Does Income Inequality Matter?

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."

Economic pyramids....

[BWJones]

It certainly can be argued that there are a number of factors contributing to higher rates of violence in cultures including steeper economic pyramids, loss of access to human services and disenfranchisement. For instance, in cultures that have a relatively high average wage and flatter economic pyramid, combined with services including universal health care, countries such as New Zealand, Australia, Sweden, Switzerland, Japan, Norway, the Netherlands, and Canada among many others, there is a significantly lower rate of violence. Granted in all of those countries there are poor and those with fantastically extensive portfolios, but the statistical disparity is not as extensive as it is among countries like Brazil and the US.

I know it impacts worker performance...

[PFI_Optix]

When the peons who live paycheck to paycheck while being the backbone for a company see executives get yearly salaries totalling more than they'll make in a year, do you REALLY expect them to work hard? For the average corporate employee, the most they can hope for is a middle management position where they take blame for others' mistakes while their bosses take the credit for anything good that happens.

Companies need to remember that even a genius CEO is worthless without the underlings who follow his successful plans. Imagine if that $53,000,000 had been distributed among the employees as a company-wide bonus.

they'll never understand

[Anonymous Coward]

it is opportunity inequality that matters.

Yes, and no...

[Bullfish]

Does some CEO grabbing obscene bonuses (deserved or not) fuel social unrest? Historically, the answer is yes, but only if the bulk of the population is suffering. Then such things become flashpoints, ie "let them eat cake". However, that is not really the case for the bulk of the US population. Most people have plenty to eat, have their gadgets etc... Are there poor in the US? Yes, but there are poor everywhere, and not all necessarily the result of oppression. People with full bellies are likely to be pissed off at excesses, but not to the point of rioting in the streets. Brasil has huge problems with social inequality far beyond what is happening in the US.

Conversation goes nowhere

[lawpoop]

If all comes down to what you believe about human nature. Roughly speaking, some people believe that poor people are poor because they are lazy and violent, while others believe that people are poor because they don't have opportunities available to them, so they turn to violence as an effective, but not ideal, way of problem solving in their miserable lives.

People on either side have fundamentally different views about reality and human nature, and thus there is no common ground in which to have a productive discussion.

Re:I know it impacts worker performance...

[ryturner]

$9.5 Billion in bonuses were distributed to employes of the company. That is an average of $370,000 each. The CEO is getting a lot, but the "peons" you talk about are still getting a huge bonus.

Re:Correlation... causation

[eln]

Obviously that very narrow event does not cause greater violence, but it can certainly be argued that larger income disparity results in greater civil unrest, which will often manifest as violence and other criminal activity (looting, etc).
   

Inequality matters - and it's usually good

[Salvance]

Income inequality is a fact of life in a capitalistic society, and should be embraced, not scowled upon. The biggest problem facing the U.S. isn't the wage gap, but the surge of regulations that prevent the poor from becoming rich (and prevents small companies from becoming large one).

Regulatory reform (healthcare, business, education, legal, etc. etc.), and the return of governing powers to the states, is what we need to ensure the U.S. doesn't become a bankrupt ex-super giant on par with Brazil ... enacting Japanese or Swedish social reforms will just put more strain on our economy as more people jump on the dole.

Sure, there wouldn't be an income gap with such a system, but I'd rather have the opportunity to work hard and become wealthy than coast through life with a lower-middle class income after taxes.

My thoughts

[east coast]

I don't have as much of a problem with the pay gap as with the same people making these large sums not being serious stock holders in their company. Their paycheck is not directly related to company performance in many cases today.

It's unbelievable to me how easy it is for someone to work their way to the top of a company without having a serious amount of their personal wealth invested into the company and that this lack of investment is a safeguard against them not having to be overly concerned in the companies well being.

I know it's a simplistic way of looking at it but it's what makes sense to me.

Power law curves

[Omnifarious]

After reading Linked [barnesandnoble.com] I've come to the conclusion that having a power law curve (the thing that gives you the 80-20 rule) is inevitable in any economy. There are only two questions to be answered.

First, how steep is that curve? Do you have excessive centralization. I think, but do not know, that the US's curve has been getting steeper over the years. This is likely not good.

Secondly, how easy is it to begin acquiring links because you're more attractive for whatever reason? This is where things that make it expensive for small businesses to start, compete or generally raise barriers to entry come in.

Personally, I think we ought to revisit a lot of laws we have concerning monopolistic behavior and financial transactions and tweak them using insights from that book. That book demonstrates through numerous examples that there are a set of powerful laws governing almost all networks that grow organically. Even the network of which molecules interact with which molecules in cells has characteristics that are similar to the network of hypertext links on webpages, which has characteristics that are similar to the food web.

Re:Correlation... causation

[246o1]

There is a limited amount of wealth in our society. It is not an entirely zero-sum game, but it is true that the more wealth the richest have, the less the rest of us have. 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.

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. Basic benefits that everyone shares equally reduce effective income inequality, and there is a well-known link between desparate poverty and crime.

Furthermore, think of the social problems associated with income inequality. The rich can basically buy and sell poor people, you can see this with many of the semi-rich sex tourists in SE Asia, but the same kind of things are possible in America. The poor have no reason to trust people who run a society that is blatantly rigged against them. Et cetera et cetera

This has some merit

[MonGuSE]

I'm sure that our billionaires skew the stats a little bit. However its not coincidence that successful companies have CEO's that know they have enough money and that their underlings need to feel appreciated. Google, Apple, Wegmans, etc... A good CEO in my opinion is one that recognizes that the excessive payment that he may get from the board will do more harm to his company than good and should therefore decline most if not all of it and redirect it to the employees. No one is worth 2000% more than another individual regardless of how good you are at your job.

Re:I know it impacts worker performance...

[lawpoop]

"That is an average of $370,000 each. The CEO is getting a lot, but the "peons" you talk about are still getting a huge bonus."

You're telling me that the janitors making $30k a year are getting a bonus of $370,000? I can't believe you let that bullshit fly.

The bonuses aren't evenly distributed throughout the company. You cite an average, which is a figure not worth looking at. You are trying to confuse the issue, making it sound like receptionists and janitors are getting almost half-a-million at Christmastime. A more enlightening number would be the median bonus. I'll bet that there are a very few executives and managers that are getting bonuses in the millions, which make up the bulwark of the $9.5 billion. Which just contributes to the income inequality, which is what we are talking about.

The rise of the American aristocracy

[iPaul]

The reason the US founding fathers put in taxes on inheritance is that the sucess of one generation shouldn't create subsequent generations already ensconced in privalege. In a way this is unavoidable, but if the future generations aren't people of merit, they will eventually loose wealth. Now we're hitting a period in American history where ridiculous wealth is tied to a strong push to eliminate inheritance taxes. Already a number of families are bastions of old money and privilege, but watch as their wealth becomes a trivial matter of their heridity. The one thing the American founding father thought was odious about Monarchies - that mediocre men ruled the world because their great-great-great grandfather was a great man - is now becoming part of American society.

Re:This has some merit

[avalys]

No one is worth 2000% more than another individual regardless of how good you are at your job.

Why not? Let's say Person A is a salesman who brings a company twenty million dollars in business in a year. Person B is a salesman who manages only one million dollars. Sounds to me that Person A is worth twenty times Person B.

Red Herring

[Anonymous Coward]

Things like the GINI coefficient are red herrings. One statistic rarely shows anything, and GINI shows even less. See Russel Roberts post on the top 1% of income at http://cafehayek.typepad.com/hayek/2007/01/the_top _1_is_a_.html [typepad.com] to see why. The USA is the fastest growing industrial economy in the world; the CEO's of these companies produce more wealth than many countries. If they are compensated what the market will bear, who am I to complain? Besides, they are only going to invest most of that wealth back into the economy making it easer to get my next new car by funding both the auto manufacturer and the loan company.

Re:I know it impacts worker performance...

[Tablizer]

Workers are cogs and are fungible. If the workers truly had the vision and the skills that C level citizens have then they would BE C level citizens.

You make the corporate world sound like a meritocracy. The higher you go up, the less it is about raw merit and more about about power grabs and politics. Not everybody wants to play those ugly games and is one reason why heavy capitalism is rejected by much of the world. The best CEO's have had "mild" thoughtful personalities similar to those of Abraham Lincoln and Tim Duncan. The personality traits of good CEO's is already well-studied and tested. However, pushy egomaniacs end up in the position instead, and they tend to get paid even if they F up.
         

Re:Correlation... causation

[flynt]

If everyone had their basic needs met, I don't think income inequality would matter as much.

Possibly, but as the article points out, happiness and contentment is not so much our absolute wealth, but our relative wealth. Many have their basic needs met, but still feel obligated to put in long hours to increase their relative wealth. The Economist's holiday issue had a nice article on this research.

Re:Conversation goes nowhere

[Dragon Bait]

If all comes down to what you believe about human nature. Roughly speaking, some people believe that poor people are poor because they are lazy and violent, while others believe that people are poor because they don't have opportunities available to them, so they turn to violence as an effective, but not ideal, way of problem solving in their miserable lives.

