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>The 1% hardly even registers on this scale (a few seconds). I really wish this point was better understood. The rhetoric around the "1%" has completely missed

>The 1% hardly even registers on this scale (a few seconds). I really wish this point was better understood. The rhetoric around the "1%" has completely missed the point, as the vast majority of the 1% is comprised of our doctors, lawyers, small business owners, and other normal successful people. Pitting the poor and working classes against them makes no sense. The real problem is the 0.00000001% of people who control now half the world's wealth [0]. http://fortune.com/2017/01/16/world-richest-men-income-equality/ http://fortune.com/2017/01/16/world-richest-men-income-equal... [0]

jon_richards 9y ago
The "1%" is weird because it simultaneously includes a lot that people didn't want it to and doesn't include a lot that people think it does. The 1% is roughly half a million in yearly income or ten million in net assets (remember to subtract your mortgage from that!). It is true that this goes beyond the ultra wealthy to largely include "doctors, lawyers, small business owners, and other normal successful people", but that doesn't mean most doctors, etc. are in the 1%. There's an urban legend that 19% of people think they are in the 1%, but the actual poll was that 19% of people think they would be affected by tax cuts affecting the 1%. I'd like to see a study of what percentage of people think they are in the 1% or soon will be, because I bet it's a lot more than 1%. So you have a term that was meant to vilify the ultra-rich, but makes the average doctor, etc. worry about being vilified.
- majewsky 9y ago
  > I'd like to see a study of what percentage of people think they are in the 1% or soon will be, because I bet it's a lot more than 1%. How many people live in the Valley?
voidmain 9y ago
> the 0.00000001% of people who control now half the world's wealth This is nonsense. Your source compares the wealth of the richest few people to the net worth of the "poorest" 50% of people. Net worth takes into account debt, and it happens that the half of the population with the lowest net worth has a total amount of debt about equal to its total amount of assets, so its total net worth is almost zero. A little more credit card spending, and an eight year old with a nickel in his pocket will have "more wealth than the poorest half". Needless to say this is not anything like half of the world's wealth. The total wealth of individuals is (according to my quick Google search) something like $250 trillion, and that presumably doesn't take into account wealth held by governments. It's also silly to use net worth to identify the "poorest". Supposedly Donald Trump had a net worth in 1990 of negative 900 million. Your source's calculation would presumably call him the "poorest" person in the world and his presence would subtract $900 million from the wealth of the "poorest half". Is that sensible? The richest people are very, very rich compared to most individuals. But no individual has much compared to the wealth of the whole world, and I suspect the share is shrinking. In the 19th century JP Morgan bailed out the US government, rather than the other way around! A more interesting analysis would be to look at the distribution of total lifetime consumption.
- Simon_says 9y ago
  None of these net worth calculations of poor people make any sense. If I take out $100k in loans to get an education, the wealth of the world has increased, but the only thing that's recorded on the ledgers of net worth is that I'm $100k in the hole.
  - imgabe 9y ago
    The bank that owns the loan would record a corresponding $100k asset.
    - lstyls 9y ago
      This is incorrect. The principal is a liability to the issuer. Income from loan payments are subtracted from the balance as they come in. The cash from the loan is an asset for the borrower, until it is presumptively paid to a third party.
    - Simon_says 9y ago
      You're not getting my point. Education itself is a form of wealth in terms of increased future earnings; otherwise few would pay for it. That wealth doesn't show up on anybody's balance sheet because it's hard to measure, but it still there. When some millennial says they have negative net worth due to student loans, they're not accounting for the positive value that their education affords them due to the fact they can do skilled labor. Look at it this way -- if a company A has an EBITDA of $20k/year and company B has an EBITDA of $40k/year, the MBAs will have no problem assigning values to these companies. And companies can increase their earnings by going into debt such that their net worth as measured by these calculations can increase. But substitute a human in, and suddenly everybody has negative net worth.
    - prostoalex 9y ago
      Prior to this transaction the bank owned $100k in cash, also valued as a $100k asset. There's no corresponding increase in wealth for the lender.
Shivetya 9y ago
I prefer to realize that even at ninety billion dollars of personal wealth; the full amount is not actually available; is that the US government would consume it in less than ten days. Even if we could confiscate his and all similar holders of wealth money we could not pay for government for even a year. the realization we must have is that this amount of personal wealth is not harming the worlds poor and it really doesn't harm those of us here. the world has such incredible poverty because of government. Government that does not respect property rights, rights to one's self, nor the product of their work. What makes capitalist societies work is property rights and it is that incentive which provides the stable society many of us enjoy. If you want to raise the poorest in the world up you do so by encouraging their governments to respect the property rights of even their weakest citizen. To respect the earnings of those who work.
- jxramos 9y ago
  Yes, I've been learning that this is a fundamental realization to make that the pie grows and the economy is not this fixed sum game where someone grows rich at the expense of others. Thomas Sowell has written well of this topic and I like his perspectives on the matter. Milton Friedman his PhD advisor is fun to watch too on YouTube. Some Uncommon Knowledge video of Thomas Sowell makes an interesting point about how the real question is not to ask why people are poor, that's the default position he claims. The real question to ask is why is there wealth in the first place.
stupidcar 9y ago
Actually, it does make sense. While the ability of the super-rich to affect society is enhanced by their wealth, their ability, and need to do so, are reduced by their small numbers. They do not form the kind of large, broadly homogeneous social group that drives long-term changes in society. The sheer scale of their exceptional wealth also lets them make special, individual arrangements that preclude the need to act en-masse. The 1% on the other hand, are rich enough to enjoy outsized political influence, but poor enough to retain some economic anxiety, and be genuinely affected by changes to taxation, inheritance, redistribution, etc. And they are numerous enough to form a corporate whole that acts to protect its own interests. The 1% are the middle managers of the world's socioeconomic hierarchy. They don't possess great power individually, but their collective power to shape the culture is vast, and has a tendency towards toxic outcomes as they attempt to safeguard what wealth they have managed to accumulate.

