AEIdeas

The public policy blog of the American Enterprise Institute

Subscribe to the blog

Discussion: (82 comments)

  1. Seattle Sam

    The primary way one acquires wealth is to do something that others find valuable. Why would it be surprising that that ability is terribly unequally distributed in the population? Felix Hernandez is going to be very wealthy because there aren’t many people who can do what he does. Why is this considered a “problem”? And to the point of the video, ten years ago, Felix was not very wealthy at all.

    1. I do not believe that is why many people are upset. The left is gaining support because the Democrats and Republicans have allowed the players in the financial system to become rich by manipulating the markets and getting bailed out whenever they make errors and take on too much leverage. People get upset when they read statements by CEOs that they like a particular business because the regulatory environment places moat around it and protects the company from competition that would benefit the consumer.

      What is needed is a free market that will punish those that make lousy business decisions and will reward those that consumers choose to make rich. Having the government decide winners and losers builds far more resentment than when the market decides.

  2. LeftCoastObjectivist

    Leaving aside that the leftward side of the ideological spectrum views the world in terms of collectives and not individuals, these very good arguments will not convince the authors or supporters of the original video. Those who suggest there’s an inequality problem won’t be moved by the idea that one can move from a poor bracket to a wealthy bracket — their objection is ultimately to the idea that anyone earns significantly more than anyone else at any time, period. If this same ideology views wealth not as an achievement but as evidence of exploitation and malfeasance, then the 1% is per se a class of criminals that must be reduced.

    1. Seattle Sam

      I wonder if it upsets people that wealth is heavily concentrated among those 45 years or older? Doesn’t it seem unfair that those who have lived longer have a LOT more wealth than those who have not?

      1. LadyBee 43

        I disagree with the concept that the wealth is concentrated more heavily among those 45 and older when it seems to me that everyday, more and more younger individuals with brilliant ideas are becoming millionaires and billionaires. People in their 20’s and 30’s are earning salaries in the hundreds of thousands of dollars, even without a college degree – this was unheard of even 15 years ago and definitely not when I was in my 20s and 30s.

        1. Those over the age of 45 are 47 times wealthier than those under the age of 35. That you can must a few counterexamples is nothing more than proof by anecdote.

    2. I fully support redistributing the wealth of all those in the top 10% that are democrats.

      We call this a win-win.

  3. Gene Hayward

    Does using 2009, ground zero for the recession, distort the picture as well? I am in the middle and was hard hit on home value and 401k. Both (especially the 401k) have recovered to a large extent. The video shows a very flat middle in 2009. What would it look like today? I am guessing it does not include transfer payments to lower income levels either.

    1. Peter McIlhon

      I don’t think transfer payments are considered “wealth”. I would consider it “income” (and I use that term as loose as humanly possible)

      1. (and I use that term as loose as humanly possible)

        Strictly speaking, one can presume anything that comes in is “income”, so I guess you’re all right. There’s no reason to believe it’s related to earning. :)

  4. PeakTrader

    Regulation is a regressive tax. Of the $2 trillion a year of federal regulations, perhaps, the top 50% of income earners pay $1 trillion and the bottom 50% of income earners pay $1 trillion, one way or another.

    1. PeakTrader

      …one way or another, e.g. through lower wages or higher prices.

    2. And how many of those regulations were put in place to “level the playing field”, “for the children,” or for “social justice?”

  5. Steven Hales

    Just some random thoughts on wealth and wealth distribution.

    Why should the ideal be just because people think it is just? Just for whom? You have to violate someone else’s rights to achieve that so-called ideal. This (the original video) is just a restatement of the discredited ideas of Rawls.

    The other thing that is not really calculated (in most analyses of wealth distribution) is the net present value of social security and Medicare benefits plus pension benefits. European analysts calculate these when looking at wealth distribution. When these calcs are done we find a much more even distribution of wealth. Wealth is simply the claim you have on the future productive capacity of the nation. If SS and Medicare are going to bankrupt us then that claim on future output must be enormous. The present value of that $15,000 SS income stream over 25 years is about $258,000 assuming 2% inflation and a discount rate of 5%. So for a married couple the NPV for their SS benefits alone is about $520,000 and that doesn’t even include Medicare benefits. Include those and you are at over $1 million in equivalent investable assets. I would say SS and Medicare are an extraordinary bargain for the poor and the middle class who are currently retired but will be less of a bargain in the future as theoretical returns from payroll taxes will far exceed future benefits.

    This gives you an idea of how much someone needs to save to have a comfortable retirement on top of SS and Medicare. That number is about $300,000 per $20,000 in annual income assuming inflation of 2% and an investment return on the declining balance of 5%. That means you have to kick the bucket on time to avoid running out of money.

    Food for thought: http://www.thefiscaltimes.com/Articles/2011/03/25/Wealth-Debate-How-Two-Economists-Stacked-the-Deck.aspx#page1
    Who knew, gentle, sweet Sweden with a wealth distribution profile similar in scope to the evil rapacious and greedy US.
    A new (2011) study seems to show Americans would prefer to live in a place like Sweden,…

    1. Why should the ideal be just because people think it is just? Just for whom? You have to violate someone else’s rights to achieve that so-called ideal. This (the original video) is just a restatement of the discredited ideas of Rawls.

      The education system has failed to educate. If you look at the wealth distribution throughout history you will find that no matter the type of economic system the top 20% control around 80% of the assets.

      Note that the video even gets socialism wrong. If you look inside China or in the old USSR you will find that the top few percent controlled most of the assets. Wealth distribution is Sweden is very similar to that in the US, particularly when we understand that wealthy families can escape Swedish taxation by moving their assets abroad. A country like Denmark has a far greater concentration of wealth than the US does.

      The trouble with this argument is not only that they young lefties that make the first video ignore reality but that the people that respond to them typically choose to ignore reality as well. There is nothing wrong with wealth inequity as long as it comes from voluntary transactions in free markets. The trouble comes when governments favour some groups by dipping into the pockets of others or create regulations that put up barriers for consumer choice. Those actions make many of the poor much poorer while they unfairly transfer wealth to those that do not have to earn it in a competitive marketplace.

      The solution is to stop all of the central planning and reduce the power of government to regulate voluntary transactions or use its power of coercion to tax incomes. Such a system would provide much more mobility would not have the same inflation levels and would produce a much greater standard of living.

      1. Steven Hales

        Vangel, agree 100% especially about nothing wrong with wealth inequality. The majesty of the market is not a phrase we hear much today.

        1. Vangel, agree 100% especially about nothing wrong with wealth inequality. The majesty of the market is not a phrase we hear much today.

          You certainly do not hear much about free market and competition from Mark or most of the commentators on this site. They confuse the system of crony capitalism with free market capitalism and by defending the former they weaken those that favour the latter.

    2. Gene Hayward

      If they had reversed the choices in the study, using US income distribution and Swedish total wealth, people would have chosen the US as ideal.

      Is there a developed country where, using total personal wealth, the distribution is like the one they use in the study to represent the ideal?

      1. Is there a developed country where, using total personal wealth, the distribution is like the one they use in the study to represent the ideal?

        No. While they can play games by blurring the lines between ownership and control there is no modern human society that has the type of distribution that is represented by the ideal. As I wrote previously, the Swedish distribution looks very similar to the American distribution and Denmark has a greater distribution of income.

  6. You are also part of the intelligentsia. The video is not a political one, it is an economic issue.

    The growth of wealth inequality parallels with the destruction of the progressive tax system and the influence of supply-side economics. This video shows there is plenty of wealth on the supply side, but the promise of supply-side hasn’t materialized.

