Inequality

[barmar]

you have the most important option which many people forget....SELL

That's cutting off your nose to spite your face. Most funds work the same way, so what are you going to do with the money instead? Put it in the bank and get a measly 1% return? That'll show those greedy fund managers.

[kenberg]

The enigma to me in the US is the survival of the apparent paradox of a religious majority who hold religious moral values, and whose religious tenets teach common-good, share-the-wealth, look-out-for-one-another economic thought, yet this group at the same time has an economic viewpoint that is based on winner-take-all, survival-of-the-fittest, am I my brother's keeper? thinking than it is on moralistic thinking.

 

Curious to me that many liberal atheists hold what seems to be the very tenets taught by the religious texts.

 

To use mathematical phrasing, religious belief is neither a necessary nor a sufficient condition for concern for others. More commonly put, a jerk is a jerk regardless of where his butt is on Sunday mornings. My guess is that religious folks would readily agree with this, they have seen it close up.

[barmar]

People are very good at compartmentalizing. That's why it's so easy to be a hypocrite -- business decisions are not viewed as being in the same sphere as the moral issues raised in religious discussions.

[kenberg]

It would be very good to understand, and I confess that I do not at all understand, what happened in the U.S. between 1910 and 1950 (dates approximate). We went from sweatshops and child labor to something of a golden age for the blue collar worker. With two major wars and a depression stuck in the middle, either as motivation or catalyst or something. I grew up with the gospel that labor unions were the backbone of this. Winston grew up with religious gospel and he has forsworn it. My religious training was lighter and easier to shrug off, but I still feel the unions played a very strong role in the development of the American middle class. No proof, it's a faith.

 

It matters, I think. How do we advance the cause of those holding the lesser parts of the pie? A good part if the strength of labor came from the rank and file membership. The president? The Pope? Yeah, maybe. But what does John L Lewis say? You don't see this today.

[Gerben42]

According to these numbers, income inequality in Germany is not a problem compared to most other countries.

 

I will guess that hairdressers in Germany don't have to worry as much about food and health care for themselves and their families as hairdressers in the United States, that their children have better access to decent schools and their politicians are less unduly influenced by super PACS and lobbyists. These are areas where growing income inequality is a big problem imo.

 

That's certainly true, but it is SEEN as a big problem here. In fact it will be one of the major topics in the coming election this fall. Coming from the Netherlands, I always thought Germany was less socialist. The point is that Germany is using the USA as a warning how they never want to be in terms of inequality (which is fine) but the amount of panic made because of it is a bit overdoing it. Many want to be like Sweden, which is overdoing it in the other direction.

 

To illustrate, most parties want to increase social welfare levels, whereas the real problem is not the benefits for the jobless (I know what I am talking about I was in this situation for half a year, it's quite possible to make ends meet on jobless benefits, and there is even room to go to the bridge club every week), but that those in bad-paying jobs earn just a bit more than the welfare level.

 

Just today I read that there is a shortage in people to take care for the elderly, and that it's hard to even find applicants from other EU countries (with much lower standard of living): They prefer to go somewhere else, given the chance.

 

Therefore my suggestion would be: No income tax on a larger sum than currently is the case (It was raised a bit I think from 8000 € to 8500 € I think, but it should really be at least € 15000), and a higher income tax on everything that is more than three times the average. And very high income tax on everything that is more than ten times the average (but still less than Francois Hollande's 75% - that is overdoing it).

[mike777]

That's certainly true, but it is SEEN as a big problem here. In fact it will be one of the major topics in the coming election this fall. Coming from the Netherlands, I always thought Germany was less socialist. The point is that Germany is using the USA as a warning how they never want to be in terms of inequality (which is fine) but the amount of panic made because of it is a bit overdoing it. Many want to be like Sweden, which is overdoing it in the other direction.

 

To illustrate, most parties want to increase social welfare levels, whereas the real problem is not the benefits for the jobless (I know what I am talking about I was in this situation for half a year, it's quite possible to make ends meet on jobless benefits, and there is even room to go to the bridge club every week), but that those in bad-paying jobs earn just a bit more than the welfare level.

 

Just today I read that there is a shortage in people to take care for the elderly, and that it's hard to even find applicants from other EU countries (with much lower standard of living): They prefer to go somewhere else, given the chance.

 

Therefore my suggestion would be: No income tax on a larger sum than currently is the case (It was raised a bit I think from 8000 € to 8500 € I think, but it should really be at least € 15000), and a higher income tax on everything that is more than three times the average. And very high income tax on everything that is more than ten times the average (but still less than Francois Hollande's 75% - that is overdoing it).

 

 

 

ok but why? I mean what it your plan? What is your goal and your plan to achieve it?

 

Per the links here....even in Germany and Europe inequality is great.

