The Wealthiest 5% Grabbed Most of the America’s Gains
blogs.wsj.com
blogs.wsj.com
The sad fact is that America is no longer a country that makes things, and as a result we no longer find ourselves in a position to employ people in positions that are actually worth a damn. Or that pay a salary worth a damn.
We still make some things. Software. Circuit designs. Entertainment. Product design (to sell things to ourselves). Pharma. People who work in these areas are paid well.
Oh, and the financial industry. Which, despite demonstrating a wonderful ability to make itself mountains of cash, has failed to demonstrate how it benefits the rest of the country. (obviously, its ability to provide lines of credit is valuable, but we had that long before investment banking came to dominate the entire financial industry)
I remember reading Snow Crash for the first time and coming across this line:
There's only four things we do better than anyone else:
music
movies
microcode (software)
high-speed pizza delivery
This is incorrect. We make plenty of things, more than in most historical periods.
http://research.stlouisfed.org/fred2/series/INDPRO
We just do it more efficiently, resulting in fewer manufacturing jobs.
http://www.ourfuture.org/blog-entry/2010020825/no-virginia-u...
Manufacturing output is up and has increased at a relatively stable clip over the past 50 years. Manufacturing productivity has increased at a faster rate, however.
The US is the #3 country in terms of exports.
Scroll all the way to the bottom.
Long version: It means we import way more than we export... In other words, we buy from others a lot more than we sell to others. In theory, this would create a strong downward pressure on US dollar, but as it is the reserve currency of the world and is backed by giant consumer economy that everyone is selling into, as well as US military might, the pressure is negated.
Some economists argue that this is extremely unhealthy and is unsustainable. I'm not qualified to say if it's true or not. One thing I would say, is look at most countries with a huge positive balance - most are oil producers or cheap(er) labor sources for less skilled stuff. Notable exceptions here is Germany. In fact, Germany is very luck that the rest of Euro zone likes to spend profusely. If not for those other countries dragging the Euro down, their currency would have appreciated exponentially, making their exports way too expensive.
I like my Chinese-made laptop more than green pieces of paper, so it sounds like a win to me.
In layman's terms, we're cashing out our hard-earned savings for meaningless, disposable trinkets. It isn't going to last, and when it's over, it's going to _hurt_.
That's all well and good until the Chinese have all your green pieces of paper, and all you have to eat is your laptop.
This makes just about as much sense as a similar statement does 100 years ago:
"The sad fact is that America is no longer a country of farmers producing food, and as a result we no longer find ourselves in a position to employ people in positions that are actually worth a damn."
A service economy and relative decline of manufacturing output (NOTE: I said relative - manufacturing output is at an all time high) is something to be celebrated, not bemoaned.
When it comes to income, the top 1% includes an attorney making $250K and a hedge fund manager making $10M. I imagine its similar for wealth. My guess is that distribution curves spike somewhere past the 1% mark.
Maybe I'm biased because I barely make the cut and don't want to pay more taxes, but it seems odd to use such an arbitrary cutoff for reporting and (especially) policy decisions.
And please tell me if I'm wrong or off here–I'm geniunely interested in this.
EDIT: downvoted? Seriously?
Absolute percentiles are useful because they do show you where you stand in relation to the rest of society. Families making $250K may not be Scrooge McDuck-style super-rich, but they're indisputably in the top few percent of the nation in terms of income. It's hard for those folks to claim to be middle class when 90+ percent of their fellow citizens make less.
It's also worth noting that people's lifestyles and "necessities" expand to fit their income, particularly if their income goes up relatively gradually. I've literally heard people say, "Well, I make $400K a year but I'm not rich because it costs a lot of money to pay mortgage and taxes in Westchester County and send my kids to private school and drive a nice car." They think that "rich" means "disposable income I can spend a whim," when in fact living in Westchester and sending the kids to private school is part of being rich.
[1]http://en.wikipedia.org/wiki/Pareto_distribution [2]Unless you look at the bottom end where you may find welfare trap effects http://en.wikipedia.org/wiki/Welfare_trap
I don't disagree with your first 2 statements. Here's my beef with "pay more taxes":
- The top 5% of earners already pay 53% of the nation's income tax revenue. The top 1% pay 33% of it. Exactly how much would you like it to be?