    The benefits of a highly progressive tax system, where we all pay the same percentage of tax we we progress through income levels, is best reflected in the economic boom of the 50’s and 60’s.

    There is nothing inherently unfair about a progressive tax system and there is ample evidence our economy does better the more progressive our tax system is.

    1. There is nothing inherently unfair about a progressive tax system and there is ample evidence our economy does better the more progressive our tax system is.

      Of course there is something unfair about having some people pay a much greater percentage of their earnings than others. Why should your tax payments be used to subsidise activities that you oppose?

    2. Of course, that economic boom of the ’50s and ’60s had nothing to do with the fact that North America was the only industrialized area in the world that wasn’t bombed to smithereens in WWII, thus being able to prosper in spite of a tax code that punishes success.

    3. Aiken_Bob

      when the system becomes so progressive that roughly 50% don’t pay tax then it isn’t progressive it is crazy. Everyone has to have some skin in the game — they way we have it now we have moochers and providers.

      1. That is blatantly false. All Americans pay taxes – for example, the sales tax. It would be correct to say that 46% of Americans don’t pay income tax. This is largely due to tax expenditures for the elderly and low income families with children that render these Americans untaxable.

  7. Abolish the income tax,and tax consumption in its place to get this economy balanced more to savings & investment,and away from its over reliance on consumption.Seventy percent of our GDP relied upon personal consumption is crazily inefficient.A US trade deficit up in the forty billion plus range month over month is stealing our great nations wealth & prosperity shipping it to foreign nations coffers.Our economy consist of this,we purchase cheap goods from low wage nations by the boatloads,they take those profits turn around and reinvest it by buying our bloated debt.This analogy might explain it properly,we shoot ourselves in the head,hand the gun to China and they finish the job,then we turn around and start the process all over again.

    1. Abolish the income tax, and tax consumption in its place to get this economy balanced more to savings & investment, and away from its over reliance on consumption. Seventy percent of our GDP relied upon personal consumption is crazily inefficient.

      Let people figure out what they want to do on their own. I see no reason to accept consumption taxes as being any more legitimate than income taxes. Taxation is theft. End of story. Let consumers and producers deal in a competitive marketplace and do as they will in the absence of coercion and you will have a much better system than having central planners decide where taxes should be levied and what regulations are needed to stimulate activity favoured by the ruling elite.

  8. marmico

    Here’s Dan Ariely of Duke who conducted the survey, the basis of the you tube visualization.

  9. PeakTrader

    Supply-side economics has been effective in raising output and employment, and lowering prices and interest rates.

    Unfortunately, government, along with creating good for society, has also created undesirable incentives and disincentives, costly problems that required costly solutions, and massive inefficiencies.

  10. Aiken_Bob

    Having watch the video the impression that I got was two guys, part of the intelligentsia, discussing how wonderful it is in their ivory tower. Their views of the ‘poor’ are like so many do gooders – do whatever as long as it makes me feel good. The poor are just so dumb they need me. The libertarian was better than the religion prof. I glad that college is in my rear view mirror – it would be hard to put up with this. – These guys need to get out and work with real people, outside of a university town.

  11. David Hitchcock

    I believe my wife was surveyed for this study, or a similar study, by a professor at Harvard. She was asked what she thought the “ideal” distribution of wealth would be, and of course, everyone would say something close to “equal”. This is a natural response, as you would “ideally” like everyone to work equally hard, be equally smart, and do well. However, when the study came out, it said that people “preferred” something closer to equality than actually occurs, which is not the same thing at all. In the real world you would prefer that those who work harder and smarter get more money– in other words the survey questions were very misleading, and interpreted in a way the survey respondents probably did not mean.

    1. Do you believe that the wealthiest people in America right now are the absolute smartest and hardest workers in the entirety of our country?

      I do not. I think, like you stated, those that work hard and are smart deserve compensation. Do I think that a CEO works 300+ harder than his average employee? Is 300x smarter than his average employee? I do not.

      What is that salary based on, then?

      1. I do not. I think, like you stated, those that work hard and are smart deserve compensation. Do I think that a CEO works 300+ harder than his average employee? Is 300x smarter than his average employee? I do not.

        One thing I DO know for sure, is that neither you nor I are qualified to judge the value of a CEO to the company that pays him or her, and therefore we aren’t able to judge whether their compensation is too high, too low, or much of anything else about it, except that it may be huge, and we wish it were ours.

        What is that salary based on, then?

        People are paid based on the value they create for an employer, or on the value they create for others, not how smart they are or how hard they work.

        If a large company’s earnings increase by a $billion and the value to owners (stockholders) increases by 10 $billion do you think paying the CEO who directed that growth a few $million is excessive?

        If you increased my net worth by $200k, shouldn’t I be happy to pay you 1%, 2%, 10% of that increaase?

        1. The issue is thinking in terms of giving money to another specific person. That is not what taxes do per se. They pay for infrastructure, roads, utilities, system of laws that provide protection, police, fire, land usage, a military protection from invaders, and access to the world’s greatest marketplace. The amount of money that goes to say Welfare for an unemployed person you focus on, is miniscule when compared to the trillions we give to banks and large corporations, and lose from offshore tax havens that circumvent taxation. This put undue burden on the middle class. Taxation is merely a collective pooling of resources we pay for all of this, and it stands to reason the wealthier use more of those resources than others. the Top 1% owns 90% of our wealth. This is so far removed from socialism as to be laughable. If we are a socialist country, then socialism works pretty damn well for corporations and they should support it. Further, if you measure return on a dollar of taxation spent, welfare and unemployment rank just below science and educations as the top policies for ROI. Why, because the people getting it spend it. That money circulates the economy supporting manufacturers, jobs, etc. You give money to a wealthy person via a lower tax, they simply invest more, the money does NOT circulate. It’s very simple economics. We yell and scream about millions in welfare while saying nothing of trillions to the banks and big oil.

          1. The issue is thinking in terms of giving money to another specific person. That is not what taxes do per se.

            But taxes do flow from productive individuals to people who work or depend on the government. That cannot be ignored.

            They pay for infrastructure, roads, utilities, system of laws that provide protection, police, fire, land usage, a military protection from invaders, and access to the world’s greatest marketplace.

            If I rob your bank account and decide to plant flowers in your garden I am still a criminal. You may not want the flowers that I pick. You may actually be allergic to them and would pay to get rid of them. That is the issue here; a group of people steals the earnings from workers and investors and spends it on projects that it decides are good for some specific group of people.

            As a consumer I would not choose to pay cops to hide in bathrooms trying to get propositioned by a gay Congressman or to hide behind bushes hoping to catch me going 10 miles over an arbitrarily set speed limit. I certainly would not pay for a weapons system that nobody in the military really wants or one that is so expensive that it makes no sense whatsoever. I would not pay to build roads and bridges to nowhere and would not want to pay for the defense of South Korea or Japan more than half a century after the last war in the area ended. You favour big government and feel that it is OK to steal the earnings of hard working people to pay for inspectors who are on the lookout for people who have installed out of specification toilets or showers in their homes or for overweight security guards at airports who have a fondness for feeling up little kids. I do not and suspect that Ron feels the same.

          2. Taxation is merely a collective pooling of resources we pay for all of this, and it stands to reason the wealthier use more of those resources than others.

            The wealthy do not use nearly as much police and fire protection as the poor do because they tend to pay for much of their own security and safety. They certainly do not depend on subsidized mass transport, food stamps, and plenty of other social welfare programs. They tend to use private airports private docks and tend to live in areas where they pay the freight for most of the upkeep and security.

