The Rich Get Richer

George Bush agrees with Democrats that increasing inequality is a problem but there is no easy answer to what to do about this thirty-year-old worldwide trend. Many of the factors that produce inequality also produce a robust economy and a cleaner environment & some solutions could exacerbate poverty.

NPR is doing a series on inequality that addresses some of the factors. I will not repeat them in detail here. They point to the usual culprits like globalization, the increasing value of training and education & technologies such as internet magnifying small distinctions into decisive advantages.

An obvious but easily overlooked factor is working women and marriage. People tend to marry those like them. This means that educated and skilled double their advantage, while those without much of either compound their disability. It gets worse, since the well off are much more likely to get married and stay married, success in marriage or lack of it is becoming a strong driver of inequality, or more precisely failure to get or stay married is a big contributor to poverty.

To solve a problem we first need to properly define it, so we need to keep some overlooked factors in mind.

The rich got richer, but the poor did not get poorer. The upper 20% got a bigger share of a growing pie, but nobody’s slice got smaller. Median income rose the last 30 years. Poverty rates have declined. This is where tax policy HAS helped. The poverty rate after taxes is significantly lower because of transfer payments. The earned income tax credit has been a potent anti-poverty program and should be expanded, but this will not be enough to stem the general trend.

Besides that, the tax regime has also not made much of a difference. Inequality grew despite differences in tax rates over the past three decades. Economic growth itself has been the driver of inequality. You do not have to believe me. This is from a Clinton connected think tank. "When viewed together, the studies indicate that the top one percent of households now receive a larger share of the national pre-tax income than at any time since 1937, except for the years 1999 and 2000."

Why was inequality greater in 1999 & 2000 (before the tax cuts)? "Income concentration grew steadily during the latter half of the 1990s, and peaked in 2000, a year that the stock market hit a record high. From 2000 to 2002, income became less concentrated at the very top, partially due to the drop in the stock market; after-tax incomes fell from 2000 to 2002 for most income groups, but declined the most for the top one percent." It looks like you can decrease inequality if you are willing to slow the economy. So the question is how much of a tradeoff are we willing to make.

Inequality is likely to be a persistent problem because of the new nature of the new rich. It used to be that we could count on a fool soon being parted from his money or that the heirs would just waste the money in the next generation. The dangerous difference in today's rich is meritocracy. Our society has become too good at sorting for cognitive ability & talent.

One reason I am less enthusiastic about good ideas that would try to equalize economic starts is that talent and intelligence are also driving inequality, but I do suspect a consumption tax might be useful. Inequality really doesn’t sting much w/o unequal consumption.

The biggest criticism I see about the new rich is the lack of restraint. This is the perverse result of our abdication of the right to be judgmental. This has removed much of the restraint. Think of Paris Hilton. Aren't you better than she is? Do you feel uncomfortable saying that? Wealth needs a social discipline. We have surrendered the ability to do that by social means. No behavior is unacceptable.

The movie Titanic had men with guns forcing the men off the lifeboats. In real life it was not necessary. The rich men on the Titanic felt an obligation to give their seats to women and children. The movie had to feature the drama, because in our modern world such behavior is unbelievable. Those rich guys featured on cribs would demand private boats. Alfred Vanderbilt, one of the richest men in the world, refused to board lifeboats and stayed on the doomed Lusitania. Men of his standing were not supposed to panic.

I do not know how to fight growing inequality or even if it should be fought. But I do think we need to reestablish the norms that the rich have responsibility to behave in decent ways. We need to revive the ability to be scandalized. Paris Hilton is not the equal of an honest workman, she just has lots of money she didn't earn.

Posted by Jack at February 11, 2007 10:18 PM
Comment #207655


One factor that you did not mention is that at some point, wealth takes on a life of its own. What percent of the top 1 percent earned their initial fortunes themselves? Safe investments managed by hired experts is quite enough to increase wealth; a meritocracy is not required.

Posted by: Trent at February 11, 2007 10:40 PM
Comment #207658


This is always a contention. If you look at the Forbes list, most of the top 25 earned it themselves or (in the case of the Waltons) literally watched and worked with their fathers who made it.

Not many people start literally from zero, but here you have the intelligence and talent at work. If you have successful parents, you inherit not only money, but perhaps also brains, talents and/or attitudes and skills.

I grew up working class. Over the course of a lifetime, I have learned lots of useful skills and attitudes. I realize that my 20 year old daughter alreay knows many of those things and she knows them more intuitively. She learned them mostly from me. Now if she was competing with someone exactly as I was at 20, she would be able to win almost all the time.

Parents can pass that along and it may be more useful than money.

Posted by: Jack at February 11, 2007 11:05 PM
Comment #207659

I disagree slightly with some of Jack’s arguments.

