record inequality

[LargoWinch]

Re: record inequality

he wrote back saying, yes, he thought financial frauds like ponzi schemes should be legal. translation: let the wolves eat the sheep.

what happens the day all the sheep have been eaten?

[MulaMan]

Re: record inequality

• You cannot help the poor by destroying the rich.
• You cannot strengthen the weak by weakening the strong.
• You cannot bring about prosperity by discouraging thrift.
• You cannot lift the wage earner up by pulling the wage payer down.
• You cannot further the brotherhood of man by inciting class hatred.
• You cannot build character and courage by taking away men's initiative and independence.
• You cannot help men permanently by doing for them, what they could and should do for themselves.

Complete ignorance, this is excatly why America is so screwed up, people unable to think for themselves and understand the real world around them, first up to wave an American flag but last to help out their fellow middle class Americans, but instead they watch Fox News all day and spew out crap such as this in support of few U.S.S.A fascists that now have immense power and wealth in America.

You can help the poor by destroying the rich and re-creating a FAIR and FREE market.
You can strengthen the weak by weakening the strong and re-establishing a strong middle class.
You cannot bring about prosperity by discouraging thrift but it is retarded to think that the current problems have anything to do with TOO much spending on the middle class. 90% of your tax money goes to a the top 1%.
You can lift the wage earner up by pulling the wage payer down and re-establishing the proper balance between capital and labor that needs to exist in a capitalist system. When the balance of power is in the hands of the capitalist and labor has no power then you have a criminal state - nothing to do with capitalism.
You can further the brotherhood of man by inciting class hatred and so have mass executions of the powerful anti-American criminals that have taken control of America and are attempting to destroy her.
You cannot build character and courage by taking away men's initiative and independence but you can turn them into retarded Fox News watching idiots through brainwashing them so that the believe they have character and courage while you take all thier grandma's 401K savings from them. LOL

[metalman]

Re: record inequality

Complete ignorance, this is excatly why America is so screwed up, people unable to think for themselves and understand the real world around them, first up to wave an American flag but last to help out their fellow middle class Americans, but instead they watch Fox News all day and spew out crap such as this in support of few U.S.S.A fascists that now have immense power and wealth in America.

You can help the poor by destroying the rich and re-creating a FAIR and FREE market.:p:p
You can strengthen the weak by weakening the strong and re-establishing a strong middle class.:p:p
You cannot bring about prosperity by discouraging thrift:p:p but it is retarded to think that the current problems have anything to do with TOO much spending on the middle class. 90% of your tax money goes to a the top 1%.
You can lift the wage earner up by pulling the wage payer down and re-establishing the proper balance between capital and labor that needs to exist in a capitalist system. When the balance of power is in the hands of the capitalist and labor has no power then you have a criminal state - nothing to do with capitalism.:p:p
You can further the brotherhood of man by inciting class hatred and so have mass executions of the powerful anti-American criminals that have taken control of America and are attempting to destroy her.:p:p
You cannot build character and courage by taking away men's initiative and independence but you can turn them into retarded Fox News watching idiots through brainwashing them so that the believe they have character and courage while you take all thier grandma's 401K savings from them. LOL:p:p

ok, you win. you can have my title.

[rjwjr]

Re: record inequality

Complete ignorance, this is excatly why America is so screwed up, people unable to think for themselves and understand the real world around them, first up to wave an American flag but last to help out their fellow middle class Americans, but instead they watch Fox News all day and spew out crap such as this in support of few U.S.S.A fascists that now have immense power and wealth in America.

You can help the poor by destroying the rich and re-creating a FAIR and FREE market.
You can strengthen the weak by weakening the strong and re-establishing a strong middle class.
You cannot bring about prosperity by discouraging thrift but it is retarded to think that the current problems have anything to do with TOO much spending on the middle class. 90% of your tax money goes to a the top 1%.
You can lift the wage earner up by pulling the wage payer down and re-establishing the proper balance between capital and labor that needs to exist in a capitalist system. When the balance of power is in the hands of the capitalist and labor has no power then you have a criminal state - nothing to do with capitalism.
You can further the brotherhood of man by inciting class hatred and so have mass executions of the powerful anti-American criminals that have taken control of America and are attempting to destroy her.
You cannot build character and courage by taking away men's initiative and independence but you can turn them into retarded Fox News watching idiots through brainwashing them so that the believe they have character and courage while you take all thier grandma's 401K savings from them. LOL

Okay, then how about this one...

