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this isnt new news. This has been brought up before. They question really should be "is this bad?" I have yet to see a compelling argument on why income dispar

this isnt new news. This has been brought up before. They question really should be "is this bad?" I have yet to see a compelling argument on why income disparity is bad. Unless you are stealing, scamming, or otherwise breaking the law to obtain enormous wealth then you deserve it. You are providing a good or service to the economy and are rewarded appropriately. If someone else can do it better than they reap the reward. Competition ensures that only the best deliverers of value are making the money. I am sure someone will cite some bankers <insert other regulated market here> raking in money with barriers to entry that are artificial...but that 99.99% of the time means that they lobbied the US Govt for regulations which protect them.

mr_spothawk 13y ago
> Unless you are stealing, scamming, or otherwise breaking the law to obtain enormous wealth then you deserve it. Yes. > Competition ensures that only the best deliverers of value are making the money. I'm not convinced that "competition" is occurring at that level. At least, not in any way comparable to the '2 entities competing in the market' sense. PS: I like money, a lot. And I have no problems with other people having a lot more of it than I do.
- collyw 13y ago
  I personally believe (and studies have backed this up) that a more equal society is better for everyone. So I have a problem when people earn money excessively (I'll leave the definition of that until I have had time to think about it. in some cases it is obvious).
- holograham 13y ago
  You are taking that second quote out of context. My next statement is agreeing that there are industries (like banking) that have a very obvious lack of competition. My next point was that lack of competition is enabled by government and not the free market.
Fomite 13y ago
Historically, income disparity has resulted in a decided lack of stability in the societies where it is present, with unpleasant consequences for all involved.
- MadManE 13y ago
  You say that like stability is inherently good to have.
  - Fomite 13y ago
    If you are profiting immensely from the system as it exists (which the 0.1% are) it is.
- thedufer 13y ago
  Historically, income disparity was a result of robbery, corruption, or some form of oppression. Only recently did high income start correlating somewhat with creation of wealth rather than redistribution. Its hard to determine whether the unpleasant consequences were a result of the income disparity or just correlated with it.
gjm11 13y ago
> Unless you are [...] breaking the law [...] [y]ou are providing a good or service to the economy and are rewarded appropriately. Not necessarily. You are providing a good or service to someone but it isn't necessarily doing any good to "the economy". An example: You are a successful hedge fund manager. You and your team of quants have a bunch of ingenious strategies for predicting the stock market, spotting arbitrage opportunities in derivative prices, etc. You successfully help your investors to get rich, for which they pay you very handsomely. But, for the most part, what you're enabling them to do is get rich at the expense of other market participants. If you weren't doing your job, the net value of the equities and derivatives markets would be pretty much exactly the same; it's just that it would be parcelled up a little differently. For the avoidance of doubt, I don't think there's anything wrong with any of that. Our hypothetical hedge fund manager isn't doing any net harm to speak of either. (There might be a bit of net good, through increasing liquidity and helping the market do its information-aggregating thing, and a bit of net good-or-harm depending on exactly who the fund's investors are.) The point is just that what a hedge fund manager is being rewarded for is making a particular set of people rich in what's largely a zero-sum game, not doing any net good overall. Another example: You study baseball or American football and get very good at identifying undervalued players. You offer your service to a major team. They get some bargains, win a lot of games, and pay you a big pile of money. All very well, and again for the avoidance of doubt I don't think there's anything wrong with this -- but you've benefited one set of people at others' expense. The overall quality of play hasn't changed (the pool of players is the same and you haven't done anything to make them play better), you've just enabled one team to get a bigger slice of the same pie. Note that none of this requires artificial barriers to entry, or crime, or even anything unethical. It's just that what you get paid for is benefiting the people who pay you and often the easiest way to do that is by moving value to them from elsewhere, rather than creating it anew.
- holograham 13y ago
  Everyone loves to cite Hedge Funds. I am no hedge fund expert but you mention a few benefits that they do provide...liquidity and information aggregating (which has derivatives such as market signalling) are very much benefits to society. What good is a stock to anyone if there isnt a liquid market to sell into (and yes the buyer should make money on that transaction). A personal hunch is that some hedge funds are breaking some laws but largely the hedge fund industry provides a net benefit to the economy. The stock market and futures markets are NOT zero sum games. They provide capital, incentive structures, and a host of other benefits to both businesses AND everyday people (like you who has a retirement fund with lots of assets that pass through hedge funds). Businesses can (and do) grow and appreciate your assets (and hedge fund assets), etc etc. Your second example is dead wrong. Identifying undervalued resources is an enormous efficiency gain in a market. They lower their cost structure while keeping quality high. It ensures that top athletes salaries are in check because they truly need to be twice as good (or 10x as good) to be paid millions of dollars. Which makes game tickets, jerseys, etc affordable to more fans who in turn buy more tickets, fan paraphernalia, etc. Yes indeed the pool of players is set (at all of humanity) but the wealth generated from quality entertainment is not capped (or capped at the leisure money of a market). Those sports leagues are always looking to expand their market and keeping costs low is one major strategy to that.
brianpgordon 13y ago
To some extent that disparity is fine- it's the basis of capitalism. But as wealth disparity becomes higher, you have to work extra hard to ensure that poor people have the opportunity to be successful and not become trapped in the underclass. This means health - both mental (maternity/paternity leave) and physical (free healthcare) - and free good (i.e. not underfunded inner-city) education up through undergrad. This also includes welfare to help people with poor financial security to get back on their feet after a crisis. Unfortunately, we're doing the opposite: the more power the upper class accumulates, the more it tries to cut such programs, because they personally wouldn't benefit. This is where the problem lies as I see it. The rich very rationally use their massive influence in government (cf Citizens United) to stay rich by passing tax cuts and reducing entitlement spending, while the majority of Americans get the shaft. And because of the two-party system and tactical voting, there's nothing we can do about it at the voting booth.
- johngalt 13y ago
  When is the last time entitlement spending went down in aggregate? Any 'cuts' I've seen have been merely been reducing the rate of automatic growth. Clarification Edit: You made the assertion that entitlement spending is being cut by the influence of the 1%. I'm asking for where this has been the case. Vague allusions to population growth, college costs and inflation aren't sufficient. Growing college costs could even be indicative of an increase in entitlements.
  - brianpgordon 13y ago
    Really? Well, the underlying population is growing, college is getting more expensive, inflation is making money worth less.. are you sure that they're not actually cuts per unit benefit?