The most disturbing growth in inequality, as I see it, is not so much in the concentration of wealth but in the creation of an increasingly closed “power class” which is NOT a meritocracy at all. I’d disagree that we’re very good at all at sorting cognitive ability and talent beyond a very rudimentaty level in the classroom.

Talented and ambitious people still find ways to succeed in America far beyond what they’d achieve anywhere else, but in whole industries—many of the most important—talent and ability are increasingly taking a back seat to other factors.

You could now have a very hard time, for example, if you’re an A student from a university in Nebraska trying to get a job interview at a Fortune 500 company amidst C students from Harvard or Yale who know the right people. That is, unless you fall into a class that might benefit from affirmative action.

It’s always been like this to some degree, and this is pretty subjective on my part, but it doesn’t seem that this was so much the case even 20 years ago, and that our society is far more interested in pedigree over talent than they used to be. This is in fact anticompetitive behavior which diminishes the quality of our society and economy in the long term.

Posted by: Loyal Opposition at February 11, 2007 11:11 PM
Comment #207660


I do not know how to fight growing inequality or even if it should be fought. But I do think we need to reestablish the norms that the rich have responsibility to behave in decent ways. We need to revive the ability to be scandalized. Paris Hilton is not the equal of an honest workman, she just has lots of money she didn’t earn.

Bernanke has recent comments on your topic.

Bernanke says many things. what I gathered was that raising the minimum wage, although polically a great idea, is not what it is cracked up to be in actually helping the poor because it reduced job creation.

Trade barriers are not a great idea.

THEE answer is education and job training. In other words the very best way to address this issue of job disparity is to increase the job skills of those ill effected.


Posted by: Craig Holmes at February 11, 2007 11:58 PM
Comment #207663


Psychologists have long said that intelligence is the single greatest factor in determining success, however we choose to define success. (It should be no surprise that I define it in terms that don’t strictly relate to income.) So I’ll concede that point. I’ll also concede that in our age in which social mobility is not as limited by traditional class barriers that we are seeing stratification based to some large degree on intelligence. (I am less convinced that genetic factors can work so strongly across single generations, but I’m not geneticist, so I won’t debate that point.)

Where does that leave the hardworking guy with an IQ of 80? You seem to say tough luck, but I still maintain that a civilized society must find a way for such people to live in dignity. That’s probably why I consider myself a liberal, though I’m not really committed to any particular solution. I think we need to develop a different way to value work that is not purely based on money. Look, I need that guy collecting my garbage far, far more than I need someone producing another rap album. The first guy provides a meaningful service; the second guy does not. (I’m not knocking entertainment, but it is a luxury.) My argument isn’t really based on this, though — it’s just the deeply held belief that a good society allows a dignified life for its members, and, no, I’m not talking about lazy bums who just refuse to contribute.

Posted by: Trent at February 12, 2007 12:06 AM
Comment #207665

In our capitalist society, money IS a social barrier. Money IS a caste system. Does your child attend private school? Do you live in a gated community? Do you party with Paris?

Those lazy no good sum bitches that won’t work is a value statement. Is it working when you attend parties and act like an ass? Does Paris work? Is it working when you suffer throught the day asking for handouts in the rain or blazing sun? Are either of these individuals productive? Do they have any value other than their bank accounts?

Is a quadriplegic who cannot work therefore less valuable and deserve a lower position in the caste sytem?

Finally, Does the pie get bigger, or are their simply more pie makers as well as pie eaters? When currency floats is the pie expanding or contracting? Will a lopsided pie (if you keep adding more to the wealthy portions) flip over and turn society upside down?

By the way, Jack, a panhandler and Paris both “earn” money. You just don’t like the way they earn it.

The rich getting richer while the poor stay the same or get poorer is a warning sign of the health of a Nation. Adam Smith advocates should take heed. When the system gets gamed, its headed for revolt.

Posted by: gergle at February 12, 2007 12:31 AM
Comment #207673

I disagree that the only difference between now and thirty years ago is that the rich are richer. The poor are much poorer. Money doesn’t go anywhere as far as it used to.

There was less class distinction in the past regardless of how much money people had. A manual laborer could have a house in the suburbs, send his kids to school, get healthcare, a car, and still have money left over for retirement. In other words, he had a good life. Beyond frills there was no reason to envy a millionaire.

We’re increasingly becoming a society of have and have nots. Have nots can’t get a good education for their children or provide well for them in general. They live in slums. Once a have and have not society sets in you have a permanent underclass. You get more crime. You have a lower standard of life for everyone in the country.

Part of the American dream is that anyone can work hard and get a fair deal in life. I’m not ready to give up on that dream. I don’t think it’s in wealthy American’s interests to have such a stratified and ossified society. To my mind everyone should make a living wage, have access to education, and be able to get by so long as they are willing to work. It’s in America’s best interests as a whole.

