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The 9.9 Percent Is the New American Aristocracy

theatlantic.com

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Re: The 9.9 Percent Is the New American Aristocracy

#141

Post by Rotten194 »

gshubert17 wrote: post #102
nordsieck wrote: post #91

Earlier quoted context omitted.

> The vast majority of middle class wealth is locked up in (non-investment) housing. There are literally 0 people I know who think owning a house is not an investment. If you're trying to make a distinction between income generating assets and assets that don't generate income, you're just digging yourself into a hole - housing doesn't generate income, but it does save cost - namely rental cost. In that sense, it is…

> There are literally 0 people I know who think owning a house is not an investment. I thought of my house as a "use asset", like a car. It's nice when the house appreciates. But I couldn't sell it and "cash out" if I had to use the proceeds to buy another house. But, as you said, it saved on rental costs.

Owning a house is an intergenerational investment -- your kids can sell it and make a tidy unearned profit on what you spent, or live in it and pocket that amount of money in not having to pay for another living arrangement. It contributes to the high IGE of the US the author was talking about.

Re: The 9.9 Percent Is the New American Aristocracy

#142

Post by coldtea »

anbende wrote: post #2

Some of the points about privilege might be accurate, but breaking economic status in to .1%, 9.9%, and 90% is arbitrary and misleading. The author tries to make the point that “the 9.9%” have the majority of the wealth and this issue is as big or bigger than the concentration of wealth at the very top. The problem is that this is largely an artifact of the division system. The distribution is highly skewed, and the…

>Some of the points about privilege might be accurate, but breaking economic status in to .1%, 9.9%, and 90% is arbitrary and misleading.

It's a arbitrary, but it's also useful to have a cutoff point. And due to power laws, as you observed, falling below that is already too low.

Re: The 9.9 Percent Is the New American Aristocracy

#143

Post by CamTin »

arduanika wrote: post #109

Reading this article makes me think of the word choice that new button on Facebook that lets you report that a link is a "false" news story. Notice the subtle shift away from the populist phrase — the accusation is not that the news is "false", but rather "fake". The facts in this piece are by and large true (although if you look closely you can see a few opinions and judgement calls that have calcified into facts).…

I totally agree that we've made great progress in providing material abundance since the start of the fossil fuel era.

Unfortunately, we're heading toward the end of this era. Without some kind of miracle (this isn't totally unlikely, but we can't exactly count on it), we will have to either dramatically lower our average standard of living, or reduce our population, in order not to totally overwhelm the planet's carrying capacity and therefore die out totally. Most likely, we'll need to do a bit of each.

The trouble is that it's hard to get most people behind a plan that says, basically "We are reducing everyone's standard of living, including those of you making $1/day and those of you making $100,000 a minute. We all have to do our part."

A still-difficult but much easier sell is "We're reducing inequality by giving some of us a hand up, and the richest of us are going to pitch in to help. We can't all live like Trump or the Sultan of Brunei but we can all be free from want without destroying the planet or suffering any mass-genocides."

The easiest sell of all is "We can all be rich and live like modern-day Americans for eternity! All we need to do is de-regulate all of these job-creating, wealth-producing industries and boom! Invisible hand!" But that's a lie.

Unfortunately, the easiest sell is the one that gets sold, but that's not to say that the middle one isn't something we can shoot for when the Plan A status quo becomes coming apart at the seams. Whether that will be too late remains to be seen.

Re: The 9.9 Percent Is the New American Aristocracy

#144

Post by JumpCrisscross »

bhawks wrote: post #135
JumpCrisscross wrote: post #128

Earlier quoted context omitted.

One still has a generation who were educated on subsidised education now reducing those subsidies, per capita, to the next. The former then expects the latter to work to fund their Social Security, Medicare and pensions as opposed to working to redistribute those hand-outs over the broader population. (Not taking a stance. Simply eliding a policy theme. My bet is SS, Medicare and pensions will be dismantled within a…

There has been no reduction of education spending on a per-capita basis (or any other form of measurement). https://www.usgovernmentspending.com/spending_chart_1970_202... It has grown at an amazing rate (as have Medicare/pensions etc). Half of the income of the middle 20% of retired folks (those making less than $65K) comes from the government subsidies you'd like to cut. The 2nd 20% gets 2/3rds their income from th…

You mention NIMBYism. I would regard that as the principal vector of wealth transfer.

Re: The 9.9 Percent Is the New American Aristocracy

#145

Post by refurb »

k__ wrote: post #137
refurb wrote: post #134

Earlier quoted context omitted.

Let me guess, you can't entirely live off your investments? ;) Not sure I agree though. So someone who makes $1M per year from their work, but has no investments isn't rich?

Isn't this a strawman? Clearly someone who makes $1M could live of their investments.

They could once they acquire enough assets.

By your definition, everyone who retires and lives off their investments is rich as well.

Re: The 9.9 Percent Is the New American Aristocracy

#146

Post by dsfyu404ed »

5DFractalTetris wrote: post #119
zjaffee wrote: post #105

Earlier quoted context omitted.

The broader point I'm getting at is that the middle class historically didn't struggle in the way they do now. They used to be able to afford homes, vacations, college, and now that is only available to the upper middle class.

