View Full Version : deep thoughts about income inequality
If this needs to be moved then go ahead, I had a hard time locating the right spot.
So my deep thought very early this morning as I was looking for my purpose in existence (other INFJ's will understand) was out of so many social issues the deep disease is about upper echelons of companies earning 400 X what the average or lowest paid employee earns. Other issues can be a lot of bandaids. And then I thought that could be my focus in things I do in everyday life or more active ways. BUT how the heck do you do anything about this? There are consumer boycotts of companies who do not have a reasonable earnings ratio. There are limits to receving government bail outs if they do not restructure with something like a 20 - 1 ratio. But really, what do you do? and is anyone already (outside of homeless protesters in front of my capital in Denver) doing something.
I suppose you could criminalize making too much money, or perhaps discourage it by creating tax laws which result in the seizure of all monies earned over a certain "fair" amount.
You could also prohibit companies earning profits over and above expenses in order to prevent disbursements to shareholders, although that might have a negative impact on investment or innovation.
Or, you could nationalize the entire private sector and allow the government to establish a "fair" wage for every citizen to ensure that no one does better than anyone else.
Personally, I wouldn't do any of those things since I believe that the rewards of capitalism lift everyone to a degree that that no other system can match. But maybe that's just me.
I suppose you could criminalize making too much money, or perhaps discourage it by creating tax laws which result in the seizure of all monies earned over a certain "fair" amount.
You could also prohibit companies earning profits over and above expenses in order to prevent disbursements to shareholders, although that might have a negative impact on investment or innovation.
Or, you could nationalize the entire private sector and allow the government to establish a "fair" wage for every citizen to ensure that no one does better than anyone else.
Personally, I wouldn't do any of those things since I believe that the rewards of capitalism lift everyone to a degree that that no other system can match. But maybe that's just me.
Most European citizens would probably say it's just you.
Progressive income taxes were supposed to blunt the excesses of the robber barons, but decades of tax cuts have taken the sting out of that strategy.
Zoe Girl, I'd consider a different profession (or skilled trade), building on the education and experience you already have--female-dominated jobs are notoriously ill-paid.
Most European citizens would probably say it's just you.
Ahhh, comfy capitalism vs cowboy capitalism, which is better? Do the greater market freedoms in the United States create a more flexible, adaptable and prosperous system than the declining welfare states of Europe?
I think so, but then again, I'm not one to believe that I can be lifted up by bringing others down.
Ain't differences of opinion grand?
...So my deep thought very early this morning as I was looking for my purpose in existence (other INFJ's will understand) was out of so many social issues the deep disease is about upper echelons of companies earning 400 X what the average or lowest paid employee earns. ....
I don't think that's an especially deep thought since this issue (income disparity etc) comes up, what, oh maybe 8 times weekly on this board. Look in Public Policy for the discussions.
try2bfrugal
9-26-12, 7:26pm
"The people pass many laws against your kind; always you break them by finding a loophole." - Plautus, 254–184 BC
This kind of issue obviously has been around a long time and will not be resolved for most of us in our lifetimes. I think all we can do is try to make a good living for ourselves as JaneV2.0 noted and focus on being happy. The joke is actually on the super rich. Having a lot of money past around 50 - 75K a year supposedly doesn't make people any happier.
http://www.forbes.com/sites/learnvest/2012/04/24/the-salary-that-will-make-you-happy-hint-its-less-than-75000/
Other than that, if you don't want to send money to soulless corporations with dubious stock option policies and overpaid executives, don't buy a lot of stuff and don't send money to Wall Street when you can help it. Shop local and nonprofit when you can. There are some more suggestions in this thread -
http://www.simplelivingforum.net/showthread.php?5965-Ideas-to-Support-Local-Economy-Not-Patronize-Out-of-State-Coporations
Lifted from one of the aviation boards I frequent.
The parable of the Liberal Farmer:
A liberal farmer picks a bottle and out pops up a genie.
She says I'll grant you one wish.
He says "My rich neighbor has 1000 head of cattle and I only have ten".
Knowing exactly what to do, POOF, 990 head of cattle appear in the farmer's field.
The farmer gets very upset and starts cussing at the genie.
The genie asks; "What's wrong?"
The farmer replies: "Are you crazy??? I didn't want a thousand cattle, that's way too much work; I just wanted you to kill the rich bastard's cattle."
try2bfrugal
9-26-12, 7:46pm
One interesting thing to note is that on a global scale, many Americans are the upper one percent to the rest of the world.
http://www.learnvest.com/knowledge-center/who-is-the-1-well-mostly-americans/
"Well, the global middle class lives on a median income of $1,225 per person, per year. That means a middle-class family of four brings home about $4,900 per year. CNN Money puts things in perspective: ”Even the poorest 5% of Americans are better off financially than two-thirds of the entire world.”
To paraphrase Donald Rumsfeld: "You work within the system you have, not the system you might want or wish to have at a later time." With that in mind, I stand by my advice to keep your eye out for a better-paying field or craft.
ApatheticNoMore
9-26-12, 7:50pm
I always find global scales to be utterly ridiculous. I mean material (and probably *only* material) standard of living is objectively better in 1st world countries, but it's not *THAT* much better, cost of living is just much higher. We have too much, and many have made a case that the only sane way forward is for the 1st world to have less, but apples to apples comparisons on dollar amounts aren't very meaningful (at least compare actual possessions or something, but dollar amounts is just so faulty).