Posted by: Max at February 12, 2007 1:05 AM
Comment #207677

Jack, I appreciate that you have posted this in the red column, as this reality has been denied over here for the most part.
The winner take all society we live in does a disservice to both democracy and capitalism.Is it hard for people to see the problem is nothing more than a failure of the free market ideology that has run amok in this Country for the past 25 years. Do we remember the “Greed is Good” mantra of the Reagan Republicans?
Why should we idolize technology and globalization, well we shouldnt but we do. All of us, Repubs, Dems and Indy’s.They should both be put into perspective and we should closely guard our future from abuse of both of these realities. How, proper policy that includes all Americans not just the corporations and the wealthy.
“Free market” and “fair trade” have been abused at the expense of the majority of people in this Country. We need to rethink our future before our future is as Mr. Stein says an obliarchy. When capital and capitalism gets in the way of democracy its time to rethink what our standards are.

Posted by: j2t2 at February 12, 2007 1:34 AM
Comment #207678

Jack, how people assess their personal well-off standard is a very complicated event. But, statistically speaking, there are a few striking correlations. Middle and lower middle class Americans take into account in assessing whether they are well off or not, how well they expect their children to fare after them? This is precisely why the voters didn’t buy into GOP propaganda about how great the economy is doing. I say propaganda, only because in the minds of parents, it appears so, given that the future economic viability of our nation is trending downward according to all the key figures in our government charged with making such assessments, Greenspan, Bernanke, Walker, and even the new head of the GAO (forget his name), and Portman.

They all state in unison that the future is not well for our children if we do not act NOW on both the debt, and the boomer retirement demographic in a way which preserves their middle class consumer behavior.

If the silver haired are permitted to fall into poverty, it will sap the discretionary income of their children as well as the broad consumer middle class, costing jobs, economic growth, and international competitive capacity. It will also likely create a political backlash the likes of which we have not seen the 1960’s. These are after all, the nation’s parents we are talking about, and that is going to pack a huge emotional whallop when the time comes to discard them as poor and useless. (Which is what we have been doing through inaction on this issue.)

Posted by: David R. Remer at February 12, 2007 1:44 AM
Comment #207687


First, no to all your questions (private school, gated community, party in Paris). You are probably referring to my trip to Paris last fall. I was working (really). While I did find time to see the wonderful museums etc, I do not party in general. I am a boring guy who doesn’t like to party. And if I do party, it is only for work reasons.

Re the panhandler. He may earn money, but I am willing to pay him a lot less than somebody who does something I consider useful. That is the whole point of the market. We all pay for what we consider useful.

The revolt idea is a bit old fashioned. It is based on the paradigm that the poor do most of the work and the rich live off their labor. The modern reality is that the amount of hours worked increases with income. The lower 20% of the income distribution does very little work at all.


The poor of today can (and do) buy more than the poor of 30 years ago. The problem is lack of progress.

Some sorts of jobs have largely disappeared or been devalued. An unskilled labor job is one of them. I came into the workforce in 1973 and worked as an unskilled worker loading cement. It paid well, especially because we worked 12 hour shifts and got lots of overtime. They used to have dozens of men loading bags. It was really hard work (the bags weighed 94lbs) and they had to pay a premium to get someone who could/would do it. It ruined your body eventually. All the old guys had bad backs. Today at that same plant one man operates a big machine that does the work all of us did. It gets it done in a couple of hours. The guy running the machines is skilled and gets paid decently. The only unskilled manual laborers needed are those cleaning up around the machines. They do not get paid well at all. How do you remedy that situation? Do you even want to? The work was really bad. Nobody liked it and it was unhealthy. You probably would not be allowed to do it today. Certainly you would have to make the bags a lot lighter so that you could hire women and weaker men.

The American success has shifted. Hard unskilled work will not longer get you a decent income. You have to have skills and/or education. This is available to all who will work for it. Not everyone will get rich, but few people need to be poor.


The greed is good mantra was featured on Oliver Stone’s movie “Wall Street”. It was and remains the straw man of the 1980s Republicans. The subtle point (enshrined in our Constitution) that you have to balance ambition with ambition/greed with greed. If you depend on peoples’ virtue, you will be disappointed. If you appeal to interest, maybe not. Greed, like fire, is a useful tool. It is also dangeous, but you cannot get along w/o it.

I agree that we need to address the structure of entitlements. The current crop of old guys will certainly continue to get what they have been getting. Us future silver haired (in my case I wish I had hair, silver or otherwise) will need to pay a little more of our own way and maybe work a little longer into our long old age. That fix will not be coming until the problem gets worse.