Doing this sort of binary divide of world views is almost too simplistic. In California (USA), one can flip burgers at McDonalds and support oneself through a community college education. There is no reason that someone in the United States cannot better their lot in life.

However, hard working, enterprising people in Mexico do not have the same level of opportunity - to the point that they will risk the hazards of the desert and coyotes in order to get a shot at the opportunities in the United States.

Re:Correlation... causation

[iPaul]

Bingo - that's it on the nose. It's not that my stack of little green slips of paper is not as tall as you stack. It's that my child dies of leukemia because I don't have enough money to see a doctor, while you child goes to the best hospitals on the planet for a mild thyroid condition. It's about access to health care, education, nutrition, and in some sense luxuries. Imagine how it galls some people in brazil that a group of Porsche driving Yuppie kids spend more money in one night on dinner than they make in a year.

Re:Correlation... causation

[ChibiOne]

If everyone had their basic needs met, I don't think income inequality would matter as much...

I understand your argument. But an armed robbery or a burglar sneaking into someone's house are totally different things from an organized kiddnapping, a serious problem in some Latin American countries. Those bastards don't feel desperate and they don't feel they are being screwed. They have their basic needs more than met to begin with. And yet, there you have them: terrorizing families, demanding monstruous ransoms and mutilating, even killing their victims even after getting their "pay".

Re:Inequality matters - and it's usually good

[BWJones]

I agree with you completely with respect to capitalism as a model and am in no way against capitalism. However, in the US, while there are possibilities for many to achieve great economic prosperity, there is also the possibility of losing *everything* including health care coverage and the roof over your head and this in many cases drives desperation. I would argue further that endemic violence arises more from a sense of desperation than anything else and in more and more cultures exposed to banal media that glorifies prosperity above all else, a sense of artificial desperation drives violent acts and petty crime.

What are the solutions? Social engineering arising out of more education and a focus on education at all levels from grade school to graduate school is certainly a major component to help drive priorities combined with some reform of systems to provide a fundamental level of health care coverage combined with more resources geared towards public housing and support of small to mid-size business. Other than that, I'd like to see less government in our lives with respect to politically and religiously motivated agendas.

Re:Correlation... causation

[BeBoxer]

I would attribute it more to ineffective police and court systems and massive corruption as opposed to an income disparity.

Because clearly, there is no relationship between these three. How could there possibly be a relationship between having lots of desparately poor people and an overworked/ineffective court system? Or between having obscenely rich folks and corruption?

Re:Correlation... causation

[WhiplashII]

The other crazy thing he says is that based on the data element:

a majority of Americans would prefer to earn $100,000 while everyone else earns $85,000, rather than earning $110,000 while everyone else earns $200,000.

he concludes:

that a nation may be collectively better off (using some abstract measure of well-being) with a smaller, more evenly divided pie than with a larger pie that's sliced less equitably

Didn't we just establish that people are unhappy unless they make more than their neighbor? Equivalence is not enough - just ask your neighbor! So the real result of this is that we should never publish who received the salary, so that you can assume that you are still the highest paid among your peers.

And that, I think are the key words: your peers. None of us aspire to being Trump - not with that hair. But we want to make more than our peers do - that's a common enough aspiration.

Re:Correlation... causation

[Anonymous Coward]

When everyone is poor, no one steals from each other.

This statement is simply wrong. Poor people who steal, steal from their neighbors. They don't go into the nice neighborhoods to do it.

Clarification

[99BottlesOfBeerInMyF]

The summary mentions income disparity, but that statistic is only used because it is easy to measure. Sociologists modeling this issue actually find that wealth disparity, not income disparity has the closest correlation to violent crime of any observed factor. Another thing to be kept in mind is that "correlation does not necessarily imply a specific causation." This quote is often mangled by people with agendas. Correlation frequently does imply some causation, whether that causation is direct in either direction or both items are caused by another factor. Probably half of all science is finding correlations and testing for causations.

Finally, I'd like to address where the research on this subject has gone in the last few decades. The correlation between wealth disparity and violent crime fits neatly with research into motivation and de-motivation for criminal behavior. In the 80's and 90's corporations funded a lot of research into how to stop employee theft. At the same time a few other studies also tackled the same issue from a less mercenary perspective. The results of all this research led to some surprising changes in the way most sociologists think about crime. While threat of punishment is a deterrent to crime, it is nowhere near as important a deterrent in most cases as was previously assumed. In fact, the strongest motivation for not commit crime was moral, but in a rather unfocused way. In some instances a sign that says please don't steal (maybe Apple wasn't nuts) proved more effective at deterring crime than a security camera. Treating employees well and building up loyalty to the company is one of the most cost effective ways to reduce theft. Business schools in the US are just in the last 5 years starting to teach this, so it may take a while for it to worm its way into corporate culture.

By now you're probably wondering, how this fits in with wealth disparity. Wealth disparity allows people to justify their crimes, removing the moral motivation to not commit crimes. If one man is born with nothing and has to go into debt simply to get started and remains in debt for years while working hard and making good decisions, and another person is born wealthy, never has to work a day in their life and is an idiot, and makes 1000 times what the first person does simply by investing in firms that loan money to the first person and people like him and collect interest, it is easy to see that life has not treated the two people fairly. The smart and hard worker makes little and struggles while the lazy idiot gets a free ride. The more common and drastic this seems to our first person, the more likely they are to commit violent crimes and robberies. They can justify those crimes to themselves by looking at the inherent unfairness they have been subjected to. Now here's where it gets interesting. Remember where I mentioned earlier that the motivation was unfocused? While the potential criminal may have justified their actions via the unfairness, they commit their violence and crime based upon opportunity. That means they are no more likely to rob the rich than to rob other poor people.

So where does that leave us? It leaves us with a hypothetical causation between wealth disparity and crime, that is somewhat supported by statistical evidence. It also gives us clues to potential ways to reduce violent crime by addressing the motivations for crime. If we implement more progressive inheritance or wealth taxes and apply that money to socialist programs aimed at the very poor, will crime be reduced? I think it will, and that seems to be the case in other countries, but no one knows for certain. I also think rather than a dole for the poor we'd do better to address the culture of drug prohibition via decriminalization, set up addiction treatment and management programs, and address the healthcare crisis that exemplifies the percieved wealth disparity issue, if not the actual differentiation.

A Qualified Yes

[mpapet]

History shows again and again, a politically and socially stable country tends to have either
a) large and stable "middle class." Another way to describe it is good income distribution and consumption by a large number of people in the country/empire in question. More recently, that also includes political participation by all citizens.
b) Despots running the show.

In more recent times, Detroit as described in the part-documentary Roger & Me has excellent examples of the phenomena at a city-scale.

Is there a direct causal relationship that can be expressed in an equation that would satisfy a ./er? No. In that way, reality definitely has a liberal bias. (to borrow a quote)

Re:Inequality matters - and it's usually good

[BWJones]

Our poor, are materially richer than many other country's middle class.

Holy $#!^ dude...... Have you ever spent any time in a major urban center? Have you ever worked in a soup kitchen or helped provide services to the poor and indigent? Comments like this are born out of a fundamental ignorance of reality brought on by steep economic pyramids that encourage cultural isolation.

Re:Correlation... causation

[spun]

It is important to remember that no matter how horrific the crime, it happens for a reason. Those reasons are only rarely completely internal to the criminal. Calling somone a bastard, while a reasonable response to such horrors, isn't helpful. It amounts to throwing up one's hands and saying, 'the devil made him do it.' It's not an explanation, but an expression of emotion. In order to come to grips with crime, we must put aside emotion and analyze the root causes dispationately. I say this as a victim of violent crime who was permaently handicapped in an attack.

What BS

[XanC]

Wealth couldn't be less of a zero-sum game. And I guarantee that if we tried your crazy plan of taking half the rich people's money and giving it away, within a year we'd be right back where we started. Why? Because the rich keep on making the decisions that made them rich, and the poor keep on making the decisions that made them poor*.

*Note: I don't believe anyone in America is truly "poor", except by choice.

The real question

[pair-a-noyd]

"Does Income Inequality Matter?"

To the people at the bottom of the food chain, yes, it does.
To the carnivorous top feeders, no, it doesn't matter at all.

Re:Inequality matters - and it's usually bad

[A nonymous Coward]

Seems to me that the difference is who decides where the money is spent. If one person decides where to spend $100 million, maybe he will buy a yacht, fancy cars, fine art, expensive condos ... the yacht and cars generate jobs, but the condos and fine art simply go into some other rich person's investment accounts. No one directly benefits. Plus there's not much variety there.

Whereas if 100 people spend $1 million apiece, there's more variety, more spent on manufactured goods which generate jobs, less spent on trading museum pieces around the shuffle board.

And in one million people spend $100 apiece, most of it is spent on food, booze, ciggies. Certainly generates jobs, but not good jobs, and no real opportunity to trigger investments.

The idea that a fired CEO deserves a $240 million golden parachute is just ludicrous.

Re:Correlation... causation

[LordPhantom]

Americans are a bunch of whiney wimps who would rather get rich quick, while being poor, than work hard

Ok, I'll bite. You had me up until that statement. You, sir, apparently like to make sweeping generalizations about a group of people you obviously understand little about.

