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Guest Post: The Key to Understanding "Recession" and "Recovery": The Wealth Pyramid
Submitted by Charles Hugh Smith from Of Two Minds
The Key to Understanding "Recession" and "Recovery": The Wealth Pyramid
The top 20% are prospering and spending money; the bottom 80% are not, but thanks to vast wealth disparity, the top slice of households can keep consumer spending aloft. This provides an illusion of "recovery" that masks the insecurity and decline of the bottom 80%.
There is statistical and anecdotal evidence supporting both a "we never left recession" and "the economy is recovering" interpretation. The key to making sense of the conflicting data is to understand that there are Two Americas.
Roughly speaking, we can divide the U.S. economy into "Wall Street"--the financialized part of the economy which encompasses the FIRE (finance, insurance and real estate) economy and its bloated partner in predation, the Federal government--and "Main Street," the looted, overtaxed remainder of the "real economy" which isn't a Federally supported corporate cartel (i.e. the military-industrial sector, the "healthcare"/sickcare sector, Big Agribusiness, etc.)
Main Street is small business, entrepreneurs, shopkeepers, small property owners (independent motels, vineyards, truck farms, etc.) and local service providers (dentists, accountants, etc.). This class of small business and their employees is in decline: Few Businesses Sprout, With Even Fewer Jobs (WSJ.com)
Needless to say, the Federal/financialized/corporate cartel tranch of the economy is doing very, very well, thank you. The number of Federal employees pulling down $150,000 annually is skyrocketing, hundreds of billions in revenues slosh into National Security and sickcare cartels, and Wall Street bonuses are in the tens of billions.
A thin, overhyped tranch of the tech economy is also doing well--Google employees just got a 10% raise, for example--but this overhyped tranch includes a razor-thin share of the 130 million person U.S. workforce. Google's global workforce is about 23,000, Twitter has a staff of roughly 300 and Facebook employs about 1,500 people.
There are two Americas in terms of wealth and income: In terms of income, the top 10% earn about half the total income, and in wealth, the top 5% own roughly 70% of all financial wealth.
I have prepared a Wealth and Income Pyramid of the U.S. to illustrate this reality. Notice that the "middle class" is mostly a figment of nostalgia and/or political illusion. Only the top quintile (top 20%) are really doing well in terms of income, and only the top 5% are prospering in terms of assets and unearned income (non-wage income).
This goes a long way to explaining how "consumer spending" can be "recovering" even as the incomes of the bottom 80% stagnate or fall. The top 5% of Americans by income are responsible for 37% of all consumer spending-- about the same as the entire bottom 80% by income (39.5%).
David Stockman, director of the Office of Management and Budget under President Reagan, recently noted in an editorial that the top 1% of Americans received two-thirds of the gain in national income from 2002 to 2006.
Over the past 25 years since 1985, the top 1 percent's share of national income has doubled; in 2007, it netted 23 percent of the nation’s total income. The income of the wealthiest Americans--the top 0.1 percent—has tripled in that 25 year period. This wafer-thin slice of Americans now earn as much as the bottom 120 million people.
Out of 113 million households, 1/100 of 1% rake in $10 million or more annually. As consumers, the top 5% carry the same weight as the bottom 80%. The top 10% take in 50% of the income. (The sources are listed in Two Americas: The Gap Between the Top 5% and the Bottom 95% Widens August 18, 2010.)
This explains how Nordstroms' earnings can rise by a healthy 43% while Wal-Mart's sales in the U.S. can decline. Frequent contributor Cheryl A. reported that on a trip to Wilmington, DE, the shopping mall was packed with shoppers and people dining out: "It's like there never was a recession."
Meanwhile, I took an old friend who was visiting the San Francisco Bay Area to a restaurant in San Francisco that has never failed to be busy in the past 10 years, and the place had more empty tables than customers. The sidewalks were crowded with people, but how many were spending money?
I think the answer is obvious: the top 20% are spending money lavishly, as per their consumerist lifestyle, while the bottom 80% are taking the kids to Costco for entertainment.
The top 20% pay the vast majority of the taxes: According to the Congressional Budget Office (CBO), the top 20% paid 86.3% of all Federal income taxes, 43.6% of Social Security, 87.8% of corporate taxes and 34.1% of Federal excise taxes. After including earned-income tax credits, the bottom 60% of households paid less than 1% of all Federal income taxes, and the households between 60% and 80% paid 13%.
But the top quintile's share of national income rose despite th tax burden. In other words, income disparity has widened even though the wealthy pay the bulk of Federal taxes.
The notion that American households are paying down debt is simply unsupported by the facts. According to the Fed Flow of Funds report, consumer credit (credit cards, auto loans, etc.) has declined a paltry 0.7% from $2.59 trillion in 2008 to $2.4 trillion--and most of that was not debt paid off but uncollectible debt written off by banks.
In other words, the households with substantial incomes may not be adding to their debt load but they certainly aren't paying it down much either--they're spending freely in the malls and in "fine dining restaurants" just like they did in 2007.
The top 20% of U.S. households are spending, so "recovery" is in the air. Those with household incomes of $100,000 or more are buying new vehicles (which explains why vehicle sales are rising) and spending freely, while the bottom 80% scrape by.
That's how you get a statistical "recovery" that masks the recessionary misery of the bottom 80%--the "real economy" left to rot as the Federal government channels the national income into politically powerful corporate cartels, Federal fiefdoms and Financial Elites.
For more on the Two Americas, please read:
Entitlements, Taxes, Inequality and Three-Way Class Warfare (September 20, 2010)
The Super-Rich (NYT)
Why We Keep Getting Poorer: High-Cost Housing (February 4, 2010)
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As best I can tell, all the facts in this piece are accurate, but there is a huge scam buried in it.
Who are we to say - who is anyone to say - what income distribution should be?
Anyone claiming that is acting as a simple tyrant. "This group is only entitled to this amont," etc.
Anyone supporting such an idea is Tyrant's Helper.
The only time any of us have a moral right to do anything about someone else's money is when they obtained it by force or fraud. In some of these cases (maybe many of them) that may be true, but the hidden scam that it is noble to decide how income should be distributed is a far more massive crime.
Income distribution? Are you talking about $8 billion per day printed at the Fed and disributed into corrupt banks? If that is what you mean, I'm with you.
But I don't really think that is what you mean...
Cdad,
Yes, what the Fed does is derfinitely a scam, but that's not what I referred to (as I'm sure you understood).
No one has any right to tell other people how much money they may or may not have. This whole "top 80%" discourse presumes otherwise, and that is a VERY dangerous thing.
You can tell others not to defraud or steal, but not what they are or are not entitled to.
Correct...but in order for market distribution of wealth to happen, you need a free market. Instead, we have corrupt bankers and corrupt politicians that have thwarted the free market. Ergo...we have Fed redistribution going on to the tune of trillions.
My point, of course, is that this is a very strange time [and article] to take up the cause of class envy. We have class theft...the largest theft in the history of the world.
On the first paragraph, we are in full agreement. :)
On the second, I guess I consider the hidden concept more of an imminent danger than you do. (No great matter.)
Best regards.
Listen apeman, if you allow this creeping fascism to continue you won't be earning anything unless you are one of the oppressors.
The easy solution: OPT-OUT for turkeyday travel.
Not traveling? Buy a ticket, go to the airport, opt-out, refuse the pat-down (sexual harassment) and fight these fucking TSA scumbags. You will be told to leave the airport and given a full refund.
http://chimpplanet.blogspot.com/2010/11/tsa-chief-threatens-americans-op...
If the fuckers touch you inappropriately, knock the bitch on his/her ass.