We are the richest country in the world and yet we have probably 50 million living in 3rd world poverty. I am willing to pay more in taxes for programs that would educate and train the poor for better jobs.
I really do not have an answer for the question! I wish I did.
I take serious issue with the quote "we have 50 million living in 3rd world poverty". Have you been to India, Thailand, subsaharan Africa, etc.
Seeing a family living on the pavement in the middle of an intersection with only the rags on their backs and seeing villages living in mud or thatched huts with water more than a mile away and zero health care and not much more food gives a totally different perspective on this issue.
ApatheticNoMore
9-26-12, 8:57pm
Aren't homeless children in the U.S. a growing problem?
I believe that this is like many surveys, the response depends on the wording in the survey.
I beg to differ with the view that this is not a deep question but the responses so far strike me that each is coming from a viewpoint with a bias, not bad or good just different.
Money or number cattle are no real indication of one's worth. Take that fact and really think about it. Mother Theresa had no money or cattle and was considered by many to be quite valuable with her own idiosyncracies as we all do. Neither did Nelson Mandela or Lech Walesa or check this out http://www.toptenz.net/top-10-world-war-ii-heroes-who-rival-oskar-schindler.php.There are so many examples to share.
How many people with money or 'lots of cattle' will be viewed in the same way, with the same respect and for the same duration?
IMHO, in today's world, as in the past, it is how one lives their life in connection with others not separate from others, that determines one's worth. What money will do is ease the daily challenges to meet one's basic needs. If I have enough to meet those needs and some choice wants, I am rich. If some in society suffer unnecessarily due to the isolation imposed by inequable legislation or ill health or aging or family obligations or lack of equal opportunity for education and food, there is a deficit that society should examine and resolve.
Individualism is to be cherished as our contribution to life but when it becomes more isolationistic (look at me!) and judgemental of others, does it becomes something to be avoided or modified?
One potential way, within the existing system, to try to move things in a more equitable direction is to choose to patronize (and therefore support the success of) businesses that do not have such dramatic splits between upper management and the average worker in terms of earnings and benefits. While I do have some issues with certain aspects of their business model that tend to encourage over consumption and waste, for me Costco is a good example of this. The CEO limits his pay to a certain amount x what the average worker gets, and it is very modest in terms of CEO level pay. But he is probably one of the wealthiest guys in town, and has more than enough to keep him happy. Also, with their pricing on their house brand items, their model is to charge 15% over production cost (or maybe the cost of getting it to the store). They get a nice, reasonable profit and we get more salted caramels than we probably need. Anyway, I like their business model and I see every time I go in how happy people are to work there (we shop at the flagship store next to headquarters, which is in a town near where I grew up).
I wish more businesses were run according to these kinds of principals, but it is rare. I have read interviews with the CEO where he talks about how their stock price gets periodically hammered because they aren't doing the kind of stuff that the markets like. But he has a long term view, and hopefullly the company will stick to his principals even after he steps down.
lhamo
Some people make more money because they are worth it. I have a friend who is a promoter, he lost his main artist next year because they were offered 25 million. They were not worth that much to him, but another promoter was willing to pay it. I remember taking bonus checks out to some of my dad's employes. George had a very large one and I remember asking dad why he was giving such a large bonus to him. He said George made the company money, as long as he was making more than we were paying him it was not to much.
Ive always made good money myself. But many didn't want the stress, responsibility, work hours, or just didn't have the ability to do what I did. Sure ditch digging is hard work, but there are many capable of doing it so the pay is less. If you want to make more money you either have to be able to generate more, or work where others don't want to. I believe there are now many good paying jobs either in North or South Dakota due to the oil boom. But you have to move there.
You cannot strengthen the weak by weakening the strong.
You cannot help small men by tearing down big men.
You cannot help the poor by destroying the rich.
You cannot lift the wage earner by pulling down the wage payer.
You cannot keep out of trouble by spending more than your income.
You cannot further the brotherhood of man by inciting class hatreds.
You cannot establish security on borrowed money.
You cannot build character and courage by taking away a man's initiative and independence.
You cannot help men permanently by doing for them what they could and should do for themselves. (http://www.quotationspage.com/quote/29645.html)
- William J. H. Boetcker,
I agree with Jane, zoe. We can only focus on our own lives, our own fortunes. Take the steps necessary to change your life for the better.
This doesn't solve the obscenity of top executives making zillions in bonuses while their front-line employees can barely feed themselves, but as it's been pointed out, this has always been so. They could forego some of their bloated salary/bonus packages and perhaps elevate their charges' standard of living, or keep more jobs here in the United States too ("job creators" I believe they like to call themselves) but that's apparently laughable here in the culture of "People have the right to make as much money as humanly possible." This will not change any time soon, if ever.
You can't legislate decency.
But back to focusing on ourselves: I would prefer to work in a couple of different lower-paying professions because I think they would be nobler and even more fun. Instead, I took classes to elevate myself to a standard of living that allows me to do more good in the world. I'm not wealthy, but I can afford to employ other people and pay them a good wage, and support the charities and other small businesspeople that I respect. And there's a little left over for pizza and beer on Sundays and a little into savings.