I'll put this in a bite-sized mental morsel for you: There are -some- poor folks who live off the charity of others, and there are -some- rich people who live off their connections. Just like every other country in the world. But that doesen't apply to everyone, there is an extremely large group of hard working middle class folks propping up the economy here, if you really worked hard and came from the background you say you did, you would know that.

It's about Reported Crime

[giafly]

1. Crime requires poor people. This is because rich people make the laws (or buy the politicians who do) and they're not stupid, so crime is what poor people do [commondreams.org].
2. But crime reporting requires rich people. This is because their taxes fund the police.
3. So to get a lot of reported crime, you need both poor people (to do it) and rich people (so it's reported). Hence this apparant effect.

Does Income Inequality Matter? No, but it appears to matter.

Re:Inequality matters - and it's usually good

[Bob9113]

I'd rather have the opportunity to work hard and become wealthy

This is one of the main points raised in the article, which is meant to inspire contemplation and discussion, not to provide a set answer. The author notes that income disparity is generally a good thing as long as there is a clear path from rags to riches. He notes, however, that if that path is unclear or nonexistent for those who have the skills and motivation to follow such a path, then there is a greater likelihood of disenfranchisement and subsequent violence.

It is a common assumption that The American Dream is alive and well. If it is, then income inequality is good. If it is not, then increasing income inequality is dangerous.

Re:Correlation... causation

[DeadChobi]

Forget Brazil. Imagine how much it galls many Americans that watch some dumb yuppie on television fritter away a couple of million dollars when that's more money than they will ever see in their lifetime. I can tell you that it makes people very angry to think about that. Not angry enough to take things into their own hands, yet, but still angry. And your salary/wage is indeed your direct access to everything you need to survive. If it's below a certain point then you can't afford to buy things like health care and food because they cost more when it's expected that the average person can pay that.

In America we're creating an underclass where the values are completely different, even from the middle class. Our middle class is shrinking in size, with more people dropping below the line between the two classes and winding up poor. When our middle class is gone we lose the perception of class mobility, and then people start fighting.

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.

Re:Correlation... causation

[Rob the Bold]

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.

That does seem to suggest that "Income Inequality" does matter. That it's not just a matter of how poor you are in absolute terms, but how poor you are compared to your fellow citizens.

Re:Correlation... causation

[ArcherB]

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).

How's the Swedish economy doing, btw? What is the unemployment rate and so on...

My point is that in a capitalist society, it is the rich that drive the economy. It is the rich that employ people and buy products. Granted, Paris Hilton doesn't need another yacht, but I'm sure the workers at the shipyard where that yacht is made will disagree.

Re:Correlation... causation

[99BottlesOfBeerInMyF]

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.

You're mistaking the psychology here. People aren't stealing because their basic needs aren't met. They're stealing because they have been able to justify that action to themselves, usually with an internal dialogue along the lines of, "life is unfair. Nothing is fair. Thus stealing, is just another way to get what I want. Why should I be a chump and stay poor just because I was born that way? I'm going to make something of myself the same way a lot of the rich families did, by being unscrupulous and doing whatever it takes."

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.

Crime does not correlate to poverty nearly as well as disparity. People don't rob others because they are poor, they do so because they feel justified since others were born with so much more than they were. Take a look at internet crime, suddenly people in the third world with nothing can rob people in the US. Predictably, there has been an explosion of internet crime from the third world. "An American makes 500 times what I do, despite being a moron. I can live for years off of one case of fraud against them." Of course there are going to be more crimes do to this disparity. Within the US, it is the difference between the rich and poor, not the overall level compared to the world (which most don't see) that drives crime.

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.

Yeah for a lifetime of hard work and smart decisions you can make 1/100,000th what one of the people born to extreme wealth and who is a lazy idiot makes from investing all that inheritance in lending firms that lend you the money you need to get started and then collect interest. In fact, over the course of my life I'll make about as much money paying interest on my mortgage and other loans as I will make for myself. Someone else is making just as much off my hard work as I am and they've done nothing but start out with money. That sort of unfairness is what drives people to crime, although usually the crime is committed based upon opportunity, not targeting the wealth specifically.

Americans are a bunch of whiney wimps who would rather get rich quick, while being poor, than work hard.

Who wouldn't rather get rich quick? This phenomenon, by the way, is in no way limited to the US. Wealth disparity correlates to violent crime and robbery levels the world around.

Re:Do your maths

[Anonymous Coward]

I've worked at Lehman Brothers for a short time (I got bored and quit). On average, this year, I'd say the take-home pay for a reasonably high-performing associate at Goldman Sachs was about $200-250,000 (three years out of undergrad or first-year out of MBA). Another 2-3 years in and we're talking about half a million. So no, the bonuses are not equally distributed--Managing Directors can get $10m bonuses--but they're not paying minimum wage to the peons either. Of course the janitors get nothing, they generate no revenue--it's unfortunate but they are completely fungible and will not earn much more than McDonalds janitors.

And as for firing the CEO, this is a misconception that a lot of "perpetual peons" have--that the CEO sits around doing nothing and collecting a big paycheck. Guys like Hank Paulson at Goldman and Dick Fuld at Lehman have been CRUCIAL to their success; these are the top client leaders who fly around the world and drum up business for all the peons. Look at Lehman's stock price since the IPO and you can determine for yourself whether Fuld earned the $1b in pay + options he's received.

Not to mention the ethical issue

[Qwavel]

Is this what it has come to? The only way to convince people that massive inequality is wrong is to suggest that it might lower the GDP?

Whether your background is Christian, Jewish, etc. Humanist, or even liberal (like mine), you probably believe in some sort of equality. Not because it helps the economy but as a matter of right vs. wrong. People used to talk about equality of opportunity as one of the basic values of democracies and now even that has been thrown away.

Now it seems that 'equality of opportunity' has been replaced by 'the American dream', which seems to mean that regardless of your socio-economic background, any level of success is still theoretically possible. Success might be extremely unlikely compared to a kid with richer parents, but it does still happen (and when it does we celebrate it on TV).

Not to mention it's un-American

[GOD_ALMIGHTY]

Noah Webster, Miscellaneous Remarks on Divizions of Property . . . in the United States [uchicago.edu]

Noah Webster, An Examination into the Leading Principles of the Federal Constitution [uchicago.edu]

Noah Webster, of Webster's Dictionary fame (the reason we don't spell color, colour), was the Federalist who gave the most detailed account of the nature of property and wealth to a free society. Essentially, he stated that the point of the Constitution was to break up power so that it would be too difficult to gain enough for one group of citizens to deny the rights of another group. The creation of 2nd class citizens (slaves were not citizens and indentured servants had rights) undermines the Constitution. The idea that Webster brought to the forefront was that wealth is power, therefore one the Constitution cannot survive an economic system that concentrates wealth and therefore power.

The second link was a paper written "at the request of the federalist leadership shortly after the ratification debate had begun" (Bailyn, Ideological Origins... p373). These ideas were in response to alleged errors made by Montesquieu first noted by the Willian Vans Murrary, an American law-student studying in London after the revolution.

Webster talks primarily of real property, ie land. In an agrarian economy real land is the primary infrastructure for the creation of wealth. Now that we have moved to a different economy, the fact that wealth equals power and the vulnerabilities of the Constitution have not changed, so we must adapt our regulations of the market in accordence. The historic record shows that the vast majority of the Founding generation would be shocked and deeply disturbed by the inequality of wealth in this country today and the trends regarding those statistics. They would see it as endangering the Constitution itself. I'm not for radical reorganization of wealth, I believe redistributing growth is much more efficient and fair than redistributing existing wealth. That's why income inequality is such an important factor and why it matters. It may not be the only problem and it may be a symptom of larger issues, but it's an effective measure given the current economic structure of the nation.

Re:The rise of the American aristocracy

[kansas1051]

Goldman Sachs' CEO received a $53 million dollar bonus because the company met some arbitrary performance standards and not because the CEO's great grandfather may have been great. The wage disparity between corporate management and the under classes is what is fueling the overall wage disparity in the U.S.A. and not inherited wealth. I can guaratenee you that most corporate management in the U.S. is not "old money." Take a look at the recent Forbes richest list and you will see that few super-rich Americans (with the exception of the Waltons) inherited their wealth. If anything, the American monarchy of "old" money has collapsed over the last few decades as new markets and technologies have emerged.

Re:Inequality matters - and it leads to unrest

[mpapet]

You start with: The biggest problem facing the U.S. isn't the wage gap, but the surge of regulations that prevent the poor from becoming rich (and prevents small companies from becoming large one).

You end with: Sure, there wouldn't be an income gap with such a system, but I'd rather have the opportunity to work hard and become wealthy than coast through life with a lower-middle class income after taxes.

There's a numerous logical problems built into your quickie-mart economics.

1. Working hard == become wealthy (economic-level)
There is no correlation between the two in the capitalist system. History shows again and again that most industries are non-competitive and devolve to monopolies if there are no regulations limiting their reach.

