Income Inequality.

[mikkel_the_dane]

So explain why this is bad.

Well, I won't, because that is not why I posted it.
You claimed that when rich people get more income, poor people get more income, because the bigger income rich people have the bigger income poor people have. That graph doesn't show that.

I'm not saying actual inequality is a good thing, it just seems in the US when income inequality is at it's greatest, that is when the poor are better off; and when the gap between the rich and poor lessens, that is when the poor are worse off. I don't care about the rich, I care about the poor and if the poor are better off when the income gap widens, I think that is good regardless of what the rich have.

 

[metis]

I'm not talking about money, I'm talking about wealth. Wealth is constantly being created and lost minute by minute; this happens on a constant basis.

Obviously, they both interrelate.

Imagine a pie chart whereas at any given point in time one small group has a huge portion of the pie to themselves, thus what's left must somehow be split amongst the rest.

IOW, basic Economics 101.

 

[Stevicus]

Assuming everything you said is true, what does that have to do with the subject at hand?

You asked why income inequality was bad. It's bad for the economy.

 

[Audie]

You are very clearly biased. So that doesn't surprise me.

Pot/kettle on steroids

Plus, every time you do that the economy improves overall.

What many people are forgetting to note is the real question should be about disposable income. The poor have zero disposable income as they struggle to obtain a simple living income. The rich already have a living income, and then have scads of money for their disposable income.
When hard times arrive, the poor suffered terribly as they choose between food or medicine or housing, While the rich lose some percentage of their disposable income, which, in anyone’s imagination, still leaves from extremely comfortably rich. ** BooHooHoo **
Also, their disposable income in good times or bad is simply hoarded away, and doing nothing for the general economy or state of the nation (Other than possibly driving housing prices up). Every time the poor get some kind of “bonus” to their wages the nation improves everywhere, because the poor go out and spend every last bit that they can get, in order to live.

And while we’re at it, the rich in no way ”create“ jobs or money.
Everyone on the right seems to have forgotten that it’s all about ‘supply and demand’. Somewhere in the 1980s (the decade of greed) they created the Lewis Powell/Ronald Reagan delusion of ”Supply Side Economics”. That of course, is a fool’s errand and leads to constant bubbles bursting, along with massive income inequality as middle-class investors lose everything they had been saving for, while the rich get a minor tap on the wrist. Not to mention the Reagan, Bush Jr., and Trump tax cuts which UTTERLY FAVORED the rich alone.
Reality is as follows……If the poor don’t have money, there can be no demand. It is demand that allows an inventor to create something to solve that demand of the many. This allows investors and salesman and CEO types to create a business which produces a lot of what the inventor created to meet the demand. It is the general populous, who create wealth for everyone, because when they have a demand , some lucky CEO and his hirelings can at last create a business to meet that demand. When the poor have enough to buy a lot of that thing, then the lucky CEO can not only make a living wage for himself, but can acquire a huge disposable income solely for himself, which he then uselessly hoards away.

" uselessly hoard" is Uncle Scrooge comic
level of comprehension. Like a bin with 3.5 cubic
acres of cash.
People don't get rich with useless assets,
they don't get rich by being so brainless as you think.

The weird notion that money can't be used
to create jobs isn't even up to that level of
evoni ic illiteracy.
I wonder how you think wealth is created.

I keep a cash reserve* that divided among everyone in
Hong Kong would give each person in HK less than
0.01 USD.
I take the cash flow I need for expenses,
the rest goes back into growth.


* in the HKSB. Where it also doesn't just
sit there but I loaned out to work for someone else.

 

[metis]

You asked why income equality was bad. It's bad for the economy.

It's also bad for stability as we tend to compare our relative wealth with others that we associate with and/or aspire to. Diana Ross said that as a youngster she didn't realize her family was poor because the majority of the people around her also were relatively poor.

 

[Audie]

You asked why income equality was bad. It's bad for the economy.

So if everybody has the same amount of money
how can anyone start or run a business?

 

[Audie]

Well...in the interests of fairness, that doesn't happen where I am either.
I'm judged pretty harshly if staff turnover increases. In hard economic terms, hiring and training new people is very costly, and it's more economic to pay fair wages.