Simply untrue. Do not change the definition of middle class. A single-wide prefab of real lumber for a family of three costs a year of wage or two for a high school graduate. Resourceful individuals can develop land cooperatives. Vacations and college aren't strictly necessary for many, nor particularly unattainable. A road trip anywhere in the USA or continental Europe is nearly free, and a four-year degree at a Sta…

While I agree with you, people compare themselves to their neighbors not their ancestors so in that sense the goal posts have moved. The bar for "middle" class is higher than it used to be.

Re: The 9.9 Percent Is the New American Aristocracy

#147

Post by wolco »

zjaffee wrote: post #51
jokoon wrote: post #38

Earlier quoted context omitted.

I disagree. What the article is trying to point out is that the 9.9% thinks he's not so wealthy, so he is against inequality, but he still, somehow, for his own comfort and merit belief system, likes his higher income. Trying to talk about ranges of income, would it the top N%, is pointless. You could strip out the hypocrisy like so: "I am not at the top, so I am still against inequality, but I am comfortable, but si…

This is a big debate in the HN world too, where tech workers in that top 10% think they are working class. The real breakdown here is that in todays day and age, there's hardly a middle class, there's the working class who struggles, lives basically paycheck to paycheck, and at the age of 45 has up to 40k in wealth to their name. Then there's that top 10% whose able to afford a million dollar home, take yearly vacati…

If you are still working you are not part of the richest class.

Measuring income per year misses the richest group of all. Those who would look down on anyone working.

Re: The 9.9 Percent Is the New American Aristocracy

#148

Post by bhawks »

JumpCrisscross wrote: post #144
bhawks wrote: post #135

Earlier quoted context omitted.

There has been no reduction of education spending on a per-capita basis (or any other form of measurement). https://www.usgovernmentspending.com/spending_chart_1970_202... It has grown at an amazing rate (as have Medicare/pensions etc). Half of the income of the middle 20% of retired folks (those making less than $65K) comes from the government subsidies you'd like to cut. The 2nd 20% gets 2/3rds their income from th…

You mention NIMBYism. I would regard that as the principal vector of wealth transfer.

Nimbyism is only a regional factor.

I think we agree this is a national conversation.

Re: The 9.9 Percent Is the New American Aristocracy

#149

Post by CamTin »

FrozenVoid wrote: post #24

A clever manipulation piece: It melds 1% multi-millionaires with upper-middle class to create some kind of bourgeois enemy. In reality these 32 million people have different lifestyles, sources of income and their networth does not indicate true wealth: they could be living in an expensive house that they bought much cheaper, but a few trips into a hospital will bankrupt them. The whole concept of "net worth" is high…

Not accounting for people's home equity when determining their wealth is one of the most bonkers bougie things I've ever heard. Should we not count their 401k savings either, because "if X took the early withdrawal penalty" isn't fair either?

If you're rich, you're rich. It makes no difference if that wealth is tied up in illiquid assets. If the precarity if your financial situation is based on the fact that you're worth millions but have decided for some reason to leave it invested in one large, volatile asset, then you don't get to claim you're in the same boat as someone who is pawning their wedding ring until payday to make rent.

Being rich but poorly invested (90% of your net worth is in your home equity) is a decision you made, not a situation you found yourself born into.

Re: The 9.9 Percent Is the New American Aristocracy

#150

Post by dnomad »

the_gastropod wrote: post #124
zjaffee wrote: post #105

Earlier quoted context omitted.

The broader point I'm getting at is that the middle class historically didn't struggle in the way they do now. They used to be able to afford homes, vacations, college, and now that is only available to the upper middle class.

Homes today are roughly twice the size they were in the 1970s [1]. Despite that, home ownership rates are higher than they were in the '70s [2]. More people today have college educations in the U.S. than any time in U.S. history [3]. I'm not fond of the rhetoric about the poor middle class. There are issues we need to solve w/r/t poor economic mobility. We should be focusing our attention more on solving those proble…

The economy is a "forward-oriented enterprise." What matters is not so much where we are but where we are going. To that end it's important to understand that homeownership rates are falling fast [1], birth rate is falling [2] and "80s babies" (ie the Millenials) are much, much poorer than their parents were in their 20s and 30s.

If you're an investor (and everybody's an investor whether they like it or not) the question you should be asking is what things will be like in ten years.

That said the article (like pretty much all economics that comes out of The Atlantic) is pretty silly. The dire condition of the American middle class is completely the fault of the US government. In the last 30 years (while China has achieved world historic growth) the US has dumped trillions into wholly unnecessary wars and giveaways to international investors. The $20 trillion dollars the US government has wasted is the greatest malinvestment in the history of the world. All the money that should've been spent on vital innovations and critical investments and infrastructure was used to blow up brown people and inflate asset prices. 2008 was just the beginning; the consequences of this extraordinary malinvestment will take decades to ripple through the global economy. The 9.9% or any other arbitrary percent of Americans are only to blame to the extent that they haven't overthrown their government and executed a few politicians. Over and over electorate have failed to correct the system and so politicians like John McCain -- who helped push America into the greatest crime of the 21st century -- are widely lauded instead of arrested.

[1] https://www.ft.com/content/51771766-7c7c-11e7-9108-edda0bcbc...

[2] https://www.vox.com/science-and-health/2018/5/22/17376536/fe...

[3] https://www.stlouisfed.org/~/media/Files/PDFs/HFS/essays/HFS...

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