2. Working hard == become wealthy (individual-level)
There is no correlation between the degree and intensity of your work and economic success. This is the core issue in "economic distribution" discussions. Work 40 years living in an apartment with one week off a year going nowhere because you can't afford it. Or, work 40 years with two weeks off a year, one spent in Aruba the other skiing in Breckenridge. Same hard work, two different outcomes.

3. Regulations...
I believe you are relying on the politically expedient interpretation of economic thinking that makes regulations bad. Is having clean water bad? Is having 100's of thousands of houses that won't fall down in an earthquake bad? Is having clean air bad? How about a 40 hour work week. Would you prefer working 7-days a week?

I'd like Chinese workers to have the same amount of regulations so I know all Chinese citizens are deriving some benefit from their economic growth and maintain political stability so I don't have to worry about being nuked by the Chinese.

Re:Inequality matters - and it's usually good

[Viper Daimao]

Well certainly if you're talking about homeless and the poorest of the poor in any country that is true. However the Census Bureau in its annual report on poverty in the United States declared that there were nearly 35 million poor persons living in this country in 2002. Most of America's "poor" live in material conditions that would be judged as comfortable or well-off just a few generations ago. Today, the expenditures per person of the lowest-income one-fifth (or quintile) of households equal those of the median American household in the early 1970s, after adjusting for inflation.

• Forty-six percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.
• Seventy-six percent of poor households have air conditioning. By contrast, 30 years ago, only 36 percent of the entire U.S. population enjoyed air conditioning.
• Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person.
• The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)
• Nearly three-quarters of poor households own a car; 30 percent own two or more cars.
• Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
• Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
• Seventy-three percent own microwave ovens, more than half have a stereo, and a third have an automatic dishwasher.

Heck, the poor in America actually have a weight problem. Think about that. According to the U.S. Department of Agriculture (USDA), 13 percent of poor families and 2.6 percent of poor children experience hunger at some point during the year. In most cases, their hunger is short-term. Eighty-nine percent of the poor report their families have "enough" food to eat, while only 2 percent say they "often" do not have enough to eat.

Overall, the typical American defined as poor by the government has a car, air conditioning, a refrigerator, a stove, a clothes washer and dryer, and a microwave. He has two color televisions, cable or satellite TV reception, a VCR or DVD player, and a stereo. He is able to obtain medical care. His home is in good repair and is not overcrowded. By his own report, his family is not hungry and he had sufficient funds in the past year to meet his family's essential needs. While this individual's life is not opulent, it is equally far from the popular images of dire poverty conveyed by the press, activists, and politicians. As I said, it sounds like middle class in many developing countries.

Re:Inequality is actually good

[99BottlesOfBeerInMyF]

Money is not zero-sum, just because some CEO gets a lot of money doesn't mean I get less.

So what? We're talking about the psychology/sociology of crime. It is the perceived disparity and unfairness that matters, regardless of underlying economics.

If there were perfect equality then there would be no incentive for anybody to make any progress at all.

True, and if there is no socialism all wealth consolidates via the wealth condensation principal until we're living in a totalitarian system. No sociologist or economist in their right mind thinks extreme socialism is going to work. The question is what level of wealth disparity/condensation is ideal to maximize living conditions. I might note, Too much wealth disparity also leads to no incentive for progress. If I'm born wealthy and just leave my money in the stock market certs daddy left me, why should I ever contribute anything to society instead of being a lazy rich bastard?

Correlations don't prove cause-effect relations.

I distrust anyone making this argument as they usually have an agenda.. The correct quote is "correlation does not imply a specific causation." Correlation frequently implies some causation and a lot of science today is finding correlations and testing possible causations. Whether crime causes wealth disparity, wealth disparity causes crime, or both are caused by some other factor is the point of research into the subject. There is some evidence for wealth disparity motivating crime, and very little evidence for any other specific causation therefor scientists in general tend to think that disparity motivating crime is the most probably correct sequence. Most science, especially in very complex systems, is not a matter of proving anything, merely finding likely answers.

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.

This is true enough, which is why you need to define your goals before taking action. If decreasing crime is your only goal, erasing all laws will do it, although it may not be a good overall result. That said, this argument does not speak to what "good things" might be scientifically caused by wealth disparity, whereas crime is a pretty obvious negative. Until someone can draw such a correlation, this is just spouting unsupported maybes.

Re:This has some merit

[happyfrogcow]

Why not? Let's say Person A is a salesman who brings a company twenty million dollars in business in a year. Person B is a salesman who manages only one million dollars. Sounds to me that Person A is worth twenty times Person B.

Person B is given Person A's sales region. Person A is given Person B's. Person B brings in 20 million now, and A brings in one million. Now is person B worth 20 times more all of the sudden?

Re:Inequality matters - and it's usually good

[Kohath]

... provide a fundamental level of health care coverage combined with more resources geared towards public housing and support of small to mid-size business.

We already have a fundamental level of health care. Go to the emergency room, you get health care. What's the "coverage" for? So someone else pays for it? That's already happening when you go to the emergency room and can't pay.

What's the goal of your plan to change the "coverage"? You pay less and others pay more?

Other than that, I'd like to see less government in our lives with respect to politically and religiously motivated agendas.

So you like government when it's your agenda, but not when it's the agenda of someone else. What an amazing principled stance!

How about we just go with less government for everyone's agenda? You can contribute to charity to implement your agenda.

Re:Correlation... causation

[bonoboboy]

"People have been Killed, robbed, beatened, and otherwise harmed by people's greed to acquire these [Wii, PS3] products. Yet, none of these are items that are within the definition of "basic needs". Nobody "needs" these." You're quite right by saying that nobody *needs* these items, but it certainly wasn't the rich out there fighting the crowds for these products. Often, they were poor bastards who were paid by someone to stand in line for them, or people who didn't actually want the machines, but wanted to cash in on the reselling of these machines on ebay or whatnot. The point here is that America's poor are getting poorer, and the richer are getting richer. The concern is that America is losing the middle class. You like bitching about America now ... are you hoping for more material down the road? Even if America's poor have a higher standard of living than the poor elsewhere in the world, does that mean America shouldn't continue to consider the situation of their own poor and continue trying to make America a better place? "The "poor" Americans are some of the richest people in the world, just look at the obesity levels." Actually, I'd say the obesity levels in America's poor aren't due to some great amount of nutrition they're getting, but more to the LACK of nutrition they're getting. Take a trip to a grocery store in a poor neighbourhood, and you'll see cart fulls of ramen, boxed meals, and red fruit drink - all full of questionable chemicals, MSG, and high-fructose corn syrup. These people are fat because they can't afford nutritious food like fresh fruits & vegetables. I'd highly recommend a visit to the Southeast section of Washington, DC at some point. Seeing such neighbourhoods in person might change your mind about the poor in America, especially in areas like this where it's quite obvious that the poor neighbourhoods are defined by things like skin colour. Yes, such things do still matter.

The Value of Money

[Alzheimers]

In other words, we care less about how much money we have than we do about how much money we have relative to everyone else. In a fascinating survey, Cornell economist Robert Frank found that a majority of Americans would prefer to earn $100,000 while everyone else earns $85,000, rather than earning $110,000 while everyone else earns $200,000.

Because, in an economy where there is less money available, that money is *worth* more and can buy things at a lower price than an economy where everyone has twice as much money. Consider the hypothetical "numbers pulled out of my butt" scenario:

If everyone has $85,000, an average car could sell for $20,000. If we double the amount of money to $200,000, that same car would now cost as much as $47,000. Having a few dollars more than the average in the first example is *always* going to be better than having half as much in the second. That hundred grand isn't worth as much! Consider that the "cost of living:" health care, transportation, even groceries are all going to increase by more than double.

It's not about how much money you have, but how much you can get with it. We can't assume that market prices stay the same when the amount of money available is doubled. It's why having a million dollars today isn't enough to be considered rich anymore -- too many people have a million dollars, and the luxuries attributed to "millionaires" in the past are now reserved for "billionaires". Meanwhile the price of necessities climbs faster than the average income, leaving our money worth less and less, until those on the bottom rungs are forced to choose, not between comforts, but between the basics. When the only food Grandma can buy with her Social Security after paying for her prescriptions necessary to stay alive has a picture of a cat on it, that's intolerable.

Re:Inequality matters - and it's usually good

[Guppy06]

"The biggest problem facing the U.S. isn't the wage gap, but the surge of regulations that prevent the poor from becoming rich"

Economic mobility is supposed to work both ways: stupid rich people are supposed to become poor when they are incompetent. But between outrageous executive salaries that couldn't possibly be spent in a single lifetime, along with benefits and golden parachutes, the rich are set for life, the lives of their children, and the lives of their grandchildren. This is money that is simply not up for the competition your touting.

Re:Inequality matters - and it's usually good

[Kohath]

In this case the CEO:FMW annual salary is 5300:1, give or take a bit.

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.

Whose choice?

[Valdrax]

Note: I don't believe anyone in America is truly "poor", except by choice.

But whose choice was it?

For example, we know that the quality of primary education ties very strongly to your chances of getting into a good college (or even going to college at all) which ties very strongly to your future career prospects. What about nutrition and healthcare, which have a noted impact on adult IQ? What about how the presence of a strong and united family or the lack thereof affects people? What about the presence of discrimination against people with "ghetto-sounding" names?

