Top 0.1% to pass bottom 90% of Americans in combined wealth

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jseah
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby jseah » Sun Dec 07, 2014 1:15 am UTC

Zcorp wrote:Moving from 500k to 50million in salary, perks and bonuses while no one else is seeing noticeable growth in pay for their contributions while productivity is soaring is problematic and does not suggest that the CEOs are the only ones adding value to companies.

Wages are not determined by productivity. Wages are more determined by negotiating power. Negotiating power is likewise linked to how replaceable you are and how much demand there is for people who do that job.

In the limit case of a factory floor worker who can be trained from /randomgraduate in three weeks, wages are not going to rise despite productivity rises. In fact, one could hypothesize that all the productivity rises in the factory floor workers since 40 years ago is almost certainly not due to those workers. If the hours have increased, this of course leads to productivity rises, but one also imagines that higher hours translates directly to proportionally higher pay...

The engineers who design better systems, the managers who streamline production and investor who purchase more expensive machines. They are the ones with tangible effects on productivity (and in the case of the engineers, their renumeration is also depressed because they don't take on the risks).


On the other hand, the lobbyist who captures the regulator also "increases" productivity. That part is problematic.

Zamfir wrote:As always, numbers need interpretation. It's household income for example, it includes demographic effects on the size and age and number of incomes at the various percentiles.
Whew, at least the bottom aren't actually going down. I was afraid of that.

In fact, the top has increased by slightly under 400%. The bottom has increased by just under 100%. So you might say that the top 5% are getting 4x larger share of the increase in productivity than the bottom 20% (this is per capita I assume).
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zcorp » Sun Dec 07, 2014 1:46 am UTC

jseah wrote:
Zcorp wrote:Moving from 500k to 50million in salary, perks and bonuses while no one else is seeing noticeable growth in pay for their contributions while productivity is soaring is problematic and does not suggest that the CEOs are the only ones adding value to companies.

Wages are not determined by productivity. Wages are more determined by negotiating power. Negotiating power is likewise linked to how replaceable you are and how much demand there is for people who do that job.

Yes...which is the point...people aren't getting paid based on how valuable you are. CEO's are not adding value equal to how much they are getting paid. Instead they get paid based on perception (right or wrong) with how replaceable they are.

The challenge is both that they aren't valuable enough to warrant the pay, and are not as irreplaceable as perceived. Further, the amount they are getting paid is creating harm to society outside of the internal system of the company, regardless of the harm or lack thereof they create inside the company.

As companies can't seem to make good choices themselves, especially in regard to why we believe they should have so much opportunity. The bonuses to bankers after the crash is a great example of this. Thus, because of the harm they cause and their ability to corrupt the system so that society it suffers for their personal gain they make to much money. This is in addition to actually measuring the value they contribute relative to their salary.

The point is the way it works now is broken and from each and every way you look at it they make to much money. The argument that they create value relative to their pay isn't a sound one. It doesn't help that quite consistently these CEO's are actively harming society and that the willingness to do so is what is valued (price-fixing, wage-fixing, letting people die due to faulty products instead of owning up to it,basically murdering people). It further doesn't help that they have so much power that their companies and they themselves are not heavily punished for it. Investors can't ignore the gains they get from cheating, and consumers can't ignore the products they produce while cheating. The justice system is supposed to be the check to prevent cheating and, in America at least, they aren't.

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CorruptUser
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby CorruptUser » Sun Dec 07, 2014 3:29 am UTC

Thought experiment. The economy is pies.

Pies require farmhands to grow wheat, millers to turn wheat into flour, and bakers to turn flower into pies. These represent unskilled, semi-skilled, and skilled laborers respectively. Which one is more valuable? Missing any part of the production chain results in no pies for anyone. So the unskilled laborers insist that they get paid equal to everyone else. But the millers and bakers point out that anyone could be a farmhand but it takes some education to become a miller or baker, so they should be paid more. If the farmhands all died off, some millers could work as farmhands instead, but if the bakers died off none of the others would be able to make pies. So the bakers get more than the millers, who get more than the farmhands.

Everyone wants a larger slice of the pie. The millers could unionize, the bakers could form a guild, and the farmhands could vote in politicians that will raise the minimum wage. But economics is weird. While each group is just trying to grab a larger slice of the pie, it's not exactly a zero sum game; feeding the farmhands more pie may result in them being healthier and producing more wheat. Depending on how this affects the millers and bakers, the result could be more pies in total even though the millers and bakers will be worse off as a result.

Now add in middle classes; you have the clerks (lower middle), accountants (middle), and flavor scientists (upper). Then you have upper management making decisions, the underclass stealing pies, etc...

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby WibblyWobbly » Sun Dec 07, 2014 4:25 am UTC

Don't forget the effects of pie-deregulation lobbying directed by the oligarchs of Big Filling.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby sardia » Sun Dec 07, 2014 4:36 am UTC

Or corporate pie raiders who break apart the pie company to get profits within 12 months instead of 12 years.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby jseah » Sun Dec 07, 2014 4:46 am UTC

Zcorp wrote:The point is the way it works now is broken and from each and every way you look at it they make to much money. The argument that they create value relative to their pay isn't a sound one. It doesn't help that quite consistently these CEO's are actively harming society and that the willingness to do so is what is valued (price-fixing, wage-fixing, letting people die due to faulty products instead of owning up to it,basically murdering people). It further doesn't help that they have so much power that their companies and they themselves are not heavily punished for it. Investors can't ignore the gains they get from cheating, and consumers can't ignore the products they produce while cheating. The justice system is supposed to be the check to prevent cheating and, in America at least, they aren't.

The problem isn't that they make too much money. The problem is that they are harming society (aka. cheating). It calls for effective regulation and oversight. More regulation doesn't help if it's not effective.
Also, I would think that the elections are meant to be the check, not the justice system.

As for how to get out of a trap where a corrupted government doesn't want to recognize and fix its own corruption... As well as design a government that is harder to corrupt? That would be, as we say, "not trivial".

CorruptUser wrote:Thought experiment. The economy is pies.
In this analogy, I assume people can eat an unlimited amount of pies.

Baseline level: One person who is farming, milling and baking makes one pie a day.
Specialization: Ten farmers, three millers and one baker can make 20 pies a day, resulting in 50% more pies per person.
Mechanization: One farmer with a tractor can farm as much as one thousand farmers without. Two hundred workers and a milling factory can mill the output of one thousand farmers with tractors. One thousand bakers working in an industrial bakery can bake using the flour of three milling factories. Factories and tractors are produced by engineers, needing one engineer per factory for maintenance and one thousand to build one factory in a year.

Now there's 2000 pies per person, who gets how much?

