Citigroup: The rich will continue to get richer at the expense of everyone else

[Cadsuane]

The *only* thing it has shown is that the top 10% have a higher percentage of America's wealth, but it does not indicate whether that's because they've taken part of the pie from the lower classes, or whether they have simply taken a larger chunk out of a larger pie. If everyone gained two dollars, but one guy gained three, everyone is better off; it's just that one guy is a little more better off. It's not a problem until everyone else *stops* gaining, or even starts losing.

Same difference, (alleged) problem remains as long as wealth distribution is disproportionate even if everyone is marginally wealthier. You aren't making very good posts, you know.

[Marootsoobutsu]

Same difference, (alleged) problem remains as long as wealth distribution is disproportionate even if everyone is marginally wealthier. You aren't making very good posts, you know.

I'm sorry; how is it a problem if everyone is wealthier? If person A gets wealthy, and person B is in a better position today because person A needs someone to help the business grow, how has person B *not* benefited as well? Person B is now in a better position to get wealthier, gain working experience, and institute their own ideas because person A succeeded.

If the only problem is, "It's bad that some people are richer than other people," then it's definitely just a point where folks will have to agree to disagree, and I'd be done here. But the attempts at justifying that position are based on ideas not supported by evidence here.

I am mystified at the proposition that universal improvement-- faster for some, slower for others, but improvement nonetheless-- could in any way, shape, or form be construed as a problem.

[SwampdonkeyPLD]

Any outcome that is "unfair" is a problem to liberals.

[Marootsoobutsu]

Anything outcome that is "unfair" is a problem to liberals.

I'm really trying to not see this as liberal or conservative.

I'm trying to understand the "why" people believe what they believe here. Once Kuya answered my questions directly, I understood his perspective. I find that more beneficial than the portions where I explained (or tried to explain) my position.

Cadsuane has now introduced another problem, albeit not terribly constructively. There is a claim of disenfranchisement. This is a legitimate concern, and a fair point. What I do not see, though, is evidence that the group in question is participating in that, or abusing the system. I would like to see the logical train that connects them. It may very well be that there is an absurdly poignant bit of evidence or reasoning-- something so completely self-evident to Beckwin or others that they think it *should* be self-evident to everyone, even though it isn't. It may likewise be a matter of the reverse, something that I take for granted that others have not considered, or have not considered in the context I have. I don't know.

My goal here truly is dialogue, not consensus. I don't think consensus is probable, but if I come away with a better understanding of things I did not know before, I am better for it. I understand Kuya's concern... I even share it. My disagreement is not so much ideological, so much as it is a question that this evidence supports the concern directly. Now, I would like to understand why Cadsuane thinks that unequal, but still positive progress across the board, is somehow bad. Also, I'd like to know more specifically why I'm "not making very good posts, you know." Obviously, I don't know, or I would be correcting the problem and making better ones.

I appreciate that Kuya took the time to answer my questions; I hope that I have answered his questions in equally good faith.

[Not not Mattaru]

Ugh, can't believe people gave credence to talking point #235

[SwampdonkeyPLD]

The problem is that your dealing with fundamental beliefs. Arguing what you two are arguing is pointless. If the economic pie is always the same size then people like Kuya and Beckwin are right, the rich can only get rich at the expense of the poor and there's your logical train. If the size of the pie gets larger then you're right. It seems to me that's the substantive debate you two should be having.

[Not not Mattaru]

I'm sorry; how is it a problem if everyone is wealthier? If person A gets wealthy, and person B is in a better position today because person A needs someone to help the business grow, how has person B *not* benefited as well? Person B is now in a better position to get wealthier, gain working experience, and institute their own ideas because person A succeeded.

If the only problem is, "It's bad that some people are richer than other people," then it's definitely just a point where folks will have to agree to disagree, and I'd be done here. But the attempts at justifying that position are based on ideas not supported by evidence here.

I am mystified at the proposition that universal improvement-- faster for some, slower for others, but improvement nonetheless-- could in any way, shape, or form be construed as a problem.

Short answer - wealth is relative, power is relative. At least as long as A/B is a meaningful distinction.

To answer to how it is a problem, it depends on the question. Is someone materially better off in absolute terms? Possibly. Is someone better off in their societal well-being and enfranchisement? Not necessarily so. Moreover, is a constantly growing economic pie, if you will, only a product of asymmetric capital accumulation? Questionable.

