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Ok. So I looked into it and I had my "OHHH!!" moment. It seems income/wealth inequality got magnified because of the number of opportunities went exponentially

Ok. So I looked into it and I had my "OHHH!!" moment. It seems income/wealth inequality got magnified because of the number of opportunities went exponentially higher. Those who were able, took advantage of those opportunities if they had education, business acumen, surplus income, liquid wealth, or were fortunate enough to have ownership in an industry that was not valued very highly before and became very valuable later. Everybody else got left behind. The numbers everyone seems to be talking about day in and day out is the top 1%. What we should really be looking at is the bottom 50%. How did the bottom 50% end up from owning 20% of the wealth in 1980 and going to 5% of the wealth today? They never had anything (like a door or opportunity or a donation box) that could collect some of that wealth flowing from A to B. And that has stifled opportunities for the middle class of the population.

ctdonath 9y ago
If you want less of something, tax it. If you want more of something, subsidize it. Wealth has been increasingly taxed, poverty increasingly subsidized. For the bottom 50%, this matters.
- TheAdamAndChe 9y ago
  Are you suggesting that we should tax the poor? Wouldn't that just make it more difficult for them to pay off debts and collect the capital required to escape poverty?
  - creaghpatr 9y ago
    No he's pointing out that we 'anti-tax' the poor currently via entitlements and maybe we shouldn't as much because it allows them a sustainable way to not escape poverty.
    - euyyn 9y ago
      Following that argument, if we taxed them, their ways to not escape poverty would be even less sustainable. Victory! Ridiculous conclusion from a simplistic argument.
      - ctdonath 9y ago
        Way to miss the point by leaving out half of it. We're giving people reasons to stay in poverty: don't work, and their food/housing/healthcare will be provided for; start working, and all that gets yanked away and whatever is earned is diminished by taxation (direct and indirect). Faced with that, there's little reason to "escape poverty". "Stop subsidizing so much" does not equate to "start taxing them". I'm all for massive reductions in both subsidizing and taxation. Help the abject & deserving poor, yes; the rest should have their disincentives to work removed and their punishment by taxation relieved.
        euyyn 9y ago
        You're talking now of an effective marginal rate > 100%, which is not what you said originally ("If you want less of something, tax it. If you want more of something, subsidize it."). I agree marginal rates should always be < 100% for the obvious reasons. I haven't seen numbers that it ever happens, but it is to be avoided in theory, yes.
  - ctdonath 9y ago
    I'm suggesting we stop subsidizing all but the abject & existential poor. Welfare entitlements have grown so profitable there's a huge disincentive to working. Do nothing, profit. Start working, entitlements are withdrawn and you face a huge net income drop, made worse by taxes on earned income. Hence much of the bottom 50% are literally incentivized to minimize income & wealth - explaining in part why so much of their wealth has migrated to other classes. I'm also suggesting we cut taxes so those who do earn aren't losing so much of their income. While technically subject to the lowest tax rates, the bottom 50% have the lowest income & wealth rates, so find it harder to replace & augment what little they have that's taken from them by "embedded taxes" passed on from higher economic classes (corporate taxes -> higher prices, property taxes -> higher rent, etc). What they earn & retain is being siphoned away by taxation. The question my prior post was trying to answer was: why has the wealth of the bottom 50% dropped so much? Well, between rewarding (subsidizing) unemployment and dis-incentivizing (taxing) earned income, we're giving the bottom 50% good reasons to earn & keep less. The result should not be surprising.
- ameister14 9y ago
  This is a massive oversimplification.
- rconti 9y ago
  So why is it that we have so many wealthy people and so much wealth?
- davidcbc 9y ago
  So your argument is that people are poor because being poor is just too good of a deal? I don't know any poor people who wouldn't prefer to be wealthier, but being in poverty also reduces opportunity and a lack of opportunity means your situation stays the same. I grew up poor, and without the assistance from government programs my family received I would not have had the opportunity to pull myself out of the cycle of poverty.
bduerst 9y ago
This seems like confirmation bias, or selectively interpreting the data. Which metric are you using for net opportunities and how does it correlate with wealth/income inequality?
- nashashmi 9y ago
  Not a statistics expert or anything like that, but I click on bottom 50% and I see after 1980, their share begins to decrease in the U.S. This was during the Reagonomics Era which according to Wikipedia, brought in small governemnt, big military, reduced taxes, and reduced regulation. To me, that is the opening of many opportunities on the private side and healthy cash flow to sustain it. The strong get stronger, and the weak get weaker. Feel free to disagree. I'd be interested in a different view.
  - elhudy 9y ago
    Keep in mind that in the 80s people packaged up and sold junk bonds - similar to the housing crisis of 08. It was a practice which essentially added no value to the economy but made a large number of people filthy rich.
ivm 9y ago
Yes, there's already a huge gap between people who can take advantage of the progress and those who can't. It wasn't that wide before and it grows with the amount of knowledge necessary to operate in the modern world. To prevent it from growing even more, we need to fix education systems.
- nashashmi 9y ago
  :( We also need to fix attitudes, habits, behaviors, etc. Maybe we can get everyone into military formation. Education is very very demanding. Plus, the more people get educated, the more competition we have, meaning the more intense things become. There needs to be another route.
  - ivm 9y ago
    But a good education system should include not-so-demanding civics and ethics parts which mean attitudes, habits, and behaviors. This will decrease the competitiveness and intensity in the society in the first place.

ctdonath 9y ago

If you want less of something, tax it. If you want more of something, subsidize it. Wealth has been increasingly taxed, poverty increasingly subsidized. For the bottom 50%, this matters.

