The problem is not that there is too much wealth being diverted to people at the
80th percentile, which is where the top quintile starts, it's that so much
is going to the top 1%. In fact even people at the 80th percentile have seen an
erosion of living standards.A better comparison is to look at the
total income generated by business and see where it is going. For decades, about
2/3 of total corporate income went to wages, while 1/3 went to profits. The
figure remained so constant for so long that experts assumed it must be a basic
law of economics. That figure has changed considerably over the last thirty
years. The amount of corporate revenue that has been diverted away from workers
and into profits is equal to the total amount of taxes collected by the federal
government.This leaves a much smaller piece of the pie to be shared
by workers, leading to lower incomes for all. In fact earning for working class
men peaked in 1973 and have been in decline ever since.Income
inequality is like global warming, conservatives have found that the best way to
deal with it is to pretend it doesn't exist.
So which way is it? The headline that says the rich are getting richer or is it
the last sentence of the second to last paragraph that says there not. To me
the headline writer erred.
Surely this letter will create a firestorm on both the right and the left.How about we use logic and reasoning instead of partisanship.So, lets look at reality.- Can anyone disagree that the gap in wealth
between rich and poor has grown and is growing?- Why is the gap growing?
Why is the wealth collecting at the top?- Is this growing gap good for our
country?- Will it continue?One must honestly answer these
questions before a reasonable discussion can be had.I will go
first.-Certainly the income gap is growing. By any measure, it is
undeniable.- Why? THAT is the hard one. Hard to say that the rich are
getting smarter and working harder than the poor. I see some poor people
busting their tails for $8 an hour.- The growing gap is bad for the
country. Good in the short term for those at the top, but unhealthy long term
for our country and our economy- Yes it will continue. Why wouldn't
it. Our country and economy is geared to the "it takes money to make
The headline to Mr. Bennett's article is false and misleading. The article
states exactly the opposite. At least the article is accurate when it states:
"Look at annual totals. Twenty-five years ago, average annual per person
spending by people in the highest quintile was two and a half times more than
that by people in the lowest one. Today’s numbers — $32,054 and
$13,032, respectively — are holding steady at two and a half times. The
rich are not getting richer on the backs of the poor."
God has told us there is enough and to spare....and I believe him.The problem is - as Roland Kayser points out - The top 5% who own
80% are hoarding the wealth God has blessed this nation.Trickle down
is NOT working, it is in fact Trickle UP.
Why would anyone be surprised that the poor are getting poorer? The only reason
the poor are getting poorer is because government programs make it easier to be
poor and to keep on being poor. Its called dependency! The number of Americans
on food stamps climbed to an all-time high last year, according to data released
by the Department of Agriculture (more poor people). If welfare reduced or
prevented poverty, given the trillions of taxpayer dollars we have thrown at
poverty, there would be no poverty! Instead of helping people not be poor
anymore, government welfare enables poverty! I am convinced this is by design,
because Democrats never met a welfare program they don't love and people on
welfare vote for Democrats! Liberal Democrats need poor people so they purposely
create more of them. What do liberals propose? More welfare, redistribution and
"social justice" which as we have seen and will see, increases
dependency and poverty grows.If we want to decrease the number of poor
people in America, stop enabling poverty!
Liberals are always trying to find different ways to divide up the pie instead
of growing the pie. They don't mind if the poor are poorer as long as the
rich are poorer, too. What we need is lower taxes and lower regulations to
encourage a much bigger growing pie. More growth and opportunity is what leads
to a bigger pie and greater prosperity for all.
I'm sorry but I fail to see how spending determines wealth. If I have 100
times the wealth of an average person it's safe to think that I not only
spend more than the mythical average person but that I spend what I want, on
what I want. I don't have many if any restrictions on what I spend. Like wise, if I have a 1,000 the wealth of an average person I likely
spend what I want, when I want, on what I want. Why would I spend ten times more
when I have 1000 times the average than when I have 100 times the average if at
100 I have everything I want when I want it? I simply spend as I always have as
I get more, I just have more left over. Which btw does reflect reality. It's absolutely logical to think that the spending ratio is holding
steady, yet it tells you nothing about wealth accumulation. Notice
Robert doesn't mention a soaring stock market with a shrinking stock market
participation by the average Joe or in I think it was 2011 123% of wage
increases went to the top 1%. Yes 123% is more than was produced.
Cats,Radical republicans are always trying to create a bigger pie so
that the wealthy can siphon off more profit. Only a fool would believe that an
increase in profit translates into an increase in wages for those at the bottom
of the food chain. Mr. Bennett's premise that spending is an
indication of wealth is really interesting. Wealthy people are increasing their
wealth at a record pace, and pulling that increase out of circulation, therefor
making how much the spend in comparison to lower income people completely
irrelevant. Lower and middle income people put all their money back into
circulation trying to survive and maybe just maybe have a few extra's. A better indicator would be to look at savings for each classification
rather than spending and measure the differences.
