Juxtatarot
Footballguy
The problem is systemic because of the CEO pay problem and other high income earners who don't produce at the levels of their compensation. I didn't include the individuals you listed.
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Wealth Inequality in America (1 Viewer)
- Thread starter Rush Limbaugh Fan
- Start date
You keep talking about the CEO pay problem. But I don't think it has very much to do with the issue.
If demand doesn't increase proportional to the increase in productivity then that increase in productivity could simply drive down the value of someone else's productivity. If we're both producing 2 ashtrays a year and there's demand for 4 of them then things will be evenly distributed among us. If I become capable of producing 4 of them it doesn't do anything to your ability to produce ashtrays. But it's possible I could meet demand and destroy the value of your productivity. You might have even become more productive yourself and produced 3 of them and have still seen a decrease in your nominal income.
Juxtatarot
Footballguy
You're right, it's only a small part of the overall problem.
Abraham
Footballguy
Carnegie had a lot more money than gates.So the guy who posted the link missed the point. There's a surprise.There has always been and will always be income inequality. The point of the link you posted is that income inequality has increased recently. But Bill Gates has no more political clout than Andrew Carnegie did 100 years ago.
And here we are back at my original point; I haven't seen anything that convinces me it's a problem.
Carnegie's dead.Carnegie had a lot more money than gates.So the guy who posted the link missed the point. There's a surprise.
Abraham
Footballguy
How do you get to Gates Hall?Carnegie's dead.Carnegie had a lot more money than gates.So the guy who posted the link missed the point. There's a surprise.
Take a left and keep going.How do you get to Gates Hall?Carnegie's dead.Carnegie had a lot more money than gates.So the guy who posted the link missed the point. There's a surprise.
Juxtatarot
Footballguy
Let's start over then. Do you see any potential problems arising when a country has its wealth concentrated into a smaller and smaller group of people?
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None other than some people in the media and on message boards whining about it.
Alex P Keaton
Footballguy
Imagine a scenario where 1 person in America controlled 99.99999% of wealth. Can you envision any negative consequences of that situation?
Imagine if the moon were made of green cheese!
Alex P Keaton
Footballguy
Congratulations on an even dumber response than your typical nonsense.Imagine if the moon were made of green cheese!
Rush Limbaugh Fan
Footballguy
FTFY
honky kong
Footballguy
Congratulations on an even dumber response than your typical nonsense.Imagine if the moon were made of green cheese!
Anything to toe the ideological line, I guess. Maybe we should be happy that he didn't pose it as a question.
Politician Spock
Footballguy
You might as well be making mudpies from those parcels of dirt... because unless there is a demand for mudpies (or ashtrays for that matter), what you've made from your parcels of dirt is worthless without demand for them.And demand is actually not "more complicated". Demand is simply made up of one's desire to own a mudpie (or ashtray) and one's wealth they can trade to obtain it.So it stands to reason, if a lot of people are becoming less wealthy, demand decreases despite the desire for products and services. It is NOT good for the economy at all for a lot of people to become less wealthy.
Alex P Keaton
Footballguy
Christo knows the drill. There was no good answer to my question that wouldn't paint him into a corner. Thus his response.Congratulations on an even dumber response than your typical nonsense.Imagine if the moon were made of green cheese!
Congratulations on an even dumber response than your typical nonsense.Imagine if the moon were made of green cheese!
I deal in reality.Christo knows the drill. There was no good answer to my question that wouldn't paint him into a corner. Thus his response.Congratulations on an even dumber response than your typical nonsense.Imagine if the moon were made of green cheese!