Re the future - I have fair confidence that my kids will go as well as I have. The problem is more choice. They have too many choices and need to settle onto some of them. Our lives were not all that good, you know. I didn’t own a car until I was 27 and I did not buy my first home until I was 42. The good old days look better looking back than they did looking forward from 1973. There was a a lot of doom and gloom prediction in the 1970s too. They didn’t happen.

Posted by: Jack at February 12, 2007 9:11 AM
Comment #207691

Jack, thank you for the post. I would like to heartily agree with your last three paragraphs. The great hoopla over the recent philanthropic endeavors of Bill Gates and Warren Buffet demonstrates the rarity of responsible wealth today. We will never hear of Messrs Gates & Buffet being too drunk to walk or having a sex tape floating around the WWW.

His faults notwithstanding, Andrew Carnegie is an apt example for today. His “Gospel of Wealth” essay should be required reading for every member of the nouveau riche. And if that is too much reading, how about Luke 12:48: To whom much is given, much is required;” and Luke 12:34: “For where your treasure is, so there will be your heart.” At the time of his death, Carnegie had given away hundreds of millions of dollars and had less than $50,000 left (it was promptly given away). I grew up in a town with a Carnegie public library, one of over 3,000 in the United States. Now, that is responsibility!

Inequality, per se, is not necessarily problematic in a society. However, it is the matter of the degree of inequality that is problematic both morally and socially.

Craig is correct when he points out that education is one antidote to inequality.

However, education is often financially out of reach for many persons. Herbert Schooling, the late Chancellor of the University of Missouri-Columbia was concerned about this problem 25 years ago and argued that we would ultimately have to extend the model of free public school education to post-secondary education to at least the Bachelor’s level. Fortunately, we already have a public university system. Despite all the problems we talk about in public school education today, it was the decision to provide 12 years of education at no cost to every child/adelescent along with the GI Bill that provided the foundation for the exponential economic growth in the United States during the post WWII era.

Finally, education is not “the” ticket for those without the intellectual aptitude for higher education. If we are a moral society, we cannot relegate these persons to a life of poverty.

Posted by: Dr. Poshek at February 12, 2007 9:57 AM
Comment #207692

News from the ghetto—
A joke I like to say is,”when I was young, I wished to live in the ghetto.” I was very poor growing up, but we always had plenty to eat. We went through hard times, as I later learned from my mother, and my parents considered welfare. They declined. Being ignorant alien residents, they figured they would have to pay the money back eventually.
I had a great childhood with plenty of friends. I had a tv in my own room which I would turn on at 6am on saturdays to watch my favorite shows. I remember watching game 6 of the 1981 World Series wondering what all the hubbub was about.
My memories of my childhood have hardly any sorrow. There were only few events that made me conscious of being poor. My parents struggled, but did not let on.
Now, me and my siblings compete against each other by aweing our parents with the latest technological innovations. All frills and luxuries, I suppose.
It all has to so with attitude and how we define success. My parents are proud of us, despite our non-millionaire status. And, we are proud to show off a living room entertainment center in our parents home, that reminds one of a NASA command center.
I owned my first car when I was sixteen and my first home when I was 29, which today is a little behind the curve. Things are getting better. A lot of the doom and gloom in today’s generation comes from expecting a lot more. This is because we are getting a lot more.
I still have a connection with my old “hood.” I see what goes on there. People survive without having a job. They have cars, electronics, and a home. On Christmas, several organizations hand out toys, which some reject.
It’s all about attitude. We want more, because we have been getting more. Even the poorest among us expect more. That is all fine. It is not a bad thing to want to live better. But, as far as I am concerned, we’ve got poverty licked.

Posted by: JoeRWC at February 12, 2007 10:17 AM
Comment #207700

Jack -
Good post.

In the last year I have begun to suspect that the poor were not losing ground as many were claiming.

In my business I deal regularly with the poor (my experience is local only) and have not noticed any change in $$ lifestyle from 10 years ago. (The local shelters are not running out of room. The soup kitchens are not feeding more people than average. The music is just as loud. The alcohol consumption rate has not moved up or down much…etc.)

First, in a really good economy, as we are learning, the rich get richer but the poor don’t get poorer. Second, I expect that the longer we have a really good economy the more likely that the middle-class would also become richer. A happy middle-class is essential to a continued good economy. Third, I expect that when the rich become richer, in our type of economic system, that extra cash at the top actually fuels a continuing good economy unless something is done to stop it.

This is excellent news! We could be looking at a long-term prosperity cycle in the USA.