- Those in the top 5% are in a higher tax bracket already (usually 33 or 35%).
- 40-50% of americans pay no federal income tax (only payroll tax) and 10% receive more cash from the IRS than they contribute in federal income taxes and payroll taxes.
So, please, tell me what those in the top 1%/5% should be paying?
If you believe theologically, ideologically, or otherwise that "all men (and women!) are created equal" then it follows they should pay equally. I would argue equally means normalizing their income against their position on the income scale so the taxes "hurt" them the same as it they "hurt" everyone else.
It is well known that 10% of the income of someone below the poverty line is a serious hardship, but 10% in the top 1% of earners is not (although it still hurts). If you normalize the taxes based on the income distribution you can cause the amount of economic "hurt" to be equalized across society. This means that the top %1 will pay much more in taxes than perhaps the bottom 90% or even 95%. However, the "hurt" they endure will be equal.
>> If you believe theologically, ideologically, or otherwise that "all men (and women!) are created equal" then it follows they should pay equally.
On this, I'm not sure how you can come to that conclusion. I'm assuming (possibly wrongly) that you're referring to the DOI, which states:
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
This seems to refer to equal starting points, equal liberties, and equal opportunities–not equal amounts of wealth or income throughout life. I think "pursuit" is a key word here. We should all be free to pursue what makes us happy, but there are no rights or guarantees that we will get it.
So you are saying all americans have equal starting points/liberties/opportunities?
(note that this is not a matter of argument - this is quite clearly settled. Of course you could question if it should be like this, and if we shouldn't change the meaning of 'equal' into more positive rights ('affirmative action' etc); I'm not so much interested in debating that. I'm just pointing out that for broadly-accepted definitions of the terms you use, your argument is flawed).
You miss this point because the mendacity is useful to the very rich, who pay their henchmen in Congress and the Murdoch media companies to repeat it endlessly.
Add the fact that most of the whales out there pay a much lower marginal rate than you or I makes it all the more impressive that they carry so much of the load. It's a stark sign of the disparity.
You should pay as much tax as is required to lift the rest of society to (or close to) your level (of lifestyle/income etc). (obviously "your level" will decrease as you pay more tax).
That's the IDEAL it is of course highly impractical. Most ideals are. :(
Just because you got given awesome opportunities (good school, good family, good race, good society, whatever) and even if you worked really hard, doesn't mean you deserve to hold disproportionate amounts of wealth compared to those that didn't get those things.
I have a friend who is roughly the same age as me, same race (white), parents were the same class, and we grew up < 3 miles from each other. Yet he is the laziest eff'ing slob I know. His wife works part-time, he collects unemployment and makes no attempt to train or find a job. They live in subsidized housing and make ends meet via welfare and taking advantage of others' charity.
I'm curious how you argue that all of society (including people like this) should have their lifestyle increase in perpetuity.
You can always find fringe cases where people are undeserving and insulting to a particular system. But the system shouldn't be defined by the few.
For every one person you find, who is a lazy slob, I bet I can find three people who want to work, want to make something of it but just don't have the means to get out of the rut they are in. (presumptuous I know, and I can't really back this up, but I'd like to believe it is true).
How about I flip that then, the wealthy robbed the people to generate their wealth, and then complain when they have to give (some of) it back.
It is very rare to find a company that isn't exploiting someone along the chain in order to generate that wealth. Of course capitalism renames it to "surplus value", but it is in fact exploitation (people being paid less than the value they add).
Do you really think an individual is responsible for all wealth they generate? So, if Steve Jobs was born in china, and lived through the cultural revolution, he would have still built Apple (or equivalent) and been the success he is today. Because society and the services around him had nothing to do with his success?
People don't generate wealth for themselves, they capitalise on opportunities provided to them. The U.S provided a lot of opportunities to a minority of people, who then capitalised on it. But their wealth wouldn't exist without the opportunities being available and thus they should pay tax (proportional to the amount of wealth they have generated) so that the U.S (government) can provide more opportunities to more people.
