News The Distribution of Wealth in the US

[arildno]

Because they do. What else? [ I already told you we're discussing beliefs. There is no why. ]

The goal of equality should be restricted to some subset of those areas where it could rationally be expected to be successfully implemented.

 

[Dale]

Because they do. What else? [ I already told you we're discussing beliefs. There is no why. ]

Such beliefs (beliefs without a "why") are known as irrational beliefs. An irrational belief is not a particularly compelling basis for accepting a conclusion.

 

[D H]

Also, some people are born richer, are more intelligent, have more talents, are healthier or had simply more luck in their lifes than others.

That's the way of the world. "All men are created equal" does not mean that everyone is the same; obviously we are not. I cannot throw a baseball 99 mph, so I can't negotiate a contract that pays me several thousand dollars per pitch. What "all men are created equal" means is that we all must be treated equally before the law. It does not mean that we men must all be made equal, by force if needed. That is the way to the world of Harrison Bergeron, the short story by Kurt Vonnegut that russ watters referenced in post #43.

Or, let's imagine everybody would work equally hard and were equally clever ...

And how are you going to achieve this outcome?

Some people are workaholics; they just aren't happy if they put in less than a 50 hour week. Others work 40 hours but manage to always produce what others take 60 hours to accomplish. Yet others put in a 40 hour week because they have to, but the employer is lucky if to get 20 hours of work out of such people. How are you going to address these disparities?

Some people are more clever than others, stronger than others, more coordinated than others, better with people than others. Sans a Harrison Bergeron type solution, how are you going to remedy these inequalities?

How are you going to deal with the perpetually lucky? Should I get to the airport 15 minutes before the flight the response will be "Harrumph. We just gave your seat to someone else; you'll have to wait for the next flight." My perpetually lucky son does that and the response is "Hmmm. We just gave your seat to someone else; we'll have to give you a seat in first class."

 

[FlexGunship]

I said in an earlier post that poverty in the west, defies definition. Let me expand: We have it so good that scaricity of needs the rest of the world uses to define poverty -- food, shelter, water, sanitation, electricity, clothing, primary eductation -- simply don't exist in the west. We're at the point where - with a straight face - we define "poor" as window air conditioning instead of central air, a mediocre computer, lack of HDTV and one car per family instead of two or three. It's a joke. I drive through the poorest city in my state on the way to work. I drive past rows and rows of run-down townhouses and see satellite dishes. Lots of them. This is a level of "poverty" worthy of blowing up our system? C'mon - that's not evidence of failure, that's evidence of spectacular success!

That's the way of the world. "All men are created equal" does not mean that everyone is the same; obviously we are not. I cannot throw a baseball 99 mph, so I can't negotiate a contract that pays me several thousand dollars per pitch. What "all men are created equal" means is that we all must be treated equally before the law. It does not mean that we men must all be made equal, by force if needed. That is the way to the world of Harrison Bergeron, the short story by Kurt Vonnegut that russ watters referenced in post #43.

Just pausing a moment to cheer you on!

 

[Dale]

This is a level of "poverty" worthy of blowing up our system? C'mon - that's not evidence of failure, that's evidence of spectacular success!

Another indication of the fantastic economic success of our system is the fact that the number 1 health concern of our "poor" is obesity. At no other point in history has a society been so wealthy that even the "poor" were still able to acquire enough food to become obese.

 

[D H]

Another indication of the fantastic economic success of our system is the fact that the number 1 health concern of our "poor" is obesity. At no other point in history has a society been so wealthy that even the "poor" were still able to acquire enough food to become obese.

That is a bit disingenuous. Just because the developed world has pretty much eliminating starvation does not mean that the developed worlds have solved the food problem. One key reason that the poor in developed nations have a much higher tendency to obesity is because a low-quality, fat-inducing diet is much cheaper than is a high quality diet. The poor in the US can eat, but not well. Eating well is a luxury that the poor cannot afford.

 

[FlexGunship]

That is a bit disingenuous. Just because the developed world has pretty much eliminating starvation does not mean that the developed worlds have solved the food problem. One key reason that the poor in developed nations have a much higher tendency to obesity is because a low-quality, fat-inducing diet is much cheaper than is a high quality diet. The poor in the US can eat, but not well. Eating well is a luxury that the poor cannot afford.

