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United States The Almighty Buck

Does Income Inequality Matter? 1186

Posted by Cliff
from the an-issue-worth-discussing dept.
theodp is concerned about the following: "Alarmed by Goldman Sachs CEO Lloyd Blankfein's record-setting $53M bonus, Charles Wheelan (aka The Naked Economist) argues that income inequality matters. Wheelan notes that the Gini Coefficient (a measure of income inequality) for the U.S. has been moving away from countries like Japan and Sweden and closer to that of Brazil, where the murder rate is 5X that of NYC and crime is materially impacting GDP."
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Does Income Inequality Matter?

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  • by spun (1352) <loverevolutionar ... m ['o.c' in gap]> on Friday January 12, 2007 @12:22PM (#17574726) Journal
    Income inequality drives crime. When everyone is poor, no one steals from each other. When everyone is rich, everyone steals from each other, but there are rules. When some people are very, very rich and some are poor, the poor feel justified in evening out the unfairness through direct action. If everyone had their basic needs met, I don't think income inequality would matter as much. But as long as some people are desperare and feel they are being screwed, and they can find an easy target in a rich person, there will be crime.
  • Typical straw man (Score:5, Interesting)

    by Flying pig (925874) on Friday January 12, 2007 @12:28PM (#17574836)
    Nobody said that - you are just creating a straw man to knock down. Correlation is correlation, it cannot be direct or indirect. Either variable a has a positive or negative correlation with respect to variable b, with an given level of significance, or it does not. There is no "direct or indirect" about it.

    Causality is different, of course, though "indirect cause" is a very medieval concept.

    I don't think anybody would suggest that paying a banker a lot of money will suddenly cause someone to become a street robber. But if there is a correlation become income inequality and crime, and given the high cost of crime, there is a case for investigating the nature of any relationship.

    As an example, it is known that high incomes in the City of London are associated with cocaine use. This inevitably brings rich people into contact with drug dealers. Given the profits to be made, it might be that the existence of a rich and rather well protected class of drug users made them a very attractive target for drug dealers, causing increased competition for access to this market. Since drug dealing is an illegal, unregulated market, this might cause more turf wars and therefore more visible drug-related crime. That is a possible chain of causation which, if correct, could have implications for policy on drugs (e.g. toleration and a legalised market.)

    The US has, I believe, nearly 2 000 000 people in prison. This is a big enougfh cost item that it needs proper study.

  • by fistfullast33l (819270) on Friday January 12, 2007 @12:29PM (#17574866) Homepage Journal
    Imagine if that $53,000,000 had been distributed among the employees as a company-wide bonus.

    Goldman handed out $16.5 billion [forbes.com] in total compensation to 22,000 employees worldwide. I'm pretty sure that while no one would turn down an extra $2400 (about $1500 after taxes), it's not going to matter much to them either way.
  • by argoff (142580) * on Friday January 12, 2007 @12:33PM (#17574918)
    ... having a fiat monetary system does. In a gold based system there are natural limits on the amount of money so that naturally limits the amount of debt and stabilizes prices over time. In a fiat system there are no natural limits on debt or money, so the economy tends to become over saturated in debt and prices tend to rise over time. However, fiat money systems fail for the same reason that any state central planed economy fails. In a gold system, if someone wants a loan or an investment - they can't print it up so they must get it from savers. In a fiat system, savers have no say and saving is punished because all loaned out money comes from the central bank. That takes investment power away from the people and puts it into the hands of central bankers (think central planners) and their friends causing all sorts of excesses - especially in the pay and bonuses of high level investment bankers who have close ties to the Federal Reserve.
  • by Viper Daimao (911947) on Friday January 12, 2007 @12:39PM (#17575076) Journal
    Exactly. I suspect that most of the income inequality of the US comes from the fact that the richest people in the world live and make their money here. Our poor, are materially richer than many other country's middle class.
  • by lpangelrob (714473) on Friday January 12, 2007 @12:40PM (#17575102)
    Things people that want money should do:

    1.) Limit your liabilities; pay off your debts as fast as you can, especially credit card debt.
    2.) Stop using credit cards. Seriously.
    3.) Stop trying to hit it rich by playing the lottery, unless you find that particularly entertaining.
    4.) Keep an emergency fund of some sort so you can stop using credit cards.
    5.) Don't co-sign loans, ever.
    6.) Spend less than what you make.
    7.) Don't lease a car.

    This list is based on what people do to get in financial trouble:

    1.) People get in credit cards and pay more interest to Visa and MasterCard over years that they could have saved.
    2.) People, especially poor minorities (see the statistics) try to win millions when the odds of being struck by lightning are less.
    3.) People don't have money saved aside so they don't use credit cards, so they pay Visa and MasterCard interest instead of having money.
    4.) People co-sign for other peoples things, they don't pay, so they're stuck with the bill.
    5.) People pay ridiculous amounts of their income to car bills.
    6.) People use credit to look wealthier than they really are.

    The reasons for this are social ("use debt as a tool!"), cultural ("I need more stuff to impress people!"), patently unfair (the less educated are far more likely to be paid less, and so get into trouble more easily; medical problems), and selfish ("I 'need' this! I 'need' that!"), and could be a thesis, but they're hard to argue, and the concepts don't require an economics degree.

    I think I've been listening to Dave Ramsey a little too much. :-p
  • by pipatron (966506) <pipatron@gmail.com> on Friday January 12, 2007 @12:40PM (#17575106) Homepage

    Not only does America have greater income inequality, but it matters more in America. There's no universal health care, social security is dependent upon you paying into it (something many people forget), single parents are expected to work full-time from the time their child is about 2 months old, etc.