I know teachers who love their work, so get by by using some of their skillsets to create small side businesses, like a weekly tutoring gig, or an online business. They find ways to support their choice to remain in teaching, while they build their skills to perhaps make a leap to something else in the future. It is a filthy shame that one of the most important roles in our society is also one of the lowest-paid....but there's no easy answer there either.
As part of my daily decisions about life, I try to keep my money -- as much as possible -- out of the hands of cheaters, liars, people who've treated me or my loved ones poorly, people who do damage to the earth, and these "I have the right to be rich - get your own" types. I lump them all into the category "vermin" and try to redirect my resources to others instead. This is what I - and you - can do, if you feel the same way.
Sometimes, that's just really hard. I am typing this on a computer made by a company that treats its bottom-tier workers very poorly. But they do some good things too, and there's no alternative for me at this moment in time, so I try to make up for it in other ways. We can only do our best.
Elevate yourself, and direct your resources wisely so you're not supporting vermin. If more folks voted with their dollars, it wouldn't be as easy to take advantage of regular folks to support bloated, ridiculous lifestyles so far above the basic needs of human beings. That's all I can really suggest. Hugs!
I wish it worked both ways, LDAHL. I was always oblivious to the very rich until it became obvious that many of them, not content to enjoy the fruits of their rarefied lives, were training their sights on the rest of us. Using imitless fortunes to buy politicians to do their bidding, to destroy unions, Social Security, and Medicare, gut environmental regulations, circumvent the democratic process (see Benton Harbor, MI), and systematically disenfranchise targeted voters. So, as Warren Buffet pointed out, we have class warfare and his class is winning.
Trying to stay on point, unless we're willing/able to emigrate, this is what we've got to work with so it behooves each of us to find the best way to make good lives for ourselves within it.
I am 100% in agreement with those that declare you can not raise the bottom by destroying the top. As attractive as that may be for some it is at best a temporary solution and history offers plenty of evidence that it won't work for long. That said, there are organizations who's practices do not fit with my personal beliefs and values. I do not bend over backwards to boycott their goods and services, but I do take reasonable precautions to avoid supporting them. I do not hold their stocks in my IRA, I purchase products from their competitors as much as possible, I do not promote their products, etc. It's not very sexy, but it seems to me that the most logical first step in this kind of protest is to not support those you are protesting against. If your convictions drive you to do more it makes sense to tell others what you are doing. A picture is worth a thousand words.
On a personal level I think you can use you buying dollars as a vote. There are not always easy or cheap choices, but by choosing smaller businesses you are probably avoiding the mega business trends of high wage disparities. For example, credit unions vs. big banks, local lumber and hardware stores vs. the big box stores, or farmers markets and places like whole foods (they seem to be fairly responsible) vs. the mega grocery chains. I'm buy a little beer every now and then and know of at least two breweries that are employee owned. I found a local craftsman to make my bed frame at a reasonable cost. There clothing manufactures like Ibex that are responsible businesses.
In the big scheme of things it might not made big changes, but maybe it will at least nudge the point along a little.
I am 100% in agreement with those that declare you can not raise the bottom by destroying the top.
It is interesting to note that nowhere in the O.P.'s post was there any reference to "destroying the top." That was a reactionary note injected by others. Asking for income equity is often re-mixed in this way to elicit sympathy for the top 1%, as though making a great income and making decent decisions about other human beings are mutually exclusive. They aren't.
And I agree with Gregg's post -- the key, zoe girl, I think, is to ACT on your convictions in any way you feel you can, in a way that feels right to you. And take a defensive position about your own life to avoid victimhood.
I like the using my voting dollars, that is in my ethics to not bring anyone down but instead address the disparity in some way. Thanks for the tip on Costco, I am looking for that type of information.
I just have to state something that may be obvious to me however I don't think it is part of the discussion. Maybe it is working with low income families and providing child care and seeing the need increase (yes these families work and many go to school as well). So if we take the people on bottom and train them for better jobs then who does those low paid jobs next? What I am seeing (I have had 10 different schools in the last 3 years in a wide varity of income levels) is that people are going to school, doing well, and still not finding a job at the end of it. This includes my staff who trained for specific jobs and ended up staying working with me when they found nothing.
I am just going to keep doing what I am doing, seeing if I can add something even more to my multiple degrees and experience, and being aware of where my money goes.
Frugalifec
9-27-12, 12:18pm
Here is how I think about it... The world has always been full of injustice and probably will be for a long time to come. It seems though that on a whole, things are improving at a glacially slow pace with nine steps back for every ten forward. CIVILization is progressing forward and expanding. It can only progress with people working together for the mutual benefit of all. There is no shortage of people that want to take the shortcut and carve out a bigger piece of the pie for themselves, we see this everyday and they tend to get a lot of attention. At the same time are the unsung masses of heroes that do their part plus a little bit more. They contribute in some small way even if it is as small an act as picking up a piece of litter. Every action we take during the day can have a positive or negative affect on the world as a whole even if it is infinitesimally small. It's like we were all dealt a hand of cards at birth. Some got dealt a great hand and others an impossibly poor hand. We all have the opportunity to play those cards to the best of our ability. The thing that makes me feel so good about this card game AS A WHOLE is that it's more important to play the cards right than to have a good hand. Is it better to have a Cadillac and not know how to start it or a bicycle and know how to pedal it? I believe the whole system we live in is very fragile and easily damaged by greed and corruption, but as a whole it is just resilient enough to heal itself over time and come out a little stronger. We humans slowly learn after many failures and do what works. If this were not true (so far) we should have gone extinct. Look at the progress the world has seen in human rights. It looks to me as nine steps back and ten steps forward.
