The Haves and the Have Mores

[ggirod]

The Haves and the Have Mores are mighty distant from the Have Nots. This study of income disparity highlights more information than anybody can absorb in one sitting. Just a sample:

again with the numbers:
30

32

The first number is the likelihood, expressed as a percentage, that a child born to parents whose incomes fall within the top 10 percent of Americans will grow up to be at least as wealthy.

The second is the percentage likelihood that a person born into the bottom 10 percent of society will stay at the bottom.

Just to drive the point home, here’s a third number: 1.3

That’s the percentage likelihood that a bottom 10 percenter will ever make it to the top 10 percent. For 99 out of 100 people, rags never lead to riches.

These estimates come from research by one of Bowles’ former students, American University economist Tom Hertz, published in Unequal Chances, a 2004 book co-edited by Bowles. To arrive at these figures, Hertz mined the Panel Study of Income Dynamics, a survey of 4,800 American families that’s been updated each year since it began in 1968, the year Martin Luther King inspired Bowles to study inequality.

[Rajiv]

Re: The Haves and the Have Mores

You are loooking at the wrong segment - From Dave Pollard

2/ Now That's Power: In 2003 I published the first of the two charts US income above, to show just how skewed US income and wealth really is. Now there's a whole statistical discipline called Econophysics and a conference looking at such curves, and they've produced the second curve above, showing this data plotted logarithmically. They claim the richest 0.1% of the population's income is described by Pareto's Law -- meaning that if you're born into that kind of money, you'll only get richer, no matter what you do. And they claim the poorest 99.9% of the population's income is explained by Boltzman's Law -- describing random movement of gases in an enclosed area, and meaning that even if you've struggled up to the left end of the green curve, you're far more likely to then get poorer than to make it to the 0.1% elite. So much for the American Dream.

The paper
An analytic treatment of the Gibbs–Pareto behavior in wealth distribution

[Rajiv]

Re: The Haves and the Have Mores

See also Born on Third Base

A. The Forbes Study and the Myth of Opportunity

With a few notable exceptions (Donald Trump springs to mind), most of the Forbes 400 are low-key about their wealth. Warren Buffet (number two on the list) reminded his Berkshire Hathaway shareholders at this year's annual meeting he had enjoyed a significant advantage simply by being born white and male at a time when opportunities for women and minorities were slim.

For the editors of Forbes, on the other hand, the Forbes 400 is a chance to roll out the age-old Horatio Alger myth that America is a land of opportunity for those willing to work hard enough. "Forget America's 50 families," the 1996 Forbes Magazine survey begins. "Forget old money. Forget silver spoons. Great fortunes are being created almost monthly in the U.S. today by young entrepreneurs who hadn't a dime when we created this list 14 years ago."

Don't forget old money too fast, though, according to Born on Third Base: The Sources of Wealth of the 1997 Forbes 400. Half of those 400 individuals and 100 families listed started their business lives with at least $50 million in family wealth or by inheriting a large company. This is what most people might call a "head start."

Forbes is right in one respect. There are dramatic cases of entrepreneurial success. In 31 percent of the cases family money and opportunity was unrelated to the listed person's attainment of wealth. In the language of America's pastime, these individuals were born in the batter's box and hit their own home run. Ross Perot would be an example, the son of horse trader, born into a comfortable but by no means affluent family. These modern day Horatio Algers, like the popular pulp novels of poor boys rising from rags to riches, come largely from the computer, communications and entertainment industries.

On the other hand, 42 percent of those listed were born crossing home plate, inheriting their way onto the Forbes list. They include familiar names like Rockefeller, Getty, Bass, and du Pont ó as well as descendants from founders of the next generation of retail fortunes like Wal-Mart and The Gap.

It is important to remember, in these billionaire boom days, that the key to great wealth in America still has more to do with what your father did for a living than your IQ, years in the workforce or level of education. Of course there are examples of mobility ó within the Forbes 400 or anywhere on the U.S. economic ladder. But these are the exceptions, not the rule. Americans do not have an equal opportunity to become wealthy.

However, it should be remembered that few of those 32% "Born in the Batter's Box" were in the bottom 10% you mention

[hayekvindicated]

Re: The Haves and the Have Mores

The more diversity you have the greater the inequality - liberals want to have their cake and eat it too. Doesn't work that way.

In the UK, Prospect magazine (which not "right-wing" by any stretch of the imagination) did an excellent piece on this a while ago - the "stark" choice facing liberals is: (1) either give up your diversity fetish; or (2) give up your equality fetish.