The engineers have been getting a larger share of it for two reasons:
Building factories and tractors is effectively an investment in the future. Engineers could go be a farmer/worker/baker to make pies. But they don't, they build factories now to make more pies later.
Additionally, engineers with the factories eventually said this to the farmers/workers/bakers: "You can come use my machines and I'll give you ten pies a day. That's five times more than if you didn't use my machine. " On the other hand, the engineers are taking 1990 pies. (most of those 1990 pies aren't actually pies though, they're more factories) That was because there's alot of farmers/workers/bakers and if one didn't like the 10 pies a day, the next guy would take it.
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby CorruptUser » Sun Dec 07, 2014 6:46 am UTC

But it hasn't been the engineers getting the pies. What's been happening is the business owners have been negotiating with each other to reduce the wages of the bakers and millers, and undercutting the farmhands with illegal immigrants. They've lobbied the pie oversight committee so the tax code is such that they have to give less and less of their pies each year. I mean seriously, why is social security only levied on the first $110k you make?

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zcorp » Sun Dec 07, 2014 7:11 am UTC

jseah wrote:The problem isn't that they make too much money. The problem is that they are harming society (aka. cheating). It calls for effective regulation and oversight. More regulation doesn't help if it's not effective.
Also, I would think that the elections are meant to be the check, not the justice system.

As for how to get out of a trap where a corrupted government doesn't want to recognize and fix its own corruption... As well as design a government that is harder to corrupt? That would be, as we say, "not trivial".

Them making to much money directly relates in multiple ways to the harm they are causing, I would even suggest it is the cause of the harm.

The justice system is failing us as they are settling for very small fines relative for the harm caused and revenue gained, even if those fines are a few hundred million dollars.

It would be great if we could get new legislation but you seem to understand the problems there. It is just sad that with the laws already in place to deal with this behavior results in the justice system is getting a penny from them and thinking they did their job.

Edit, Re Pies:
The business owners (the people with capital or those capable of gaining it) have also colluded and agreed to pay engineers around 0.002 pies -with some very generous rounding- of that 2k, but hey thats 4 times more pie than the 'specialized' level of workers!

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby jseah » Sun Dec 07, 2014 12:22 pm UTC

CorruptUser wrote:I mean seriously, why is social security only levied on the first $110k you make?

I would imagine the justification being that SS was meant to be more of an insurance scheme than redistributive.

Do SS payouts scale with how much you are taxed by it? If yes, then I would interpret it that way.

Zcorp wrote:It would be great if we could get new legislation but you seem to understand the problems there. It is just sad that with the laws already in place to deal with this behavior results in the justice system is getting a penny from them and thinking they did their job.

Honestly though, the problem here is one of coordination. And that you need lots of people with their own (slightly) different ethical viewpoints to cooperate in order to form government.

We could go down this route, but we'd be discussing basic government and social principles. A bit like trying to define a complete map of human ethics. Which isn't truly possible because no two people have 100% identical ethical principles and some form of compromise or coercion is going to be required.

Coordination problems are of less fundamental nature and are more like "oh, I didn't know you were doing/planning to do that". The Internet might be useful here, as other people have noted before in other threads, full direct democracy is possible once everyone has internet access. (including that the Internet can make the dissemination of information less dependent on large scale capital infrastructure; as long as service provider can be forced to stay neutral - aka. Net Neutrality)

Zcorp wrote:Edit, Re Pies:
The business owners (the people with capital or those capable of gaining it) have also colluded and agreed to pay engineers around 0.002 pies -with some very generous rounding- of that 2k, but hey thats 4 times more pie than the 'specialized' level of workers!

I may have rounded it too much, but I included the business owners inside the "engineers". Not just the people who invent new machines.

I wasn't thinking of the people who actually work on the factory floor building capital industry as engineers. In the analogy, I'd class them on the same level as millers/bakers, using machines to build more machines.

The people who actually do the inventing though have a chance to strike out and build a new company. We have recently seen that in internet startups as well as small single-drug focused research companies. (who aim to get bought by bigger companies but the point remains)
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zcorp » Sun Dec 07, 2014 12:30 pm UTC

jseah wrote:Honestly though, the problem here is one of coordination. And that you need lots of people with their own (slightly) different ethical viewpoints to cooperate in order to form government.

I doubt the problem in America is that we have slightly different ethical viewpoints on how to best improve society. Not only does it not match the rhetoric but it doesn't match the behavior. It seems to be a much deeper rooted actual corruption here.


The people who actually do the inventing though have a chance to strike out and build a new company. We have recently seen that in internet startups as well as small single-drug focused research companies. (who aim to get bought by bigger companies but the point remains)

Some of them do have that chance, but few starts up succeed and few people have the opportunity to even try. Generally the creative and technical experts are not the ones seeing the profits from their inventions, but an okay salary and some perks.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby ucim » Mon Dec 08, 2014 4:39 am UTC

Zcorp wrote:They are issues that are inclusive of each other
No, they are not. If they make too much money, there's a reason it's too much. That is what should be addressed.

Zcorp wrote:Moving from 500k to 50million in salary, perks and bonuses while no one else is seeing noticeable growth in pay for their contributions while productivity is soaring
... is not what the graph says is happening. According to the graph (whose interpretation is still not all that clear), the bottom doubled their buying power - after inflation. This is not "not noticeable".

Zcorp wrote:The point of having an opportunity to make a lot by being productive is to add value to society,
No, it is not. I don't exist to "add value to society". In fact, I don't exist for any reason at all other than that my parents were entertained for an evening. It is up to me to give myself meaning to my existence, and I do that the way I choose to do it. As it happens, I can add value to society, and I can be richly rewarded for that. Or I can wind up in the poorhouse trying.

Zcorp wrote:
ucim wrote:But the problem is that money buys influence, perhaps disproportional to the amount that it should be able to buy influence.
Which is to say nearly the same thing considering the system in which they are working. That you are unwilling to focus on the effect of them making to much money, which is the point of saying thyey are making to much money, is a lack in your perspective of the conversation not the other way around.


Please - this is painful: it's too much, not to much!

Anyway, it is not "nearly the same thing". It's almost like saying "he's too smart; he can swindle people, so we should make him stupid by adding television to his diet. If he were stupid, he wouldn't be able to swindle people.", where the problem isn't that he's smart, but rather, that he's a criminal.

Zcorp wrote:CEO's are not adding value equal to how much they are getting paid.
How do you determine how much value they are adding?

CorruptUser wrote:Thought experiment. The economy is pies. [...]
jseah wrote:...Baseline level: One person who is farming, milling and baking makes one pie a day....
Nice analogy.

Zcorp wrote:Them making to much money directly relates in multiple ways to the harm they are causing, I would even suggest it is the cause of the harm.
And I would suggest that it is just a scapegoat for those who don't have as much.

jseah wrote:Do SS payouts scale with how much you are taxed by it?
Yes.