"Demand" doesn't matter in my ashtray example. We were just producing them for our own use. There's a reason I kept it simple.In a more realistic economy, I'm not contending that one person's success never comes at another person's expense. As was mentioned earlier, one restaurant can drive another out of business. Businesses compete with each other all the time. Microsoft may have been good for the world, but it was bad for Netscape. Nonetheless, that seems particularly irrelevant to the question of whether rich people are gaining at the expense of the poor. Bill Gates competed against Marc Andreessen, not against the poor. The relationship between Bill Gates and his employees, and between Bill Gates and his customers, was cooperative — rather than one of them gaining at the other's expense, they presumably both made each other better off than they otherwise would have been. (And I'm not contending that every rich person has made his employees and customers and society in general better off. There are exceptions. But the fact that somebody is rich does not mean that he automatically impoverished the rest of society, as would be the case in a zero-sum economy. Very often he enriched the rest of society. The fact that he made a lot of money isn't a bad thing; hence Christo's question about why we should care if somebody else made a lot of money.)
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Politician Spock
Footballguy
In a pure barter system, this is true. If the trade occured using a pure asset based currency, this would also be true.However, when all currency exists with the overhead of interest due, because all currency comes into existence from the creation of interest bearing debt, then there is depreciation, be it ever slow slight, that more times than not it is experienced by the poorer party of the two sides in the trade. Or in other words, the one that needs the depreciating asset (aka, the currency) in the trade is worse off than the one who recieved the good or service. However, be it ever so slight that this inequality in the trade even exists as a result of the architecture of the currency, people don't even notice, and wonder why the hell the rich keep getting richer and the poor keep getting poorer. It could go on for say, a hundred years, before people start to realize the problem.
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fatguyinalittlecoat
Footballguy
You said "imply" in your earlier post. That seems different from what you're saying here. Imagine that 90% of the time that one guy grows his income, it results in other people's incomes shrinking, but 10% of the time it doesn't. In that situation, it doesn't follow that everybody else necessarily got poorer, but it might imply that they probably did.And even though the economy isn't zero-sum, there are certain resources that are limited, for example, land. So if one guy gets incredibly rich, it might hurt others in the marketplace for those particular resources. This is a hijack anyway. My personal view is that massive wealth inequalities are just wrong.'Maurile Tremblay said:
honky kong
Footballguy
There are more than two choices here.'jon_mx said:
Politician Spock
Footballguy
It's not a hijack at all. Because if the argument is that the economy is not a zero-sum, nor an infinity-sum game, then it must be equally recognized that certain assets of wealth have limits, such as land as you point out. One of the oldest tricks in the books is for the wealthy to monopolize such an asset, to the point where they can extract even more wealth from the poor. They used to do it with gold, because gold is what gave our currency value, and it was in such limited supply it was easy to monopolize and manipulate the economy, which is why the gold standard was signifcantly altered three times in the past 80 years. Land on the other hand, given how much was discovered in the "new world", was a much harder asset to monopolize... but as population has drastically risen we are beginning to approach close enough to the limit to make it a monopoly opportunity for the rich to screw over the poor again.When the rich are getting richer and the poor are getting poorer, more times than not the rich have found a way to make that happen in the system.You said "imply" in your earlier post. That seems different from what you're saying here. Imagine that 90% of the time that one guy grows his income, it results in other people's incomes shrinking, but 10% of the time it doesn't. In that situation, it doesn't follow that everybody else necessarily got poorer, but it might imply that they probably did.And even though the economy isn't zero-sum, there are certain resources that are limited, for example, land. So if one guy gets incredibly rich, it might hurt others in the marketplace for those particular resources. This is a hijack anyway. My personal view is that massive wealth inequalities are just wrong.'Maurile Tremblay said:
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Clifford
Footballguy
Not really interested in debating sematics. The jist of what the guy said was right on, and its coming from someone with tons more knowledge of this subject than either you or I will likely ever have.His point is that1) Lower taxes on the wealthy does not create jobs (he has a slide on the past ten years that convincingly makes this point. The evidence is right there if you choose to look at it and accept it)2)Businesses create jobs to meet demand. Therefore demand is the true job creator, and business owners are merely a step in between the creation of the need and the creation of the job.3) Putting money in the hands of more people, rather than putting money in the hands of far fewer people, creates more demand and therefore more jobs.At least that is what I got from it. If you got something else that's fine.'Maurile Tremblay said:
In the case of Bill Gates I might argue that his crappy products actually decreased productivity in comparison to the quality products that he defeated through good marketing and unethical business practices. And that the disadvantage he successfully peddled still persists today. Although, I really don't wish to actually debate this with the horde of M$ apologists around here.But I get your point.'Maurile Tremblay said:
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Start with Google.'Abraham said:How do you get to Gates Hall?'Christo said:Carnegie's dead.'Abraham said:Carnegie had a lot more money than gates.So the guy who posted the link missed the point. There's a surprise.