    The reason it matters more in America is because of the greater income inequality. In Sweden (good example since I live here.. :P), the higher taxation and minimum wages, and also a non-linear taxation where people who earn more will not only pay a higher tax but even a bigger share of their income, results in a smaller income inequality. This money goes into public healthcare and social security, in order to basically make sure that even if you're the lowest drug-addict scum on earth, you don't have to steal anything, but can just show up at the social security office and get more than enough money to buy everything they need (except, unfortunately for them, the drugs).

    This does not stop all crime, of course, since the drug addicts prefer to buy drugs and alcohol for the money and then live on the streets, and there are always a lot of people that still aren't happy with what they got but rather want to have more. There are also the people that are here illegally, which means that they can't get any help from the government.

    It does, however, help a great deal.

  • Yes, It Does (Score:5, Interesting)

    by p0tat03 (985078) on Friday January 12, 2007 @12:40PM (#17575108)

    I've lived in Canada for many years now, but before then I came from Taiwan, which as a country is really not as poor as it gets in southeast Asia. I can tell you that the wealth gap certainly does matter.

    Fellow Taiwanese feel free to disagree - but as a child over there I was constantly being protected, my father having worked for one of the larger multi-nationals with an Asian presence in the 80s. Daily you would hear news of kidnappings, children being snatched on their way to their fancy private schools; chauffeurs, butlers, maids, and servants selling out their employers and helping in kidnappings, extortions, and other crimes.

    I went to a fairly exclusive private school that taught mostly the children of foreign execs stationed in the country, and also the high-level Chinese that worked under them. All of our parents were paranoid about our security to the extreme. At many points it wasn't a matter of *if* someone makes an attempt to kidnap your child, but *when*. It wasn't the greatest of times to be a wealthy parent, though as a kid I never really felt threatened - I was probably too young to understand.

    Then I came to Canada and that turned upside down. I can't remember the last time a kidnapping happened in Canada that was driven by the ransom - usually it's some sick f--- getting his jones on molesting little girls, not an organized group out to steal from the rich.

    The difference? Canada has well-established social security. The average income is extremely high compared to most Asian countries, there is health care and welfare. In Taiwan (at the time) there was no health coverage *at all* for those who were not privately insured, almost no social assistance at all, and the wealth difference between the majority, still toiling for pennies in unsafe factories, vs. the newly-minted elite that was being quickly created by American investment, was massive.

    America isn't quite at that point, but I get the distinct impression that the gap is widening. If it continues, we will reach a point where the majority of the country is unable to afford the necessities of life. Then the violence will start.

  • by dmeranda (120061) on Friday January 12, 2007 @12:42PM (#17575144) Homepage

    Perhaps a link to Paul Graham's Mind the Gap [paulgraham.com] essay would be worth reading as well.

    There's at least four fundamental errors that are made or implied by the Inequality Matters argument:

    1. Money is not zero-sum, just because some CEO gets a lot of money doesn't mean I get less.
    2. If there were perfect equality then there would be no incentive for anybody to make any progress at all.
    3. Correlations don't prove cause-effect relations.
    4. The results are highly selective and not an indicator of good/bad on a whole. Even if more crime does result, many other good things may also result as well.
  • Picking on New York? (Score:3, Interesting)

    by OhHellWithIt (756826) on Friday January 12, 2007 @12:43PM (#17575170) Journal
    From TFA:
    Overall, the murder rate in Brazil is five times that of New York City. As in the United States, much of that violence is poor-on-poor, although the toll redounds everywhere. The New York Times reported recently on a World Bank study concluding that if Brazil had the much lower homicide rate of Costa Rica, Brazil's GDP would have been three to eight percent higher in the 1990s.

    I'm no fan of New York City, but he's definitely using a bogeyman here. In 2002, the murder rate in Washington, DC, was six times [infoplease.com] that of the Big Apple. New Orleans was nearly eight times more deadly, and that was before Katrina. The state of my birth, South Carolina, which is relatively rural, has a murder rate of around the same magnitude of New York City.

    FWIW, I agree with the general thrust of the article, that such large wealth and income inequities are not a good thing.

  • by Archangel Michael (180766) on Friday January 12, 2007 @12:43PM (#17575180) Journal
    "But as long as some people are desperare and feel they are being screwed, and they can find an easy target in a rich person, there will be crime."

    PS3, XBox360, Wii, Nike Shoes .....

    People have been Killed, robbed, beatened, and otherwise harmed by people's greed to acquire these products. Yet, none of these are items that are within the definition of "basic needs". Nobody "needs" these.

    The "poor" Americans are some of the richest people in the world, just look at the obesity levels. Truly "poor" people are literally dying of starvation, worry about their next meal, wonder where they will sleep tonight.

    I am SICK of the poverty pimps of America describing the "plight" of the American poor. With very little effort, and one can get a job, find a place to stay, and have a life, as evidenced by the MILLIONS of Latinos streaming across the boarder to take jobs that no American wants.

    I know, I've been "poor". I've also know what its like to have to get up off my ass and get a job, and do crappy work for a living. If one works hard, is honest and never stops learning, one can end up in IT, with a decent wage. But it does require SOME effort, and not quitting ... EVER.