I don't often defend Bennett. But, I'm certain he didn't write
the headline for the piece: "The rich are getting richer off the poor".
In fact the paper edition has a different title entirely: "The rich are not
exploiting the poor".
"Liberals are always trying to find different ways to divide up the pie
instead of growing the pie."And conservative only idea for
"growing the pie" is lower tax rates. And it does not matter what
the tax rate is to conservatives, the only answer is LOWER.We hear
how Reagan lowered taxes and the economy grew. Well, Mr Reagan's
predominant tax rate was 50%. But, we hear today that 39% is a job killer. So,
what is a reasonable tax rate?I actually think that your typical
liberal want to level the playing field, rather than take from the wealthy.Corporations are designed to maximize profits. And that is a good
thing, up to the point of unscrupulous tactics. Want less regulations? Hold
the corporate decision makers personally responsible when they cross the line.
Dont fine the corporation. Jail the offenders.We could quickly get
rid of most regulation.
If we sink everyone's boat, they do all reach the same level.
The facts don't matter to some people. Bob Bennett clearly and absolutely
told us that "Today’s numbers — $32,054 and $13,032,
respectively — are holding steady at two and a half times." That
doesn't fit their agenda. They're so very certain that government has
the right to take from the producer and give to the non-producer that they
refuse to read the facts.Nothing has changed in 25 years except that
their "hero", Obama, has promised them that some "rich guy" will
pay their way through life. Obama knows that if he told people to grow up and
become responsible - as Kennedy taught us - that he would have never been
elected. He is the champion of the "poor" who have been taught by
government since the days of FDR that some "rich guy" owes them a
living. They are told that that "rich guy" will risk everything he has
so that they don't have to. That's what they want. They believe in
receiving their bread from the efforts of others, instead of from the "sweat
of their brow".
I grew up in real poverty but in this wonderful country of opportunity, I worked
my way through college via low paying jobs and very long hours. I never took a
dime from the government or anyone else. I worked my rear end off, gained some
marketable job skills, worked hard to be productive, innovative and creative at
my jobs. In order for my employers to keep my creativity talents, they paid me
well! I could have become a "victim" and sat out my life waiting for my
next welfare check and I would have only existed physically but I would have
missed the joys achievement and personal growth. I tell you this not to boast
but to point out that in America, anyone can become rich, if the government
would just stop punishing success and achievement. If the government continues
to reward laziness, bad choices, and failure we will have much more poverty and
much less prosperity.
Our U.S. economy works like this simple example: Put five people in a
circle. Give one a store keeper a dollar and ask him to buy things from
the others and pass it around.He buys a loaf of bread, The baker
then takes that same dollar at buy wheat, The wheat farmer takes it and
buys clothes, fuel and equipment,The store keeper then takes it and buys
another loaf of bread. Notice, the more it is passed around the
circle the more everyone has from that one dollar. Now ask someone
to put that dollar in their pocket. Wow, the four others just went
broke!$21 Trillion has been pulled out of the U.S. economy and
squirreled it away in Swiss and Cayman Island bank accounts.It is
not being invested -- hiring, stocks, bonds, or capital of any sort -- let
alone being SPENT.It is simply pulled out of the system and not
being used [see, usury] out of greed.I repeat -- God has given
us enough and too spare.We need to address the Gadianton Master
Mahan's who have squandered all that "gain".
It has been proved throughout history time and time again. The freer the
economy, the less government interference, the greater the prosperity for
everyone. Hong Kong is a perfect example and there are many others. I realize
that truth is very inconvenient for the agendas of those who think they are
entitled to the redistribution of the wealth of others. In fact, the greatest
income equality exists in economies with the greatest freedom and the least
government interference. Honestly, some of you people need to take econ 101.
Mr. Bennett missed a big point that Roland astutely pointed out. It's the
top 1% that is benefiting disproportionately. I won't argue that this is a
bad thing. We should have more freedom, and let the chips fall where they may.
Nobody should resent guys like Jobs for getting rich because all of our lives
are better thanks to them.However, some of the top 1% are parasitic
rent-seekers who maintain a high income through political influence at
society's expense. The Federal Reserve prints trillions of dollars that
filters through the banking industry. It's Obama's version of
"trickle down economics". But most of it collects on balance sheets of
big financial institutions owned by the super-rich, while the inevitable
inflation is a disproportionate burden on the poor and middle class.