I'm not sure about every demographic, but in my neighborhood feeding a family on frozen spinach ($1.19), fresh corn ($0.33 per ear), a can of beans ($1.69), and some boneless chicken ($1.99/lb) is STILL cheaper than trying to feed a family from McDonald's.

Blaming obesity on the cost of food seems disingenuous. Perhaps you could argue that it's more difficult to get and and takes longer to prepare but that's really just blaming the obese for their obesity (something you are trying to avoid).

Besides, I don't know of any research that says that weight gain is linked to anything other than excessive calorie intake. There are lots of fancy diets and nutritional plans, but if you eat fewer calories than you use, you will lose weight.

 

[Dale]

That is a bit disingenuous. Just because the developed world has pretty much eliminating starvation does not mean that the developed worlds have solved the food problem. One key reason that the poor in developed nations have a much higher tendency to obesity is because a low-quality, fat-inducing diet is much cheaper than is a high quality diet. The poor in the US can eat, but not well. Eating well is a luxury that the poor cannot afford.

It is not disingenuous at all. The poor can eat. In earlier times the chief health concern of the poor was starvation. That is an economic success!

 

[arildno]

That is a bit disingenuous. Just because the developed world has pretty much eliminating starvation does not mean that the developed worlds have solved the food problem. One key reason that the poor in developed nations have a much higher tendency to obesity is because a low-quality, fat-inducing diet is much cheaper than is a high quality diet. The poor in the US can eat, but not well. Eating well is a luxury that the poor cannot afford.

This is SO untrue!

Buying raw materials for bread, for example, baking it for yourself, and similarly for lots of other food stuffs are STILL much less expensive than going to McDonald's.

The critical factor is that the food at McDonald's is READY-MADE, and is abundantly cheaper than other types of ready-made food deliverers.

 

[mheslep]

... If all US citizens get access to decent preventive health care, costs for all of us insured people should drop, and the incidence of emergency-room use should drop as well - the most expensive medical care in the system.

Turns out that no it doesn't. While guaranteed preventative health care would reduce instances of catastrophic illness, the cost of the X additional preventative treatments is still greater than the cost of the Y fewer treatments of catastrophic illness.

 

[FlexGunship]

Turns out that no it doesn't. While guaranteed preventative health care would reduce instances of catastrophic illness, the cost of the X additional preventative treatments is still greater than the cost of the Y fewer treatments of catastrophic illness.

Well, that's not necessarily a fact. However, either conclusion doesn't seem to be "obviously true."

 

[Evo]

That is a bit disingenuous. Just because the developed world has pretty much eliminating starvation does not mean that the developed worlds have solved the food problem. One key reason that the poor in developed nations have a much higher tendency to obesity is because a low-quality, fat-inducing diet is much cheaper than is a high quality diet. The poor in the US can eat, but not well. Eating well is a luxury that the poor cannot afford.

I'm not sure about every demographic, but in my neighborhood feeding a family on frozen spinach ($1.19), fresh corn ($0.33 per ear), a can of beans ($1.69), and some boneless chicken ($1.99/lb) is STILL cheaper than trying to feed a family from McDonald's.

Blaming obesity on the cost of food seems disingenuous. Perhaps you could argue that it's more difficult to get and and takes longer to prepare but that's really just blaming the obese for their obesity (something you are trying to avoid).

Besides, I don't know of any research that says that weight gain is linked to anything other than excessive calorie intake. There are lots of fancy diets and nutritional plans, but if you eat fewer calories than you use, you will lose weight.

DH is correct, it is a well known fact in America that low calorie diets are much more expensive than high calorie diets.

Healthy eating really does cost more.

That’s what University of Washington researchers found when they compared the prices of 370 foods sold at supermarkets in the Seattle area. Calorie for calorie, junk foods not only cost less than fruits and vegetables, but junk food prices also are less likely to rise as a result of inflation. The findings, reported in the current issue of the Journal of the American Dietetic Association, may help explain why the highest rates of obesity are seen among people in lower-income groups.

continued...

http://well.blogs.nytimes.com/2007/12/05/a-high-price-for-healthy-food/

 

[FlexGunship]

DH is correct, it is a well known fact in America that low calorie diets are much more expensive than high calorie diets.