Now, who gets to make the choices that shape your life as a child? Is it you, or is it your parents?

Anyone can say that a person made all the choices that led them to where they are today, but it takes a certain short-sightedness to think choices all happen in a vacuum or that all people have equal access to opportunity. Intergenerational income mobility has been on the decline in America because of the prevalence of people who have that philosophy: you sink or swim on your own; there are no hands to hold you up or to keep you down. The fact is that if you're born to poor parents, you're more likely in America than in any other industrialized nation to end up just as poor as them, and if you're born to rich parents, your more likely here to end up rich as well.

I think a lot of people just don't understand how expensive it is to be poor. Try buying things with bad credit, working jobs with no healthcare until you end up in the emergency room, working such long hours at pitiful wages to make ends meet that you can't raise your kids, renting in overpriced slums because you can't afford to pre-pay 1-2 month's rent, etc.

Public works to help cover medical, food, and education expenses does go a long way to giving children the opportunities that their parents don't currently have. A higher minium wage would let parents make ends meet without having to abandon their children, and less financial stress makes for happier relationships and better health. Educating people in school about debt management and about the impact of their choices would also help out a lot.

There are things we can do to improve the opportunity of people to make those good choices that keep one out of poverty. You're right that wealth is no zero-sum game, but there's something fundamentally wrong with our society that makes us think that the biggest pile is a greater sign of efficiency than the highest tide.

Re:Don't be stupid with money.

[lpangelrob]

I know many people don't carry forward a balance, but 115 million Americans [go.com] do. So the odds of people being in consistent credit card debt are pretty high.

If someone wanted to go all-out cash, Best Buy and other retailers still take checks. Not an option for everyone, but it's true.

But yeah, no argument that spending more than you make is the root of the problem.

Property rights are good

[NewIntellectual]

The money that *anybody* honestly makes is nobody else's goddamned business. That is the short answer. Whether the millionaire got it from a lifetime of frugal savings, clever investments, winning the lottery, creating a business, singing songs, or whatever, it's his money and everybody else should keep their thieving hands off of it. If envious people want more money, they should stop spending time complaining and spend the time working smarter and harder.

This is really what all of the Marxist BS about "income disparity", in all of its infinite variations, is all about, rationalizations aside.

Re:Correlation... causation

[Grym]

I couldn't disagree more. The rich don't drive the economy any more than any other consumer does. How is a single mother buying baby formula any less connected to the economy than Paris Hilton buying a new purse? You might be tempted into an argument of scale (that the purse costs thousands more), but this point is moot because there are far more single mothers than Paris Hiltons. In fact, I'd go so far as to say that the rich, as a result of their savings accounts, contribute less to the economy, per capita, than an individual forced to live paycheck to paycheck. Therefore, measures aimed at reducing the wage gap would probably help the economy more than hurt it and would certainly provide greater incentive to produce products that people need and not spurious things like yachts.

This entire line of logic that the rich drive the economy by buying yachts is the modern equivalent of Broken Windows Fallacy [wikipedia.org].

-Grym

Mod Parent Up -- One Sided Relationship

[Valdrax]

Economic mobility is supposed to work both ways: stupid rich people are supposed to become poor when they are incompetent.

This is really the problem with both the income gap and the issue of executive pay that brought it up. Our version of capitalism is sliding further and further away from the ideal goal of meritocracy.

The problem is that most people who want to remove "the surge of regulations that prevent the poor from becoming rich" are really talking about the elimination of social services (and the taxes to pay for them) that help distribute risk for the poor. Our society, in the form of bail-outs for companies that can't fund their pension plans while paying multi-million dollar CEO benefits, is only moving towards covering the risks of the wealthy and ignoring the risks of the middle class and poor.

The whole idea of the free markets being fair is that people with great ideas will generate wealth, and people with poor ideas will get driven out of the market and out of wealth. This happens very rarely, though. Once you're in the big leagues, you can drive a company into the dirt and walk away with more money that an entire small town of people may earn in their lives.

Past a certain point, wealth is one-way without deliberate and reckless dedication to spending your way out of it. There's a whole world of difference in terms of risks between people who work for money (the salaried class) and people whose money works for them (the investor class).

Re:Correlation... causation

[iocat]

Bullshit. In most third world countries(or countries with extreme income disparities anyway) -- the people at the top do far less work and produce far less goods than the people at the bottom. With very little social mobility, it's easy for a rent type situation where the assholes on top keep the 'common people' down -- it's not some perfect Objectivist paradise where hard work or being smart alone can make you successful. It's also not like the US where factory work is an awesome job with solid pay and great benefits. People who may produce a lot (like all your cheap consumer goods) get paid fuck all, as do people in the service industries. (A typical, college-educated, tri-lingual, hotel clerk in Bangkok earns about $125 a month, for instance.)

But even if I concede your point, I disagree with your valuation. Unless the chairman of goldman sachs cures cancer, productizes cold fusion, and gets ROME a third season, there's no way on earth he is worth 200,000% more to society than the dude who drives the truck that brings milk to my grocery store, my kid's teacher, or the dude who just sold me a coffee.

Re:Inequality is actually good

[bockelboy]

I think you didn't get the gist of the article (or simply didn't read it). The author is not arguing for income equality, but the necessity of social mobility.

When social mobility - or even the appearance of social mobility - disappears from a society, people will go outside the boundaries to make it happen. And, by social mobility, I mean something people feel that they can control, not luck (i.e., it's important to feel that if they are a genius who works hard, they can make money).

In Brazil, if you are born in a slum, you die in a slum. There's no equivalent of the "American Dream", telling folks that hard work will get you far in life (debate for yourselves whether or not this is true in America). If you work hard in a favela, you won't die as quickly in the favela. You will never get out.

That sort of thinking/belief is what drives people to consider options outside the boundaries of law.

Why it matters...

[dtjohnson]

1) Extremely high executive compensation attracts people for management who are extraordinarily greedy and selfish. These traits lead them to make business decisions that are both self-serving and short term in outlook; exactly the opposite of what any business needs to grow and prosper.

2) A top management receiving pay that is so much higher than most of the people working in the business allows them to live in ways far beyond the means of most other employees. As a result, they lose touch with the day-to-day problems and issues of their workforce and consequently make poor decisions.

3) People who are paid far above others soon begin to think that they are somehow wiser, more intelligent, more creative, harder working, etc than others and begin to devalue their contributions and opinions. This can have disastrous consequences for any organization.

4) Extremely high compensation usually carries a built-in obligation for a 100 percent time and life commitment, something that is unimportant to selfish people but critically important to many talented people who might otherwise seek higher positions.

The most talented top managers often seem to stumble into their positions by chance after the organization has been nearly destroyed by the self-seeking opportunistic managers to the point that those types no longer find the position attractive.

Re:so many arguments against

[CokeBear]

If you consider taxes to be stealing, do you also consider the money used to pay firefighters and to pave the roads to be "stolen"?

Re:Correlation... causation

[MalleusEBHC]

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. So you are stuck buying a crapshack in the $200,000 range in a questionable neighborhood that you hope is not too bad. Here is the problem. your little 1200 Sq foot crapshack was built in 1955 and has no insulation. so heating it costs you over $200.00 a month during winter months. While the rich guy in his 4800 sq foot home get's away with $180.00 a month keeping it at 72 degrees because he has low E glass, south facing windows, thermal mass, decent insulation etc....

The gap is widening... I realize that I will never EVER be able to afford to build a house, the income gap has widened enough that I will never be able to catch up to the fact that housing is spiraling out of control in price. The depressing fact is that I see my 15 year old and know that she probably will never be a homeowner unless she does somethign stupid and get's one of those unrealistic mortgages, marries a rich guy, or becomes a doctor.

And this is in non-popular metro areas, Only the truely insane tries to buy a home in California near San Diago, LA or Frisco. (Where you have the $500,000.00 Crapshacks)

It's this kind of pessimistic attitude, combined with excessive spending, that is keeping people from home ownership. I just got out of college and got a job as a software engineer, but my goal is to get a house in 5 years. I make about average money for a fresh out of school software engineer, which isn't great considering that I'm living in Silicon Valley and intend to buy a place here. I could take the "woe is me" attitude and resign myself to never buying a house, but instead I'm focusing on saving my money and setting myself up to get a house. Sure I don't have a lot of money to throw around on excessive consumption like I see out of many of my fellow grads, but it means that I'll be able to buy a house with an honest-to-God down payment and a real mortage, not some crazy ARM.

Being the son of an accountant, fiscal responsibility has been drilled into me since before I can remember. It still amazes me that some people fail to realize that if they curb their spending and plan for the future, it can do wonders to their financial and living situation.

Could it be because....

[robophobe]

Criminals are just bad people with no morals?

There was a time in my life when I was poor. I drove a crappy old car. I had ratty old furniture. I lived in a really bad neighborhood. I saw wealthy people and their life style, yet, instead of envying what they had and trying to steal it, I worked my ass off and made something of my life. I'm not rich, but I'm not poor now.

We are spoiled brats here in the states. We whine and complain about the wealthy and get all worked up, when if we devoted that same energy to achieving something in our own lives, we would be much better off.

