Of the 1%, by the 1%, for the 1% • Hacker News Board

Re: Of the 1%, by the 1%, for the 1%

#41

Post by cagey » Sun, Apr 03, 2011, 12:53 PM UTC

hootmon wrote: post #26

Just consider this. Most tax money goes toward providing defense, Which is just a nice word for protecting the property of the wealthy. The more property you have, then the more value you receive, thus the more, not less, you should pay. Its called welfare for the rich. Our taxes go towards securing their position and goods. Say hello to that boot rushing down on you.

> Most tax money goes toward providing defense

It seems like (FY2010) 20% of Federal expenditures go toward defense, and 58% go to entitlement programs (which (I speculate) the 1% wealthiest do NOT receive disproportionate benefit from).

Source: http://globaleconomicanalysis.blogspot.com/2011/03/usa-incor... second graph

Re: Of the 1%, by the 1%, for the 1%

#42

Post by stretchwithme » Sun, Apr 03, 2011, 12:57 PM UTC

Some people work very hard and are very creative. Those who produce more should get more. That isn't the entire picture of how people get wealthy in America, but it is the gist of it.

Of course, America has an increasingly corrupt government and a great many people acquiring wealth by using government to scam the rest of us. And we should be railing against that.

But the fact that wealth is distributed unevenly is inevitable. Not only are the productive wildly different in their abilities to produce, the ability of the corrupt to steal varies greatly as well.

Re: Of the 1%, by the 1%, for the 1%

#43

Post by dctoedt » Sun, Apr 03, 2011, 1:01 PM UTC

The key section of the article is the last one, about "the erosion of our sense of [national] identity, in which fair play, equality of opportunity, and a sense of community are so important."

The author, Joseph Stiglitz [1], doesn't explain how inequality of wealth alone causes such erosion. On its own, inequality very well might not.

But other factors might be at work as well. Consider the effects of envy, or more precisely, "relative deprivation" [2]. There's been research indicating that no matter how well off humans are on an absolute scale, we tend to become dissatisfied when we perceive that we're worse off than our neighbors; we tend to believe we're somehow entitled to do at least as well, or even better, than they. (See also "keeping up with the Joneses.")

Envy is probably a product of natural selection; it can be a useful motivator, at least when properly channeled.

On the other hand, envy might be less adaptive in an era of global mass communications. It's certainly easier today for millions of people to become aware of, and then (perhaps subconsciously) resentful of, others who seem better off than they.

So it could be that we have a combination of causes at work: Increasing public awareness of wealth inequality leads to increased envy, which might indeed start to erode the social fabric.

If this turns out to be the case, what could we do about it?

Some might say humanity should be less envious, that people should just accept inequalities of wealth as natural consequences of their own limitations. History suggests that they -- or should I say, we -- probably won't.

[1] Joseph Stiglitz, professor at Columbia, former chief economist of the World Bank, Nobel Memorial Prize in Economics 2001 http://en.wikipedia.org/wiki/Joseph_Stiglitz

[2] http://en.wikipedia.org/wiki/Relative_deprivation

Re: Of the 1%, by the 1%, for the 1%

#44

Post by lusis » Sun, Apr 03, 2011, 1:23 PM UTC

henrikschroder wrote: post #34

rudiger wrote: post #28

The top 1 percent of American income-earners account for ~25% of the nation’s total income every year. The top 1 percent of American wealth-holders account for ~40% of the total wealth. I hear statistics like this all the time but I never understand... What is the "correct" amount? The top 1 percent of anything by definition are going to hold some larger share. There are compelling theoretical reasons for wealth and…

The main criticism isn't that "the rich" have a lot of the income and assets, or that their share is increasing, it's that the rest of the people are getting less. The american society as a whole is getting richer, but the majority of the members of that society are getting poorer. Is that really the way things should be? On the other hand, this piece only talks about inflation-adjusted net income. If you compare the…

Wealth isn't a fixed pool of stuff. Me having more wealth isn't taking away from someone else.

Re: Of the 1%, by the 1%, for the 1%

#45

Post by nice1 » Sun, Apr 03, 2011, 1:35 PM UTC

SamReidHughes wrote: post #2

The worst kind of article is the kind that makes you want to flag it for being inappropriate and rant about it at the same time.

The last tsar of Russia and his lot also practiced denial. The ensuing tragedy not only wiped them out, but also caused misery to countless people for almost a 100 years. Lets hope history won't repeat itself.