Income inequality should not in and of itself be troubling, as long as the
“pie is getting bigger” and those at the bottom are not both growing
in number and their spending power is not declining relative to that same
demographic (the poor) in decades past.What is troubling is how the
wealth at the top is growing and the productive (or not) uses that wealth is
being steered towards. The growth of the financial sector suggests that some
significant portion of the wealth being created is simply carving up an existing
pie. Bob is right to point to wealth creation as the driver of an
economy and living standards but he is wrong to omit (can’t fault him too
much since it’s the R Party line) that the WAY wealth is being created
matters.We could change the tax code tomorrow in a way that would be
revenue neutral but would fundamentally change our economy and revive the middle
class – namely, reduce the corporate tax rate to zero on all productive
activities while raising the rate on distributions (unless reinvested), passive
income, inherited wealth, etc…
" The freer the economy, the less government interference, the greater the
prosperity for everyone"That sounds great. And it works very
well to an extent.. But with unfettered, unregulated capitalism we would have
polluted water and air, unsafe food, one oil company and one airline and only
the banks and the very wealthy would own everything.Tell me what
regulations you think are good? Any? "In fact, the greatest
income equality exists in economies with the greatest freedom and the least
government interference. Honestly, some of you people need to take econ
101."What do you base that on? By one measure, the GINI
coefficient, Denmark, Sweden, Norway and Austria have the most "income
equality". Do you sincerely think these countries have the "greatest
freedom and least government interference"?These are some of the
most "liberal" countries in the world.At least make an
attempt to support your assertion.
Two percent of 1 million is 20,000. Two percent of 10,000 is 200. Mr. Bennett
wrote his article using percents to disguise what the differences between the
rich and the poor are. He then talked about the differences in
living costs. That is also a misrepresentation of what is happening. Does living
costs only include basic housing, food, and transportation? It's not clear
in the article what it does include. I'm sure with only basic living
expenses calculated there would only be a difference of 2 1/2 times but most of
the poor have one home and the rich could have multiple homes and multiple other
things not considered basic that aren't even considered in the
calculations. Finally to blame Obama for his take on the numbers is
nothing more than the partisan politics that have dominated and divided our
society for generations since FDR, maybe even longer.
Politicians love to use statistics (often badly) to drive policy. The
"income inequality" crowd uses these all the time.The use of
quintile wealth and income growth statistics might have more validity if the
members of each quintile were static, but they are not. In other words, those
"rich" and those "poor" people are not necessarily the same ones
each year.When one rich guy goes broke and is replaced in the pool
of "rich people" by a lottery winner, it looks statistically like that
one rich guy just got a huge raise, when in fact he is broke and somebody richer
entered the pool.Likewise, if a "poor" person (e.g. a doctor
who just finished medical school and gets a high paying job) exits the pool of
poor people but is replaced by some illegal immigrant who just sneaked across
the border with just the shirt on his back, it looks statistically like the
"poor just got poorer".
A major reason for the wealth disparity is our tax system taxes labor at a
higher rate than it taxes capital. Consequently, we get more investment in
capital than in labor (people--human capital). Those who have only labor to
offer suffer, while those who have capital continue to amass more and more.
I usually agree with Senator Bennett. Not quite so here.Though
growing the pie is certainly the right overall course and yes, direct
redistribution is bound to fail. But we need a bit more.Frankly,
all growth in the economy is not equal. We need long-term development policies
that favor workers. Growth in manufacturing would be particularly helpful. We
should look to Germany and Japan to see how they have managed to keep a higher
percentage of manufacturing in their economy.
EI generally have agreed with Bob Bennett's opinion pieces. Not this time.
His cherry-picking of statistics and skewed interpretation of them is
unfortunate. Let's look at a couple of things:1. He seems to
think that not having a mortgage is an advantage. Yes, if you own your house and
are retired. But most of the poor are paying rent, which is a double
disadvantage in being more expensive than a mortgage payment and in not allowing
you to build up equity (wealth).2. Yes, the top 5 percent pay 60
percent of the taxes, but they pay a much smaller percentage of their income
than they did for most of the 20th century, when the middle class thrived.3. Spending does not reflect economic well-being. The wealthy spend a
little and save or invest the rest. The poor generally spend on necessities and
either go into debt to survive or need government or charitable assistance.4. The whole zero-sum argument is hokey. Yes, the pie is growing. But it
grows very slowly, and if most or all of that growth goes to the top, a rising
tide doesn't lift all boats. It swamps quite a few.
Here is the real problem.... and that is those who are in the lowest quadrant
are largely unskilled labors... and the market and need for people with these
skills isn't growing, but is shrinking. They are caught between a rock
and a hard space. They are becoming economically redundant, un-needed,
unprofitable. TThere are only so many low wage jobs in this
country, and the need for them is going down, not up. Technology will continue
to make things like secretaries, assembly workers, and the like, redundant. Add
to that, global markets opening up with millions of cheap employees... it is not
looking good for the lower quadrant.I am not sure Obama has the
answer to this problem... and not sure anyone else does either.
Although I believe the headline is correct, it certainly isn't what Mr.
Bennett wrote. (As of 10:19 a.m., the headline read: "The rich are getting
richer off the poor" Maybe it will change.)I wish they'd
assign this headline writer to write headlines for Krauthammer's rants.
5. The real problem in our economy is not the redistribution of wealth that
conservatives find so evil. It is the initial distribution of wealth. And it can
be tied directly to the dual pay system of corporate capitalism. Under this pay
system, a select few (executives and owners) are paid as much as possible; the
rest (workers) are paid as little as possible. This is called minimizing costs.