            Where many of the wealthy rob us is their relationship to the Fed and the government. They write laws that provide protection from competition, give them subsidies and bailouts, and access to cheap money earlier than the average individual who is robbed of purchasing power due to access to newly created money and credit. A just society would reject state-run public and corporate welfare.

            The Top 1% owns 90% of our wealth.

            It isn’t your wealth.

            This is so far removed from socialism as to be laughable. If we are a socialist country, then socialism works pretty damn well for corporations and they should support it.

            They do. You have national socialism in the US where government, industry, and other special interest groups work together to limit the freedom of consumers.

            Further, if you measure return on a dollar of taxation spent, welfare and unemployment rank just below science and educations as the top policies for ROI.

            Really? The return on public education and most publicly funded scientific research is actually low or negative.

            Why, because the people getting it spend it. That money circulates the economy supporting manufacturers, jobs, etc. You give money to a wealthy person via a lower tax, they simply invest more, the money does NOT circulate. It’s very simple economics. We yell and scream about millions in welfare while saying nothing of trillions to the banks and big oil.

            LOL…It is simple economics. And wrong economics. You are singing from the statist songsheet where government spending is good no matter how stupid the spending is allocated. The real world does not work that way.

      2. Aiken_Bob

        I’m always at a lost when I read something like this – some artist get thousands for a painting and some nothing – I’m sure they are not 300x better. Some actors receive a bucket of cash for a performance, some actors receive nothing – are they 300x better or work harder. Some students receive A others F do the A students work 300x harder than the F student. If you can figure out why CEO are paid what they are why are you on an economic blog – makes no sense to me.

        1. I’m always at a lost when I read something like this – some artist get thousands for a painting and some nothing – I’m sure they are not 300x better. Some actors receive a bucket of cash for a performance, some actors receive nothing – are they 300x better or work harder. Some students receive A others F do the A students work 300x harder than the F student. If you can figure out why CEO are paid what they are why are you on an economic blog – makes no sense to me.

          It makes perfect sense.

          There are fields where compensation is not scalable because individuals are paid by the hour are not scalable. A lawyer or prostitute who gets $400 an hour is limited in what s/he can earn because there are only 24 hours in a day. At some point there is a ceiling on earnings.

          There are other professions where compensation is scalable. Your artist example is one of those. You can have one artist spend a lifetime creating a piece that has little to no value while another create a work that takes minutes but sells for tens of thousands of dollars. The artist is not restricted by the amount of time spent performing the job because the value of what s/he produces is totally subjective and determined by the purchaser.

          This is exactly why we have the types of distributions that we see in society regardless of the type of system that is in place. In totalitarian systems where most of the decisions are made by a few those few value their own contributions far more than those of the ordinary citizen. As a result they get to control most of the country’s assets even though they are a very small percentage of the population. In a free market where consumers have a choice those individuals who have figured out how to offer great products at low costs tend to get a disproportionate amount of the wealth. There is nothing unnatural about this. What is unnatural is to have the type of distribution that most people consider ideal.

          1. Scott Davis

            ” In a free market where consumers have a choice those individuals who have figured out how to offer great products at low costs tend to get a disproportionate amount of the wealth. ”

            No, the wealthy got there by inheritance, not merit. That’s most. You’ll never be able to rationalize economic rewards or make them ethical. Corporate competition results in unethical, illegal and murderous behavior. Coal plants lobby (bribe) Congress to let them pollute. Children downwind die of asthma.

            They win by rigging the game. Take a second look at the 400 billionaires running America. Look how they got there. Think they’re getting into heaven?

          2. No, the wealthy got there by inheritance, not merit. That’s most.

            Oh. Then perhaps their parents or grandparents earned the money?

            You’ll never be able to rationalize economic rewards or make them ethical. Corporate competition results in unethical, illegal and murderous behavior.

            And all this time I thought competition forced corporations to provide better products at lower prices to hold or gain market share.

            Coal plants lobby (bribe) Congress to let them pollute.

            You have that bribe part right, and that’s exactly why government should be as small and limited as possible, so as to remove the attraction of buying politicians by corporate interests.

            Children downwind die of asthma.

            Your appeal to emotion is heartrending, but we apparently don’t care enough about this calamity to boycott the product of these coal plants and force them into bankruptcy.

            They win by rigging the game. Take a second look at the 400 billionaires running America. Look how they got there. Think they’re getting into heaven?

            They got there, or their parents got there, by providing goods and services that consumers find so valuable that they are wiling to spend those billions to get them.

            What do you suppose billionaires do with their great wealth? They are directing it in ways that benefit large numbers of people, who *voluntarily* hand over money for those benefits.

            Learn some economics. Your simplistic and naive drivel is becoming tedious.

          3. Scott Davis

            “They are directing it in ways that benefit large numbers of people, who *voluntarily* hand over money for those benefits.”

            Really? Adelson feeds the gambling addiction. Shell Oil kills environmental protestors to pave the way for oil drilling. BP whitewashes deformed sea life in the gulf with their silly PR ads.

            The biggest money comes by way of coercion. I could list the number of great little companies Microsoft killed in the courts.

            In the closing years of the 19th century, women workers were flushing newborns down the toilets in pieces in textile mills because there wasn’t enough food for her growing children. In China, there are nets to catch workers who try to escape their fate through suicide.

            That’s what happens with unchecked, unregulated, capitalism. It’s coming again. Here. I’ve showed you the trend.

            Oh I understand economics. I reject its immorality.

          4. The biggest money comes by way of coercion. I could list the number of great little companies Microsoft killed in the courts.

            Actually, I doubt it. It is not a sin to give consumers stuff for free. If Google, Microsoft, or Apple want to provide me with a program so that I do not have to pay some outside vendor $50 I am more than happy to get it for free.

          5. In the closing years of the 19th century, women workers were flushing newborns down the toilets in pieces in textile mills because there wasn’t enough food for her growing children. In China, there are nets to catch workers who try to escape their fate through suicide.

            What a fool. Workers preferred textile mills to working the fields. Otherwise they would not be working there. As for China’s workers, they are seeing a huge increase in their standard of living thanks to all of the investment. It was not that long ago when families exchanged the bodies of their dead children because they were starving. That was under an anti-capitalist system, which is what you favour because you consider it more virtuous.

          6. Learn some economics. Your simplistic and naive drivel is becoming tedious.

            Our friend’s stupidity is astounding. He even makes Larry look good in comparison.

          7. Really? Adelson feeds the gambling addiction. Shell Oil kills environmental protestors to pave the way for oil drilling. BP whitewashes deformed sea life in the gulf with their silly PR ads.

            You have legitimate references sourcing these claims, right? Murder, in particular, is a serious accusation. One would think that government law enforcement would be interested in that.

            The biggest money comes by way of coercion. I could list the number of great little companies Microsoft killed in the courts.

            Please do. Microsoft enlisted government force to destroy competitors? I see the problem here, and you should too. Its the availability of government force to private interests.

            In the closing years of the 19th century, women workers were flushing newborns down the toilets in pieces in textile mills because there wasn’t enough food for her growing children. In China, there are nets to catch workers who try to escape their fate through suicide.

            I’m guessing that you just finished reading something by Noam Chomsky, am I right?

            That’s what happens with unchecked, unregulated, capitalism. It’s coming again. Here. I’ve showed you the trend.

            Would that be the same capitalism that has provided more benefits and a higher standard of living, as well as longer life, to more people than any other system in all of history?

            Oh I understand economics. I reject its immorality.

            Heh. If you understood economics you would understand that it’s a method of describing human action and interaction in a society, and that it can’t be described in terms of morality. People have a moral dimension, economics does not.

            Try looking around you at the real world as it exists, and try thinking for yourself, instead of quoting Chomsky without any understanding.