TheAdamAndChe 9y ago
Are you suggesting that we should tax the poor? Wouldn't that just make it more difficult for them to pay off debts and collect the capital required to escape poverty?
- creaghpatr 9y ago
  No he's pointing out that we 'anti-tax' the poor currently via entitlements and maybe we shouldn't as much because it allows them a sustainable way to not escape poverty.
  - euyyn 9y ago
    Following that argument, if we taxed them, their ways to not escape poverty would be even less sustainable. Victory! Ridiculous conclusion from a simplistic argument.
    - ctdonath 9y ago
      Way to miss the point by leaving out half of it. We're giving people reasons to stay in poverty: don't work, and their food/housing/healthcare will be provided for; start working, and all that gets yanked away and whatever is earned is diminished by taxation (direct and indirect). Faced with that, there's little reason to "escape poverty". "Stop subsidizing so much" does not equate to "start taxing them". I'm all for massive reductions in both subsidizing and taxation. Help the abject & deserving poor, yes; the rest should have their disincentives to work removed and their punishment by taxation relieved.
      - euyyn 9y ago
        You're talking now of an effective marginal rate > 100%, which is not what you said originally ("If you want less of something, tax it. If you want more of something, subsidize it."). I agree marginal rates should always be < 100% for the obvious reasons. I haven't seen numbers that it ever happens, but it is to be avoided in theory, yes.
- ctdonath 9y ago
  I'm suggesting we stop subsidizing all but the abject & existential poor. Welfare entitlements have grown so profitable there's a huge disincentive to working. Do nothing, profit. Start working, entitlements are withdrawn and you face a huge net income drop, made worse by taxes on earned income. Hence much of the bottom 50% are literally incentivized to minimize income & wealth - explaining in part why so much of their wealth has migrated to other classes. I'm also suggesting we cut taxes so those who do earn aren't losing so much of their income. While technically subject to the lowest tax rates, the bottom 50% have the lowest income & wealth rates, so find it harder to replace & augment what little they have that's taken from them by "embedded taxes" passed on from higher economic classes (corporate taxes -> higher prices, property taxes -> higher rent, etc). What they earn & retain is being siphoned away by taxation. The question my prior post was trying to answer was: why has the wealth of the bottom 50% dropped so much? Well, between rewarding (subsidizing) unemployment and dis-incentivizing (taxing) earned income, we're giving the bottom 50% good reasons to earn & keep less. The result should not be surprising.
ameister14 9y ago
This is a massive oversimplification.
rconti 9y ago
So why is it that we have so many wealthy people and so much wealth?
davidcbc 9y ago
So your argument is that people are poor because being poor is just too good of a deal? I don't know any poor people who wouldn't prefer to be wealthier, but being in poverty also reduces opportunity and a lack of opportunity means your situation stays the same. I grew up poor, and without the assistance from government programs my family received I would not have had the opportunity to pull myself out of the cycle of poverty.

bduerst 9y ago

This seems like confirmation bias, or selectively interpreting the data. Which metric are you using for net opportunities and how does it correlate with wealth/income inequality?

nashashmi 9y ago
Not a statistics expert or anything like that, but I click on bottom 50% and I see after 1980, their share begins to decrease in the U.S. This was during the Reagonomics Era which according to Wikipedia, brought in small governemnt, big military, reduced taxes, and reduced regulation. To me, that is the opening of many opportunities on the private side and healthy cash flow to sustain it. The strong get stronger, and the weak get weaker. Feel free to disagree. I'd be interested in a different view.
- elhudy 9y ago
  Keep in mind that in the 80s people packaged up and sold junk bonds - similar to the housing crisis of 08. It was a practice which essentially added no value to the economy but made a large number of people filthy rich.

ivm 9y ago

Yes, there's already a huge gap between people who can take advantage of the progress and those who can't. It wasn't that wide before and it grows with the amount of knowledge necessary to operate in the modern world. To prevent it from growing even more, we need to fix education systems.

nashashmi 9y ago
:( We also need to fix attitudes, habits, behaviors, etc. Maybe we can get everyone into military formation. Education is very very demanding. Plus, the more people get educated, the more competition we have, meaning the more intense things become. There needs to be another route.
- ivm 9y ago
  But a good education system should include not-so-demanding civics and ethics parts which mean attitudes, habits, and behaviors. This will decrease the competitiveness and intensity in the society in the first place.