The luxury of poverty

[Gob]

Income inequality in the USA, wiki article.

Also;

How do the rich justify and excuse this record? They claim that they can invest the money they save from taxes and thereby create jobs, etc. But do they? In fact, cutting rich people's taxes is often very bad for the rest of us (beyond the worsening inequality and hobbled government it produces).

Several examples show this. First, a good part of the money the rich save from taxes is then lent by them to the government (in the form of buying US Treasury securities for their personal investment portfolios). It would obviously be better for the government to tax the rich to maintain its expenditures, and thereby avoid deficits and debts. Then the government would not need to tax the rest of us to pay interest on those debts to the rich.

Second, the richest Americans take the money they save from taxes and invest big parts of it in China, India and elsewhere. That often produces more jobs over there, fewer jobs here, and more imports of goods produced abroad. US dollars flow out to pay for those imports and so accumulate in the hands of foreign banks and foreign governments. They, in turn, lend from that wealth to the US government because it does not tax our rich, and so we get taxed to pay for the interest Washington has to give those foreign banks and governments. The largest single recipient of such interest payments today is the People's Republic of China.

Third, the richest Americans take the money they don't pay in taxes and invest it in hedge funds and with stockbrokers to make profitable investments. These days, that often means speculating in oil and food, which drives up their prices, undermines economic recovery for the mass of Americans, and produces acute suffering around the globe. Those hedge funds and brokers likewise use part of the money rich people save from taxes to speculate in the US stock markets. That has recently driven stock prices higher: hence, the stock market recovery. And that mostly helps – you guessed it – the richest Americans who own most of the stocks.

http://www.guardian.co.uk/commentisfree ... ic-finance

[Lord Jim]

[Scooter]

Yet if poverty means lacking nutritious food, adequate warm housing, and clothing for a family, relatively few of the more than 30 million people identified as being “in poverty” by the Census Bureau could be characterized as poor.

Perhaps the fatuous idiot who wrote this should try to find nutritritious food, adequate warm housing, and clothing for less than the $10,830 per year that is the poverty threshold for an individual.

The notion that someone isn't really poor if they have a refrigerator is the stuff of morons.

[dgs49]

Fretting about "income inequality" is a pointless and meaningless exercise, as is moaning about how the "super rich" acquired or accumulated their wealth. It is only satisfying to those with the ignorance to believe that a nation's economy is a "zero-sum" proposition, where everything that one person has must necessarily be at the expense of someone else, just as deserving.

Those kinds of emotional and intellectual masturbation exercises serve only to conceal the basic facts of economic life, which those on the Left absolutely abhor: Most of the people who are wealthy and have high incomes have acheived them through some combination of hard work, education (in its broadest sense), and intelligent risk-taking. Go to any sizable corporation in the country and you will find that for the most part, the people at the top of that company have gotten there through their intelligence, hard work, and good judgment. Check the parking lots at 7pm; those aren't the secretaries' or the draftsmens' cars out there.

Liberals love to look at the exceptions - those who've gotten ahead through nepotism, blind luck, dishonesty, and so forth - but the vast majority have EARNED it.

On the other side of the bell curve, the majority of The Poor are also exactly where they deserve to be. They have (mainly) had children out of wedlock, dropped out of school, chosen the easy path for most of their life choices, and have ended up exactly where logic indicates they would end up. Liberals like to refer to these people as "unfortunate," which, while true anecdotally and occasionally, is generally FALSE and misleading. Misfortune has nothing to do with their current life situation, which in most (but not all) cases resulted from a lack of diligence and horrible life choices. Indeed, most "middle class" people today started their adult lives in the bottom income quintile. I know I did. But they got married, sacrificed, worked, saved, invested, and reached the "middle economic quintiles," as most people generally do. And the opportunities for accumulating wealth in the traditional ways are as viable now as they ever have been (NOTE: Trying to get rich by working for a corporation has always been a statistically terrible proposition).

The Left's myth of serendipitous wealth is vital, because if the "Rich" achieved their high levels of income and assets by nothing more than the fact that they were "fortunate," and conversely if the "Poor" are only poor because they have been "unfortunate," then it is eminently "fair" to confiscate the income and wealth of the Rich, in order to redistribute it to the Poor.

But if people are deserving of their economic incomes, assets and status, then redistribution of wealth is immoral - tantamount to theft.

It is good and not a little ironic that our correspondent gives a subtle nod to Karl Marx. KM never earned an honest dollar in his life, choosing instead to sponge off rich friends and relatives while writing his economic claptrap. Which has been proven false time and time again over the past hundred-plus years.

Liberal politicians and self-interested bureaucrats have made a career and a life out of bringing as many people as possible to suck at the government's teats, whether through welfare, housing assistance, medicaid, food stamps, and what have you. They have justified this by creating the false impression that America is plagued by millions of "hard working" families who have children who lack the basic necessities of life. While such people certainly exist, they are in no way representative of the entire class of "The Poor," who - as indicated by the statistics shown above - are not nearly as destitute as their advocates on the Left want the rest of us to think.

"If only The Rich would pay their fair share, wouldn't it be lovely for everyone?"

Right.

Like in Cuba, North Korea,and the old Soviet Union.