Maybe it could be compared to becoming FI. A whole lot of small steps in the right direction are better than just one of the very biggest steps you could make. I think we would all like to make things happen with that one big step, that one home run.... but it has never worked that way for me. Any success I had always seems to be from dogged persistence.
So there is my 2 cents, hope it helps.
One interesting thing to note is that on a global scale, many Americans are the upper one percent to the rest of the world.
http://www.learnvest.com/knowledge-center/who-is-the-1-well-mostly-americans/
"Well, the global middle class lives on a median income of $1,225 per person, per year. That means a middle-class family of four brings home about $4,900 per year. CNN Money puts things in perspective: ”Even the poorest 5% of Americans are better off financially than two-thirds of the entire world.”
And many people make money off that differential - but it's slowly evening out.
ApatheticNoMore
9-27-12, 1:06pm
Big picture: we live in a world where it is ok, by the workings of it all, to let 1 billion or so of the people in it suffer and die from poverty and it is more or less considered ok. You were born into it and have probably always known it. Eat your vegetables people are starving in .... and that's a part of life growing up in even the most Norman Rockwell suburb. I'm not trying to oversimply global poverty, I realize it's complex, I just do think it all boils down to that in the end. We live in a world where money is created out of thin air for banks and leant to everyone else at interest (with Qualitative Easing 3, they are pocketing the interest difference and not even lending out). And it is a world where money is funneled upward.
I'd almost advocate direct opt out of the system whenever you are able. Barter with a friend rather than trade, support your local small farmer over agribusiness. But it is very hard to totally opt out of the system.
Money isn't everyones highest value in life, many maybe aren't willing to give more and more and more of their life to chase more and more and more money because they are marching to the beat of a different drummer and always were. Hardly can help it if noone else hears. Mother Theresa wouldn't choose to become Warren Buffet if only she had Warren Buffets talents. Nontheless, if your financial situation is so bad it is causing constant stress, it's true what people say, you might want to find a way to make at least a little more money, for the sake of quality of life.
Money isn't everyones highest value in life...
That is actually a pretty powerful thought. Money won't directly buy security, but it can allow for enough options to let the holder feel more secure which makes it very desirable. Maybe we just need to shift the dynamic a little bit and begin to place a higher value on other things that improve our quality of life and let us feel that sense of security, but don't necessarily cost a lot or need to be mass produced. Essentially that is the kind of thinking that brought alot of us to these boards. How do you spread that to a wider audience?
Here is some context:
http://www.globalrichlist.com/
My DH & I live in a 1600 sf house, built to current code, with fresh, clean water on demand, electricity, the ability to keep warm, safe outside space, access to garden space, transit, stellar health care, responsible government & emergency services, friends, family, and jobs. That is incredibly luxurious living.
We are lucky. Both of us are white, educated, raised by educated parents, and born into this country. Luck of the draw this time around. Last night I ran into a former neighbor, Benito. He's Honduran Carib American, a Merchant Marine. He & his wife lost their Habitat house to foreclosure a few years ago.
I know that no matter what the particulars about his situation with the house are, he did not have family reserves to draw on to help them keep the house. We do have that. The advantages my family have had are a combination of being the 'right' race in this country, and having had these advantages, worked into the 'right' class over the last two generations.
Both of my parents were born into rural working class families that beieved in education & made it happen for their kids, as mine did for us. My grandparents & parents worked hard - but not any harder than Benito's parents & grandparents. This is the level laying field concept playing out in real life. If hard work alone got one ahead, all the immigrant farm laborers I have known over the years would be weathy.
Sadly, my DH & I cannot fulfill the trajectory our parents worked so hard at, which is to help our kids with their educations. Our middle class dream has been seriously damaged by the undoing of the safety nets that my parents experienced, primarily the VA education benefit, and the social good of pension plans. I have never known anyone my age with an actual pension plan, and few of my friends have retirement savings, as we simply have not had enough to direct that way. We are emblematic of the shredding of the middle class, and I am pissed off about it.
In our inequitable society, and sadly getting more inequitable by the year, hard work alone is not enough, never has been. Race, class, gender & phyisical capacity offer earlier starting times out of the gate. To me, that is the root of income inequality played out in real life. Remedy these inequalities, level the playing field, and everyone's hard work will count with relative equality.
This necessitates government action. I alone cannot remedy inequality, or level the field. Governments can. Governments are formalized collective action, and that is powerful. It is appropriate to be cautious of that power; I have empathy with the conservatives who voice this concern. Nonetheless, governments are good mechanisms to organize & direct collective action on the scale needed to remedy inequality, and to give everyone a fair chance to live meaningful lives.
So, appreciate what you do have, extend a hand to those in need, and participate in your government!!!
I wish it worked both ways, LDAHL. I was always oblivious to the very rich until it became obvious that many of them, not content to enjoy the fruits of their rarefied lives, were training their sights on the rest of us. Using imitless fortunes to buy politicians to do their bidding, to destroy unions, Social Security, and Medicare, gut environmental regulations, circumvent the democratic process (see Benton Harbor, MI), and systematically disenfranchise targeted voters. So, as Warren Buffet pointed out, we have class warfare and his class is winning.