[Beckwin]

I'm sorry; how is it a problem if everyone is wealthier? If person A gets wealthy, and person B is in a better position today because person A needs someone to help the business grow, how has person B *not* benefited as well? Person B is now in a better position to get wealthier, gain working experience, and institute their own ideas because person A succeeded.

If the only problem is, "It's bad that some people are richer than other people," then it's definitely just a point where folks will have to agree to disagree, and I'd be done here. But the attempts at justifying that position are based on ideas not supported by evidence here.

I am mystified at the proposition that universal improvement-- faster for some, slower for others, but improvement nonetheless-- could in any way, shape, or form be construed as a problem.

Because everyone is not getting wealthier; only a few are. The issue lies in that the pie is growing, but only very few people are getting a bigger piece, and it's absurd to think that they're the only ones "working smart" or "pulling their own bootstraps" or whatever other capitalist slogan you want to use.

Wealth leads to power, so when so much wealth is disproportionately and unjustly in the hands of very few, power is exercised in ways that are generally counter-democratic.

America has the biggest pie and a high per capita GDP, but other countries with more balanced wealth distributions (yet a smaller pie, slower growth, etc) demonstrate better functioning democracies, higher qualities of life, and so on.

as for your previous response to me, "small business" does not necessarily mean the top 1%. I'm excluding small businesses so plow stops inundating us with his anecdotes about meager mom-and-pop businesses who only profit a couple hundred thousand a year. places like that are not what the article is talking about.

[Kuya]

No, though I think they are a better representation of the whole than you probably do. While there are invariably some groups left out, any glance at 10% will show you people from every major demographic in the country. Yes, even the poor are represented in the rich, because a good chunk of the top 10% started out in much farther down the economic ladder. It's not perfect representation, but you'll never have a perfect representation of the population in a 10% swath of class-specific demographics.

The main part that I think you're dead wrong about, is that any concentration of wealth inherently translates into disenfranchisement of the poor. It is certainly a possibility, but concentration of wealth to the extent shown in this article is not alarming, unless one is deliberately class-baiting.

There is a potential for it to be negative, but the reality of the situation (insofar as I see it), is that some degree of concentration is healthy. It is especially good when it is concentrated in those who are creating small businesses, or who are being rewarded for specific, vital functions. You want the capital for investment-- particularly investment in employees-- to be in the hands of those with the talent and ability to create new niches in the economy, to satisfy needs and wants of the market. In a nation where there is no hereditary class, this tends to mean that those who are efficient with money, or who are creating economic potential, are rewarded. As we've seen, these same people pay a higher portion of taxes-- it's been shown that, while these top 10% are earning 26% of the wages, they are paying 65-70% of the federal income tax (and even more once capital gains, payroll, and other taxes are applied)-- so it's hard to argue that they are not also funding many projects for which they receive no direct benefit.

As long as neither the potential for upward mobility of the poor is not harmed (to this point, it is not, and is easier than ever to achieve), and the standard of living for the middle-80 is on the rise (it is), then the concentration described is healthy, and to be appreciated. It's when wealth concentration equates to oppression that it's something to comment on and be alarmed about.

In short, the part where I think you're dead wrong is in looking at this, and jumping to a conclusion without searching for more evidence. I'm not saying that this information is evidence of good, mind you. I'm just saying that it doesn't say one way or another. It could be very bad; it could be a positive indication of an economy starting to recover. We just don't know.

There is scant evidence that america's concentration of wealth has been a positive. If you compare America with Nation-States with more equitable wealth distributions, you notice that even though America has a higher concentration of wealth in a smaller porcentage of its population, its social services are of lower quality or non-existent, its unemployment rate is higher, it has one of the highest encarcelation rates, and its politics is a show of who can gather the most money. While none of these things may be caused by wealth concentration, and some might not even be related, the status of America's public sector is decidedly of much lower quality.

Let's pose a few questions. Why do you think wealth concentration is bad and what positive consequences has it engendered in the US?

[Kuya]

Thought this was somewhat relevant.

http://www.huffingtonpost.com/2010/0..._n_559032.html

Like i said, CEOs, especially the famous bank CEOs involved in the financial crisis lack frugality (or in some cases, just the mid tier employees), meaning, the decency of not flaunting their wealth or in this case, rubbing it in.

[Cadsuane]

I'm sorry; how is it a problem if everyone is wealthier? If person A gets wealthy, and person B is in a better position today because person A needs someone to help the business grow, how has person B *not* benefited as well? Person B is now in a better position to get wealthier, gain working experience, and institute their own ideas because person A succeeded.

