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> The economic story of the past decades is supposed to be the death of the American Dream. Income inequality has risen, the wealth of the middle class stagnate

> The economic story of the past decades is supposed to be the death of the American Dream. Income inequality has risen, the wealth of the middle class stagnated, and stories of the poor working their way to prosperity became just stories. I think the article doesn't really do a good job to change that view. The inequality has risen and the wealth of the middle class has stagnated. This is absolutely true. Things like raises are no longer the norm, bonuses in many jobs have disappeared, prices and debt have risen much faster than the rise in income. At the same time, wealthy people continue to grow their wealth. The fact the top 0.0001% gained their wealth not by inheriting it doesn't change what is happening to the poor, middle class, etc. as a result.

Samuel_Michon 13y ago
> The top 0.0001% gained their wealth not by inheriting it How did you come to that conclusion? I looked for that in the figures, but I couldn’t find what percentage came into money from an inheritance. Perhaps it’s placed in the 12% ‘Diversified/Other’ category, but the impression I got from the article was that they tallied how the money was earned in the first place, not where the ones holding the purse got it from. I believe your interpretation of the article in this aspect is incorrect. For instance, 4 of the top 10 spots are taken up by members of the Walton family. Those people inherited their wealth from Bud and Sam Walton, the founders of Wal*Mart. http://en.wikipedia.org/wiki/Walton_family http://en.wikipedia.org/wiki/Walton_family
- alnis 13y ago
  From the article: > Kaplan and Rauh find that America’s wealthiest are no longer a collection of Rockefellers and Carnegies. During the period the researchers investigated, the number of individuals on the Forbes 400 who were the first in their family to run a business rose from 40% to 69%. Sixty percent of individuals on the list grew up wealthy in 1982 while only 32% did in 2011. > Although being born into wealth is less and less necessary for admission to the club of America’s wealthiest individuals, ...
  - Samuel_Michon 13y ago
    Thanks for your input, but the comment I was responding to was: > The top 0.0001% gained their wealth not by inheriting it Your contribution does not cover that.
    - thwarted 13y ago
      That's the assertion from the priceonomics.com article, covered by the paragraphs from the article quoted by alnis.
- deleted 13y ago
  [deleted]
- walid 13y ago
  Do some math. According to Wikipedia the population of the USA is 316,856,000. The 0.0001% of the population is 31685 after removing partial human beings caused by mathematical division. If the Forbes 400 list is used as a sample space for the rest of the 0.0001% then the numbers seem plausible. Note that I'm just playing "mathematician" and I haven't analyzed the 400 people in the list or did anything deeply scientific.
  - amitutk 13y ago
    0.0001% of 316,856,000 is 317 (after rounding partial human beings caused by mathematical division), close enough to 400.
    - walid 13y ago
      Yup my bad, I just multiplied 316,856,000 by 0.0001 without dividing by 100.
walid 13y ago
The last sentence is the most important point of the article and probably should have been a separate article on its own: > America’s .0001% is becoming more meritocratic, but the means of a middle class background remain a necessary launching board. So in other words the most important aspect is to be from the middle class to be successful otherwise your chances are much less. Makes sense on many levels such as chances of personal development due to financial and psychological stability. Poverty has been in the news lately and I read an article on how being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive.
- humanrebar 13y ago
  > being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. While that's poetic, I'm very skeptical that you could even prove that empirically. It's much more likely (because it is empirically demonstrable) that IQ is more strongly impacted by genetics (IQ of the parents), prenatal care (especially with respect to smoking and binge drinking), and childhood (mal)nutrition. I'm not sure how you would even test "obsession with survival" controlling for those things, all of which are much more common in poverty-stricken households. I'm not saying that worrying about the next meal isn't terrible, but I am saying that we need to make sure we're not getting our causes and effects mixed up here. We can't just emulate "middle class" advantages for poor kids and expect the playing field to be level. In other words, it's not as simple as saying being middle class is necessary to be successful, because to some degree, having minimally successful parents is necessary to be middle class in the first place. And why are parents successful? Probably things like good impulse control, general responsibility, mental health, and innate intelligence. Many of those things have certain genetic components. So how do we make sure every kid has a fair shake at being rich? I'm not sure there's a good answer to that since it seems like so many of your cards are dealt in who your parents are. If you're really worried about it, I suggest you support substance-abuse recovery programs and food banks. Keeping kids healthy, well-fed, and free of birth defects are things we should be doing anyway.
  - nitrogen 13y ago
    > > being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. > While that's poetic, I'm very skeptical that you could even prove that empirically. A study which claims to show exactly this: https://news.ycombinator.com/item?id=6298326 https://news.ycombinator.com/item?id=6298326 Anecdotally, I consider this plausible based on my own experiences during lean months as a startup founder.
deleted 13y ago
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deleted 13y ago
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pringles885 13y ago
That is absolutely wrong. The middle class got richer. http://1.bp.blogspot.com/-q83NyGTLock/UekhmnoX4tI/AAAAAAAABc8/2DTpx4H9Rug/s1600/family+incomes.jpg http://1.bp.blogspot.com/-q83NyGTLock/UekhmnoX4tI/AAAAAAAABc...
bedhead 13y ago
The widening wealth inequality as it relates to inheritance can be explained mostly by one simple concept, something Buffett himself call the most powerful force in the universe: compounding. Wise people with money, given enough time, will rocket to become insanely wealthy. Compounding does nothing for the middle class who generally spend most of their income, and it works the opposite way for the poor who are debtors. Over time this force will make the wealth gap worse and worse, which is exactly what's happened.
- deleted 13y ago
  [deleted]
- ljf 13y ago
  "wise people with money" or did you mean "people who are wise with their money" - America seems to have a default setting of rich people = good, poor = stupid.
  - leoedin 13y ago
    I don't think the commentor implied that people without money couldn't be wise, but just that people who are both wise and posess money will be able to make it grow.
  - deleted 13y ago
    [deleted]
  - bedhead 13y ago
    Just run a little experiment in Excel to see what I mean. Plug in 100 numbers representing wealth in a normal distribution. Then fast forward these over say, 25 years. But the key here is that the top ~20% grow at 15%, the bottom 20% grow at 0%, and everyone in between grows at inflation so about 3%. This is generally what happens in the real world, for the most part. Watch how skewed that normal distribution becomes over 25 years. It's not a conspiracy, it's just algebra.
  - paulhauggis 13y ago
    So, what would you call people that continually make poor life decisions over and over and end up in large amounts of debt for the foreseeable future? Smart?
sgloutnikov 13y ago
Inequality for All is a movie worth checking out - http://inequalityforall.com http://inequalityforall.com