“To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.” — Thomas Jefferson, letter to Joseph Milligan, April 6, 1816

[rjwjr]

Re: record inequality

rjwjr, This article was about the top .1%. I think you may be right when you push out to the whole top 5%.

Still this being said, what about the top 1%?
Can you believe that the majority of 100,000 are criminals?

Or, put another way, 2% of the population is in prison. 6,000,000. Do you truly believe that the majority of these people are criminals?

I am not being rhetorical...

Sorry about the 5% vs .1% difference. I wasn't trying to be sneaky and I don't believe I was the first to mention the 5%, I'm fairly sure I took it from a previous post.

I don't know that I'd say that the majority of the top 1% are criminals, but I could be convinced that they are not always as ethical as I'd like them to be. Either way, I can't deny that 50,000 or more very wealthy people may be criminals or severely ethically challenged.

Yes, I truly believe that almost 100% of the 6,000,000 people in prison are criminals. They received fair trials after all and were convicted. There are millions more criminals on probation. I'm not quite sure why this is relevant, however.

[ASH]

Re: record inequality

90% of your tax money goes to the top 1%.

How do you figure?

[bpr]

Re: record inequality

I don't know that I'd say that the majority of the top 1% are criminals, but I could be convinced that they are not always as ethical as I'd like them to be.

This is a significant concession, but you''ve still got it wrong. Look at the chart again. That's .01%.

About 30,000 individuals.

I'll name a few from the past ten years:
Angelo Mozillo
Bernie Madoff
John Thain
Larry Summers
Henry Paulson
Stephen Schwarzman

(I can, of course, name quite a few members of this class who are squeaky clean in the public eye and excellent stewards of their wealth, but they only make headlines when they've got insider info on ImClone).

Also, the title "criminal" is not quite accurate, since it specifies that one must have broken a law at some time. These folks are powerful enough to have rewritten the law in their own favor (Sandy Weill's Citigroup bill comes to mind), or negotiated special favor with key governmental agencies intended to regulate them, which puts them in a special category of thuggery.

This has nothing to do with industry or small business owner sized wealth, or even the wealthy versus the poor. This class of wealthy is different from those making a mere seven figures a year. And, I'd argue, it's a difference in kind, not in quantity (in other words, it's not how much you've earned, but how you've earned it).

[ASH]

Re: record inequality

ASH,

Let me approach this theoretically, and see if we agree or disagree on that level.

In my value system, I'm not even O.K. with someone who works hard earning $155,000/year (your example) while another person who works hard (or wishes to work but cannot find work) cannot afford "basic" necessities for their family. There is a finite pie, and if one person gets a big slice while another goes wanting, I consider the one getting the big slice sucking the life out of the latter, albeit not necessarily intentionally being a parasite.

What do you think?

I'm afraid I don't agree. I think you and I are starting from different (moral) axioms, and have therefore arrived at different conclusions.

So, we now apparently have a society in which 5% own almost 60% of the wealth. I consider that a problem. If I have understood EJ and Fred correctly, they also consider that a problem (or the symptom of a problem).

Do you not think it's a problem?

Indeed, I think this is a severe problem. However, I think it is a practical problem rather than a moral problem, and I only think it is a problem to the extent that it is a cause of other sociological problems; it is not in and of itself a problem.

Isn't the rectification of the problem to move some of the wealth from the rich to the poorer in some fashion?