          8. Adelson feeds the gambling addiction.

            I missed this one. Do you believe he can force anyone into one of his casinos? He is wealthy because thousands of people enjoy spending lots of money at his establishments, and do so willingly. They get exactly what they expect to get.

            Get a grip.

  12. Scott Davis

    That’s always the right-wing answer. Oh, you’re just a temporarily inconvenienced millionaire. You’re not poor. Or as the author said, ” what is happening to actual flesh-and-blood human beings whose income and wealth change all the time” Change can be negative as well as positive. People can fall out of the middle class as well as rise above the poverty line, but overall, mobility is stagnating. Mobility is not helping to defuse the situation. We are past Tsarist-Russia level of inequality and in immediate peril of class violence. http://www2.lse.ac.uk/newsAndMedia/news/archives/2005/LSE_SuttonTrust_report.aspx Note how the US press keeps this out of the headlines.

    1. Thanks, Scott. I guess that explains the enormous rush of people leaving the US and UK for countries like Canada, Germany, Sweden, Norway, Denmark and Finland where opportunities are so much better.

    2. Aiken_Bob

      and your basis for income mobility is dead is what? if there is any reason for some folks being stagnate it is the artificial rules we have imposed on ourselves, e.g. make over x then no welfare, more than y employees then hit with a big fine, etc. This is a self inflicted wound.

      1. Scott Davis

        My basis for social mobility evaporating is the facts:
        http://www.damianhinds.com/Content%20-%20PDF%20Docs%20for%20web%20site/7%20Key%20Truths%20about%20Social%20Mobility%20-%201%20May%202012%20%28final%20version%20for%20web%29.pdf

        Does social mobility exist? Of course. Is the US a land of exceptional opportunity? No. It is poor relative to its peers. As far as the lack of emigration out of the US, that might be because it is difficult to get in to other countries. These are typical arguments, and typical triumphalist stances. I don’t expect people to surrender their cherished beliefs however unsupported by the facts.

        The idea that people only have themselves to blame for not becoming rich is typical too. Are the people in Norway that much more industrious? If hours worked are any indication, no. They do have greater class mobility though. Explain that away.

        1. Scott

          My basis for social mobility evaporating is the facts:
          [link]

          Facts? That’s collectivist claptrap produced by politicians, sourced from other political drivel, and presented in a visually appealing format that people like you with little economic or political understanding can relate to.

          The only conclusion one can draw from it is that the world is an unfair place, people are helpless to improve their own well being due to barriers beyond their control, and only massive government programs produce the desired equality of outcomes. You will need to do better than that.

          As far as the lack of emigration out of the US, that might be because it is difficult to get in to other countries.

          Anything’s possible, it might indeed be difficult to move to other countries. Do you have some evidence that that is, in fact, the case?

          The idea that people only have themselves to blame for not becoming rich is typical too.

          Typical of what, Scott? If people don’t improve their financial well-being between leaving school and retiring, just who would you blame?

          Are the people in Norway that much more industrious? If hours worked are any indication, no. They do have greater class mobility though. Explain that away.

          Have you considered that in a country with high taxes and a high level of income redistribution, the difference between being rich and being poor isn’t as great as in a country with lower taxes and lower income redistribution, so the range of incomes is compressed, and moving among the various measured levels of income doesn’t require as large a change?

          1. Scott Davis

            Calling statistical analysis “collectivist claptrap” will not change the empirical nature of the study. It just proves your resistance to facts.

            Keep on believing the poor have only themselves to blame. Nothing will dissuade you.

            I say typical because it is the motivated cognition that plagues Republicans. That’s well documented too. It only angers them to present facts. Their minds are made up. That’s an unscientific stance, but then Republicans don’t believe in science either.

            More here: http://faculty.virginia.edu/haidtlab/jost.glaser.political-conservatism-as-motivated-social-cog.pdf

            Hardly surprising that I’m the only one who can bring in research to back my positions, just like the video and this hack job of an unresearched rebuttal above.

          2. Keep on believing the poor have only themselves to blame. Nothing will dissuade you.

            I do not think that is what Ron is saying. Yes, there are some poor who choose their lot in life because they prefer handouts from the state to working. But many are driven to that position because the costs of employment have been driven to such high levels by governments even as those same governments have permitted idleness to be more rewarding. When there are incentives not to work people do not work. And when they do not work they cannot become ‘wealthy’ in the sense that you are thinking even though they may live in better conditions than 99% of people did a century ago.

            I say typical because it is the motivated cognition that plagues Republicans. That’s well documented too. It only angers them to present facts. Their minds are made up. That’s an unscientific stance, but then Republicans don’t believe in science either.

            There is very little difference between the Republicans and democrats in this case. Republican controlled Congress and Republican presidents have been responsible for increasing the welfare state no less than Democrats because both parties are the parties of big government and entitlements.

            I say typical because it is the motivated cognition that plagues Republicans. That’s well documented too. It only angers them to present facts. Their minds are made up. That’s an unscientific stance, but then Republicans don’t believe in science either.

            More here: http://faculty.virginia.edu/haidtlab/jost.glaser.political-conservatism-as-motivated-social-cog.pdf

            Hardly surprising that I’m the only one who can bring in research to back my positions, just like the video and this hack job of an unresearched rebuttal above.

            Some of us recall similar ‘research’ being published by National Socialists in Germany and the International Socialists in the USSR. The crap that you cite is just about as ‘scientific’ as that research used to be.

            If you want ‘research’ it may help you to look at real world examples. The people in North Korea were not very different genetically or culturally from the people in South Korea. The people in West Germany were not very different genetically or culturally than the people of East Germany. But in their development those same people wound up in very different places. The South Koreans became wealthy while the North Koreans starved. The funny thing is that the distribution is not all that different. The socialism of the North still gave the control of most of the assets in the country to a small number of people in the Party. Exactly the same thing happened in Germany. The West prospered while the East collapsed economically. And if you look around the world and check out the standard of living by country you will find that the countries that do the best have the least amount of meddling by the state while those that do the worst have the most. The job of government is not to pick winners of losers or to transfer wealth from one group to another. It is only to protect people and their property from anyone who initiates force against them.

          3. Scott Davis

            Yes, I got the gini index backwards. I apologize. But this is what motivated cognition does when confronted with facts: Oh, the statistics are wrong. Just like Nazi and communist studies. Where’s the proof of bad methodology or lack of objectivity? Remember unskewed polls? How’d that work out for ya?
            Norway has oil, that’s why people are prospering? England has oil too, but has worse social mobility. I don’t see how oil wealth has to benefit everyone and so make a bad system look good for a while.
            And, you aren’t addressing the trend. Here we go, deeper into misery for the 47%, and you have nothing to offer but work harder? Many working poor work hours that would exhaust you. Would your answer be the same to a 1776 French peasant?

          4. Yes, I got the gini index backwards. I apologize. But this is what motivated cognition does when confronted with facts: Oh, the statistics are wrong. Just like Nazi and communist studies. Where’s the proof of bad methodology or lack of objectivity? Remember unskewed polls? How’d that work out for ya?

            My point was that the ‘studies’ are not very scientific. Science requires certainty and objectivity, not activists doing psychological hit pieces on a group that they do not like. The approach is nothing new. It has been used by one group to discredit another for a long time.

            Norway has oil, that’s why people are prospering? England has oil too, but has worse social mobility. I don’t see how oil wealth has to benefit everyone and so make a bad system look good for a while.

            Norway has a lot more oil per person than England. And its peak came after the peak in the UK sector. And let us not mention the fact that Norway is a very homogeneous country that is a lot easier and simpler to govern than England.

