The ever widening gap between rich and poor

[Bignose]

I've always said I just want enough money so I don't have to worry about money. For me, it's not so much about the acquisition of stuff, it's about the freedom from stress that comes from knowing that you aren't going hungry if the car breaks down.

Yeah, and I think that this reflected in the number that comes out every so often about how another $10k when making $20k or $40k is huge, and leads to much more happiness (or lack of stress, or other similar emotions), but another $10k when making $80k just isn't that much. That's what leads to the numbers like "after making $80k, you don't get any happier with each raise." In a great deal of this country, if you are making $80k, you won't be hungry if the car breaks down.

 

... apart from the people that do it to themselves. I see far too many people who buy too much home, buy a new car every few years, and they wonder why -- even when making $80k -- they are living paycheck to paycheck.

 

So, I go back to my original thesis, that these people need to learn it isn't stuff that makes them happy. They would be equally happy in a home with 25% less sq. footage. They would be equally happy with a car that is more than 3 years old. That they would probably be happier knowing that they were putting 10% of their salary into retirement savings so that they won't have to worry about paying for their golden years. They would be happier spending time with friends and family rather than buying another 72" 4k TV.

[iNow]

I agree with the above that wealth itself doesn't tend to make people happy so much as it reduces much of the stress that comes from not having wealth. That fear of a broken down car or unexpected illness/medical bills that are going to devastate your family is a very real thing and very toxic to our general well-being.

 

That said, studies do consistently show that one of the best ways for us to be happy is to nurture new experiences. Travel and tourism and going to theme parks and theater etc. make us much happier than the acquisition of material possessions like cars and tvs, but these things are next to impossible to achieve without some bit of wealth or financial cushion. In this sense, wealth very much can aid our ability to be happy by facilitating the enjoyment of new experiences that will drive positive memories for years/decades to come. That trip to Europe or the Great Wall or to the Outback or the beach every summer... That is a type of happiness that can, in fact, be bought with wealth, and no matter how good you are at budgeting that ability is relatively absent when your income is too low... and I believe it follows that more income would allow for more such experiences (3 trips per year instead of 1 trip every 3 years, for example).

 

Fun fact: I read an article a week or two ago that the happiness we experience peaks immediately BEFORE the trip is taken... That week leading up to your visit to Jamaica or whatever... The anticipation we feel and the ability to imagine ourselves enjoying the experience to come makes us even happier than actually being there.

[dimreepr]

 

The only thing I would add is that fair competition is rewarding and has social benefits. A hippy may be happy but a hippy could be defined as someone in need of a bar of soap and a job application. The lazy irresponsible self indulged individual is as unethical as the inside trader. Values and contentment do not make us moral.

 

 

Contentment has almost nothing to do with money and everything to do with a lack of anger and resentment; the lack of these destructive emotions means the need to break moral convention is diminished to effectively zero; that may not make us moral but it does mean the reason for an immoral act is unnecessary and pointless.

 

Of course money has its part to play, given the world in which we find ourselves, but it’s by no means essential to live; food is, water is and, depending on location, shelter is but money isn’t and has nothing to do with job status or cleanliness.

 

A lazy irresponsible self indulged individual isn’t likely to be content or happy and may well be unethical, what’s your point?

[Phi for All]

Yeah, and I think that this reflected in the number that comes out every so often about how another $10k when making $20k or $40k is huge, and leads to much more happiness (or lack of stress, or other similar emotions), but another $10k when making $80k just isn't that much. That's what leads to the numbers like "after making $80k, you don't get any happier with each raise." In a great deal of this country, if you are making $80k, you won't be hungry if the car breaks down.

 

... apart from the people that do it to themselves. I see far too many people who buy too much home, buy a new car every few years, and they wonder why -- even when making $80k -- they are living paycheck to paycheck.

 

So, I go back to my original thesis, that these people need to learn it isn't stuff that makes them happy. They would be equally happy in a home with 25% less sq. footage. They would be equally happy with a car that is more than 3 years old. That they would probably be happier knowing that they were putting 10% of their salary into retirement savings so that they won't have to worry about paying for their golden years. They would be happier spending time with friends and family rather than buying another 72" 4k TV.