Bill Gates must not like me talking about his crappy products, because the word document I was working on just froze and won't ####### recover. It won't even close and save. I don't feel like typing all this #### again. Thanks for the "increase in productivity" you greedy POS.
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Sorry, I meant "imply" in its logical sense: "A implies B" means "If A then B," or "B follows from A."
They may well be wrong. My point is that the utilitarian case for that position is harder to build than simply "More total wealth for Mitt means less for others," because that's not necessarily true. Maybe it's easier to think about it in reverse. It's not easy to intuit that increasing Mitt's wealth is possible without decreasing anybody else's wealth, but it is easy to intuit that decreasing Mitt's wealth is possible without increasing anybody else's. Suppose we drop a big rock on Mitt's uninsured house, crushing it. Mitt just got poorer, but it wasn't offset by an equal increase to anybody else's wealth. Society as a whole just got poorer by one house. Wealth destruction is just wealth creation in reverse. If we run the rock-smashing scene backwards, Mitt's wealth was just increased (to the tune of one house), but nobody else's wealth was decreased. In a non-zero sum world, one person's loss isn't necessarily somebody else's gain, and one person's gain isn't necessarily somebody else's loss. It's therefore possible for one person to gain and gain and gain and gain without detracting from the wealth of others, which makes the utilitarian case for "massive wealth inequalities are necessarily, inherently bad" trickier to make than it would be in a zero-sum world, where the decreasing marginal utility of money could do most of the heavy lifting.This is a hijack anyway. My personal view is that massive wealth inequalities are just wrong.
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Task Manager actually closed it and seems to have let me save - I got a nice little message letting me know that "Microsoft Word has stopped working". You think? Pile of crap.
Politician Spock
Footballguy
Those that didn't own the house that got crushed did in fact just get wealthier. They did not gain any assets, but the assets they had before the rock crushed the house just became a larger percentage of all assets in existence. Likewise, if I own one house, and do nothing for the next 20 years, while my neighbors keep building house after house after house, I am losing wealth as my one house becomes a smaller and smaller and smaller pecentage of all houses in existence. Of course this is not relatively easy to see when all asset prices rise in dollar value. If the dollar value of something is rising, it appears to be increasing in wealth. When what is actually happening is the dollar is losing value. If I own one dollar, and do nothing for the next 20 years, while dollar after dollar after dollar keeps getting created, I am losing wealth as my one dollar becomes a smaller and smaller and smaller percentage of all dollars in existence... but given everything's value is measured by the value of a dollar, it makes it look like everything is increasing in value, or that everyone is getting wealthier.Sorry, I meant "imply" in its logical sense: "A implies B" means "If A then B," or "B follows from A."They may well be wrong. My point is that the utilitarian case for that position is harder to build than simply "More total wealth for Mitt means less for others," because that's not necessarily true. Maybe it's easier to think about it in reverse. It's not easy to intuit that increasing Mitt's wealth is possible without decreasing anybody else's wealth, but it is easy to intuit that decreasing Mitt's wealth is possible without increasing anybody else's. Suppose we drop a big rock on Mitt's house, crushing it. Mitt just got poorer, but it wasn't offset by an equal increase to anybody else's wealth. Society as a whole just got poorer by one house. Wealth destruction is just wealth creation in reverse. If we run the rock-smashing scene backwards, Mitt's wealth was just increased (to the tune of one house), but nobody else's wealth was decreased. In a non-zero sum world, one person's loss isn't necessarily somebody else's gain, and one person's gain isn't necessarily somebody else's loss. It's therefore possible for one person to gain and gain and gain and gain without detracting from the wealth of others, which makes the utilitarian case for "wealth inequalities are necessarily, inherently bad" trickier to make than it would be in a zero-sum world, where the decreasing marginal utility of money could do most of the heavy lifting.This is a hijack anyway. My personal view is that massive wealth inequalities are just wrong.