Zcorp wrote:I doubt the problem in America is that we have slightly different ethical viewpoints on how to best improve society.
Right. It's that we have very different ethical viewpoints on how to best improve society. It's a big country with many different kinds of people.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zcorp » Mon Dec 08, 2014 6:50 am UTC

ucim wrote:
Zcorp wrote:They are issues that are inclusive of each other
No, they are not. If they make too much money, there's a reason it's too much. That is what should be addressed.

Yes they very much are, but instead of saying yes and no back and forth, how about you address my explanation and not my statement then we might have something that resembles discourse.

Zcorp wrote:The point of having an opportunity to make a lot by being productive is to add value to society,
No, it is not.

In fact it very very much is. Do you not know why have a capitalist system? I'm unlikely to be willing to give you a history lesson on it but if you need it I could point you in the right direction.

The suffice to say free enterprise as an idea is done largely to make society better, not individuals better.

I don't exist to "add value to society". In fact, I don't exist for any reason at all other than that my parents were entertained for an evening. It is up to me to give myself meaning to my existence, and I do that the way I choose to do it. As it happens, I can add value to society, and I can be richly rewarded for that. Or I can wind up in the poorhouse trying.

Yeah...no clue how you consider this relevant.

Zcorp wrote:CEO's are not adding value equal to how much they are getting paid.
How do you determine how much value they are adding?

Its a good question and one that would take a lot of time to go into, so if we want to we should make a new thread.

Zcorp wrote:Them making to much money directly relates in multiple ways to the harm they are causing, I would even suggest it is the cause of the harm.
And I would suggest that it is just a scapegoat for those who don't have as much.

Again...address the explanation or argument and not the statement, that way we might actually learn something from each other instead you just degrading this to 'no' 'yes' 'no' 'yes'.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby mat.tia » Mon Dec 08, 2014 9:14 am UTC

CorruptUser wrote:Thought experiment. The economy is pies.

So if wages were somehow "democratically" fixed, would the farmhands get the most pie?
If so, would there not be any farmhands wanting to become a miller, or a baker?

ucim wrote: But the guy whose company failed, and who lost all his investment in it, isn't getting his money back from the company that beat him in the marketplace. Should he?

That's a serious question.

of course he should [edit: I mean to say: "of course he should NOT"]
Last edited by mat.tia on Mon Dec 08, 2014 10:24 am UTC, edited 1 time in total.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby TG333 » Mon Dec 08, 2014 9:49 am UTC

At the risk of reiterating someone else´s idea, but frankly I´m at work and cant plow thru the hole thread right now.

Sure as there will be christmas around the end of december theres a yearly headline about income-inequality growing. All you ´mericans be assured that this disscussion goes on in Europe as well. And i always find myself wondering, when inequality has become somehting to worry about in its own right. If the allocation of goods shifts AND the total welfare suffers, well then there´s something wrong. But only complaining about how the spread between rich and poor is growing without acknowledging how each individuals groups welfare is developing is pretty ignorant communist bs.

One might even argue that its a good thing to allocate a lot of goods in the hands of intelligent and productive investors, who can put their funds to good productive work. Thing is that when talking about "rich" and "poor" (not mentioning that we could argue all day what "being poor" actually means in a developed western society) people tend to think in cash, which obviously isnt the case. The wealth of the Forbes 500 are mostly stakes in successful companies. And what makes companies succesful? Usually a business grows and makes profits, when it is of any use for the people. Here in Germany the Richest man is a founder of a chain of cheap groceries. His success has in it´s draft given many poorly educated citizens a safe job at the till and has brought decent groceries for good value to the lesser fortunate. The issue is just way too complex to be discussed in the daily mail or among housekeepers and thats a huge problem - when being informed is no longer the basis for having an opinion.
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby elasto » Mon Dec 08, 2014 10:09 am UTC

The bottom line is that many countries and economies have done and do prosper with CEOs only earning a small multiple of what their lowest paid worker earns. Last year there was a ballot in Switzerland for CEOs to earn no more in a month than their employees earn in a year. It failed to pass but reports where that the 'no' campaign was outspending the 'yes' campaign by more than 50:1 and also that almost all newspapers were campaigning against it. The 1% were running scared...

Any argument that capitalism would somehow fall apart under such a rule seems to fall flat to me. In 1965 in the US the CEO:Worker pay ratio was 20:1. Now it's grown to about 300:1

Are CEO's 15 times more valuable now than a couple of generations ago? Was the US some sort of hotbed of communism and economic failure back then?

Supporters of the 1:12 initiative said it only would have affected 0.3 percent of all Swiss companies and 3,400 managers. Switzerland is home to Europe’s largest drugmakers as well as the headquarters of the world’s largest oil traders Glencore Xstrata Plc (GLEN) and Vitol SA.

Switzerland is the world’s second-most competitive country behind the U.S., according to an annual ranking published by IMD’s World Competitiveness Center. The Swiss also have the highest gross average monthly wage in Europe at about $7,766, the most recent UN data shows.

The measure would have been “a much stricter rule than in other countries,” said Robert Pozen, a senior lecturer on business administration at Harvard Business School. Pozen commented before the results were announced.

Reining in huge executive payouts has found appeal outside Switzerland. In Spain, the country’s Socialist party is proposing measures similar to the 1:12 imitative.

In Germany nearly three quarters would support such pay curbs, according to a poll by GfK commissioned by the newspaper Welt am Sonntag. German Chancellor Angela Merkel’s party bloc agreed to tighter limits on executive pay, according to the coalition draft accord.

Switzerland ranks higher in income equality than the average of 34 countries in the Organisation for Economic Co-operation and Development, according to OECD. The gap between the wealthiest 10 percent and the poorest is smaller than in Japan, the U.K., the U.S. and Canada, the OECD data showed.

Ballot initiatives are common in Swiss politics, on issues ranging from healthcare to European Union membership. At least 100,000 signatures are needed for an initiative to come up for a national vote. Most voters cast their ballots by mail.


link

All countries should have such a direct ballot system. Unless they only pay lip-service to the principle of liberal democracy that is... (I know the US does have such ballets at the state level but at the federal level would be nice also)

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby LaserGuy » Mon Dec 08, 2014 3:15 pm UTC

Incidentally, I remember there being a story floating around last year basically saying that American companies could save a tonne of money by outsourcing most of their executives because they could get comparable/indistinguishable people from Europe or Asia for a tenth the price.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby ucim » Mon Dec 08, 2014 3:25 pm UTC

Zcorp wrote:how about you address my explanation and not my statement then we might have something that resembles discourse.

I thought I had.
Zcorp wrote:The issues is both that 'they make too much money' and 'everyone else makes too little money' and how that is a near zero-sum game. While the total payout increases in this game, those payouts are not going to workers.
But this is not a zero-sum game. The money is ultimately coming from turning of dirt into goods. Value is being created. Your basic premise is wrong. Based on the graph presented, The bottom tier doubled in income. The top tier tripled. This is not unreasonable, nor is it indicative of a problem.