I don’t think you need to be a malefactor of great wealth or some plutocrat’s dupe to hold most of those views. Can’t reasonable people oppose mandatory union membership for certain jobs? Can’t they see entitlement programs requiring reform before they collapse under their own weight? Can’t they object to unwarranted regulatory burdens or excessive taxes (understanding that opinions as to what’s excessive or unwarranted can differ)? Can’t they see robbing the next generation to bribe the current one as a moral issue? Are we all empty vessels, waiting to be filled up by whoever buys the most ad time?
Why see villains where there are only people who disagree? Why blame poverty on the existence of wealth?
I don’t think you need to be a malefactor of great wealth or some plutocrat’s dupe to hold most of those views. Can’t reasonable people oppose mandatory union membership for certain jobs? Can’t they see entitlement programs requiring reform before they collapse under their own weight? Can’t they object to unwarranted regulatory burdens or excessive taxes (understanding that opinions as to what’s excessive or unwarranted can differ)? Can’t they see robbing the next generation to bribe the current one as a moral issue? Are we all empty vessels, waiting to be filled up by whoever buys the most ad time?
Why see villains where there are only people who disagree? Why blame poverty on the existence of wealth?
Of course all these issues are fair game for debate and resolution. But now that money is speech (sic), a huge advantage devolves to the plutocrats. We've always had poverty, but shipping jobs overseas by the hundreds of thousands and moving thousands more to "right to work for less" states is accelerating poverty in this country. As far as deficits go, I'm inclined to agree with that great statesman Dick Cheney (sic), who famously said "Deficits don't matter." At least they don't matter as much as some would have us believe. If we had a robust economy and higher tax rates, they wouldn't be an issue.
At any rate, I'm with Redfox. I'm living a comfortable life--thanks to a union-negotiated pension and Social Security--in the ramshackle little house I bought with the sweat of my brow.
In my peak earning years, I was earning more than 400x times what the lowest paid employee in my company was making.
Of course, I had mortgaged my home to help start the company, taken a big pay cut for the first several years the company was in operation, worked 80+ hour weeks to invent and productize our key technologies, all without any firm promise of success. For which I ended up with a fraction of a percent of ownership of an S&P 500 company.
Our lowest paid employee showed up years after the company was established, and likely performed basic janitorial functions.
I took no money out of his mouth by my earnings. My efforts created the very job he had.
I don't see how that makes me a bad guy, or why you should want to boycott my company because we were being "unfair".
Of course all these issues are fair game for debate and resolution. But now that money is speech (sic), a huge advantage devolves to the plutocrats. We've always had poverty, but shipping jobs overseas by the hundreds of thousands and moving thousands more to "right to work for less" states is accelerating poverty in this country. As far as deficits go, I'm inclined to agree with that great statesman Dick Cheney (sic), who famously said "Deficits don't matter." At least they don't matter as much as some would have us believe. If we had a robust economy and higher tax rates, they wouldn't be an issue.
I don’t think our problems can be reduced to Snidely Whipflash and Scrooge McDuck outsourcing jobs to save a few pennies. I think what we are seeing is a collision of rising expectations with declining competitiveness. Our education system is turning out a less competitive product, and our major competitors seem less inclined to engage in ruinous wars with each other than they used to. We quit saving some time ago, and leveraged what assets we did have. You can blame Wall Street or the banks if you like, but there are two sides to every transaction.
While I admire Dick Cheney, I think he was wrong about deficits. Our kids will pay for our profligacy with some combination of higher taxes and inflation. There simply aren’t enough rich people to tax the debt away, and at some point the higher taxes become an obstacle to a robust economy.
shipping jobs overseas by the hundreds of thousands
Of course as previously noted that is moving income from the top few % of gloabal workers to those at the bottom. Classic NIMBY.
As Redfox touched on, many who have accumulated wealth including me have to be grateful for two particular influences in our lives - winning the birth canal lottery and demographics.
DH and I were poor as kids but found fields of employment in high demand and compensation due to the boomer generation creating huge demands for goods and services including power supply, housing, improved healthcare...
,
I am grateful for the opportunities of living in a country with really good systems of food availability, education, banking, justice, fossil fuel supply, transportation, communication, health ...
Demographics gave us the opportunity that we were fortunate enough to have the perfect timing.
Yes, we gambled on real estate and the stock market and won but we didn't have any learning disabilities, any mental or physical health issues, any sense of limitation of potential and we supported each other by never spending what we did not have on hand.
As DH and I have discussed our supreme good fortune, I am convinced that at least 66% of our success is being born in the right place at the right time with the right parents, given the right opportunities due to demographics and we made a success of it.
Malcolm Gladwell has written a lot more on this in one of his books.
My one daughter finished college and her entire class could not find a job in over a year in the early 90's. I believe that many are finding similar circumstances at present for those seeking employment and that makes for inequities. It is not knocking anyone else down or living on anyone else's $$ earnings but the way that life flows.
I make a point of acknowledging my gratitude for the fortunate blessings over my life and never claim that because I succeeded on my individual efforts alone, therefore, everyone should be able to do so as readily as I have.
...
While I admire Dick Cheney, I think he was wrong about deficits. Our kids will pay for our profligacy with some combination of higher taxes and inflation. There simply aren’t enough rich people to tax the debt away, and at some point the higher taxes become an obstacle to a robust economy.
We're a long way from taxes-as-obstacle. Consider the fifties.
