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Top 1% now owns more of the wealth than the remaining 99%

theguardian.com

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Re: Top 1% now owns more of the wealth than the remaining 99%

#51

Post by sliverstorm »

13thLetter wrote: post #34
prostoalex wrote: post #21

According to census.gov http://blogs.census.gov/2013/03/21/household-wealth-and-debt... at least in the US "changes in overall median net worth observed over the past decade have been driven primarily by changes in one of its major components – equity that American households hold in their homes". The recipe for greater wealth equality is to subsidize mortgages and restrict new construction, so that everybody's house…

> The recipe for greater wealth equality is to subsidize mortgages and restrict new construction, so that everybody's house values move up a notch, which makes everyone feel a little bit better about themselves. I assume this suggestion was made "A Modest Proposal"-style, right? Those are the policies we've been following, and they cause great harm. It's already nearly impossible to buy a home in many American cities…

You're worried about a non-problem, just increase the subsidy! ;)

Re: Top 1% now owns more of the wealth than the remaining 99%

#52

Post by pvnick »

Wealth disparity may be growing, but I think folks disagree about the source. Some point to tax havens which allow the rich to accumulate wealth without a bit being shaved off and redistributed. They say we need to increase taxes and disallow tax havens to limit wealth accumulation.

I don't think taxes paint the full picture. For the past 7 years or so central banks in the US, Japan, and UK (and recently the European Central Bank) have embarked on aggressive quantitative easing programs, printing and injecting into the economy massive amounts of new cash, propping up banks and stock markets. The first layer that this cash passes through is filled with wealthy folks (i.e. bankers and those with lots of investments). The people at the lower end of the wealth spectrum benefit indirectly through living in an economy which survived and having their investment-backed retirement/pension packages in-tact (for the most part). Thus quantitative easing is fundamentally a regressive stimulus package, with most of the new cash going into the pockets of the most wealthy, and the least wealthy getting table scraps by comparison.

Quantitative easing may have spared us a collapsed global economy, but the effects are increasing wealth inequality. I don't know what the best solution is, and in fact I don't think anybody does. Everyone is kinda shooting in the dark here.

Re: Top 1% now owns more of the wealth than the remaining 99%

#53

Post by hfourm »

dollar wrote: post #3

Who cares about socialist propaganda like this? There is no evidence that "equality" in the distribution of wealth is good for middle class and low income persons. For example, if the distribution were more equal on a relative basis, but all brackets had less money than before, is that supposed to be an improvement?

I would prefer HN to be a place where things like "socialist propaganda" aren't thrown around so loosely. Thanks.

Re: Top 1% now owns more of the wealth than the remaining 99%

#54

Post by Natanael_L »

dollar wrote: post #3

Who cares about socialist propaganda like this? There is no evidence that "equality" in the distribution of wealth is good for middle class and low income persons. For example, if the distribution were more equal on a relative basis, but all brackets had less money than before, is that supposed to be an improvement?

Yeah, except for like every single study showing how equal societies perform better in almost every meaningful metric

Re: Top 1% now owns more of the wealth than the remaining 99%

#55

Post by Aloisius »

dollar wrote: post #3

Who cares about socialist propaganda like this? There is no evidence that "equality" in the distribution of wealth is good for middle class and low income persons. For example, if the distribution were more equal on a relative basis, but all brackets had less money than before, is that supposed to be an improvement?

Hear, hear! Let them eat cake!

Re: Top 1% now owns more of the wealth than the remaining 99%

#56

Post by Lawtonfogle »

jayvanguard wrote: post #4
dollar wrote: post #3

Who cares about socialist propaganda like this? There is no evidence that "equality" in the distribution of wealth is good for middle class and low income persons. For example, if the distribution were more equal on a relative basis, but all brackets had less money than before, is that supposed to be an improvement?

Most normal countries aren't aiming for equality, they are just aiming for not-massive-inequality.

