CNN: Viral video shows how wealth is really distributed

[PeterMP]

Here's a graph showing the growth of the SP500 from March 1973 through yesterday. Note how until about the mid 90s growth of the 500 largest companies in America was flat. You do see some growth starting in the mid to late 80s. But there's radical growth in the mid-90s. Even the corrections of the Internet bubble and the Great Recession don't put us below 1995 levels. I'd venture to guess that rise in Executive pay also coincides with the sharp rise in the overall economy. Yes, I concede that some of that growth was irrational exuberance and baseless growth via junk mortgages, but it's hard to seperate that when you're in the midst of it and negotiating executive pay.

Wouldn't you expect then that income would be the same as in 1995, then using your reasoning?

I mean it would go up and down, but the net result would be that it is currently the same as in 1995.

That hasn't happened.

[Corcaigh]

Fascinating video, thanks for making actual contributions to the thread.

I think it is fascinating ... that the wealthy in unequal societies have more problems than the wealthy do in more equal ones.

In my personal experience, the USA & UK are generally more fearful and stressed societies than other wealthy western peers. And I'm not talking of fear of foreign threats.

[zoony]

I think it is fascinating ... that the wealthy in unequal societies have more problems than the wealthy do in more equal ones.

In my personal experience, the USA & UK are generally more fearful and stressed societies than other wealthy western peers. And I'm not talking of fear of foreign threats.

What do you mean by this?

My experience is that in Europe people are more comfortable with their assigned roles. They play the part of blue collar or aristocrat perfectly, and they are perfectly content to realize that is all they will ever be, for better or worse. Based on nothing more than breeding.

They know that money cannot change their status. If you're born in Germany as white trash and make millions and millions as a professional footballer, you're still subservient white trash. You know it, you're comfortable with it, that's how it is. Your kids will be white trash as well, even though you have a chauffeur take them to school in a Bentley

It's not that way in this country. That might play a bit into the uncomfortableness.

[Corcaigh]

What do you mean by this?

My experience is that in Europe people are more comfortable with their assigned roles. They play the part of blue collar or aristocrat perfectly, and they are perfectly content to realize that is all they will ever be, for better or worse. Based on nothing more than breeding.

They know that money cannot change their status. If you're born in Germany as white trash and make millions and millions as a professional footballer, you're still subservient white trash. You know it, you're comfortable with it, that's how it is. Your kids will be white trash as well, even though you have a chauffeur take them to school in a Bentley

It's not that way in this country. That might play a bit into the uncomfortableness.

Eh ... what?

Plenty of data shows that the USA is less socially mobile than a number of European countries, including portions of the video I posted. And we're not talking about a few multimillionaire soccer players.

Take Angela Merkel, first female German Chancellor. She must have come from aristocracy to achieve a position like that, what with being the first female to do it. Instead she's the daughter of a teacher and a pastor, and did a PhD in physics, and then worked as a research scientist for more than a decade.

The previous German chancellor (Schröder) was the son of a lance corporal killed in action in WW II, and raised by a single mother who was an agricultural laborer to support the family. Schröder worked in retail sales and construction work to put himself through high school. Such blue-blood aristocracy.

In contrast, with the Bushes, Clintons and Kennedys, Romney etc (Obama largely being the exception) and elsewhere with legacy admission to Ivy Leagues, the USA is closer to an aristocratic society at the top.

[PeterMP]

The previous German chancellor (Schröder) was the son of a lance corporal killed in action in WW II, and raised by a single mother who was an agricultural laborer to support the family. Schröder worked in retail sales and construction work to put himself through high school. Such blue-blood aristocracy.

But you don't understand he's still white trash!!

[zoony]

But you don't understand he's still white trash!!

Based on their last names, they absolutely would be.

[JimboDaMan]

In contrast, with the Bushes, Clintons and Kennedys, Romney etc (Obama largely being the exception) and elsewhere with legacy admission to Ivy Leagues, the USA is closer to an aristocratic society at the top.

Can't include the Clintons in that list, neither Bill nor Hillary came from wealthy backgrounds. In fact since Kennedy most of the Democratic presidential nominees have come from fairly modest backgrounds, John Kerry being an exception. Gore had a political pedigree and the family was comfortable but not as wealthy as commonly believed. LBJ, Humphrey, Clinton, Obama, Carter, Mondale, McGovern all came from pretty humble beginnings.

edit: left out Mike Dukakis, who's father was an OB so they were pretty well off. But both his parents were immigrants, not like we're talking about a patrician family.

[Corcaigh]

Bill didn't get there as part of the establishment, but Hilary got a little help from being married to POTUS.

[The Sisko]

Alexey, which is why I intentionally used the word "perceived" when I last responded. That's the employee's perceived value (from the employer's perspective) to the company whether it's accurate or not. Again, assuming the employee is not on commission.