Of course as previously noted that is moving income from the top few % of gloabal workers to those at the bottom. Classic NIMBY.
I believe that's the globalist philosophy colloquially known as "the race to the bottom," wherein the goal is obtaining the cheapest possible labor to endlessly bloat profits. Outright slavery would be the best possible labor solution, if you follow that logic.
We're a long way from taxes-as-obstacle. Consider the fifties.
What happens when you compare actual effective tax rates, instead of notional marginal tax rates?
The playing field needs to be level. Most of my income comes from qualified dividends and interest or tax free bonds. Why should I only have to pay 15 percent or nothing. The poor working stiff may pay much more. I am not talking about people who have created something like bae. I am talking about people like me and the money changers (investment bankers, Bain Capital type people). The few thousand shares I own of GE, AT&T etc. do not provide them enough capital to build things. My investment in these corporations is to provide me income at a preferred tax rate.
Currently the deck is stacked in favor of the wealthy.
Edited to add effective tax rate: My effective fed tax rate is not even 15 percent. According to my accountant it was 8 percent in 2011.
What happens when you compare actual effective tax rates, instead of notional marginal tax rates?
My head explodes? http://www.kolobok.us/smiles/other/bomb.gif
The playing field needs to be level. Most of my income comes from qualified dividends and interest or tax free bonds. Why should I only have to pay 15 percent or nothing.
But of course, as a money-changer, you know those dividends are being double-taxed, and thus the lower rate. And you understand the reasoning begin tax free bonds being...tax free. And you understand that capital gains and such aren't indexed to inflation. Etc. etc.
As a money-changer, you understand you can't just pick one number out of context and use it to make your case. Right?
I mean, I'm just a dumb old engineer, and I see how it works...
As a money changer I understand that a dollar is a dollar. I don't care how much GE pays in taxes as long as the dividend they pay fits my needs. He'll the German government takes 25 percent of my dividends before the actual cash is put in my bank account. The theft is a nice chunk of change. But the dividend left is also a nice chunk of change. No I don't get all of the German tax back with the US foreign tax credit. I also receive no benefit from the German government.
Remember that taxes are only one item on a P&L statement. There other expenses such as labor, depreciation, or interest expense that could be fare more than taxes. Corporate taxes have become a political talking point.
This old broken down banker (money changer) is not as sharp as a young engineer but he has been investing in the stock market for a long time and it has been good to him.
Yossarian
9-27-12, 10:10pm
I believe that's the globalist philosophy colloquially known as "the race to the bottom," wherein the goal is obtaining the cheapest possible labor to endlessly bloat profits. Outright slavery would be the best possible labor solution, if you follow that logic.
Not true (or even clever really).
http://3.bp.blogspot.com/-KtXK43b3DzQ/Tr6MbgN2Z2I/AAAAAAAAQNc/Inq0IqAmZs0/s1600/wages.jpg
We're a long way from taxes-as-obstacle. Consider the fifties.
The competitive advantage of being the last intact major economy in the world compensated for a lot in the fifties.
At any rate, I'm with Redfox. I'm living a comfortable life--thanks to a union-negotiated pension and Social Security--in the ramshackle little house I bought with the sweat of my brow.
I'm in a similar position about to move into a new (to us) house having never had union support and with no delusion that SS will be viable in a little over 10 years when I qualify for the first check. All done with no significant advantages or disadvantages. Between DW and I we had four parents, only one of whom had a degree (my Dad). One of us does (her). Both families were economically at the lower end of middle class. Two of our kids have completed their undergrad degrees and we have been able to pay for their schooling. The third is heading that direction next year and we should be ok getting her through without debt, for us or for her, as well. All accomplished without unions or special entitlements or outside support beyond the level I expect the government to provide in return for my tax dollars (public education, infrastructure, defense, etc.). Now, if you want to say we were privileged compared to a Namibian tribesman who immigrates to the US with $4 in his pocket, no education and a dream I suppose you would be right, but what good does that do for anyone? Does it really make a point?
I believe that's the globalist philosophy colloquially known as "the race to the bottom," wherein the goal is obtaining the cheapest possible labor to endlessly bloat profits. Outright slavery would be the best possible labor solution, if you follow that logic.
Slavery would be expensive in modern times. There is no great surplus of food or potable water in the world. The cost of clothing and shelter have risen across the board. Any slave owner would have to provide all that just to protect their investment. Human slavery started fading into history when oil was harnessed. The machines that run on it are far more efficient and require far less care than fragile humans.
Re the chart: it's inevitable that slave wages will rise in a developing country; then it's on to the next slave labor provider. I recently watched a documentary showing Chinese factory workers putting in 14-hour days for pennies an hour. Pretty close to slavery.
"The competitive advantage of being the last intact major economy in the world compensated for a lot in the fifties."
I don't think we need to go back to a 91% top rate, but I do believe we should return to Clinton- or Reagan-era tax rates. Tax cuts as a political ploy have outlived their usefulness.
Re the chart: it's inevitable that slave wages will rise in a developing country; then it's on to the next slave labor provider. I recently watched a documentary showing Chinese factory workers putting in 14-hour days for pennies an hour. Pretty close to slavery.
Well geez, why do that? They should have just gone back to their $40/hr lifeguard jobs.
I don't think we need to go back to a 91% top rate, but I do believe we should return to Clinton- or Reagan-era tax rates.
