CNN: Viral video shows how wealth is really distributed

[AsburySkinsFan]

There's an underlying assumption though that all rich people seem to have earned and merited their wealth through hard work. That's not the case just as it's not the case that all poor are lay and shiftless.

But, caricatures are so much easier to defend or defeat. That and whenever you fight against certain caricatures you get to call people comrade and use other terms to insinuate that the only reason that people are pointing out economic inequalities is because they're really communists who want to forcibly redistribute the income of the rich to their lazy cousins who can't be bothered to get off their arse. It never once crosses their minds that the reason the proletariat did what they did in Russia was because the Czars created a similar economic disparity...as did the French before their revolution. The reason those revolutions took place was because those at the top refused to recognize that they were perpetuating the problem.

[dchogs]

Let them eat cake.

[deejaydana]

The irony is QE seemingly has helped exacerbate income inequality (and not ameliorate it at all). Sure the stock market is booming but you won't find many out there who'd make the argument that we have a healthy job market. Once again the path of good intentions leads to ruin for the poor and those who can least afford it. We all bring to a conversation of course our own experiences and our own biases and I'm not above that for good or ill as much as any other poster here (and just as the authors of that video come with theirs). I guess the doom and gloom tone of the video doesn't resonate with me because it's not what I've lived or what ANY of my friends have either. None of us came from any money either.

[Elessar78]

There's an underlying assumption though that all rich people seem to have earned and merited their wealth through hard work. That's not the case just as it's not the case that all poor are lay and shiftless.

Yeah, but what should the mechanism be when Sam Walton leaves his heirs his massive fortune? Even if you tax the heck out of it at 51%, it won't change the statistics in the video on wealth distribution by much.

You have the people that inherit their wealth and you have the people that work hard and get their wealth. The latter have figured out how the system works and as wealth builds they have the means to really leverage their position to create more wealth. Frankly, most of the middle class seem to be more obsessed with acquiring material goods and experiences (symbols of wealth) as opposed to acquiring and building actual wealth. The level of ignorance in personal finance is rampant among the middle and lower classes— lots of debt and low savings rate is endemic among the middle class.

So yeah, there's gross income inequality and CEO's get paid an amount disproportionate to work (but arguably it's not disproportionate to the value they bring to a company) but the middle class and lower classes do themselves no favors by their behavior. A lot of wealthy people I know are very frugal—this doesn't just mean high income earners which can come and go, but actual net worth.

By the way, I should've used a smiley, but my "comrade" comment was meant in jest toward Alexey.

[Mad Mike]

Yeah, but what should the mechanism be when Sam Walton leaves his heirs his massive fortune? Even if you tax the heck out of it at 51%, it won't change the statistics in the video on wealth distribution by much.

You have the people that inherit their wealth and you have the people that work hard and get their wealth. The latter have figured out how the system works and as wealth builds they have the means to really leverage their position to create more wealth. Frankly, most of the middle class seem to be more obsessed with acquiring material goods and experiences (symbols of wealth) as opposed to acquiring and building actual wealth. The level of ignorance in personal finance is rampant among the middle and lower classes— lots of debt and low savings rate is endemic among the middle class.

So yeah, there's gross income inequality and CEO's get paid an amount disproportionate to work (but arguably it's not disproportionate to the value they bring to a company) but the middle class and lower classes do themselves no favors by their behavior. A lot of wealthy people I know are very frugal—this doesn't just mean high income earners which can come and go, but actual net worth.

Which explains why CEOs get golden parachutes even when they fail miserably. :doh:

And I noticed how you framed your argument and your bias is on display...

the middle class and lower classes do themselves no favors by their behavior

A lot of wealthy people I know are very frugal

So *all* middle class are screw ups but "a lot" of the wealthy are frugal.

[zoony]

What should Disney have paid George Lucas?

[AsburySkinsFan]

I guess the doom and gloom tone of the video doesn't resonate with me because it's not what I've lived or what ANY of my friends have either. None of us came from any money either.