Every time I go into a job interview I try to negotiate the best deal for me. That means money and security and non-income benefits. I don't see why a CEO would do anything different.

If you look at my posts in other threads, I'm for higher taxes on the top earners, I'm open to higher estate taxes. My position in this thread is that ALL the blame is put upon the richest Americans when I feel that the middle class does have some responsibility on why that gap is widening

---------- Post added March-11th-2013 at 07:44 PM ----------

Which I totally get and not saying it should be everyone's goal. I'm simply pointing out that these behaviors, in the aggregate, are part of the reason for the widening income gap. The truly wealthy may not be cutting consumption as much but they have all that surplus income. Assuming you have $50,000 currently in your portfolio, if you slashed $1,500 a month from your expenses and invested it for 20 years and got a 8.25% rate of return the amount of savings at the end of two decades is $2 million. Or if you saved all 3k/month you could retire in 15 years with $1.2 million in the bank. And this wouldn't be a high risk path that requires a lot of luck, the SP500 has returned this much over the course of it's existence.

I'm not saying this is the path for everyone. It's perfectly fine to enjoy life now, but when we have a discussion about wealth disparity this is the angle I see.

Elessar I think there are some inherent assumptions you're not examining here. First, you're assuming that everyone starts out with the same opportunities and a level playing field. In fact, quite the opposite is true. One only need look at the disparity between schools in poor neighborhoods and those in rich neighborhoods and the outcomes.

Moreover, in recent years the Grand Oligarch's Party has succeeded in demonizing public education and teacher's unions (some of that scorn on the latter being richly deserved) and diverting public funding away from public schools into private schools so that in essence the rich are getting a write off for putting their kids into private schools they would have paid for anyway. And that's just one example of the takeover of the political system.

The assumption inherent in your comments about the poor saving/investing rates among the middle class is that they have the disposable income to invest with. Over the past 20 years or so, middle class wages have all but stagnated and even worse, more and more costs that were once born by the employer have been shifted onto the employee, i.e. higher health insurance costs, pensions replaced by 401K, decreasing fringe benefits, etc. Thus the middle class has been saddled with a greater financial responsibility with little, if any increase in wages. Even worse, most of them resorted to maintaining their lifestyles with debt rather than wages. I agree with you that as a country we don't save enough, or do a very good job of understanding investments but under these circumstances that outcome isn't exactly surprising.

Finally, your comment about negotiating the best compensation you can get assumes the average employee has the same leverage and advantages that upper management does when negotiating their compensation packages. Not so by a mile. I think a lot of the reasons cited here also speak to Mike's point about upper management getting golden parachutes for crappy performance while the rest of us just get...fired.

Elessar78, are you just pointing out trends?

Because if you are you implying that a rise in SP500 indicates increased value brought by executives, justifying the extraordinary rise of executive pay, somebody else could just as easily imply the opposite - fat cat executives giving more and more shaft to ever more productive employees :evilg:

You say it tongue-in-cheek but I think there's some merit to this. Much of the corporate profits driving those stock price increases were derived from short-sighted management strategies. Unfortunately, this management strategy has some negative implications not only for the future of their companies but for the country as a whole.

[Elessar78]

Economist op/ed piece

http://www.economist.com/blogs/democracyinamerica/2013/03/wealth-inequality?fsrc=scn/tw/te/bl/yourmoneyyourlife

Adding injury to insult, new research reported in the Washington Post finds a link between America's wealth inequality and the life-expectancy gap. Focusing on men and women in two counties in Florida, the data show that being on the wrong side of the wealth gap can, quite literally, kill you.

[st. John’s] county’s plentiful and well-tended golf courses teem with youthful-looking retirees. The same is true on the county’s 41 miles of Atlantic Ocean beaches, abundant tennis courts and extensive network of biking and hiking trails.The healthy lifestyles pay off. Women here can expect to live to be nearly 83, four years longer than they did just two decades earlier, according to research at the University of Washington. Male life expectancy is more than 78 years, six years longer than two decades ago.But in neighboring Putnam County, life is neither as idyllic nor as long. Incomes and housing values are about half what they are in St. Johns. And life expectancy in Putnam has barely budged since 1989, rising less than a year for women to just over 78. Meanwhile, it has crept up by a year and a half for men, who can expect to live to be just over 71, seven years less than the men living a few miles away in St. Johns.