Re:Perception of opportunity

[Ranger96]

It also helps that most people do not understand the distinction between being 'rich' and being 'wealthy'*. As long as people perceive they too have a shot at becoming rich (i.e. have a pile of money) through winning the lottery, or winning American Idol, or other such foolishness, they'll be more content.

*If you are paid a lot of money for doing something, you are rich. If you pay people a lot of money to do stuff for you, you are wealthy.

Re:Not to mention the ethical issue

[superwiz]

Equality is not right. People seem to confuse equality with justice. Everyone one should get what they deserve. In a crime-free society that would be ideally accomplished with exchange through trade of willing individuals. The problem with modern American society is not inequality. It is injustice. America no longer has a legal system. Access to courts is to expensive to be afforable for reasonable matters. Corporations blatantly screw consumers because consumers have no recourse. Insurance is mandatory for cars (in most states) and for doctors so insured have very little recourse against insurance companies (the causility here is not direct, but you can fill in the blanks), etc. Until a system is re-established in which everyone who breaks the law gets what they deserve (as opposed to say sitting on death row for 20 years) lawlessness will continue.

Re:Correlation... causation

[Tyberius]

Gotta call bullshit.

The rest of the cash just sits idle and creates a void, which is then filled by inflation.

Unless your millionare sticks the money in the mattress, then it is not idle. Even if it is in the bank, the bank will lend the money to job creators or homeowners, and if it is invested, then it goes to job creators.

Re:Inequality matters - and it leads to unrest

[drsquare]

2. Working hard == become wealthy (individual-level)
There is no correlation between the degree and intensity of your work and economic success. This is the core issue in "economic distribution" discussions. Work 40 years living in an apartment with one week off a year going nowhere because you can't afford it. Or, work 40 years with two weeks off a year, one spent in Aruba the other skiing in Breckenridge. Same hard work, two different outcomes.

Incorrect. The poor person in this case is obviously not working as hard. He obviously didn't work as hard at school, nor has he worked hard enough to acquire the extra education needed to get a better job. He has not worked hard enough to learn how to make more money. He has not learnt the most productive ways in which to direct his hard work.

Let's not confuse physically hard work with actual hard work. It's intellectually easy to perform grunt work for 80 hours a week for 40 years. It doesn't require any thought, any planning, any ambition or any risk-taking. In fact it is the path of least resistance, i.e. the easy route.

Re:Correlation... causation

[corbettw]

You can't eat stock options you know.

No, but when someone invests their money in a public corporation, either by buying stock in the company or by buying shares of a mutual fund that holds stock in the company, then either one of two things happen: one, someone else sells their corresponding shares for money (which can buy food, which you can eat), or two, the company sells shares in itself directly, which raises capital to expand the business, which means it can hire more employees, whom the company pays with money, with which the new employees can buy food (and then eat).

So while investing in the markets doesn't directly enable you to eat, it does set off a chain of events on which our entire economic system is based and which eventually lead to people buying food and eating it.

Re:Correlation... causation

[LordPhantom]

The points you're making in this reply, although admirable are irrelevant to your original statement, namely that "Americans are a bunch of whiney wimps who would rather get rich quick, while being poor, than work hard". I agree with you, 100% about living within means, hepling the poor, etc.
You keep repeating that there is this class of people who have a large amount of items but "don't feel like working for them". I submit to you that in my opinion (and based upon my life's experiences) it's highly unlikely that the majority of working Americans do, in fact, operate this way OR the economy would be worse off than it is.

You claim broad, systemic knowledge of how Americans live and what the economy is "really" based on, yet you offer no proof of what you're saying. On top of that you've "lived in California" all of your life (not exactly the paragon of "normal" Americans to anyone not living there).

Perhaps you should consider that your somewhat limited perceptions could use a...touch... more perspective? I hope so, although I will admit that in some cases simply bashing a large demographic of people because it's chic can be easier than truly thinking.

And in -that-, I suspect you are not in the least bit unique among your peers. Or is that a generalization that is unfair?

Re:Perception of opportunity

[rwhamann]

Hmmm .. child of perpetually broke auto worker who made just enough to keep me out of eligibility for financial aid but didn't give a single penny for school ... I joined the military and worked my way up through the ranks and would now be considered upper middle class.

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.

Re:Correlation... causation

[Enrique1218]

Imagine how much it galls many Americans that watch some dumb yuppie on television fritter away a couple of million dollars when that's more money than they will ever see in their lifetime.

I am not so galled that someone wasted a million dollars which is more than I might see in my lifetime. I am galled that I couldn't think of something to sell those idiots. That is probably why I won't see that much in my lifetime.

To quote Lao Tzu

[dave562]

"There is no sin greater than not knowing when you have enough."

Re:Correlation... causation

[inverselimit]

Gold has no tangible value. It is shiny, thus people want it, but it has no 'inherent' value. Sure, it can be used in a few manufacturing processes, but if that was all it was good for (i.e, not shiny), it wouldn't be worth much.

Re:Correlation... causation

[Pendersempai]

Actually under our federal income tax code, gifts are tax-free if they're under $12,000 (with some provisos which are satisfied here). So the rich guy wouldn't get a tax break (and thus you're correct that he only receives about $600,000 after tax) but the gift recipients would not be taxed on the gifts. See sec. 102.

Re:Perception of opportunity

[vcalzone]

Well, I can't speak to your personal experience, but I think more people are in a situation where they're perpetually broke than are able to climb out. I'm not arguing that it's impossible to pull yourself up through hard work, just that there's a lot of really hard-working people who don't ever get to that point. I don't think most people would argue that everyone who has wealth earned it through strong character and hard work, so how can anyone argue that people who are poor were too lazy to earn any more? It needs to be plausible for anyone to be able to provide for a family if they are willing and able to work hard. That was the American Dream.

Re:Correlation... causation

[Anonymous Coward]

My Anonymous friend, your ideas sound great, but you missed the one operative word in your parent's post: "corruption". While your scheme is a great idea that might actually work in the US, this one word wipes away any hope of recovery in most poor countries, and disqualifies your ideas completely.

Have you ever seen the police (routinely) taking bribes in the city streets in broad daylight? Maybe known someone who was killed by a policeman who was trying to steal his car?

People talk about how the US congress/administration/law enforcement/etc is in the corporate pocket, corruption, blah, blah... My friends, very few of you have ever seen corruption. Americans are amateurs. You want to see corruption? Go pretty much anywhere south of Texas.

Corruption is the single biggest problem holding poor countries down. Government won't take the money from that wonderful scheme of yours and build roads and hospitals, they'll use 90% of it to line their pockets.

This is why people try to get into the US, and why we're having this huge border fence debate now. It's because the US has hope of progress, where third world countries will always be third-world countries as long as the culture there allows wanton and unabashed corruption at the highest levels such as few Americans have ever seen. The governments cripple the people through high taxes, but the people seldom see their "tax dollars at work", unless it's that new Ferrari the President is driving.

Anarchy would probably be better for these countries, since it'd be almost the same effect on the people, without their having to pay for the privilege. The government is the peoples' worst enemy, and they're the ones with the guns.

The latest tale in corruption is Chavez's quest for dictatorship. I'm watching that story with interest. They say Liberty dies to thunderous applause, and it's happening in Venezuela right now. The people have elected their next dictator. I hope they like him, because it looks like he's going to be around for a while.

Re:Inequality matters - and it's usually good

[FallLine]

Hey Spaceman. Nice to see you again

It depends on what the CEO does with that money. If he doesn't need $50 of it, and puts it away somewhere, it doesn't flow back into the economy, causing problems.

There is no way a US CEO is going to take money out of the economy unless he, perhaps, gets his check in cash and hides it under his mattress (for a long time) or burns it all up. The odds are that that CEO is going to invest much of that money back into the equity markets, particularly in higher risk stocks than what less affluent people are apt to make, which has very real and important benefits for the economy. He may put some of his money in the bank, but that's going to help people buy houses in the form of cheaper mortgage interest rates. He may buy, say, some 5M dollar painting, but then the painter or auction house is going to invest/spend that money too. Basically the only way to meaningfully remove from the economy is to do less, i.e., don't work harder/smarter for more money and take whatever money you have an invest it in the most conservative instrument possible... I think our current capitalist system generally incents us to do more: to work harder, smarter, invest, spend on things we want, etc. The greatest danger to our economy is that which threatens to slow it all down by removing the incentive to work hard, to spend, and to invest.

I'm not defending the highest CEO salary/bonuses per se, but there are justifications for it (supply and demand, etc) and that this is really a call for the board / shareholders to make.

If instead, the CEO gets $80 and the employee gets $21, the CEO is still well off (having the ability to invest the $30 after his original $50 in expenses), and the employee is much better off (with $20 more), and more of it flows back into the economy. Isn't that how it's supposed to work?