Samuel_Michon 13y ago

> The top 0.0001% gained their wealth not by inheriting it How did you come to that conclusion? I looked for that in the figures, but I couldn’t find what percentage came into money from an inheritance. Perhaps it’s placed in the 12% ‘Diversified/Other’ category, but the impression I got from the article was that they tallied how the money was earned in the first place, not where the ones holding the purse got it from. I believe your interpretation of the article in this aspect is incorrect. For instance, 4 of the top 10 spots are taken up by members of the Walton family. Those people inherited their wealth from Bud and Sam Walton, the founders of Wal*Mart. http://en.wikipedia.org/wiki/Walton_family http://en.wikipedia.org/wiki/Walton_family

alnis 13y ago
From the article: > Kaplan and Rauh find that America’s wealthiest are no longer a collection of Rockefellers and Carnegies. During the period the researchers investigated, the number of individuals on the Forbes 400 who were the first in their family to run a business rose from 40% to 69%. Sixty percent of individuals on the list grew up wealthy in 1982 while only 32% did in 2011. > Although being born into wealth is less and less necessary for admission to the club of America’s wealthiest individuals, ...
- Samuel_Michon 13y ago
  Thanks for your input, but the comment I was responding to was: > The top 0.0001% gained their wealth not by inheriting it Your contribution does not cover that.
  - thwarted 13y ago
    That's the assertion from the priceonomics.com article, covered by the paragraphs from the article quoted by alnis.
deleted 13y ago
[deleted]
walid 13y ago
Do some math. According to Wikipedia the population of the USA is 316,856,000. The 0.0001% of the population is 31685 after removing partial human beings caused by mathematical division. If the Forbes 400 list is used as a sample space for the rest of the 0.0001% then the numbers seem plausible. Note that I'm just playing "mathematician" and I haven't analyzed the 400 people in the list or did anything deeply scientific.
- amitutk 13y ago
  0.0001% of 316,856,000 is 317 (after rounding partial human beings caused by mathematical division), close enough to 400.
  - walid 13y ago
    Yup my bad, I just multiplied 316,856,000 by 0.0001 without dividing by 100.

