who started Google, Facebook, Twitter etc. etc. etc...

Sure, you have a Walton family thrown in once in awhile.... but it is not that common..