Calorie for calorie, junk foods not only cost less than fruits and vegetables, but junk food prices also are less likely to rise as a result of inflation.

Bolding is mine.

Isn't the whole point to get fewer calories while still maintaining baseline nutirion? It's well known that corn has fewer calories (about 80 per ear) than a Twinkie (about a 160). But no one would suggest that a Twinkie is nutritionally equivalent to two ears of corn!

A low calorie diet is still cheaper as long as you don't try to use low calorie foods in a high calorie diet. I found a blog that disagrees with your blog, Evo: (http://www.thepacifican.com/new/index.php?option=com_content&task=view&id=3316&Itemid=100016).

Furthermore, your evidence is a NYTime blog post, but the NYTimes ITSELF disagrees: (http://www.nytimes.com/2011/09/25/opinion/sunday/is-junk-food-really-cheaper.html).

[...]or “it’s more affordable to feed a family of four at McDonald’s than to cook a healthy meal for them at home.”

This is just plain wrong. In fact it isn’t cheaper to eat highly processed food: a typical order for a family of four — for example, two Big Macs, a cheeseburger, six chicken McNuggets, two medium and two small fries, and two medium and two small sodas — costs, at the McDonald’s a hundred steps from where I write, about $28. (Judicious ordering of “Happy Meals” can reduce that to about $23 — and you get a few apple slices in addition to the fries!)

In general, despite extensive government subsidies, hyperprocessed food remains more expensive than food cooked at home. You can serve a roasted chicken with vegetables along with a simple salad and milk for about $14, and feed four or even six people. If that’s too much money, substitute a meal of rice and canned beans with bacon, green peppers and onions; it’s easily enough for four people and costs about $9.

 

[mheslep]

...If you think that the income gap in this country isn't a problem, think again. History is littered with revolution after revolution when the poor rise up against a plutocracy and demand a more level playing field. We are on the verge of it happening again.

In the last century in particular, history is littered with demigods falsely arguing that another ethnic group or another class was responsible for their woes in life (Rousseau, Robespierre, Lenin, Stalin, Hitler, Mao, Milošević, Colonel http://en.wikipedia.org/wiki/Th%C3%A9oneste_Bagosora" ).

 

[Evo]

Bolding is mine.

Isn't the whole point to get fewer calories while still maintaining baseline nutirion? It's well known that corn has fewer calories (about 80 per ear) than a Twinkie (about a 160). But no one would suggest that a Twinkie is nutritionally equivalent to two ears of corn!

A low calorie diet is still cheaper as long as you don't try to use low calorie foods in a high calorie diet. I found a blog that disagrees with your blog, Evo: (http://www.thepacifican.com/new/index.php?option=com_content&task=view&id=3316&Itemid=100016).

Furthermore, your evidence is a NYTime blog post, but the NYTimes ITSELF disagrees: (http://www.nytimes.com/2011/09/25/opinion/sunday/is-junk-food-really-cheaper.html).

Who says they're eating at McDonald's? The truly poor are eating the cheapest things they can buy which are the fattier cuts of meat, beans, noodles, rice, no fruits, fish, or vegetables.

 

[FlexGunship]

Who says they're eating at McDonald's? The truly poor are eating the cheapest things they can buy which are the fattier cuts of meat, beans, noodles, rice, no fruits, fish, or vegetables.

I'm not sure that any of those things you mentioned were included in the blog post you linked to. I got a distinctly different impression.

Foods with high energy density, meaning they pack the most calories per gram, included candy, pastries, baked goods and snacks.

That quote is from the blog you cited. I don't think they included meat, beans, noodles, or rice in the "junk food" category. I'm not sure they were attempting to create "meals" from the sample foods they gathered.

 

[mheslep]

Well, that's not necessarily a fact. However, either conclusion doesn't seem to be "obviously true."

You're right, it is not a fact; it was the conclusion of a several groups (e.g. CBO) looking at the issue during the run up to the passage of the 2010 US health care law, and undisputed so far as I know by any reputable work.

 

[FlexGunship]

You're right, it is not a fact; it was the conclusion of a several groups (e.g. CBO) looking at the issue during the run up to the passage of the 2010 US health care law, and undisputed so far as I know by any reputable work.

Fair enough. I obviously agree with you on the point, but it seemed unfair to simply declare it a fact. Since you have something to back it up, I guess the point is moot.