Well, except this really isn't the situation we find ourselves with. Where the CEO recieves X, the individual workers at these firms, due to the size of them, will almost always recieve X / 100,000+. What would have been a 50M bonus for the CEO would usually be closer to a $500 bonus for the employee (assuming the CEO deserves nothing): nice but not going to make a huge dent in the lifestyle of the employee. What's more, those employees may tend to spend disproportionately more of their share on retail spending, but I'd argue that, in many cases, society ultimately gets a lot more bang for the buck over than long run in having 50M dollar be invested in a deserving equity even than a short burst of spending spread out throughout the entire economy. What's more, I think the 50M dollars is a much better incentive to the CEO than $500 would be for most of the employees and if that $50M dollar incentive results in even a 10% boost in sales/efficiency the results are going to be widespread (and it pay for shareholders to do so usually)

Re:Don't be stupid with money.

[Lord Ender]

Bad advice. People who don't use credit cards are just throwing money away. Cash-back cards give you 5% back on groceries and gas. If you don't make much, that 5% is a significant portion of your income!

Good advice would be "Always use cash-back credit cards and always pay in full."

Additionally, it is much easier to analyze your personal spending habits if you always use the same credit card because the CC companies send out these neat booklets that show breakdowns of your spending ("you spent 16% of your money on groceries in 2006").

And another point: If you only carry a card (and no cash) you will never run the risk of losing serious money from theft/mugging.

"Never use credit cards" is only good advice for seriously irresponsible people. And they tend to have bigger problems.

I lived on less than $10k/year for several years in college. I also used a credit card throughout, and never paid a single fee or finance charge. So don't say I wouldn't understand--I've been there.

Re:Correlation... causation

[maxume]

Better to be in a system of plenty than in a system of scarcity.

Exactly. And capitalism has shown it self to work a whole lot better than any other system of resource allocation. Europe didn't convert to the Euro and deregulate in an attempt at becoming more insular and poorer.

Your assumption that government is free of con men and cheats is scary. It's also hilarious that you think private industry generates more paperwork than the ultimate bureaucracy. All large institutions generate useless paperwork. There is a particular kind of organism that thrives on ass covering and rule following, and anytime something gets big enough that it starts needing rules to function, they move in and take over.

Re:Perception of opportunity

[UserGoogol]

Almost anything is possible if you work hard no matter where you live. Even if you're starving in North Korea, you can in principle become prosperous. You might need to wage a revolution to overthrow the government, but it's possible. Class mobility is not measured by whether it is possible to move between classes, but how hard it is. From your own description, you had to work rather hard. Not anywhere near as hard as revolting in North Korea, but certainly harder than you would have had to work if financial aid had been more generous.

Re:Perception of opportunity

[rwhamann]

Frankly, if your goal is just rising above the poverty level of the inner city, you can achieve that goal in the military without heroic hard work, just with decent, honest level of work - the proverbial Protestant work ethic. Yes, rising to the top is hard work, but escaping the inner city or backwoods rural country? Not even nearly as hard as you might think.

Of course, there is the risk of death or injury. There's the fact that you will have to change your mindset - it's called military service for a reason.

My comment was directed at those who claim there is almost no way out of the {insert bad situation/origin]. Bull-puckey. We hire. We train. We reward.

Re:Inequality matters - and it's usually good

[feepness]

Holy $#!^ dude...... Have you ever spent any time in a major urban center? Have you ever worked in a soup kitchen or helped provide services to the poor and indigent? Comments like this are born out of a fundamental ignorance of reality brought on by steep economic pyramids that encourage cultural isolation.

You proved his point. The poor in most countries don't HAVE soup kitchens or get 'services' provided to them... at all.

Re:so many arguments against

[ElleyKitten]

I'm sure you'll change your opinion when your neighbor's house is burning and the fly embers will ignite your house if the fire is not properly contained. They show up to the fire. If I paid the fee, they protect my house. If I didn't, they don't.

The fees should be a part of property taxes. You try telling someone whose house is burning down that you're just going to stand there and watch. You try living with it on your conscience when they run back instead to save the irreplaceable pictures of their dead mother/their baby kitten/whatever and die, knowing you could have saved them (and their photos and kittens).

And what about renters whose landlords didn't pay? How's that fair?

There's certain things a functional society should just do. Putting out fires is one of them.

Re:The rise of the American aristocracy

[toddhisattva]

Time has shown that you cannot hurt the rich with taxes of any kind.

You only hurt the people trying to get rich.

So inheritance taxes, whatever their purpose, end up destroying small businesses and family enterprises.

It is so bad, the goal of many is to die broke. Using lawyers and accountants, they must distribute the family holdings via tiny bits every now and then to their posterity.

The truly rich, they are surrounded by clouds of lawyers and accountants, so they are not going to get hurt by any tax at any time ever.

While to a rancher, hiring even one lawyer to help, that costs as much as a few really nice tractors.

But the rancher has little choice, because he must die broke.

Re:Correlation... causation

[gobbo]

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)

This, more or less, is how I explain money to my children: it's a stored barter, delayed value given for goods or services, that can later be redeemed at convenience, so it gives more choice and helps you meet your needs better.

However, I use this explanation because they are children. I don't need to confuse them with the details of what, for instance, their grandfather sees going on, as he manages the financing of new ventures and schemes.

My dad doesn't like to admit it very often but the larger the sum, the more opportunity to game the system (I wish that he would game it himself some, then he wouldn't be broke but rich). Huge amounts of capital mean everyone with decision making power who's in on it will make out large, and if some look the other way, everyone makes out larger. Think of high finance as The House, and in the casino, the House always wins in the end.

A big part of the gravity-like agglomeration of capital is how much gaming of the system is going on, under considerable secrecy. Finance is very compartmentalized under some valid privacy rules, and the nod-and-wink regulation that accompanies it. When incredible breaches like the Enron debacle make us think about rooting out corruption, we've just fallen into an ideological trap: 'the players are mostly fair, and the rules keep them that way.' How about this: many of the players are working for the House, and the House doesn't even legally exist, it's a loose syndicate that caan't be centralized or identified.

Hollywood and the utilities industries have had some of the more embarrassing schemes that I've heard of. The amount that people were getting paid just for retainer, and then rubberstamping things or scheming over coffee, would give you chills, and the amount of 'surplus' capital in these schemes that were budgeted into various hidden payouts was astounding--and this is the stuff I was allowed to see. I'm talking more money in minutes than you make in years. It's not that "someone values Mr. Moneybags time" more, and that it's fair value--it's just that the only people looking are in on it.

The most disturbing part of what you wrote (and how most of my country thinks) is in the way that you conflate exchange value with use value, as though there were some natural market force determining that $8,000,000 for 2 hours of handwritten expertise is equivalent in productivity to 150 years in the factory assembling automobiles. If you've seen the way nudge-nudge that it works, and the willful blindness and denial put to use by people in the position of directly supporting this global embezzlement, you'd know that something else is at work: avarice and deception, and an ideological outlook that blurs 'what you can get for it' with 'how useful it is.'

Re:Correlation... causation

[iocat]

I'm not a commie, and I'm not opposed to capital markets, but I think it's retarded to assume that just because some guy is getting massive bonuses, that means he earned them. It's equally (or more) likely that a situation has developed that lets a bunch of fat cats scratch each others' backs. GS is a public company. If I was a shareholder, I'd be pissed that that obscene amount of cash is going to the CEO and not back to shareholders, or to fund even more, better research into what to invest it, etc. (Not that the CEO has anything to do at all with where they invest.) I think that's one of the reasons BH is so successful -- Warren Buffet isn't perceived as basically raping corporate coffers as the current generation of CEOs is.

Re:Correlation... causation

[DavidShor]

The world is not a zero-sum game

Re:Inequality matters - and it leads to unrest

[Raven_Stark]

"Incorrect. The poor person in this case is obviously not working as hard. He obviously didn't work as hard at school, nor has he worked hard enough to acquire the extra education needed to get a better job. He has not worked hard enough to learn how to make more money. He has not learnt the most productive ways in which to direct his hard work."

That's a nice steaming pile of shit from the back end of the GOP elephant.

Out of high school I worked as a ditch digger for years trying to pay my way through college. I would get up at 4 a.m. and work until 5p.m. 6 days a week. When I came home, I collapsed into bed, usually too tired to eat supper or even watch TV. I slept covered in dirt and sand from the ditches. Social life, hah! I was one of the lucky ones because I had a fairly good head on my shoulders. I was able to alternate working 6 months and 6 months of college. (Living with my parents at low rent and getting all the financial aide I could, and driving a $220 car.)

Many of my coworkers were too stupid to go to college or otherwise better their income. They worked harder than I did since I'm just a pencil necked geek. They are stuck in that kind of work through no fault of their own. They absolutely were not lazy. They worked their asses off an had very little to show for it. I escaped with a ruined back and arthritis is many joints at age 25.

I do thinking jobs now. Having done both, I can say you are totally full of shit if you think desk jobs and hard academic work can hold a candle to hard manual labor. The only nice thing about manual labor is your mind is free to think, however, that is only when you aren't delirious from heat and exhaustion which was most days in Florida.

Re:Perception of opportunity

[killjoe]

What you don't understand is that the military was designed to harvest people like you who had no other choice. When I was in the military the vast majority of the people I "served" with were there either to get money for education, to get out of their rinky dink town, or because they just could not cut it in the real world.

You say you "worked your way up". In the military this simply means you hung around and re-enlisted and generally didn't fuck up too bad.