    Americans are a bunch of whiney wimps who would rather get rich quick, while being poor, than work hard.
  • Re:Typical straw man (Score:5, Interesting)

    by Rob the Bold (788862) on Friday January 12, 2007 @12:48PM (#17575324)
    The US has, I believe, nearly 2 000 000 people in prison. This is a big enougfh cost item that it needs proper study.

    A little over a decade ago, I was asked to do a little research. I worked at a company that put phones in jails for prisoners to call their moms, wives and girlfriends (collect). Boss wanted to find proof that this was a growth industry. I was the only engineer there, so math-related problem came to me. A little digging at the library showed that the population of at federal, state, county and local detention facilities was roughly doubling every 10 years.

    Good news for the company: customer base was growing faster than US population at large. Bad news for everyone else: if trend continued everyone would be in jail sometime around 2070. I assumed (to myself) that this trend couldn't coninue for that long . . .

    I hadn't checked the numbers lately, but in the mid 90s the population was about 1 million. So if your 2 million figure is right, we're still on track.

  • by DBA_in_ohio (1050320) on Friday January 12, 2007 @01:02PM (#17575660)
    The present situation in which the middle class is losing ground is not as some would have it, the mysterious workings of a competitive, dynamic free market economy. It's the direct result of decades of corporate controlled multi-national trade agreements and labor arbitrage provisions facilitating the offshore outsourcing of work and the importation of "cheap labor" into the U.S.

    I've fought this fight in the IT sector for more than 5 years now. Middle and upper middle class American IT workers have been methodically targeted for replacement with lower wage foreign replacement workers. Carly "the Outsourceress" Fiorina was notorious for this activity but she is hardly alone. Her successor at HP, Mark Hurd was part of the same dynamic during his tenure at NCR in Dayton, Ohio. Larry Ellison and Bill Gates have been whacking their American workforce for years while whining to Washington politicians that they can't find qualified American IT workers. The result: politicians keep expanding the number of foreign "guest workers" permitted into the U.S. under non-immigrant visa programs such as H-1b. (There's a push underway even now for an increase.)

    I think that the many Americans seeking a middle class life, well-qualified to perform even advanced work who may have lost jobs, are under threat of job loss and seeing their wages/salaries pushed DOWN by offshore outsourcing and NIV work programs SHOULD be outraged at both the politicians and the so-called business leaders and the Wall Street investors who demand that American workers get kicked to the curb.

    The wealth now accruing to the already wealthiest segments of our society represents an illegitimate TRANSFER of wealth from the American middle class.

    The increasing share of wealth controlled by the richest Americans is NOT the result of any Darwinian "survival of the fittest". Offshore outsourcing, "free trade" and NIV worker replacement programs are POLITICAL creations driven by lobbies funded by the wealthiest segments of our society.

    This is a recipe for CLASS WARFARE. You'll find that Sen. Jim Webb of Virginia has spoken out re. this situation since before he entered the Virginia primary in which he defeated longtime ITAA pro-outsourcing and pro-NIV President Harris Miller.
  • by maxume (22995) on Friday January 12, 2007 @01:02PM (#17575666)
    Using a credit card is harmless. Carrying (large amounts of) unsecured debt other than a student loan is insane(student loans are utterly fantastic investments). If someone is disciplined enough to pay off their balance every month, a credit card is a decent way to track spending. Sure, a debit card does all the same stuff, but why not use my free rewards card?
  • by denis-The-menace (471988) on Friday January 12, 2007 @01:02PM (#17575672)
    "some well-off people" I know get there clothes used because they think clothes are outrageously priced. They also buy used cars, and food in the reduced-price section, etc.

    Many poor people shop at the GAP, have new cars, go for take-out all the time and bitch that those "well-off people" have money to burn.
  • Re:What BS (Score:3, Interesting)

    by RightSaidFred99 (874576) on Friday January 12, 2007 @01:03PM (#17575684)
    My wife works in the social work field. Poverty begets poverty for the simple reason that semi-retarded, poor, illiterate scumbags pop out child after child, and those children do the same damn thing. I literally _hate_ those kinds of poor people. Hate them with a passion. This may sound "overly-republican", but you won't be able to point out any flaw in the logic. One way we could improve this country in about 2 generations is by, I don't know, _enforcing_ all that bullshit we spout about "think of the children"? Here's how it works. If you abuse your child once, you get probation, education, whatever (assuming you didn't cut of a hand or sexually molest) - I'm talking run of the mill abuse. Second time, depending on the severity - you get a choice: You get sterilized or you go to prison for a very long time. Either way you're not going to spit out more children to abuse who will in turn have more poor, abused scumbag children. You'd be amazed how poorly the state protects children and how _many_ children these scumbags spit out, one after the other. This leads to an obvious exponential scumbag-ization effect over time when 90% of these children do the same thing.
  • by nursegirl (914509) on Friday January 12, 2007 @01:06PM (#17575764) Journal
    Toronto, ON, Canada has been called the most multicultural city in the world by the UN. In general, large cities in Canada are pretty diverse, while more rural communities are still pretty homogenous.

    Also, in Canada, we've favoured more of an approach that's "mixed salad" rather than "melting pot," so areas that are heterogenous are very heterogenous.

    But my experience has been that the disparity between the rich and the poor in Canada is generally less sharp. The public schools in our poorest areas aren't significantly worse than the public schools in our richest neigbourhoods. That can provide real hope, particularly in impoverished areas with high numbers of immigrants. Generational poverty is harder to tackle, because then you get into learned hopelessness and helplessness.
  • by billcopc (196330) <vrillco@yahoo.com> on Friday January 12, 2007 @01:26PM (#17576190) Homepage
    By allocating capital to where it is best used Goldman Sachs produces huge wealth for everyone.