Hmmm.
I've been hearing that once you get in line, you're obliged to either go through the scanner or get a pat down. If you refuse to comply with TSA 'officers' you'll be liable to a fine of $11,000.
nah-not gonna happen. you just declare that your /ES bid was withdrawn just before you actually made the offer. Then you do it like 23,000 times per second. The Thousands Standing Around crowd will be mesmerized and you can get away (since you are actually withdrawing your bid) and all is good.
- Ned
Article fact-check blooper ... 2.59 -> 2.4 is a change of 7.3%, not 0.7%
You again.
This fine that you speak of is pure bullshit. A scare tactic used by federal trolls paid to fuck with people on blog sites.
I'll knock a bitch out if he/she sexually assaults me, and NO I will not submit to your scanner machine.
$11,000 only if they find it in my ass with a new set of teeth -- I promise.
FUCK THE TSA -- Don't fly and Osamas-terrorists win, do fly and Bushs-terrorists win.
Top 5% avoid the TSA all together, with their own or corporate private planes and Netjets (and others like it). Wonder how long the new House Speaker, John Boehner, will fly commercial, once he has to be x-rayed or cavity searched? (BTW, I do know these guys just walk around security at the airport) In the meantime, the sheeple will be herded, prodded and tagged.
I think you guys have both missed the main cause of the current income distribution. It's the way it is because of the tax and regulatory policies of the last 30 years. You are going to get a very uneven distribution of wealth any time you tax the elites and middle class at nearly the same rates (and in many cases tax the elites at a much lower rate; capital gains). On top of that the corporate rate for large companies is quite low assuming they have half decent accountants and tax lawyers. So the already wealthy benefit even more from the low corporate rates.
On the other hand, small businesses (ie, the middle class) get taxed heavily relative to the wealth that they have and they have to deal with burdensome regulation relative to their size and capacity.
CH1, you assume that the rich are rich because they work harder and earn it. Its not always the case. They earn some of it initially and then our tax system works to perpetuate and maintain their wealth. Its exactly the same type of social planning that you fear except it favors the wealthy instead of the rest of the people.
Our tax code is thousands of pages not because of taxes on the middle class (which can mostly be gathered on 15-20 pages) but because of tax breaks and loopholes for the wealthy.
As for CH1's initial question, it is obvious that elected officials are there to guide how wealth should be distributed and they've overwhelmingly favored a small minority in recent decades.
tiberius-I think that you misunderestimate the "30 years" by maybe a factor of 10 or maybe 100. - Ned
Yeah, you are right. Nothing new about this. It goes back to before biblical times.
What should be considered here is how the wealth is made. There are two broad categorisations - wealth creation/transfer through voluntary, or involuntary, means.
Voluntary transactions: i) creative: you invent a better mousetrap, or ii) you work for someone else, or iii) through gambling/investing/speculation.
Involuntary transactions: theft, fraud, robbery, tax, government-enforced positions of power.
I don't have a problem with billionaires who acquired their wealth through voluntary transactions; the problem is with the people who came to their fortunes through involuntary transactions, ie, exploitation.
I suspect many of the uber-wealthy now got that way through our government-sanctioned ponzi finance. These - along with more mundane thieves, robbers and fraudsters, should be imprisoned and have their wealth confiscated.
The 'honest' rich should pay taxes like everyone else.
Exactly why we need a system reset. The guys with the most money have not earned it, they have stolen it, financed both sides of wars, made things illegal in order to profit enormously from smuggling (Prohibition then, Cannabis/Cocaine now), and lent money to people at usurious rates.
With people like that in dominating the finance/banking system of course we will end up with a crooked world, where corruption and fraud are seemingly rewarded. Or at the least, hardly punished!
After the reset the limited liability aspect of corporations would be eliminated (a sane legal system would clearly be needed) and transparency and accountability would be the name of the game.
Read our latest PsychoNews story, Move Along, Nothing To See Here
http://psychonews.site90.net (server under maintenance)
http://www.optionsninja.com/2010/11/22/move-along-nothing-to-see-here/
It is also important to distinguish whether or not wealth is created through exporting or redistributed through corporate welfare, government contracts, and central bank front-running, because there is a big difference. The Wall Street Industrial Complex (NYC) and the Wealth Redistribution Complex (DC) are running wild with fiat paper printing and fractional reserve counterfeiting!!!!!
Following is an excerpt from Bill Bryson's book "At Home" (pages 233 - 235). It highlights the period in America where there was no income tax or other major 'redistribution of wealth', there was no monopoly centralized (communist) policy for money planning, and there were asset-backed currencies. Ideas and wealth were pouring into America with this more favorable business environment. The "gap" between the wealthiest people and the poorest was, of course, boundless, but the additional wealth creation came in from overseas via massive exporting, and, in addition to the entrepreneurial "rich" creating manufacturing jobs, they threw parties and built homes that created jobs, and they funded universities and hospitals to secure their legacies (as the mega-rich very often do). They also brought art and worldly treasures to our shores that sit in our museums today. Importantly at this time, ambitious immigrant workers were certainly no less "exploited" than anywhere else in the world and, unlike the restrictive class barriers and lack of upward mobility in Europe, new and existing Americans were becoming millionaires by the tens of thousands. This growth was not agrarian via slavery (this ended in 1865) or cotton, but rather industrial via steel and ingenuity and, most importantly, via the power of property rights (including virtually no taxes, i.e. "right to your own wealth") and free markets. This unprecedented growth happened decades before "the roaring 20's" of easy credit, and before the Federal Reserve was ever created.
Bill writes:
"The Eiffel Tower was the most striking and imaginative large structure in the world in the nineteenth cetury, and perhaps the greatest structural achievement too, but it wasn't the most expensive building of its century or even of its year. At the very moment that the Eiffel Tower was rising in Paris, two thousand miles away in the foothills of the Appalachian Mountains in North Carolina an even more expensive structure was going up - a private residence on rather a grand scale. It would take more than twice as long to complete as the Eiffel Tower, employ four times as many workers, cost three times as much to build, and was intended to be lived in for just a few months a year by one man and his mother. Called Biltmore, it was (and remains) the largest private house ever built in North America. Nothing can say more about the shifting economics of the late nineteenth century than that the residents of the New World were now building houses greater than the greatest monuments of the Old.
America in 1889 was in the sumptuous midst of the period of hyper-self-indulgence known as the Gilded Age. There would never be another time to equal it. Between 1850 and 1900 every measure of wealth, productivity and well-being skyrocketed in America. the country's population in the period tripled, but its wealth increased by a factor of thirteen. Steel production went from 13,000 tons a year to 11.3 million. Exports of metal products of all kinds - guns, rails, pipes, boilers, machinery of every description - went from $6 million to $120 million. The number of millionaires, fewer than twenty in 1850, rose to forty thousand by century's end.
Europeans viewed America's industrial ambitions with amusement, then consternation and finally alarm. In Britain, a National Efficiency Movement arose with the idea of recapturing the bulldog spirit that had formerly made Britain pre-eminent. Books with titles like The American Invaders and The 'American Commercial Invasion' of Europe sold briskly. But actually what Europeans were seeing was only the beginning.
By the early twentieth century America was producing more steel than Germany and Britain combined - a circumstance that would have seemed inconceivable half a century before. What particularly galled the Europeans was that nearly all the technological advances in steel production were made in Europe, but it was America that made the steel. In 1901, J.P. Morgan absorbed and amalgamated a host of smaller companies into the mighty US Steel Corporation, the largest business enterprise in the world had ever seen. With a value of $1.4 billion it was worth more than all the land in the United States west of the Mississippi and twice the size of the US federal government if measured by annual revenue.