Posted by: Don at February 12, 2007 11:11 AM
Comment #207711

Hard to argue that the wealthy should behave better. There are a few “lights” out there. I understand that much reasearch was done in Silicon Valley looking for a method for them to take it with them to no avail.Carnegie would have spent the later part of his life in federal prison for things like price fixing,insider trading etc if he was around today. His brutal union busting and exploitation of workers was based on the notion that he had a better idea of what to do with the wealth they created than they did.What arrogance. Even his partner,Frick, admitted they would both go to hell.
The notion that the potential for instability caused by inequality is “old fashioned” is wishful thinking and not bourne out by reality. Swelling prison populations are an indicator of this as are the periodic regional insurrections that occur,usually in urban ares. It should be noted that instead of storming the bastille we get the storming of Sears or Walmart.
Education and training,although important, are much less important than opportunity. Russia has a highly educated populace for example. In the Philippines a business degree might, with luck ,get one a job selling shirts.A friend of mine was in the business of setting up pig farms there. He could employ college trained vetrinarians to shovel pig shit.The government pushes education as a subtitute for the real economic reforms needed for a prosperious society ie. land reform,a progressive taxation system,accessable tort reform.
Also of note in the Philippines 90% of the businesses are owned by ethnic Chinese. Many other countries have similar situations. That means that the benefits of globalization,foriegn capital etc. go mostly to a distinct minority,able to take advantage of it through education,connections etc.This can and has led to violent destableizations.The extent that we have a similar class structure is the extent that we face similar instability.
And then there is Monopoly. Good game. If you are lucky enough to buy Boardwalk you are well ahead. Its a roll of the dice. Another thing about Monopoly,what happens when one player gets ALL the money? The game is over. Do we want the game to be over?

Posted by: BillS at February 12, 2007 12:25 PM
Comment #207732


I think inequality is potential problem, although I do not fear much from the “poor” lower 20% of the population. The problem with this group is dependency.

I just am not sure what to do about it. Inequality has been rising worldwide & under different U.S. tax regimes. It reached an all time high before the recent tax cuts and then dropped when the economy went bad.

Life is not as simple as Monopoly and even Monopoly is not as simple as mere luck. There are people who consistently do well at Monopoly. The best property, BTW, is not Boardwalk, where nobody lands and the houses cost a lot to build. The best is Illinois. The red properties are much better than the blues. Yellow are next best.

Posted by: Jack at February 12, 2007 2:56 PM
Comment #207752
Jack wrote: But I do think we need to reestablish the norms that the rich have responsibility to behave in decent ways.

And government is FOR-SALE.
There’s nothing wrong with wealth, but using it to control government ain’t right.
Also, politicians have stacked the deck to give themselves many unfair incumbent advantages (money attracted by incumbency, Gerrymandering, Perk$ of Office, getting paid while campaigning, time to campaign while getting paid, two offices financed by tax-payers, campaign organization and volunteer support already in-place, visibility and access to the news media, etc.)

Also, a tiny handful of the wealthy (0.15% of 200 million eligible voters) give 83% of federal donations (of $200 or more in 2002).
The average voter can’t compete against that.
The 99.85% of eligible U.S. voters (averaging $2 per person) are being drastically out-spent by a tiny 0.15% of all voters (averaging $6666 per person).
What’s fair about that?
No wonder irresponsible incumbent politicians carry the warer for their big-money-donors, and ignore the majority of the voters … especially since those voters keep rewarding the politicians for it by repeatedly re-electing them. Sounds pretty [expletive]ing illogical doesn’t it?

How and why does that happen?

Voters are basically lazy.

That’s not said with malice, but it is a fact of human nature that we fail to account for when we attempt to design governments, organizations, and societies.
We fail by forgetting the importance of Transparency (visibility), and Accountability (deterrent via law enforcement), and Education (prerequisite to avoid repeating history). For example, on a small scale, look at what a lack of Transparency did to Enron.

Voters fail to pay much attention until things get really bad.
At that point, pain trumps lazy.
Too bad it has to be that way (most of the time; 2.000 steps forward, 1.999 steps backward).

As for all those statistics … sure, things appear OK at the moment, and things have been worse in the past, but the massive debt, borrowing, spending, and money-printing of the last 30+ years is bearing down on us, and has the real potential for a serious economic melt-down. Perhaps as bad as the Great Depression. (i.e. massive debt, out-of-control borrowing, spending, excessive money-printing, plundering Social Security & Medicare surpluses, inevitable consequences of the demographics, etc.) finally catch up with us. That is when that graph (above) will change drastically, becoming much more volatile, and Congress will no longer get to enjoy their cu$hy, coveted 90%+ re-election rates.

BillS wrote: And then there is Monopoly. Good game… . Another thing about Monopoly,what happens when one player gets ALL the money? The game is over. Do we want the game to be over?
BillS, You anaolgy is very accurate.