It is an accepted business practice to consider people a cost or a resource that
must be minimized. This usually happens in one of four ways: send jobs to Third
World countries, increase productivity (which allows a company to produce the
same amount of product with fewer workers), replace workers with technology, or
simply cut their wages (let the free market dictate). Any of these methods
result in more money accumulating at the top and less going to the bottom.
Classic trickle-up economics.
@JoeBlow "...[W]ith unfettered, unregulated capitalism we would have
polluted water and air, unsafe food...."I don't believe
this for a second. Do you want polluted air and water and food? What makes you
think everyone else who participates in the free market would choose such
things?"...one oil company and one airline and only the banks
and the very wealthy would own everything."Maybe you're
confusing capitalism with cronyism. They're not the same thing. Free
markets promote competition. Monopolies are achieved only when government is a
partner. But you said "unfettered."
13,000 U.S. households have the same amount of "income" as the remaining
220 million.Somehow, I don't think those 13,000 are actually
PRODUCING anything or doing the same amount of work or contributing to society
in general as the other 220 million.There in lies the rub, and the
problem that needs to be addressed.
The U.S. consistently ranks in the top 5 (numbers 3 or 4) on the list of
"ease of doing business" by the World Bank. What is
China's rank? #95.
"Here is the real problem.... and that is those who are in the lowest
quadrant are largely unskilled labors... and the market and need for people with
these skills isn't growing, but is shrinking. They are caught between a
rock and a hard space. They are becoming economically redundant, un-needed,
unprofitable. " This is exactly the problem. At one point in
time we had workers that were doing jobs no one else in the world could do, and
were getting paid well for it, not anymore. However countries like Germany and
most of the other successful western countries have figured this out and moved
the core of their economies to just such industries. Of course they still
hamburger flippers etc. but their economy is based on the production of value.
Value only they can produce. I would disagree that Obama
doesn't have the answers. His job policy proposals have all been based on
this principle. However the right is stuck in everybody's lazy except me
and if you only cut taxes all will be well rut.
@pragmatistferlife - I will agree with you.... that last thing that is going to
help is tweaks to the tax code... that is a tail waggin' the dog solution.
Obama is just pressing the same old class warfare button that has been used a
thousand times by the liberals.. it buys a few votes from the ignorant, who
think someone will give them something for nothing... I pity the fools
@JoeCapitalist2 – “The use of quintile wealth and income growth
statistics might have more validity if the members of each quintile were static,
but they are not.”Yes, it’s called social mobility and
you might be surprised to learn where the U.S. currently sits on this
measurement scale (hint: not good) and how countries the Right typically
describes in very unpleasant terms are doing relative to us (Denmark, Norway,
Canada, Sweden & Germany all have greater social mobility than the U.S.).If you’re serious about social mobility being an indicator of a
well-functioning free market economy (and you are right to be) then the current
lack of social mobility should trouble you. Conversely, you should be asking
hard (non-ideologically driven) questions as to why the countries I noted above
are doing better and how public policy is impacting the results. @Kent C. DeForrest – “Classic trickle-up economics”Let’s not throw the (capitalist) baby out with the (bad public policy)
bathwater.These things may sound unpalatable, but as long as markets
are competitive (including a well-functioning labor market) much of this
“creative destruction” does drive a higher standard of living.
The arrogance of the central planning crowd that thinks government should tell
people what they can make is astounding. LDS Liberal, who are you to decide that
the top 13K households aren't producing anything? Many of those people have
been instrumental in creating the wonderful products that have changed all our
lives for the better in the last 20 years. And Deforrest, businesses that
don't "minimize costs" will not exist for long (at least in a free
market). Business exists to make money for the owners, not to provide jobs for
people. Social benefits are side effect. If you lose sight of that, you descend
into the worker's paradise that was the Soviet Union.
The conservative premise is always that our poor aren't really poor and our
rich aren't really all that rich.Try actually living on $10 a
hour and get back with us Bennet. $10 an hour is all a politician should be
"Twenty-five years ago, average annual per person spending by people in the
highest quintile was two and a half times more than that by people in the lowest
one. Today's numbers; $32,054 and $13,032, respectively; are holding steady
at two and a half times. The rich are not getting richer on the backs of the
poor."Richer has to do with income, not spending. Why are we not
comparing income levels? Do they paint a picture contrary to what Bennett is
trying to argue?Also, how are the highest quintile spending only 32k
a year? That makes no sense at all since even most families who make 80k a year
are still spending at least 60k of it a year. Or am I supposed to
read this as the highest quintile family of four spending 128k a year while the
lowest quintile family of four spends 52k a year? That'd be an issue
because the lowest quintile only makes about 20k a year in income at the most.
Robert Bennett: Are the rich getting richer off the poor?Well lets
just give everyone making $15 an hour or less a few weeks off and we'll see
exactly how many rich people start screaming Bennett. What do you really think
would happen?Not to mention that the rich in this country are
relying on exploiting the poor of other countries even more than the poor in
this country and the answer is a resounding YES! In fact, exploiting the poor is
the only thing that makes most of the rich wealthy in America since Columbus
discovered American exploitation. Really, where do you conservatives
find these people?