    What kind of brainwashed bullcrap is that ? There is no way to "produce wealth for everyone", at least not in material form. Being wealthy essentially means having a lot more money than the average joe. If everyone were equally "wealthy" then the word would lose its meaning. You cannot truly create wealth out of thin air, you simply transfer value from one entity to another. There is no net gain. By giving some guy a 53M bonus, you're just shifting that money (aka POWER) away from an immediate group of people. The recipient, in turn, will probably spend a small portion of it on luxuries (high markup low value), and lock the rest away in the bank (or investments). The money that is spent will recirculate to some extent, trickling back down to the common people but still resulting in a pyramid of profit for the middlemen. The rest of the cash just sits idle and creates a void, which is then filled by inflation.

    When you have more money than you can spend, you're actually creating a cascade of economic problems. Way back when money was invented, it represented effort and value. You trade the fruits of your labor for money, which could then by traded for other people's goods and services. Today's money has little to do with its ancestral purpose. What has Lloyd Blankfein done to tangibly benefit the people around him, that is worth 53 million ? 53 million bucks can build a shitload of houses, educate a ton of kids, or feed tens of thousands of people to satiety. Or it can buy one man some short-term entertainment, maybe get his kids through college and pay off a few gold-diggers.

    To me, the only currency that matters, the only one whose value is fixed and whose purpose is clear, is energy. We are living on a planet with finite resources, yet population is growing out of control. All the money in the world won't help when there's no more oil to power factories, no more heat to cook our food, no more electricity to run our hospitals. The fact that such a disaster is centuries, perhaps millenia away doesn't make it less of a problem, that's where we're headed and unless something radical comes around to change our course, humankind will be doomed. It's hard to be rich and famous when you're extinct.
  • by FooAtWFU (699187) on Friday January 12, 2007 @01:30PM (#17576292) Homepage
    If you were to take half the money of the richest 10% of Americans and spread it out among the poorest 40%, you'd probably take one of the biggest steps in history towards eliminating poverty.
    There once was a country called Zimbabwe. It was a decent country, physically, with plenty of natural resources (mineral and agricultural). It had a cool pair of rivers named the Limpopo and Zambezi. They had some very rich white people with lots of land (<1% of people owned 70% of the land) who had moved in during the colonial era, and some very very poor black Africans. One day, when the black African majority had gained power, they decided, "This is unfair. We will redistribute the wealth in this country." And so they distributed the wealth (mostly the land), taking from the rich and giving to the poor. And when they started, the rich white people saw what was happening, and they left, and the land was redistributed.

    Zimbabwe is now infamous for having what is possibly the world's most messed-up economy. Their inflation rate was 1204.6% a year as of last August. Poverty is everywhere and only getting worse. And, of course, no one in their right mind is going to invest anything in the country. As Wikipedia puts it:

    The scale of the drop in farm output has produced widespread claims by aid agencies of starvation and famine. However Mugabe's expulsion of the international media has prevented full analysis of the scale of the famine and the resultant deaths. What is not in dispute is that a country once so rich in agricultural produce that it was dubbed the "bread basket" of Southern Africa, is now struggling to feed its own population. A staggering 45 percent of the population is considered malnourished. Foreign tourism has also plummeted, costing tens of millions of dollars a year in lost revenue.

    For reference, the CIA World Factbook places their Gini index at 56.8, as of 2003.

  • by ArcherB (796902) * on Friday January 12, 2007 @01:33PM (#17576356) Journal
    I can tell you that I get pretty pissed off when I hear about million-dollar bonuses when if I had 1% of that money I wouldn't have to worry about college tuition for the rest of my career. It makes me angry, so I try to ignore it. Watching commercials also gets me a little mad because of the huge disparity between the way the "average american" is depicted on television, and the way we actually live. If you're willing to buy into the commercial vision, then you start to think that everyone but you is living like that, and then you start to wonder how you can get to that point. When you start to think that you can't, you get angry.

    You get angry or jealous? There is a difference.

    1% of one million is $10,000. I spent more than that on college but I'm sure you could get an education for less than that. But let's say that a million-dollar-bonus earner was forced to give it away in 1% increments. He would be able to give $10,000 to exactly 100 people (all before taxes of course). After taxes, he could give approximately $6000 to 100 people, who in turn would only receive $4000 each (after taxes again). Could you go to college on $4k?

    Finally, in your perfect world where the rich have to give all their money to pay for your college, why would you want a college education anyway? You bust your ass through college, work hard, long hours in your job, and when you are successful, you'd have to give away your money to some angry kid who despises you for your hard earned success and is too lazy to pay for his own education!

  • by maxume (22995) on Friday January 12, 2007 @01:44PM (#17576614)
    This brings to mind the stuff in freakonomics about drug dealers. A guy in Chicago went into a gang and got to know them, and analyzed their economics. The guys on the street dealing the drugs, taking most of the risk, earn about $10 an hour all told. They work really hard at it, and regularly risk their lives. They are willing to do this for the chance it gives them of getting to the top, where they make a pretty decent living(~$100,000).