On one hand, none of this is surprising: more money translates into better health care, more leisure, more exercise and less unhealthy fast food. It is not a shock that individuals in the wealthier county would live longer lives, on average. But the research is notable for three reasons. First, the numbers aren’t trivial. We’re talking about a 5-10% boost in life expectancy for wealthy seniors. Second, it is not just a Florida phenomenon: “Even as the nation’s life expectancy has marched steadily upward, reaching 78.5 years in 2009, a growing body of research shows that those gains are going mostly to those at the upper end of the income ladder”. Third, the longer lives for the rich, like a snarled subway train, cause further inequalities up and down the line. Specifically, longer life expectancies for the rich complicate the drive to raise the retirement age and threaten to turn Social Security taxes into a regressive source of revenue. Here is why:

“People who are shorter-lived tend to make less, which means that if you raise the retirement age, low-income populations would be subsidising the lives of higher-income people,” said Maya Rockeymoore, president and chief executive of Global Policy Solutions, a public policy consultancy. “Whenever I hear a policymaker say people are living longer as a justification for raising the retirement age, I immediately think they don’t understand the research or, worse, they are willfully ignoring what the data say.”

Take a minute to process this. As a bipartisan proposal to bring entitlement spending under control, raising the retirement age to 67 or 70 will enlist the working poor to pay into the system for a few more years, curtailing their retirement years to the single digits, while the taxes they pay will flow into Social Security checks for the wealthier and healthier. A senior with a fatter bank account wins twice—with greater longevity and more years drawing Social Security checks—while the poor work longer, live fewer years and collect less in benefits.

Makes some nice points but healthy habits lead to longer lives. No longer financial but more behavioral—are the truly wealthy (or even just the "wealthier") really suppressing middle and lower class health as well?

[Mad Mike]

Economist op/ed piece

http://www.economist.com/blogs/democracyinamerica/2013/03/wealth-inequality?fsrc=scn/tw/te/bl/yourmoneyyourlife

Makes some nice points but healthy habits lead to longer lives. No longer financial but more behavioral—are the truly wealthy (or even just the "wealthier") really suppressing middle and lower class health as well?

Wealth buys the ability to devote more time and energy to behavioral issues as well as better access to health care. It's not friggin rocket science. :doh:

[Elessar78]

Wealth buys the ability to devote more time and energy to behavioral issues as well as better access to health care. It's not friggin rocket science. :doh:

Apparently in your world it takes a lot of time and wealth not to eat a Big Mac or buy soda by the case? It takes time and money to go for a walk daily? If you do simple things, you won't need (as much) expensive health care treatments.

[Corcaigh]

If you do simple things, you won't need (as much) expensive health care treatments.

But the studies show something more significant.

Health outcomes are worse for the wealthy in the USA than the wealthy in countries with a smaller wealth gap.

[Elessar78]

But the studies show something more significant.

Health outcomes are worse for the wealthy in the USA than the wealthy in countries with a smaller wealth gap.

As Puffy said, Mo money, mo' problems.

I've become the reluctant defender of the wealthy. Sigh.

[Jumbo]

I've become the reluctant defender of the wealthy. Sigh.

How much does that pay? :pfft:

[GibbsFactor]

There's only one way to fix this. Campaign Finance Reform.

[grhqofb5]

There's only one way to fix this. Campaign Finance Reform.

I agree on campaign finance reform, But I would also suggest that protests be organized across several major cities to protest the wealth disparity situation. Even set up camps, stay overnight, have soap box speeches, just be a presence so that the media takes notice. Set up right in front of the offices of the stockbrokers/CEOs/Corporate fat cats if necessary. Shut down businesses for the day, have a general strike. Just try to embarrass the **** out of them on their turf. Get cameras in their faces, be generally annoying, etc., and they'll eventually give in.

On a serious note though, what do you suggest for campaign finance reform??

[PeterMP]

Apparently in your world it takes a lot of time and wealth not to eat a Big Mac or buy soda by the case? It takes time and money to go for a walk daily? If you do simple things, you won't need (as much) expensive health care treatments.

I've written on here before about issues with the poor and obesity in terms of the quality and vaule of the food.

I've said before, rather than eating a value meal from McDs, people that are poor would be better off splitting one and buying a good multi-vitamin. They'd be healthier and save money.

However, there are real issues with being poor and health that are less of an issue if you have money:

1. Time to exercise is an issue. If you are working 2 jobs and have a family, finding time to exercise is going to be difficult.

2. There are environomental issues. There was a piece here posted on lead and violence, and while I am somewhat dubious of that it is absolutely true that places where is still high levels of lead are places where people tend to be poor (and there tends to be violence). People that live in old homes (with lead paints) and in areas where people are poor and so drove leaded cars longer so more accumulation of lead still tend to be poor. And it just isn't lead. It is all sorts of environmental pollutants.

3. The last issue is food deserts- areas where it is diffcult (not impossible) to buy healthy food. I have low HDLs. My solution to the problem, start eating foods that will increase my HDL. If I was poor and lived in a food desert, that would probably be harder.

[Elessar78]

I've written on here before about issues with the poor and obesity in terms of the quality and vaule of the food.

I've said before, rather than eating a value meal from McDs, people that are poor would be better off splitting one and buying a good multi-vitamin. They'd be healthier and save money.

