Class Struggles

[pclayton]

I think rioting is very unlikely. I think raising taxes on upper-income people is very likely. You gotta preference :lol:

 

Peter

Then you'll have investment bankers looting Tiffany's!

 

Better call the National Guard. ;)

[pbleighton]

"Then you'll have investment bankers looting Tiffany's!"

 

High concept, dude!

 

Peter

[Winstonm]

I'll reiterate my feelings. I don't think we have such a widepsread problem that rioting in the streets is imminent. This seems like rhetoric to me.

 

 

I congratulate you on your own personal rise, Phil. Although we are not at the point of rioting, statistical evidence backs up the claim that the divergence between what we might call rich $300,000+ per year incomes, and everyone else is growing wider. Obvioulsy, there are many causes, but some of the substantial problems this has caused for the U.S. as I see it is a diminishing middle class, 46 million uninsured, and a negative saving rate compounded by massive debt.

 

Our economy is 70% driven by consumption, yet we keep paying less and less while demanding the same consumption appetite, which has caused the sonsumer to use every debt trick available, from spending savings dry to MEWs to credit cards to sustain an unsustainable lifestyle - at some point in the future, something has to give.

 

Last time we were in this negative savings, high debt situation was 1928 - and 1929 didn't turn out to be such a good year.

 

And we may have recently seen the canary in the coalmine - M&T bank decided to hold their own Alt-A loans (not subprime) because the prices offered were not sufficient. If banks and mortgage companies start having problems selling their debt, this will cause a tightening of lending standards - tightening lending will eventually effect consumption - and then the wheels fall off.

[pclayton]

I congratulate you on your own personal rise, Phil.

 

Thanks Winston, but I have miles to go before I sleep :lol:

 

Although we are not at the point of rioting, statistical evidence backs up the claim that the divergence between what we might call rich $300,000+ per year incomes, and everyone else is growing wider.

 

I don't dispute this. What I dispute is the severity of the problem. What is considered an 'optimal' distribution of wealth?

 

Obvioulsy, there are many causes, but some of the substantial problems this has caused for the U.S

 

46 million uninsured

 

Insurance is a personal choice to transfer risk, although personally I think auto insurance should be mandatory to obtain vehicle registration. I would argue that a healthy person doesn't need health insurance if he is prudent if he chose to save an equivalent amount into investments. Please explain why this is a problem. You say that indigent people will be lining up at public hospitals to get help? I say turn them away if they cannot afford medical coverage. THIS will cause people to purchase at least catastrophic coverage. but if they know that an emergency room will treat them regardless of their insurance situation, they are disincentivized from purchasing health insurance.

 

Do you have disability insurance? I don't, and arguably I need it. I assume the risk of getting run over by an uninsured driver. Life insurance? Again, a personal choice and I hope folks don't read too much into uninsured 'lives'.

 

...and a negative saving rate compounded by massive debt.

 

Personal spending is a function of personal responsibility. Anyone can live beyond their means. However, the thread is about the discrepancy in wealth and income, not about materialism. The tightening of bankruptcy requirements hopefully will curtail come of this out of control spending. I don't think its government's place, but I wouldn't mind better disclosures on credit.

 

Last time we were in this negative savings, high debt situation was 1928 - and 1929 didn't turn out to be such a good year.

 

People tightened their belts and the fall off in demand caused a downward spiral of job layoffs. A liquidity crisis from under capitalized banks caused a financial crisis. Smoot-Hawley didn't help either.

 

And we may have recently seen the canary in the coalmine - M&T bank decided to hold their own Alt-A loans (not subprime) because the prices offered were not sufficient.  If banks and mortgage companies start having problems selling their debt, this will cause a tightening of lending standards - tightening lending will eventually effect consumption - and then the wheels fall off.

 

There was a time when banks didn't sell their paper. Alt-A loans are 'no-doc' loans; borrowers that have good credit but cannot (or want to) prove their income. They are non-conforming, and aren't resold in the normal secondary market. A bank actually holding its own paper will lessen the dollars for lending, but then the demand will increase for purchasing this paper, or purchasing derivatives and tranches of the loans. This hardly spells a death spiral.

 

And I'm still at a loss why you think this is connected to income disparity.

[mike777]

btw an emergency room must treat the poorest of the poor...In fact this is the main reason why the poorest of the poor have better health care than most of the world.

 

We all pay for this in higher hosp and ins costs.