 

btw2 I know this is an old point but does it does it seem major parts of Europe...want to become a Museum a pretty museum where people with lots of education discuss the wonders of the world in a very interesting fashion(and much more interesting than vast most) but take very little risk onto themselves.

 

What I don't see....I don't see at all in any of the posts in this thread is an attitude of entrepreneurial culture where risk and failure is as natural and necessary for success

[helene_t]

Coming from the Netherlands, I always thought Germany was less socialist.

In terms of Gini index and such, Netherlands always come up as having a large income discrepancy relative to most Western European countries. Having lived in NL I am a bit surprised by this, and wonder to what extent it is real. Since obviously there are many issues with calculating such indices. NL has a lot of households with a full-time working husband and a part-time working wife so this would make individual-level inequality quite high but household-level income less so, when compared to Scandinavia but I think also when compared to Germany and France.

[eagles123]

talking about inequality: http://www.bbc.co.uk/news/uk-politics-22067155

[Winstonm]

 

 

What I don't see....I don't see at all in any of the posts in this thread is an attitude of entrepreneurial culture where risk and failure is as natural and necessary for success

 

Mike,

 

Here in the good 'ol U.S.A. the risk taker is the person who leaves his present job/occupation and surrenders with it his health insurance benefits. Without guaranteed new health benefits that discount existing preconditions, how can that person move freely?

 

What risk does Warren Buffet take when he invests? Loss of some of his fortune? But I bet he can still afford his doctor bills even after his loss.

[kenberg]

talking about inequality: http://www.bbc.co.uk...litics-22067155

 

I had not known this until I saw it here. A truly extraordinary person. Not being a Brit I won't argue specific policies one way or the other, but what we saw was a leader who knew and spoke her mind, and who was very effective in bringing about the changes that she felt were needed. Surely many a political leader would hope, usually without success, to be remembered in this way.

[mike777]

Mike,

 

Here in the good 'ol U.S.A. the risk taker is the person who leaves his present job/occupation and surrenders with it his health insurance benefits. Without guaranteed new health benefits that discount existing preconditions, how can that person move freely?

 

What risk does Warren Buffet take when he invests? Loss of some of his fortune? But I bet he can still afford his doctor bills even after his loss.

 

 

You seem uneasy with the failure part....

90% of all restaurants fail perhaps we should at least promise them all food, shelter and a doctor so they will not starve and live out on the street when winter comes.

 

 

btw I don't understand what your point is about Buffet. He is not a risk taker because he pays for his own doctor and gives billions to charity?

 

What I don't see....I don't see at all in any of the posts in this thread is an attitude of entrepreneurial culture where risk and failure is as natural and necessary for success

[onoway]

I had not known this until I saw it here. A truly extraordinary person. Not being a Brit I won't argue specific policies one way or the other, but what we saw was a leader who knew and spoke her mind, and who was very effective in bringing about the changes that she felt were needed. Surely many a political leader would hope, usually without success, to be remembered in this way.

Most political leaders today are apparently mainly motivated by self interest and the possibility of getting reelected. Most seem in truth somewhat less than fervent in their desire to see a country better off for their tenure, if they even think about it in such terms.

 

The write-up reminded me of those about Pierre Trudeau who roused the same intensity of rage or glee with his policies. Whether they agreed or not, few doubted that what both Prime Ministers did was what they felt was best for the whole country.

 

Here was a (leader). When shall we see such another....

[PassedOut]

What I don't see....I don't see at all in any of the posts in this thread is an attitude of entrepreneurial culture where risk and failure is as natural and necessary for success

Mike,

 

I started my first little business when I was in 6th grade, using the savings from my paper route to buy a power lawn mower and to place a newspaper ad offering my services. A couple of years out of college, I used savings from my corporate job to start buying rental properties as a side business. I've started several businesses since then, two of which I'm still active in. I'm not a billionaire (by a very long shot), but I do contribute to the economy and to job-creation.

 

From my perspective, income inequality is a very serious problem in the US. A strong middle class with disposable income provides the customer base for all kinds of products and services.

 

Over the years I've paid a lot of taxes (the estimated tax payment due next week reminds me of that), but I think that the US tax rates now are ridiculously low. We need to build up tax revenues to put people to work rebuilding our country and preparing for the future. I'm happy to pitch in with that now, as always.

 

We do need to stop wasting money on unneeded military equipment and on stupid wars. The Iraq war was stupid, and everyone with common sense saw that it was stupid before the US attacked. If the government had been honest enough to raise the taxes required to fight that war, more folks would have taken a look at how that money was spent. It will take some time to dig out from under that.

 

But taxes are required to pay for the services -- including safety net services -- that folks need. Even folks who need the safety net for a time remain customers for those of us who create businesses.