I think a better question would be "why are the middle class getting
poorer"?? The facts show that middle class income has flat lined during the
Obama years while the hand out crowd has grown and so has their take home pay
(welfare, food stamps, dishonest disability etc, free health care...) all thanks
to money from the middle class. Wealth redistribution is destroying America just
like it destroyed Greece.
Look how many posters have convinced themselves that they will always be poor
unless the government "steals" money from that "rich guy"
invested in America. One poster got it right. He showed us that ANYONE can be
paid well if he prepared carefully and then WORKED for it. He SACRIFICED until
he had the necessary skills and abilities to command the price that represented
his VALUE to those who needed him. He didn't listen to "crooks"
and "shady" politicians who tell us that, without them and their power
to "steal" from Obama's mythical "rich guy", that we will
all starve.We will NOT starve! We will prosper as a nation when the
whiners work as hard as they complain.One poster used an example of
$5 being passed around. He forgot to take 35% out of the "pot"
everytime a "rich guy" makes a profit. He forgot to take out of the
"private" pass-around money the money that Obama and his followers
demand that we pay as ransom if we want the "freedom" to be
Americans.Hard work and risk made America great. Corrupt politicians
and envious people never helped anyone but themselves.
To "LDS Liberal" luckily we are better informed than you appear to be.
If you read "Did the 'Lost' Middle Class Become Upper Class?"
in USA Today, you find that a large portion of the middle class have become
wealthy.To "JoeBlow" but lower taxes, lower government
spending, and less regulation do work. See "JFK on the Economy and
Taxes" at the JFK Library web site. JFK knew that cutting taxes worked.
There are also studies out there showing that when you cut spending, it also
boosts the economy.Nobody wants "unfettered, unregulated
capitalism", that is typically called anarchy. What we want is capitalism.
Capitalism is a system where the government maintains property rights, enforces
contracts. Read "The Role of Government in a Free Society" by Milton
Friedman from his book Capitalism and Freedom.FYI, the GINI
coefficient is a lousy measure of income inequality. It can be fooled and give
J ThompsonSPRINGVILLE, UTLook how many posters have convinced
themselves that they will always be poor unless the government "steals"
money from that "rich guy" invested in America. One poster got it right.
He showed us that ANYONE can be paid well if he prepared carefully and then
WORKED for it. He SACRIFICED until he had the necessary skills and abilities to
command the price that represented his VALUE to those who needed him. He
didn't listen to "crooks" and "shady" politicians who tell
us that, without them and their power to "steal" from Obama's
mythical "rich guy", that we will all starve.======== Ya -- you described Paris Hilton to a tee....
@Invisible Hand – “Business exists to make money for the owners, not
to provide jobs for people. Social benefits are side effect.”While it’s true that businesses make money for the owners, do you
honestly believe that if their endeavors did NOT produce social benefits they
would exist at all? If so, you need to reacquaint yourself with the coiner of
your moniker – Adam Smith believed in capitalism BECAUSE it was socially
beneficial, not because it made money in a vacuum, and certainly not if it
produced socially corrosive effects. The “side effect” as you call
it is what matters.And he also knew that capitalism is only as good
as the rules that govern its activity (laws & regulations) and the moral
character of its participants.Suggest reading his Theory of Moral
Sentiments before re-reading Wealth of Nations… @patriot – “The facts show that middle class income has flat lined
during the Obama…”It’s actually been flat since
the mid-70’s with the only noticeable uptick in the Clinton years - so
much for your “Obama is the root of all evil” theory.
The problem being ignored by Bennett is that, as books and articles by
economists have pointed out, the game is "rigged" in favor of the
superrich. They take a disproportionate share of the wealth created. There is
only so much to go around, so in effect the top 1% getting 95% of the economic
gains during our recent recovery leaves little for the 99%. It is not the rich
exploiting the poor, but the fallacy of supply-side, trickle-down economics and
deregulation over the last 30 years. (The 1% have more than doubled their
ownership of the nation's assets since 1980 from 19% to 40%). This economic
philosophy has not benefitted the middle class, whose incomes have remained
mostly stagnant, and the percentage of those in poverty has actually increased.
Though not an economist, even the new pope is smart enough to correctly pointed
out that trickle-down has never really worked.
@TylerD: We agree that the side effect of social benefits is the best argument
for capitalism and free markets. It's preferable to get the social benefits
from people freely seeking their own self-interest than government
compulsion.To answer your question, yes, people will seek their own
self interest whether that produces social benefits or not. Fortunately, in free
markets people seeking their own self interest produces social good for all.
LDS Liberal, if you want to trade places with Paris Hilton, please do. She
appears to be one of the most miserable people in the news, always flitting here
or there trying to find "happiness". Is that what you want? Do you
think that coveting someone else's possessions would bring you happiness?