 

Can we do better, sure, should we discuss it, sure.

 

Again I bet high tech will make alot of this stuff cheaper and cheaper for the poorest of the poor and widely available.

 

In other countries I bet the main issue will be politics and the government not a lack of science.

 

Off track side note

 

The Dutch are the tallest in the world at 6'1"'. Usa far shorter.

[helene_t]

Off track side note: The Dutch are the tallest in the world at 6'1"'.  Usa far shorter.

I once heard an American stand-up comedian explain this in a bar in Amsterdam: every time the Netherlands got flooded, the short people drowned. Survival of the tallest.

 

Here comes a rant about the whole "class" issue (which is something different from income disparity: a unimodal distribution can have larger variance than a bimodal one although for otherwise comparable statistics it tends not be the case):

 

People have an obsession with categories. While a rainbow is in fact a continuous spectrum of all colors, people describe it as divided into bands of distinct colors. Presumably just because our language lacks features like "572.3 nm light", "572.4 nm light" etc (to any desired level of accuracy): we only have a finite number of colors (violet/blue/turquise/...../red): presumably we could say that the color of a blood orange is 68.34% percent orange and 31.66% red, but we usually don't do that, we just approximate with either-or. This is just language, but I often get the impression that it reflects back on the way people perceive the World: people think that there really "are" bands in the rainbow. This often leads to completely meaningless questions: at what stage does the embryo acquire a "soul" (while the truth is that it becomes gradually "ensouled", presumably coming close to the assymtotics of maturity during childhood), at what stage in evolution did apes become humans (while truth is that they gradually became more and more human, each generation being indistinguishable from the previous, and any arbitrary threshold being crossed back and forth thousands of times).

 

Back to income distribution: another meaningless question is "how many people live in absolute poverty" (or: belong to the "lower class") while truth is that we are all more or less poor, on a continuous scale. The obsession with categories has damaging effects on government policies: in many countries, people with an income below some arbitrary threshold are entitled to free health insurance, cheap public transport or whatever. As soon as they come close to that threshold they loose the motivation for earning more, since the loss of said benefits would leave them worse off if they crossed the threshold.

 

The concept of "classes" may have been apt in societies with legal categories of citizens with strong social implication (apartheid, feudalism). But a modern capitalist society is not a class society. Income disparity could be high (theoretically it could be higher than in a feudalistic or apartheid society) but that doesn't make it a class society.

[mike777]

Speaking of rainbows

 

 

Hawkings....as a young ...young student....at Cambridge was asked one question ..Phd test......"talk about rainbows"

[Gerben42]

While a rainbow is in fact a continuous spectrum of all colors, people describe it as divided into bands of distinct colors.

 

The question is: Why 7 colors? Even numerology involved here!

 

Hawkings....as a young ...young student....at Cambridge was asked one question ..Phd test......"talk about rainbows"

 

I'm sure it wasn't the only question, but is an interesting one!

 

My Ph.D. exam was during the 2006 football world cup, in Germany, so I got a football physics question ;)

[mycroft]

(totally offtopic)

Yeah, Gerben, why do footballs curve so strongly?

 

Phil - it's isn't just downtown Calgary, it's all of Calgary. Real estate prices have jumped about 70% in the last two years. Rents frequently double at renewal time. You would have people lining up for an $8/hr job three years ago - the same job can't find applicants at $12/hr with benefits and $700-$1000 bonus for staying for three months.

 

Yep, the crane is the municipal bird again.

 

The problem specifically with downtown Calgary is that city hall has decreed that to avoid more congestion on the roads (which is on par with Toronto and Houston, but maybe not yet LA), no more parking is to be provided downtown. Use Transit. Which is good, at least most of the time, except that the trains are almost Japanese-packed, and the parking lots at the stations themselves are full to overflowing. And extra transit capacity isn't coming online for another two or three years.

 

So downtown parking rates are the highest in the country - monthly rates of $500, daily rates of $30 being common. And the traffic is still as bad. And with the infrastructure crunch of 10-5 years ago, a city of 1.1M has roadwork capable of handling 750K - never mind the "community" city planning method that has "20 000 people - 2 exits" all over the place.

 

But strangely enough, it's still a great place to live (if you can afford to).

 

Michael.

[Winstonm]

Although we are not at the point of rioting, statistical evidence backs up the claim that the divergence between what we might call rich $300,000+ per year incomes, and everyone else is growing wider.