 

[daveb]

That is a bit disingenuous. Just because the developed world has pretty much eliminating starvation does not mean that the developed worlds have solved the food problem. One key reason that the poor in developed nations have a much higher tendency to obesity is because a low-quality, fat-inducing diet is much cheaper than is a high quality diet. The poor in the US can eat, but not well. Eating well is a luxury that the poor cannot afford.

True. It used to be that obesity was the province of the wealthy class (or at least obesity was seen as a sign of wealth). Much of this had to do with the wealthy class's attitude towards vegetables and fruit which were eaten raw mostly by the poor (the rich would eat prepared fruits in tarts and pies, though). Now, fruits and vegetables are more expensive than the crappy, cheaper foods, so the poor don't eat as much (unless they grow their own).

 

[Dale]

My apologies to all for helping to derail the thread off of the original topic and onto the much less interesting topic of obesity among the poor.

 

[WhoWee]

This is re-posted from (my) post 80 - maybe this will get us back to the OP?

"Perhaps it would be helpful to put a face on the "uber-rich"?

Warren Buffet?
Bill Gates?

How about (after mourning him last week) Steve Jobs (it was reported Apple has more cash than the US)?

What do we want to DO to these people - in the context of creating "a system that leans towards justice and fairness"? What do these people owe the people marching through the streets of America demanding change?

http://www.forbes.com/forbes-400/list/
These are the faces of the uber-rich - the first hedgefund person (George Soros) is in position number 7 and the second is in position 17 and Carl Icahn is number 25 - the rest of the top 25 are entrepreneurs or their families."

 

[John Creighto]

Well thanks, but you didn't really agree with that much of what I said: I was arguing specifically against both the need and wisdom of "fundamental change".

Well, first we have to decide what fundamental change is. In my opinion fundamental change happens all the time in law, politics, economics, technology and through social movements. Another name we might give to such events is "black swan's".

When economic downturns happen, some people will have the knee-jerk reaction that it means the system requires "fundamental change". It doesn't. The economy is cylical and downturns happen. Some are worse than others, and this one is pretty bad. And while it has some specific causes, most do and those particular causes (credit default swaps, unreasonably low interest rates, poorly-conceived lending rules) can be fixed without dynamiting the entire system. People just need to relax a little and focus on the real problems.

Well, what do you consider dynamiting the system? Did the New-Deal dynamite the system of Laissez-faire capitalism in favor of a system of state/corporate capitalism? If we went back to small government and system that gave large corporations less of an advantage would this be dynamiting the system, gradual change or something in-between?

All efforts to try to stabilize a system of market imbalances in the end lead to greater instabilities in the long run. The longer we try to keep the market from self correcting the greater the crash and the greater the likely hood of a knee jerk reaction that will take us in the wrong direction.

We can fight all we want to protect the value of the capital the people who hold the wealth have accumulated but but if the system is failing a large sector of the population and nothing is done to address the flaws in the system then those in power are creating a dangerous and unstable environment.

Now while I argued that a sufficiently advanced economy can afford to take a little off the top to help those at the bottom, the middle of a downturn is precisely the WORST time for such change, as the economy is less able to withstand a reduction in growth in bad times than in good times. Unfortunately, though, major changes require political capital and political capital is at its greatest during hard times. This is why hard times are dangerous, and we've seen examples throughout history of countries failing because when times got tough they made ill-conceived, fundamental changes.

Do you expect demand to be driven by the people at the top or the people at the bottom. It is true that the people at the top can create demand but the assets the people at the top hold in a large part derive their wealth based on the products they sell the people at the bottom.

At the same time, this thread is focused on one particular symptom as evidence that the system needs "fundamental change", when the symptom isn't even relevant to the supposed disease. None of what ails us now as a result of the recession is caused by an uneven wealth distribution.