walid 13y ago

The last sentence is the most important point of the article and probably should have been a separate article on its own: > America’s .0001% is becoming more meritocratic, but the means of a middle class background remain a necessary launching board. So in other words the most important aspect is to be from the middle class to be successful otherwise your chances are much less. Makes sense on many levels such as chances of personal development due to financial and psychological stability. Poverty has been in the news lately and I read an article on how being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive.

humanrebar 13y ago
> being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. While that's poetic, I'm very skeptical that you could even prove that empirically. It's much more likely (because it is empirically demonstrable) that IQ is more strongly impacted by genetics (IQ of the parents), prenatal care (especially with respect to smoking and binge drinking), and childhood (mal)nutrition. I'm not sure how you would even test "obsession with survival" controlling for those things, all of which are much more common in poverty-stricken households. I'm not saying that worrying about the next meal isn't terrible, but I am saying that we need to make sure we're not getting our causes and effects mixed up here. We can't just emulate "middle class" advantages for poor kids and expect the playing field to be level. In other words, it's not as simple as saying being middle class is necessary to be successful, because to some degree, having minimally successful parents is necessary to be middle class in the first place. And why are parents successful? Probably things like good impulse control, general responsibility, mental health, and innate intelligence. Many of those things have certain genetic components. So how do we make sure every kid has a fair shake at being rich? I'm not sure there's a good answer to that since it seems like so many of your cards are dealt in who your parents are. If you're really worried about it, I suggest you support substance-abuse recovery programs and food banks. Keeping kids healthy, well-fed, and free of birth defects are things we should be doing anyway.
- nitrogen 13y ago
  > > being poor impacts IQ simply because it becomes the mind's obsession of finding means to survive. > While that's poetic, I'm very skeptical that you could even prove that empirically. A study which claims to show exactly this: https://news.ycombinator.com/item?id=6298326 https://news.ycombinator.com/item?id=6298326 Anecdotally, I consider this plausible based on my own experiences during lean months as a startup founder.

deleted 13y ago

[deleted]

deleted 13y ago

[deleted]

pringles885 13y ago

That is absolutely wrong. The middle class got richer. http://1.bp.blogspot.com/-q83NyGTLock/UekhmnoX4tI/AAAAAAAABc8/2DTpx4H9Rug/s1600/family+incomes.jpg http://1.bp.blogspot.com/-q83NyGTLock/UekhmnoX4tI/AAAAAAAABc...

bedhead 13y ago

The widening wealth inequality as it relates to inheritance can be explained mostly by one simple concept, something Buffett himself call the most powerful force in the universe: compounding. Wise people with money, given enough time, will rocket to become insanely wealthy. Compounding does nothing for the middle class who generally spend most of their income, and it works the opposite way for the poor who are debtors. Over time this force will make the wealth gap worse and worse, which is exactly what's happened.

deleted 13y ago
[deleted]
ljf 13y ago
"wise people with money" or did you mean "people who are wise with their money" - America seems to have a default setting of rich people = good, poor = stupid.
- leoedin 13y ago
  I don't think the commentor implied that people without money couldn't be wise, but just that people who are both wise and posess money will be able to make it grow.
- deleted 13y ago
  [deleted]
- bedhead 13y ago
  Just run a little experiment in Excel to see what I mean. Plug in 100 numbers representing wealth in a normal distribution. Then fast forward these over say, 25 years. But the key here is that the top ~20% grow at 15%, the bottom 20% grow at 0%, and everyone in between grows at inflation so about 3%. This is generally what happens in the real world, for the most part. Watch how skewed that normal distribution becomes over 25 years. It's not a conspiracy, it's just algebra.
- paulhauggis 13y ago
  So, what would you call people that continually make poor life decisions over and over and end up in large amounts of debt for the foreseeable future? Smart?

sgloutnikov 13y ago

Inequality for All is a movie worth checking out - http://inequalityforall.com http://inequalityforall.com