As I see it, your basic argument is that money buys influence, so people shouldn't have too much money, so that they don't have too much influence. Am I right here?

I do see "too much influence" as something that should be considered, and something that is problematic in a few special cases, but this is the wrong way to look at it.

As I see it, you are claiming that "these people" are "damaging society". You take that as an obvious given. Am I right?

I do not see that as an obvious given, certainly not without defining (or at least describing) what society is "supposed to be". People legitimately differ on that.

Zcorp wrote:
ucim wrote:How do you determine how much value they are adding?
Its a good question and one that would take a lot of time to go into, so if we want to we should make a new thread.
It's directly relevant to this thread. Without agreement here we're talking past each other, because your premise is not accepted as obvious. At least not by me.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby LaserGuy » Mon Dec 08, 2014 4:06 pm UTC

ucim wrote:But this is not a zero-sum game. The money is ultimately coming from turning of dirt into goods. Value is being created. Your basic premise is wrong. Based on the graph presented, The bottom tier doubled in income. The top tier tripled. This is not unreasonable, nor is it indicative of a problem.


By the way, did you actually read the accompanying article that came with that graph? Because it basically says the exact opposite of your point:

Real median household income averaged $50,781 from 1964-2013, ranging from a low of $43,558 in 1967 to a high of $56,895 in 1999.
[...]
Measured relative to GDP, total compensation and its component wages and salaries have been declining since 1970. This indicates a shift in income from labor (persons who derive income from hourly wages and salaries) to capital (persons who derive income via ownership of businesses, land and assets). This trend is common across the developed world, due in part to globalization.[14] Wages and salaries have fallen from approximately 51% GDP in 1970 to 43% GDP in 2013. Total compensation has fallen from approximately 58% GDP in 1970 to 53% GDP in 2013
[...]
While the median household income had increased 30% from 1990 to 2006, it has increased only slightly when considering inflation.[23] In 1990, the median annual household income was $30,056 or $44,603 in 2003 dollars. While personal income has remained relatively stagnant over the past few decades, household income has risen due to the rising percentage of households with two or more income earners. Between 1999 and 2004 household income stagnated showing a slight increase since 2004.[29][30]

Since 1966, the median household income in the United States has risen by 31%, fluctuating several times. The rise in household income is largely the result of an increase in personal income among college graduates, a group that has doubled in size since the 1960s, and women entering the labor force. Today, 42% of all households have two income earners. Household income increased dramatically faster for affluent households with income inequality having increased steadily since the 1970s.[33][34]

While household income has increased, its growth has been slowed by a decrease in married-couple households who tend to have two earners and, therefore, higher incomes. While the proportion of wives working year-round in married couple households with children has increased from 17% in 1967 to 39% in 1996, the proportion of such households among the general population has decreased. This means that the share the most economically prosperous type of household has been dwindling in the United States.[35]


tl;dr: A significant portion of the increase in household income you're seeing is a result of the shift from one-income to two-income homes, as well as a generally better-educated workforce. Real wages have stagnated or declined since the 70s.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby mat.tia » Mon Dec 08, 2014 4:08 pm UTC

ucim wrote:But this is not a zero-sum game. The money is ultimately coming from turning of dirt into goods. Value is being created. Your basic premise is wrong.


Can you help me understand that?
I've always thought money was a mean to distribute existing resources and not one to measure how much of them there are in absolute value.

ucim wrote:Based on the graph presented, The bottom tier doubled in income. The top tier tripled. This is not unreasonable, nor is it indicative of a problem.

Does this make you conclude everyone is richer? It might be that everyone is better off; but the bottom tier is 1/5th poorer than it was, proportionally.
It is not indicative of a problem as long as you don't consider a problem an increasing and intrinsic divergence of wealth in the two categories of people.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby ucim » Mon Dec 08, 2014 5:59 pm UTC

LaserGuy wrote:By the way, did you actually read the accompanying article that came with that graph? Because it basically says the exact opposite of your point
No. I skimmed it but not too closely.

I retract the points I made based on it. But those points were more of a tangent, and not in support of my primary contention - that being that income inequity per se is not a root cause of societal ills, and therefore should not be attacked as if it were a root cause.

mat.tia wrote:
ucim wrote:But this is not a zero-sum game. The money is ultimately coming from turning of dirt into goods. Value is being created. Your basic premise is wrong.
Can you help me understand that?
I've always thought money was a mean to distribute existing resources and not one to measure how much of them there are in absolute value.
To mercilessly compress thousands of years of monetary history, money was once the thing being produced. Salt, for example, or gold. It got traded around as a common denominator for other things being produced (chickens, furs) that were less convenient to carry around for such purposes. Soon tokens and certificates replaced the actual valuable goods that money was made of; the gold was held for safekeeping by the government banks, and people passed around certificates entitling the bearer to go get it if they wanted it. But so long as the government was willing to give the gold back, the certificates were just as good as gold. Now these certificates are no longer backed by anything, because the government has kept the gold. But so long as money keeps moving, it's almost as good as gold. The government now has to keep the economy moving in order that money (or really, "currency") continues to be desirable. If the economy fails, your dollars will be useless.

Using money (and currency) to measure total intrinsic value is a bit problematic now, and this doesn't account for the fact that some value is intangible. If you pay me in gold to write a book, the amount of real value has increased by the value of the book (which is counted as equal to the gold it traded for). But if nobody buys the book, then the book turns out to have been worthless. And if people get tired of gold, then gold also becomes worthless. "Value" is really a measure of what people want, and of how much of it there is, and that changes with time.

However, if the book is very popular, then lots of people get to work printing copies of the book, felling the trees to make the paper to print the book, building the dams to generate the power to push the electrons to transmit the podcast based on the book, etc. The economy steams ahead, and the government can get away with printing more money.

mat.tia wrote:[The pictured income divergence] is not indicative of a problem as long as you don't consider a problem an increasing and intrinsic divergence of wealth in the two categories of people.
I don't consider it intrinsically to be a problem. It may cause problems, but that's another issue.

How would you determine what the ideal distribution of wealth ought to be? If I (for example) write an app that protects people from spam, and sell it for $40, and 90% of America loves it and buys it, I'd be a billionaire. Would that be a problem? Why?

morriswalters wrote:
ucim wrote:Income (in)equality is a result, not a cause.
Income inequality is inherent in the structure of society. The degree to which that inequality impairs an ongoing stable society is at issue. An[d] it should be controllable.
Yes, exactly. But it is the degree to which the inequality impairs society that should be controlled, not the inequality itself.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Tyndmyr » Mon Dec 08, 2014 6:43 pm UTC

mat.tia wrote:
ucim wrote:But this is not a zero-sum game. The money is ultimately coming from turning of dirt into goods. Value is being created. Your basic premise is wrong.