[Liberty1]

In addition, I doubt the validity of Sue's data that 1/2 of the super rich inherited their money (data analyzed by "fair economy.org" might not be the most objective, and the analysis is 15 years old at this point). Eyeing the actual list:

Kinda old data, but I don't see the trend is any different

http://blogs.wsj.com/wealth/2008/01/14/ ... ted-money/

1. According to a study of Federal Reserve data conducted by NYU professor Edward Wolff, for the nation’s richest 1%, inherited wealth accounted for only 9% of their net worth in 2001, down from 23% in 1989. (The 2001 number was the latest available.)

2. According to a study by Prince & Associates, less than 10% of today’s multi-millionaires cited “inheritance” as their source of wealth.

3. A study by Spectrem Group found that among today’s millionaires, inherited wealth accounted for just 2% of their total sources of wealth.

Each of these stats measures slightly different things, yet they all come to the same basic conclusion: Inheritance is not the main driver of today’s wealth. The reason we’ve had a doubling in the number of millionaires and billionaires over the past decade (even adjusted for inflation) is that more of the non-wealthy have become wealthy.

So it’s not just that the same old rich folks are getting richer. The more-important shift is that the rich are getting more numerous.

[dgs49]

As tacky as they are, the popular television programs about "flipping houses" are a fabulous example of the still-viable "American Dream."

These are people who generally started with nothing, and through creativity and insight, they make a ton of money. They start with a run-down house, invest in it - intelligently - and re-sell it for significantly more than they have in it. What's more, EVERYBODY BENEFITS! The seller benefits by getting rid of an asset that is killing him, the workers benefit by gainful employment, and the buyer generally gets the refurbished house at a very good price, because the "flipper" wants it to sell quickly.

Doesn't take any education, any significant initial money, or even technical skills. All the work is farmed out.

The wealth is CREATED, it isn't taken from anyone. Who is the victim? Why should the successful "flipper" feel guilty about not paying 60% of his gross income to the federal government? He is doing a great public service.

[dales]

Yes, "house-flipping" part of the scheme that got us into the banking mess.

Brilliant!

[Long Run]

Yet if poverty means lacking nutritious food, adequate warm housing, and clothing for a family, relatively few of the more than 30 million people identified as being “in poverty” by the Census Bureau could be characterized as poor.

Perhaps the fatuous idiot who wrote this should try to find nutritritious food, adequate warm housing, and clothing for less than the $10,830 per year that is the poverty threshold for an individual.

The notion that someone isn't really poor if they have a refrigerator is the stuff of morons.

I don't think the article is suggesting that the "poor" aren't actually poor or don't face difficulties. It is simply pointing out that "poor" is a relative term, and the poor here live better than many "middle class" people elsewhere, as well as much better than the average American of 100 years ago. The $10,830 poverty level number for a single person doesn't count the thousands in public payments and subsidies the person will receive for being poor (food stamps, housing assistance, Medicaid, etc.). They still are poor, and still have it much harder than you or I, but as the article notes, they have it significantly easier than most people in the world.

[Scooter]

I don't think the article is suggesting that the "poor" aren't actually poor

Except that is exactly what the author said:

relatively few of the more than 30 million people identified as being “in poverty” by the Census Bureau could be characterized as poor

[dgs49]

Another take on "poor":

Watching House Hunters International the other day. Young (attractive) American woman wants to live in Paris. Has a US$160k budget for an apartment (flat). Spends US$200k for a 120 ft2 hovel - literally the size of a nice master bathroom. She will struggle mightily to meet the mortgage payments and feed herself in Paris.

Poor?

You can find the same phenomenon around every big city in the U.S., though perhaps not to the same degree. People with "middle class" incomes struggling to pay for some shit-hole in San Francisco. Deserving of sympathy or scorn (for not having the common sense to move someplace else)?

[Gob]

The wealth gap between American whites and minorities has grown wider during the recession, according to an analysis of US Census data.

It found the median wealth of white US households in 2009 was $113,149 (£69,000), compared with $6,325 for Hispanics and $5,677 for blacks.

This left whites with about 20 times the net worth of blacks and 18 times that of Hispanics.

Those ratios compared with 7:1 for both groups back in 1995.

Asians also lost their top ranking to whites in median household wealth, more than halving from $168,103 in 2005 to $78,066 in 2009.

The report suggests Asian households were clustered in places such as California that were hit hard by the property market meltdown.

The study, compiled by the Pew Research Center from 2009 data, found the wealth gap was the widest it has been since the government began publishing such statistics by ethnicity in 1984, when the white-black ratio was roughly 12:1.


http://www.bbc.co.uk/news/14296246

[dgs49]

Gobster, I don't know how common the phenomenon is in Oz, but a LARGE proportion of the "households" of minorities in the U.S. are created when a young, single girl has a child. 70% of African American children are born to single women - a number that has not changed in more than a decade. The analogous number for Hispanics is only a little better. Such "households" will NEVER accumulate any wealth. The mother will always struggle financially, whether she is gainfully employed or decides to live off the government's teat. Thus, that large "minority" demographic will forever have a net worth of Zero (or less).

Contrast that with the more "normal" household made up of a married couple, both of whom work. Ignoring the impacts of the Great Recession for a moment, their net worth is likely to grow over their lifetime and the "average" net worth of such households will increase over time.

So the "wealth gap" increases over time, mainly because that huge demographic at the bottom (single parent households) remains with a financial net worth of zero (or less).

For perspective, my own personal net worth didn't reach zero until I was almost 30. From the time I bought my first car until then, it was less than zero.

Also, keep in mind that when minorities get at least a high school education, and get married before having their first child, the "income gap" virtually disappears.

[BoSoxGal]

Net worth is everything.