            And, you aren’t addressing the trend. Here we go, deeper into misery for the 47%, and you have nothing to offer but work harder? Many working poor work hours that would exhaust you. Would your answer be the same to a 1776 French peasant?

            People are working a lot more because governments take much more of what they earn in taxes, tariffs, and fees at a time when regulatory costs are increasing their costs. The EU used to have stupid regulations that governed the curvature of cucumbers that could be sold to the public. It has all kinds of similar laws that make it more expensive for poor people to purchase food, gasoline, and other products. My argument is for a lot less meddling by government and much less taxation. Let people keep what they earn and more of them will choose to work more rather than hope that the government can transfer wealth to them by taxing productive workers or investors.

          5. Calling statistical analysis “collectivist claptrap” will not change the empirical nature of the study. It just proves your resistance to facts.

            Scott, I have news for you: That isn’t an example of scholarly analysis. Where are the references, the footnotes? Where can I find information on the methodology used?

            Keep on believing the poor have only themselves to blame. Nothing will dissuade you.

            Pouting will get you nowhere, Scotty boy.

            I say typical because it is the motivated cognition that plagues Republicans. That’s well documented too. It only angers them to present facts. Their minds are made up. That’s an unscientific stance, but then Republicans don’t believe in science either.

            That’s amazing! You can describe *all* Republicans this easily? It must be comforting to assign people to ideological boxes so you don’t have to consider them as individuals.

            But why are you off topic? How is describing Republicans pertinent to an economics discussion?

            More here: http://faculty.virginia.edu/haidtlab/jost.glaser.political-conservatism-as-motivated-social-cog.pdf

            Will wonders never cease! Conservatives tend to be conservative? Who would have thought? The sad part is that people actually get paid to produce this stuff. talk about undeserved wealth!

            .Hardly surprising that I’m the only one who can bring in research to back my positions, just like the video and this hack job of an unresearched rebuttal above.

            So far, Scott, your only discernible position is that people who have a lot of wealth don’t deserve it.

          6. Scott Davis

            Here’s what’s wrong in a nutshell. As a whole, workers are producing more and getting less in return. The excess is going increasingly to the top.
            http://rdwolff.com/sites/default/files/graph.JPG
            All I hear from you people is that the economic system is fair. That contribution to the economy and compensation track nicely together, so that there must be something wrong if you’re poor (lazy, etc., ) and virtue in wealth (as if you never heard of Madoff).
            As the system becomes less and less just, it becomes brittle, in peril of collapse. And here you are, continuing somehow to think there’s nothing wrong.

          7. Here’s what’s wrong in a nutshell. As a whole, workers are producing more and getting less in return. The excess is going increasingly to the top.

            Actually, it isn’t just going to the ‘top’. It is going to the capital that makes that productivity possible and the last time I looked workers were also investors.

            Now where I agree with you is the financial sector. It is clear that governments have bailed out the financial companies that made all kinds of errors and bailed out managers that should have lost their pensions and their stock holdings. Instead the governments bailed out the sector and sat back as the managers paid themselves obscene amounts in bonuses as investors and workers got screwed. But that is a problem caused by too much meddling by government, not the market.

            All I hear from you people is that the economic system is fair. That contribution to the economy and compensation track nicely together, so that there must be something wrong if you’re poor (lazy, etc., ) and virtue in wealth (as if you never heard of Madoff).

            The free market would be fair. But we have very little of that. Instead we have a system where governments protect special interests from competition. Unions and bank managers get rich while the consumers and ordinary investors/workers get screwed. As I stated above, the solution is less meddling, not more.

            As the system becomes less and less just, it becomes brittle, in peril of collapse. And here you are, continuing somehow to think there’s nothing wrong.

            The system becomes more and more managed. If that system fails it is hard to blame the market while you ignore the role of the planners.

          8. Here’s what’s wrong in a nutshell. As a whole, workers are producing more and getting less in return. The excess is going increasingly to the top.
            http://rdwolff.com/sites/default/files/graph.JPG

            I thought the problem was that income mobility was dead, then I thought the problem was that there are too many evil billionaires, and now you say the problem is that worker compensation isn’t rising as fast as productivity.

            You may want to stick to one relatively narrow topic, as you can’t likely present your entire socialist agenda in a blog comments section.

            But thanks for the link. At last you have produced a meaningful reference, however it may not be telling you what you think it does.

            The reason for increased output per worker is that *capital* is provided by those insufferable *capitalists* to increase worker productivity in the form of innovative technology, automation, and better tools.

            Think of a construction worker using a nail gun instead of a hammer and nails. That worker produces a great deal more in a day than he or she did in the past – not because they are working harder, or have gotten smarter – but because someone else has provided them with a productivity tool to increase their output. that’s exactly what you are seeing in the chart you presented.

            The producer of that productivity tool deserves to be rewarded for their contribution to higher productivity, which results in lower prices to consumers, and the provider of that capital investment deserves a return on their investment just as much as the workers deserve a return on their labor.

          9. Scott Davis

            “as much as the workers deserve a return on their labor.”

            Why should a capitalist give more to a worker than what’s needed for temporary survival? That would maximize profits. If he gives the worker any more, he has to raise prices and the competition will trounce him, so he can’t and won’t. If he tries to organize fire him. If he asks for better pay fire him and give him a bad reference to scare the other workers. They’ll hear about his death and the capitalist will have far fewer problems.

            That’s the logic of the dismal science. And that is what is happening.

          10. Why should a capitalist give more to a worker than what’s needed for temporary survival?

            Because there is a market rate. A business needs workers and if it does not pay as much will lose them to their competitors. If it pays too much it will gain workers but lose customers and will suffer just as the business that paid too little. You might try learning some basic economics because your ignorance is showing.

          11. Scott Davis

            The corporation’s sole goal is to maximize shareholder value. In other words, to make its owners rich.
            To do this, it must charge its customers the maximum possible.
            Therefore, corporations try to minimize competition.
            If an upstart offers a competitive product, sue for intellectual property theft however unfounded. (Microsoft) Headhunt away its top talent. (Oracle) Engage in predatory pricing so the upstart cannot make a profit. Raise price after eliminating the threat to pay for the battle. (Walmart)
            Lower product costs wherever possible. If regulatory enforcement is lax, make product cheap and unsafe. (HFCS, aspartame, so many others) If product is in bad repute, sell it overseas.(Altria)
            If employees try to unionize, close the plant and move to 3rd world. (MA)
            Environmental concerns? Use lobbyists to blunt legislation, fight infractions in court. (WR Grace) File SLAPP suits against accusing individuals.

            Corporations will if left unchecked, drive workers down to subsistence. They destroy demand for their own goods, but do not have the vision or the foresight to see this. Otherwise, they would use the 2 trillion in the bank the fortune 500 has right now and create jobs (consumers) and increase sales. They won’t do this. We recovered from the same demand trap in the early 30s by massive government programs. We hit recession again in 37 from the withdrawal of the same stimulus. The final cure for the depression was WWII. Economically speaking, another massive government program.

            This is not to say that government is any better. Government has the potential, however, to be more accountable. All you can do with a corporation is refuse its products if you can. Shareholder revolts are rare. Founding a society on unbridled capitalism is like marrying a prostitute. Do you expect to raise a nice family that way?

          12. The corporation’s sole goal is to maximize shareholder value. In other words, to make its owners rich.

            Of course.

            To do this, it must charge its customers the maximum possible.

            That sounds right.

            Therefore, corporations try to minimize competition.

            Every seller wishes to have no competition whether he sells labour or goods or services.