I do get a bonus, but I'm not sure what you'd consider 'insane'...lol

Any bonus at all is insane.

 

[Audie]

Assuming everything you said is true, what does that have to do with the subject at hand?

Mpst of it is just the vice of nostalgia in
action. The sentimental belief that everything used to ne better. Typical of fundamentalists of divers sort.

 

[wellwisher]

You said

if someone is a brain surgeon - that's something that most people wouldn't be able to do, so they earn a higher salary for that. They provide a valued service to society, so I don't think too many people would begrudge a brain surgeon a high salary. Or if someone is a scientist or inventor, if they create something truly momentous and beneficial, then by all means, let them have their reward. I don't think very many people would object to that.

Bill Gates, Elon Musk, and Jeff Bezos have all invented something truly momentous and beneficial; so according to what you said, by all means let them have their reward, and nobody should object to that!
Lots of comments; I will try to get to the rest later

The problem is the Political Left assumes anyone can do brain surgery, so we need to make that well playing job, equitable by having people of all different skin colors, genders and sex and shoe sizes, none of which have nothing to do with brain surgery, become brain surgeons in title. The people who have unique skill and talent are worth their wage. If we do it the Lefty way, most will be overpaid for their lack of skill. The Lefty projection of the rich is based on their shallow criteria. It does not recognize wage as a function of unique or special talent but rather it is all about politics, like they do.

One of the main problems of poverty is the Government. One can always find cases where people rise out of poverty and become successful. The question becomes why doesn't this occur more often? It has to do with the political Left making poverty too comfortable, while making the first step out, into the lower middle class, too costly. You can lose easy money, if you leave the plantation. Ambition has to go to the black market, which is tax free and not subject to IRS scrutiny; double dip. The black market is not stable employment for ambition, so nothing changes.

The Left does not benefit by self reliance forming in poor people and then poor people rising into the middle class. They need you to become and remain dependent, so they can control your vote with quid pro quo. Once people become middle class and an active part of the American dream, more options and needs open up. These self supplied options and needs become wild cards that cannot be played if you are made to stay dependent. Middle class can demand of their leaders while poor can only beg.

This is why the Left never says, get out and we will teach you to work. Rather they say, stay where you are, we will steal from the rich and give it to you, but only if you stay put. This way we can run this quid pro quo scam, forever. The war against poverty is over 50 years old and the rate has not changed. The total number has gone up, since the population has grown. They are keeping the poor, poor, since there are $trillions to skim, forever.

I remember seeing the total money value given to a young poor mother and her child in a well off northern Liberal State. This included housing, living expenses, medical benefits, day care, food, etc. It added up to about $45K. If they just gave her the cash up front; monthly checks, she would become lower middle class and leave poverty.

But it is done in a way where this lower middle class value is only offered if you stay dependently poor. There are too many middlemen making money off that woman, including government bureaucrats and workers. She is part of a larger government business model. The rate of poverty never changes since that business model needs bodies. No government program invents itself out of a job. Cost increases and overruns are the way of the government; deficits by growing the supply of poor.

You can feed a person a fish each day, so they can live, or you can teach then to fish so they can feed themselves forever. Big Government business models want you dependent since the fish industries do not want the competition and need a dependent and dependable demand.

 

[PureX]

Thats certainly one lens to look at it through. It's not what I meant though.
Take a hypothetical community of 50. Imagine it under whatever political system you prefer, and whatever form of economic controls you prefer.

You can probably imagine it functioning pretty well. Personal and familial relationships do a lot of heavy lifting, regardless of the formal structures.

Bump it to 500, and imagine it.
5,000
50,000
500,000
5 million

I'm not defending capitalism, neither am I attacking it in this post. I'm suggesting that one thing commonly not discussed in ideologically charged discussions is scale, and the impact of large, less connected populations.

Capitalism without control is problematic. I favour guardrails. And because of our larger, less connected communities, those guardrails need to be more active, and formal, rather than informal and societal, as might have worked in the past.