jon_richards 9y ago

The "1%" is weird because it simultaneously includes a lot that people didn't want it to and doesn't include a lot that people think it does. The 1% is roughly half a million in yearly income or ten million in net assets (remember to subtract your mortgage from that!). It is true that this goes beyond the ultra wealthy to largely include "doctors, lawyers, small business owners, and other normal successful people", but that doesn't mean most doctors, etc. are in the 1%. There's an urban legend that 19% of people think they are in the 1%, but the actual poll was that 19% of people think they would be affected by tax cuts affecting the 1%. I'd like to see a study of what percentage of people think they are in the 1% or soon will be, because I bet it's a lot more than 1%. So you have a term that was meant to vilify the ultra-rich, but makes the average doctor, etc. worry about being vilified.

majewsky 9y ago
> I'd like to see a study of what percentage of people think they are in the 1% or soon will be, because I bet it's a lot more than 1%. How many people live in the Valley?

voidmain 9y ago

> the 0.00000001% of people who control now half the world's wealth This is nonsense. Your source compares the wealth of the richest few people to the net worth of the "poorest" 50% of people. Net worth takes into account debt, and it happens that the half of the population with the lowest net worth has a total amount of debt about equal to its total amount of assets, so its total net worth is almost zero. A little more credit card spending, and an eight year old with a nickel in his pocket will have "more wealth than the poorest half". Needless to say this is not anything like half of the world's wealth. The total wealth of individuals is (according to my quick Google search) something like $250 trillion, and that presumably doesn't take into account wealth held by governments. It's also silly to use net worth to identify the "poorest". Supposedly Donald Trump had a net worth in 1990 of negative 900 million. Your source's calculation would presumably call him the "poorest" person in the world and his presence would subtract $900 million from the wealth of the "poorest half". Is that sensible? The richest people are very, very rich compared to most individuals. But no individual has much compared to the wealth of the whole world, and I suspect the share is shrinking. In the 19th century JP Morgan bailed out the US government, rather than the other way around! A more interesting analysis would be to look at the distribution of total lifetime consumption.

Simon_says 9y ago
None of these net worth calculations of poor people make any sense. If I take out $100k in loans to get an education, the wealth of the world has increased, but the only thing that's recorded on the ledgers of net worth is that I'm $100k in the hole.
- imgabe 9y ago
  The bank that owns the loan would record a corresponding $100k asset.
  - lstyls 9y ago
    This is incorrect. The principal is a liability to the issuer. Income from loan payments are subtracted from the balance as they come in. The cash from the loan is an asset for the borrower, until it is presumptively paid to a third party.
  - Simon_says 9y ago
    You're not getting my point. Education itself is a form of wealth in terms of increased future earnings; otherwise few would pay for it. That wealth doesn't show up on anybody's balance sheet because it's hard to measure, but it still there. When some millennial says they have negative net worth due to student loans, they're not accounting for the positive value that their education affords them due to the fact they can do skilled labor. Look at it this way -- if a company A has an EBITDA of $20k/year and company B has an EBITDA of $40k/year, the MBAs will have no problem assigning values to these companies. And companies can increase their earnings by going into debt such that their net worth as measured by these calculations can increase. But substitute a human in, and suddenly everybody has negative net worth.
  - prostoalex 9y ago
    Prior to this transaction the bank owned $100k in cash, also valued as a $100k asset. There's no corresponding increase in wealth for the lender.

Shivetya 9y ago

I prefer to realize that even at ninety billion dollars of personal wealth; the full amount is not actually available; is that the US government would consume it in less than ten days. Even if we could confiscate his and all similar holders of wealth money we could not pay for government for even a year. the realization we must have is that this amount of personal wealth is not harming the worlds poor and it really doesn't harm those of us here. the world has such incredible poverty because of government. Government that does not respect property rights, rights to one's self, nor the product of their work. What makes capitalist societies work is property rights and it is that incentive which provides the stable society many of us enjoy. If you want to raise the poorest in the world up you do so by encouraging their governments to respect the property rights of even their weakest citizen. To respect the earnings of those who work.

jxramos 9y ago
Yes, I've been learning that this is a fundamental realization to make that the pie grows and the economy is not this fixed sum game where someone grows rich at the expense of others. Thomas Sowell has written well of this topic and I like his perspectives on the matter. Milton Friedman his PhD advisor is fun to watch too on YouTube. Some Uncommon Knowledge video of Thomas Sowell makes an interesting point about how the real question is not to ask why people are poor, that's the default position he claims. The real question to ask is why is there wealth in the first place.

stupidcar 9y ago

Actually, it does make sense. While the ability of the super-rich to affect society is enhanced by their wealth, their ability, and need to do so, are reduced by their small numbers. They do not form the kind of large, broadly homogeneous social group that drives long-term changes in society. The sheer scale of their exceptional wealth also lets them make special, individual arrangements that preclude the need to act en-masse. The 1% on the other hand, are rich enough to enjoy outsized political influence, but poor enough to retain some economic anxiety, and be genuinely affected by changes to taxation, inheritance, redistribution, etc. And they are numerous enough to form a corporate whole that acts to protect its own interests. The 1% are the middle managers of the world's socioeconomic hierarchy. They don't possess great power individually, but their collective power to shape the culture is vast, and has a tendency towards toxic outcomes as they attempt to safeguard what wealth they have managed to accumulate.