Do you think that being "bequeathed" great wealth without corresponding
responsibility will make you happy?I think that you know the value
of life, understanding that unearned "glory" or "wealth" would
not be found among your "values", those "values" that you would
teach your family in Family Home Evening, your Sunday School Class, or even
those who might report to you at work. If you are in a position to evaluate
people at work, do you give the unqualified and undeserving huge bonuses to
"make them equal"? Even the government doesn't do that, or are all
the pay grades just notations on paper? Do all government employees earn the
same?What you're "preaching" is not being practiced by
Obama, by Congress, or by the Court. In their world, it's "winner take
all". Not exactly what they're "preaching", is it?
@Invisible Hand – “in free markets people seeking their own self
interest produces social good for all.”Thanks for your comment
and glad we agree (i.e., social benefits) – although we should note that
not everyone does (e.g., Ayn Rand follows – their moral compass completely
escapes me).And while I believe the free market works wonders for
creating wealth not to mention releasing the productive & creative abilities
of people, there are many cases where this pursuit of self-interest does not
produce social good. The list is actually quite long –
everything from polluters to financial folks who securitize bad assets (while
reaping huge commissions) to CEO’s who destroy long term value so they can
golden parachute out with their short term gains, etc…This is
why we need proper & vigorous rules of the road. Transparency laws go a long
way towards promoting social good, but I have little confidence in our
politicians to pass good ones given the influence of K Street.Bottom
line – in the global economy it’s a lot more complicating than
simply the “socially positive” transactions of a butcher and a
@TylerD: You are right that governments can force businesses and individuals to
pay for the negative externalities of their activities like pollution. Pollution
has a societal cost, and the polluters should pay that cost. That is tricky
though because reasonable people can disagree on the magnitude of the cost.As for financial shenanigans, Some of that should be prosecuted as
fraud. Much of it is the result of the LACK of free market, meaning government
is picking winners and losers via "too big to fail" policies and bailing
out losers. And the rest of it should fall under "caveat emptor" rather
than government regulation. Even in finance, less government would do more to
solve the problems than more regulation.
re:Tyler DFlat lined since the 1970's? Holy geez guy - what is
your definition of the middle class? I am smack dab in the middle class as a
software engineer and that field alone has exploded in pay scale since about
1990. There has been a constant up-tic in pay for the middle class until your
beloved socialist - wealth redistributing president decided to end that surge.
Now you have college graduates having to take work far below their degree and
other professionals (engineers, MBA's, etc) having to take HUGE cuts in pay
just to stay employed. Don't even try to tell me that your beloved Barack
didn't cause all this because in fact he did. His wealth redistribution
poison has stalled economic growth as never before and the recession which
should have ended 3 years ago continues all due to Barack's economic
incompetence. Facts are not on your side guy.
"If President Obama really wants to help the poor in America, he should
focus more on ways to create additional wealth rather than on ways to
redistribute what we now have" the article states. To which I ask, are you
suggesting that the wealthy in the nation now have enough, and that any new
wealth created by the president, if he could do so, would then all accrue to the
less fortunate? Of course not. If the wealth of the nation doubled tomorrow the
ratio of who has it versus who does not would not change. Something else has to
If income inequality is such a key concern, then why are many states promoting
lotteries that take a little money from many people (often poor people) to try
and make one person rich? The news today is that the mega lottery could reach
one billion dollars! Perhaps we should take that $1 billion and distribute it to
the poor--in increments of $1, $5, $10, and $20. The simple way to do
that--abolish state lotteries.
@patriot. I always find it interesting that republicans believe in personal
responsibility but then blame Obama and democrats.
Bennett only fixated on the consumer spending, but he failed to address the
extremely low wages by historic standards. The rich are getting immensely richer
while the middle class is shrinking and the poor are getting poorer. That much
is known fact. If the rich are not getting rich on the backs of the poor, then
who are they getting their money from? I suspect it is the shrinking middle
class. The middle class has always taken it in the short from both political
parties and their taxation and economic policies.
Invisible HandPre Great Depression we had a largely unregulated
financial industry. Prior, folks thought the markets would self-regulate.
Regulations came about to stop it from repeating. Even after a few decades of
regulatory pullback, there was at least enough to keep a second Great Depression
to just a Great Recession.Patriot,Glad for your success.
And the fact that the middle class is getting squeezed does not mean there is
no one entering the middle class. Middle class income peaked about 1999 and
(though there was a secondary peak about 2007, it has been sliding since then.