            If an upstart offers a competitive product, sue for intellectual property theft however unfounded. (Microsoft)

            Which is why the IP laws need to go away. They offer monopoly protection that cannot be justified. Those come from legislatures, not common law.

            Headhunt away its top talent. (Oracle)

            Nothing wrong with offering more money to people. Do you propose slavery as a solution?

            Engage in predatory pricing so the upstart cannot make a profit. Raise price after eliminating the threat to pay for the battle. (Walmart)

            Predatory pricing? I think that you mean affordable prices that consumers want and expect. What is wrong with that? Did Walmart increase its prices now that it is so big?

            Lower product costs wherever possible.

            Of course. Wasting resources is not a virtue. Lower costs mean lower prices and higher efficiency.

            If regulatory enforcement is lax, make product cheap and unsafe. (HFCS, aspartame, so many others)

            Regulations do not make products safe? And corporations do not want to poison their customers because that is the fastest way to go out of business.

            If product is in bad repute, sell it overseas.(Altria)

            Great imagination. All producers try to sell their products in as many markets as possible. For the record, you could have said GM. It has a much better reputation in China than it does in the US.

            If employees try to unionize, close the plant and move to 3rd world. (MA)

            What is wrong with having plants abroad?

            Environmental concerns? Use lobbyists to blunt legislation, fight infractions in court. (WR Grace) File SLAPP suits against accusing individuals.

            You are getting back to the evils of government again. It is not the place of government to use regulatory powers to protect polluters.

            It is by now obvious that you are totally ignorant of economics or logic. Most of your examples are arguments against government, not the free markets.

          13. Corporations will if left unchecked, drive workers down to subsistence.

            They compete for labour so what you say is not possible. But that is a common error among the economically illiterate.

            They destroy demand for their own goods, but do not have the vision or the foresight to see this.

            Right. That is why Guinness has been around in a very competitive market since 1759, Ford has been making cars since 1903, and Coca-Cola has been selling its products since 1886. What was the demand for the iPad before Apple created tablets?

            Otherwise, they would use the 2 trillion in the bank the fortune 500 has right now and create jobs (consumers) and increase sales.

            Isn’t economic ignorance bliss? You can live in a make believe world where lunches are free and there are no consequences to bad decisions. There is too much capacity around the world. Many companies need fewer workers, not more.

            They won’t do this. We recovered from the same demand trap in the early 30s by massive government programs.

            No, you did not. There was no recovery in the 1930s. It began after the troops came home and the government stopped increasing spending.

            We hit recession again in 37 from the withdrawal of the same stimulus. The final cure for the depression was WWII. Economically speaking, another massive government program.

            Shed your ignorance and look at Harding/Coolidge. They inherited a collapsing economy after WWI and cut spending and taxes instead of raising them. The economy contracted sharply but recovered once the liquidation phase was over. Hoover/FDR did the opposite. They spent too much and increased taxes/tariffs. As a result there was no liquidation and no recovery.

          14. Why should a capitalist give more to a worker than what’s needed for temporary survival?

            Why? Because if he doesn’t, someone else will. If a skilled worker produces $50/hr for an employer, and the employer pays him only $5/hr, other employers will hire away that worker for something more than the $5/hr. Eventually the worker will be paid a wage close to, but not above his value to an employer.

            It’s called competition – the same force that keeps firms from charging a higher price for their products.

            That would maximize profits. If he gives the worker any more, he has to raise prices and the competition will trounce him, so he can’t and won’t.”

            Profit isn’t a fixed amount, it’s what’s left over, if anything, after all costs are paid. It’s squeezed between costs and competitive prices, and if a business can’t produce a profit, it goes bankrupt. That’s good for us as consumers. It means we can choose what we consider the best product or service at the lowest price. Providers who succeed in pleasing us in that way will thrive, and those who can’t will fail.

            Consumers dictate prices, and thus profits.

            Labor, like any other input to production, is not in unlimited supply, so firms must pay the price necessary to ensure that they have as much of it as they need, just as they must pay an amount for raw materials, building rent, utilities, etc., to stay in business.

            If he tries to organize fire him. If he asks for better pay fire him and give him a bad reference to scare the other workers. They’ll hear about his death and the capitalist will have far fewer problems.

            That might happen if there was an unlimited supply of workers who cost nothing to hire and train, but in the real world this is not at all likely.

            That’s the logic of the dismal science. And that is what is happening.

            No, that’s the socialist propaganda parroted by the uninformed.

          15. Scott Davis

            “Why? Because if he doesn’t, someone else will. If a skilled worker produces $50/hr for an employer, and the employer pays him only $5/hr, other employers will hire away that worker for something more than the $5/hr. “Eventually the worker will be paid a wage close to, but not above his value to an employer.”

            No. Doesn’t work that way. The employer is a member of a group of companies that compare wages through compensation surveys. They are careful not to engage in a bidding war on talent or they will all lose. A cartel can break down if anyone cheats, but for most jobs most of the time, it works. Wages are fixed.

            Right now with high unemployment, wages are stagnant and the cost of living keeps rising. Even if the economy heats up, employers will work hard to prevent worker advancement. You don’t get rich working for somebody else.

            Your naive faith in the labor supply as a market is touching, but misplaced. The market is rigged.

          16. No. Doesn’t work that way. The employer is a member of a group of companies that compare wages through compensation surveys. They are careful not to engage in a bidding war on talent or they will all lose. A cartel can break down if anyone cheats, but for most jobs most of the time, it works. Wages are fixed.

            LOL

            You MUST be kidding me. Do you seriously believe that millions of employers are able and willing hold the line against higher wages to the detriment of their own bottom line? talk about naive! You seriously lack understanding of human nature.

            If that is true, what keeps them from agreeing to charge whatever they please to consumers?

            And speaking of consumers, where do you suppose customers come from if workers are paid only subsistence wages? Do the filthy rich just buy from each other? are they all shopping at Walmart? You *really* need to consider learning some economics, and lose the ideological spin you are so enamored of.

            Right now with high unemployment, wages are stagnant and the cost of living keeps rising. Even if the economy heats up, employers will work hard to prevent worker advancement.

            LOL

            Yes, those heartless bastards are only happy when they see someone else suffer.

            You don’t get rich working for somebody else.

            That’s correct, and that’s why not everybody works for someone else. Some people – we call them entrepreneurs – are willing to risk their own money on risky ventures that may fail and lose them everything, and they are willing to wait for a return on their efforts until their idea is produced and sold. They are rewarded, if at all, for their willingness to defer consumption.

            Workers, on the other hand, are those who aren’t willing to risk their own skin, and don’t want to wait for a reward, but prefer to be paid right away for their efforts. The security of a known, immediate reward, as opposed to a deferred unknown reward. Lower risk, lower reward.

            Your naive faith in the labor supply as a market is touching, but misplaced. The market is rigged.

            Like any other commodity, there is a market for labor. You might at least look up the definition of scarcity as it’s used in economics.

          17. The only “income redistribution” taking place in America is from the bottom towards the top. It is easy to measure. Right now if the wealthy were losing wealth and the poor were gaining wealth, you would be accurate in a top down income redistribution. However, the exact opposite is occurring. The information is right there for you to see, what is wrong with you people. DO you have Stockholm syndrome? Trust me, the oil Barrons and wall street bankers don’t need your help, they seem to be robbing us all just fine. You are blinded by propaganda and ideology that corporations pay for through owning news and paying politicians. Try to remember that for decades Americans like you took the side of tobacco companies that cigarettes don’t cause cancer, and that scientists saying they did were “paid” to be against tobacco. We see the same exact obstruction today in Global Climate change. 98% of scientists think its true and greatly affected by man, but you fall for the 2% hired by oil companies. Brilliant.