    Basically, they are born into a crisis and never realize it, and they see the horrible 'career' of dealing drugs as one of the better ways out. Putting them in prison is an excellent waste of money, the next generation is always ready to replace them.
  • by Harmonious Botch (921977) on Friday January 12, 2007 @01:47PM (#17576666) Homepage Journal
    "... happiness and contentment is not so much our absolute wealth, but our relative wealth"

    This is almost correct. I read a research paper a few years ago ( If I can find the link again, I'll post it ) that said that it was a combination of relative wealth and opportunity that lead to contentment.
    Specifically, the authors were looking at revolutions, and noted that they tended to occur when the top quintile made 40 times as much as the bottom quintile, AND there was little or no movement of individuals between quintiles. But if people had the opportunity to move, revolutions did not occur even with greater inequality.

    In other words, if people believe that they can someday earn a pile of money, they are much less likely to resent those who have. They will view the rich guy as an incentive.
    But if they believe that they cannot get rich - due to caste sytems, monopolies, licencing, racial laws, or some other artificial means of locking them out - then they are far more likely to become violent.

    It was reassuring to me that the author said that the US has far greater mobility between quintiles than most developed nations.
  • by Anonymous Coward on Friday January 12, 2007 @01:48PM (#17576698)
    The OP is talking about the same type of million-dollar bonuses the article discusses -- the bonuses that involve many millions of dollars. 1% of 53 Million dollars is certainly enough to provide tuition for College while also working full time. That you try to say the OP is invalid by misconstruing his statement shows exactly where you stand on this. And how willing you are to deceive yourself to remain in support of income inequality on the scale it is today. It is very clear you view yourself as the pre-rich. Sorry, Charlie, but chances are no matter how hard you work, no matter how much you spit on the poor, you won't be joining the elite ranks. At least not under this president. But, please, keep deluding yourself. I, on the other hand, will help my fellow human and do what I can to insure the government does the same rather than continues with the opposite.
  • Re:Yes, It Does (Score:5, Interesting)

    by p0tat03 (985078) on Friday January 12, 2007 @01:58PM (#17576964)

    I would rate *your* post +5 pandering to stereotypes as well, to assume that "cultural differences" (which usually is just the politically correct way to say "uncivilized slant-eyed brutes" whenever I've ever heard it) even matters in this case. I admit my "evidence", though it was never meant as such, is anecdotal, but considering how prevalent and worrisome the issue was at the time, I would say the majority of the country's elite felt the same pressures.

    Honestly, unless you are also an Asian immigrant, I would contend that I have a far better sense of "cultural differences" between East and West. I was born and raised in a bilingual environment, lived in both the east and west, speak both English and Mandarin fluently, and I consider myself a pretty even mix of Chinese and American/Canadian cultural traditions.

    So let me comment on your post from that perspective:

    First, in the West there has been a concerted (and almost completely sucessful) effort to stamp out kidnapping for ransom. The penalties are steep...

    And how does that matter? Don't be quick to assume that there have been no major effort to stamp out kidnapping for ransom in Taiwan. Massive undertakings have been taken, with some limited success. Oh, and by the way, we shoot kidnappers (not that I agree with it entirely, but that's the penalty of kidnapping). On the whole Asian penal systems have harsher penalties: prisoners are rarely afforded the kind of quality of life that you see in American jails, and we still shoot people in a public venue (such as a stadium), as opposed to pump them full of anesthetics till they die.

    This isn't a commentary on supporting or opposing capital punishment, but rather my belief that when the wealth gap is sufficiently wide, no level of punishment or threat of punishment will deter the people from trying to even the playing field. If you and your neighbours cannot afford to eat, have corrugated aluminum over your heads, while behind a chain-link fence lies huge mansions of exorbitant excess, you will try and take it.

    and typically the top echelons of the police get involved.

    And they didn't in Taiwan? You try to sound diplomatic and neutral, but clearly you're biased against Asian culture and capability. Considering that the kidnapped children were always part of the rich elite, you can bet your ass that the top echelons of the police were always involved. There were nation-wide manhunts for alleged kidnappers, where absolutely no expense was spared to apprehend the criminals (and then shoot them).

    Secondly, in the West - families don't typically cooperate with the kidnappers. They go to and cooperate with law enforcement authorities.

    As they did in Taiwan. See my point above. Why are we assuming that an Asian family would be more likely to keep the kidnapping to themselves instead of going to the authorities? What reason do you have to make this assumption?

    Thirdly, when the crime of kidnapping for ransom involves children - it invokes the 'protect the children' meme that appears much stronger in the West than in Asia. (For example, you hear tales of children in Asia being sold into chattel bondage, often sexual. Such tales are noticeable by their near complete absence in the West.)

    Ooh, this is a huge can of worms. Having seen the media first-hand during this time of my life, I can say without a doubt that the "ZOMG protect the children from eeeeevil!" thing was as strong in Asia as I've seen in America. Are you trying to tell me that the Chinese culture is somehow less susceptible to the ancient "think of the children!" ploy?