Ramsay Hunt Experience
Footballguy
I don't think that most critiques of inequality really rely on zero sum premises. I do think that there has been some convincing critiques published that suggest that the steady growth in the American economy has done little to increase social utility across a large swath of the population, in part because of distributional problems. They are not arguing that more wealth for the Romney's necessarily means less wealth for the poor. They are arguing that when the vast majority of the growth of the economy goes to the rich, the rest of the population (and in particular, the working poor) experience (at best) a stasis in social utility. I think that's the conclusion that Tim Noah came to for Slate (I think we discussed this series on Slate before, but the PDF is available HEREI have also read books, such as Wealth in America, that argue (convincingly, IMO) that excessive inequalties in wealth undermine confidence in the fairness of the system and likely presage societal upheavals that aren't particularly good for anyone. I think it's clear that early 20th century progressiveism was better for the wealthy than some of the seemingly likely alternatives, such as the type of vibrant socialism that took hold in Europe.
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I brought up the zero-sum premise in response to post #21 because it seemed like Juxtatrot may have been headed down that road. (Turns out he wasn't, but zero-sum thinking is pretty common in this context. I think it's something human brains are hard-wired for, and it takes a conscious effort to avoid it.)
Yes, I'm not familiar with the literature on the subject, but I think it's very likely that there are some good arguments showing that massive wealth inequality is not optimal. That's partially why I want to shoot down the bad arguments — to help the good ones crowd them out.
Better for the non-wealthy too, I'd wager.
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Percentages are always zero-sum, but that seems like an odd way to measure wealth. It implies that all possible universes are exactly equal in wealth, since in each of them the total wealth is precisely 100%.
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GroveDiesel
Footballguy
5 years ago I was a renter instead of owning a house. I owned one crappy car, now own two ok cars. I didn't have an HDTV, now I do. Didn't have a PS3, now I do. Had a crappy cellphone, now have a sweet smartphone. My life has certainly improved in lots of very tangible ways in just 5 years, let alone 10 or more. And I certainly wouldn't consider myself wealthy. Probably in the lower half of FBG wealth. I'm unsure why I should be upset that somebody else's life improved even more than mine.
Politician Spock
Footballguy
Being "odd" doesn't mean that it should be ignored. After all, if there are 10 houses available for sale, the market price for my house is determined by the supply and demand. Thus, if a rock crushed one of the 10 houses for sale, my house just became more valuable because now it is one of only 9 available. As such, I became wealthier when a rocked crushed a house that had nothing to do with me.
That's not an increase in real wealth. It may be an increase in nominal wealth measured in dollars, because the total number of assets decreased, so the assets per dollar decreased, so the dollars per asset increased. But that's an accounting phenomenon, not a real enrichment.You might also say that your bargaining power increased, because now you can charge Mitt to rent out a room while his house is being rebuilt (or charge more to renters you were formerly competing with Mitt for). But that's also not an increase in wealth. Bargaining power is how surpluses are divided up, and changes in bargaining power are always zero-sum. But a change in bargaining power isn't a change in wealth: it's a change in income potential.
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fatguyinalittlecoat
Footballguy
I'm having trouble following this. If you own assets that increase in value, why doesn't that make you wealthier?
Politician Spock
Footballguy
The measurement of dollars is a facinating aspect as well, but it's not the issue here. If the economy was a barter system, and the houses available went from 10 to 9 because of a rock crushing incident, my house is now worth MORE loaves of bread, bales of hay, sheep, horses or whatever. That is to say, that if today I bartered my house based on 10 houses being available, I may have received 10 horses for it. But if I had waited until tomorrow, after the rock crushed one of the houses, I could have received 11 horses for my house. Are you saying that a person with 11 horses is only nominally wealthier than a person with 10 horses, but a person with 11 houses has more real wealth than a person with 10 houses? I don't agree at all. 11 horses is 1 horse more of REAL wealth than 10 horses. 11 houses is 1 house more of REAL wealth than 10 houses. Add in the aspect of a currency architecture that must inflate over time, and THEN we experience nominal values. The effect of a rock crushing a house has a real effect on everyone's wealth, not a nominal one. Nominal wealth is based on measuring everything by the same asset and that asset's worth is different today than it was yesterday, and will be different tomorrow than it was today.