 

Living within your means is simple, but it isn't easy. We're barraged constantly with the image of what a person with our income should dress like, what kind of car they should drive, neighborhood they should live in. It takes experience to know how little that sort of thing matters. Often, by the time you figure it out, you're already in debt you can't handle.

 

Most people I know who get a $10K jump in salary feel the need to do something, starting with celebrating. And then it's really easy to justify buying a new car, because you've got an extra couple hundred dollars a week coming in. And this and that, better quality products after buying generic for so long, and suddenly you've spent that extra money several times over. If you'd just done nothing different, pretty soon you'd stop worrying about money as much.

 

Every year at Christmas, my family tries to figure out how we can stop giving each other little bits of junk we wrap up just to unwrap. This year, we just accepted that unwrapping gifts is fun. We had a very few major gifts, mostly museum memberships and tickets to upcoming events, and all the stuff we wrapped were items we normally buy anyway. It's not the actual gift, it's not the value, it was just unwrapping it from under the tree and sharing the love that's fun.

 

The lazy irresponsible self indulged individual is as unethical as the inside trader.

 

I can't help but feel that this attitude lies at the heart of why people (at least in the US) aren't more cooperative, which I feel increases this wealth inequality. We know intellectually that using our pooled resources does wonderful things like building roads and airports. We come up with fantastic social programs that help people in need and attempt to take care of the most needy among us.

 

Then, inevitably, a group comes along that doesn't like the smell of someone, and declares they aren't worthy of public support. They get labeled lazy and irresponsible, and this group starts objecting to giving them anything from the resource pool. The group starts defining what it is to be a citizen of the US so they can exclude people they don't like. That's when we stop helping people just because they're people, and start justifying why we shouldn't have to pay so much in taxes.

 

Fun fact: I read an article a week or two ago that the happiness we experience peaks immediately BEFORE the trip is taken... That week leading up to your visit to Jamaica or whatever... The anticipation we feel and the ability to imagine ourselves enjoying the experience to come makes us even happier than actually being there.

 

I can relate to that. Many years ago, I used to buy historical replica swords to collect. After a while, I realized I got more pleasure from pouring over the catalog, figuring out what I wanted to get next, anticipating the arrival, etc. When the blade actually got here, I admired it for a while... and then went back to the catalog, to look for my next treasure. I stopped collecting swords when I realized this. I wasn't a sword collector, I was a shopper.

[Wolfhnd]

"Contentment has almost nothing to do with money"

 

Unless you are starving, sick, lonely and bored.

 

"I can't help but feel that this attitude lies at the heart of why people (at least in the US) aren't more cooperative, which I feel increases this wealth inequality."

 

There is nothing cooperative about someone who isn't engaged in the economic welfare of their society. It is pure escapism to believe that goods and services should be distributed equally and it's inherently unfair. Wealth inequality is not equivalent to income disparity, everyone should be rewarded according to their contribution unless there are extenuating circumstances. There is an apparent disconnect with reality in people that fail to recognize that someone has worked hard to provide them with food, shelter, transportation and health care. Many of the people that provide these services are underpaid resulting in income disparity. There is no disparity for people who simply don't work because they don't feel like doing so.

 

It's also delusional to not see the part that ordinary people play in the unethical practice that permeate society. During the housing crisis the market speculators took advantage of the ordinary peoples greed in wanting houses they could not afford and were purchasing as a speculative hedge of their own. Ethical standards have to be universal if cooperation is going to be the hallmark of society.

[iNow]

It's also delusional to not see the part that ordinary people play in the unethical practice that permeate society. During the housing crisis the market speculators took advantage of the ordinary peoples greed in wanting houses they could not afford and were purchasing as a speculative hedge of their own.

You need to update this talking point. It's inaccurate in the extreme: http://www.vox.com/2015/1/26/7897035/poor-financial-crisis-mortgage

[Phi for All]

There is nothing cooperative about someone who isn't engaged in the economic welfare of their society. It is pure escapism to believe that goods and services should be distributed equally and it's inherently unfair. Wealth inequality is not equivalent to income disparity, everyone should be rewarded according to their contribution unless there are extenuating circumstances. There is an apparent disconnect with reality in people that fail to recognize that someone has worked hard to provide them with food, shelter, transportation and health care. Many of the people that provide these services are underpaid resulting in income disparity. There is no disparity for people who simply don't work because they don't feel like doing so.