 

 

 

I don't dispute this. What I dispute is the severity of the problem. What is considered an 'optimal' distribution of wealth?

I have no idea. :P More or less a philosophical debate. I appreciate your views, too. I think that there is some truth to the more conservative views as well as some truth to the more liberal ideas - picking a middle ground is the difficult task.

 

Insurance is a personal choice to transfer risk, although personally I think auto insurance should be mandatory to obtain vehicle registration. I would argue that a healthy person doesn't need health insurance if he is prudent if he chose to save an equivalent amount into investments. Please explain why this is a problem. You say that indigent people will be lining up at public hospitals to get help? I say turn them away if they cannot afford medical coverage. THIS will cause people to purchase at least catastrophic coverage. but if they know that an emergency room will treat them regardless of their insurance situation, they are disincentivized from purchasing health insurance.

 

Do you have disability insurance? I don't, and arguably I need it. I assume the risk of getting run over by an uninsured driver. Life insurance? Again, a personal choice and I hope folks don't read too much into uninsured 'lives'.

 

I should have pinpointed "health" issurance. Trying to take the kids to the doctor when you are bringing home $25K a year is not an idle decision - if your are lucky, it might only cost $125 for the office visit, another $100 for labwork. For many, the option is $500 a month for health insurance or rent - so they gamble on goodhealth.

 

 

...and a negative saving rate compounded by massive debt.

 

 

 

Personal spending is a function of personal responsibility. Anyone can live beyond their means. However, the thread is about the discrepancy in wealth and income, not about materialism. The tightening of bankruptcy requirements hopefully will curtail come of this out of control spending. I don't think its government's place, but I wouldn't mind better disclosures on credit.

 

I agree this is only a symptom - the only point to it is the decrease of income has caused too many to rely on debt to maintain a lifestyle that can no longer be maintained - not that they are poor, but their lifestyles would have to be adjusted downward to return to positive savings.

 

 

 

Last time we were in this negative savings, high debt situation was 1928 - and 1929 didn't turn out to be such a good year.

 

 

 

People tightened their belts and the fall off in demand caused a downward spiral of job layoffs. A liquidity crisis from under capitalized banks caused a financial crisis. Smoot-Hawley didn't help either.

 

Similar liguidity crisis could happen again, IMO. Has nothing to do with wealth disparity other than the high-risk, high-reward nature of today's financing.

 

 

 

And we may have recently seen the canary in the coalmine - M&T bank decided to hold their own Alt-A loans (not subprime) because the prices offered were not sufficient.  If banks and mortgage companies start having problems selling their debt, this will cause a tightening of lending standards - tightening lending will eventually effect consumption - and then the wheels fall off. 

 

 

 

There was a time when banks didn't sell their paper. Alt-A loans are 'no-doc' loans; borrowers that have good credit but cannot (or want to) prove their income. They are non-conforming, and aren't resold in the normal secondary market. A bank actually holding its own paper will lessen the dollars for lending, but then the demand will increase for purchasing this paper, or purchasing derivatives and tranches of the loans. This hardly spells a death spiral.

 

And I'm still at a loss why you think this is connected to income disparity

 

Nothing to do with it - just my only personal tangent. :D

[mike777]

I am a bit confused are you saying office visits and labwork is too cheap and should cost more? If another country has cheaper rates, than go to that country's doctor and lab. That is what globalization is all about.

[DrTodd13]

All these arguments revolve around societal axioms. People argue forever when there is no hope of there ever being agreement because their axioms differ. For me, the ultimate good is freedom and so any distribution of wealth produced by everyone having total freedom is optimal. For others, maximizing societal stability in lieu of people's covetousness is the ultimate good and for those people the optimal distribution of wealth is such that you minimize the amount of rioting that people do. Redistribute too little and the poor riot out of greed. Redistribute too much and the rich either fight back, leave the country, or refuse to produce. In any case, when you remove society's productive people the system will collapse because there is no one left to prop it up.

[mike777]

All these arguments revolve around societal axioms. People argue forever when there is no hope of there ever being agreement because their axioms differ. For me, the ultimate good is freedom and so any distribution of wealth produced by everyone having total freedom is optimal. For others, maximizing societal stability in lieu of people's covetousness is the ultimate good and for those people the optimal distribution of wealth is such that you minimize the amount of rioting that people do. Redistribute too little and the poor riot out of greed. Redistribute too much and the rich either fight back, leave the country, or refuse to produce. In any case, when you remove society's productive people the system will collapse because there is no one left to prop it up.