I have mentioned this a few times on various threads. The size of a business makes a huge difference in how they treat everyone involved. When the capital investors never have to look the customers and employees in the eye, or witness the hardship their greedy decisions cause them, it becomes very easy for them hide in their gated communities and on their exclusive golf courses to 'blame the victims' and tell themselves and each other that capitalism is wonderfully rewarding the best and brightest, and punishing the lazy and stupid. And who among them will contradict them? Not a one.

A mom and pop size business, however, has to look their customers and employees in eye, and see the hardship their greed will cause if they engage in it. And their own community will know how selfish and self-serving they are. And how undeserving of their ill-gotten wealth.

Bigger is NOT better when it comes to trading goods and services because they bigger they are, the less they have to care about any individual.

 

[Audie]

I have mentioned this a few times on various threads. The size of a business makes a huge difference in how they treat everyone involved. When the capital investors never have to look the customers and employees in the eye, or witness the hardship their greedy decisions cause them, it becomes very easy for them hide in their gated communities and on their exclusive golf courses to 'blame the victims' and tell themselves and each other that capitalism is wonderfully rewarding the best and brightest, and punishing the lazy and stupid. And who among them will contradict them? Not a one.

A mom and pop size business, however, has to look their customers and employees in eye, and see the hardship their greed will cause if they engage in it. And their own community will know how selfish and self-serving they are. And how undeserving of their ill-gotten wealth.

Bigger is NOT better when it comes to trading goods and services because they bigger they are, the less they have to care about any individual.

Next: mom n pop aircraft mfg,
oil exploration, construction
companies, and railroads.

 

[PureX]

So explain why this is bad.

It's bad because human lives matter. And now days money is life. Money buys health, and security, and opportunity. Money gives people hope and respect. Money buys everything we humans need to live, and live well. So that not having it, or not having enough of it, means suffering, and loss. And not just of material things. It means the loss of hope and purpose and self-respect. Which is why we are seeing addiction spreading so rapidly among the poor.

And what are we gaining by allowing a few very greedy people to amass huge piles of wealth while so many others are siffering from the lack of it? People that are so greeedy that even though they have many, many times more than they will ever need to live a happy and comfortable life, they still want to amass even more. In fact, no matter how much they gain, it will never stop them from wanting to gain even more. So you tell me, what does humanity gain from feeding these people's bottomless greed? Compared to what we lose by denying half the human population on Earth a chance to fulfill their God-given potential?

 

[lewisnotmiller]

Any bonus at all is insane.

How so?

 

[lewisnotmiller]

I have mentioned this a few times on various threads. The size of a business makes a huge difference in how they treat everyone involved. When the capital investors never have to look the customers and employees in the eye, or witness the hardship their greedy decisions cause them, it becomes very easy for them hide in their gated communities and on their exclusive golf courses to 'blame the victims' and tell themselves and each other that capitalism is wonderfully rewarding the best and brightest, and punishing the lazy and stupid. And who among them will contradict them? Not a one.

A mom and pop size business, however, has to look their customers and employees in eye, and see the hardship their greed will cause if they engage in it. And their own community will know how selfish and self-serving they are. And how undeserving of their ill-gotten wealth.

Bigger is NOT better when it comes to trading goods and services because they bigger they are, the less they have to care about any individual.

I agree. It's almost unavoidable that a bigger business is more reduced in terms of it's measurables, to efficiency and profit. Its more beholden to ownership and stakeholders that might not even know what the business does, or that they have ownership stakes in it (indirectly, via equity funds, etc).

 

[YmirGF]

OK, I'll bite. So what is the solution to income inequality? Steal from the rich and give to the poor? More government rules and regulations?
A $50.00 minimum wage? But... before you answer, I would prefer you have some basic financial understanding, and not just piddling talking points I'm already very bored hearing.

 

[Alien826]

You forgot the shareholders.
They contributed in the beginning by providing the initial resources and now they only skim the profit - forever, without any further contribution.

Yes, they should be included. But I wouldn't say they make no further contribution. Seen as a simple loan, they forego the use of their money and receive interest payments in compensation, which I see as OK. When they actually own part of the company through shares, it's different. The value of their investment goes up (or down of course) with no further input from them. If I had a time machine and went back to invest a modest sum in Microsoft when it was just starting, I could be a multi-millionaire today, with almost no effort expended.