If the only problem is, "It's bad that some people are richer than other people," then it's definitely just a point where folks will have to agree to disagree, and I'd be done here. But the attempts at justifying that position are based on ideas not supported by evidence here.

I am mystified at the proposition that universal improvement-- faster for some, slower for others, but improvement nonetheless-- could in any way, shape, or form be construed as a problem.

Various arguments as to why it's a problem.

1.) Costs of living rise as inferior but cheaper goods and services are replaced, along with the acceptable standard of living, leading to a case where wealth as measured by GDP must increase simply to avoid poverty.

2.) Marginal utility of money decreases the more of it you have. The economic benefit a hundred dollars has to an Ethiopian farmer is far greater than that of a hundred to a Saudi prince. Hence a large concentration of wealth owned by a small group of people represents an overall loss in economic welfare.

3.) We've already established that the path to wealth lies in savings, or the accumulation of debt assets and equity in capital goods. Simply selling labour and spending on consumption tends to result in downward social movement. Indeed, due to 2.), the upper classes spend a far smaller portion of their income on consumption and are more prone to saving and investment because of it, creating a virtuous cycle for the accumulation of their own wealth, whereas the poorer classes, who must spend a greater portion of their income on consumption, face a far more difficult struggle in saving money and investing, and hence don't tend to move upward in social class. As this phenomena propagates itself through generations the less likely it is that the wealthy will be wealthy solely due to their ability to contribute, since they will be an embedded caste, whereas the poor will tend to remain poor regardless of their ability to contribute. A summary of this argument is that it's much harder to get rich than it is to stay rich.

4.) Marx said that the person or group of people who controls the means of production posesses the only truly significant expression of power in a nation, and a chief means of production is the ownership of capital. Imagine if you will a scenario taken to (slightly absurd) extremes as in argument 3.), wherein the entirety of a nations investment and ownership of capital is undertaken by a small plutocracy. This is a society in which the notion of representative democracy would be in serious jeopardy, due to the mutual resentment between social classes, the abandonment of merit based compensation, and the lack of social cohesion and stability much aided by the accumulation of power in the upper classes that must result from their ownership of the economy. If such a state of affairs seems difficult to visualize just think of western civilization pre-enlightenment.

[Marootsoobutsu]

There is scant evidence that america's concentration of wealth has been a positive. If you compare America with Nation-States with more equitable wealth distributions, you notice that even though America has a higher concentration of wealth in a smaller porcentage of its population, its social services are of lower quality or non-existent, its unemployment rate is higher, it has one of the highest encarcelation rates, and its politics is a show of who can gather the most money. While none of these things may be caused by wealth concentration, and some might not even be related, the status of America's public sector is decidedly of much lower quality.

Let's pose a few questions. Why do you think wealth concentration is bad and what positive consequences has it engendered in the US?

More people in lower and middle America own their own homes than they did 10 years ago. Access to higher education is more widespread now than it was 10 years ago. Food is cheaper now relative to income than ever before. About the only area that is more expensive now relative to income is health insurance, and while I may not agree with any of the current plans proposed to deal with that, I do recognize the need for health care reform.

I would generally submit that the main reason that America's social services are of lower quality than other nations, is because America spends a larger portion of its GDP on its military than it does on those social services, and I would combine this with a more generally optimistic (whether realistic or not is debatable), view of the ability of the individual to change their social status.

While incarcerations have increased in the US, this seems mostly tied to the war on drugs-- incarceration on most other spectrum have gone down steadily over the last 30 years. Whether one agrees with the war on drugs or not, drug related crimes-- particularly short-term incarcerations-- are the major reason for the issue. It is my suspicion that if more European nations shared a similar governmental emphasis on the war, their rates of incarceration would be similar.


For your specific questions, wealth concentration is bad when the general progress of the middle 80 is reversed, when the poor pay a portion of taxes in excess of their relative proportion of income, or when the concentration is so great that the ability for the bottom 90 to break into the top 10 becomes unrealistic.