The good news for is that a standout non-lazy person will raise much more revenue than a stand-out leach will be able to take.
Of course this is a problem, because how can you expect people to abide by law they cannot understand? Worse, how can you communicate to people that they're incapable of understanding without being (or even just 'coming across as') condescending? I don't know, I don't have an answer. But when people like this: http://www.nytimes.com/2009/05/03/magazine/03european-t.html... show being absolutely oblivious to the mechanism (people who are for the rest presumably quite intelligent, and who - professionally - spend quite a bit of time on a piece like this), how can we expect the average citizen to really understand?
I guess it's a recent problem too - just 50 years ago people just listened to their banker about financial things and their doctor on medical things, and believed whatever they said, but we've long passed that point.
I honestly have no idea what this number would look like but it must be non-zero. Everybody wants to fit a picture of a fat, stupid, cartoonish banker gambling away grandma's pension and getting a mammoth bonus into this slot but how much is that the case? If the number's not zero, then its something. How much?
Its not completely outside the realm of possibility that the 5% created nearly all of the gains and then only grabbed most. Net win.
http://rortybomb.wordpress.com/2011/03/18/the-federal-reserv...
WRT manufacturing: http://rortybomb.wordpress.com/2011/01/21/immelt-ge-capital-...
But that's not what happens.
The top 5 percent may create some gains for the other 95, but their gains that "trickle down" do so very, very selectively, and only go so far. Probably the most obvious evidence that trickle-down economics doesn't work is this:
The share of wealth held by the bottom 60% dropped 7.5%.
When over half of the people are on the shrinking pie side of the table, it's pretty tough to spell "Net win"
I.e., if I become 10% richer, but some other guy becomes 20% richer, my share of the wealth is lower but I'm still wealthier.
Before anyone assumes that 'positional goods' means "biggest house on the block" or "huge speedboat", I might point out that "a house to rent/buy in a high school district that doesn't completely suck" and "time with a competent doctor" are a couple examples of de facto positional goods.
I'm aware that we could see a big increase in the supply of that latter in theory, of course... but I'd be willing to bet that it'll be quite likely to see big-screen TV halve in price in the next 5 years, or a mid-market car add most of the features of a 2011 luxury car by 2016, etc. I'd also bet that the relative pricing of good educating, lawyering or doctoring goes up in the same time frame, even taking into account innovations in these spaces (Khan academy, do-it-yourself legal stuff, ...)
Distribution of positional goods is determined primarily by position - the bottom 10% are always stuck in last place for positional goods. There is nothing you can do about that short of making everyone's wealth identically equal.
It it has, then it COULD be a net win. Example: Pie consists of $100. I (rich guy) have $50, the rest of the folks (5 people) split the other $50, and have $10 apiece. I cleverly invest abroad and double my money. I now have $100. The rest of the folks invest less cleverly, and turn their $10 into $12. Their share of the wealth declines, no?
They might be making less inflation adjusted dollars than their parents did in the 70's working at the Ford plant, but how many 1970's dollars did it take to buy an iPad, or laser vision correction, flat screen HD tv, cable with 500 channels etc etc? (1)
Steve Jobs is a billionaire. I make less programming than my dad did at my age as a lowly salesman. But I have so much more. I'm OK with that.
(1) I don't mean what would the inflation adjusted price of the iPad be in 1975 or whatever. I mean all the money in the world in 1975 couldn't have bought even one seeing as how they didn't exist and all. "The Pie" is more than dollars.
IANAE, but I don't think wealth creation works like that (the Randian hero as the engine of humanity). I'm inclined to think that parents are the greatest wealth creators, followed by teachers
http://economix.blogs.nytimes.com/2010/05/21/who-creates-the...
I think some things should be rewarded. If you find a cure for cancer, you deserve to be rich. But even then, maybe a couple of million $ would be enough, even if what you gave to society is worth trillions. Perhaps related: Joel Spolsky's article on how to compensate an intern who created a lot of value for the company. Can't find the article atm, but I think he ended up giving hardly anything. Cancer researchers are just interns of society, when seen from space.