That's one solution. I think taxing and redistributing is possibly the most efficient way to move wealth from rich to poor. Alternatively, you could raise the value of labor relative to capital, through regulation, and create conditions in which the poor "earn" more (although I think that would shrink the size of the pie, and harm the purchasing power of lower-earners). Those are the two realistic solutions which I find most palatable. The two other possible -- but horrific -- solutions include a quasi-feudal distribution of wealth and power (the rich control the poor using the state's monopoly of force), or a revolution in which the poor effect a redistribution by violence. Thankfully, I think either of the violent scenarios are not especially likely, because democracies have already demonstrated that the vote works as a safety valve. We are definitely going to get more socialism, because when there isn't a 1-to-1 relationship between political power (a vote) and what you pay into the collective pot (taxes), that's what inevitably happens. However, it's going to turn into a much more acrimonious contest once the national credit runs out, and we have to start paying full price for our redistribution. Right now, we're not just redistributing from the rich to the poor; credit is letting us redistribute the productivity of foreign countries to ourselves based upon the promise of redistributing from the future to the present. Just imagine what will happen when we have to pay for current expenditures entirely out of our own current productivity.

One example of an appealing solution that I doubt is realistic is to increase the size of the pie by such a large amount that even the sliver that the lowest-earning segment owns is adequate to support a decent material standard of living. (That, believe it or not, is one of the things I wrote on my college entrance essays, when I still thought I was hot shit: I wanted to study science so that I could discover something that created so much material wealth that even the "poor" would have plenty. Ah, youth and optimism...)

I think the answer is an Economic Bill of Rights.
It would guarantee a redistribution of wealth so that every segment of society willing to work would receive the basic necessities. The rich could earn as much as they wanted . . . capped only by the requirement that everyone willing to contribute to society as they are able receive food, shelter, work and basic health care.

I think that from a practical standpoint, something like this may indeed result. My theoretical solution to the problem that Munger pointed out about a future world in which machine labor renders a great majority of humans redundant is a form of communism in which the state owns the machines, and citizens each receive a fraction of the national production (see Munger's thread about the economically-redundant). That wouldn't work at all in any economy that relies upon the profit motive for productivity (i.e. in any economy that has ever existed yet), but if we're going to get all science-fiction "what if" and posit a world in which machines account for the entirety of economic productivity, then maybe a communist utopia would make sense.

However, let me say that from a moral standpoint, the idea of an "economic bill of rights" seems like a perversion of the concept to me. I think it is very significant that the original Bill of Rights was about things that the state would not do to circumscribe individual liberty, rather than positive actions that the state was obliged to do to provide material benefits to individuals. It is very significant that forbearing to use the state's monopoly of force to restrict enumerated freedoms of the individual costs the parties to the social contract nothing, and benefit all equally. That you would suggest redistribution from some individuals to other individuals -- a transaction that has material costs and unequal benefits -- could be some type of "right" means you have a very fundamentally different understanding of the philosophical foundations of government than I. Rather, I see such measures as a practical necessity, but hardly a right.

IMO, the minimum litmus test of any economic societal structure is making sure that every one deserving is taken care of, before the stronger, more well-placed, and more intelligent members of society get their yachts and Rolls Royces.

I think your definition of "deserving" is the willingness to work, and my definition is based upon the material value of what is actually produced by said work. Also, the $155k-a-year set is a different crowd than the folks with yachts and Rolls-Royces (and I was originally pointing out the difference between the top 5% and the top 0.1% or 0.01%). Still, even if we don't agree upon the moral assumptions which underly this debate, I do see how your opinion makes sense given your values. And, based upon your many posts, I think we agree on much else.

[ThePythonicCow]

Re: record inequality

In my value system, I'm not even O.K. with someone who works hard earning $155,000/year (your example) while another person who works hard (or wishes to work but cannot find work) cannot afford "basic" necessities for their family. There is a finite pie, and if one person gets a big slice while another goes wanting, I consider the one getting the big slice sucking the life out of the latter, albeit not necessarily intentionally being a parasite.

I remain certain the economies exclusively following this principle leave their citizens poorer than is possible under various Western economies (even if with Chinese characteristics.)

See the The Real Story Behind Thanksgiving.

People work harder and smarter for their own benefit than for the "common good,", thereby raising the average level of prosperity of the community.

However charity for our fallen, our weak, our children and our elders, is a moral mandate.

