The 'Glass Floor' Is Keeping America's Richest Idiots at the Top
huffingtonpost.ca
huffingtonpost.ca
This would seem to contradict the premise of the article. The talented poor kids would by that argument have no problem breaking into the top echelons of society, irrespective of the resources available to rich kids to attend the best colleges. Reality is somewhere in between.
You're talking about two different metrics there, intelligence and achievement. Ideally the former would lead to the latter, but in practice, I've seen myself and read in numerous places how the most clever people rarely ascend into management, because management doesn't want them in management, they want them doing the work. They do it best.
There's a reason "failing upward" is a concept.
Basically, tech skills are in high enough demand that good tech people are too valuable to be allowed into management
I'm a self-taught autodidact who grew up relatively poor (by first world standards) and attended a mid-tier Midwestern school-- so I do have a BS degree but not one of the top-brand ones that really open doors.
I've worked my way up to doing a lot of the things that top-tier college grads do: working with other top people, working on advanced leading-edge things, and raising angel and venture capital.
There's a catch though: I feel like I've had to work at least twice as hard to do these things vs. someone who graduated with a name brand degree from a top school. I'm also white and male, so if I were female or non-white I'd probably have to work 4-8X as hard.
So yeah, you can battering ram yourself past things like name brand university bias, classism, racism, etc., but it's nice if you don't have to. So my advice to today's young people would be to go to a top tier university if you can do so on reasonable terms. I'd also say it probably matters more if you have other things going against you like race, gender, or a stronger class divide. Having that name brand university will compensate a bit. It's somewhat disturbingly like leveling your character in some kind of MMO.
In most jobs so far I’ve been able to work my way up but always felt I had to prove myself a lot more to get the same outcomes as other more credentialed colleagues.
Got into a reasonably secure position (I’m now 39), but I still have a lot of impostor syndrome moments, and I’m sure I’ll start encountering ageism soon.
Hopefully after I’ve paid the house off.
https://www.scientificamerican.com/article/is-inequality-ine...
>Wealth inequality is escalating in many countries at an alarming rate, with the U.S. arguably having the highest inequality in the developed world.
>A remarkably simple model of wealth distribution developed by physicists and mathematicians can reproduce inequality in a range of countries with unprecedented accuracy.
>Surprisingly, several mathematical models of free-market economies display features of complex macroscopic physical systems such as ferromagnets, including phase transitions, symmetry breaking and duality.
An interesting article that argues that wealth inequality is inevitable in a free market system which does not have non-market measures that counteract the tendency to oligarchy.
I'm always super skeptical of claims like this (disclaimer: haven't actually read the paper), because they seem to make clearly overextended analogies between dissimilar fields. If you're used to studying "phase transitions, symmetry breaking, and duality" in ferromagnetics, then when you look at economics you're likely to see similar patterns - but at face value, we're comparing replicable features of (relatively) simple physical systems to non-replicable macroeconomic behavior. If we could rewind time and run a bunch of population level counterfactual scenarios, then it might be worth taking seriously, but I have yet to see a convincing case for making conclusions about population level systems based on unrelated physical models.
CAVEAT: this isn't to say that models aren't useful. Neither am I claiming that we can't take some insights from other fields. I just think we tend to sometimes forget that the map is not the territory. For example, I could certainly imagine populations undergoing changes between states which we could roughly analogize to be "phase transitions", but I wouldn't therefore conclude that those states were, in fact, fundamental - I'd expect similar dynamics to play out differently depending on context.
Mandatory SMBC Comic:
I think it's not unimportant to remember that Americas economic position in the world was dramatically different then. With the end of WWII, we had the Brenton Woods system, and the Marshall Plan. Those 2 systems drove economic growth, and placed America in the center of it. It was an unprecentented period of economic development worldwide, but especially so for America. The tech boom drove quite a bit of growth too, but it was narrower, and not in the same level of magnitude.
The point is, 1944 - 1991 is a HIGHLY unusual economic state, and it's not reasonable to expect that the mobility that existed then should still exist today.
This part I agree with.
> and it's not reasonable to expect that the mobility that existed then should still exist today.
This part I absolutely do not. Perhaps the social mobility wouldn't be exactly the same, but surely we can do better than the current state of affairs? I wonder how many people could be elevated to comfortable middle class status with all the money hoarded so Jeff Bezos can have over 20 different extravagant homes?
And that's to say nothing for the cost of college going through the roof while conferring even less benefit to people's careers, stagnant wages, ever-rising taxes on the 99% since the IRS finds it difficult to audit the wealthy...
More fundamentally: money is created through debt. Central banks print money to increase the money supply. This money is being used to buy assets to float up the stock and real estate markets. In other words, central banks are a form or corporate welfare for the rich. It doesn't have to be this way. We could print money and use it to build housing for those who can't afford it. That would also stimulate the economy. The problem is that we think of real estate as an investment, when housing is actually a fundamental need.