Can you help me understand that?
I've always thought money was a mean to distribute existing resources and not one to measure how much of them there are in absolute value.

ucim wrote:Based on the graph presented, The bottom tier doubled in income. The top tier tripled. This is not unreasonable, nor is it indicative of a problem.

Does this make you conclude everyone is richer? It might be that everyone is better off; but the bottom tier is 1/5th poorer than it was, proportionally.
It is not indicative of a problem as long as you don't consider a problem an increasing and intrinsic divergence of wealth in the two categories of people.


Conflation of wealth with money. Happens a lot. Wealth is ultimately created by turning dirt into goods, via the pie example or whatever. Money simply happens to be a handy means of dealing with wealth. It isn't the same thing, but the use of money is so universal that the conflation happens a lot.

Still, as we're concerned with wealth, this is entirely correct. It's not a zero sum game. Humanity is wealthier than it was 200 years ago. Either in total, or on average. A given snapshot of society will show a finite value of wealth, but over time, you'll see that change based on a number of factors.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby mat.tia » Mon Dec 08, 2014 6:50 pm UTC

ucim wrote:
mat.tia wrote:[The pictured income divergence] is not indicative of a problem as long as you don't consider a problem an increasing and intrinsic divergence of wealth in the two categories of people.
I don't consider it intrinsically to be a problem. It may cause problems, but that's another issue.

Just pointing out the circularity of the thing
ucim wrote:How would you determine what the ideal distribution of wealth ought to be?

What would you say? One that rewards production?
One that incentivates production, no mind at how the products will be used/distributed?
An incentive on production that minds of final distribution/use of products?

Tyndmyr wrote:Still, as we're concerned with wealth, this is entirely correct. It's not a zero sum game. Humanity is wealthier than it was 200 years ago. Either in total, or on average. A given snapshot of society will show a finite value of wealth, but over time, you'll see that change based on a number of factors.

I thought one's wealth would be measured by the proportion of goods in the market he's able to buy. [edit: or, simply, owns]
If not so, how do you measure wealth in absolute value?

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zamfir » Mon Dec 08, 2014 7:25 pm UTC

ucim wrote:How would you determine what the ideal distribution of wealth ought to be? If I (for example) write an app that protects people from spam, and sell it for $40, and 90% of America loves it and buys it, I'd be a billionaire. Would that be a problem? Why?

Yeah, sure. You're describing a horribly uncompetitive market. I don't know how you would imagine to be only seller of that functionality, especially at that price level and with such profitability?

If you look at real-world example of software billions, there is always some kind of barrier against competition involved. A network effect, a first-mover effect, a scale effect, strategic patents. And on the other side, software functionality without such barriers tends to suffer from a race-to-zero problem, where it is hard to justify any development cost because you know that copycats will eat away any good revenue. As a result, software truly excels in its arbitrary relationship between profitability, and value to wider world. The 62th richest person in the US is the maker of WhatsApp, an instant messaging program exactly like every other.

We simply don't know what a good profit mechanism for software would be. Instead, we have a hotchpotch system that mostly relies on natural anti-competitive barriers. That delivers crazy profits if the barriers fall one way, while a wide variety of crucial software is produced by hobbyists for free. It kinda works, and the people who could change the system tend to have a stake in it. So hotchpotch stays, but it's a troubled example to justify fortunes.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby ucim » Mon Dec 08, 2014 8:20 pm UTC

Zamfir wrote:...As a result, software truly excels in its arbitrary relationship between profitability, and value to wider world...
But this can be said of many things; celebrities of all kinds come to mind. In the end, luck plays a role in wealth. Certainly luck of birth (which includes inherited wealth as well as inherited genes), and luck of meeting well-connected people at the right time. There is a certain arbitrariness in the laws involved (patent vs copyright, for example, and phone vs cable).

I don't see any good mechanism for regulating luck, or regulating the benefits of luck. (Sure, there are mechanisms, but none are good).

mat.tia wrote:Just pointing out the circularity of the thing
Yes, there is a feedback mechanism involved, but the different parts of the loop are not interchangeable.

mat.tia wrote:
ucim wrote:How would you determine what the ideal distribution of wealth ought to be?
What would you say?
I'm not convinced there is one. Sure, a situation where one person has all the money is non-ideal, but so is a situation where one person has all the power. And the problem is that concentrated money buys power, not that it buys goods. But concentrated money (as well as concentrated power) is necessary to society.

In any case, a distribution of wealth is a result, not a target. I would say it needs to be the result of a healthy process of production and trade. If there is too much of an imbalance, this could be seen as a symptom of an underlying problem. But if so, the thing to address is the underlying problem. If a canary dies, you don't just buy a new bird.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zcorp » Mon Dec 08, 2014 8:21 pm UTC

ucim wrote:[
As I see it, your basic argument is that money buys influence, so people shouldn't have too much money, so that they don't have too much influence. Am I right here?

I do see "too much influence" as something that should be considered, and something that is problematic in a few special cases, but this is the wrong way to look at it.

Don't just tell me it is the wrong way to look at it. Address my explanation and argument or better yet actually make one of your own. If you can't do the bare minimum to show you are worth conversing with, people aren't going to want to converse with you.

Given my explanation, why is this the wrong way to look at it? What is a better way to look at it?

As I see it, you are claiming that "these people" are "damaging society". You take that as an obvious given. Am I right?

I do not see that as an obvious given, certainly not without defining (or at least describing) what society is "supposed to be". People legitimately differ on that.

I'm claiming that the inequality in income is damaging society in many ways. The one that I have brought up so far is the positive feedback system that exists now for influence and wealth. There are a variety of others, the effect this inequality has on the buying power of the average worker, and how a decreasing buying power and lack of middle class will deflate the economy. People care about fairness, how much and perception of fairness varies between individuals but it is tied to our well-being, and not just ours but many social animals. However, these and other additional aspects of how 'they have too much money' are not currently the focus of the argument but are relevant and become more so in the next level of this discussion.

Zcorp wrote:
ucim wrote:How do you determine how much value they are adding?
Its a good question and one that would take a lot of time to go into, so if we want to we should make a new thread.
It's directly relevant to this thread. Without agreement here we're talking past each other, because your premise is not accepted as obvious. At least not by me.

It is great that you have decided to 'retract the points you made by not reading the actual article.' However, please take a second to think about how disrespectful it is to those in discussion with you to not read it but form an opinion about it anyway. Take a second to think about how maybe the reason it isn't obvious to you is that you are unwilling to read and learn about the what we are actually talking about. I've give you a explanation and argument that you have ignored. All you have given me is:

"no I disagree, and no I'm not going to read anything to better inform myself so that things your saying actually make sense. Instead I'm just going to keep calling you wrong and ask you to make things more obvious to me as long as that doesn't require anything from me, like reading."