[kenberg]

I just don't understand this discussion about risk taking. We all are required to wear seat belts, but that's not the idea I know. Restaurants open. No one stops them. And yes, they often fail. Part of the problem is that it is pretty difficult to compete with the chains. Restaurants are required to pass various inspections and that might interfere with some people's notion of entrepreneurship but I do favor health checks. At the large scale end, there seem to be a lot of venture capitalists and such who are doing fine.

 

Times change and the nature of risks change. There are a fair number of people in the stock market.

 

And circumstances change. As a young man I owned a couple of motorcycles. As an older person I was very interested in keeping my daughters off of motorcycles. My older daughter has a job that takes her on foreign travel where she is escorted by guards with machine guns as she goes from building to building. Is that enough risk for you?

 

But I must brag a little, I am in the running for entrepreneur of the year. I just got a notice from an account saying that my holdings increased in value by over 5000%. It seems that something I unknowingly owned had gone belly up and was, for quite a while, worth two cents. Through some magic, it has been re-evaluated and is now worth $1.05. Warren Buffet, eat your heart out.

[barmar]

But I must brag a little, I am in the running for entrepreneur of the year. I just got a notice from an account saying that my holdings increased in value by over 5000%. It seems that something I unknowingly owned had gone belly up and was, for quite a while, worth two cents. Through some magic, it has been re-evaluated and is now worth $1.05. Warren Buffet, eat your heart out.

As mentioned before, everything is relative. If you owned 100 shares, you can spend your "windfall" on a nice dinner. If you own a 100,000 shares, you can buy a luxury car or a nice boat.

 

BTW, even though Buffett can afford to pay for practically all his health care needs out of pocket, I'll bet he still has health insurance. But he might treat himself to concierge service instead of just using Berkshire Hathaway's group plan.

[mike777]

"I just don't understand this discussion about risk taking"

 

 

America's greatest asset is the one we distrust the most. A culture of risk taking and the use of optionality, this remarkable ability to engage in rational forms of trial and error, with no comparative shame in failing, starting again, and repeating failure.

 

Compare this to say Japan where shame comes from failure, which causes people to hide risks under the rug, an attitude that strangely contrasts with their traditional respect for fallen heroes and the so-called nobility of failure.

 

 

This raises the whole issue that growth in society may not come from raising the average the Asian way, but from increasing the number of people in the "tails", that small, very small number of risk takers crazy enough to have ideas of their own and who make things happen. Granted many may disagree with this.

-------------

 

 

btw I use the word optionality in the sense one does not care about the average but rather the dispersion around the average. Options like dispersion of outcomes and don't care about the average too much. An example might be the luxury goods industry.

 

Example the tails of the distribution on the higher end of income brackets, the extreme, are much more determined by changes in inequality than changes in the average.

[Cthulhu D]

The enigma to me in the US is the survival of the apparent paradox of a religious majority who hold religious moral values, and whose religious tenets teach common-good, share-the-wealth, look-out-for-one-another economic thought, yet this group at the same time has an economic viewpoint that is based on winner-take-all, survival-of-the-fittest, am I my brother's keeper? thinking than it is on moralistic thinking.

 

Curious to me that many liberal atheists hold what seems to be the very tenets taught by the religious texts.

 

Religion in the US has completely changed from what it says in the actual text to justify capitalist culture and rich elites. Consider the passage in the Bible where Jesus states that a rich man can no more go to heaven than he can pass through the eye of a needle, in the context of asking a dude to give all his stuff to the poor. This is of course a condemnation of capitalism, but yet Baptists are somehow obsessed with the idea that there was a historical gate of Jerusalem or something, and somehow this lets them off this obligation.

 

Of course, the idea of the gate was apparently made up in the 9th century, but this doesn't stop Baptists from buying into this crock to justify their hating of welfare etc. It's completely bizarre - but it's because the Baptists etc in the US are less 'Christian' than the liberal atheists.

[kenberg]

Religion in the US has completely changed from what it says in the actual text to justify capitalist culture and rich elites. Consider the passage in the Bible where Jesus states that a rich man can no more go to heaven than he can pass through the eye of a needle

 

No no, it's a camel that passes, or rather doesn't pass, through the eye of a needle.

 

And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.

[/Quote]

[mike777]

Religion in the US has completely changed from what it says in the actual text to justify capitalist culture and rich elites. Consider the passage in the Bible where Jesus states that a rich man can no more go to heaven than he can pass through the eye of a needle, in the context of asking a dude to give all his stuff to the poor. This is of course a condemnation of capitalism, but yet Baptists are somehow obsessed with the idea that there was a historical gate of Jerusalem or something, and somehow this lets them off this obligation.