I would generally submit that a wealth concentration in the bottom nineteen of the top quintile (ie-- two through 20 of the top 20%) is desirable. This is the point where you have the vast glut of successful small businesses lie, and it covers the majority of doctors, dentists, surgeons, lawyers, CPAs, engineers, and other highly skilled individuals that maintain the economic infrastructure of the nation. In short, that's the point where you have the innovators and the professionally excellent. It represents people from a massive array of socioeconomic backgrounds. But it's where the majority of wealth is created-- not only for those at the top, but for those in the lower 80. In short, it's the top 20 that drives capitalism; the bottom 80 are essential aspects who should not be ignored nor disenfranchised, but it's the innovators and the specialists that provide upward mobility for everyone. Also, the group is then large enough that cabalistic unilateral policies are unlikely, so concentration of power isn't equated in such a case with the concentration of wealth. Again, all this with the caveat that the lower 80% are not prevented upward mobility, that quality of life is increasing for the lower 80%, etc...

Also note, I am not saying this notice is good; I stress that there is possibility that it could very well indicate that it *is* a bad direction. I'm just saying that, for this particular article, there's room for both positive and negative trends.

[Cadsuane]

More people in lower and middle America own their own homes than they did 10 years ago. Access to higher education is more widespread now than it was 10 years ago. Food is cheaper now relative to income than ever before. About the only area that is more expensive now relative to income is health insurance, and while I may not agree with any of the current plans proposed to deal with that, I do recognize the need for health care reform.

A comparison of America today to America x number of years ago does not address a comparison of America to other nations in the present day.

I would generally submit that the main reason that America's social services are of lower quality than other nations, is because America spends a larger portion of its GDP on its military than it does on those social services, and I would combine this with a more generally optimistic (whether realistic or not is debatable), view of the ability of the individual to change their social status.

Not very compelling, riddled with weasel words.

While incarcerations have increased in the US, this seems mostly tied to the war on drugs-- incarceration on most other spectrum have gone down steadily over the last 30 years. Whether one agrees with the war on drugs or not, drug related crimes-- particularly short-term incarcerations-- are the major reason for the issue. It is my suspicion that if more European nations shared a similar governmental emphasis on the war, their rates of incarceration would be similar.

Poverty also correlates with incarceration rates, and not just poverty period, but relative poverty. Your war on drugs argument is a scape goat.

For your specific questions, wealth concentration is bad when the general progress of the middle 80 is reversed, when the poor pay a portion of taxes in excess of their relative proportion of income, or when the concentration is so great that the ability for the bottom 90 to break into the top 10 becomes unrealistic.

I would generally submit that a wealth concentration in the bottom nineteen of the top quintile (ie-- two through 20 of the top 20%) is desirable. This is the point where you have the vast glut of successful small businesses lie, and it covers the majority of doctors, dentists, surgeons, lawyers, CPAs, engineers, and other highly skilled individuals that maintain the economic infrastructure of the nation. In short, that's the point where you have the innovators and the professionally excellent. It represents people from a massive array of socioeconomic backgrounds. But it's where the majority of wealth is created-- not only for those at the top, but for those in the lower 80. In short, it's the top 20 that drives capitalism; the bottom 80 are essential aspects who should not be ignored nor disenfranchised, but it's the innovators and the specialists that provide upward mobility for everyone. Also, the group is then large enough that cabalistic unilateral policies are unlikely, so concentration of power isn't equated in such a case with the concentration of wealth. Again, all this with the caveat that the lower 80% are not prevented upward mobility, that quality of life is increasing for the lower 80%, etc...

I address this in my own post.

[Kuya]

More people in lower and middle America own their own homes than they did 10 years ago. Access to higher education is more widespread now than it was 10 years ago. Food is cheaper now relative to income than ever before. About the only area that is more expensive now relative to income is health insurance, and while I may not agree with any of the current plans proposed to deal with that, I do recognize the need for health care reform.

I would generally submit that the main reason that America's social services are of lower quality than other nations, is because America spends a larger portion of its GDP on its military than it does on those social services, and I would combine this with a more generally optimistic (whether realistic or not is debatable), view of the ability of the individual to change their social status.

While incarcerations have increased in the US, this seems mostly tied to the war on drugs-- incarceration on most other spectrum have gone down steadily over the last 30 years. Whether one agrees with the war on drugs or not, drug related crimes-- particularly short-term incarcerations-- are the major reason for the issue. It is my suspicion that if more European nations shared a similar governmental emphasis on the war, their rates of incarceration would be similar.


For your specific questions, wealth concentration is bad when the general progress of the middle 80 is reversed, when the poor pay a portion of taxes in excess of their relative proportion of income, or when the concentration is so great that the ability for the bottom 90 to break into the top 10 becomes unrealistic.