Not saying that's a bad idea, just curious if you've looked into what the actual revenue would be under Reagan rates vs. todays revenue. Serious question Jane as I have not checked the answer out and it sounds like you have.
...
Slavery would be expensive in modern times. There is no great surplus of food or potable water in the world. The cost of clothing and shelter have risen across the board. Any slave owner would have to provide all that just to protect their investment. Human slavery started fading into history when oil was harnessed. The machines that run on it are far more efficient and require far less care than fragile humans.
Point taken. It makes better economic sense to lock workers from dawn to late night in factories with suicide nets, pay them pennies an hour, and charge them for gruel and dormitories.
Not saying that's a bad idea, just curious if you've looked into what the actual revenue would be under Reagan rates vs. todays revenue. Serious question Jane as I have not checked the answer out and it sounds like you have.
No I haven't. I'm operating on the (simplistic?) idea that a higher tax rate would bring in more revenue, but perhaps off-shoring or loopholes or some other variable would render an increase ineffective.
I'm in a similar position about to move into a new (to us) house having never had union support and with no delusion that SS will be viable in a little over 10 years when I qualify for the first check. All done with no significant advantages or disadvantages. Between DW and I we had four parents, only one of whom had a degree (my Dad). One of us does (her). Both families were economically at the lower end of middle class. Two of our kids have completed their undergrad degrees and we have been able to pay for their schooling. The third is heading that direction next year and we should be ok getting her through without debt, for us or for her, as well. All accomplished without unions or special entitlements or outside support beyond the level I expect the government to provide in return for my tax dollars (public education, infrastructure, defense, etc.). Now, if you want to say we were privileged compared to a Namibian tribesman who immigrates to the US with $4 in his pocket, no education and a dream I suppose you would be right, but what good does that do for anyone? Does it really make a point?
...
Congratulations on your accomplishments, Gregg. I wouldn't bring the third world into the mix. Apples and oranges and all.
Point taken. It makes better economic sense to lock workers from dawn to late night in factories with suicide nets, pay them pennies an hour, and charge them for gruel and dormitories.
It really does - there's enough of it out there as proof. At least in the short term - after the middle classes that these products are being sold to collapse, the whole system is going to fall down. But if your goal is making money now as opposed to trying to maintain a viable system in the long term, that's not an issue.
San Onofre Guy
9-28-12, 11:58am
I've not read the entire thread, but even if one has never been a member of a union, you have to thank unions for wages benefits and working conditions that you enjoy. If not for unions, the philosophy of Ayn Rand would rule the employers.
Unions, yes, and the 40 hour work week, end to child labor, weekends, and so forth.
ApatheticNoMore
9-28-12, 12:36pm
Unions, yes, and the 40 hour work week, end to child labor, weekends, and so forth.
If there were strong unions, most people might still have a 40 hour week. :) The 40 hour week as it stands now is more some kind of ideal, when most professional workers were made legally salaried (ie no overtime ever) that battle was lost. I mean half this board seems to complain about working 50, 60, 80 hour weeks and we still talk as if there were a 40 hour week. Yes, I generally try to get 40 hour a week jobs, but it's something you need to ask about up front or be prepaired to be working many entirely unpaid hours.
It's kind of interesting that union talk is just about as polarizing as Obama/Romney talk. In my experience each side truly seems to believe the other is completely off their rocker. Sorry for the diversion, just something I've been noticing more after spending time with some deeply entrenched union supporters earlier this month.
ApatheticNoMore
9-28-12, 1:46pm
I'm in a similar position about to move into a new (to us) house having never had union support and with no delusion that SS will be viable in a little over 10 years when I qualify for the first check. All done with no significant advantages or disadvantages.
People literally expect us to think about and figure in how viable Social Security will be in 30 year or so when I can finally START TO collect. I don't know. I support the program and think it should be maintained but your asking me to think 30 years and then much more ahead on a program. As for pensions does almost anyone under 40 have a pension? Because I pretty much almost NEVER meet ANYONE who does (I suppose some long time public sector workers may be the exception and I maybe know one!). I mean the not having a pension is normal for generation X and even more Y and millenials isn't it? Nothing special. Having a pension is some odd rarity.
As for priviledge how do you even quantify that? The whole priviledged discussion on the web has gone completely off the rails, apparently there is a single priviledge, it's economic, and it disqualifies your views on every possible matter, not matter how unrelated it is to those economic issues, or something. As if your uncle regularly rapes you with a broomstick when you are a kid (um nothing that extreme happened here), but because your parents pay for college you are priviledged. Well no, you are lucky in one way because you don't have to worry about college debt, and unlucky in another.
Not to worry about economic inequality.The whole world population is about to be reduced to an even playing field.
http://moneymorning.com/ob/faber-warns-everything-will-collapse/
This whole discussion and nobody mentioned Henry Ford? A very large part of his business philosophy was that he needed to pay his workers enough to buy his product. This made him very successful, obviously. I'm not sure where this philosophy is now, but it does seem to be waning. It also seems kind of like the only sustainable (in the long term) business plan for any business that wants to get beyond a niche market. This has little to do with taxes, but a lot to do with businesses. So why don't businesses do this as a matter of course? Why have they strayed from the original model that eventually created a middle class that was one of the wealthiest on earth?
^ Very interesting observation... I wish I had a theory to answer it!