    Oh, and the tales of children being sold into chattel bondage, often sexual, are really not prevalent. They are equally absent in Asia as they are in the West. Keep in mind that much of Western media's portrayal of Asia is extremely negatively biased, probably for the enjoyment of people such as yourself. Why? I don't really know, but it reinforces the stereotype o

  • by thecapn32 (1004481) on Friday January 12, 2007 @02:01PM (#17576998)
    I honestly think that it's a little bit of both. Whenever I think of this issue I think of some of the poorer African-American people that live in my area (in DC). At some point in the not-to-distant past, there really weren't opportunities available to African-Americans. And while they could get jobs as janitors and the like, there was no real opportunity to rise above the poverty line because pay was so low. If you're in a situation like that, what do you tell your kids about why you're poor? "The Man kept me down." And it was TRUE. Now we fast forward to quite a few years later, and there are still tons of poor African-Americans living in DC. And while some strive to become more wealthy and get educated, others are content to not get jobs and stay poor. Ask them why, and they'll tell you there aren't opportunities out there. Something that was probably passed on to them from previous generations. And while it was once true, now it's just an excuse. It's not too hard to get a job, prove yourself a hard worker, and get a community college education on the side, as was mentioned in another post. Are these people just lazy? Probably. But at one point, the lack of opportunity was also true. It reminds me of an article I read in the newspaper a few weeks back about a poor guy in the south who couldn't get a job no matter how hard he tried, and he had nothing but the clothes on his back. Then the reporter followed him as he got a job interview and then a job at a garage. It didn't pay that much, but it was enough to get him on his feet. Then the reporter went back to the garage later and the manager said that the guy had never shown up and they had to give the job to someone else. Then the reporter interviewed the guy again, and the guy said there were no opportunities out there. Hmm. It's probably a little of both.
  • by paanta (640245) on Friday January 12, 2007 @02:14PM (#17577212) Homepage
    Why not bitch? Because obviously the services and contibution you're providing is not worth the amount you are asking for.

    This is based on the assumption that people earning $150K and people earning $5.15/hr are both being paid a fair market value for their work and that the labor market operates freely. Guess what? They aren't and it doesn't...for a looooong list of reasons.

  • by sorak (246725) on Friday January 12, 2007 @02:16PM (#17577260)

    Hold on. Nobody is suggesting that we ditch the whole money idea and turn to communism. That is a strawman argument.

    As for the taxes part, that asks the listener to ignore the plight of someone who works hard for little income, and feel sympathy for someone who has an excessive amount of money, but must give away a larger-than-average portion of it. Now if we are to feel no sympathy for people who have no money, than how do we feel sympathy for people who are incredibly well-off, but could have more.

  • by blugu64 (633729) on Friday January 12, 2007 @02:17PM (#17577280) Homepage
    " Way back when money was invented, it represented effort and value. You trade the fruits of your labor for money, which could then by traded for other people's goods and services."

    First of all let me say I see your point however I have to take issue with it. This is still what money is. I goto work and use my time, effort, and skills in exchange for a money. I then use that money to buy goods and services. Now Mr.MoneyBags might make more then I do, but that is because someone values his time, effort, or skills more then mine, and thus he gets paid more. What he does with his money, be it giving food to starving kids, saving it for his family, or blowing it all away on fast cars and fast women is his perogative and his choice. He earned the right to spend that money however he chooses (withing the confines of legally, of course)

    "To me, the only currency that matters, the only one whose value is fixed and whose purpose is clear, is energy. We are living on a planet with finite resources, yet population is growing out of control. All the money in the world won't help when there's no more oil to power factories, no more heat to cook our food, no more electricity to run our hospitals."

    This is exactly why quite a few people buy gold. It will pretty much always be worth something, as it has tangable value rather then just abstract value.
  • by Anonymous Coward on Friday January 12, 2007 @02:22PM (#17577390)
    Then I'd want 2 or 3 19 year old blonds...then my buddy would want 4 or 5...and a second car, different color...I'm not sure I can believe that there is any limit to human greed...
  • by debrain (29228) on Friday January 12, 2007 @02:23PM (#17577426) Journal
    What business is it of yours how much the CEO makes?

    If a CEO gets an extra $100 and his employee gets an extra $1, is the employee worse off? No, he's better off by $1.


    I agree with you, but there's a caveat that may be worth mentioning: inflation. Without getting into the details, if you inflate everyone's income, then prices will reflect (oversimplified, but not incorrect). Thus, if you have a bunch of CEO's whose incomes are growing faster than inflation, but employees whose incomes are growing at less than the inflation rate, then the income disparity between them grows, and you end up with an ever widening class disparity. Thus, there is a reason for concern over the richest getting richer, and the poorer not getting richer.

    Example in point: I can't speak for anywhere else, but in the US and Canada, I understand that when adjusted for inflation, the average income has gone down $800 in the last 20 years.
  • by Just Some Guy (3352) <kirk+slashdot@strauser.com> on Friday January 12, 2007 @02:54PM (#17578052) Homepage Journal
    The poor (making $20.00 an hour or less) cant afford to build a home or buy a old home in lower crime areas... you just cant afford a $350,000.00+ mortgage when you make a paltry $20.00 a hour.

    I live in a sub-$200,000 "crapshack". Of course, it's 4900 square feet on a half-acre plot in the good part of a nice town with first-rate schools. I admit that the hot tub in the attached sunroom has a broken thermostat, and it's difficult in practice to fit three cars in the garage when visitors come, but I think we'll persevere.

    You decided to live in someplace with a hyperinflated housing market, but don't extrapolate your lifestyle choice problems to the rest of us who've found the good life elsewhere.

  • by Slashdot Parent (995749) on Friday January 12, 2007 @03:08PM (#17578324)
    The reason the US founding fathers put in taxes on inheritance
    I stopped reading right here. Hope the rest of your comment was more correct than this obvious falsehood.

    The estate tax in the US was made permanent in 1916 after a decade or two of debate.

