CNN: Viral video shows how wealth is really distributed

[alexey]

http://economy.money.cnn.com/2013/03/08/wealth-video/?iid=HP_LN

Think you know how wealth is distributed in America? Think again.

A YouTube video that's gone viral recently shows that our perceptions of who has money and how much they have is quite skewed. The poor and middle class have a lot less than most people think, while the rich have a lot more. And the Top 1% are off the charts.

The video, which has been viewed more than 3.8 million times, draws heavily on the wealth inequality work of Michael Norton and Dan Ariely, professors at the business schools of Harvard and Duke business, respectively. The duo asked Americans how they thought wealth was distributed and found that the estimated and ideal divisions of the wealth pie bear little resemblance to reality.

The piece also features a CNNMoney story on an AFL-CIO report that showed CEOs earned 380 times the average worker.

[Predicto]

It is a very powerful piece. Obviously something is wrong. We are rapidly going from a country with a massive middle class and legitimate upward mobility to a country where almost all the wealth is concentrated in a few elites, something like third world nations like Bolivia or Honduras.

I'm not sure it will have the impact on people that it should, because everyone will claim different causes for the change depending on their personal ideology.

It reminds me of the arguments I used to have with Honorary Hog, when he would repeat, over and over in thread after thread, that the Bush tax cuts were fair because everyone got a tax cut (and he would claim that liberals lied about the issue). He ignored the fact that 99 percent of the total cuts accrued to the very well off (and he conveniently forgot that this is what every liberal on here kept telling him every time he raised the claim again).

[HOF44]

I believe it is the single biggest problem we face right now as a country. I am all for entrepreneurs getting there due, but we have a wealthy class now that through monetary control are changing how wealth is distributed in this country to their benefit. To many are getting richer because they are rich, not because they have created something of value.

[greenspandan]

the problem is any attempt to staunch the inexhorable flow of money upwards is labeled "wealth redistribution" (and SOCIALISM!), when really it's an attempt to merely slow down the wealth redistribution that is already happening!

[Duckus]

Watched it earlier this week and shared it all over the place. Really fascinating.

[D'Pablo]

One thing of note is that the composition of the top 1% is not entrepreneurs. The Facebook billionaires are a rarity. As Joseph Stiglitz has been promoting as of late, the top 1% are mostly 'rent-seekers' or the estates of deceased, productive people.

'Rent-seekers' are persons that profit off the labor of others, such as traders and venture capitalists (a lot of folks in the finance sector), without creating a product or net benefit to our GDP. Traditionally, 'rent-seekers' were those persons who would snatch up properties, not develop them, and seek rent from others that sought to use those properties in a productive manner. This is one of the reasons for states adopting methods for prescription or adverse possession.

I should mention that venture capitalism and trading do serve valid purposes in the market, but does anyone think that an investor should universally make hand over fist more than the person creating useful products?

[endzone_dave]

CEOs have learned they can treat people like total crap and get away with it. Like food and water, people NEED jobs. Laying people off, increasing the number of hours worked per employee, cutting benefits, small salary increases (if any) are now standard in the work place. And out government does nothing about it.

I know some people who work for a company that made $3B in profits last year and the whole company is under a salary freeze. Ridiculous.

[SemperFi Skins]

CEOs have learned they can treat people like total crap and get away with it. Like food and water, people NEED jobs. Laying people off, increasing the number of hours worked per employee, cutting benefits, small salary increases (if any) are now standard in the work place. And out government does nothing about it.

I know some people who work for a company that made $3B in profits last year and the whole company is under a salary freeze. Ridiculous.

Oh yes they do, but not in a good way... they just feed that corrupt CEO even more money with buyouts, compensation packages, etc...

[Prosperity]

One thing of note is that the composition of the top 1% is not entrepreneurs. The Facebook billionaires are a rarity. As Joseph Stiglitz has been promoting as of late' date=' the top 1% are mostly 'rent-seekers' or the estates of deceased, productive people.

'Rent-seekers' are persons that profit off the labor of others, such as traders and venture capitalists (a lot of folks in the finance sector), without creating a product or net benefit to our GDP. Traditionally, 'rent-seekers' were those persons who would snatch up properties, not develop them, and seek rent from others that sought to use those properties in a productive manner. This is one of the reasons for states adopting methods for prescription or adverse possession.

I should mention that venture capitalism and trading do serve valid purposes in the market, but does anyone think that an investor should universally make hand over fist more than the person creating useful products?[/quote']

Yes it was peculiar. The wealthiest are lawyers, and wealth managers, not people we generally consider wealth creators.

[dchogs]

powerful video. it is sad and interesting to see how protective folks are of the top 1-5%. it is too bad that feeling isn't reciprocated.

[zoony]

I could have done without a lot of the snide commentary. It was unnecessary and cheapened the video. I shut it off after "good ole American dream" comment.

What a ****ing jackass.

[Springfield]

I could have done without a lot of the snide commentary. It was unnecessary and cheapened the video. I shut it off after "good ole American dream" comment.

What a ****ing jackass.

Yeah, I watched this video before it was on ES and thought to myself, "I wonder what kind of agenda this guy has".

Especially when he said something like, "we all know that socialism is bad."