America's industrial success produced a rollcall of financial magnificence: Rockefellers, Morgans, Astors, Mellons, Morgans, Fricks, Carnegies, Goulds, du Ponts, Belmonts, Harrimans, Huntingtons, Vanderbilts and many more basked in the dynastic wealth of essentially in exhaustible proportions. John D. Rockefeller made $1 billion a year, measured in today's money, and paid no income tax. No one did, for income tax did not yet exist in America. Congress tried to introduce an income tax of 2 per cent on earnings over $4,000 in 1894, but the Supreme Court ruled it unconstitutional. Income tax wouldn't become a regular part of American life until 1914, and in the meantime any money that was made was kept. People would never be this rich again."
+100
Get what you earn, Earn what you get.
If you make 100 million busting your hump selling "Pet Bullion" in little boxes or Crayons or hotel rooms or whatever.
You earned it.
You Keep It.
You Decide how You want it distributed (if at all)
If you got it by fraud, it's different.
Thanatos
"If you got it by fraud, it's different."
Work is work.
He who works hardest at his chosen profession, sorry smartest, wins the cash.
No fucking way around it.
Sometimes you eat the bear and sometimes the Bear eats you.
Gully Foyle
Work is work.
I'm a professional burglar.
I work hard at my chosen profession, sorry, smartest wins the cash.
Hope you don't complain if you're silly enough to go out to the movies one night, and I just happen to be in the neighborhood.
Sometimes the victim eats shit. Nothing personal, just business.
Al Gorerhythm
Go ahead. There is always more crap out there.
Leave the door open then, will you. There's a good chap.
yo al,
i respect the point you're making (nicely done), but would argue that the problem isn't that you *are* a professional burglar and *do* exist, but rather that TPTB indicate that they have captured and held *all* professional burglars, when in fact they have none, nor the capacity to do so.
in this way, they create a population of unwary and unguarded sheeple, who *aren't even allowed* to protect themselves from the enemy that "doesn't exist".
and yet, we all know you exist.
So what about a hard working hit man?
If one visits you, wipes you out and takes your shit...
You are ok with it?
And I should be OK with it too?
I am not talking about fair failure, I am talking about fraud.
If that doesn't mean anything to you, OK... We just won't be doing any business, that's all.
OK, read a great article showing how middle class America with "above average" income of $60k per household are ending up with nearly identical disposable income as a family earning $14k annually due to government assistance and rebalancing. So, while average American household income is approx. $55k, we now have a difficult situation in which those with marginally "above average" household incomes are only arguably little better off than those households living in poverty.http://www.zerohedge.com/article/entitlement-america-head-household-making-minimum-wage-has-more-disposable-income-family-mak
I'm not knocking a family struggling to make $14.5k. For what it's worth, average person making $14.5k a year works 40hrs a week x 50wks a year @ $7.25/hr. Not easy raising a family either way. However, I thought the important point was what it takes for America to simply sustain the current state of redistibutive affairs, so, come with me on a flight of fancy, and let's make some assumptions how this status quo could be sustained:
1- Hold the $13.7 Trillion national debt at current levels and let it grow no faster than GDP growth (about 2 to 3% / yr) and pay interest only on this ( @ 3% / yr...ridiculously low but so what, it's my assumption) w/ no plan to pay down any principle (it's ok, we haven't paid any since 1960) and no further debt growth (so no further annual deficits in excess of 3% of GDP and Federal government must cut their spending roughly by half from currently 25% of GDP to 15%).
2- We enact a 30yr plan to fully fund the $111 Trillion "unfunded liabilities" through taxation (Medicare, Medicaid, Social Security). Everybody gets what they've been promised.
3- We tax the 110 million US federal taxpayers (although I believe only 51m actually had any federal tax liability last year…again, bear with me as we will have population growth over those 30yrs which will mean we may eventually get to 110m taxpayers…and the numbers below simply double if you base it on those actually paying federal taxes).
4- Let's assume corporations and other tariffs on trade and imports make up 20% of the payments as they are 20% of tax receipts
5- To personalize this, let's take this down to a per taxpayer basis at a not so low monthly payment to be paid in addition to all their other current bills and taxes.
And waaalaaaa…
Servicing national debt per taxpayer = $248/mo
( $13.7T / 110m fed taxpayers = $124k / TP * 3% (-20%) / yr)
Funding "unfunded" liabilities per taxpayer over 30yrs = $2222/mo
($111T / 110m fed taxpayers = $1,000,000 * 30yrs (@ 0%)(-20%))
).
So, only $2470 / mo ($29,644 / yr) or nearly all the "average" households disposable income per every American tax payer in addition to their current bills and taxes for the next 30yrs and the unfunded's would be current and national debt interest payments are current (debt is still $13.7T but should be easily manageable from a GDP standpoint assuming GDP grows at any rate
OK, so its not likely we will stop running an annual deficit or that we'll tax ourselves to make up for the unfunded liabilities. Perhaps we should be having a conversation about how we get that $ / per taxpayer number down to a manageable level (some combo of lower benefits and higher taxes)??? Perhaps we should be doing this tomorrow???
I'm not in favor of forced redistribution of wealth and income. So I don't know what the solution is.
But I have a very difficult time believing that a single individual was so smart, so hard-working that they produced, by themself, $100M of value in a single year. It just doesn't pass the smell test.
You cannot isolate someone's efforts from the economic context.
What I mean is, Jay-Z and Celine Dion would be merely middle class if there were not the technology and copywrite laws that allow them to sell their music to a mass market and collect from every sale.
A-Rod is NOT a better baseball player than Ted Williams but he is paid more than 100x more because of cable and satellite TV, marketing and a host of other factors that have nothing to do with how smart or hard-working A-rod is or Ted Williams wasn't.
Our system does NOT perfectly distribute wealth and income in accordance with our contributions and to think so is highly misguided.
It is interesting to me that Smith writes of 2 Americas. It reminds me of another author who wrote of another oppressive period in history and of another 2 cities: "It was the best of times; it was the worst of times."
+1 Excellent points, Poly.
CH1
Dude read or watch Harrison Bergeron
That was a great short.
The Euphio question is another one... From the same book of shorts.
KV Jr.
Did we read the same article? Where was there any suggestion of income re-allocation?
That income and asets are distributed is simply fact, and the article points out how they are distributed.
But there are many facts to go along with the "why" things are as they are, and these facts are primarily politically based.
...and when I say politically based, I am not supporting "liberals" or "conservatives". I mean bought and paid for corporatist politicians of all stripes. The laws are written to favor the few over the many, as the article clearly implies.
As the owner of a small business for more than 30 years, I know this to be true, and have been railing about it for more than 20 years. It is not a recent problem, but a slow-growing cancer approaching critical stages.
The America I grew up in and loved is gone.
I hear you. Even the business climate has been tilted to the rich corporations against the little guy in America. All the while politicians cry that they support small business, all the laws they write only support corporate interests. And yes, it is in a critical stage now with the Citizens United decision that corporate money=free speech. It is only going to get worse. We will have monopolies in every sector and the individual will be shit out of luck starting a small business.
who doing the tilting?
Well said.
I hear a lot of people say, "what is earned is earned, redistributing it is theft", and I can agree with that principle.
But I think we have a system of laws, tax loopholes, evasion schemes, subisidies preferential treatments, central bank schemes etc... that ends up de facto redistributing wealth in the opposite direction of what most usually believe, ie not from the rich to the middle class but the other way round.