[sunskyfan]

Re: The Haves and the Have Mores

The difference between a "liberal" and a "conservative" in this case is that the "liberal" looks at the world as say "why-not?" and the conservative says "it is not my concern". I think most people would endorse the idea of merit being the determiner of relative wealth and having a good heart correlate with the overall merit function in our culture.

Nepotistic wealth is no different than dependence on the state.

[GRG55]

Re: The Haves and the Have Mores

The more diversity you have the greater the inequality - liberals want to have their cake and eat it too. Doesn't work that way.

In the UK, Prospect magazine (which not "right-wing" by any stretch of the imagination) did an excellent piece on this a while ago - the "stark" choice facing liberals is: (1) either give up your diversity fetish; or (2) give up your equality fetish.

I'm quite certain I don't understand what you are trying to say here hv?

Maybe I'm missing something but Canada, as one example, is more diverse now than it was 100 years ago...and income inequality is no where near as great today as it was then...

[Starving Steve]

Re: The Haves and the Have Mores

The more diversity you have the greater the inequality - liberals want to have their cake and eat it too. Doesn't work that way.

In the UK, Prospect magazine (which not "right-wing" by any stretch of the imagination) did an excellent piece on this a while ago - the "stark" choice facing liberals is: (1) either give up your diversity fetish; or (2) give up your equality fetish.

And why can't society be both diverse and equal? That should be the goal of governments: to make their countries as diverse and equal as possible, yet as wealthy as possible. The entire pie of wealth should be grown to as big a diametre as possible, and each person should be given a fair slice of the pie.

And we can grow the pie by making the cost of living as low as possible, also by innovating, manufacturing, and by exporting.

Let's start with hydro-electric dam construction and nuclear power plant construction to lower electric bills. Such construction could employ millions of workers. The jobs would be for everyone, not just for the engineering and corporate elite.

Let's start with urban renewal to lower land costs and lower rents. Again, the jobs would be for everyone who could dig or haul, and anyone who could hammer a nail or lift a shovel or pour cement.

This new world is not hard to envision, but it is going to take a paradigm-shift in our thinking. The new China gives us a model for what could be done here.

[c1ue]

Re: The Haves and the Have Mores

Economic mobility in the US is one thing, relative economic mobility is another.

Whatever the above report states - at least part of that mobility/inertia is common to all nations.

The United States is, however, supposedly the land of opportunity hence implying that economic mobility would be higher.

This report disputes that assertion:

http://www.economicmobility.org/asse...m%20Report.pdf

relative economic mobility.bmp

What is interesting is that the Scandinavian nations - with their much flatter relative wealth distribution - have much higher economic mobility than the US.

From my point of view - the real reason the US is the 'land of opportunity' is best exemplified by a conversation I had with an acquaintance of mine.

His name is Emil; he is Georgian (Central Asia Georgia) and emigrated to the United States about 10 years ago. Since I've known him, he worked construction, was a waiter in several different Russian restaurants, and is now driving a cab.

From his perspective, America is awesome. In Georgia after the collapse of the Soviet Union, he and many others were burning firewood in their apartments in order to cook and have heat. In America despite arriving with nothing, he has a reasonably comfortable living.

Yet his life is not middle class by any stretch of the imagination. In fact, this 'upward mobility' he has experienced could be stated for any immigrant able to move from a very poor nation to a very rich one.

This does not take credit away from America allowing so many immigrants in to reap this 'Great Leap Forward'.

However, as hard times in the US and accompanying unemployment are here to stay, it will be interesting to see just how open the US will remain. And once this core pillar of economic mobility is removed, what that does to a nation which already is not terribly economically mobile for various reasons.

The distinctions between 'liberal' and 'conservative', 'Republican' and 'Democrat' are stupid and pointless.

The point is what economic mobility, or lack thereof, means to American society, values, and ultimately behavior.

[hayekvindicated]

Re: The Haves and the Have Mores

I'm quite certain I don't understand what you are trying to say here hv?

Maybe I'm missing something but Canada, as one example, is more diverse now than it was 100 years ago...and income inequality is no where near as great today as it was then...

Im only stating facts as they are. Studies have been done on this.

By definition, when a population becomes more diverse, you have more competing "cultures". And, all "cultures" do not excel economically to the same degree - we can argue about the causes but those are simply facts. As an example, even among US immigrant groups, ethnic Chinese, for example, earn far more than ethnic Mexicans (actually several times). Neither group arrived in the US with an advantage of language or similar culture.

In Canada, I'd like to see county by county breakdown of inequality today. I will bet you my bottom dollar that counties that are the least diverse have the least inequality and vice versa. The same is true of the US - that article clearly shows that. I would bet my bottom dollar that California (which is very progressive and with a much greater welfare state) has much greater inequality than Iowa or Kansas (for example).