 

The disconnect with reality is in your tired, well-refuted arguments against welfare and social programs. Are you still buying into Reagan's image of the black Welfare Queen? Recent studies have shown that 93% of the fraud committed in the welfare programs is committed by the corporate vendors who are awarded federal contracts. It's pure escapism to believe it's the recipients who're responsible.

 

Many Americans have bought into the talking-head drivel about there being so many people who don't feel like working. Same goes for the myth of the welfare moms with 8 or 10 kids so they can get more money (average in the system is 2.1 children, slightly higher than the societal norm). Ditto for welfare encouraging dependence, since studies have also shown that children of welfare recipients, while more likely to go on welfare, only do so about 20% of the time. That's four kids out of five that were enabled by the helping hand the People to escape that system.

 

http://www.unm.edu/~coughlin/links/Publications/Welfare_Myths_and_Stereotypes.pdf

 

I think it's just easier for some people to imagine long lines of lazy people draining the hard-earned money from their wealthy pockets. It's a fantasy that might let them keep more of their money. I'll try to dig up the poll I read where conservatives were asked some questions about taxes. Almost every single one agreed that more funding needed to go into fighting poverty, almost the same number that agreed welfare was a bad thing.

[Wolfhnd]

Reagan was an idiot probably senile during office and the neocons are fascist. The economist that almost destroyed our economy were insane randroids. Nothing you suggested was my position actually reflects it but does reflect a knee jerk liberal bias. There is little evidence that either the conservatives or liberals in this country have any idea what they are talking about.

 

You also missed the point entirely in so far as morality is not a tiered system where those at the top have more obligations than those at the bottom. The influence on ethical behavior works in both directions.

 

Compromising your beliefs is the hallmark of a cooperative, civilized, democratic society not hypocrisy. Thus the reference to the juvenile philosophies of the hippies.

[swansont]

"Contentment has almost nothing to do with money"

 

Unless you are starving, sick, lonely and bored.

 

 

Starvation and illness are not examples of discontent, they are starvation and illness, respectively. Loneliness and boredom don't necessarily require money to combat.

 

There is nothing cooperative about someone who isn't engaged in the economic welfare of their society. It is pure escapism to believe that goods and services should be distributed equally and it's inherently unfair.

 

Who are the people pushing for equal distribution?

[Wolfhnd]

You need to update this talking point. It's inaccurate in the extreme: http://www.vox.com/2015/1/26/7897035/poor-financial-crisis-mortgage

 

 

The article you refer to makes my point clearly as there are no innocents in regards to greed. Of course there are concerns that the housing crisis will lead to discrimination against the poor but that is why we elect people to deal with these issues. What is not clear to me is that the immorality of the underclasses especially the middle class do not aid and abet the immorality of the rich. I pointed out that it was the ordinary middle class people that were investing in property for irrational profits with full knowledge is was a pyramid scheme. The poor had no idea what was going on and I would say could have carried less until it effected them.

 

Starvation and illness are not examples of discontent, they are starvation and illness, respectively. Loneliness and boredom don't necessarily require money to combat.

 

Who are the people pushing for equal distribution?

 

There is a fundamental paradox in so far as the environmental damage to the planet is driven not by the consumption of the rich but by the multitudes of ordinary and poor people. The rich consume comparatively little in proportion to income. Which I think is illustrated by the fact that income is grossly exceeding consumption and can be correlated to income disparity. The point I was trying to make is that contentment is abstract and unlikely to be directly tied to consumption. The need to uncouple consumption from contentment is not abstract and a worthy goal. That said meeting even the basic consumption required for contentment is unlikely with the current population trends. For the vast majority of people on this planet their problem is not contentment.

 

 

"Who are the people pushing for equal distribution?" My response was in reference to this term "wealth inequality"?