All the left and liberal posters here make a huge mistake in saying there is
only 1 dollar or there is just one fixed size pie.That is a complete
lie, a complete fallacy.It is just not true.There is a
constantly growing pie, in fact there are multiple pies and ion a free economy
and true capitalist system anyone can make there own pie or many pies.When the PC was invented and Bill Gates created windows, ushering in a huge
and vast windows/PC industry,that made millions rich and billion
lives better.tells us please what pie did they take from and who
lost their piece?The answer is they created their own pies and no
one lost but everyone gained.That is trickle down.Extreme Left views of the economy are built on covetous lies and hate for
There's a whole lot I feel I need to say here, but there just isn't
enough room. The missing dimension in this discussion is Marx. Everybody needs
to know something about his economic model, including the senator. But few know
anything about it. And they think it is not necessary to know anything about
it. But they are wrong. Sooner or late Marx is going to surface. Indeed he
Great explanation Tyler.While you very graciously countered this
part of the comment "Fortunately, in free markets people seeking their own
self interest produces social good for all." I would say this is a blatant
falsehood in todays finance based economy. If we had a value added
economy I might agree but today not so and the damage is everywhere. "Don't even try to tell me that your beloved Barack didn't cause
all this because in fact he did." the great recession caused the condition
you describe and Obama had nothing to do with the creation of the recession. So
yes I'm telling you Obama in fact didn't cause the wage crisis.
IF tax cuts and deregulation was so awesome, then why has our economy been
terrible this past decade? We've seen near record low in tax
cuts and deregulation yet the economy was terrible under Bush. Inf act, under
the Republican Regime we saw the greatest recession since the Depression!
All this dividing us into quintiles is just the science of division. it's
the basis for DIVISION and class-warfare. I wish we could see people as people
(regardless of their quintile). But since Bob went there...Maybe
instead of just comparing the incomes of the individuals in the quintiles... we
should compare what each quintile brings INTO the economy.I wonder
if Bob has a statistic for how many Americans in ANY quintile get their job and
their income from a company started, funded, and managed by a poor person.
Probably not many.So this assumption that bringing down the top
quintile magically brings up the lowest quintile is absurd. The poor are not
the people with the money needed to start, fund and run companies that give ALL
the quintiles jobs!And no... most jobs in America do NOT come from
the Government... America's jobs come from the higher quintiles investing
their time and risking their wealth to start companies which in turn creates new
jobs and new wealth...The only way to raise all ships is to stop the
attack on the class/quintile that creates the jobs.
Re: nonceleb - He said, "The 1% have more than doubled their ownership of
the nation's assets since 1980 from 19% to 40%"...You make
it sound like we all own everything collectively as a nation (not true)... and
these evil 1%-ers just took it from the Nation. That's a very weird
(class-warfare/ nationalist/ collectivist) outlook IMO.---Like the article points out... it's NOT a zero-sum game. Meaning the 1%
can CREATE more resources. They understand that they don't have to TAKE
it from another class/quintile... they can CREATE it (net new assets). When a
business opens... it CREATES more assets, more jobs, and more $$$, for ALL
quintiles.New businesses, jobs, pay checks, etc, are good for EVERY
quintile.It's just pure ENVY that makes us begrudge that
another quintile may benefit more from this process more than the quintile you
are in (even though ALL quintiles benefit).
Bob's question is, "Are the rich getting richer off the poor"?An equally interesting question is... "Are the poor getting
less-poor off the rich"?It's a known fact that SOME people
move out of the ranks of the "Poor" each year. And it's not the
Government that brings them out of the ranks of the poor... it's a job. A
job most likely created by one of these vilified 1%-ers.The
government only makes it more comfortable to stay poor. They don't
actually get people OUT of the lower quintiles. Getting OUT takes education,
hard work, and a job. Not a bi-weekly welfare check.So IMO
vilifying another quintile is not the answer. Government checks are not the
answer. A job and the ability to move up in that job are the answer. And where
will you get that new job?... From the Government? From the lowest quintile?
NO... Where do these jobs come from?So lets stop the class-warfare
rhetoric and get back to work.
Invisible Hand: "And Deforrest, businesses that don't 'minimize
costs' will not exist for long (at least in a free market). Business exists
to make money for the owners, not to provide jobs for people."You seem to be guilty of two-dimensional thinking, that our only options are
capitalism and communism. But there are many types of capitalism and communism.
Our particular form of capitalism (corporate capitalism) is rather
dysfunctional. There are actually many businesses that do not follow the typical
corporate values. Take Paul Newman's company Newman's Own, for
example. He set up the company with three objectives: 1. quality products, 2.
fair labor practices, and 3. give all the profit away. As of about 2010, a
couple of years after Newman's death, his company had given away $300
million. And it was not in danger of failure.There was a time in
this country when corporations, which, by the way, are chartered by government,
were viewed solely as a means to accomplish public purposes, not to produce
individual wealth. Study corporate history. It's enlightening to see where
we went off track. I'll give you a hint: railroad. For 150 years now, the
tail has been wagging the dog.
When you have a pot luck dinner, should just one person bring the food to share,
or only half the guests bring a dish to share? Pot luck works best
if everyone brings something to share.The proponents of running this
country pot luck (socialist) need to be willing to bring something to the table.
Otherwise it is more of a soup kitchen, and I am not thrilled to be eating from
a soup kitchen.