Yes the process is destructive.

[Winstonm]

I am a bit confused are you saying office visits and labwork is too cheap and should cost more? If another country has cheaper rates, than go to that country's doctor and lab. That is what globalization is all about.

Funny, Mike. You know what I am saying - for many the choice is among going to the doctor, paying the electric bill, or food for two weeks. And this is not a problem of the very poor - this hits a broad base of working class who cannot afford health insurance.

 

However, if you know any Indonesian doctors who want to migrate and work on $10 office visits and $5 labwork please let us all know. :P

[Winstonm]

All these arguments revolve around societal axioms.  People argue forever when there is no hope of there ever being agreement because their axioms differ.  For me, the ultimate good is freedom and so any distribution of wealth produced by everyone having total freedom is optimal.  For others, maximizing societal stability in lieu of people's covetousness is the ultimate good and for those people the optimal distribution of wealth is such that you minimize the amount of rioting that people do.  Redistribute too little and the poor riot out of greed.  Redistribute too much and the rich either fight back, leave the country, or refuse to produce.  In any case, when you remove society's productive people the system will collapse because there is no one left to prop it up.

Who is John Galt?

[mike777]

I am a bit confused are you saying office visits and labwork is too cheap and should cost more? If another country has cheaper rates, than go to that country's doctor and lab. That is what globalization is all about.

Funny, Mike. You know what I am saying - for many the choice is among going to the doctor, paying the electric bill, or food for two weeks. And this is not a problem of the very poor - this hits a broad base of working class who cannot afford health insurance.

 

However, if you know any Indonesian doctors who want to migrate and work on $10 office visits and $5 labwork please let us all know. :P

Ok we agree that going to the doctor is cheap compared to going to another country. That seems to be a good start. Again I guess I put my faith in tech/science to bring the cost down more and the quality of care up.

 

Can we agree there have been improvements for the poorest of the poor, major ones in the last 100 years or 50 years or maybe even less than that?

 

Can we do better, sure. I guess imho I see more/faster improvements in medical care for the poorest of the poor than you do.

 

I think one thing we can improve is that fact that 500 million people get sick every year from Malaria. From what I understand the two main factors stopping improvements are lack of DDT use(ty Rachel Carson) and government policies in the poorest countries.

[hrothgar]

I think one thing we can improve is that fact that 500 million people get sick every year from Malaria. From what I understand the two main factors stopping improvements are lack of DDT use(ty Rachel Carson) and government policies in the poorest countries.

Mike

 

You really need to stop getting your science from Michael Crichton... Here's a good web site that addresses the usual right wing technobably about DDT and Malaria

 

http://www.grinningplanet.com/2007/01-16/ddt-and-malaria.htm

[Winstonm]

Can we do better, sure. I guess imho I see more/faster improvements in medical care for the poorest of the poor than you do.

 

Again, it is not the "poorest of the poor" who have the major problem - it is the 45 year old who used to work for $18 and hour plus benefits at the GM plant in Oklahoma City, which was shut down, and now the only work he can get is the $8 an hour no benefit job at the Convergys call center.

 

Too bad his creditors won't allow him a 4-year reprieve from his debts so he can retrain in a higher paid area - but that is life. I suppose one could argue that he should have saved 1/2 his salary all those years and lived more frugally, and I won't disagree - but the reality is he did not and he is no different than 99.9% of the U.S. population in that regard.

 

If you look at charts from the past 20 years, income is stagnant to falling for the middle class, medical costs are up, and health insurance ownership is down - and throw in inflation to the mix...well, it is not a pretty sight.

 

This is not a matter of "gambling" on good health - anyone can get pneumonia, break a leg, get Lyme disease or a myriad of other health problems that can strike otherwise healthy people - do you have any concept of the cost of hospital stays or surgery? For a huge proportion of Americans, the gamble is between good health and bankruptcy - which is the whole point of insurance in the first place, to guard against catastrophic loss.

[mike777]

As for Malaria can we agree:

1) about 500 million get sick from it every year?

2) something more needs to be done that works in practice, in the real world?

3) DDT eradicated Malaria in the USA and Europe.