If it is okay to inject a little bit of history in this discussion let me state this again:

"What economists call over-production is but a production that is above the purchasing power of the worker, who is reduced to poverty by capital and State. Now, this sort of over-production remains fatally characteristic of the present capitalist production, because workers cannot buy with their salaries what they have produced and at the same time copiously nourish the swarm of idlers who live upon their work.
http://www.panarchy.org/kropotkin/1896.eng.html

This was written in 1898 by Piotr Kropotkin

The simple fact is that the combination of large wealth inequality and having a high percentage of the economies wealth valued based on the purchasing power of the people at the bottom leads to a situation where the poor do not have the money to create the demand needed to justify the wealth holdings of the rich. All efforts to perpetuate these imbalances lead to unnecessary inefficiencies which result in hardship. These inefficiencies are allowed to be created because financial institutions are allowed to leverage based on an overvaluation of their capital. This expands the money supply based on fictitious wealth and erodes the buying power of the poor.

The refusal of main stream media and politicians to address these imbalances and contradictions means that the people who do address these issues will gain political power. Currently the only somewhat main stream politician addressing the fact that the poor don't have the money to stimulate the economy and the relationship between wealth inequalities and major economic downturns is Robert Reich. My guess is Reich favors a large public sector and unless people who favor smaller government are willing to address these issues it is likely that we are headed in the direction of large governments.

In fact, the OP's link shows that the wealth of the uber-rich grew substantially in the early to mid-90s, then crashed in 2000 with the stock market, then started back up again a couple of years later. The 90's, being the liberal heyday, this shows clearly that liberals are interpreting the data backwards: The vast growth in upper level incomes in the 90's, due to stock market growth and the internet boom caused spectatularly low unemployment and budget surplusses due to more capital gains income from the upper level earners and less welfare/unemployment payouts to the lower level earners.

If you read the book, "The Dollar Crisis" it essentially said that the only progress Clinton made on the debt was due to capital gains taxes". In other word the mild progress that Clinton made on the debt was simply a result of a bubble fueled by cheap money which essentially leads to a growth in debt.

That is -- if income inequality is the symptom and not the disease. Liberals fall victim (partially due to politicians pounding it into them) to the idea that wealth is a zero sum game and 'the rich get richer while the poor get poorer', so wealth inequality is a measure of poverty. That's false. Income inequality certainly has risen in the past 20 or 30 years, but poverty? Nope. So the income inequality issue really is either a misunderstanding of what inequality means or is jealousy over how much faster the rich are getting richer than the poor: The rich are too rich, so we must take their wealth. Sorry, but that's no way to run an economy. Certainly no reason to scuttle the system we have.

I'll address this last paragraph in another thread but I don't believe that the buying power of the bottom have of the income distribution has remained constant.

 

[WhoWee]

The refusal of main stream media and politicians to address these imbalances and contradictions means that the people who do address these issues will gain political power. Currently the only somewhat main stream politician addressing the fact that the poor don't have the money to stimulate the economy and the relationship between wealth inequalities and major economic downturns is Robert Reich. My guess is Reich favors a large public sector and unless people who favor smaller government are willing to address these issues it is likely that we are headed in the direction of large governments.

A somewhat Main Stream politician label doesn't quite fit him - does it? Robert Reich said this about the stimulus - and why it shouldn't benefit white construction workers.


Then he was concerned about the TEA Party - because they wanted to end the Fed?
http://online.wsj.com/article/SB10001424052702304173704575578200086257706.html

Now one of the goals of the Occupiers is ending the Fed and he supports them?

 

[Evo]

I'm not sure that any of those things you mentioned were included in the blog post you linked to. I got a distinctly different impression.



That quote is from the blog you cited. I don't think they included meat, beans, noodles, or rice in the "junk food" category. I'm not sure they were attempting to create "meals" from the sample foods they gathered.

That "blog' I cited was about "this" peer reviewed published paper.

The economics of obesity: dietary energy density and energy cost.
Drewnowski A, Darmon N.

SourceNutritional Sciences Program, School of Public Health and Community Medicine, University of Washington, Seattle, WA 98195, USA.
adamdrew@u.washington.edu

Abstract

Highest rates of obesity and diabetes in the United States are found among the lower-income groups. The observed links between obesity and socioeconomic position may be related to dietary energy density and energy cost. Refined grains, added sugars, and added fats are among the lowest-cost sources of dietary energy. They are inexpensive, good tasting, and convenient. In contrast, the more nutrient-dense lean meats, fish, fresh vegetables, and fruit generally cost more.

http://www.ncbi.nlm.nih.gov/pubmed/16002835

And we can get back on topic now.