Re: Of the 1%, by the 1%, for the 1%

#46

Post by bokonist » Sun, Apr 03, 2011, 1:36 PM UTC

qq66 wrote: post #25

pg wrote: post #3

This is written more like a speech by a politician than as an attempt at analysis. The type of economic inequality that successful startups yield, and which accounts for a lot of the entries in the Forbes 400, is described merely as a theory cherished by the rich, and dismissed with evidence it would be a compliment to call anecdotal. And while there's a lot of talk about how the rich own the government, he doesn't e…

The Forbes 400 is mostly entrepreneurs but the "Forbes 40,000" is mostly financiers, only a small fraction of whom create net positive value.

Source?

Re: Of the 1%, by the 1%, for the 1%

#47

Post by qq66 » Sun, Apr 03, 2011, 1:41 PM UTC

bokonist wrote: post #46

qq66 wrote: post #25

Earlier quoted context omitted.

The Forbes 400 is mostly entrepreneurs but the "Forbes 40,000" is mostly financiers, only a small fraction of whom create net positive value.

Source?

No source since the "Forbes 40,000" doesn't exist but I can assure you that it's much more common to make $100m on Wall Street than in entrepreneurship. My direct manager when I interned at Lehman Brothers had probably socked away $50m himself.

Re: Of the 1%, by the 1%, for the 1%

#48

Post by revorad » Sun, Apr 03, 2011, 1:42 PM UTC

gaius wrote: post #18

moultano wrote: post #8

Earlier quoted context omitted.

250k of household income puts you at the 98.3 percentile, so any two married valley engineers probably qualify, and they probably can't afford a house. http://en.wikipedia.org/wiki/Household_income_in_the_United_...

Same situation here in the UK - you become one of the hated "rich" at about GBP 37k where income tax goes up to 40%. Nowhere in the Home Counties is that enough to get a mortgage even on a 1-bedroom flat, let alone a house. A super-tax of 50% kicks in at GBP 150k - but an ordinary family home costs around GBP 500k. As normal in politics, the middle classes are being raped for the benefit of those at the top and at th…

not sure what your definition of ordinary family home is but i recently bought one for less than half the price you quote in zone 2 of london. a similar place would be much cheaper anywhere else further out in london and the country.

Re: Of the 1%, by the 1%, for the 1%

#49

Post by Mz » Sun, Apr 03, 2011, 1:51 PM UTC

ladon86 wrote: post #24

tesseract wrote: post #21

Earlier quoted context omitted.

> GBP 37k What is that percentile wise? As an American, I am perpetually shocked at how low UK salaries sound when I hear them, especially given that I know consumer goods are more expensive on your side of the pond. Is it made up for by comparatively lower cost of housing or other essential items or what? Or is there a huge transatlantic income gap that I never really hear about (mostly it's cost of living differenc…

Well it's definitely not cost of housing, which is very expensive here. For the most part you can expect to pay a lot more for a much smaller house in the UK compared to the US. I'm not sure where it is that we make up the difference in costs, or if indeed we do.

As a guess: Healthcare. My understanding is that it is largely covered by the government in the UK but consumes somewhere in the neighborhood of 20% of US incomes (figure remembered off the top of my head -- I really want to say about 22% but that implies more accuracy than I feel confident implying). So that one item alone should make a quite large impact on actual outcomes.

Re: Of the 1%, by the 1%, for the 1%

#50

Post by Tycho » Sun, Apr 03, 2011, 2:05 PM UTC

_delirium wrote: post #37

rudiger wrote: post #28

The top 1 percent of American income-earners account for ~25% of the nation’s total income every year. The top 1 percent of American wealth-holders account for ~40% of the total wealth. I hear statistics like this all the time but I never understand... What is the "correct" amount? The top 1 percent of anything by definition are going to hold some larger share. There are compelling theoretical reasons for wealth and…

A recent survey found rather surprising consensus between people on different part of the political spectrum if you asked them what an ideal wealth distribution would be. Overall, people thought the top 20% should ideally own about 32% of the wealth; liberals preferred 30%, while conservatives preferred 35%. People making over $100k/year were slightly more pro-inequality, but still only gave 40% as their ideal target…

So what would that actually mean? If you put everyone on the X axis in order of their income, with the Y axis representing income, what would the curve look like in order for the top 20% to own 30% of the wealth? And if you left this running, what would the total wealth graph look like after say 50 years?