[swansont]

There is a fundamental paradox in so far as the environmental damage to the planet is driven not by the consumption of the rich but by the multitudes of ordinary and poor people. The rich consume comparatively little in proportion to income. Which I think is illustrated by the fact that income is grossly exceeding consumption and can be correlated to income disparity. The point I was trying to make is that contentment is abstract and unlikely to be directly tied to consumption. The need to uncouple consumption from contentment is not abstract and a worthy goal. That said meeting even the basic consumption required for contentment is unlikely with the current population trends. For the vast majority of people on this planet their problem is not contentment.

 

 

"Who are the people pushing for equal distribution?" My response was in reference to this term "wealth inequality"?

 

 

Um, OK. If you say so. Hard to glean that from what you said previously, though.

[Wolfhnd]

 

 

Um, OK. If you say so. Hard to glean that from what you said previously, though.

I admit that I have been conducting myself as if this was a casual conversation. The complexity of the issues involved would require that we break each point down into pages of discourse. I have a tendency to ramble anyway so my failed attempt at concisement is pretty standard for me and I apologize for any stupid mistakes I may have made.

Edited January 28, 2015 by Wolfhnd

[cladking]

 

 

There is a fundamental paradox in so far as the environmental damage to the planet is driven not by the consumption of the rich but by the multitudes of ordinary and poor people. The rich consume comparatively little in proportion to income. Which I think is illustrated by the fact that income is grossly exceeding consumption and can be correlated to income disparity.

 

 

 

I couldn't disagree more.

 

Not only do I believe "enviromental damage" is typically grossly overstated but the conditions which cause it are set up by the wealthy in order to grow wealthier. Gasahol for instance is a net waster of energy but there is money involved that goes to the few at the expence of the many because government has tipped the balance. In the 1940's an illegal consortium of companies bought up street car companies and shut them down to sell less efficient cars. Today companies are racing to the bottom to provide the poorest quality at the highest possible price so the owners can grow rich. Without government interference the companies would go bankrupt. When they go bankrupt anyway the bosses divide up the spoils and reward themselves with million dollar bonuses. Food is adulterated with the addition ofd water and chemicals to make it stay in as the consumer pays and the economy is less efficient.

 

No! We waste far more than we use because we have an economy based on waste and engineered by big business which controls big government. In toto rich people "consume" five or ten times what poor people and the middle combined consumes. We reward rich people for destruction of resources and companies so they destroy. High taxes on the wealthy used to prevent this but now they use their ill gotten gains to buy ever more government which is employed to create ever more waste.

 

There is no hyperbole here. ...Perhaps a little bit of flambouyant language but I'll defend any statement.

 

If you want things to return to some semblance of normality high taxes on the very wealthy (income over 5,000,000 or bonuses over 1,000,000) are necessary because greed runs wild otherwise. The harder part is that we'll need to reinstitute the concept of "responsibility". This idea was mortally wounded early in the last century. Now we are led by the incompetent and the greedy in a corrupt system founded on waste.

[Wolfhnd]

"if you want things to return to some semblance of normality high taxes on the very wealthy (income over 5,000,000 or bonuses over 1,000,000) are necessary because greed runs wild otherwise."

 

The French had a solution it was called the guillotine.

 

A lot of what you say makes sense in so far as democracy is made impossible if the rich are not subject to the will of the majority in some way. As I said the neocons are fascist and what they promote as free trade is actually just making the distinction between corporations and government irrelevant. What once was the privilege by noble birth to be above common law is now the privilege by wealth to ignore traditional ethics. The problem is made worse by the fact that a huge percentage of the worlds "wealth" is no longer controllable by any government because it is represented by private derivatives. The money changers have got to go because the temple is definitely defiled.

[cladking]

"if you want things to return to some semblance of normality high taxes on the very wealthy (income over 5,000,000 or bonuses over 1,000,000) are necessary because greed runs wild otherwise."

 

The French had a solution it was called the guillotine.

 

A lot of what you say makes sense in so far as democracy is made impossible if the rich are not subject to the will of the majority in some way. As I said the neocons are fascist and what they promote as free trade is actually just making the distinction between corporations and government irrelevant. What once was the privilege by noble birth to be above common law is now the privilege by wealth to ignore traditional ethics. The problem is made worse by the fact that a huge percentage of the worlds "wealth" is no longer controllable by any government because it is represented by private derivatives. The money changers have got to go because the temple is definitely defiled.