 

[John Creighto]

A somewhat Main Stream politician label doesn't quite fit him - does it? Robert Reich said this about the stimulus - and why it shouldn't benefit white construction workers.


Then he was concerned about the TEA Party - because they wanted to end the Fed?
http://online.wsj.com/article/SB10001424052702304173704575578200086257706.html

Now one of the goals of the Occupiers is ending the Fed and he supports them?

Robert Reich was Clinton's secretary of labor. I consider that fairly main stream. Ron Paul might also talk about some of the contradictions in the system but there are far too many politicians not addressing the imbalances in the economy.

My point wasn't I agree with Robert Reich. My point was if most politicians continue to perpetuate the same obvious sophistries that ignore the imbalances in the system and this gives people like Reich power. If you don't like the direction Reich would take the country you should look for someone closer to your views who is willing to tell it like it is.

Now with regards to your link. The unemployment rate is considerably higher in the African American population. I do not agree that affirmative action is the way to address this but there has been a significant amount of politicians supporting this type of policy for quite a while. As with regards to the fed. Well, some challenge the notion of government controlling the money supply, politicians in a large part support the role of the central bank. Whether or not you agree with this it hardly makes Reich's view on this issue fringe.

We shouldn't have to agree with everything someone says to listen to them. Odds are there will be few people we are in complete agreement. The only reason there is large clustering of views along party lines is politicians exploit social group identities to divide people along party lines.

Listen to the slogan on wallstreet: "A people united can't be divided". People are sick of the false dichotomy between supply side vs demand side economics. The truth is far to much money is going to administrating both government and large corporations. This is a long ways away from the notion of an efficient market.

 

[Jimmy Snyder]

When I followed the link in the OP, I was taken by the relative stability of the numbers in the tables. Here is an example, the first table in the link.

  Total Net Worth 
Top 1 percent Next 19 percent Bottom 80 percent 
1983 33.8% 47.5% 18.7% 
1989 37.4% 46.2% 16.5% 
1992 37.2% 46.6% 16.2% 
1995 38.5% 45.4% 16.1% 
1998 38.1% 45.3% 16.6% 
2001 33.4% 51.0% 15.6% 
2004 34.3% 50.3% 15.3% 
2007 34.6% 50.5% 15.0%

What I see here is that the top 1% increased their slice of the pie by about 13% from 1983 to 1995, but had frittered it away by 2001, presumably on fatty food if I understand the rest of the posts in this thread. Since then it hasn't changed much and for those poor souls 2007 was a lot like 1983 all over again. The poor lost out, not to the uber rich, but to the merely well off.

If I read the OP correctly, he rejects our system because it lacks justice and fairness. Did I get that right? No program is suggested for getting back in his good graces. However, given the link, I expect it is to take away the wealth of the wealthy and give it to the ... Here I'm not sure, give it to the bottom 80%?, 20%?, 1%. I don't know. I do know this though. The top 1% are not holding $50 trillion in cash. In order to give anything edible to the lower end you're going to have to sell non-liquid assets. This will not increase their value, in fact, personally, I wouldn't give ten cents on the dollar knowing that whatever I buy will be taken away from me too. Perhaps the poor will buy the stuff. Maybe my neighbor will buy some. He's been living the good life because he makes so much more money than I do. As a result he is now in debt, poor, and in need of the money in my 401K so he can buy the assets of the rich so that the rich will have cash that we can take away from them to give to him so he can stop eating the junk food at McDonalds and eat the cholesterol ridden dishes at Alain Ducasse where I can't go because that would be unfair. Obviously, I don't like it when someone chooses equality over freedom. But it really sticks in my craw when they claim it brings justice and fairness.

 

[MarcoD]

Sorry, but no statistics which stops at 2007 can be taken seriously. The financial bust was in 2008, and the effects are still developing.

Given your stats, I would only want to know what happened afterwards, and can't care about the rest of the argument. [ I didn't even notice that you were making a case for the poor. ]

 

[Jimmy Snyder]

Given your stats, I would only want to know what happened afterwards, and can't care about the rest of the argument.

Not my stats, the OP's stats.

 

[CAC1001]

A free society will always have an unequal distribution of wealth, but everyone is unequally wealthy.

 

[WhoWee]

Not my stats, the OP's stats.

Ivan, we made it to post 120 - now we need you.