 

Of course, the idea of the gate was apparently made up in the 9th century, but this doesn't stop Baptists from buying into this crock to justify their hating of welfare etc. It's completely bizarre - but it's because the Baptists etc in the US are less 'Christian' than the liberal atheists.

 

 

thank you for your post. A good example why risk takers are not thought of highly and in deep respect.

[Cthulhu D]

No no, it's a camel that passes, or rather doesn't pass, through the eye of a needle.

 

Yeah, typographical error - point still stands.

[mike777]

Yeah, typographical error - point still stands.

 

 

what point in regards to the topic?

 

don't be rich ..don't be an elite?

 

No one posts about zero taxes or zero safety net.

 

However I do post about having a national risk taker day celebration.

 

I do post about not focusing on the average income of a country.

[Cthulhu D]

what point in regards to the topic?

 

don't be rich ..don't be an elite?

 

No one posts about zero taxes or zero safety net.

 

However I do post about having a national risk taker day celebration.

 

I do post about not focusing on the average income of a country.

 

No, the point is, how can you proclaim to be a follower of Christ, and then be against generously helping your fellow man.

 

I was naked and you clothed me, I was sick and you visited me, I was in prison and you came to me.’ Then the righteous will answer him, saying, ‘Lord, when did we see you hungry and feed you, or thirsty and give you drink? And when did we see you a stranger and welcome you, or naked and clothe you? And when did we see you sick or in prison and visit you?’ And the King will answer them, ‘Truly, I say to you, as you did it to one of the least of these my brothers, you did it to me.’

 

Then those self same Christians rage about welfare, foreign aid, etc. How can you be against the state helping out the starving, and yet claim to be a Christian? It's hypocrisy. Of course, if you're not a Christian that's a completely different thing, but when the Baptists are out protesting against this sort of stuff, you have to wonder.

[awm]

However I do post about having a national risk taker day celebration.

 

I do post about not focusing on the average income of a country.

 

I disagree with the importance of "risk-takers" here. What is important is that we enable people to come up with great ideas, give them the opportunity to develop those great ideas into working products or companies, and then reward them to a degree that incentivizes them to do these things.

 

If anything the notion of "risk" is what discourages people from doing the above. One of the great ideas that lead to economic success in the industrial revolution was the idea of a limited liability company -- that the personal assets of the company's founders would not necessarily be at risk if the company were to crash and default on its debts. Arguably nationalized health care is another such idea -- while your economic fortune may be "at risk" your physical life will not be.

 

While there is some risk inherent in any venture, an awful lot of startups happen when people with a fair bit of money saved up figure they can (at worst) go without an income for a year or two. Rather than celebrating those who took more extreme risks and succeeded (I'm sure there are some) we could worry about making sure as many people as possible have the background knowledge, connections, guaranteed health care, and bit of savings necessary to help them succeed.

[mike777]

Adam you hit upon my most important ]point where I try and persuade you and your lovely wife.

 

 

I am not against a safety net.....just not for trying to raise the average as the number one point.

 

 

 

 

1) you only post part of my posts

 

 

 

2)America's greatest asset is the one we distrust the most.

 

 

I only post some of yours:

 

 

If anything the notion of "risk" is what discourages people from doing the above.

 

 

----------

 

 

I thought this was by far your most important point:

I disagree with the importance of "risk-takers" here.

 

 

You hit upon the most important point I made.''---------

 

 

--------

 

 

 

"I just don't understand this discussion about risk taking"

 

 

America's greatest asset is the one we distrust the most. A culture of risk taking and the use of optionality, this remarkable ability to engage in rational forms of trial and error, with no comparative shame in failing, starting again, and repeating failure.

 

Compare this to say Japan where shame comes from failure, which causes people to hide risks under the rug, an attitude that strangely contrasts with their traditional respect for fallen heroes and the so-called nobility of failure.

 

 

This raises the whole issue that growth in society may not come from raising the average the Asian way, but from increasing the number of people in the "tails", that small, very small number of risk takers crazy enough to have ideas of their own and who make things happen. Granted many may disagree with this.

-------------

 

 

btw I use the word optionality in the sense one does not care about the average but rather the dispersion around the average. Options like dispersion of outcomes and don't care about the average too much. An example might be the luxury goods industry.

 

Example the tails of the distribution on the higher end of income brackets, the extreme, are much more determined by changes in inequality than changes in the average.

[mike777]

disagree with the importance of "risk-takers" here. What is important is that we enable people to come up with great ideas

---------

 

 

 

No

 

That is the last thing...not the first thing we want to do.......we do not want to enable.....to transport risk from.....you miss the entire point.

 

 

 

 

 

Adam all of your points want to enable.......you want to transfer risk!

 

You want me to take on the risk of your ideas but you get all of the upside.