While life is more complex, the game of Monopoly is very much like what the government (run by FOR-SALE, bought-and-paid-for politicians) and the Federal Reserve Bank are doing.
They print excessive amounts of money out of thin air and try to lend it to everyone possible.
The nation is swimming in debt ($20 million personal debt nationwide, and over $22 trillion of federal debt).
They tap-into and capitalize on some people’s bad credit habits.
When some people default on their loans, the banks confiscate real assets from money printed from thin air.
That’s not an excuse for bad credit, but many predatory practices and excessive usurious interest rates exist. Some banks are charging 24% ! That’s obscene. Many courts won’t even enforce civil contracts for loans charging over 10%, because it is considered usury. But not for the banks. They can get away with what would be considered illegal for you to do.

But that’s only part of it. The excessive money printing benefits those that get it first (early in the cycle). But that’s not all. It perpetuates inflation. We’ve been brainwashed to think 2% to 4% inflation is OK. It’s not. It hammers the poor on fixed incomes, and erodes their savings.

At only 4.5% inflation, $100 becomes:
___ $96.35 in 01 year
___ $92.70 in 02 years
___ $89.05 in 03 years
___ $81.75 in 05 years
___ $63.50 in 10 years
___ $45.25 in 15 years
___ $35.43 in 20 years

At 12% inflation, such as in the late 1970s and early 1980s, $100 is eroded to only:
___ $89 in 01 year
___ $78 in 02 years
___ $70 in 03 years
___ $55 in 05 years
___ $43 in 07 years
___ $30 in 10 years
___ $15 in 15 years
___ $9 in 20 years

Also, the incessant inflation causes economic instability, because it causes people to run around like chickens with their heads cut off trying to find a place to invest their hard earned money so that the insidious inflation won’t erode it. And you have to be very careful, because there are all sorts of scams, fraud, insider trading, more usurious fees, etc.

BillS wrote: And then there is Monopoly. Good game… . Another thing about Monopoly, what happens when one player gets ALL the money? The game is over.
Well, sort of.

There will most likely be painful consequences in the not too distant future as the top 1% of the U.S. population gets wealthier and an increasingly larger slice of the pie (20% of all wealth in 1980 … now 40% of all wealth in 2007). Again, there’s nothing wrong with being wealthy, as long as that wealth is not used to take advantage of others, or control government, which is currently a huge problem in our FOR-SALE government. That sort of elitist control of government makes it rotten to the core. That’s a huge part of the problem now … not merely the difference between Democrats and Republicans.

What certainly happens is a decline in the nation in many ways.
The massive debt, borrowing, spending, money-printing, and severe fiscal irresponsibility of the Congress and Executive Branch, and the slumbering voters that keep rewarding (empowering) irresponsible politicians by repeatedly re-electing will eventually have painful consequences.

Posted by: d.a.n at February 12, 2007 6:32 PM
Comment #207754

LOL, this is funny, a bunch of rich, as in not poor or impoverished, guys arguing how “bad” economic inequality is.
It’s funny since there really is no one who can argue on how bad it is to be economically impoverished since anyone who can probably doesn’t have internet access to do so. Then again, it’s not really funny, just sad.
To say that the rich in America have become an elite aristocracy is quite accurate; over the past 30 years, politicians and corporations with their lobbyists have ensured that the rich and powerful remain rich and powerful by eliminating the Estate Tax, increasing tax cuts for the wealthy, and sending off their kids to the top schools in the country as legacies.
As in the words of the Mahatma Gandhi, “A nation’s greatness is measured by how it treats its weakest members.”

Posted by: greenstuff at February 12, 2007 6:33 PM
Comment #207755


I heard that Ghandi quote. I studies ancient history. I have no real idea how most of the Greeks, Egyptians etc treated their weakest members. Although the Spartans clearly treated their weakest extraordinarily bad, most people have heard of them. I really do not think that is the biggest factor of greatness, despite the cool sounding soundbite.

Posted by: Jack at February 12, 2007 6:37 PM
Comment #207764

greenstuff -
“As in the words of the Mahatma Gandhi, ‘A nation’s greatness is measured by how it treats its weakest members.’”

We treat our poor exceedingly well. 1) They are given a free education (including free breakfast and lunch). 2) If they take advantage of the free education they have a good chance of moving up the financial ladder of success (some even make it to the upper class). 3) If they don’t succeed, they are provided with a myriad of fiancial programs (including free windows, insulation and doors for their houses). 4) We even pay for their abortions so they won’t have as many poor mouths to feed.

I bet Ghandi’s own country didn’t make it so good for their poor.

Posted by: Don at February 12, 2007 7:36 PM
Comment #207769

Loyal Opposition,

You said, “You could now have a very hard time, for example, if you’re an A student from a university in Nebraska trying to get a job interview at a Fortune 500 company amidst C students from Harvard or Yale who know the right people.”

This may be true. But I can say this. There is a much broader access to Harvard and Yale now than there was 30 to 40 years ago. During the 60’s, Harvard pulled more than 50% of their students from 15 private prep schools and 10 public high schools. Almost all were on the East Coast and the private schools were populated by only the children of the most well-off in America.

