An Idiot's Guide to Inequality
nytimes.com
nytimes.com
What Oxfam is saying is: if you rank people by wealth on the x axis then plot their wealth of the y axis, the integral (sum, or area under the curve) of the function on the first half of the graph is equal to the integral on the last 85 points. Try actually drawing it, it might help you understand.
Doesn't make the fact not-disgusting, just slightly less so.
EDIT: Wow, 5 corrections in two minutes.
Why?
It uses netto worth so for example academics with student loans and good social security or the bancrupt industrial tycoon are worse off than the indian farmer with his small farm.
It's gotten to the point where not even poor people are willing to listen or support many of the policies that promote their well being while not being a significant burden to anyone.
The poor aren't supporting policies that promote their well-being? Without evidence, that straw man is pretty easy to knock down.
- The US is, among the developed nations, the one with the highest income inequality, and growing - Unlike practically all wealthier and a remarkable number of poorer countries, the US has no social safeguard for people in case of medical emergencies. People die from not being able to pay medical procedures. And this is objectively a bad thing, from every possible metric. - The inequality in education among the rich and poor impedes social mobility, again in a manner unheard of in many places. - Countries who have succeeded or are succeeding in closing the inequality gap do so through a set of consistent, well-researched policies which all have the same effect and lead to overall greater quality of life. - The power of law enforcement in the US has fewer and fewer checks, leading to the police to have an oppresive attitude towards the populance which, when combined with the privatized prison system, leads to the highest incarceration rate in the world, not coincidentially led by poor people, with an astounding amount of non-violent offenders.
This list can keep growing as long as I have time, so I'll just leave it at that and conclude the American working class has a naive to nonexistant notion of class struggle and suffers tremendously because of it.
This "fact" always annoys me. Yes, Medicare can't directly negotiate with drug companies. However, there are two mechanisms that provide substantial discounts for drugs that Medicare buys.
1. All drug manufacturers must report the price they sell their drugs for to the government every quarter. That data is used to create the ASP (average selling price). This is the price Medicare pays. If a drug company starts offering discounts on their sales to private insurers, that get added to the ASP.
2. For drugs covered under Medicare Part D (pharmacy benefits), there is something called the "donut hole" where a patient has to pay the full costs of the drug. That is being phased out by 2020. Drug companies will have to pay for the donut hole themselves. The discount varies with the drug price, but for example, if a drug costs $5000 in a year, drug companies will have to pay $1300 of that back to the government.
So yes, Medicare doesn't directly negotiate with drug companies, rather they legislate big discounts.
its not just anecdotal either, numbers have shown that those that already have educations are the ones that are mostly uses these resources. for a very large amount of the poor, i feel its them, not 'us'. the opportunities are there, and america may have disadvantages for those not well off, but we certainly have more poor people than whats justified by those disadvantages.
we created a system where people who are smart and ambitious can thrive. we also created many opportunities in that system, and those same people are the ones that take advantage of them. I think thats a huge part of this 'gap'.
the 2nd part happens to be with the time that we are in. most of this 'wealth' has been either inflated up by the fed's massive additions to the money supply (which does only help the rich but it is fully implemented and endorsed by democrats) and annother reason for the gap is the internet barons of the present age.
back in the late 1990s, bill gates was worth more than the bottom 50% of the country. if figures like that are still withstanding, how do you think its distorted now that we have brin/page, zuckerberg, bezos, etc etc?
America used to have first-rate public schools. So did many other Western countries. A lot of the early computer pioneers from the late 40s to the late 60s came up through that system, and it's a fair bet that technology would have developed more slowly without it.
But for some reason teaching the proles to think and improve themselves doesn't meet with universal approval, and public education now is much less generous than it used to be.
At the same time there's been a constant propaganda onslaught from low-information media that shapes perceptions about what's interesting and important, and that media menu doesn't include learning cool stuff for fun or for profit.
So people end up educationally damaged and demotivated for a reason. Pigeon-holing them as 'lazy and unmotivated' is a very lazy way to misunderstand what's happened to them.
This instinct kicks in on such a low cognitive level that it's almost impossible to suppress.