This can't go on for to long, here in South America a big % of the people I know (20/40 years old) lives with their parents and have no plans to buy real state because the prices are absurd.
This is a very important fact that is so often overlooked. Rent escalates in cities because people own multiple homes / units and are looking to make a profit so the price goes up. In the mean time housing is becoming an increasingly larger portion of the non wealthy's expenses.
Further complicating this is that the less wealthy are forced to move to poorer areas and in many states, schools are funded largely through property taxes. This means the less wealthy are forced to send their children to lower quality schools perpetuating the wealth gap.
I think this is ultimately the crux of the issue. Without rapid economic growth, the only way to make society rapidly more "fair" is to focus on redistribution. I'm actually not completely against the idea either. I can think of a number of institutions, like education, healthcare, and childcare (pre-k) that make a whole bunch of sense to make more "equitable". But I do believe we need to have a level sense about what is reasonable to expect. It's not ever going to be close to the levels we had in the second half of the twentieth century. If we go at it too aggressively, we're risking a lot.
Why not? Lack of inequality wasn't down to Bretton Woods, but to taxation and regulation that were the result of trying imperfectly to learn from the The Great Depression and World War 2.
It's disassembling all of that which has brought us to another gilded age. We're already seeing a rise in extremism and rejection of politics that are very analogous to the thirties. The cult of Neoliberalism from 1980 on, and its socialism for the rich, capitalism for the poor is what is generating the risk.
Not many. A significant portion of the value of AMZN comes from having Bezos owning and operating the company.
As a concept, I don't hate the rich. Some people will inevitably have more than others and I believe it's a solid carrot to dangle from a stick to get people to put in their best. But there comes a point where people are making so much money, to the detriment of the economy as a whole, and it's not doing anything. It's just running up a score for the person involved.
What on Earth can you even DO with 112 billion dollars? There's nothing you can't buy. You could buy everything a few times over and still have enough money to never work again.
And in and of itself, I wouldn't really care, except we have millions of people who can barely afford food, let alone the other necessities. We have diabetics dying because they can't afford insulin. We have combat veterans killing themselves because we broke their brains and don't take care of them afterwards. It should be a source of national embarrassment for us.
If the government seized 75% of it, the government would be left holding 80 billion dollars worth of stock, which they can't really do anything with.
The problem with stocks is that when you sell it you have to have buyers on the other end. This is called liquidity. I doubt there are enough buyers of Amazon out there to sell 80 billion worth, so what is the government to do, just hold onto it? They could try to sell it all at once, causing the stock to crash. Or they could sell a little over time.
I suppose you could create a sovereign wealth fund with the seized assets, sort of like what other countries do with oil reserves (Norway, etc.) But all that does is create a giant, government run investment fund, which will invest in businesses, etc. Not exactly redistribution...
You're thinking very narrowly on the current set of rules of the financial system. That system was created by people, capitalism is not some immutable truth that we've slowly learned over the years. It's a set of systems built by people, and so it can be changed.
That being said, I don't think we necessarily need asset seizure (at least, not yet.) I think just simple taxation would suffice. It seems insane to me that Amazon paid no taxes at all. And on the personal end for Bezos himself, I think a good first step would be capping the amount that can be deducted for philanthropy, not just for Bezos, but for all the wealthy of the country; charity is nice and all, but it's a little odd that we let you deduct it from taxes, no? It's not like 5 million to the Metropolitan Museum is going to benefit society the same as 5 million in tax revenue.
The government seizes securities all the time and sells them with no problem. They probably couldn't sell all 80,000,000,000USD of stock all at once but neither can anyone else.
Money is a medium of exchange and price is the subjective measure of how the market values wealth.
As some comments stated, most of the money Jeff owns come in the form of stocks which is priced at a certain amount, paper wealth, and is not spendable until it is sold and turned into cash.
The real wealth is Jeff’s ownership of all the things that actually produce goods and services for the economy.
Examples are the distribution centers, data centers that run the site, and the army of engineers who produce software and hardware for the company. Arguably, he and his company have contributed a lot to the economy.
Yes, he is obscenely rich but saying it’s not possible to make X amount of money a second is naive because monetary value is a subjective measure.
In Zimbabwe dollars, Jeff makes like a trillion a second.
Remember when the stock market lost trillions of dollars or whatever during the 2007 depression?
That was paper wealth, monetary value that was reflected in the price of actual assets until it all evaporated during the housing bubble.
Borrowers and stock owners lost a lot of paper wealth but lost their dignity more than they lost real assets as borrowers never owned anything and stock owners owned absurdly price stocks that were bound for a correction.
Some rich people killed themselves over this too, which is funny.
I don't know what number should be used to say "this amount will fundamentally change someone's life", but I'm going to arbitrarily pick $50,000.