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fatguyinalittlecoat
Footballguy
I think the example would be easier with a rare baseball card than a house. Assume there's 100 rookie Honus Wagner cards in existence. 99 of them get destroyed in a freak accident. Seems like the guy who now owns the only one just got a lot wealthier.
Politician Spock
Footballguy
Yes he did. If all 100 rookie cards still existed, and they all kept rising in price, that is nominal increase. The wealth of the card has not changed at all. Only the currency to which it is being measured against has changed. Each card is still likely only worth the same amount of loaves of bread, bales of hay, sheep, etc, etc... that they were worth before, because all have likely inceased in value to the currency. It's a nominal increase.However, when the other 99 were destroyed, the wealth of the card did not increase because the currency has decreased in value. It increased in real wealth. Not only is it worth far more in dollars. It is also worth far more in loaves of bread, bales of hay, sheep, and everything else. It didn't not increase in wealth nominally, but increased in real wealth... and the owner could have had zero to do with the destruction of the other 99 cards while experiencing the wealth transfer.
fightingillini
Footballguy
You're correct on the demand side. The problem with your argument is that....who is going to supply the capital to meet the demand and provide jobs? The answer is.....the rich. It's not cheap to start businesses or expand business, so you can't credibly argue that the middle class will provide the capital. So you're only looking at the issue from one side. Job creation comes from the rich and the middle/lower classes. So you have to give the rich incentives to invest an provide capital to grow/start businesses to meet an increased demand.So you can't argue point #1 IN ISOLATION. Just saying that lower taxes doesn't create jobs isn't entirely true......just as saying lower taxes on the wealthy will automatically create jobs isn't entirely true either. It just isn't that simple. Job creation is a function of a lot of variables, tax policy being one of them. Regulatory enviroment is another. Demand, and so on.I believe your point #2 should say "Business create jobs to meet demand if the jobs added will add long term extra value to the bottom line". Businesses aren't going to hire even if demand increases if the increased expense of hiring outweighs processing the extra demand. Also, companies need to see an increase in long term demand in order to believe that hiring will help their bottom line. If demand is just a short term fix (ie like a transfer payment stimulus), companies will likely just make their current employees work harder or just hire seasonal/temporary workers to meet the short term demand.Regarding point #3, I won't disagree that putting more money in hands of more people will increase demand. The issue is.....how do you do it? I would like our government to have pro growth policies so that we increase the number of wealthy people.....have more people go from middle class to rich, or lower to middle class. I understand that we have wealth inequality in this country, and it's never going to change....the rich are going to get richer. IMO, it's not the government's responsibility to spread wealth around for the sake of fairness. You keep taxing the successful at alarming rates, then you will give people less incentive to become successful. And that's wrong.
fatguyinalittlecoat
Footballguy
"Wrong" like immoral? Or just bad policy? And not everyone agrees with you about the government's role.