This makes it very easy to leech profits from the underclasses through payday loans. The profit is made at the point that the survival instinct programs them to ignore.
This is why outright prohibition of payday loans usually has a positive impact on the financial wellbeing of the underclasses.
Unfortunately, even the middle and upper classes who struggle with giving up smoking still look down on the set of people who take payday loans, thinking that their superior intelligence and good sense is what leads them to not be suckered.
Empirical study on the effect of poverty on short term thinking:
http://www.theatlantic.com/business/archive/2013/11/your-bra...
Study on the effect of banning payday loans on the financial health of the underclasses:
http://www.federalreserve.gov/pubs/feds/2013/201381/201381pa...
I am where I am today because my family had enough money to own a computer (and never threw out the old ones, so the kids got to mess with the cast-aways—my first program was for a Kaypro 2), because my brother's interest in programming inspired my own, and because I was able to spend years without adult responsibilities learning everything I could.
That, and my parents fully supported every dive I took into every crazy interest. My parents kept books around and bought me toys to feed my interests—I had a chemistry set, an electronics kit, a violin, multiple microscopes, and access to books on subjects from photography to biology. I lived in nerd heaven… except for that bit where my parents expected me to clean my room.
I was working on a hobby OS in high school (1) because I was smart and dedicated, but also (2) because I didn't really have much else to worry about. I had plenty to eat and a safe place to sleep. Eventually, I even had a dial-up Internet connection, so I wasn't stuck with the local library's computer books from the 80s. All this was straight-up handed to me in the hope I'd do something great with it.
That advantage continues today. Because I have a stable job in middle-class territory, I can spend my free time on whatever crazy experiments I want. I do, and they continue to teach me things, even when the end result only 2 people on Earth actually care about. (Case in point: https://github.com/LnxPrgr3/crossfeed)
I know people in rural Tennessee who see an Internet connection as an unnecessary luxury, and the first bill to be cut when money gets tight. I imagine my life would be dramatically different had I grown up there.
Would I even know what I'd be missing?
I lived a significant portion of my life in pretty severe poverty; I was raised in it. It requires a decent amount of discipline to not waste money even when you are hungry and can't pay the bills, and many poor people do not have that discipline and therefore stay poor. Many non-poor people have the same lack of discipline but can simply afford to be more wasteful. Given two choices that solve an immediate problem (e.g. hunger) people will often choose the one that is most wasteful of their money even though they know they are poor.
I was never the world's most disciplined person but I did manage to bootstrap myself out of poverty in fairly boring fashion working low-paying jobs. As long as I had an income (never guaranteed) I always managed to spend less money than I earned. It is pretty shocking the percentage of people in poverty that are obviously wasteful with their limited resources but it also explains their long term outcome.
I earn a fine income today but my spending stopped rising with my income a long time ago. Old habits of not spending frivolously on low-value things die hard I guess.
You had the discipline to fight it: That's great. But that does not mean that other people's experiences are like yours. Go read the literature.
And apparently other's people's experiences are only significant if presented by you "I've seen it happen in people that you'd originally think that they had a whole lot of self discipline:"
>I lived a significant portion of my life in pretty severe poverty
My experience suggests the opposite. Much like the study.
The fact that you suggested that it takes discipline, to me, also suggests that you felt the same uphill struggle to be able to do forward planning.
It takes no discipline for me to do forward planning these days. It's easy to focus on now that my income far outstrips my outgoings.
The problem is that any kind of plan which has a reasonable chance of building up some savings and giving you some financial stability involves sacrifice now, probably to a very painful degree.
In my view it's not the thinking that's the trouble but the execution. It's hard to not spend all your money full stop. Having less money means that any savings involves greater sacrifice.
The mindset I'm describing is one where you are forced to prioritize necessities - rent/food/electric bill, not one where you sacrifice all the small luxuries in order to be able to cover your necessities and save.
Yes I'm aware that there are feedback loops that make it much easier to say poor than to claw your way out. I have suffered them to a very minor degree. But from a systems perspective being poor is simply spending all the money you get and not saving any of it. It's not that we can't identify the problem; it's that people lack the awareness or education and potentially the will to make the changes necessary to not be poor. Poor is less about your income and more about the decisions that you make every day to spend all of it, at least in my experience. I know people making $40k who save a lot and are very peaceful and people making $150k living paycheck to paycheck and struggling financially and mentally.