Well, heck since you or your friends haven't experienced it then it must not be a problem. :doh:

[Elessar78]

Which explains why CEOs get golden parachutes even when they fail miserably. :doh:

And I noticed how you framed your argument and your bias is on display...

So *all* middle class are screw ups but "a lot" of the wealthy are frugal.

I wouldn't say all but tell me that I'm wrong that the majority of the middle class: overspends, doesn't invest enough, doesn't save enough, and carries too much debt?

All of which is a hindrance to building wealth.

"Nearly 44 percent of Americans don't have enough savings or other liquid assets to stay out of poverty for more than three months if they lose their income, according to Wednesday's report by the Corporation for Enterprise Development. Almost a third have no savings accounts at all."

from: http://www.npr.org/2013/01/30/170561872/study-nearly-half-in-u-s-lack-financial-safety-net

Also, I heard recently on Marketplace Money a statistic that 50% of Americans do not own a single stock.

It seems silly to fault CEOs for negotiating a golden parachute when, in the same situation, with the same leverage, any of us would do the same. If Stephen Strasburg sucks does he give back his money? John Wall? OJ Mayo isn't offering the Grizz his money back.

The frugal wealthy people comment wasn't meant as a jab, but wealth doesn't have to be overt. It's not always jets and mansions and sports cars. It's about driving a beat up pickup truck, living in the same house you bought when you were 25, keeping personal overhead low, etc. But lest you think I just come from a place where I look down upon poor people, my wife feeds the homeless once a week for over a decade and we do mission work from time to time and she counsels people in the lower strata on a daily basis and there is a common thread. Particularly with the poor (not necessarily the homeless that's more of a mental illness issue), they don't have the skills and know how to create a budget much less come up with a plan to save and build wealth. Some will argue that they don't even have enough to get ahead, maybe in some cases that's true but for the most part if they just played "defense" more that they could start to gain some traction.

So while some see the income inequality issue as the rich doing something nefarious to increase the gap, I see it as much as the lower and middle class not knowing how to keep up.

[Larry]

I wouldn't say all but tell me that I'm wrong that the majority of the middle class: overspends, doesn't invest enough, doesn't save enough, and carries too much debt?

All of which is a hindrance to building wealth.

"Nearly 44 percent of Americans don't have enough savings or other liquid assets to stay out of poverty for more than three months if they lose their income, according to Wednesday's report by the Corporation for Enterprise Development. Almost a third have no savings accounts at all."

Which is a great way of saying "It's that stupid middle class's fault that they aren't millionaires: They're trying to earn wealth, instead of accumulating unearned wealth, like the rich folks do.

(Note: I'm using the terms "earned" and "unearned" as IRS terms to categorize income. Although I do believe that they aren't completely bad labels, either. Just not 100% of the time.)

So while some see the income inequality issue as the rich doing something nefarious to increase the gap, I see it as much as the lower and middle class not knowing how to keep up.

When the Mitt Romney class pays a 5% tax rate on their income, and people making 1% of what they're making are paying several times that tax rate, which class do you think deserves the credit for the tax system being set up that way?

Or, to go back to the point I was making above, when society (or at least a good chunk of society) has accepted the theory that investing is more valuable than earning, which class do you think most benefits from society assigning value using that yardstick?

[deejaydana]

Well, heck since you or your friends haven't experienced it then it must not be a problem. :doh:

Perhaps that sentence of mine was ambiguous, certainly it could have been worded better but your selective use of quoting me also changes the context of what I was saying (which was that I came from a background of very little means or money). I hope you're happy with yourself.

[Mad Mike]

What should Disney have paid George Lucas?

Oh please. This isn't about setting false values for labor or property and Lucas is hardly a standard. :doh:

[alexey]

...

So yeah, there's gross income inequality and CEO's get paid an amount disproportionate to work (but arguably it's not disproportionate to the value they bring to a company)...