However, there are real issues with being poor and health that are less of an issue if you have money:

1. Time to exercise is an issue. If you are working 2 jobs and have a family, finding time to exercise is going to be difficult.

2. There are environomental issues. There was a piece here posted on lead and violence, and while I am somewhat dubious of that it is absolutely true that places where is still high levels of lead are places where people tend to be poor (and there tends to be violence). People that live in old homes (with lead paints) and in areas where people are poor and so drove leaded cars longer so more accumulation of lead still tend to be poor. And it just isn't lead. It is all sorts of environmental pollutants.

3. The last issue is food deserts- areas where it is diffcult (not impossible) to buy healthy food. I have low HDLs. My solution to the problem, start eating foods that will increase my HDL. If I was poor and lived in a food desert, that would probably be harder.

I'm claiming this post unfair particularly because I was one of the people that bought up the issues of food deserts in another thread. But anyway. Yes with the very poor these are issues. But the income gap also involves the middle class whom have access to decent health care, information on nutrition, and the leisure time to exercise.

---------- Post added March-19th-2013 at 04:32 PM ----------

How much does that pay? :pfft:

It's tough, but if I had to do this for a living a la Fox News . . .

[PeterMP]

I'm claiming this post unfair particularly because I was one of the people that bought up the issues of food desserts in another thread. But anyway. Yes with the very poor these are issues. But the income gap also involves the middle class whom have access to decent health care, information on nutrition, and the leisure time to exercise.

Most everything happens on a sliding scale, even if we can only measure significant differences at the extremes.

[Larry]

There's only one way to fix this. Campaign Finance Reform.

Violates the Constitutional Rights of Corporations.

[Mad Mike]

Apparently in your world it takes a lot of time and wealth not to eat a Big Mac or buy soda by the case? It takes time and money to go for a walk daily? If you do simple things, you won't need (as much) expensive health care treatments.

And apparently in your world the only way someone can have bad health is to eat big macs all day and collect welfare checks.

[Elessar78]

And apparently in your world the only way someone can have bad health is to eat big macs all day and collect welfare checks.

From the CDC

Chronic Diseases are the Leading Causes of Death and Disability in the U.S.

1. 7 out of 10 deaths among Americans each year are from chronic diseases. Heart disease, cancer and stroke account for more than 50% of all deaths each year.

2.In 2005, 133 million Americans – almost 1 out of every 2 adults – had at least one chronic illness.

3. Obesity has become a major health concern. 1 in every 3 adults is obese3 and almost 1 in 5 youth between the ages of 6 and 19 is obese (BMI ≥ 95th percentile of the CDC growth chart).4

4. About one-fourth of people with chronic conditions have one or more daily activity limitations.5

5. Arthritis is the most common cause of disability, with nearly 19 million Americans reporting activity limitations.6

6. Diabetes continues to be the leading cause of kidney failure, nontraumatic lower-extremity amputations, and blindness among adults, aged 20-74.7

7. Excessive alcohol consumption is the third leading preventable cause of death in the U.S., behind diet and physical activity and tobacco. 8

You can roll your eyes all you want and love how you added welfare checks, but that's okay. A vast majority of health problems can be traced back to behavior.

[Larry]

You can roll your eyes all you want and love how you added welfare checks, but that's okay. A vast majority of health problems can be traced back to behavior.

Suspect it would be much more accurate to say "are INFLUENCED by behavior".

[NoCalMike]

I hate the invention of the term "envy politics" because it assumes that everyone wishes they were rich. Would it be nice? Sure, but the truth is, most people don't spend their days being envious of those who are wealthy, nor do they "hate rich people"

They do however see a decline in the value of a hard day's work. People in general are working just as hard as they did 50 years ago, yet the value of their paycheck is minuscule. Some families with 2-incomes are still not making as much dollar for dollar as their parents or grandparents. Purchasing power is down.

It is a hard pill to swallow when people keeping hearing that corporate profits are through the roof, at all time highs, yet the promise of the "trickle" is never coming. The relationship between the employee and the employer doesn't seem to be what it once was.

The investment in this country has turned into investment for one's self.

A lot of rules, regulations, and checks & balances have changed over the last 30 years and that is a pandora's box that will be hard to ever close, especially since the Supreme court has drastically changed the way corporate donors can contribute to politicians.. It is going to be a difficult battle for a politician to stand up for the little guy even if that is what he truly believes in his heart because of the money that will go into his or her defeat. I was pretty shocked Elizabeth Warren was able to win. I'm glad she did, but still shocked.

And how did this turn into welfare and food stamps? Go look at the % that goes to that, compared to the % that goes to subsidies for huge companies and corporations. It doesn't even compare in the slightest, but it makes for a good boogeyman on Talk Radio.