During most of the era that followed the French, American and Industrial revolution, we have seen the share of wealth going to the middle class increasing to arrive at a maximum in the 1970s. It's also in the 70s that the share of value added going to profits and dividends vs salaries and wages was the smallest at around 25%/75%.
Since then, it's actually been going backwards : the middle class is getting squeezed and the share of value added going to profits vs salaries and wages has been increasing from 25%/75% to 35%/65% in all countries of the OECD. This trend can anyway not continue for much longer for eventually this can only result in revolutions and/or civil wars.
You make a decent point.But the rich have bent the rules to favor them.
A logical extension of being rich.Doesnt make it right , but understandable.
Of course a flat tax on and on would help out all.But Im afraid that the rich and powerful will simply ride it all into the ground.
Name one group that has given up anything (by choice) for the greater good.
Some here have seen this clip , I ordered the book.
http://finance.yahoo.com/tech-ticker/the-rich-get-richer-and-they-have-y...
Goddamn, this place is loaded with trolls lately!
The author (one of the more cogent commentators on the scene) is clearly making no recommendation about redistributing wealth. He's stating the well-understood economic principle that vast disparities in wealth are not conducive to growing a healthy economy. All tail and no dog has never been sustainable for long.
I follow the time-honored practice of not speaking if I have nothing to say. Try it out CH1.
Now I'm a troll? Well, that's better than some people have thought of me.
Dude, I started my saying that I thought the facts were legit. (That's trolling?) Then I pointed out a hidden assumption in the language used. I think it is an important point to make.
FWIW, I think the author is a good guy. But, you have called me "troll," and will now be likely to defend that position. Ah well...
Once again, your assumption is completely unwarranted. Quit making things up.
Vast wealth disparities are also poison for a democracy.
If you want to kill economic growth the best way to do it is to kill the democracy.
+1. Effectively a wealth monopoly. As a thought experiment - take it to the extreeme. One person has all the money, and everyone else has none. How well does that "economy" work? There needs to be a balance, or at least, wealth distribution within a normal range of values.
So your solution is re-distributing the wealth. Congratulations on being a Democrat. In a society that values being a winner over everything, having money = being a winner. If you came up with a business idea that would make you $10 million dollars a year, would you give some of that money to businesses that weren't succesful?
Is giving subsidies to ADM redistribution?
How about TARP? Is that redistribution?
How about tax breaks for certain insurance policies for executives?
How about tax breaks for churches?
The redistribution is already in full-swing, idiot, we're just haggling about the direction of flow.
Very well said.
Stop your whining. Work is work, honest or not. All's fair in wealth accumulation, didn't you know. Now, get back to work and put your savings in a bank or IRA.
what is left out here is that had the banks been nationalized or some form there of,trillions of$ could have gone to infrastructure,energy,what the fuck ever and created good jobs. right now this recovery would be real with more of the bottom people spending and investing. IT IS THAT SIMPLE
I work in software - not at Google or Facebook, but as an independent consultant. I have been instrumental for developing software solutions that have made the clients that I work with tens of millions of dollars. My income this year, for the first time, is very low six figures. The CEOs of a few of the companies that I work with make anywhere from 10-10,000 times that counting in stock options and perks.
In general, the people that are in that upper 1% are not adding commensurate value to the organizations that they work with. Instead, they get the big bucks because of their connections and because they have suitable disposable income to invest freely without it impacting their daily life.
CH1, you argue that there is in fact no moral right to do anything about someone else's money (expect when obtained by force or fraud). I'd say that both are at work right now. How many people were fired in the last three years in order to make the stock price of companies look better? How many people lost pensions and life savings because of fraud and misrepresentation? How many people have lost their homes because there were few rentals available and you had to pay a million+ in mortgage capital and interest to get a home, due to speculation and securities fraud?
Income distribution is generally an indicator of how healthy a society - the more equitable the distribution, in general the more productive that society is. As wealth becomes concentrated, productivity - the ability to create meaningful change - drops, as does the overall standard of living. In the long term, that creates crime, social decay, lower lifespans, and reduced opportunities, not just for the bottom half, but even for those people at the very top, and it increases the likelihood that revolutionary forces (generally from the upper middle class), will end up fomenting radical (and violent) change, usually directed at those in the upper upper tranches.
Maybe the bottom 80% can pool some money together and buy a lobbyist to pay off the politicians to write laws that favor the poor.
Maybe they could get off their asses and vote in an election or two; no lobbyist required.
Any recommendations?
For how to get them to vote...or for whom they should?
The former: Make their EBT card dependent on it.
The latter: Me.
Cha-ching!
There is nothing wrong with pointing out class disparity, and no one with any sense would deny that massive wealth inequality will doom a democracy.
I would tend to agree with you, but you deciding for me how much of my shit to give away isn't exactly democratic.
Massive wealth inequality starts with small wealth inequality. It's sort of a no win scenario. If we have freedom, then the more fortunate and the more intelligent will tend to take advantage of those less so. Disparity results, and snowballs. Now Midtown decides my ass needs to cough up more and more so we can all be even? That's Democratic.
ColonelCooper
Ever see the Ragpicker trial scene in The Madwoman of Chaillot?
Buy the play just to read it.
Well, there ya go then. Does that include ex-wives whose husbands were banking thieves?
The poorest countries on earth have the greatest income disparity. Empires and supra-national political structures crumble under the weight of have-and-have not. But all of these have never made the claim 'liberty and justice for all'. America's peak prosperity has coincided with the success of the middle. America in crisis has coincided with the greatest unaddressed inequalities
THERE IS FRAUD.
fiat paper money favors those who get it first and borrow the most. fractional reserve counterfeiting allows bankers to create money out of thin air that others cannot.
small business people, family farms, and little old ladies scrubbing toilets for bread and milk money LOSE EVERY TIME.
THEY NEVER HAD A CHANCE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I didn't read anything in the article that suggested a redistribution of income. Regardless, the whole fucking charade is becoming obvious to everyone. I don't think any ZH readers would suggest replacing fascist system with a communist one. A fair capitalist one would be nice, however.
Capitalism without legal bribes would be nice indeed.
That it would!
Folks when Wang here says he was at the malls and they were busy and he didn't see any of those 42+ million on food stamps there, well, He's looking at his peeps, that is the crowd that IS doing well.
And it's why he didn't see any of those walmart shoppers when he was coming out of Nordstroms....
So don't tell him the system needs to be changed.
As Pedro(amplified by a SNL skit) used to say...
"De System has be verry verry good to me"
This explains how Nordstroms' earnings can rise by a healthy 43% while Wal-Mart's sales in the U.S. can decline
I'd take a communist system over a fascist one if those are the only two choices.
OT: The BLS just e-mailed me letting me know the entire last year and a half of ECI data is wrong
http://www.bls.gov/bls/eci_corrections_111910.htm
Shocked I tell you, shocked I am.
Sonovabitch! These guys need to be run outta town on a rail.
Was that a glitch in the matrix, or am I having a real deja vu moment?
Was that a glitch in the matrix, or am I having a real deja vu moment?
Was that a glitch in the matrix, or am I having a real deja vu moment?
I'd believe some of the stats, but I disagree with the title, for sure. My parents technically qualify as part of the "top 20%" based on household income (around $68K), and they ain't doin' great at all.
The top 20% of U.S. households are spending, so "recovery" is in the air. Those with household incomes of $100,000 or more are buying new vehicles (which explains why vehicle sales are rising) and spending freely, while the bottom 80% scrape by.
I think they might need to scrape up another 32K to make it
Sure enough. 100K sounded high for the top quintile, but there it is. According to the Fed's stats, 100K-150K is 11.4% of households, then another 8% are above 150K.
http://www.census.gov/prod/2010pubs/p60-238.pdf
Kinda sad you can't qualify as "rich" until you're getting into such tiny percentages of the population.