I would generally submit that a wealth concentration in the bottom nineteen of the top quintile (ie-- two through 20 of the top 20%) is desirable. This is the point where you have the vast glut of successful small businesses lie, and it covers the majority of doctors, dentists, surgeons, lawyers, CPAs, engineers, and other highly skilled individuals that maintain the economic infrastructure of the nation. In short, that's the point where you have the innovators and the professionally excellent. It represents people from a massive array of socioeconomic backgrounds. But it's where the majority of wealth is created-- not only for those at the top, but for those in the lower 80. In short, it's the top 20 that drives capitalism; the bottom 80 are essential aspects who should not be ignored nor disenfranchised, but it's the innovators and the specialists that provide upward mobility for everyone. Also, the group is then large enough that cabalistic unilateral policies are unlikely, so concentration of power isn't equated in such a case with the concentration of wealth. Again, all this with the caveat that the lower 80% are not prevented upward mobility, that quality of life is increasing for the lower 80%, etc...

Also note, I am not saying this notice is good; I stress that there is possibility that it could very well indicate that it *is* a bad direction. I'm just saying that, for this particular article, there's room for both positive and negative trends.

I am getting that you're quite ambivalous about this, though you seem to lean more towards the side that wealth concentration is good. You also seem to believe that disproportionate wealth to the top 20% is not wealth concentration which just seems likes disigenuous framing, since i also got the feeling you did not feel that even 10% consituted wealth concentration.

Finally, hypothetically, if government policy were aimed at increasing the wealth distribution towards the top (i am not discussing whether the change in wealth distribution meant that those at the bottom were losing wealth to the top) in the belief that this would benefit everyone, i find it hard to believe that people will not feel resentful over the favourable treatement government policy is giving to a smaller proportion of its population, and i doubt the argument that these upper class people are the wealth producers would help as it would come off as elitist and condescending to others. This ties into my earlier statement that wealth concentration breeds ill will or political instability.

I agree that America's emphasis on war and war on drugs is an important part of the equation, but the policy on wealth distribution seems to run along the kind of government policy. And as Cads had mentioned, poverty is relative.

[Cadsuane]

Beckwin, I'm quoting Marx now. Am I still a pseudo-moderate, or was that post progressive enough?

[Kuya]

In short, it's the top 20 that drives capitalism; the bottom 80 are essential aspects who should not be ignored nor disenfranchised

This part worries me as it struck me as dishonest. Like a statement that says: "Well this may be so, but...", which sounds more like an apologist stance. The top 20 drive capitalism, but the bottom 80 are "essential parts" that should not ignored or disenfranchised... but that doesn't mean that they won't be, particularly because they're not "the drivers of capitalism".

I am not saying that what you say is not true; it is very likely that concentrating wealth at the top is a very efficient way to manage capital. I am just doubtful that this efficient management of capital is worth it.

[Cadsuane]

This part worries me as it struck me as dishonest. Like a statement that says: "Well this may be so, but...", which sounds more like an apologist stance. The top 20 drive capitalism, but the bottom 80 are "essential parts" that should not ignored or disenfranchised... but that doesn't mean that they won't be, particularly because they're not "the drivers of capitalism".

I am not saying that what you say is not true; it is very likely that concentrating wealth at the top is a very efficient way to manage capital. I am just doubtful that this efficient management of capital is worth it.

It is, really, since highly skilled labour on its own is still worth peanuts. And I disagree that it's an efficient way to manage capital. Alot of money is wasted on their being a class of poor people who are doomed to remain poor. The more people that save and make varied investments, the better off we all are (better financial markets with less risk, more importantly a greater stock of capital), which is good for the sake of the progressive argument here since we can argue for economic well-being in aggregate and not just some silly notion of fairness.

[Kuya]

I recall my economics books saying that as the income distribution is more equitable, there tends to be more spending. And sociologically (i mean correlations), nations with more equitable distributions of wealth tend to have better indexes of development (i assume that this was the term, since there were two; wealth and development since meassuring GDP was seemingly not an accurate way to reflect whether a society's people lived comfortably).

[Kuya]

Let me see if i can find an article i read that mentioned something paradoxical: mortality rates seem to decrease when income is more equitable, but this seemed to always hold true. Meaning, during the great depression, mortality rates seemed to have gone down, as did income become more equitable, but the idea of it struck me as quite counter-intuitive.

[Beckwin]

Beckwin, I'm quoting Marx now. Am I still a pseudo-moderate, or was that post progressive enough?

you've redeemed yourself.