On a tangent, I find it curious how we all seem to have been brainwashed somehow into taking certain assumptions _automatically_ for valid that then frame the entire discussion.
I mean, where does the connection between "what you gave to society" and your financial profit come from? It's not at all clear to me, on second thought, that they are connected so closely. Also, what exactly does it mean to "give to society" when your (more neutrally formulated) net effect on your environment is determined not just by "effort" but also by randomness and by the very environment you interact with? Finally, it's not clear to me that everything can be quantified (in the special sense of putting a competitive market value on it). The concept of value is, I suspect, a strict superset of "monetary value", and it's important we understand (as a society) better what are the special conditions under which a mapping to "money space" makes sense.
Big, hairy questions, sure, but to give a concrete example for the last one: Since when does it make sense that the "performance" of museums or orchestras is measured in how much tickets they sell? (Incidentally, see how far today's terminology is off?) Yes, I can't pull a better answer out of my hat right now but I _am_ quite sure this question itself is framed in the wrong way because we already presuppose the applicability of concepts like "competitive exchange" and "valuation".
Don't get me wrong, I'm a big believer in competitive markets, private property and responsibility, and entrepreneurship. The thing is, I feel more and more that this type of thinking can only be applied to a subset of political issues, it is not a universal acid. And I just got reminded of how deep these issues are because even in your post, which goes generally in the same direction I am currently thinking, I can see certain ideas "embedded" already.
There's a group of people who like to paint the picture that the US is devolving in to a Dickensian nightmare. There is always room for improvement, but as someone who lives here and has traveled extensively I don't think you can say that "lots of people live in squalor".
Sure, we have 300+ million people, so you can find people who are homeless and living on the street, but that would still be the case even if the government offered unlimited free housing.
To be honest lots of stories from the USA sound disturbing, but then again I can not claim to know every corner of Germany. Perhaps there are lots of people living in squalor here, too.
That being said I know where one is and I've been there working with a local church organization. It's in the woods behind a local shopping center, and at any given time there are about 15-20 people living there.
The church helps out the best they can, but the vast majority of the men living there wouldn't leave if they were offered free housing. Most of them have mental issues, and the only way to really get them out would be involuntary commitment.
In short, it's ridiculous to find a tent city somewhere, film it, and use it to claim that America is devolving into Calcutta.
Are you saying that there is no problem in the USA, no financial crisis etc? Because I have been hearing other things - but I know the media likes to hype, too...
I'm fascinated with how technology has changed rural life, so I like to visit small towns just to observe. For instance 10 years ago I noticed fairly substantial differences in the way teenagers from rural areas dressed compared to suburban teenagers (i was a suburban teenager at the time). Now the differences, in apparel are closing rapidly. Also, when I was a kid and the Nintendo 64 came out but everyone was out of stock. All you had to do was drive to some small town (Hazlehurst, GA) Walmart to find one. Now because everyone is so connected, that same Walmart had a line out the door on the day the PS3 was released.
I'm also the type of person who likes to go to a city with no plan in mind and just wing it. A few friends and I, went to New Orleans about 2 years after Katrina, we got a hotel near Bourbon Street, but we spent most of our time just walking. We walked for miles, covered a huge part of the city, and definitely ended up in some places where we probably shouldn't have gone.
In summary, yes I've definitely been in places where one would expect to find tent cities.
I'm not saying they don't exist, but if you do find one, it's likely to be just a handfull of people living in the woods, not what I'd really call a "tent city."
Also there is a problem in the US, there is a financial crisis, but the average person gets up everyday and goes to work. They may be worried about the economy, but no more than the other stuff the 24 hour news warns them about (you know--child murderers, plagues, terrorists etc...)
If you started off wealthy before the real estate crisis, and just stayed in cash, your wealth in absolute terms would decline slightly as your house lost value and your super-conservative cash holdings earned you 0%.
In relative terms the guy who bought with no money down, easy mortgage guaranteed is now seeing his total wealth delta in severe red, so yeah, the wealthy ones are seeing their proportion rise by staying stable.
http://en.wikipedia.org/wiki/File:United_States_Income_Distr...