UBI is a pretty popular concept. Even unteachable capitalists like @Revoltingest favor it. Some countries are seriously thinking about implementing it, some have have run initial tests. We may see it in our lifetime.
And it will become necessary when the third industrial revolution hits us. This time there seem few jobs in sight those who lose their jobs to AI can take.

Yes. I won't expand on it here, but its power goes far beyond simply giving people basic financial security.

 

[PureX]

I agree. It's almost unavoidable that a bigger business is more reduced in terms of it's measurables, to efficiency and profit. Its more beholden to ownership and stakeholders that might not even know what the business does, or that they have ownership stakes in it (indirectly, via equity funds, etc).

Greed is made easy, and acceptable, in every corner of our commercial culture. And because "everyone does it", we do it, too. And so the poison spreads, and quality of life diminishes even for the rich. And no one seems to be able to see why it's happening even though the answer is everywhere, all aroud us, all the time.

I went to several big box stores to look for a window air conditioner for my work. First I looked up which kinds have the best consumer reputation for price and reliability so I would know what I'm looking for. And of course the web sites for these stores all showed that they sold these better brands, as well as the cheap chappy brands. But when I went to the actual locations, all they had on hand were piles and piles of the cheap crappy brands, and none of the higher quality brands. And the reason was quite obvious: because the cheap low quality brands start with low wholesale prices that the stores could then mark way up for a big profit and still sell them as a "deal". Whereas the high quality brands start with a higher price point that the store can't mark way up or the price would be too high and no one would buy them. Also, the quality machines will last 5 -7 years and the cheap machines will only last a couple. So the stores want to sell you those cheapies with the big mark up, and then sell another one to you again in a year or two, and again with the big mark up. Money, money, money!

It's all about the greed. The CEOs of those big box chain stores gave someone a nice bonus for thinking up this profit "strategy" even though it's designed to discourage the customers from buying the better machines and saving money in the long run. Screw the customers! And every time I go to these stores (they have driven all the independent mom-pop stores out of business) I see these same kinds of "profit strategies" intended to bilk the customers out of as much money as possible while giving them as little value as they can get away with. This is what passes for "good business" in a capitalist system: business strategies that are intended to frustrate and inconvenience people just to gain the maximum profit from every transaction with them. And as a result, everyone's life just gets a little more difficult and frustrating, day after day after day.

 

[EconGuy]

I've always considered it as practiced in the United States to be a good thing.

There are a few issues in answering this question to any level of satisfaction.

Most people are responding without knowing what you mean when you say good. I'm not trying to be pedantic, but I think we can agree that something as complex as wealth distribution in a society can have both good and bad effects simultaneously and it really depends on how one evaluates the question of good relative to goals that you might want to achieve.

For example, poor people can experience suffering as a result of their economic situation.

Now, depending on your worldview that is either good, bad, or neither. But that question is a moral question; that being, is it bad for poor people to suffer? Or said another way, is it good to prevent suffering? Of course this leads to a myriad of other possible questions, so we'll need to tease those out as we discuss.

The other possible way to look at this is, is income disparity "good" from an economic standpoint?

And lastly, what about a societal or political standpoint?

The answer to all these questions depend on how each person answers these questions.

So from my point of view:

Morally, suffering of the poor could be avoided without asking much from wealthier members of society and I would say it is good to avoid unnecessary and unwanted suffering when possible.

Economically, high disparities of income aren't conducive to a strong and prosperous economy, because....

Societally and politically, wealth disparity is usually corrosive.

But since good and bad are subjective, the answer to the question is, it really depends on what you think societal, political and moral goals should be. Either I will disagree on the goals that you believe society should pursue or we'll agree and the debate will be on how best to achieve the goals we agree on.

 

[Audie]

How so?

I omitted the lol, , and ****sarcasm****

 

[EconGuy]

Managers determine workers wages, and though they may make more money than the average worker, they aren’t usually rich.

Actually managers as a group are one of the highest paid groups of people, but I concede that income and wealth aren't the same. Nor does the title "manager" confer a high level of income necessarily.

Respectfully

EG