None the less, it is a powerful video. I love graphs. Makes it easier for me to quantify. I wonder if his numbers are 100% correct. I'm just waiting for someone to come out and say that this guy is lying. That's just my pessimism speaking though.

[Larry]

I could have done without a lot of the snide commentary. It was unnecessary and cheapened the video. I shut it off after "good ole American dream" comment.

What a ****ing jackass.

Wondering how somebody who isn't willing to accept ranting, for the sake of also getting the facts that are mixed in with it, could possibly have lasted a year, in Tailgate.

[deejaydana]

I could have done without a lot of the snide commentary. It was unnecessary and cheapened the video. I shut it off after "good ole American dream" comment.

What a ****ing jackass.

I wouldn't have minded if at some point they had lumped in govt as a contributing factor to our country's ills and it didn't help that the narrator spoke to the listener as if he was 10 years old. Envy politics will always sell to some degree.

[AsburySkinsFan]

Envy politics will always sell to some degree.

Ahh is this what the Right has decided to call it these days? When Rush Windbag became the leader of the Right he did a wonderful job selling to his faithful lemmings that any attempt to address social and economic inequality was class warfare, and the drones believed every word of it, now they just repackage the mindless attack while defending a system that is working against them.

So enlighten us oh wise one, how is it that the government created this level of economic inequality?

[Burgold]

I agree that the commentary defuses the message, but the message and how he chose to illustrate it is pretty powerful. What can and should be done about it is a different matter. I guess it does point to why Conservatives argued so hard that the top 5% couldn't afford to pay 3% more in taxes.

[alexey]

I wouldn't have minded if at some point they had lumped in govt as a contributing factor to our country's ills and it didn't help that the narrator spoke to the listener as if he was 10 years old. Envy politics will always sell to some degree.

Your worldview is based on some assumptions.

One assumption is that an individual's wealth and income = that individual's productivity and value to the economy. In other words, that people always get paid according to value that they produce.

Consider how dramatically your worldview would fall apart should those assumptions turn out incorrect.

[RiggosMohawk]

At the risk of being flamed relentlessly, I will play devils advocate and mention a point that has occured to me since watching this very interesting video.

I think it's a slanted analogy to compare our net worth to a pie, or something equally divisible. What was the net worth of Americans 10 years ago? Possibly higher. 20 years ago? Definitely lower. Better would be to think of the net worth as a pile. The reason I think the pie/blocks is slanted b/c as the pie/blocks must encompass a larger amount, of course each slice must then be smaller. If instead you think of it as a pile, the statistics might show that the middle class' pile is the same size it was 10 years ago, while the pile for the top 1% has grown drastically. I'm not saying that isnt a problem, but the presentation of his graphics is designed to make you (unless you're in the top 1%) feel like your pile is so much smaller now... when in fact you might be better off now than you've ever been in absolute terms.

I would have much preferred an analysis showing the net worth change (in absolute terms, inflation adjusted) for the "bottom 99" and for the top 1 from 93 to 03 to now. I think that would have been very interesting to see.

[Burgold]

But at least at one point he did compare the total wealth owned by the wealthiest decades earlier to today's numbers. There is no question that the richest posess far more of the pie than before.

[deejaydana]

Ahh is this what the Right has decided to call it these days? When Rush Windbag became the leader of the Right he did a wonderful job selling to his faithful lemmings that any attempt to address social and economic inequality was class warfare, and the drones believed every word of it, now they just repackage the mindless attack while defending a system that is working against them.

So enlighten us oh wise one, how is it that the government created this level of economic inequality?

Well one obvious way is the blurred line between Wall Street & the WH. Or how about the tax free deals handed to Facebook and GE under this Administration? I don't get why you are so thin skinned though. I don't come on this board and call you mindless because we have differing views of what might constitute the most equitable set up for the largest possible swath of our country's people. BTW: the system has served me very well but I realize it's not perfect and never will be. Hope your day gets better.

[Corcaigh]

Is the increasing gap in wealth inequality a problem for society?

[Springfield]

Is the increasing gap in wealth inequality a problem for society?

I don't know what video you posted, but in answer to your question... yes.

People will become fed up.

[Larry]

Recall, a year or so ago, seeing a joke:

A CEO, a Tea Partier, and a union guy are sitting at a table. On the table is a plate, with a dozen cookies.

The CEO takes 11 cookies, and turns to the Tea Partier:

"Watch that union guy. He wants half your cookie."

[kramdizzle]

I agree. The rich are too rich. When rg3 goes.for his.contract extension we should only give him $50k a year. After all he doesn't need a fancy new car. Its not my business what other people make. Is it your business how many tv's your neighbor has? How about his disposable income? No, its not your business.

some people were born poor, some middle, and some wealthy. Yes the wealthy people have an easier time staying/growing their wealth but its not impossible to become wealthy when born poor. It's also easy to become poor when born into the middle class. Bottom line is if you want to change your status do something about it. Nobody is stuck slinging burgers or driving a bus. If you want something go and get it.

Oprah was born dirt poor and she made it. I can give you examples of people like john mccaffrey I knew growing up in the middle class who is now dirt poor and in and out of jail.

[Larry]

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