There are so many social factors to consider when it comes to education and motivation to pursue a career which will provide a 'good' income. It's not all just down to corporate policy and government.
There have been various government-led incentives here to get kids from low-income, working-class backgrounds to undertake university degrees or pursue more 'knowledge-driven' (as opposed to vocational) careers. For some reason the government thinks that there should be an equal distribution of people from all backgrounds and races in each area of work and life... These initiatives do not work as well as predicted. When you live in a culture where being smart is 'uncool' or where you're surrounded by people who don't value education or are convinced they're not bright enough to go to university, what are the chances that kids are going to summon the drive and motivation to apply? (Just for clarity, it is currently free to go to university in my country [Scotland] if you are normally resident here. There's no financial barrier.)
I'm not trying to say that a degree = a high-paying job (it most certainly does not) or that it is impossible to improve your income without one, but it can be a sign of valuing personal development and skills development, as well as having the motivation to cultivate these.
I don't know. I work in an institution here which is basically a level below university, bridging a gap between school and university. There are so many students there that lack basic confidence in their own abilities, and it really saddens me because I know it probably arises from the environment they developed in or live in, and will continue to affect them for the rest of their lives.
But then again, some people don't want a stressful, 40+ hour per week job, whether it pays well or not - they want to spend their time doing other things they feel are more worthwhile and may feel resentful having to work more than they really want to, but at the same time, feel like there's no alternative. We are expected to "contribute" to society primarily through work, but when we need something reasonable back from society/government (like affordable healthcare in the US... or a liveable wage) we are not always allowed to have it, even if we feel we've made a decent contribution by working long hours for what we might consider an inadequate wage.
Ok now I'm just rambling.
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As for unions, I am a member of a public sector one. If it weren't for them, the lowest-paid workers (minimum government wage) at our institution would not have been moved up the salary scale to be in line with the UK "living wage", which is a wage set in accordance with the current cost-of-living in the UK. http://www.livingwage.org.uk/about-living-wage The government-set minimum wage is over £1 lower outside London.
ToomuchStuff
9-29-12, 11:04am
This whole discussion and nobody mentioned Henry Ford? A very large part of his business philosophy was that he needed to pay his workers enough to buy his product. This made him very successful, obviously. I'm not sure where this philosophy is now, but it does seem to be waning. It also seems kind of like the only sustainable (in the long term) business plan for any business that wants to get beyond a niche market. This has little to do with taxes, but a lot to do with businesses. So why don't businesses do this as a matter of course? Why have they strayed from the original model that eventually created a middle class that was one of the wealthiest on earth?
I am trying to figure out where people work, that they can't afford the products they make? In your example, the model T was the ONLY car they made at that time, although other brands of cars were out and cost more. I don't think too many Ford employee's couldn't afford what would be their entry level car now.
People who work at McDonald's can afford that product, I think your confusing having more choices (including the choice of not to make wise ones), with income.
This whole discussion and nobody mentioned Henry Ford? A very large part of his business philosophy was that he needed to pay his workers enough to buy his product. This made him very successful, obviously. I'm not sure where this philosophy is now, but it does seem to be waning. It also seems kind of like the only sustainable (in the long term) business plan for any business that wants to get beyond a niche market. This has little to do with taxes, but a lot to do with businesses. So why don't businesses do this as a matter of course? Why have they strayed from the original model that eventually created a middle class that was one of the wealthiest on earth?
I was thinking about Henry Ford in just this context last night. Glad you brought him up. Since the eighties, it's been all about the investor class; workers were thrown overboard. I well remember all the sudden talk about the need to be competitive, blah blah blah. It was no longer enough to make a modest profit, all operating costs (read wages) were to be cut to the bone to maximize return, and there was no end in sight...The race to the bottom began then.
I am trying to figure out where people work, that they can't afford the products they make? In your example, the model T was the ONLY car they made at that time, although other brands of cars were out and cost more. I don't think too many Ford employee's couldn't afford what would be their entry level car now.
People who work at McDonald's can afford that product, I think your confusing having more choices (including the choice of not to make wise ones), with income.
I'm guessing Chinese slave laborers aren't able to buy the electronics they're spending seven days a week 14-16 hours a day making.
I'm guessing Chinese slave laborers aren't able to buy the electronics they're spending seven days a week 14-16 hours a day making.
How many hours of subsistence farming does it take?
These factory workers are being exploited, paid slave wages, and worked around the clock by an industry that could well afford to treat them fairly. Subsistence farming if on their own land couldn't be worse--at least they could feel sunlight on their faces, talk among themselves, and eat fresh food. I don't see how anyone can defend sweat shops, but even outright slavery had its defenders. In theory, Chinese workers can escape these hell holes. I guess that's the difference.
Subsistence farming if on their own land couldn't be worse
You need to get out more or at least to the rural third world more. The moderinzation of China has created a lot of wealth and has lifted millions of people out of poverty. Sure, some goes to the people at the top, but not all. All those people in the countryside are voting with their feet despite your advice. In fact it is probably the biggest social problem that China has- it is better in the industrialized areas and they have huge flows of people from the rural areas to the cities. That creates its own problems, and while that life may not be perfect, their choices are relative.
And it seems they are buying those products.
http://farm9.staticflickr.com/8322/8037070047_4a4608c9bb.jpg (http://www.flickr.com/photos/73138905@N05/8037070047/)
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