So there needs to be a balance. Neither winner take all nor the common good takes all works.

The debate I read on this thread is falling into a common fallacy. When two goals conflict and the optimum answer lies in a mix, people often lapse into shouting for one or the other.

Black

No, White.

No, Black, you dufus.

Can we discuss what shade of grey works best?

[flintlock]

Re: record inequality

How do you figure?

I was curious about that part also.

[dcarrigg]

Re: record inequality

Sorry about the 5% vs .1% difference. I wasn't trying to be sneaky and I don't believe I was the first to mention the 5%, I'm fairly sure I took it from a previous post.

I don't know that I'd say that the majority of the top 1% are criminals, but I could be convinced that they are not always as ethical as I'd like them to be. Either way, I can't deny that 50,000 or more very wealthy people may be criminals or severely ethically challenged.

Yes, I truly believe that almost 100% of the 6,000,000 people in prison are criminals. They received fair trials after all and were convicted. There are millions more criminals on probation. I'm not quite sure why this is relevant, however.

I didn't think that you were trying to be sneaky - just that the argument for who is ethically challenged gets stronger the higher up the income chain you go. By the time you are at the top 0.1% it's much more likely that something fishy is going on - it's likely that even being in the top 0.1% poses ethical challenges (how much does one need?)

So far as the prison numbers go, it was just serving to prove a point - that millions of people can be criminals given the legal structure. If 6,000,000 have been convicted, how many more have gotten away with a crime at some point or other in life?

It is no stretch of the imagination to think that tens of millions of people in the US have committed criminal violations. Why should it be a stretch of the imagination that these could be as well represented at the top of income earners as the bottom (the bottom 0.1% and top 0.1% probably have this in common).

[Fiat Currency]

Re: record inequality

what happens the day all the sheep have been eaten?

I guess we're going to find that out over the next decade

[newnewthing]

Re: record inequality

Complexity provides jobs in the service sector. It has been especially powerful enabler of the FIRE economy. A major question of the last century was what would provide jobs as manufacturing/farming became more efficient. FIRE expanded in the void. I was struck by a comment made a few decades ago by a USSR refugee. He was gobsmacked by the complexity of things in America from insurance to tax forms.

[we_are_toast]

Re: record inequality

Ironically (given differences of opinion) this also ties in pretty well with rjwjr's point about financial prudence playing a role in stratifying wealth according to ability. In earlier times, with dearer credit, it seems as though the less financially astute had less rope with which to hang themselves. Ease of taking on debt would seem to increase the opportunity to make poor financial decisions, and magnify the consequences.

If we look at the victims of Bernie Madoff, I think we can agree that you had to be pretty wealthy to get into his fund. And yet these people did not have even the most basic financial sense to ask how these returns were possible even in severe downturns of the market. So I guess I wonder how all these people who apparently accumulated their wealth because of their unique abilities, became so stupid as to loose it all in what was clearly a Ponzi scheme?

I think we can also agree that it was the wealthy individuals, investment banks, brokers of all sorts, who developed the CDS, CDO, MBS ... schemes which were basically slot machines with fancy names. It appears it was these tools, that these wealthy people and their divine abilities created, that is now the rope that will not hang them (must be those abilities again) but looks like will hang most of the rest of us.

[newnewthing]

Re: record inequality

If we look at the victims of Bernie Madoff, I think we can agree that you had to be pretty wealthy to get into his fund. And yet these people did not have even the most basic financial sense to ask how these returns were possible even in severe downturns of the market.

Bernie's secret was a low rate of return. You will look long and hard to find Ponzis that offered such a low rate. When my broker pitched a managed portfolio they had a panoply of offerings very few of which had less than a 15% ROR. They weren't Ponzis though and, as expected, their future ROR was a lot lower. I believe Bernie fully expected to continue the Ponzi until his death and was brought down by the general market collapse and consequent redemption demand.

The people that recognized the Ponzi as having too high a ROR were the very few intimately familiar with his stated strategy running competitive funds. They weren't listened to in large part because they were competitors. Some very financially sophisticated folks were taken in by Bernie.