I qualify in the 11.4% category and I sure as hell don't feel rich. Granted, it's offered me the opportunity to deleverage the "traditional" way (i.e. not by default). However, that is only through penny pinching (and I mean pinching).
I should clarify given how that previous post sounded: for damn sure 100-150K is not rich. The stats put everyone in the 200K+ range in the same category, which is just patently absurd.
It fascinates me that even when looking at the top 3.4% "bracket" of household incomes, you know that the vast majority of those people aren't "rich" by any stretch of imagination.
It's a shame. We could've done better.
$68K is a long ways from the top 20%. It's amazing just how many people think they are part of the movers and shakers that aren't.
Why do you think they consistently vote in the best interests of the "movers and shakers" and against their own?
I think he does a good job of distinguishing between those who earn their money, mostly the bottom 80%, and those who get their money at the point of a gun, the government.
What happened to RoboTrader's post? It was the first one and I was trying to reply so I could make sure I understood his ridiculous assertion.
I keep getting junked....
LOL...
Attn: Bears
Right now, I see more signs of strength instead of
weakness.
Yes,
the financials are trading very badly right now, but if the market was
headed for a crash, the leading stocks would not be breaking out to new
highs and certainly retail stocks and transports would have already
rolled over and would be in a decisive downtrend by now.
Remember,
at the prior tops, a large percentage of sectors were weak and the
market was being held up by just a few "key" stocks.
We don't have
anything like that right now.
In fact, the weaker sectors like
energy are getting stronger. Just look how oil has crashed from $88 to
$80 in just a few days and the OIH, XOP and XLE have hardly moved.
Since when can a Contributor who continually exploits his image-posting priviledges, simply take over another thread as if it's his own?
If you don't like the topic posted, seems to me you should then post something of your own. As a stand-alone article, like a contributor.
He's entitled to his opinion. Given the weak-minded tendency here to accept no alternative views, I'm glad he brings it.
BTW, he did post a daily column here back in the day.
Everybody's entitled to their opinions, but a formal Contributor has other, more appropriate means of expressing them.
The nah-na-nah-nah-nah-nah in unrelated threads gets old.
I haven't seen any nah-nah-nahs because I don't look for them. So gold or some other sacred cow takes a whallop three days in a month... toughen up the ego a bit and smile because you bought at $800. That's not the point anyway.
The point is that the grating variations of: "gold [or insert other bullshit noun here] is the only phenomenological construction feasibly capable of fulfilling all of mankind's storage of value needs..." are just pompous, sterile theorizing.
If somebody points out that some near-BK, piece of trash stock is outperforming every possible benchmark it is "rolling on ecstacy at Burning Man" hilarious.
LOL....
I like RobotTrader, actually I like how consistently correct he is.
I firmly believe that robotrader is a masochist.
Posting makes him a sadist.
Maybe he could just flagellate himself and leave us alone.
He is both. Jean-Paul is taken.
Robo, are you are fishing for responses. What's up?
Uncharacteristic.
WTF.
Why junk when you are giving your opinion and attempt at supporting with fact?
whatever.
No babes = you get junked. Ya think we want to wait for Leo?
as the oldest bull in this club of two i remain true to my thesis: "this is a kudzu recovery" as the "green shoots" no one speaks of anymore "turns out to be a weed garden" (or worse--and i'm beginning to think the latter.) the stock market didn't collapse in the 1970's and I don't see how it's possible for it to collapse in this time frame either. clearly as in the 70's however, "governments are collapsing." actually "they're called countries" and "they're being annihilated." perhaps "they should go public"? "Greece (ticker symbol =+= ) as ADR began trading today--it is expected that Ireland (ticker symbol <?>) will be going public soon...brought to market in an IPO underwritten by....
I'm with you robo! Who needs a banking sector?
Cause and effect are not exclusively provincial, Robo T. How the DOW rises on a mostly daily basis is not difficult to decipher. The cosmetic raising of the stock indices, real estate, commodities etc, by the strategy of monetizing through POMO, has an effect on the rest of the world as a byproduct.
One thing that they are not deliberately monetizing, is the precious metals group. Under the current system, when used as a savings vehicle, as opposed to a trading vehicle, one can protect the value of savings, eliminating value destruction by transferring risk assets into them.
Play the stocks all that you care to, in search of nominal gains. Just be aware that when one considers the inverse relationship that supply has with value, the result of these nominal increases to your account are ephemeral, as dictated by supply. When you think you are having a win, the inverse value ratio proves otherwise.
A large income and/or social disparity is a foundational cornerstone of revolution.
Slavery under the veil of "freedom".
Seems like every time this topic comes up the lead in is about the "ultra-rich" but then sure as shit when the nitty gritty of taxes come into play anyone making over $250k, even if they live in an expensive part of the country, get lumped into the same category as Warren Buffett and Bill Gates, aka "evil rich people who need to get fucked in the rear with taxes" according to some
My proposal: rate = ln(income / 1000) * 5 (we'll pretend that people making less than $e,000 get a pass)
3:12p ET Monday, November 22, 2010
Dear Friend of GATA and Gold (and Silver):
Noting J.P. Morgan Chase & Co.'s central role in suppressing the price of the monetary metals, particularly silver, the international journalist and provocateur Max Keiser has been waging a campaign to smash the market-manipulating investment bank by persuading civic-minded people to buy and take possession of at least 1 ounce of the precious metal. A comic excerpt from Keiser's recent program on the Russia Today television network promotes the campaign at YouTube here:
http://www.youtube.com/watch?v=hC3ewlIWizs&feature=player_embedded
Of course GATA applauds anything that gets people out of paper claims and into real metal, but we're skeptical that even the exhaustion of public inventories of silver and the explosion of the huge short positions nominally on Morgan Chase's books will hurt the bank very much.
For those short positions, like the overwhelming interest rate derivative positions on the books of Morgan Chase, are probably not Morgan Chase's own at all but rather the U.S. government's. Certainly no financial institution would undertake such disproportionate positions -- positions that essentially make Morgan Chase both the silver market and the interest-rate market -- without effective assurance that government would backstop those positions. No other investment bank has undertaken such disproportionate positions.
So much of the spending and lending by the Federal Reserve, Treasury Department, and Exchange Stabilization Fund is secret that there can be nothing outlandish about such suspicions. No one can deny that the government also has intimate and secret communications with J.P. Morgan Chase & Co. about the markets. After all, the bank is a primary dealer in U.S. government securities and often acts openly on behalf of the U.S. government and thus in effect has access to virtually infinite amounts of money for market intervention.
Indeed, there is long history along these lines, since even before creation of the Federal Reserve, J.P. Morgan himself -- the banker, not the bank -- functioned in extremis as the central bank of the United States. And in her prize-winning biography, "Morgan, American Financier," the writer Jean Strouse reported that Morgan's first big score in the financial markets was his cornering the gold market in New York during the Civil War. Further, Morgan's monopolizing of industries was a major cause of enactment of anti-trust law.
Yes, exhausting the metal available for delivery could blow up the commodity futures markets, an admirable objective insofar as those markets, overloaded with derivatives, long have been largely mechanisms of price suppression. (See the British economist Peter Warburton's 2001 essay discerning this: http://www.gata.org/node/8303.)
But if the metal runs out, the commodity exchanges will change their rules or implement rules already adopted requiring cash settlement and prohibiting new long positions. The government can cover any amount of such settlements in cash through its agents. This sort of thing has been done before and can be done again.