How complicated should we make this?In an economy consisting only of houses and dollars, the neighbor's house did not increase in real (as opposed to nominal) value. If all remaining houses increase in dollar-value by 11%, the neighbor can now sell his house for 11% more dollars, but the purchasing power of those dollars is now reduced by that same 11%. Ultimately, assuming all the houses are identical, he can still trade his house for exactly one other house, no more, no less. His house is worth exactly what it was before as measured in purchasing power.If we add cars to the economy in addition to houses and dollars, the destruction of Mitt's house might make houses worth a greater number of cars. Whether any specific neighbor is enriched or impoverished by that fact will depend on how many of each good he has. If he has an above-average number of houses and a below-average number of cars, he'll be enriched; but that enrichment will be exactly offset by the impoverishment of people who have an above-average number of cars and a below-average number of houses. So there can be distributional effects, where Mitt's misfortune does enrich some other specific individuals, but in total it is cancelled out.On the whole, when Mitt's house is crushed, society is exactly one house poorer, and Mitt is exactly one house poorer, which means that the rest of society, as a whole, has neither gained nor lost (though certain specific individuals may have).Of course, it is possible to make things more complicated still. We can add services to the economy. And we can take into account the fact that not all other houses are affected equally. And that people who were doing business with Mitt may be affected by Mitt's newly reduced purchasing power, etc. But the basic point remains: destroying Mitt's house does not make the rest of society as a whole better off. (And if Mitt snaps his fingers and magically rebuilds his house — or two houses, or fifty houses — it does not make the rest of society as a whole worse off.)
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Politician Spock
Footballguy
The bolded is the issue, and the question is why it occuring.If for example today the wealthiest 1% hold 50% of all the assets, but 10 years from now the wealthiest 1% hold 70% of all the assets, then that distributional effect is occuring. Then question should be why it is occuring.
The easy answer is that they just created that wealth, and it wasn't wealth that they took from the 99%. But as you point out, the distrubutional effect is a real effect. If the distributional effect IS in fact part of the reason, then to say they wealthy just created the additional wealth and didn't take any from the 99% isn't exactly true. It's probably true only to a certain degree. The rest is the distributional effect.
I think the distributional effect will generally run the other way. If somebody gets rich by building houses, that makes houses go down in value compared to cars. So he'll actually become less rich than he would have been if there had been no distributional effects of the type we're talking about. Those distributional effects seem to constitute a (small) negative-feedback loop on wealth-creation.When the wealthiest 1% go from owning 50% of all assets to 70% of all assets, it's more likely due to the positive-feedback loop that is compound interest (or, more generally, increasing returns on investment over time). Money can make money, and more money can make more money, so wealth can be self-propagating at ever-increasing rates. (That's one of the arguments for higher taxes on capital gains.)
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Clifford
Footballguy
1. I'm not trying to provide my argument, I am trying to tell people about someone else's argument whose opinion is way more valid than mine. I just happen to agree with him. Just want to make that clear. Best to just watch his video:
2. Unless I am wrong I believe that is the crux of Nick Hanauer's argument.
3. Nick Hanauer appears to disagree with you. Coming from a position of being a billionaire and having run multiple companies.
4. See #1
5. I would imagine by reducing tax breaks for the rich and using those to fund tax breaks for the lower and middle class.
6. We are not taxing the successful at alarming rates. We are taxing the successful at some of the lowest rates in history. Some are taxed as low as 15%, a point Hanauer brings up in his speech. I realize that the last point was an opinion and you might find the 15% or 35% alarming. But historically they are low, short term and long term.
Main point here is that you are arguing against a billionaire who has owned and run multiple companies, made decision on when and how to expand, and felt so passionately about this subject he did a TED talk.
I realize my opinions are far too uninformed to ever convince anyone that there is something wrong with the current tax system in that it is not configured optimally to grow our economy. Even if it's the exact same argument, it will be much more convincing coming from someone of Hanauer's standing and experience.
So my question to you is, do you feel strongly enough about your own opinions on this matter that you are willing to place them above the opinions of someone with far greater experience in the area than yourself?
ETA to anyone interested, here is his crux of why tax breaks for the wealthy has been unsuccessful in creating jobs
http://youtu.be/iIhOXCgSunc?t=2m42s
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Politician Spock
Footballguy
Now apply that to your earlier example of owning a parcel of dirt and the ability to create wealth by making ashtrays. Or consider the question of at what point does the creation of personal wealth via the creation of new personal assets become a point of diminishing returns, where each new item you create is not even worth the time it took to create it?
Money can not create money. Money however can be used to obtain more money. The creation of money in our country is reserved to the banks, and NOT to people who posses money. Those who are tied in to that money creation process then have far more ability to obtain more money than those who own parcels of dirt.