Ahh, if only i didn't have an english major for a live in girlfriend.$100,000 or more; percent in group: 6.24%
http://en.wikipedia.org/wiki/Personal_income_in_the_United_S...
1. The bottom is worse off relative to the top in terms of wealth than they were before.
2. The bottom is worse off in terms of wealth (quality of life) than they were before.
People seem to imply 2 when they talk about 1. but they are very different things.
But showing the data that the top has increased their % share of the wealth does not prove that.
http://research.stlouisfed.org/fred2/series/USHOWN
http://en.wikipedia.org/wiki/File:U.S._Uninsured_and_Uninsur...
http://www.newyorker.com/online/blogs/johncassidy/2011/09/po...
(More to the discussion in the article, ) As long as we continue to structure tax cuts as we do, and as long as an attempt to get the wealthiest top percentages to pay at least as much as the middle class in taxes (on a percentage basis, mind you) is called "class warfare" by the GOP, it's not likely to change (the response to the "Buffet clause" in the last two days or so). It's not hard to understand how our politician's priorities influence the outcome embodied by the title of this post...
Which just means that income is an inadequate measurement. How many Americans would prefer to live in 1975 than today?
It is my understanding, citation needed perhaps, that over all cost of living was lower in 75. So perhaps there were no iphones, ssd hard drives, big screen plasma televisions, xboxs, etc. but on a single income (not one of our 100k plus incomes but a regular joe income) you could likely afford a home, a nice car, etc.To give an example that affects most people in small ways: in 1975 I would be wearing heavy, uncomfortable glasses all day, and would fully expect to wear dentures after a certain age. Instead, my vision has been corrected to be perfect and I will almost certainly chew my last meal with my own teeth. My Dad had cataract surgery a couple of years ago: the new lenses are so great that he no longer even needs reading glasses. They had cataract surgery in 1975, but not with the kind of results my Dad experienced.
To give an example that affects a smaller number of people in a bigger way: since 1975, survival rates for many types of cancer have increased dramatically. Similar effects for heart disease.
I'm not trying to say that all of the increases in cost of health care are due to increased availability of treatment options, but it's almost certainly a big driver. Would you accept a health care plan that charges 1970s rates (in real dollars) but restricts you to 1970s medicine? If you are young and healthy, it might actually be a good deal, except for the dental plan.
But that's clearly, obviously and without question BULLSHIT (when you look at what you can actually do with that money, rather than just look at inflation-adjusted dollar numbers). A typical American male in that income bracket today has a house that is larger and much more comfortable than back then, has access to a much broader range of food, can communicate with anybody anywhere in the world instantly, carries in his pocket a device to communicate with people he knows in a much more efficient and convenient form than whatever was available 30 years ago, has a higher life expectancy and better access to information (not to mention that the information that is available is vastly more), etc etc.
What would you prefer, being Louis XIV who lived in a castle with no bathrooms (everybody shat where ever they happened to be standing and there were servants to sweep it up) or in the typical house of somebody in the West in the 20th-40th income percentile today (with running, hot water and functioning plumbing, electricity etc?) Or even being an early 20th century rich businessman/socialite in NYC, where the health circumstances even for the very rich were vastly inferior to what is now available to everybody except those at the very bottom of the socio-economic ladder?
Sorry it's such "obvious bullshit" to you.
There isn't the clear separation that you are putting forward here.
If what you say is true then that is the argument that needs to be made before reaching that conclusion, that's all.
However I don't think it is so outrageous to point out that the wealthy have increased their wealth considerably while income among the poor has remained stagnant, and then leave it at that. Egalitarian ideals are still alive and well, and you don't have to be particularly leftist to think that huge gaps in wealth allocation are symptoms of a dysfunctional market economy.
This could simply be responsible reporting, with some food for thought but mainly leaving it to the reader to draw his own conclusions.
Why? The pattern of variation seems no different than for any other skill. What causes people to react so strongly when the skill is making money?