mr_spothawk 13y ago

> Unless you are stealing, scamming, or otherwise breaking the law to obtain enormous wealth then you deserve it. Yes. > Competition ensures that only the best deliverers of value are making the money. I'm not convinced that "competition" is occurring at that level. At least, not in any way comparable to the '2 entities competing in the market' sense. PS: I like money, a lot. And I have no problems with other people having a lot more of it than I do.

collyw 13y ago
I personally believe (and studies have backed this up) that a more equal society is better for everyone. So I have a problem when people earn money excessively (I'll leave the definition of that until I have had time to think about it. in some cases it is obvious).
holograham 13y ago
You are taking that second quote out of context. My next statement is agreeing that there are industries (like banking) that have a very obvious lack of competition. My next point was that lack of competition is enabled by government and not the free market.

Fomite 13y ago

Historically, income disparity has resulted in a decided lack of stability in the societies where it is present, with unpleasant consequences for all involved.

MadManE 13y ago
You say that like stability is inherently good to have.
- Fomite 13y ago
  If you are profiting immensely from the system as it exists (which the 0.1% are) it is.
thedufer 13y ago
Historically, income disparity was a result of robbery, corruption, or some form of oppression. Only recently did high income start correlating somewhat with creation of wealth rather than redistribution. Its hard to determine whether the unpleasant consequences were a result of the income disparity or just correlated with it.