How exactly do you expect us to make things more obvious to you if you can't even be bothered to RTFA. Please learn to gain information before forming in opinion, one great weakness if humanity is confirmation bias, and if you continue to form opinions without having sufficient information to do so you are a shining example of the problem.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby LaserGuy » Mon Dec 08, 2014 8:44 pm UTC

ucim wrote:
Zamfir wrote:...As a result, software truly excels in its arbitrary relationship between profitability, and value to wider world...


But this can be said of many things; celebrities of all kinds come to mind. In the end, luck plays a role in wealth. Certainly luck of birth (which includes inherited wealth as well as inherited genes), and luck of meeting well-connected people at the right time. There is a certain arbitrariness in the laws involved (patent vs copyright, for example, and phone vs cable).

I don't see any good mechanism for regulating luck, or regulating the benefits of luck. (Sure, there are mechanisms, but none are good).


Suppose that there was some mechanism by which we could determine precisely how much of an individual's net worth was due to good luck and how much they earned through their own efforts. Would you consider it fair, in some sense of the term, if there was a mechanism to transfer the wealth due to good luck to people whose net worth was less than it ought to be, based on their efforts, as a result of bad luck?

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby morriswalters » Mon Dec 08, 2014 9:25 pm UTC

Be arbitrary. Pick how big you wish the Middle class to be and set policy to maintain it around that point. This should have the net effect of reducing the population of the poorest. Money will still flow, the super rich will still be super rich. But the world will be more stable(I hope!).

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby sardia » Mon Dec 08, 2014 9:30 pm UTC

morriswalters wrote:Be arbitrary. Pick how big you wish the Middle class to be and set policy to maintain it around that point. This should have the net effect of reducing the population of the poorest. Money will still flow, the super rich will still be super rich. But the world will be more stable(I hope!).
he doesn't want to be arbitrary.
Ucim wants a sob story to justify spending on the poor, but doesn't need one for the rich. This is itself arbitrary but you'll never get him to admit it.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zamfir » Mon Dec 08, 2014 9:55 pm UTC

ucim wrote:But this can be said of many things; celebrities of all kinds come to mind. In the end, luck plays a role in wealth. Certainly luck of birth (which includes inherited wealth as well as inherited genes), and luck of meeting well-connected people at the right time. There is a certain arbitrariness in the laws involved (patent vs copyright, for example, and phone vs cable).

I don't see any good mechanism for regulating luck, or regulating the benefits of luck. (Sure, there are mechanisms, but none are good).

Indeed, but this cuts both ways. If some change has as side effect that it diminishes the wealth of rich people, than that is also part of that whole hands-in-the-air-who-can-help-it story.

And there is a lot of that. For example in labour relations, where it is very common to argue that something is good or bad "for business", "for the economy", "labour market flexibility". How easy it is to fire people. How many statutory holidays people should get. Flexible working hours. Support for collective wage bargaining. Minimum wages. Pension arrangements. Etc.

The argument here is typically in three steps: certain flexibilities look superficially to make life easy for employers, at the cost of increased headaches for employees. But in step two, they help "the economy", and this will in step three help the employees by raising their wages.

The same pattern in taxation. Lots of anti-tax arguments say that this or that higher tax will "distort" the economy, and this does more damage than the value of anything you can spend the taxes on. And of course financial regulation, where the economy will surely suffer unless the rules are to suit the people being regulated. Trade agreements. Anti-trust rules. Etc, etc. Lots of fields where choices come with a clear pro-business option, which is then argued to benefit everyone in step three.

It's that step three that matters. If some measures help business, will the gains eventually spread to everyone? For the last decades, the US has really pushed such pro-business line on many issues. Compared to its own past, and compared to other wealthy countries. Step two seems to work fine, US business does well. But step three is getting dubious.

So, back to the luck and desert and fairness. According to some people, step three was bogus anyway. The rich are the deserving heroes of the economy, who never got their fair share because of oppressive anti-business heavyhandery. And pro-business regulations are good because they help the good people and hurt the moochers. There were some promises of rising tides to lift all boats, but it would actually be unfair if that came true. Since most boats do not deserve to be lifted. I don't buy it, but it is a coherent argument.

You, ucim, seem to argue that the rich do not necessarily deserve their wealth, but neither are they undeserving. It's just somewhat arbitrary in between, and we shouldn't act directly to change it. I can get behind that. But it turns the tables on a lot of neoliberal choices, if more money for rich people is a neutral thing instead of a good thing.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Tyndmyr » Mon Dec 08, 2014 10:00 pm UTC

mat.tia wrote:
Tyndmyr wrote:Still, as we're concerned with wealth, this is entirely correct. It's not a zero sum game. Humanity is wealthier than it was 200 years ago. Either in total, or on average. A given snapshot of society will show a finite value of wealth, but over time, you'll see that change based on a number of factors.

I thought one's wealth would be measured by the proportion of goods in the market he's able to buy. [edit: or, simply, owns]
If not so, how do you measure wealth in absolute value?


It is. Inflation, deflation, etc may change the relationship of money to wealth. Thus, we typically use inflation adjusted dollars to be able to accurately measure wealth over time. Without such adjustments, over significant time periods, you get very strange results. In modern society, wealth is *mostly* expressed in financial value, because dollars are so commonly used, but of course, not every transaction actually takes place in dollars. Even if we were on a barter system, wealth would still move around, aggregate(perhaps in the hands of a shrewd trader) or what have you. It'd just be a lot more of a hassle, with higher overhead costs, which would decrease overall efficiency.

LaserGuy wrote:
ucim wrote:
Zamfir wrote:...As a result, software truly excels in its arbitrary relationship between profitability, and value to wider world...


But this can be said of many things; celebrities of all kinds come to mind. In the end, luck plays a role in wealth. Certainly luck of birth (which includes inherited wealth as well as inherited genes), and luck of meeting well-connected people at the right time. There is a certain arbitrariness in the laws involved (patent vs copyright, for example, and phone vs cable).

I don't see any good mechanism for regulating luck, or regulating the benefits of luck. (Sure, there are mechanisms, but none are good).


Suppose that there was some mechanism by which we could determine precisely how much of an individual's net worth was due to good luck and how much they earned through their own efforts. Would you consider it fair, in some sense of the term, if there was a mechanism to transfer the wealth due to good luck to people whose net worth was less than it ought to be, based on their efforts, as a result of bad luck?


An interesting theoretical question...this gets back to "what is fairness". If such a machine operated so that somehow, everyone's rewards were perfectly in line with their contributions, in theory, it would be wonderful. I suspect, though, that we are unlikely even to agree on how to measure contributions.