I'd offer this passage from Robert Wright's The Moral Animal as one answer. This assumes the distribution of wealth serves as a proxy (inexact, even inaccurate, perhaps, but functional) for the distribution of access to sexual resources among males:
Men have long competed for access to the scarcer sexual resource, women. And the costs of losing the contest are so high (genetic oblivion) that natural selection has inclined them to compete with special ferocity.
http://books.google.com/books?id=MuI_DVZ1Xo8C&lpg=PP1...
So the argument goes something like this:
Material resources (wealth) provide access to sexual resources and reproductive success (any organism's raison d'etre). An organism hard-wired to persist its genes will probably also be hardwired to recognize the existential threat presented by unequal access to the resources required to persist its genes and take radical action to avoid it. Since among most animals (including humans), females make a greater biological investment, they enjoy the privilege of selecting among males, preferring those with resources to best provide for their offspring, which puts males in the position of scrabbling to accumulate the resources necessary to win the affections of a mate.
That probably leaves out a few necessary premises, but if you're not familiar with the argument, hopefully you at least get the picture.
Wright makes the point that a society in which there is such radical inequality of wealth that a significant number of men have not the resources to attract a mate, settle down, and marry, also tend to be the most violent and unstable.
If you had a society in which there was radical inequality of wealth, but not radical inequality of access among young males to mates, you would expect less instability. But allowing for the shortcuts in reasoning that evolution might encourage, you'd still expect some. And as various behaviorial economic experiments have demonstrated, humans seem to have a tendency to reason about fairness in relative rather than absolute terms. So in such a society, you'd probably still have a greater threat of instability than one where there was a more equitable distribution of wealth -- and, especially, the perception of it.
The truth is that for the middle class and above, social intelligence, wit, charm, "Game", and other characteristics matter as much, or more, than raw financial net worth. Of course, these are often correlated, but there are plenty of broke bikers, musicians, and womanizers doing quite well too, in comparison to Aspie SW millionaires.
I think wealth is more equal to total free time left on the planet. So total time minus time spent working to provide things for survival minus time spent surviving (like cooking, sleeping, running from lions). The washing machine is invented, lots of peoples' wealth skyrockets. Food gets cheaper, people's wealth goes up.
Looking at income is a short-sighted definition of wealth.
Don't be surprised when someone talks about the money they've made. They think they have it rightly, just as many feel slighted. No shame in the game of the wealthy.
Things shouldn't go to people "according to his need".
But now things are going to people "according INVERSELY to his need".
Endless claim checks on future productivity are being stockpiled by precisely those who have no need of 99% of that productivity. In many cases they also have very little future, because they are old.
Politics is bought and paid for. People will not pay taxes. Inflation must now be used as a regressive wealth tax of last resort. At least it transfers purchasing power from the old to the young.
Poor people should, if they were intelligent, stop spending their disposable income and use it to buy the thing that gives the best return on investment - which is bribing politicians. And no, corporations aren't people, and money isn't speech.
Many people living in the SF bay area for example technically belong to the richest 3-5%... But cannot even afford a nice house here.
And with "nice" I do not mean a pool, 10 rooms. movie room, etc, but just enough rooms for the kids and in a neighborhood with good schools.
Now I have a very liberal viewpoint, and above categorization mostly fits me. Still I personally do not mind to be taxed a bit higher.
But all that talk about the richest 5% living the life of riches is just not accurate.
It's relative. You seem to define rich as basically being able to spend whatever you want and not have to worry about money. As another commentor has stated, being able to own a home in an area like the SF bay area is rich. It is a very desirable area, with good climate, and jobs.
examine this condition more closely. you will be surprised and disgusted.
Of course, it's perfectly fair to say that the disparity is important whether or not the same people are involved year-to-year or not. I'm not trying to get into that part of the discussion. I'm simply trying to point out the difference between stereotypes and averages and real, live people. There are lies, damned lies, and statistics. (old joke)
http://www.frbsf.org/publications/economics/letter/2007/el20...
It stands to reason, then, that if the children of top earners are likely to stay in that income bracket, that people in the top income bracket are also likely to stay there.