Anyway the military is a special case. I am sure the US would love it right now if the only way to get from the poor classes to the middle classes was by joining the military.

Re:Redistribution as the cure-all! Except, not.

[GOD_ALMIGHTY]

You can't point out Zimbabwe and condemn any attempt to provide a form of wealth distribution. To counter your point, in Poland the state easily controlled at least 70% of the wealth. The transition from concentration of wealth in the state to distributing it among the citizens was much smoother and Poland isn't experiencing the inflation that Zimbabwe does. The goals were the same, the solution was ultimately the same as well, division of concentrated wealth.

Did Zimbabwe royally screw up their attempt? Were they clumsy in their execution? Most definately, otherwise they would not have the problems they have today. Might I also point out that the current leadership of Zimbabwe was antagonistic, to put it nicely, towards the wealthy. A couple of rich whites got killed over this situation and fear of violence and political instability were a much larger causes of capital flight than simple wealth redistribution.

The lesson here is not to allow this situation to develop in the first place. If you do find your nation in such a situation the solution will need to be well engineered so as not to create more instability that it attempts to solve.

Your Ideas Scare Me

[DavidShor]

This system will lead to abject serfdom and governmental tyranny

Re:human services

[mangu]

In US, if you can't pay for private health insurance you'll be bankrupt if you have some kind of a serious health problem.

I'd rather owe a million dollars to a private hospital than die while waiting to be admitted to a public hospital, something that happens rather frequently in Brazil.

Besides, people who use public hospitals in Brazil have a standard of living that's waaay below anyone who is completely broke in the USA. Or do you think being unable to get a credit card is worse than maintaining your family with $163/month, which is the current minimum wage here?

Re:Offshore Outsourcing = Class Warfare

[TheSync]

The present situation in which the middle class is losing ground

How do you define "middle class" and "losing ground"?

Re:Correlation... causation

[w1ll0w]

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA HAHAHAHAHAHA...wait, wait, let me catch my breath...HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH AHAHAHAHAHAHAHA.

You must really believe in the "inherent good" of mankind. The simple fact is man is by nature competative, ruthless, greedy, etc. Socialism won't work because the most important variable in that system is man. Why should I work hard if I'm not compensated for it. The reason capitalism works much better is that it feeds the competitive and greedy nature of man. There will always be rich and poor, always has been and always will. As for your fear of guns I'm not sure what to make of it.

Protection - gun vs. pepper spray...gun wins, gun vs. martial arts...gun wins.
Hunting - meat is too tasty to give up.
Defending the Home - I'm sure I'll feel much safer with a burglar downstairs carrying a gun knowing that if he is spooked and kills me or my family my security company might catch him and avenge our deaths.

killing others needlessly - there's plenty of ways to do this, I can go get a bat and with one well placed swing kill a man. Guns definitely make it easier with less work, but don't underestimate man's ability to kill when he wants. Swords and spears are pretty affective and might make a comeback if guns were illegal. But don't fret, the illegal arms dealers will make a killing and so will all who will posses these illegal arms.

In the Star Trek world that you dream of,this might work, but back hear in realty we'll have to keep dealing with the problems as they come.

Re:Yes, It Does

[DerekLyons]

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.

Anyone who think cultural differences don't matter is, to put it bluntly, ignorant in the extreme. The differences exist - and they do matter. (Hint: If cultural differences *didn't* matter - why must Western businessmen play to cultural sensitivities in Asia in order to do business there?)
 
 

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.

Your anecdotal evidence proves this contention laughably false. You keep accusing *me* of bias - while indulging in the same habit yourself. You whitewash *known* differences between the cultures to 'prove' that I have bias.
 
 

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.

It matters because it highlights the differences between the two cultures. Somehow never occurs to you to ask *why* the sucess in Taiwan has been 'limited', while in the West the sucess is virtually complete? (Hint: I gave the answers in my original post.)
 
 

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.

Which explains why pedophiles from around the world go to Asia. It explains the utter *lack* of coverage of such things in the West. (Somehow child molestors and child pornographers in the West get a great deal of coverage - yet operators of child brothels in the West go unremarked and unreported? I don't think so.)
 
 

Note: I consider myself Canadian. I love this country so much that I've become a proud citizen of it. I wear the flag proudly and sing the anthem at hockey games, but I will not subscribe to the disturbing Western tendency to portray Asia as a cesspool of underage prostitution, oppression, and all the ills of the world.

Had I portrayed it as such - you'd have a point. I pointed out known cultural difference - it's not my problem that you are either a) ignorant of them (probably as a result of your tender age and privileged upbringing, or b) your own biases prevent you seeing them.

Me

[DavidShor]

Tax cuts to the poor just drives inflationary consumption, I don't see how that really improves living standards.

You make it sound as if the CEO's pry money from the peoples hands. Money moves around, get over it.

Re:Mod Parent Up -- One Sided Relationship

[Anonymous Coward]

I'm a high school teacher. But I also graduated in the top 5% of my class at Brandeis (undergrad) and hold one masters (Harvard) and am working on a second. I went into teaching by choice, consciously knowing that I would be overworked and undervalued by many. A couple of years ago, the scandal about the NYSE's CEO salary hit the news, and I remember doing the math. At the time, as a new teacher in a small private school, I was earning a salary in the low $30K range, and yet here was a CEO earning roughly 3000 times my salary.

This is where inequality in pay gets ridiculous. I'm willing to concede perhaps he worked harder, or was responsible for more critical operations, but I'm not willing to concede that *anyone* works 3000 times harder! And, granted it's an extreme case, I'm comparing this $140M salary to my own -- a well educated professional -- rather than to a minimum wage earner.

And people wonder why our education system is going to crap these days. How can we find (and keep) good teachers when the best and the brightest know that they will make far more money in the medical/legal/tech industries.

Re:Inequality matters - and it leads to unrest

[inKubus]

And of course, people leave out un"PC" realities of socioeconomics that are harsh but TRUE. NOT EVERYONE IS SMART. Now, the trick is not making generalizations like, "My garbageman is only a garbageman because he's uneducated with an IQ of 80 and can't find another job." That would be false. However, it's tough to miss the fact that economic growth in this country is not coming from skilled jobs being added to the economy. The majority of jobs are added in hospitality/healthcare/retail and entertainment. That means that Bushes' "Great" employment numbers are really consisting of people working menial mindless drone work. There is no such thing as "productivity" in these fields because nothing is being produced. Everything we consume is made in China or Mexico now. As a country we don't DO anything. All we do is spend money, manage spending money, come up with new ways to generate money out of thin air, and of course eat and drink. Everyone in this country is on drugs, from the poor bums drinking their wine and shooting smack to the rich housewife's Xanax and Valium.

You said:
The poor person in this case is obviously not working as hard. He obviously didn't work as hard at school, nor has he worked hard enough to acquire the extra education needed to get a better job. He has not worked hard enough to learn how to make more money. He has not learnt the most productive ways in which to direct his hard work.

You contradict yourself on the last 3 lines. It's not that he's not working HARD enough, it's that he's not working SMART enough. And, because of differences in every human, some people are dumber than others, so they may NEVER work SMART enough to compete with someone with more intelligence. In general, anyway.

The thing we Americans are so arrogant about is that hilbilly barely graduated from middle school nascar watching bible thumping HICKS think they are smarter than all Chinese people, all Iraqis, all of everyone pretty much. Insensitivity is standard and faith is being fancied over reason. And this arogance breeds new arrogance in their spawn, and it's spreading. The idiots are taking over, and they are going to destroy this country if the upper classes let them. But they won't. Instead, they'll be enslaved. And while the government continues to appear to be stupid, the people who really run things behind the scenes bring us all that much closer to doom. Sooner or later, the population will be large enough that no matter how rich you are you'll have a neighbor. And at that point they'll start killing people.

Ok, so maybe this is all a bit extreme, but acceptance will breed it. I don't think anyone on Slashdot really has to worry about it, because most people here are above-average intelligence. But there's going to be a great war or something soon, there has to be. It may not involve the U.S. but it will have world changing consequences.

Re:Perception of opportunity

[Courageous]

I do not accept your analogy of the non working poor to the "idle rich," and find your "see some real poverty and get back to us" quip, with it's (false) implication that I have not seen "real poverty" to be both perjorative and useless.

"Real poverty," as you put it is exactly why I don't believe in income inequality and prefer to think that there is an element of absolute need that is unsatisfied. In Mexico, "real poverty" means that the roofs don't work particularly well, the houses are made from sheet metal, there's no insulation, often no plumbing, no heating to speak of, so and so forth. There's also a real, constant question about whether or not one may or may not be fed today. In "real poverty" communities that you pretend to be the sole understander of, many basic necessities are entirely unmet.

Income inequality is not the source of their bitterness. They have lots more than that to be bitter about, believe me.

C//

Re:I know it impacts worker performance...

[argStyopa]

Does this also apply to relatively dimwitted athletes that get $250 million over 5 years because of a fortunate genetic accident that gives them mad skillz?

Let's start there, oh, and Hollywood. I'm guessing that income disparity on Hollywood sets is fairly significant as well. Get back to me when you get Tom Cruise to accept SAG scale pay.