Hell, I'm not even sure everyone wants luck to go away. Gambling is a significant activity, and I dare say that the idea of becoming wealthy due to luck is a significant motivator for this. Even if you somehow ban gambling in building such a system, it is likely some will choose to do so anyway.

sardia wrote:
morriswalters wrote:Be arbitrary. Pick how big you wish the Middle class to be and set policy to maintain it around that point. This should have the net effect of reducing the population of the poorest. Money will still flow, the super rich will still be super rich. But the world will be more stable(I hope!).
he doesn't want to be arbitrary.
Ucim wants a sob story to justify spending on the poor, but doesn't need one for the rich. This is itself arbitrary but you'll never get him to admit it.


The rich do not require spending, because...they are rich. Usually, they simply strive for contributing less towards the poor. The current American system, when it does subsidize the rich, usually does so on the dime of other rich folks, as the poor pay comparatively little in taxes. These sorts of rich person battles for one to pay the other's tab are, of course, not efficient overall, but I dare say that the poor fellow isn't a major party to the costs of government, etc.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby sardia » Mon Dec 08, 2014 10:20 pm UTC

I disagree. The rich may not require spending, but it doesn't mean they don't ask and get spending.

I disagree, subsidies to the rich come at expense to the poor and the middle class. For example, sequestration bit everyone, but then we passed a few bills to refund the faa because rich people were complaint. That's the rich getting subsidized at the expense of the poor. The same thing happens when our taxes have all these loopholes. The ones who can afford to take advantage of them results in either a higher rate or less services for everyone else.

There's also weirder scenarios that are hard to categorized. If a successful steel and casting company gets taken apart by large shareholders ( eg pensioners mutual fund) for the overfunded retirement accounts inside, then is it the rich robbing the rich to pay pensioners? Meanwhile, the workers get their retirement money siphoned off.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zamfir » Mon Dec 08, 2014 11:00 pm UTC

Are there much examples of pension funds directly stripping companies, passing on the money to retirees? There is usually some private equity fund in between, and those are quite capable of stripping both the company and cheating on their passive partners at the same time.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby KrytenKoro » Mon Dec 08, 2014 11:21 pm UTC

ucim wrote:I retract the points I made based on it. But those points were more of a tangent, and not in support of my primary contention - that being that income inequity per se is not a root cause of societal ills, and therefore should not be attacked as if it were a root cause.

It does seem a bit worrisome to me that, from what I've been told, the last time we had this much of a discrepancy was right before the Great Depression.
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby ucim » Mon Dec 08, 2014 11:28 pm UTC

LaserGuy wrote:Suppose that there was some mechanism by which we could determine precisely how much of an individual's net worth was due to good luck and how much they earned through their own efforts. Would you consider it fair, in some sense of the term, if there was a mechanism to transfer the wealth due to good luck to people whose net worth was less than it ought to be, based on their efforts, as a result of bad luck?
Well, let's see. I work hard for my money, and (by hypothesis) my own good luck and bad luck cancel out. So, after taxes, what I have left over is 100% mine. It happens to be a lot. My son had the good luck to be born to me. He's only 18 years old, but clever, diligent, and has a good attitude. He also has a pretty good idea for a gizmo that does fancy tricks with geese. The youtube likes alone are worth it!

So, I invest in my son. I give him all my money, and say "have at it!".

My neighbor, whom I don't like, lost his job. His son is also clever and diligent, but he has a dumb idea he wants to pursue. Something about calculating the best routes into town to save time and gas. He has this nutty idea that he can get carmakers to build it into their cars. Too bad he doesn't know any carmakers. But, not my problem.

So, along comes this "mechanism" that determines that my son was too lucky, and my neighbor's son was too unlucky. So, this mechanism transfers my hard earned cash that I gave my son over to this son-of-a-neighbor-that-I-don't-like.

So, no. That mechanism is not fair. It robs me of my ability to give my money to my son, and have him actually receive it. That's what it means to be "my" money.

It may benefit society to the extent that saving gas is better than watching geese do the mambo, but it also means that his second business (which he hasn't thought of yet) of using 3d printers to make prosthetics on the cheap won't have the benefit of his prior experience. Oh well, maybe somebody else will think of it.

Zcorp wrote:Don't just tell me it is the wrong way to look at it. [....]Given my explanation, why is this the wrong way to look at it? What is a better way to look at it?
I don't have a solution. But that doesn't make any other solution better than leaving it alone. And the right problem has to be the one addressed, or we end up in the "drug problem" miasma; a similar feedback loop where the wrong problem is typically addressed.

The better way to look at it is the influence money has on power. And this is not to say that concentration of power is a bad thing either - it is a necessary thing if we are to get anything done. So, look at money's influence on power, and how (and whether) to reduce this. Consider that simply being the CEO of a big corporation, even if you don't take home mucho moolah, carries a lot of clout.

Consider that when corporations get too big, they can dictate policy simply through threat of failure. Corporations employ lots of people, and control lots of ouptput which controls and/or influences lots of people. This will remain true no matter what the limitations on individual wealth may be.

When a corporation becomes "too big to fail", then it has jackknifed, and has transferred the risk (of failure) to the general public. Perhaps at this point the public should become a stockholder. (Even if in theory this sound good - it's off the top of my head - in practice I'm not sure it would have much of an effect given the public's propensity to not vote their shares of stock they own individually. However, perhaps a fund could be created to manage these shares in a manner that benefits the public. Selecting the managers of this fund would be as problematic as selecting our political leaders. But it's an idea that might be worth discussing.

There is the Disney problem - corporations making political inroads that further their own agendas. Disney is the only corporation that has a permanent no-fly zone above it protected by the FAA. Even nuclear power plants don't get that kind of protection. Other corporations no doubt have been able to craft legislation to their own ends; the RIAA comes to mind, as do the cable companies vs the internet.

I don't know whether this is due to actual government corruption, or simply the fact that these corporations have the ability, knowledge, and resources to make and present their case, where the ordinary citizen does not. I see it as a legitimate role of govenment (under "consumer protection") to counteract this. But I don't see this happening. (Or perhaps I merely disagree with their results.)

This is where the problems lie. Not with influence that comes from personal wealth, but rather, with influence that comes with position. It just so happens that this position also bring enough money to make others jealous.

That said... there's a very real problem with some super-rich folk; that is that they can purchase significant armaments on the black market; perhaps even nuclear weapons. But these folk can just as easily be overseas, and it's the black market that is the problem, not the money. To solve this problem, go after the black market. (Yes, I know how easy that is.)

Zcorp wrote:How exactly do you expect us to make things more obvious to you if you can't even be bothered to RTFA.
TFA basically said that there is income inequality. It put numbers on the amount. That's not the part I dispute. I dispute the claim that it's "too much".