$155 Billion / 50,000 = 3.1 million.
That's approximately the population of Arkansas.
Similarly, massive redistribution of wealth just further divides society into givers and receivers. The elite will continue to control the government, education, and big corporations and continue locking out the receivers.
In Europe, for example, the same families have been rich and in control forever, because the high income tax scheme protects them from new entrants, while their assets continue to appreciate. The middle and lower classes are supplicated through state benefits, so moving up the ladder isn't as much of a concern.
By the way, I am not against high taxes and redistribution, but people should be totally aware of the trade offs being made. High taxes and redistribution are often sold as "socking it to the rich" but in reality it is the complete opposite and cements the position of the rich.
I agree University reform is absolutely needed in the US. The cost is too high, we subsidize garbage degrees, rich kids benefit the most from it, grades are too subjective (because outside of engineering/medicine objective testing is racist/sexist/etc.) Kick out the legacy students that shouldn't be a factor at all.
Jeff is worth $112 Billion. Amazons total assets are $162.6 B, and it has 645,000 employees.
So if you create Amazon equivalent jobs, you could presumably create 645,000 * (112/162) = 446,000 jobs with Bezos fortune.
However, Amazon jobs with $174,000 assets/job may not be what you consider middle class. If you are talking about manufacturing jobs Ford, for example has $256 B assets and 200,000 jobs or $1,280,000 in assets/job.
So good manufacturing jobs would be more like $112 B/ 1.28 M = 87,500 jobs.
Or, more improbably, that the government seizes control of his stock, sells it to the public, and then uses the $112 B to create new jobs with the same asset per job ratio as Amazon or Ford. Of course, in this case, the $112 B would be frittered away on administrative expense, graft, corruption, etc. and no actual long-term employment would be created.
1. The IRS has admitted that its to hard to audit the rich so it goes after poor people instead.
2. Its much easier to take risk if you have a safety cushion. If a rich kid takes a risk and starts a company, often with his parents capital, the worst that happens is he may have to move back in with his parents. If a less wealthy / poor person takes a risk and fails, there is a very real chance of becoming homeless or so entrenched in debt that escape is close to impossible without bankruptcy.
3. For people with no family support and who's parents did not guide them towards college, if they work 2 jobs and each of those jobs pays $15 and somehow work 40 hours a week at both, that's still only 60k a year, completely upending the argument that those who succeed do so only because they work hard. People are not going to be able to start a business, save for retirement and raise a family with that.
4. The rich can use campaign donations and lobbyists to further rig the system in their favor.
This list can go on forever.
I am not saying its impossible to come from nothing and gain great wealth but the odds are very much stacked against you, regardless of the amount of effort you put in.
It's an oxymoron, but elegantly explained: “When you create a ‘meritocratic’ selection process where the production of merit is increasingly skewed by parental income, you end up with a hereditary meritocracy.” Sums up the situation pretty niceley. I can't speak for the US, but in Germany it's been this way for quite some time. The single most important factor in determining future achievements is the income of ones parents.
We start the "selection process" even earlier than in College. Kids after elementary school (at the age of ~10) go either to the Gymnasium (which gives you a university certification) or Realschule + Berufsschule (trade school). I know some elementary school teachers and hear horror stories of vindictive but resourceful parents suing schools, teachers and whole school-districts because their kids didn't get into a Gymnasium. This has lead to a situation where as much kids as possible get funneled to a Gymnasium, in order to avoid being sued by the parents.
Gymnasium education is being diluted so every idiot in the class can participate. And the young adults that achieve Abitur (Gym-degree) are utterly unprepared for any form of University-Level education, since self-organized learning and critical thinking skills are still somewhat important here. At the universities, the same game happens again, only it's a bit more complicated to influence positions there.
While there probably isn't any bribery happening, to me this reeks of sheer unfairness.
They managed to torpedo the Trump family, and the (hated by the far left) Bidens as well. If this were real journalism, we'd hear about some favorite lefties as well.
* Fun fact: In February 2017, Malia Obama started an internship for Harvey Weinstein at The Weinstein Company film studio in New York City. Good luck reading about that one in an article like this!
"The truth is that, to many people calling themselves Socialists, revolution does not mean a movement of the masses with which they hope to associate themselves; it means a set of reforms which ‘we’, the clever ones, are going to impose upon ‘them’, the Lower Orders. ...
Though seldom giving much evidence of affection for the exploited, he is perfectly capable of displaying hatred — a sort of queer, theoretical, in vacua hatred — against the exploiters. Hence the grand old Socialist sport of denouncing the bourgeoisie. It is strange how easily almost any Socialist writer can lash himself into frenzies of rage against the class to which, by birth or by adoption, he himself invariably belongs."
– George Orwell, “The Road to Wigan Pier” (excerpt from Chapter 11)