Equality and massive inequality are both bad because working harder doesn't help one get ahead. You want enough inequality so that those who work harder are awarded more, but enough equality so that everyone has a chance to work harder and get ahead (compared to current day where some of the hardest workers are barely hanging on).

Re: Top 1% now owns more of the wealth than the remaining 99%

#57

Post by mikeash »

nilkn wrote: post #35
refurb wrote: post #18

Earlier quoted context omitted.

Good catch. So if I "own" a $1M house, but have a $800K mortgage, they ignore the debt and say that I have $1M in wealth? Ridiculous.

Even if that's their methodology, I don't think it's that ridiculous. It's not like just anyone can go get an $800k mortgage. On top of that, you would stand to personally profit on any gains the home might see in the real estate market. To offer a slightly extreme example, I'd consider a recently minted surgeon with $300k in loans, a mortgage, and a $500k base salary to be considerably wealthier than the debt-free s…

Your extreme example is only going to be backwards for a few months, then the surgeon's proper net worth is going to pull ahead. So I'm not sure that's really worth considering too much.

The fact that not everybody can go get an $800,000 mortgage is pretty much accounted for by the fact that you have to put down some sort of down payment, which translates into equity in the house. If you have an $800,000 mortgage then the purchase price for the house was probably $1 million or more, and if the value has held then that's at least $200,000 in net worth.

It's true that the owner stands to profit from any gains the price sees in the real estate market, but they also stand to suffer from any losses.

It really just makes no sense to count a house's value but not the (negative) value of the mortgage on it. For an extreme case in the other direction, someone with a $1 million house that has a $1 million mortgage on it (because, for example, they bought at a higher price and then prices fell) and who can barely afford their payments (perhaps because they took part in mortgage fraud, or just lost their job) should not be counted as wealthier than somebody with a $100,000 house and no debt.

Fortunately, it looks like the actual study does count debt and the wording in the article was just horrible.

Re: Top 1% now owns more of the wealth than the remaining 99%

#58

Post by AnimalMuppet »

wavefunction wrote: post #23
elcct wrote: post #14

Earlier quoted context omitted.

Who are you to decide who needs what?

The point is that we should all be deciding what we all need. To your point, who are the very wealthy to decide who needs what all on their lonesome?

> The point is that we should all be deciding what we all need.

Gently, there. There's a big difference in practical outcome between "we've all decided that we need fairer rules" and "we've all decided that we need your stuff".

That's part of why the US isn't actually a democracy. There is wisdom in limiting people's ability to "decide what we all need".

Re: Top 1% now owns more of the wealth than the remaining 99%

#59

Post by santosha »

I'm not sure if this was addressed in the Credit Suisse report, but these kind of comparisons can be very misleading. The problem is that a lot of people in the bottom 10% have net negative assets (every fresh grad with college loan debt for eg). This skews the distributions, making the wealthy seem richer than they really are.

Suppose A has 50$, B has 30$ and C has -20$ (owes a creditor). A seems to control ~82% of all the wealth, but B is actually in much better shape than that number suggests.

Re: Top 1% now owns more of the wealth than the remaining 99%

#60

Post by prostoalex »

13thLetter wrote: post #34
prostoalex wrote: post #21

According to census.gov http://blogs.census.gov/2013/03/21/household-wealth-and-debt... at least in the US "changes in overall median net worth observed over the past decade have been driven primarily by changes in one of its major components – equity that American households hold in their homes". The recipe for greater wealth equality is to subsidize mortgages and restrict new construction, so that everybody's house…

> The recipe for greater wealth equality is to subsidize mortgages and restrict new construction, so that everybody's house values move up a notch, which makes everyone feel a little bit better about themselves. I assume this suggestion was made "A Modest Proposal"-style, right? Those are the policies we've been following, and they cause great harm. It's already nearly impossible to buy a home in many American cities…

Right, this is not the recipe for fair market prices or housing affordability.

This is a recipe for increasing wealth equality, an abstract statistical value the press tells us we should be outraged about.

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