In suitable irony, the monkey video won't play for me. None of youtube works for me. I was on AT&T, and they forced me into U-verse and then dumped me onto Frontier. Ever since U-verse, youtube has been poor to unavailable, and parts of google no longer work well (maps for example sometimes won't finish downloading). I don't know if this is some corporate shenanigans and (of course) they won't tell me. But I can't access.

sardia wrote:Ucim wants a sob story to justify spending on the poor, but doesn't need one for the rich.
No, I want justification for limiting freedoms - in this case the freedom to keep my money. "He has too much money" is not justification by itself.

Zamfir wrote:If some change has as side effect that it diminishes the wealth of rich people, than that is also part of that whole hands-in-the-air-who-can-help-it story.
I'm ok with that, so long as said change is justified in and of itself.

Zamfir wrote:You, ucim, seem to argue that the rich do not necessarily deserve their wealth, but neither are they undeserving. It's just somewhat arbitrary in between, and we shouldn't act directly to change it. I can get behind that. But it turns the tables on a lot of neoliberal choices, if more money for rich people is a neutral thing instead of a good thing.
Pretty much. We shouldn't act directly to change it for its own sake. However, if it brings problems, then those problems need to be addressed. If that reduces the wealth of the rich, so be it. The rich benefit disproportionally from society, and that brings a disproportionate responsibility.

"The rich" (individuals) are an attractive target. But "The powerful" is probably more accurate, and individuals are often powerful for reasons other than their personal wealth.

The hard question is how to encourage the powerful to act contrary to their own best interests, and in line with those they affect. Taking their money away won't do it.

Jose
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby LaserGuy » Tue Dec 09, 2014 12:32 am UTC

ucim wrote:So, no. That mechanism is not fair. It robs me of my ability to give my money to my son, and have him actually receive it. That's what it means to be "my" money.


Why is it fair that you should be able to give him your money? Why should I care that there are certain things you can't do with your money, especially if that minor restriction in your freedom brings greater utility elsewhere?

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby ucim » Tue Dec 09, 2014 12:43 am UTC

LaserGuy wrote:Why is it fair that you should be able to give him your money?
Because it's my money. That's what "my" means.

There are things I can't do with my money, but those are things that I can't do with somebody else's money either. They are not a function of the money being mine.

GIving to one's children is one of the most fundamental rights one can have. If that right is to be taken away, we are going to need a bigger can.

Jose
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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby elasto » Tue Dec 09, 2014 2:15 am UTC

I would argue a good metric of 'fair' is what distribution produces the highest average happiness/satisfaction across a society.

Unless you believe in heaven, the only goal of life can be to do things that make you happy. (Happiness isn't the same as pleasure etc. of course. eg. Working every possible hour in a crappy job so that your child can have the education you never did or volunteering to help out in an overseas Ebola clinic are not pleasurable activities in the least - but can bring personal satisfaction/pride which will make you happy.)

Turns out that, economically speaking, it isn't everyone having the same amount of income/wealth that maximizes satisfaction, but nor are the huge disparities of 300:1 useful (because rich people mostly tend to judge themselves on a pecking order: Additional money after a certain point is just for keeping score, not for utility. If all the rich are taxed at 40% vs 60% the pecking order doesn't change so nor does their happiness.)

So, as studies have shown, a flatter income curve (of the order of 15:1 or so) maximizes a society's overall happiness. History has shown veering to either extreme is at your peril.

As for the moral argument for taxes - or why 'your money' isn't 'your money': A great deal of a person's income/wealth is because previous generations have sacrificed their income/wealth to better society: You only have customers buying your goods because crime is low; because people have jobs, transportation and education; because society is stable and long term investments are possible etc. All of which society had to spend money to kickstart and sustain.

The moral thing for you to do is to 'pay it forwards' - to invest in tomorrow's society just like yesterday's taxpayer invested in yours.

And, of course, it's not just tomorrow's society you owe a duty to; You have a moral obligation to pay the 'upkeep costs' to keep today's society happy and stable. And, as seen above, that includes a flat income/wealth distribution. After all, it's just luck that you were born yourself and not someone else. 'There but for the grace of God go I' and all that.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby Zcorp » Tue Dec 09, 2014 2:26 am UTC

ucim wrote:
Zcorp wrote:Don't just tell me it is the wrong way to look at it. [....]Given my explanation, why is this the wrong way to look at it? What is a better way to look at it?
I don't have a solution. But that doesn't make any other solution better than leaving it alone. And the right problem has to be the one addressed, or we end up in the "drug problem" miasma; a similar feedback loop where the wrong problem is typically addressed.

We aren't even to the point if talking about a solution...we are still simply trying to get you to recognize that there is a problem with the wealth distribution. That some people have too much money.

You didn't tell me how 'my way of looking at it' is wrong.

When a corporation becomes "too big to fail", then it has jackknifed, and has transferred the risk (of failure) to the general public. Perhaps at this point the public should become a stockholder.

You aren't ok with taking the rich guys money, say through paying their at least their proportional share of taxes, but are ok with taking their company over?

This is where the problems lie. Not with influence that comes from personal wealth, but rather, with influence that comes with position.

Are you unfamiliar with individual contributions to influence politics via super pacs and the like? Or do you honestly believe that isn't a problem?

That said... there's a very real problem with some super-rich folk; that is that they can purchase significant armaments on the black market; perhaps even nuclear weapons. But these folk can just as easily be overseas, and it's the black market that is the problem, not the money. To solve this problem, go after the black market. (Yes, I know how easy that is.)

Seriously? Your concerned that the rich guy is going to purchase a nuke? That is the problem you see?

TFA basically said that there is income inequality. It put numbers on the amount. That's not the part I dispute. I dispute the claim that it's "too much".

So far you have disputed both that the buying power of nearly everyone is stagnant and falling and you have cited that article as a evidence against the idea that our economy is near a zero-sum game. No, you aren't just using that article you didn't read to dispute they are making 'too much.' You are using it to dispute the reasons why 'they are making too much money' is bad.

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby LaserGuy » Tue Dec 09, 2014 2:54 am UTC

ucim wrote:
LaserGuy wrote:Why is it fair that you should be able to give him your money?


Because it's my money. That's what "my" means.


What does that have to do with fairness?

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Re: Top 0.1% to pass bottom 90% of Americans in combined wea

Postby sardia » Tue Dec 09, 2014 2:56 am UTC

No, I want justification for limiting freedoms - in this case the freedom to keep my money. "He has too much money" is not justification by itself.

Taxation is legal and very important principle of any government or society. Justification given. Technically, I don't even have to convince you, I just have to convince 51% of the country that it's ok to raise taxes to pay for program xyz. That's all the justification I need. And no, the freedom to keep your money is not a legitimate excuse to not say... pay to prevent families from freezing.


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