 

 

I don't disagree but I don't think it's a political issue. The parties are two sides of the same coin and a duck needs two wings to fly. The entire government is in bed with big business.

[Wolfhnd]

 

 

I don't disagree but I don't think it's a political issue. The parties are two sides of the same coin and a duck needs two wings to fly. The entire government is in bed with big business.

 

The very description of a dysfunctional democracy. I don't let the general population off the hook however because democracy is a painful series of compromises and sacrifices that most people would prefer not to engage in.

[cladking]

 

The very description of a dysfunctional democracy. I don't let the general population off the hook however because democracy is a painful series of compromises and sacrifices that most people would prefer not to engage in.

 

I think it all goes back to the lack of responsibility resulting from a belief in a "sub conscious" mind. If peoples' ids are ruling their ever action then we can't hold them personally responsible and we can't punish only their ids or superegos. It's the lack of responsibilty that destroyed education and then the media and finally government but at the root is "we the people". One of the most extreme examples was the senator who accidently killed an aid while drunk and fleeing police and then covered up the crime by swimming to the mainland to establish an alibi. Still he was reelected for decades and was never charged with a crime. The mayor of New Orleans sat by as his city flooded and was reelected. In one race not too long back in the same state the voters had a choice between a thief and a bigot. The Chicago mayor allowed his city to flood and then allowed the engineer who tried to stop it to be fired.

 

No matter how badly things go and how little approval Congress gets they are all reelected over and over. We're living in a time of the greatest erosion of quality and efficienbcy in human history and those who are in charge of running products into the ground are taking an ever increasiong share of alkl the wealth for themselves. They no longer compete to produce a better mousetrap but to make it ever cheaper and less effective so you need to buy dozens where one once sufficed. Then they market the mousetrap in packaging that can't be opened without implements of mass destruction (OK, just a little hyperbole). For this we may far more, create tons of garbage, and watch the rich take the profits from the workers who are forced to build the mousetraps according to the specs they've laid out.

 

I actually have to make some of my own things now days just to keep having to run back and forth to the stores. Manufactuyrers are allowed by their buddies in government to call pressed cardboard "genuine leather" so belts break in the first use. They are allowed to omit the fact that they pump food full of chemicals and water so it costs far more and is more expensive to handle from the "food" label. The whole time a greater and greater percentage of natural and human resources are being tossed on the ash heap.

 

Of course it's all our fault. No one demands quality in anything. We accept what we are offered and don't weant tpo stand in line to rertiurn it. We "vote our pocketbooks" because the quisling media say this is in our own best interest. We hold Congress in very low regard but keep electing our own congress critters because they bring home the bacon. We're willing to trade education for political correctness but never notice that it's the poor blacks who are being hurt the most by the failure of the system. Rather than repairing the fundamental problems goivernment now is taking money from the schools that are less damaged and throwing it into the exact same programs that destroyed these schools in the first place. But those who operate this system and profit from it are making more money than ever. Even the lobbyists are millionaires now days. If people complain about the system the leaders blame the products; the children. Rather than holding the administraators responsible they puyt pressure on the kids who are under much more stress than in the past as evidenced by rising suicide rates. I find it remarkable that more than the tiniest percentage of children would ever kill themselves. Kids can adapt to almost anything. This is about akin to a company blaming their mousetraps for the poor quality and punishing them.

 

The draconian cuts in taxes on wealthy people in the '80's was an interesting experiment but it failed utterly. Now we may need draconian changes to return us to a state before the shark was jumped. It might not even be possible to remove business' tentacles from government without crippling one or the other. But if we don't then our children will live in a world where the few have everything and the many are beholden to them for everything. The first step is to get the taxes on the very wealthy back where they must belong. This should be done in stages to prevent disruption and allow planning. It should not affect hard working doctors and other professional making a million or two a year. This should be targeted as well as possible at those who have benefited from government interference with free markets. There need to be draconian taxes on bonuses especially in the financial industry. We need to get back the CEO's who know how to run business rather than who to call for favors. Of course some hard working people will be hit with high taxes but I guess this is just the price that has to be paid for the human propensity for greed. Even after very high taxes they'll have more left than everyone else. Of course so long as people won't hold government and manufacturers responsible there's not going to be any going back. So long as we tolerate poor quality, flooded food and cities, and lack of opportunity because we get lots of bacon there can be no change.