In short, take the metal out of the banking system -- yes, all you can. That will make market manipulation a lot more difficult and drag it into the open. But you won't crush J.P. Morgan Chase, for the investment bank is the government and the government is the investment bank.
The big objective here is to take control of the government away from the bankers and return it to the people. This is just the latest round in an old political struggle -- the struggle between the financial interests and the producing interests -- that has been simmering in the United States since William Jennings Bryan made it the center of his presidential campaign in 1896.
Advocating free coinage of silver back then, Bryan told the Democratic National Convention in Chicago that went on to nominate him: "Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business."
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Oh, by the way....
On the subject of "insider selling"....
Anyone consider that the PigMen have to offload some stock to pay for their expensive gifts to their mistresses?
No doubt, the sales of fine perfume, lingerie, handbags, jewelry, etc. are reaching records.
Any wonder why JWN, COH, TIF, etc. are leading the tape nowadays?
Ooops....bitch overboard!
Full steam ahead!
Oh! Is that your mistress? Nice.
It's a vicious circle jerk.
Money isn't wealth. Money is worthless paper or useless metal. What matters is what you can get with your money, which requires production. Instead of breaking things down by how much money these different classes have, why don't we break it down by how much they produce? If the fraction remains the same, then we have justice. If not, and I think you will find that we do not, then something is amiss.
"then somthing is amiss"...lol..understatement of the day...like your posts, btw...:)
touché
When those on the receiving end of redistribution have no incentive to produce something and perhaps advance their socioeconomic position, inequality becomes more "sticky".
What would happen if some form of work was required to receive benefits? Such as spending X hours a week in the food bank, or clearing invasive plant species from parks. At least then the amount produced would not be zero (less than zero, actually). Perhaps resigned to their fate that they must work in exchange for handouts, they would be more motivated to find a more favorable situation with a private employer?
I'm against redistribution and I think the current system where almost 1/2 of 1040 filers owe no tax (or get a transfer payment back) perpetuates income inequality because there is zero incentive for these people to better their situation when they can simply steal money from the 1/2 that owes taxes.
Really, why would that family making minimum wage want to work harder when they might lose some of their benefits and they would have to become more productive than the $60k salary family to see a real gain?
The common misunderstanding about economics and wealth is that the problem with wealth is how its distributed. In reality, this is not the case as wealth is something that does not come naturally. It must be created and/or produced by some purposeful activity. Those who focus on the distribution then seek to implement policies to remedy this issue, and inevitbly they redistribute the means and incentives for further production away from those who have proven themselves the most capable. This (along with the knowledge/calculation problem) is why your socialist societies are always far poorer as a whole than your capitalist societies. That's a fact.
Of course beyond the whole society is worse off thing, there is the whole moral issue of expropriating the justly acquired wealth/property from some to the benefit of others. On a small scale we call this theft and jail the perpetrator, yet somehow when government does this on the enormous scale the thievery is OK.
I always think of government like a machine. The majority vote builds it with the intention of taking from some to give to those who are "most deserving," but ultimately they have no control over who controls the machine, and those with the most to lose and the who can pay the highest price are the ones who end up controlling it (read: the bankers' lobby). Until people realize that ANY forcible removal of justly acquired property from one to benefit another, whether done by government or by the hamburglar, is not OK, we will continue to have a society in which fraud is unpunished, banking cartels continue to obliterate all but the most fortunate in the world, and the income gap grows every larger.
Chuck Bone
YOU LIE ZIONIST JEW BANKER SCUM!
I got me some Guns so stay the fuck away from my Gold.
Shiny, shiny, Gold.
+1
democracy is not a suicide pact. that's what the American public voted "no" on in November. Simple as that. What I'd like to know is "since when is capitalism?"
But it balances out since the bottom have most of the kids.
The real question is where the fuck is FORECLOSURE COURT? Fuck Judge Judy! I want to see some random bitches battling it out on tv! Maybe have Springer Judge it, or Tim Stack.
I'm still buying...fuck'em...
Pardon me, this is all bullshit. Good, but bullshit none the less.
I just got off ANOTHER flight. First class mind you, came to $2367.58.
Ok, well, I got my BALLS recorded for posterity, hmmmmm.....like that?
So, you festering fags, who won the war on terror? Hmmmmmmm.....any takers?
I'm gonna have another drink and think about America as it used to be.
I wonder what America we are talking about. The original sea pirates that came over and gave out infected blankets or the one where infected zombie banks are running the show?
War on terror indeed, funny thing about being vested in nursing homes (good racket btw) is eventually rich or poor, everyone ends up half mad and shitting themselves eventually. Wrap your head around that without sometype of chill up your spine and not be terrified. At least if a bomb goes next to you in a cafe, your life will be done in a quick clip. Instead most will be given their sanity and life away inch by inch, once in a while grasping onto a moment of clarity with the full understanding they've crapped themselves and some stranger has been collecting bit of lint and shiny objects on your behalf.
Isn't getting old grand, enjoy the next week, you'll be thinking about this.
Interesting post, I have always wondered why we deny death so much. I am reading Becker's "Denial of Death" for some insight, existentialism study gave me some insight all these years, so trying to throw some neo-freudian spin on it.
After seeing 2 grandparents in your described endgame, I want to go differently...with any luck when "that" time nears, I will still have the witheral to be able to take up a backpack, get dropped off in the middle of the mountains, and let nature take its course and become bear food or something useful.
I prefer to think around it as I am on borrowed time. The buddhist concept of impermanence, that in 100 years I will not be remembered, nor will I leave anything behind other than a shadow in my great grand children's DNA. I could say that writings and stuff would make it, but I've watched tape backups go up in smoke and when I eventually lose my marbles it won't really matter if I owned a tin hut or a 60 room mansion. I simply won't be able to identify the original owner or what it means in a tactical sense all the mean while sitting in my own shit.
If anyone needs to see wha tthe end game looks like, go visit a nursing home. While comfortable for most elderly, it's not a place anyone would wish on anyone if they had their full mental faculities. Most of the adverts show happy grey haired people looking like this.
http://www.living-trusts.net/nursing-home-care.jpg
When what the picture doesn't tell you she's in there because she set fire to her own house twice and emptied her own blister pack/pill box by forgetting that they took all their pills in the same day. Then usually suffering from some form of co-morbidity (heart comboed with diabetus comboed with liver with kidney's). What most look like is far from a happy picture.
http://www.scientificamerican.com/media/inline/blog/Image/dementia_termi...
If he looks like he doesn't know what's going on, it's true, he doesn't. Not a clue. Literally it can happen as fast as six months and you go from knowing what a modern tv remote does, to figuring out a light switch.
It's not the concept of death that is spooky, that's going to happen regardless. It's the that idea you fade away and you are still alive waiting for someone to wipe your ass.
How about buying a really fast car, driving it over a huge cliff and recording it on You Tube? Bet that one lasts 100 years ;-}
All these comparisons between wealth and poverty, winning and losing is very unsettling. From now on, let's just talk about wealth and winning.
Ok, all you wealthy, winning people know the other kind of people?
You do?
Well then, help them!
What, you're afraid their condition will rub off on you like some contagious disease?
Then we will institute organizations and agencies that will act as intermediaries, thus insulating you from direct observation and contact with these others.
Problem solved.
Now get back to creating wealth!
Everything is proceeding as planned.
I think that the original point being made was that no one or who has the right to say who is in certain financial categories.
There are many ways to hide income; the Asians, over many centuries, before this country was even discovered, were in full bloom. Their peoples were going thru all the ies that we are now, and learning to survive.
Right now, I am classified as low income, but if the truth were known, I actually meet far higher criteria, due to gold, silver, hidden assets, etc.