    What was that you were saying about the founding fathers, again?
  • Re:What BS (Score:3, Interesting)

    by multiplexo (27356) on Friday January 12, 2007 @03:10PM (#17578352) Journal

    Look me in the eye and tell me that George W. Bush never used family connections to get out of trouble, get into college, avoid being drafted, evade drunk driving convictions, rescue his failed businesses, get elected governor of Texas and become President of the United States. Look me in the eye and tell me that. The fact is that the rich protect the rich, they take care of themselves and they do everything they can to make sure that they stay on top. This has little or nothing to do with merit and everything to do with gaming the system to make sure that no one ever threatens their economic hegemony. Don't believe me. Don't think that rich folks do this sort of thing? Then pray tell me why rich folks and rich corporations spend so much money lobbying politicians. Could it be because they want to make sure that certain unfair advantages they have (such as having a lower tax rate on interest and capital gains) stay in place? The idea that rich folks are all noble, hard working, self-made Horatio Alger types is utter crap, only a pathetic tool, someone who jacks off to a semen encrusted copy of Atlas Shrugged could believe such arrant nonsense.

  • by Anonymous Coward on Friday January 12, 2007 @03:17PM (#17578496)
    > What business is it of yours how much the CEO makes?
    > If a CEO gets an extra $100 and his employee gets an extra $1, is the employee worse off? No, he's better off by $1.

    The obscene amount of money that CEOs make is at the expense of employees, stock holders, and consumers. If the yearly profit of a small company (say 150 people total) is $100 million and the CEO gets $60 million, that leaves only $40 million for the rest of the company's employees and stock holders.

    That $40 million is not then evenly distributed. $10 million goes to stock holders. Another $20 million goes to various executives. $5 million goes to management. The remaining $5 million is allocated to the 125 employees that comprise 83% of the people in the company and are the only people actually producing the wealth that generated the $100 million in profit -- everyone else is, by definition, overhead.

    So the reason what the CEO makes is everyone's business is that it is a zero-sum game. If a CEO gets an extra $100, his employee do not get an extra $1. Instead those employees lose $100 / numberOfEmployees. Typically, the CEO isn't getting an extra $100, but rather an extra $100 million. And $100 million / numberOfEmployees is still quite a huge chunk of change.

    If CEOs were the ones actually producing the wealth, *maybe* those salaries and compensation packages would be merited. But CEOs do not produce any wealth. The are, at best, necessary overhead. At worst, they are charlatans. Most CEOs are between.

    If our society ever started distributing wealth according to production instead of control, our GDP would increase ten fold in a year.
  • by bongomanaic (755112) on Friday January 12, 2007 @03:18PM (#17578526)
    He didn't say that the US has greater mobility than most developed nations, and he was wise not to since it's not true, e.g. http://cep.lse.ac.uk/about/news/IntergenerationalM obility.pdf [lse.ac.uk]
    Thus the picture that emerges is that Northern Europe and Canada are particularly mobile and that Britain and the US have the lowest intergenerational mobility across the European and North American countries studied here. The USA is seen by some as a place with particularly high social mobility. In part this is a consequence of using measures of class to estimate mobility (these will be affected by changes in the class structure over time). However, the idea of the US as 'the land of opportunity' persists; and clearly seems misplaced.
  • by Red Flayer (890720) on Friday January 12, 2007 @03:21PM (#17578574) Journal
    If a CEO gets an extra $100 and his employee gets an extra $1, is the employee worse off? No, he's better off by $1.
    That's an extremely oversimplified view.
     
    How many workers are there in your hypothetical system? How many CEOs? A little math for you:
     
    Say that there are 100 workers and one CEO in the system. Assume all income is spent on goods[1]. Let A represent the total value of the goods in the system. If each worker is paid $5, and the CEO is paid $100, then each worker can purchase .01A
    ($5 / (100*$5 + 1*$100)). Now give each employee a raise to $6, and the CEO a raise to $200. Now each worker can afford
    .0075A ($6 / (100*$6 + 1*$200)).
     
        See what happened? The increased inequity resulted in each workig having a smaller proportion of purchasing power. This effect is magnified when the ratio of CEOs to workers decreases... see why the income disparity can be a problem?
     
    Algebra. It's useful.
     
    [1] In reality, this isn't true. A lot of the income on the high end is invested, which results in an even greater income disparity, since those at the bottom of the chain don't have residual cash to earn for them.
  • by Anonymous Coward on Friday January 12, 2007 @03:50PM (#17579150)
    "Without researching the numbers, you might end up giving each of the poorest 40% about $20-$200 each."

    Population of USA: 300 million. 40% is 120 million
    Take the mid range of $20 to $200 -$110. $110 x 120 million is $13.2 billion, double is $26.4 billion
    10% - that's 30 million.
    $26.4 billion / 30 million is $880

    So this means you are suggesting that the richest 10% in the USA are worth an average of $880 each (net).
  • by starm_ (573321) on Friday January 12, 2007 @04:02PM (#17579366)
    Free markets do work magic sometimes, and you are right, profit is often a cost of efficiency. It tends to be beneficial at least when it is lower than the gains in efficiencies.

    One of my favourite libertarian economist summarized economics by two things.

    One: Incentives matter. Two: There's no such thing as a free lunch.

    And I tend to prefer free market solutions for a lot of problems. However, I find that pure libertarians often forget the dark side of incentives. Basically, incentives work both ways. In a laissez faire context, everybody has to compete. The actors in this system get incentives toward the two following strategies.

    1) Improve yourself to be better and more valuable than others. Create value. This is where we you get efficiency gains and where the whole society benefits.