Now those schools (which are still some of the best high schools in America) represent only 10% of the student body at Harvard. Harvard pulls a majority of its students from public schools across all 50 states as well as many foriegn countries.

Similarly, there has been a concerted effort in the Ivy League to diversify beyond the “have’s.” The Ivy League began a “need blind” admissions policy in the 80’s which says regardless of your ability to pay tuition you will be accepted. The University will provide grants and loans in order to allow all qualified applicants to attend. In the past 5 years, Harvard has gone even further by saying that families don’t have to contribute to the educational cost if they may less than $40K/ year. Those families that make between $40k and $60k have drastically reduced burdens. Over half of Harvard students receive over 50% in grants each year and two-thirds of all students receive some financial aid.

Companies generally recruit at Harvard and Yale because it is cheaper. Those universities have spent a lot of money pre-screening their student body to ensure that the large majority are among the best and the brightest in the country. If you know that you are recruiting for 100 new hires into a Fortune 500 company, you are better off spending your money recruiting at Harvard, Yale, and the rest of the top 25 universities that will offer dozens of suitable appilcants each rather than trying to cherry pick from the 3 or 4 qualified applicants at smaller schools.

The same runs in reverse by the way. Microsoft and other tech companies doesn’t do a lot of hiring from liberal arts schools like Harvard and Yale. Instead, they are camped out at two ends of the spectrum. They are at MIT, CalTech, and Carnigie Mellon. They are also at local technical colleges like ITT.

Dr. Poshek,

You said, “Finally, education is not “the” ticket for those without the intellectual aptitude for higher education. If we are a moral society, we cannot relegate these persons to a life of poverty.”

I agree that education only works so well for those without aptitude. What is your solution for them? How do we keep them out of poverty and off the government dole in today’s economies?

Posted by: Rob at February 12, 2007 8:03 PM
Comment #207774


I think it depends upon the kind of education one goes after. The college route is good for some, but so is vocational education which has been sadly jettisoned in many schools as not college prepatory. I think the system breaks down at the high school level. I for one would like to see more vocational training in the 9-12th grades. Including life prep courses like “How to go and ask for assistance from the Bank” Balance checkbooks, use quickbooks for office, how to setup a business, how to be a mechanic, hardware engineer etc. There are a lot of people who would benefit from CPR/First Aid classes for daycare work. child development courses etc. Art, Music, sports and gay studies are fine, but not enough time is spent exploring the non-white collar work world.

I have a degree in Economics which matters not in the swimming pool service industry. We are all about water filtration and chemical distribution. I do take alot of courses in different aspects of my industry to keep up with what is new etc. But “EFFORT” coupled with “DESIRE” and the ability to read is all that is really required here.

Posted by: scottp at February 12, 2007 8:30 PM
Comment #207788

Rob: The short answer to your question — you probably don’t. Then, the more pertinent and thornier question: What does/should that “dole” look like?

scottp: Don’t sell yourself or your education so short. You have a skill set that you (or anyone who obtains a college degree, regardless of the subject area) use every day and often don’t even realize. The “ability to read” you cite is a case in point. Your education allows you to comprehend and to apply the information you obtain through reading more effectively than, say, a high school graduate.

—— As for voc ed in the secondary schools: it has gone to the wayside because it didn’t (and can’t) produce results with the concomitant consequence that secondary voc ed students leave high school with fewer skills than had they not pursued voc ed. However, voc ed has demonstrated its effectiveness at the post-secondary level (think junior & community colleges, ATT, DeVry, etc). The skill set required for the mere study of auto mechanics today is barely achieved through a high school curriculum. Rand did a huge study several years ago of “mid-skilled” workers including auto mechanics. They found that over half of entry-level auto mechanics brought with them one or more years of a liberal arts college curriculum (reading, writing, mathematics, and analytical thinking skills). The blue collar world has nearly disappeared and is being replaced by a world of work largely comprised of zero-skilled and skilled workers. I understand your sentiments and wish they were the reality. Alas, it is a new world out there and it is changing faster than even an Olympic sprinter covers his/her 100 meters.

Posted by: Dr. Poshek at February 12, 2007 10:02 PM
Comment #207791

It can be argued that the poor in America aren’t so bad off compared to the poor in many other countries. This argument ignores the fact that this nation is the wealthiest by far and that the percentage of wealth owned by the poor can be measured in nanodollars.

Posted by: jlw at February 12, 2007 10:05 PM
Comment #207794

In my mind the issue of mobility is central to the question of equality. I would not be very concerned with a great deal of inequality if it could be shown that there was some degree of mobility to go along with it. A system that had inequality as well as mobility would, in my view, be acceptable from Rawls’ “original position”. However, I have not come across any studies dealing with mobility - and I fear there may be certain parts of our society cut off from the potential for mobility (extreme rural areas and urban slums, potentially). Can anyone shed light on this important sub-topic within the inequality question?