Now one can face this fact honestly and accept it or we can engage in lies and distortion (like our leaders and media do). I am not saying that diversity is the only factor in creating inequality. But it is a major factor. Most people will never say it for fear of being called racist.

[Master Shake]

Re: The Haves and the Have Mores

Im only stating facts as they are. Studies have been done on this.

By definition, when a population becomes more diverse, you have more competing "cultures". And, all "cultures" do not excel economically to the same degree - we can argue about the causes but those are simply facts. As an example, even among US immigrant groups, ethnic Chinese, for example, earn far more than ethnic Mexicans (actually several times). Neither group arrived in the US with an advantage of language or similar culture.

In Canada, I'd like to see county by county breakdown of inequality today. I will bet you my bottom dollar that counties that are the least diverse have the least inequality and vice versa. The same is true of the US - that article clearly shows that. I would bet my bottom dollar that California (which is very progressive and with a much greater welfare state) has much greater inequality than Iowa or Kansas (for example).

Now one can face this fact honestly and accept it or we can engage in lies and distortion (like our leaders and media do). I am not saying that diversity is the only factor in creating inequality. But it is a major factor. Most people will never say it for fear of being called racist.

I'd wager that you're already aware of this, but Thomas Sowell, one of this country's greatest scholars, has done a lot of research in this area.

[hayekvindicated]

Re: The Haves and the Have Mores

And why can't society be both diverse and equal? That should be the goal of governments: to make their countries as diverse and equal as possible, yet as wealthy as possible. The entire pie of wealth should be grown to as big a diametre as possible, and each person should be given a fair slice of the pie.

And we can grow the pie by making the cost of living as low as possible, also by innovating, manufacturing, and by exporting.

Let's start with hydro-electric dam construction and nuclear power plant construction to lower electric bills. Such construction could employ millions of workers. The jobs would be for everyone, not just for the engineering and corporate elite.

Let's start with urban renewal to lower land costs and lower rents. Again, the jobs would be for everyone who could dig or haul, and anyone who could hammer a nail or lift a shovel or pour cement.

This new world is not hard to envision, but it is going to take a paradigm-shift in our thinking. The new China gives us a model for what could be done here.

Find me one country which has done this.

[hayekvindicated]

Re: The Haves and the Have Mores

I'd wager that you're already aware of this, but Thomas Sowell, one of this country's greatest scholars, has done a lot of research in this area.

Yes and many others. Sowell actually also spent time studying inequality in Asia and Latin America. In Asia for example (South East Asia) - in Malaysia, Indonesia and Philippines, the overseas Chinese are a hated minority (like Jews in an earlier time in Europe) but they virtually own those countries despite having arrived with almost nothing just a century or so ago and having regularly faced rampant bigotry and discrimination. The same patterns repeat themselves over and over again. Sowell's book is excellent on this subject.

[Ghent12]

Re: The Haves and the Have Mores

Let's start with hydro-electric dam construction and nuclear power plant construction to lower electric bills. Such construction could employ millions of workers. The jobs would be for everyone, not just for the engineering and corporate elite.

"Engineering elite," is a hilarious term.

Let's start with urban renewal to lower land costs and lower rents. Again, the jobs would be for everyone who could dig or haul, and anyone who could hammer a nail or lift a shovel or pour cement.

This new world is not hard to envision, but it is going to take a paradigm-shift in our thinking. The new China gives us a model for what could be done here.

Yes, sure, we could absolutely employ millions in rudimentary construction jobs like China. However, in order to do it like China, we'd need to pay Chinese wages, meaning all $10 per hour jobs turn into $0.50 per hour jobs, and so forth. And all those people currently living in those housing areas to be rebuilt? Who cares about them, let them be displaced and disappear like they always do. Let's also try to improve the track record which is currently negative when it comes to adding places to live.

[Verrocchio]

Re: The Haves and the Have Mores

The new China gives us a model for what could be done here (Starving Steve).

Sure thing, Steve. We could adopt the model, but are we ready for the massive air, water, and land pollution and general environmental degradation that resulted from the Chinese growth model? An estimated 750,000 Chinese die prematurely each year because of pollution.

[MulaMan]

Re: The Haves and the Have Mores

I'd settle for a properly regulated free market like we had after FDR.

The rich hated it because they had to actually COMPETE with everyone and anyone, so the free market has been destroyed.

De-regulation destroyed the free market. People just cannot understand that "free market" means a "regulated market" so that the rules are simple and clear for all to compete. They somehow think "less regulation" by definition means a more "free" market, completely untrue.

The first step is to regulate banks and seperate banking from speculators and allow speculators to fail, no back stop.