[Wolfhnd]

cladking your right it can't be undone at once. Small steps are needed as part of the solution to almost every problem we have discussed.

 

We also need to fix the absurdly broken stock market, It is a hang over from the 18th century when only traders traded. You didn't need to worry about insider trading back then because everyone was an insider. Project that into the 21st century and there is virtually no connection between the people trading and the people investing and that leads to moral hazards. Insider trading is only a problem because we have allowed finances to lose their transparency. I understand their is a need to protect some product secrets but surely there are better ways to prevent predatory investor from disrupting industry than hiding everything behind closed doors. Their is also a difference between speculating on the future of a company than speculation on that companies stock value. Once stock no longer represents a long term investment the value of the stock market to society is questionable and it become something like a pyramid scheme or casino.

[cladking]

The stock market is a much more complicated problem.

 

Fixing it will be harder because the notional value of derivatives greatly exceeds the productive capacity of the entire planet. The financial industry has gamed the system and rigged the means by which it is operated.

[Wolfhnd]

The stock market is a much more complicated problem.

 

Fixing it will be harder because the notional value of derivatives greatly exceeds the productive capacity of the entire planet. The financial industry has gamed the system and rigged the means by which it is operated.

 

Absolutely it is self insulating from regulation because it is the new economy devoid of any connection to reality and can't be fixed without wreaking the real economy it pseudo represents.

 

Small steps?

[cladking]

 

 

Small steps?

 

I guess.

 

Sometimes I wonder if draconian action might be required for some things. The banking industry is the most serious case. A "bank hoiliday" so new operators can be found before allowing the return of most and the imprisonment for some might be safest.

[Wolfhnd]

 

I guess.

 

Sometimes I wonder if draconian action might be required for some things. The banking industry is the most serious case. A "bank hoiliday" so new operators can be found before allowing the return of most and the imprisonment for some might be safest.

 

Intent is an important consideration in law. Do you think that they are aware of any wrong doing they may have committed or is it just so embedded in the culture that they may actually think they are acting ethically?

[cladking]

 

Intent is an important consideration in law. Do you think that they are aware of any wrong doing they may have committed or is it just so embedded in the culture that they may actually think they are acting ethically?

 

I prefer to stay away from speculation in this area but I believe it needs to be investigated. Some crimes seem rather apparent but the regulators are ignoring them until there's a public outcry such as with MF Global. In most cases it's difficult to identify the individuals being harmed or it's difficult to show intent. Packaging up toxic waste and selling it as securities might not break any laws but it is surely amoral and screams for legislation. Paying .1% on money and loaning it at 25% used to get you tossed in prison.

 

Now days things just seem to be different. Even the LME defaulted on nickel but everyone just shrugged it off. Collusion, manipulation, monopolistic practices all seem the rage. But the most serious problem is that now days it's possible to get very wealthy by destroying wealth. The only way to create wealth is through mutually beneficial agreements and before governmenmt interference it was very difficult to generate cash through destruction of wealth. Even when you were successful there was a good chance that some laws were bent but, more importantly, the ill gotten gains were taxed at 91% which served to reign in a lot of avarice. But now the little guy pays the taxes and it's easy to get rich going bankrupt. You just destroy a company someone else built and pocket everything that isn't nailed down.

[Wolfhnd]

"before government interference it was very difficult to generate cash through destruction of wealth."

 

Can you clarify this statement?

[Wolfhnd]

Here are a couple of ideas I have and I'm sure they have lots of holes but you have to start somewhere.

 

 

Elimination of monetary speculation.

The stock market needs to return to the original intent that industry needs the means to raise capital other than by borrowing from lending institution. I recommend that speculation be removed as much as possible by placing restrictions on how soon after a stock is purchased that it can be sold.

I also recommend that money not be treated as a commodity and end all speculation on currency.

This obviously will require international cooperation and will have to be negotiated.


The creation of derivatives that can be used as currency.

I recommend that derivatives must be converted to currency to be exchanged tying them to monetary policy.