BadgerbadgerMurray, UTWhen you have a pot luck dinner, should just
one person bring the food to share, or only half the guests bring a dish to
share? Pot luck works best if everyone brings something to share.========= You should re-listen to President Packer's
conference talked entitled: Feed My SheepThe story about the
abundant feast, and a hungry family shows up uninvited and unable to pay
contribute.No one in their right mind, having "enough and to
spare" could EVER consider turning away the poor, the needy, the
hungry...I've NEVER been to a Pot Luck where we ran out of
food, and there was ALWAYS enough for un-invited guests and left-over too
boot.Perhaps you might, I will not!
Kent C. DeForrest: "There was a time in this country when corporations,
which, by the way, are chartered by government, were viewed solely as a means to
accomplish public purposes, not to produce individual wealth."You are more than welcome to start your own company or corporation and use the
profits (if it is successful) to do whatever you wish. You can give it all to
charity like Paul Newman did, or you can buy yourself a great big yacht. If you
are the owner and you take all the risks, then you are entitled to the
rewards.But quit bashing all the other company owners to choose to
use the profits for things you don't approve of. Owners (from small
business all the way up to mega-corporations) are obligated to pay their fair
share of taxes and to pay their employees a fair wage in exchange for their
labor. (We can argue all day on what is "fair".) But they are not
obligated to run their company as a public service just because socialists think
@Thid BakerOn one level I can see what you mean when you say that low paid
workers are dependent on the government. However, you missed a whole group of
"people" (conservatives think corporations are people right?) that are
dependent on this welfare, and that's companies that primarily rely on
these low wager earners to run their entire enterprise, and rake in big profits
doing it. WalMart, Mcdonalds and most other fast food and big box companies get
away with poor wages because the government makes up the difference. Food
stamps, WIC, section 8 housing, and most other government programs for the poor
are as much corporate welfare as they are welfare for individuals. If the
government cut off all of this welfare WalMart and the others would have to pay
a real wage, or they wouldn't be able to keep people working there. These
big corporations are as responsible as any organization in America(including
Democrats) for keeping the welfare program going. Why wouldn't they?
Considering that they would have to pay 10-15 bucks an hour, plus benefits, if
there was no welfare, they want it around as long as possible.
What incredibly amateur economic analysis. Interesting that he cites economists
for his numbers, but can't cite them for his interpretations...
I think the middle class is shrinking because the economy is shrinking. There
are a number of factors causing the economy to shrink. One is that energy prices
are being artificially driven up based on false assertions about atmospheric
CO2. Another is high corporate tax rates, which incentivize businesses to leave.
Yet another is one Clayton Christensen points out, how our business schools
teach incorrect ideas involving ratios that cause businesses to outsource jobs.
It's complex - there are many other factors at work.Some
complain that rich people are taking too much. But if the government confiscated
the entire wealth of the super-rich, it wouldn't fund the government for
more than a few months. It isn't that much wealth, and most of it
isn't liquid.What we're really debating is the freedom to
own and control property and to engage in voluntary transactions with others. We
cannot go down the roads of socialism or marxism without giving up freedom,
freedom that was bought with the blood, sweat, and tears of our forebears. If we
give it all up, we'll not get it back, and the world will be the poorer for
Re: Pops "But if the government confiscated the entire wealth of the
super-rich, it wouldn't fund the government for more than a few months. It
isn't that much wealth, and most of it isn't liquid." The top 1%
of households own 70% of the private sector wealth. "It isn't that
So the next question is: what is the dynamic at work which has resulted in this
concentration of wealth at the top? Do these people just work harder than us?
Probably not, there's something else going on, and this Marx (and only
Another way to increases the income of the working poor would be to shut down
the flood of foreign legal and illegal labor that depresses their wages below
subsistence level of Americans. Tens of millions of jobs have been lost in the
past two decades due to automation, mechanization, off-shoring of manufacturing
and the flood of foreign labor. Nothing can be done about jobs lost to
mechanization, automation and off-shoring, but the labor surplus due to foreign
labor can be controlled.By the way former Senator Bennett fully
supported flooding the unskilled labor market with illegal labor. Proof of this
is his two votes for amnesty. No effort has ever been made to reduce the foreign
labor competing and depressing wages for the American working poor.
JoeCap2:Okay, so let's just let things go along as they have
for the past 30 years. Let's hear your solution for dealing with the
inequality that really will kill the golden goose if left on its current
trajectory. And don't repeat the silly argument about growing the pie. The
pie grows slowly. Endless growth itself is a problem of an entirely different
order, but we'll save that for another day. Recent history has shown that
the growing pie doesn't help those who are below about the 60th percentile
anyway. All we have to do is project current trend out for a few decades, and
we'll find that the top 5 percent will own almost everything and so many
people will require government assistance that there is no way to help them. If
you are unwilling to address the symptoms of the problem by reinstituting
realistic tax rates (pre-Reagan), then you must deal with the source of the
problem, which is initial distribution of wealth. So let's hear your
solutions to the mess that current corporate values have produced.