    2) Destroy other's ability to compete with you. This is NOT a gain to society. In fact it can be a huge cost. Libertarians often forget that the same incentives that bring efficiencies also promote anti-competitive behaviours. It's a sword that cuts both ways.

    This happens in almost all competitive situations. Why do you think there is always a need for referees in sports?

    Another example I heard against the free markets all the time comes from the world of management. Apparently, some years ago, Microsoft had adopted an interdepartmental competition system in order to motivate sectors to innovate. The most successful projects would get more budgets for the following year and the less successful would get less or get killed. The projects were judged against each other instead of on their own merits and everybody knew that. What happened is that the different Microsoft applications stopped being interoperable with each other because no team would want to help another one at the risk of losing their own budget. The e-mail client stopped interacting well with the web browser, and the word processor would not play well with internet applications etc. Microsoft had to reform quickly in order to survive.

    I think do think free market incentives are an important tool for an efficient society, however, this is only true in contexts where we can assure competition will be fair and that the gains in efficiencies for everyone is greater than the profit to a few select people.
  • by Kohath (38547) on Friday January 12, 2007 @04:47PM (#17580454)
    Do you understand the concept of monetary supply and inflation?

    Yes.

    More cash does NOT buy more in our system...

    Yes it does.

    more cash merely dilutes the value of cash.

    Only if the government increases the money supply. If a company pays their employees more, it doesn't. This is regardless of who in the company get how much of the increase.

    The only way to get more purchasing power (which is a real term, and doesn't need quotes) is to have proportionately more cash in relation to everyone else.

    No. If productivity increases, total wealth increases without the cost of goods increasing. Everyone can buy more in the aggregate. The proportionality doesn't change that.

    No, not good for everyone. It is a zero-sum game.

    Free economic systems are a positive sum game. When free people trade, each party in the trade is better off than they were before the trade. Were that not so, one party or the other would decline to complete the trade. Total wealth is created in each trade.

    What happens if everyone gets a raise in the system? Goods get more expensive, and that raise is wiped out. If your raise was smaller than the average, it means that you, net, lost income.

    Inflation is like 3 percent. Why are you pretending it's a huge factor in the economy? In theory, inflation can be a big problem. But it isn't in the US economy (with all our huge income disparities) so stop trying to tell people it is.

    I'm not trying to trick people.

    Clearly you are. If you weren't, then there's no reason to bring up inflation. We have very low inflation despite our "potentially catastrophic inequitable system".

    You're trying to trick people into thinking they're poorer when they're better off.
  • by killjoe (766577) on Friday January 12, 2007 @05:09PM (#17580914)
    The money does not go to job creators. It goes mostly to people who borrow to pay for a car, house or credit cards. Those people are charged interest so the bank makes money and the bank owners can get a new place on lake como so they can rub shoulders with george clooney.

    In other words the vast majority of that money is being used to further squeeze blood out of that stone.
  • by falconwolf (725481) <falconsoaring_2000NO@SPAMyahoo.com> on Friday January 12, 2007 @05:23PM (#17581178)

    Can be done. Not always easy. Not always fun. But if you are physically able (a substantial if) and havn't committed any crimes (totally within your power to control), there is an almost guaranteed path of upward mobility for those who choose to work hard.

    Good thing you added "almost" to the front of the statement on the subject line, though I'd change "guaranteed" to "possible". I came from a lower income, not lower middle income but lower income, background and I went into the army to save money so I could afford to go to college. After getting my AA degree, I started at a community college because it's cheaper and students don't have to fight for tyme with a professer trying to get a grant or doing research, after having left campus after my class I was hit by a moving van while riding my bike because of which I now have a permanent disability. However it's not a directly a physical disability, instead I am a survivor of a TBI, Traumatic Brain Injury [headinjury.com]. Because of my injury even if I had wanted to continue with the major I had, which was Computer Engineering, I would of had to retake almost all of the classes needed for the major. And then it's possible I could never do the work as my memory was damaged and it can be difficult if not impossible for me to remember simple things like how to solve a physics 101 problem, and I was taking physics as a minor. SO while I worked hard to get where I was headed, a few microseconds changed it all for me.

    Falcon
  • by mfrank (649656) on Friday January 12, 2007 @05:30PM (#17581300)
    Their wealth was in the land. How did they take the land with them when they left, Sherlock?

    The morons that took over the farms did idiotic crap like pull irrigation pipe out of the ground to sell for scrap metal. That's what screwed up the country.

    WTF, look at Somalia. The *entire* economy of Somalia is based on money sent back for Somalians working in the US.
  • by rohan972 (880586) on Saturday January 13, 2007 @02:46AM (#17587664)
    Recently I met a guy who owns 4 houses (I don't know what mortgages he has, but he seemed to be doing well). His job? Plastic extruder operator, basically a labourer working shift work. There would probably be plenty of people in his workplace, all making similar money, doing a similar amount of work, but not accumulating wealth. I have known several people like that. I know a number of people with higher incomes but less wealth and more debt than myself.

    It's like fitness. The majority of people could be physically fit, but many aren't. Many of those people work hard at their jobs/businesses etc, that is, they're not lazy. They just haven't prioritized fitness, they haven't done what it takes. It's the same with money. Many would like to be better off, most could (in developed countries). They just don't do what it takes. There are many reasons other than laziness, in my opinion.

    How many people do you know who have made a serious attempt to become millionaires? I mean, have had a goal to do it, developed a plan to achieve it and have consistently worked that plan for 10 years or more? Anyone who hasn't done that really doesn't know if they could or not.

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