I think that this is what the initial contributor was saying.
He is correct. And it throws off the Feds concepts and influences the "stats."
In America, now, there is a huge hidden economyl--thank god.
Whilst the article generally rings true, I had to read it twice just to make sure, but it hardly seems credible that "As consumers, the top 5% carry the same weight as the bottom 80%." I mean really, do the 5% live in malls with their credit cards permanently jammed in the readers? That's a LOT of consuming. What do the rich have for breakfast? Gold flakes with diamond sprinkles? Anyway, that inverted pyramid does not paint a picture of a healthy society - more like a socio-economic graphic of the Middle Ages.
You must not get to involved with numbers, unless directly related to the creation of wealth.
You are to receive proper indoctrination on the consumption habits of wealthy individuals through our "Life Style's of the Rich and Famous", "MTV Cribs", and "Orange County" documentaries; which should stimulate envy, thus promoting emulative consumption.
Everything is proceeding as planned.
agreed. all by design in a debt-based monetary system.
The top have more disposable income, the bottom are purchasing essentials. Conspicuous consumption (BWM, Rolex, DeBeers) is very expensive.
The scale of wealth has changed while our relative perception of it has not; and, its not about wealth distribution, it's about mechanisms for wealth redistribution. Society has not developed mechanisms to deal with issues of wealth redistribution in near zero growth environment. So, we are learning as we go.
Hate him or love him Bernanke is doing his job: because you have a job. President Obama is doing his job, because he is a the lighting rod of so much societal anger not his causing; and he knows that. I think we all want justice; but this is not the movies; I am sure it will come; just not with blazing glory. More likely in badly lit courtrooms, one decision at a time. Then, eventually we will all die, and nobody will give a shit except to the extent it makes them a buck. So, what the fuck is my point? This is it: Give generously to those in genuine need because it's simply the right thing to do. To do otherwise should be treasonous.
Cheers.
I respectfully disagree. I provide an essential service (municipal water and sewer engineering), and I would have a job with or without Bernanke.
Capitalism is fine as long as it is regulated. It rewards innovation, allocates capital efficiently, and provides a public benefit. Without regulation it becomes exploitation.
Most capitalism is very beneficial. Americans still have excellent sanitation, police services, and judiciary. Where the judiciary is failing with foreclosures, the free press and our adversarial legal system are making rapid headway. The FED privatized the currency, and I think this is wrong, and progress is being made here too.
As far as the FED, which is a HUGE topic of discussion here, I think it is recognized that it has outlived its usefulness. That is why it is being treated at the 'Bad Bank'. It will be loaded up with bad assets, and wound down over the next 6 years or so.
WTF, I am not interested in income distribution; the whole problem is allowing people the opportunity to use their resources and ideas to move ahead, achieve.
Here is my example: I lived in Calif. for many years, where opportunity flourished. I got ahead, lost some, got it back. I was not held down, but was master of my own fate.
Two years ago, I moved to Kansas. Here, people are not provided with the opportunity to get ahead, use their brains, be small businessmen, entrepreneaurs (sp). Everyone is tied down by taxes. Everyone is locked in; move a little up, pay more taxes--locked back in--no chance to get ahead. Dull, grey population, huge American resource gone to hell. (and don't throw that old man in my face, who inherited it all). This is not a Republican state, but a fuck'n socialist cum fascist bedrock.
What America was built on was taken away by affirmative action, taxes, and misplaced liberal swamp gas. It still exists in the unions who are now running this country and bleeding it dry with $150,000 per year salaries given to ninnies and uneducated dolts.
It was also taken away by unfair trading treaties, unnecessary wars, and a poor educational system. Liberal/Conservative, Democrat/Republican is a false choice, my friend. None of them have our best interests at heart. And either way you are voting for a politician, who was funded by a banker.
"Unions who are now running this country"?? Excuse me?
Do you realize that unions represent all of 7% of the working population?
Yeah, isn't it funny the standard of living in America has fallen, and continues to fall, as formerly unionized industries like manufacturing have gone overseas? This is one of the few points I really diverge from other conservatives on. Listening to some of them, you'd swear unions killed the dinosaurs (twice!) and eat children who fall out of bed in the middle of the night.
Thanks for that. It explains why the spx has doubled since mar 09
Next time please try to give a more timely buy signal
Btw all these high PE stocks over $100 and $200 WILL announce splits, then watch for a pipe up
This article is full of shit. The top wealth classes have lost the most in this downturn, or more generally, in the past decade, as stocks have gone nowhere. The people getting ahead are the government workers, the civil servants, and the people on social security and other welfare programs, who keep getting increases in their pay into an environment of deflation.
In real terms, the wealth of the top 5% has dropped precipitously. The stock market is still down 20-30% from 2007 levels. If you index against commodities, the top 5% has lost 70-80% of their wealth in the past decade.
I know we shouldn't cry a tear for the wealthy, but at least realize that its not the 'rich' that are running around spending, keeping the economy going. Its the welfare/civil servants who are.
You are wrong. Are you a drone?
http://neithercorp.us/npress/?p=926
But yes, your Gov't entitlement recipients are getting the goods. This is about to end.
http://globaleconomicanalysis.blogspot.com/2010/11/6-new-governors-seek-to-kill-defined.html
No, he's probably just never worked in civil service or known anyone who has. Try to tell anyone that not all state workers are unionized and it always results in blank stares. Hell, you want to talk about raises, some of those non-union state workers are going on 3 years without one.
I've been buying American for years in a futile attempt to keep the real economy going even as my paycheck stagnates and all some assholes (not necessarily this guy, but all of the phony America-loving "conservatives" who suddenly care about the national debt now that a Democrat is in office and have the unmitigated gall to ridicule American workers in between their endless excuses for the Chinese offshoring that put us in this hole) can see to do is just shit even harder on me because of my employer.
spinone, I could not agree more. You are spot on. As for the indexes going up lately, well, has anyone in here learned about POMO?
I have stocks, Canadian stocks, and they are going up too, but they are not controlled by POMO and HFTs.
"blazing glory"? i like that...it's just an interest rate though. no biggie. insofar as "the rich people got us" well..."they got me" that's for sure. when last i checked "they got nothing on you" because "where's the income?" now if we're talking rich INSTITUTIONS then I'm with you. The last time we actually had a "plutocracy" was over 90 years ago. It's simply not possible to have one right now. We have as we always have since WWII "government" or perhaps more accurate to our age "WAR." Needless to say "obliterating 90% of American people in the name of fighting 1500 deadenders" can only be made possible by "the word." Again "that word is called WAR." Needless to say "we haven't thought about how to pay for that thing for some time now." Certainly not since 2008 where we decided to "never let a crisis go to waste" instead.
So, everything is okay. BS! That chart reminds me of the Roman Empire, and yes, the US is an empire. Or the French revolution.
History has proven, this scenario is not substainable. Take away Ben's QE, QE2, America collapses.
I owe myself so much. I do not know how I will repay. Maybe I will .. by force of.
Tyler,
Patiently awaiting your article on the Tropos/Bank
of Taiwan Vs. US Federal Reserve/BIS featured on
Harvey Organ's blog. Sounds like a huge deal deserving
top billing over any Euroland or Hedge Fund problems.
$700 billion dollars? Stolen by the Federal Reserve?
Gotta be more than meets the eye here.
What's with the 3 cent U. S. postage stamps under the signatures?
See how naive I am?
The eyes have it
http://www.conspiracyarchive.com/NWO/Bilderberg-Participants-2010.htm
Hey I take my 4 year old to Costco for entertainment; she doesn't know any better, I aint super rich, and it saves money.
