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Basic housing and a sense of security are things that we should like all of our citizens to have access to. I don't see that it's particularly unreasonable to

Basic housing and a sense of security are things that we should like all of our citizens to have access to. I don't see that it's particularly unreasonable to remove those costs from consideration when we consider a person's wealth. Sure, they are enormous assets for the individual. But if the individual didn't need a place to sleep, it would be a gobsmackingly terrible investment to put most of your life's earnings into one basket like that. It's an investment made under duress, and the anticipated appreciation in value comes from the fact that future generations will be similarly forced.

gjm11 9y ago
It would make some sense to subtract off a fixed amount for "basic housing" and another for a basic pension. But that's not what Ruccio wants to do. He wants to exclude all housing and pension wealth. That's crazy! It means that given two people in the exact same financial situation, if one of them decides they want to spend more of their money on a really nice house (or a house somewhere really expensive) then suddenly that person is -- for the purposes of Ruccio's calculations -- much poorer. Likewise if one of them decides they want to move a load of their money into (tax-efficient) pension funds. Nonsense: this reflects a difference in priorities and preferences, not in wealth.
- jakelazaroff 9y ago
  This isn't about the relative wealth of two people in similar financial situations, it's about the relative wealth of hundreds of millions of people in vastly different financial situations. Sure, caps for "basic housing" and "basic pension" might make small comparisons easier. But unless 90% of Americans are (in aggregate) so overspending on housing and pensions that it substantially affects their wealth relative to the top 1%, it's not really crazy to exclude it all.
  - sokoloff 9y ago
    By the proposed methodology, if I sold stocks and paid off my mortgage, I'd thereby become poorer and if I did a max cash-out refinance, blew half of it Vegas and bought stocks with the other half of that money, I'd become richer. That seems like a flaw in the methodology to me.
  - gjm11 9y ago
    I'm not sure "overspending" is at all the right term. A rough back-of-envelope calculation on my own situation (which I guess isn't outrageously unrepresentative for the comfortable-but-not-1%) suggests that my family's Ruccio-wealth could have been 3-4x greater as a fraction of our nominal wealth, if we had made different but still reasonable choices about how nice a house to have and how much to sink into pension funds. Our house is nice but by no means a mansion. Our retirement will be comfortable but by no means extravagant. I don't see any good reason to think we're overspending on either. And I think a 3-4x difference in Ruccio-wealth is substantial; if repeated across the population of decently-off sub-1%ers, I think it would make a big dent in the difference between Ruccio's figures and everyone else's for what fraction of wealth is in the hands of the 1%.

gjm11 9y ago

It would make some sense to subtract off a fixed amount for "basic housing" and another for a basic pension. But that's not what Ruccio wants to do. He wants to exclude all housing and pension wealth. That's crazy! It means that given two people in the exact same financial situation, if one of them decides they want to spend more of their money on a really nice house (or a house somewhere really expensive) then suddenly that person is -- for the purposes of Ruccio's calculations -- much poorer. Likewise if one of them decides they want to move a load of their money into (tax-efficient) pension funds. Nonsense: this reflects a difference in priorities and preferences, not in wealth.

jakelazaroff 9y ago
This isn't about the relative wealth of two people in similar financial situations, it's about the relative wealth of hundreds of millions of people in vastly different financial situations. Sure, caps for "basic housing" and "basic pension" might make small comparisons easier. But unless 90% of Americans are (in aggregate) so overspending on housing and pensions that it substantially affects their wealth relative to the top 1%, it's not really crazy to exclude it all.
- sokoloff 9y ago
  By the proposed methodology, if I sold stocks and paid off my mortgage, I'd thereby become poorer and if I did a max cash-out refinance, blew half of it Vegas and bought stocks with the other half of that money, I'd become richer. That seems like a flaw in the methodology to me.
- gjm11 9y ago
  I'm not sure "overspending" is at all the right term. A rough back-of-envelope calculation on my own situation (which I guess isn't outrageously unrepresentative for the comfortable-but-not-1%) suggests that my family's Ruccio-wealth could have been 3-4x greater as a fraction of our nominal wealth, if we had made different but still reasonable choices about how nice a house to have and how much to sink into pension funds. Our house is nice but by no means a mansion. Our retirement will be comfortable but by no means extravagant. I don't see any good reason to think we're overspending on either. And I think a 3-4x difference in Ruccio-wealth is substantial; if repeated across the population of decently-off sub-1%ers, I think it would make a big dent in the difference between Ruccio's figures and everyone else's for what fraction of wealth is in the hands of the 1%.