 

 

 

If your websites have a better idea, great, count me in. :P I do not own DDT stock. :D

[mike777]

"....which is the whole point of insurance in the first place, to guard against catastrophic loss...."

 

 

 

Well I would not phrase it this way. Insurance spreads the risk across some class of people. It does not lower costs in the general sense, yes they may get bulk discount pricing. Someone still pays for the catastrophic loss, it does not make the costs disappear.

[hrothgar]

As for Malaria can we agree:

1) about 500 million get sick from it every year?

2) something more needs to be done that works in practice, in the real world?

3) DDT eradicated Malaria in the USA and Europe.

Did you bother to even look at the web site? Alternatively, is your brain capable of processing information that doesn't match you're preconceived ideas?

 

 

DDT Pesticide Promoters' Myth #1

 

"DDT wiped out malaria in the US."

 

DDT Facts

 

Malaria had been largely eliminated in the US by the time the Centers for Disease Control (CDC) first used DDT in spray campaigns in 1947. CDC's four-year spray effort was designed to prevent the reintroduction of malaria from troops coming home from World War II. Almost twenty years earlier, in 1928, the Public Health Service had already noted the decline of malaria in the US. The pockets that persisted in the South until the late 1930s were controlled by the Tennessee Valley Authority's efforts to:

 

    * cut down on mosquito breeding sites by draining swamps, and

    * protect the population by building well-screened houses.

 

According to one journalist investigating the issue, "About the best one CDC physician involved in the campaign could say about [the DDT campaign] was that 'we kicked a dying dog.'

[Winstonm]

"....which is the whole point of insurance in the first place, to guard against catastrophic loss...."

 

 

 

Well I would not phrase it this way.  Insurance spreads the risk across some class of people.  It does not lower costs in the general sense, yes they may get bulk discount pricing. Someone still pays for the catastrophic loss, it does not make the costs disappear.

100% accurate. Insurance spreads the cost among many so no single individual suffers catastrphic loss. And your point is?

[Winstonm]

As for Malaria can we agree:

1) about 500 million get sick from it every year?

2) something more needs to be done that works in practice, in the real world?

3) DDT eradicated Malaria in the USA and Europe.

 

 

 

If your websites have a better idea, great, count me in. :) I do not own DDT stock. :)

WHO promotes indoor spraying with insecticides as one of three main interventions to fight malaria

 

15 SEPTEMBER 2006 | WASHINGTON, D.C. -- Nearly thirty years after phasing out the widespread use of indoor spraying with DDT and other insecticides to control malaria, the World Health Organization (WHO) today announced that this intervention will once again play a major role in its efforts to fight the disease. WHO is now recommending the use of indoor residual spraying (IRS) not only in epidemic areas but also in areas with constant and high malaria transmission, including throughout Africa.

 

“The scientific and programmatic evidence clearly supports this reassessment,” said Dr Anarfi Asamoa-Baah, WHO Assistant Director-General for HIV/AIDS, TB and Malaria. "Indoor residual spraying is useful to quickly reduce the number of infections caused by malaria-carrying mosquitoes. IRS has proven to be just as cost effective as other malaria prevention measures, and DDT presents no health risk when used properly

 

Maybe we should buy some DDT stock. :P Or sell short Mosquito repellants. :)

[mike777]

http://en.wikipedia.org/wiki/DDT

 

WHO and ddt

 

http://news.bbc.co.uk/2/hi/science/nature/5350068.stm

 

Anti ddt

http://www.heartland.org/Article.cfm?artId=16803

http://www.irinnews.org/report.aspx?reportid=54054

 

Pro ddt

http://scholar.google.com/scholar?q=author...m=1&oi=scholarr

 

http://scholar.google.com/scholar?q=author...m=1&oi=scholarr

 

http://www.malaria.org/DDTpage.html

[hrothgar]

http://en.wikipedia.org/wiki/DDT

 

WHO and ddt

 

http://news.bbc.co.uk/2/hi/science/nature/5350068.stm

 

Anti ddt

http://www.heartland.org/Article.cfm?artId=16803

http://www.irinnews.org/report.aspx?reportid=54054

 

Pro ddt

http://scholar.google.com/scholar?q=author...m=1&oi=scholarr

 

http://scholar.google.com/scholar?q=author...m=1&oi=scholarr

 

http://www.malaria.org/DDTpage.html

Ran across the following today

 

http://www.prospect-magazine.co.uk/article...ls.php?id=10175