These f***ers in the top 1% need their taxes raised. Not every schmuck making $250,000 or more.
According to wikipedia, the top 1% of households make $350k or more in income annually. I'm in that bracket (barely), and I vehemently deny being rich; some kind of Bad Man who has obtained my income level by false or immoral means. The simplistic brush that paints all those who earn above a certain level as evil, corrupt or part of some elite group is a very callous and cruel brush indeed. Shout with me now: "LET'S LYNCH THE BASTARD!"
Humanity needs to mature, but quick. TANSTAAFL needs to be tattooed on every-one's forehead for a couple of generations. No freebies. No entitlements. Everything has costs, and buried and hidden costs will eat your society alive if you keep ignoring them. Easy credit is the devil's honey and it mainly traps the ignorant and unwise. Systems that require unending exponential growth BLOW UP, ALWAYS. Every citizen, no matter how small their income, needs to pays taxes as civic duty to support their much, much smaller government. Everyone needs to LEARN what money is, and where it comes from, and how governments can steal its value when society stops being vigilant.
And if there is social injustice in individuals obtaining outrageous incomes for their work contributions, then By God society, not the government, needs to shame the practice into oblivion. But where individuals *do* make a significant difference then peeps need to shut the f up and let others earn what they can.
I'm against corruption, biased wealth transferal systems, and government sponsored theft. Put an end to it where it is found. But the amount of money that an individual earns in a year IS NOT circumstantial evidence of those crimes.
So you are one of the whiny well off whoes taxes would go up about what? 4.5K? If that?
And that is just going to bankrupt you? I'll take a wild stab and say that your property taxes are probably about the same as your Federal Tax, or you live in a very expensive state and need to change accountants, otherwise I don't see how you could pay anything like 170K in taxes. I think it probably that you have a 50% marginal tax rate and pay more like 50K a year.
I agree with you though.
"Everything has costs, and buried and hidden costs will eat your society alive if you keep ignoring them. " I just don't think that it has ever occured to you that you can function only because of the infastructure provided by taxes that you are so outraged about paying.
Huuuh. WTF is with the usd
There is no problem inherent to any income distribution. If the bottom 30% choose not to work or only do the minimum to survive, then they do not "deserve" any particular portion of the income pie. Each individual deserves only what they earn. Bill Gates deserves his billions in that he created products that made the world better and were products of a voluntary association. No one had to buy his products and no government subsidies were used to produce them (that I know of).
The problem is how you get income. Income not earned is stolen, at least if its not donated charitably. A farmer actually steals someone else's work when they get a subsidy. I know farmer's are sacred but its still theft. The pizza parlor or the grocery store which ostensibly feed people, too do not get subsidies and go out of business if not run well. A welfare recipient also steals. They get money other people earned. The government steals it for them, but it is still theft. Now, if the money is donated charitably it is not theft. However, state programs are not charity. Social Security is theft also. First the government steals the actual revenue to balance the general revenue books. Second, recipients who live longer than about seven years draw out more than they put in. It is a pyramid scheme that requires ever larger wealthier generations to "donate" enough taxes to make it work. Bernie Madoff ran a Social Security pyramid. It's only legal for the government to do that as he found out.
Wealthy people who get tax breaks do not actually steal. In essence, they only keep a larger portion of what they actually did earn. However, I do consider it "cheating" in that they play by a different set of rules than all the rest of us in the game. This, too is wrong but for a different reason. I got laid off last year and paid taxes that were breathtaking on the severance and when I had to cash in a 401K. There was no escape for me. Plus, letters to two different Congressmen, one Democrat, the other Republican got no response. If I were a wealthy donor I suspect I would have gotten two rapid responses.
I personally despise the modern typical CEO. They are vastly overpaid, self congratulating, mediocre talent that runs innumerable companies into the ground as they escape wealthy. They escape the just desserts of their own bad decisions. I had a CEO run off with a quarter billion after the stock dropped about 60%. Waves of layoffs followed. However, it is hard to balance any economic power against them because the market for labor is so badly distorted.
The common denominator for me is government involvement in all these distortions. What I like about this article is it doesn't say what the proper distributions are or how to remedy what clearly appears to be a problem. It does address the underlying problem of how the wealth is distributed because of government policy. This is a power no government can wield for long. It becomes a system of "crony capitalism" or fascism if you prefer. It becomes bread and circuses as long as people can vote. It wrecks economies because the central planning which goes with it entails economic physics that the average congressperson does not even understand, i.e., it will be riddled with the laws of unintended consequences.
I believe in freedom because in a truly free economy it is constantly in harmony and rebalancing itself every second of every day based on voluntary relationships. It rewards ingenuity and productivity in the service of one's fellow man. Dishonesty cannot get very far. Starbuck's did not become the coffee behemoth because government forced people to drink it's coffee. It flourished because people liked the atmosphere, products and service. It cannot make a single cent without happy customers unlike the DMV which can send out 100,000 unhappy customers per day and still stay in business.
So, I say that most of the bad stuff you read about here on income distribution plus the inherent insolvency of all Western governments is due to lack of freedom, government intervention in markets and byzantine tax rules and cowardly unprincipled budget practices. It will all break eventually and most will blame the wrong people. The fundamental wrong decision was to give government unlimited power over us. To give government power is to give stupid petty corruptible people power over yourself. It actually warms my libertarian heart to see that a few thoughtful people here really get it and understand this.
When the rich buy the government they make the rules that keep them rich. Privlige literally means private law.
"I believe in freedom because in a truly free economy it is constantly in harmony and rebalancing itself every second of every day based on voluntary relationships. It rewards ingenuity and productivity in the service of one's fellow man."
There is no "free economy" at that point. You have monoplies and trusts. The large buy out the small and there is no competition. Stagnation sets in. We have been though this 4 or 5 times in this country. You get conditions like those that caused Jesse James to turn to banditary because of the railroad's iron grip on the income of ranchers, or the guilded age and the trusts, when we forget and let the big get so big that they eat the competition THERE IS NO MARKET that you yearn for. THERE IS MONOPLY.
And the only force big enough to break the trusts and monoplies are ___________.
+++ Freedom guy, well worth the effort.
"It actually warms my libertarian heart to see that a few thoughtful people here really get it and understand this."
too bad it's only a few, and will probably remain that way.
"you can't teach some people with a two-by-four" -- my buddy paul.
FWIW, if you look at the entire welfare system (foodstamps, SS, medicare, etc.) as a form of pacification insurance directed at the terminally lazy or helpless, it makes a little bit more sense and seems slightly less nefarious. not to say it hasn't become the very ponzi scheme you describe, but keeping the disenfranchised 'victims' fat dumb and happy has become a sad but necessary evil for the PTB. hungry folks might actually do something - even in america.
to the critics of that thought, sure, we put money in those 'insurance' systems and arguably 'deserve' something back, but were we to have been allowed to keep it in the first place, it's possible we wouldn't be hungry to start with.
"right, so let me get this straight. we pay our taxes to the federal government, then send a few shmucks to congress to beg for it back in return for promising to do what that government wants us to do? that doesn't make much sense - why don't we just...(?) oh, nevermind."
Isn't there a tail risk to these theories that the best and brightest are always the most successful (economically), and competent if not entirely trustworthy. Isn't it possible that it is really a kind of might makes right proposition with just the patina of noblesse oblige thrown-in to complete the deception so as to keep the mass swindled.
All your children are poor, unfortunate victims of systems beyond their control...
All your children are poor, unfortunate victims of lies you believe...
A plague upon your ignorance...
Present company excepted, of course.