Posted by: Jim M. at February 12, 2007 10:42 PM
Comment #207801

I still think the only true long term solution to this wage issue poor is with education and job skill training. The rest pretty much looks like window dressing and political postering.


Posted by: Craig Holmes at February 12, 2007 11:05 PM
Comment #207804

Jack, Yes the phrase originated from a movie perhaps but was the phrase “trickle down economics taken from a movie? It seems to me when you plan the economy based upon the trickle on theory there has to be someone that gets trickled on.
The gilded age seems to be where we have come full circle to once again. The priniciples applied then have been applied the past 30 years and history repeats. I do beleive that technology and globalization has a small part to play but policies and principles are the key. It can be changed we just need another FDR for our times.

Posted by: j2t2 at February 12, 2007 11:54 PM
Comment #207814

I always think it interesting the way people justify wealth.

I worked hard for that money, they invariably say. I know of no one who claims they don’t deserve their wealth.

The poor are poor because they don’t adapt well to society. They are drug addicts and lazy. That is the cry of many who blame the poor.

Woody Guthrie wrote a book called Bound for Glory, about his travels in the Dust Bowl era. He talked about being roused by the guards for the Railroad, and the Police especially in the richer parts of town. He described the stale air of the well manicured lawns and the invisibility of the poor to the wealthy.

When asking for a handout meal, for which he was always willing to work, he always found better success among the laborers. They didn’t judge him as much, weren’t so predjudiced against his tattered clothes, and understood that sometimes a fellow was just down on luck.

This kind of gritty knowledge isn’t learned from reading. It won’t show up in telepoll, or census stat. The poor are hidden from society. You have to seek them out to know how they exist. A lot of the comments here seem to me speculation more about how people distance themselves from the impoverished, than about one on one knowledge about economic struggle. As someone pointed out the poor generally don’t have internet access.

You’ll never see Bill Gates drunk or in a rage not because he has no faults, but because his private behavior is well hidden. People are people, irrespective of their wealth.

I work in construction. The laborers, unskilled workers work the hardest and longest hours. They are the worst paid, but most of them are paid well above minimum wage. The work is usually spotty, without benefits. This contributes to an often unstable lifestyle. Many came from this lifestyle and know no other. Still they are people, like any other group.

I have never been impressed by gloss. I have mingled with both the poor and the wealthy. The behavior of people varies among both groups. There are honest and decent people among both. There are complete asses among both. There are drug addicts and rage-aholics among both.

Life is often random. Money flows to those skilled in acquiring it. It’s a skill that doesn’t relate much to the values that person has. Jesus preached about this in his time. It hasn’t changed much in my opinion.

Posted by: gergle at February 13, 2007 2:40 AM
Comment #207939


When you see a guy with a sign saying he will work for food, ask him about it if you do not mind the abuse you will get.

Not everybody can be rich, but in the U.S. today few people are poor for very long w/o behavior that contributes.

Posted by: Jack at February 13, 2007 8:25 PM
Comment #208018


At least in Houston, there are a few panhandlers with a sense of Humor. I’ve seen more than one with a sign that says, “Billy wants a beer, why lie?”

Yep. they get old and/or die, so they fall off the screen.You don’t last long on the street. You can’t save everyone, but I don’t know why you consider the mentally disabled deserving of being on the street.

Posted by: gergle at February 14, 2007 5:04 AM
Comment #208383

I’m not so sure that wealth today is tied with ability. I read recently (I forgot where) that the vast, vast majority of the super-wealthy, that is not people with just 1-2 million dollars but more like billions, inherited their wealth. Even people like Donald Trump and Bill Gates already came from wealthy families. Most wealth, in America at least, is inherited.

For the US “meritocracy” in action, just look at George Bush, he’s never had an honest job in his life, because of his family background he’s graduated from Yale and now is the president. If he was from a poor or middle-class family, do you honestly think that would happen?

Andrew Carnegie (one of the richest men over 100 years ago) believed in the right to accumulate lots of wealth, but also believed the wealthy had an obligation to use it to better society. Even Adam Smith said some things quite different from right-wing “free” market think tanks. This is unlike rich people today, who instead even though they have more money than they ever need, try to get out of paying their fair share and screw the rest of us.

Posted by: thom at February 16, 2007 2:48 AM
Comment #208736


Gates was solidly middle class. Sam Walton was too. So was Warren Buffet. Most Americans are middle class, so that is no surprise. It is hard to become rich. It is not hard to become not poor.

Posted by: Jack at February 18, 2007 5:38 PM
Post a comment