Notice that the top 4% mentioned in this article fit quite comfortably in the top 20% of income earners. And through extrapolation, I imagine that the movement among the top 4% is even more severely diminished. It would be truly exceptional for even the child of someone in the top 4% to find themselves in poverty or for that matter the middle class.
[1] http://www.economicmobility.org/assets/pdfs/EMP_Across_Gener... (PDF! page 5)
As you should see, it's not really that simple to say "39% stay and 61% fall out." While technically correct, falling isn't equally distributed over the other quintiles. The children of the top quintile are only 9% likely to fall in the bottom quintile and the children of the bottom quintile are only 6% likely to rise to the top quintile.
And really, the top comment was trying to claim the parents migrated income brackets. The numbers here are about children inheriting the incomes of their parents. This data strongly suggests the wealth gains over the past decade are in fact concentrated in the already wealthy. Not only that, but it shows the concentration of wealth has momentum that lasts for generations.
The United States today still has tremendous opportunity for income mobility compared to many other parts of the world and other parts of history. But these articles are showing a disturbing trend that this may not be sustainable.
I only said there was a 58% chance they'd rise out of poverty, by which I meant they'd rise out of the bottom quintile. I think that being born dirt poor, and moving into not dirt poor is a very good goal for the majority of people.
Also 6% of people born into poverty eventually make it to the top quintile, that's higher than I would have expected.
We shouldn't pretend that wealth doesn't give huge natural advantages, but we also shouldn't pretend that we are going to be able to eliminate those advantages without eliminating wealth.
Any attempts to change this system gets vigourously branded 'socialism' both by the media (fox news) and by republican opposition which also has historical connotations harking back to McCarthyism and the Cold War ...
I don't think this is going to change anytime soon unless we see some sort of systemic collapse ... I would argue that this is possible ...
very wealthy: anyone with net worth exceeding $10M.
wealthy: anyone with net worth between $1M - $10M
upper middle class: anyone with net worth between $100k - $1M
middle class: anyone with net worth between $10 and $100k
poor: anyone with net worth < $10k
the very wealthy seem to fall into one of two groups: successful business owners and venture capitalists on the one side, and bankers, traders, and some classes of lawyers on the other.
the wealthy and middle classes all seem to consist of professionals and small business owners, who have met with varying degrees of success.
the poor consist largely of immigrants, people living in impoverished urban and rural areas, as well as people without a trained skill.
here's what i think is happening: a group of the very wealthy, mainly those on the banker-trader-lawyer side of the divide, have this country by the balls. they have accomplished this by having their politician friends (how many politicians are former lawyers? and how many came from wall street? ok, now how many are former business owners or venture capitalists?) convince the poor that the "rich" are responsible for their plight. to fix this problem, they propose raising taxes on the "rich."
this proposal invariably means raising income taxes, which the very wealthy rarely pay because their income is mostly in the form of capital gains. the democrats propose a tax raise, the poor vote them into power, and income taxes go up. the wealthy and the middle class both feel like they're getting fucked, probably because they are. so they fight back, saying they want to lower taxes, reduce government spending, and cut social programs. the republican party says they support these ideals, so they get this type of vote. once in power, the republicans pass a tax cut on both income and capital gains taxes. they also increase government spending, because, hey, why not, fuck you buddy. the poor see this response and it confirms to them what the very wealthy have been saying through their proxy politicians, so the fight goes on.
if this process is going to stop, we need a new word to describe the members of the very wealthy who are contributing nothing but misery to the economy, whether by gambling with other people's wealth and getting bailouts when they lose, or simply by using the broken legal system as a weapon to extract wealth from the venture capitalist / successful business owner side of the divide. if we had a single word to embody this concept, i think more people would become aware of the distinction between the 'productive rich' and the 'destructive rich' and we could fix the problem. since 'destructive rich' isn't exactly catchy, i propose we call those people 'dicks.'
If we had a flat tax (say, 20% on both capital gains -- short and long term -- and income tax), we wouldn't have any of this nonsense. But then, we'd have a lot of out-of-work lobbyists (read: politicians in 'retirement') and people who work for non-profits and charities...
No I wouldn't. The ones who are getting most of the benefit should be paying the most for the service.