        2. My basis for social mobility evaporating is the facts:
          http://www.damianhinds.com/Content%20-%20PDF%20Docs%20for%20web%20site/7%20Key%20Truths%20about%20Social%20Mobility%20-%201%20May%202012%20%28final%20version%20for%20web%29.pdf

          LOL…You cite a report created by UK Labour politicians who nearly managed to destroy England with their failed theories and are mainly responsible for the problems that they cite.

          Does social mobility exist? Of course. Is the US a land of exceptional opportunity? No. It is poor relative to its peers. As far as the lack of emigration out of the US, that might be because it is difficult to get in to other countries. These are typical arguments, and typical triumphalist stances. I don’t expect people to surrender their cherished beliefs however unsupported by the facts.

          You clearly have no wish to surrender your cherished beliefs no matter how they have been disproved by the facts.

          The idea that people only have themselves to blame for not becoming rich is typical too.

          I think that you are missing the argument on this front. It is not the ‘people’ who are to blame but the politicians who take so much of their earnings in taxes to support other people who choose not to look after themselves. And it is the central banks to blame as their policies of monetary expansion make it nearly impossible for savers to retain their purchasing power without activity that transfers much of their wealth to the advantaged financial sector.

          Are the people in Norway that much more industrious?

          No. But they are sitting on a lot of oil that has been used to generate wealth. Any country could appear to be as wealthy on a pre capita basis if it were given the same amount of oil. The question is where would Norway be without that oil.

          If hours worked are any indication, no. They do have greater class mobility though. Explain that away.

          It’s the oil wealth stupid.

  13. Scott Davis

    I wonder just how far the gini index has to shrink before AEI true believers start to worry. 100%? Castles and huts? We’ll reach the flash point of revolt long before that. We have already surpassed the inequality of the gilded age and Tsarist Russia, and the gap keeps growing.

    1. I wonder just how far the gini index has to shrink before AEI true believers start to worry. 100%? Castles and huts? We’ll reach the flash point of revolt long before that. We have already surpassed the inequality of the gilded age and Tsarist Russia, and the gap keeps growing.

      The Gini Index? What does that measure other than how Scandinavian a country happens to look like? And if you understood dumdum, you would know that a low score is good while a high score is bad. (Even those of us who consider the index worthless understand that point.

      On the Gini Index we see that Belarus, Afghanistan, Bulgaria, and Serbia do better than Germany. Do you really think that people prefer to live in Bulgaria or Afghanistan rather than Germany? If that is the case why are so many Bulgarians and Serbians trying to move to Germany?

  14. Scott Davis

    Shell oil kills:

    A Manhattan court judge “Cabranes ruled that transnational corporations who participate in gross human rights abuses cannot be held responsible for torture, genocide, war crimes and the like because, as corporations, their activities fall outside the jurisdiction of international law.”
    Can’t post the link. Comment gets blocked. Just google the quote and you’ll find it.

    Even Fox News commented on Deformed Gulf sealife after DeepWater Horizon

    Adelson’s Billions? Just google Macau Adelson corruption

    As far as not being grateful for capitalism and all its benefits, that’s a straw man argument. I don’t think the free market is bad. I think it should even be more free, particularly from the monopoly powers of big business that crushes small ones. And, I’ve seen enough breathtaking immorality and outright evil to have much regard for capitalists. You can say there are worse alternatives, but that doesn’t make them good.

    1. Shell Oil Kills: Is this the link you are having trouble with?

      It sounds like Ken Siro-Wiwa and the others were tortured and executed by a brutal dictatorship, acting in its own interests. I suppose you can stretch this to include Shell oil, but the problem is that corporations are groups of people with a common interest. Where are the charges against Shell employees, and those within the brutal government of Sani Abacha?

      Without consulting a team of legal scholars, I can only guess that Judge Cabranes may have been correct in ruling that multinational corporations acting on foreign soil didn’t fall under the jurisdiction of the Second Circuit Court of Appeals. What would you have him do?

      This seems to be another example, as you keep pointing out, of government being the problem. In this case, the Nigerian government.

      Even Fox News commented on Deformed Gulf sealife after DeepWater Horizon

      A news report? Where’s the study? If I were to guess, and of course that’s all any of us can do, I’d say the ,toxic oil dispersants used may have been more of a problem than the oil itself.

      By the way, not to minimize the disastrous oil spill, but are you aware that the Deepwater Horizon sank to the bottom because fire suppression efforts filled the drilling platform with water until it could no longer float, and it then sank to the bottom, destroying the intact pipeline that brought oil to the surface, and making efforts to stop the flow of oil much more difficult?

      Did you also know that Belgian dredging companies weren’t allowed to help with oil spill cleanup and coastline protection due to Obama’s refusal to waive requirements of the the Jones act, a protectionist measure that prohibits foreign vessels from traveling between US ports?

      Adelson’s Billions? Just google Macau Adelson corruption>”

      Once again you are pointing out someone enlisting government force or regulation to hurt its competitors. Do you see a pattern here? Companies are relatively powerless without enlisting the monopoly on force exercised by government. Once again your outrage is directed at the wrong people. Reduce government power, and reduce this corrupt influence.

  15. Scott writes:

    No, the wealthy got there by inheritance, not merit. That’s most.

    People have the right to transfer the money they earn to whomever they wish. In a free market you only get wealthy when consumers choose to buy what you sell over other options. That makes the accumulation of wealth virtuous because you earned it by solving problems for others. There is no virtue in using force to redistribute income.

    You’ll never be able to rationalize economic rewards or make them ethical.

    Sure you can. In a free market consumers choose who to reward with their patronage. The virtuous become wealthy while the less competent have to settle for a lot less. I woudl argue that you can never justify economic theft or make it ethical.

    Corporate competition results in unethical, illegal and murderous behavior.

    No, it does not. There are rules that protect people from the activities of others.

    Coal plants lobby (bribe) Congress to let them pollute. Children downwind die of asthma.

    Which is why Congress should not have the power to let polluters pollute. What you need is a rights based free market, something that as an authoritarian you clearly oppose.

    They win by rigging the game. Take a second look at the 400 billionaires running America. Look how they got there. Think they’re getting into heaven?

    You are making my argument for me. There should be no ‘game’ to rig because Congress should not have the power to meddle in voluntary transactions. It is the authoritarians on the left and right that make the ‘rigging of the game’ possible.

  16. I agree with the video’s inaccurate portrayal. The issue of wealth inequality is not that wealth is not equal.

    I’d like to start with a disclaimer that I do not think that the current reality of our nation’s wealthy distribution is anything to be proud of. A thriving middle class is what drives an economy, but that being said, the solution to the issue does not lie in any socialist type of principles.

    For every negative there is a positive. Therefore, wealth inequality has a positive. It’s a positive that we have stood by since the early days of our nation – equal opportunity. Framing the conversation in the negative fails to address the real issue that our nation faces. It’s not that wealth is inherently bad, that would make us socialist. The issue is that somehow the odds are stacked against people thereby creating opportunity inequality. The idea that this country was founded on the belief that if you can dream it you can achieve it rings true to everyone, yet its reality is somewhat different. We should be more focused on understanding how that really translates today as opposed to a few decades ago. How much harder do people have to work? What are the chances that a mere high school diploma will yield the sort of success it did a few decades ago?