gjm11 13y ago

> Unless you are [...] breaking the law [...] [y]ou are providing a good or service to the economy and are rewarded appropriately. Not necessarily. You are providing a good or service to someone but it isn't necessarily doing any good to "the economy". An example: You are a successful hedge fund manager. You and your team of quants have a bunch of ingenious strategies for predicting the stock market, spotting arbitrage opportunities in derivative prices, etc. You successfully help your investors to get rich, for which they pay you very handsomely. But, for the most part, what you're enabling them to do is get rich at the expense of other market participants. If you weren't doing your job, the net value of the equities and derivatives markets would be pretty much exactly the same; it's just that it would be parcelled up a little differently. For the avoidance of doubt, I don't think there's anything wrong with any of that. Our hypothetical hedge fund manager isn't doing any net harm to speak of either. (There might be a bit of net good, through increasing liquidity and helping the market do its information-aggregating thing, and a bit of net good-or-harm depending on exactly who the fund's investors are.) The point is just that what a hedge fund manager is being rewarded for is making a particular set of people rich in what's largely a zero-sum game, not doing any net good overall. Another example: You study baseball or American football and get very good at identifying undervalued players. You offer your service to a major team. They get some bargains, win a lot of games, and pay you a big pile of money. All very well, and again for the avoidance of doubt I don't think there's anything wrong with this -- but you've benefited one set of people at others' expense. The overall quality of play hasn't changed (the pool of players is the same and you haven't done anything to make them play better), you've just enabled one team to get a bigger slice of the same pie. Note that none of this requires artificial barriers to entry, or crime, or even anything unethical. It's just that what you get paid for is benefiting the people who pay you and often the easiest way to do that is by moving value to them from elsewhere, rather than creating it anew.

holograham 13y ago
Everyone loves to cite Hedge Funds. I am no hedge fund expert but you mention a few benefits that they do provide...liquidity and information aggregating (which has derivatives such as market signalling) are very much benefits to society. What good is a stock to anyone if there isnt a liquid market to sell into (and yes the buyer should make money on that transaction). A personal hunch is that some hedge funds are breaking some laws but largely the hedge fund industry provides a net benefit to the economy. The stock market and futures markets are NOT zero sum games. They provide capital, incentive structures, and a host of other benefits to both businesses AND everyday people (like you who has a retirement fund with lots of assets that pass through hedge funds). Businesses can (and do) grow and appreciate your assets (and hedge fund assets), etc etc. Your second example is dead wrong. Identifying undervalued resources is an enormous efficiency gain in a market. They lower their cost structure while keeping quality high. It ensures that top athletes salaries are in check because they truly need to be twice as good (or 10x as good) to be paid millions of dollars. Which makes game tickets, jerseys, etc affordable to more fans who in turn buy more tickets, fan paraphernalia, etc. Yes indeed the pool of players is set (at all of humanity) but the wealth generated from quality entertainment is not capped (or capped at the leisure money of a market). Those sports leagues are always looking to expand their market and keeping costs low is one major strategy to that.

brianpgordon 13y ago

To some extent that disparity is fine- it's the basis of capitalism. But as wealth disparity becomes higher, you have to work extra hard to ensure that poor people have the opportunity to be successful and not become trapped in the underclass. This means health - both mental (maternity/paternity leave) and physical (free healthcare) - and free good (i.e. not underfunded inner-city) education up through undergrad. This also includes welfare to help people with poor financial security to get back on their feet after a crisis. Unfortunately, we're doing the opposite: the more power the upper class accumulates, the more it tries to cut such programs, because they personally wouldn't benefit. This is where the problem lies as I see it. The rich very rationally use their massive influence in government (cf Citizens United) to stay rich by passing tax cuts and reducing entitlement spending, while the majority of Americans get the shaft. And because of the two-party system and tactical voting, there's nothing we can do about it at the voting booth.

johngalt 13y ago
When is the last time entitlement spending went down in aggregate? Any 'cuts' I've seen have been merely been reducing the rate of automatic growth. Clarification Edit: You made the assertion that entitlement spending is being cut by the influence of the 1%. I'm asking for where this has been the case. Vague allusions to population growth, college costs and inflation aren't sufficient. Growing college costs could even be indicative of an increase in entitlements.
- brianpgordon 13y ago
  Really? Well, the underlying population is growing, college is getting more expensive, inflation is making money worth less.. are you sure that they're not actually cuts per unit benefit?