Are you willing to argue for this "arguably"? Are you willing to argue that income discrepancy trends over the last 40 years actually reflect discrepancies of value brought to companies?

Please get on the record about this. It would be a shame if you were only brave enough to "jest" about these difficult questions.

[zoony]

Oh please. This isn't about setting false values for labor or property and Lucas is hardly a standard. :doh:

Well, what is this about exactly? Sounds like you have a specific plan. Lets hear it

[Burgold]

Well, what is this about exactly? Sounds like you have a specific plan. Lets hear it

I think the superissue is what is the healthiest balance for the economy and well being of the nation. Most would argue that the economy isn't healthy right now for a number of reasons with wealth disparity being one of them (though the amount of weight varies). From liberal to conservative, all want ingenuity and sweat to be rewarded. I think most even cheer for that lucky bum who wins the lottery. However, when we look at the rate of salary increase versus the rate of overall wealth increase for the top... something feels askew. After all, is the guy who invents the widget's value worth a 1/10,000 the amount of the guy who inherited the company? Should the average worker in a company earn in a year what the CEO makes in an hour? It smells wrong. It feels wrong.

What to do about it is a question that's next to impossible to answer because we shouldn't legislate salaries, but the math seems odd.

[HOF44]

What to do about it is a question that's next to impossible to answer because we shouldn't legislate salaries, but the math seems odd.

The answer would be strong unions, of course the problem with that in practice has been union leadership more interested in their bottom line than the constituents they represent. See one Smith, DeMaurice. We need unions like we had at the beginning of the last century, not ones that overreach like the old auto unions.

[Elessar78]

Are you willing to argue for this "arguably"? Are you willing to argue that income discrepancy trends over the last 40 years actually reflect discrepancies of value brought to companies?

Please get on the record about this. It would be a shame if you were only brave enough to "jest" about these difficult questions.

I was only jesting about how rampantly Progressive your views always are.

I'll assume you have a job. Your employer pays you based on what he perceives you bring into the company. Unless you are on commission then you are paid in relation to why you bring in. I invest in the total stock market and as the market for its entirety has trended upward, I can't say corporate leaders are doing too badly by me as a whole.

[Jumbo]

Well, what is this about exactly?

It's about time

It's about space

It's about two men in the strangest place.

[Elessar78]

Excerpt from Millionaire Next Door from WaPo:

http://www.washingtonpost.com/wp-srv/style/longterm/books/chap1/millionairenextdoor.htm

YOU OR YOUR ANCESTORS?

Most of America's millionaires are first-generation rich. How is it possible for people from modest backgrounds to become millionaires in one generation? Why is it that so many people with similar socioeconomic backgrounds never accumulate even modest amounts of wealth?

Most people who become millionaires have confidence in their own abilities. They do not spend time worrying about whether or not their parents were wealthy. They do not believe that one must be born wealthy. Conversely, people of modest backgrounds who believe that only the wealthy produce millionaires are predetermined to remain non-affluent. Have you always thought that most millionaires are born with silver spoons in their mouths? If so, consider the following facts that our research uncovered about American millionaires:

* Only 19 percent receive any income or wealth of any kind from a trust fund or an estate.

* Fewer than 20 percent inherited 10 percent or more of their wealth.

* More than half never received as much as $1 in inheritance.

* Fewer than 25 percent ever received "an act of kindness" of $10,000 or more from their parents, grandparents, or other relatives.

* Ninety-one percent never received, as a gift, as much as $1 of the ownership of a family business.

* Nearly half never received any college tuition from their parents or other relatives.

* Fewer than 10 percent believe they will ever receive an inheritance in the future.

America continues to hold great prospects for those who wish to accumulate wealth in one generation. In fact, America has always been a land of opportunity for those who believe in the fluid nature of our nation's social system and economy.