    We should be focused on the underlying issue that creates opportunity inequality – lack of education. Our schools are behind on a global scale, everyone knows that. Compare our public school system to our nation’s elite private schools and the issue becomes clear. Education is the key – not just for the sake of obtaining a degree, but for the sake of being fiscally responsible. I grew up in a lower middle class household. My parents valued education more than anything else. They understood that the “wealthy” and the “successful” in this country by and large valued education and sought the best education for their children.
    For the rest of my blog please visit my page at diggbie.blogpost.com

    1. Scott Davis

      Finally an intelligent comment. Though I do not think that America had equal opportunity in the early days. Revolutionary times? A woman, a native american, a black would have less opportunity no matter the effort.
      The rags to riches story, the Elmer Gantry myth haunts and clouds our thinking. A dream, not a reality, though we can be better or worse at it.
      Equal opportunity the concept was born out of Johnson’s Great Society days, more or less. Kennedy also had a hand in civil rights, turning discrimination into an unlawful act. Did you know as late as the 50s the newspaper carried help wanted headings for women’s jobs and men’s jobs?
      Anyone who thinks we have a meritocracy now should reconcile the fact that the valedictorian of a poor high school has about as good a chance of graduating college as the person who placed last in class rank at a rich high school. There’s no doubt in my mind which one worked harder. There should have been a different result.
      And, oh yes, don’t make up socialism to be what its detractors say. Understand it for itself, and see most of the first world is closer to it than the USA. It doesn’t kill freedom or democracy, quite the opposite. Corporatocracy is despotism.

  17. Scott Davis

    On 4/11/2013 6:27 PM, AEIdeas wrote:
    >
    > The Top 1% owns 90% of our wealth.
    >
    > It isn’t your wealth.
    Look at a dollar bill. Who is the guarantor of the value of the currency? The government. Who owns the government? The people. What sustains the USA when it is under attack? The people. Who maintains order in the marketplace, enforces contracts and educates the workforce? The people’s government. The wealth of the country is nothing without the people of the country. Do not think that a wealthy individual is sovereign. That’s plutocracy, not a democratic republic.

    1. Look at a dollar bill. Who is the guarantor of the value of the currency? The government.

      Is that why the currency has lost more than 80% of its purchasing power in four decades? When money can be created out of thin air there is no guarantee of value. And if you know what you were talking about you would know that value is subjective.

      Who owns the government? The people.

      Really? The last time I looked the government could fine or put you in jail for having too much pressure in your shower or for smoking pot and decided that you had to pay double the world price for sugar. Did the people decide that? Government is run by a well connected gang of thieves that lives as parasites off the general population by buying votes.

      What sustains the USA when it is under attack? The people.

      It has always been individuals who decide to act that matter. There is no monolithic thing that we can call ‘the people'; there are only groups of individuals.

      Who maintains order in the marketplace, enforces contracts and educates the workforce?

      The market does a great job of regulating itself when there aren’t government meddlers to muddy the waters and when those that take the risks have to deal with the consequences. Look at the housing bubbles and tech bubbles as a perfect example of what happens when government can increase the supply of money and credit and the risk takers don’t have to worry about failure. The hundred plus regulators did not stop the securitization fraud in the real estate market and hurt anyone who saw what was going on by ensuring that the promoters were invulnerable to market attacks until very late in the game. The interests of the speculators and the government coincided so they protected and gave cover to the bubble blowers. In a free market the short side would have wiped out the bulls much earlier in the game and the big banks who made the errors would have been wiped out. The government did not allow the market to punish the big banks. Instead it bailed them out by harming the sound Main Street banks who had nothing to do with the bubble.

      The people’s government. The wealth of the country is nothing without the people of the country.

      You confuse groups of individuals with the people and government with society. Even my 14-year old knows better.

      Do not think that a wealthy individual is sovereign. That’s plutocracy, not a democratic republic.

      I think that all individuals are sovereign. That is what freedom is about.

      1. Scott Davis

        The only form of government in which individuals are sovereign is Anarchy.
        An unregulated market devolves into gangster capitalism and finally, no market at all, just rule by monopolistic corporations, or in other words, Fascism.
        If you think value is subjective live without dollars and see how long you do.

        1. The only form of government in which individuals are sovereign is Anarchy.

          You confuse government with society again. Anarchy does not mean no law and no institutions. It simply means no central authority and a voluntary society.

          An unregulated market devolves into gangster capitalism and finally, no market at all, just rule by monopolistic corporations, or in other words, Fascism.

          No. An unregulated market keeps the frauds and crooks in check by wiping them out. In a free market those that make bad decisions are allowed to fail, not made bigger and more powerful through bailouts.

          If you think value is subjective live without dollars and see how long you do.

          You demonstrate your ignorance again. Value is subjective because the purchasing power of that ‘dollar’ changes. The same egg can cost you twice what it used to cost you because its value went up against the dollar in the opinion of consumers.

          You really need to do some reading because it is clear that you don’t even understand what is being said on this site.

          1. Scott Davis

            Subjectivity means no agreed-upon status. Just because a value is not static does not mean its value has no objective reality.

            An unregulated market rewards crooks. If I can kill my competitors I can raise prices. If there is no punishment for doing so killers win. Law prevents this, and other unfair practices.

            An example where regulation was relaxed and socially beneficial behavior increased can be found, in for example, generic drugs and airline routing. These had the effect of increasing competition, showing the role of government in fostering free markets.

            Oh, I know what is being said on this site, and I know the misery caused by the Chicago School “Reforms” in other nations and here.

          2. Subjectivity means no agreed-upon status. Just because a value is not static does not mean its value has no objective reality.

            The value of goods and services cannot stand apart from the individuals who are evaluating them. For each individual the valuation being made is a subjective matter. What is more important to realize is that even the individual cannot come up with a value using objective data or measures. As Menger pointed out more than a century ago valuation is simply a preference of one increment of a thing over another. Nobody ever gets to measure the value of all of the water in the world against all of the gold. S/he simply chooses at the margin and there the outcome of valuation is determined by preference for the quantities of the goods that the individual is deciding on. While I may value water more than gold because I need it to survive the price for an identical glass of water that I would choose to pay is entirely dependent on circumstances. If I were walking around my local neighbourhood I will value that glass very differently than if I were in a hot desert. All value is determined by individuals acting at the margin and that is done by those individuals ranking items by preference. When the fisherman exchanges his fish with the farmer for some wheat both sides value what they got more than what they gave up. There is nothing ‘objective’ about the transaction.

            An unregulated market rewards crooks. If I can kill my competitors I can raise prices. If there is no punishment for doing so killers win. Law prevents this, and other unfair practices.

            Did you look at the Wall Street banks? An unregulated market would have destroyed them. Instead the regulators bailed them out and made them bigger. Did you look at Madoff? The math geeks figured out that the books were cooked because the variances were too low. The regulators kept giving him a pass and his list of victims kept growing. Have you looked at JPM? It is misreporting reality but the regulators keep smiling and saying that all is OK. As a result, the short sellers, who would destroy the company by exposing the fraud can’t do anything but lose money if they bet against the inevitable.

            An example where regulation was relaxed and socially beneficial behavior increased can be found, in for example, generic drugs and airline routing. These had the effect of increasing competition, showing the role of government in fostering free markets.

            Deregulation means that the government is not getting in the way as much. Deregulating the telephone companies and the airlines was great for consumers but no so great for the lazy management groups in companies that got fat because they were protected by artificial monopolies.

            Oh, I know what is being said on this site, and I know the misery caused by the Chicago School “Reforms” in other nations and here.

            The Chicago School is made up of another type of statist. Its practitioners have constantly argued against truly free markets but sells themselves as champions of the consumer and taxpayer.

  18. Injun for hire

Comments are closed.

Sort By:

Refine Content:

Scholar

Additional Keywords:

Refine Results

or to save searches.

Open
Refine Content