I think one of the contributing factors is the low interest rates right now. If you're poor and struggling anything given up today is a BIG deal so you need a LOT more in a year to convince yourself that it's worth it. At 1% interest it's basically never worth it, but at 10% it might be.
Being poor is ABSOLUTELY about income and NOT about being a single $150,000 / year programmer who is one paycheck away from being on the street.
1) Financial hardship happens to almost everybody at some point.
2) Being poor happens to some.
3) Poverty happens to a subset of the poor. These people are the mainstay of payday lenders.
The very idea that people who USED to be in groups 1 and 2 and think that they can lecture group 3 from experience is a gross insult.
Citation needed. There's a fair bit of evidence otherwise. E.g.: http://www.amazon.com/Scarcity-having-little-means-much-eboo...
Udacity is much better than most MOOCs at this, given that most of them have a limited window for which you can submit projects for completion. My anecdote: I wanted to take classes from Coursera on data science, but I am the sole developer for a publisher and have worked 60-70 hour weeks during the time that they've published the classes due to a project crunch. I don't currently have time to keep up with the course material in order to complete the class satisfactorily.
Now, you can rebut that somewhat by saying that we have free public resources in libraries to take advantage of, but when you're raising a kid and working a shift at the grocery store, you don't have much time to be in the library, most of which have very short hours on Saturdays and are closed on Sundays.
What we need are cheaper computers and subsidized internet access.
Chris Giles in The Financial Times found his numbers wanting. (2) In Piketty's response(3), he downplays the importance of the questions, focusing on the European numbers. FOr5 the US numbers, he recommends substituting the numbers of Emmanuel Saez (Berkeley) and Gabriel Zucman.(4) But those numbers are based on reported capital gains taxes without adjusting for major changes in the law and changes in the definition of capital gains.
I don't know if Piketty is right or wrong, but I know his Excel spreadsheets are not adequate evidence. I'd like him to be right; I think wealth disparity in the USA since 1980 is more due to legal maneuvering than merit. I also know my thinking it isn't evidence.
1) http://www.timeenoughforlove.org/Heinlein.htm
2) http://piketty.pse.ens.fr/files/capital21c/en/media/FT230520...
3) http://www.voxeu.org/article/factual-response-ft-s-fact-chec...
See [1],"FT journalist accused of serious errors in Thomas Piketty takedown", [2] "Have Giles and the FT gone too far in the attack on Piketty?" (where the answer is "..On most points, Piketty has answered the points in a reasonable (and to me generally persuasive) way.", and [3] Piketty's response to Giles.
1) http://www.theguardian.com/business/economics-blog/2014/may/...
2) http://www.primeeconomics.org/?p=2723
3) http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014Tec...
I do agree that using the word inequality is worse than using opportunity. I also firmly believe corruption should be ended but I still have not seen a strong argument for why income inequality is bad and I think from a probabilistic perspective, net worth of the wealthy would increase over time so who is to say it isn't a natural process?
If we take an average middle class family and a rich family. Both want to build or buy a house. Let's suppose the houses they want cost the same, e.g. $200.000. The rich family pays $200.000 and is done. The middle class family however, will have to take a loan of, let's say, 20 years at 4%. This family will eventually pay almost $300.000 for that same house.
So because the rich family can buy things without loaning, they actually pay less. This might seem obvious to some, or most of you, but it still strikes me as "unfair" (though it's perfectly fair that you pay interest on a loan).
Class conscious Europe? Oh sure, broad stroke it up. Meanwhile, when it comes to superficial signs of class consciousness and the social norms related to that, I see American doctors introducing themselves as "Dr. <Name>", in both medical and civilian situations. People emphasizing or hinting at having gone to prestigious universities like the Ivy League kind. People referring to their bosses by sir/ma'am. Casually denigrating certain professions, especially janitors. All of these practices are kind of foreign to my part of Europe.
People like to talk about their achievments whether it's graduating from Ivy League, getting medical degree or finishing marathon. I do not think it's a class thing.