More than one hundred years ago the same was true. In The American Economy, Stanley Lebergott reviews a study conducted in 1892 of the 4,047 American millionaires. He reports that 84 percent "were nouveau riche, having reached the top without the benefit of inherited wealth."

[PeterMP]

Excerpt from Millionaire Next Door from WaPo:

http://www.washingtonpost.com/wp-srv/style/longterm/books/chap1/millionairenextdoor.htm

Almost everybody that has looked at has concluded that class mobility is decreased in the US and is lower than in many European countries now.

http://www.huffingtonpost.com/2011/11/07/income-mobility-us_n_1079501.html

---------- Post added March-10th-2013 at 09:16 PM ----------

Well, what is this about exactly? Sounds like you have a specific plan. Lets hear it

1. A pre-1980s tax code in terms of progressiveness, but with more simplicity.

2. A tax on stock transactions that take into the account the volume of the trade that "punishes" people that buy and sell stocks (especially large volumes) at high regularity.

3. A robust inheretence tax.

4. Do soemthing about college tuition or student loans

[Larry]

Excerpt from Millionaire Next Door from WaPo:

http://www.washingtonpost.com/wp-srv/style/longterm/books/chap1/millionairenextdoor.htm

Almost everybody that has looked at has concluded that class mobility is decreased in the US and is lower than in many European countries now.

http://www.huffingtonpost.com/2011/11/07/income-mobility-us_n_1079501.html

The "catch" in his post is he's talking about millionaires.

Millionaires aren't the reason income disparity is growing so rapidly.

Millionaires (people with a million net worth) are more like the top 1%.

Heck, with real estate prices in the DC Metro, there may well be some millionaire career civil servants. (Maybe even some of those famous secretaries from the other threads.)

The problem isn't the top 1%. It's the top 0.01%. The people for whom a million is a month's income.

Yeah, lots of the people who have a net worth of a million are working class people who did a really good job, worked well for many years, made some good real estate decisions.

I'm not saying they're Joe Average. But they're a lot closer to Joe Average than they are to, say, Mitt Romney.

[PeterMP]

The "catch" in his post is he's talking about millionaires.

I'd like to see a break down of when these millionares became millionares.

That sounds a lot like my in-laws. Of course, when they went to college in the 1960s it was much cheaper and eaiser to go w/o help from your parents.

[Predicto]

Hard work blah blah blah is useful for discussing an individual, but it does not explain the remarkable trend where more and more and more of the national wealth is concentrated in fewer and fewer people.

Something else is happening.

[8181]

Here's a whacko theory. (Keyword: theory)

The Internet ****ed everything up.

Money is made when there are inefficiencies. Nickeling and diming here and there.

Mom & Pop had a hard enough time competing with Walmart, let alone Amazon. Salesmen could earn a couple grand more on cars by sweet talking someone before there was Edmunds. Restaurant employees at a crappy place could earn money based on people's curiousity before Yelp. Photographers and writers could make money at their trade before blogging and Facebook made everyone a professional photographer and writer. Stock brokers would sell their "specialized" knowledge and skills before Internet discount brokerages.

But now the Internet? Beneficial for large corporations who profit off of economies of scale while putting out of business people who sold "knowledge".

Good game.

[Mad Mike]

Well, what is this about exactly? Sounds like you have a specific plan. Lets hear it

This thread is about a problem that was outlined in a video that you dismissed for it's "snide commentary". We are discussing the problem. The fact that I don't claim to have the answers does not make the question you posed any more relevant.

Lucas sold extremely valuable intellectual property, in return he received a **** load of compensation. More power to him. He created it, he gave it value. he deserves it. But it has no more relevance to the conversation than the asking the value of a car.

And I think I will stop there. It never pays to argue with people who have power over something you care about. I've said my peace. I'll leave it at that.

[KERRAKPO9198]

http://www.extremeskins.com/showthread.php?380018-Who-Runs-The-World-Solid-Proof-That-A-Core-Group-Of-Wealthy-Elitists-Is-Pulling-The-Strings