Discussion of The 9.9 Percent is the New American Aristocracy (Atlantic Monthly)

[bacchi]

  If you want the benefits from not eating the marshmellow, it is undeniably simple.  Don't eat the marshmellow.  Yes, it does look like being willing to resist eating the marshmellow has a genetic component to it, in which case you can't rightfully take credit for it.  But at the same time, it doesn't mean people who resist don't want to eat the marshmellow;

No it's not "undeniably simple".  No mention of the fact that kids who grow up with untrustworthy authority figures aren't likely to trust that a 2nd marshmellow will actually be theirs? 

https://bold.expert/marshmallows-arent-likely-to-fix-low-income-kids-real-problems/

No surprise many here try to deny the points made in the article, it's too much cognitive dissonance.  It's not that difficult to increase social and economic mobility, initiate policies that result in higher mobility in other countries.  Same with universal health care.  We know what works, we just lack the want to due to the high level of selfishness of many Americans.

Thank you. The marshmallow experiment is best done with cohorts.

[montgomery212]

Definitely see myself in this article as I'm pretty close on the numbers, though I will say these types of articles -- in trying to make the point that the top 9.9% really don't get how all their problems are first world problems -- tend to go overboard in discussing the "ease" of making it into and staying in the top 9.9%. I get it, if you have a $1.2mil NW your life is undoubtedly easier bc of money bc a $500 car repair or a $200 dr. bill showing up bc insurance didn't pay all if it is no big deal; whereas for the guy supporting a family on 60k, these things could be a very big deal. So I'm not downplaying it.

But the tone of these things is always -- oh if you're born to the right parents and raised in the right suburban district with good schools, your $1.2mil NW just shows up. I -- and many of my peers -- were born to middle class/upper middle class parents -- engineer dads mostly with either stay home moms or moms who picked up office jobs; immigrant parents who came with a few thousand BUT DID have an advantage of coming to the US with a college/masters degree. Yet let's not act like it wasn't competitive as hell to end up at the top of the class at a good NJ school district; which you needed to get into an ivy; then competing to do well at said ivy -- not to mention taking out some loans bc parents couldn't pay in full; then competing to get into any ivy law school; competing to stay at the top of that class -- not to mention more loans; and then competing to get that big law firm job in NYC that would pay $$$ to reward all the years of hard work. But of course said job didn't just pay bc you had degrees -- it paid bc you worked 100/hrs week while constantly fearing being laid off -- bc those firms take associates for a time, burn them out and kick them out. And while making that $$$, you had to sacrifice to build that NW -- not living in swanky NYC apartments but a rather regular place so you could save and invest and set yourself up for the future. There was a definite divide between young lawyer friends who did that (and thus walked away from the big firm job when kicked out with a sizeable NW) vs. those who lived large on the law firm salary and then left with little to show for it financially. And maybe it's just me bc of immigrant parents, but I have never had 1 instance where a parental connection could get me a job, internship etc. I'm out there applying and getting rejected just like everyone else.

Yes you ARE at an advantage if you have 2 parents who went to college bc to them education is paramount, they'll do what they can to buy the house in the gilded district and it is an expectation since birth that you will go to college. Yet they can't provide you everything that even higher income levels can -- SAT coaching and admissions counselors costing 10s of thousands; paying in full for college; jobs/internships bc they/their families own huge businesses. I'm not seeing how most of the 9.9% has things just handed to them just for existing. Now if OTOH I CAN provide some/all of these things to my kids in the future, I surely will do so to make their life easier -- without caring about the criticism that I'm doing it to protect what's mine.

Agree that it's not automatic and we shouldn't act like you just coast into the gilded zip code lifestyle. But what you're describing above is a universe away from how I grew up. We had 6 people in a 1k sq ft house. We had a crack house across the street. We had drive bys and heard gunshots almost every night. I had to take back alleys to school so I wouldn't get jumped and have my bike stolen. Most of my neighborhood friends are dead, in jail or out of jail and underemployed. My mom had to make clothes for us or shop at goodwill. We drank powdered milk. You better believe the schools WERE NOT anything like as good as the ones in better areas. You think the best of the best teachers are in the hood?

Competing to get into an Ivy? I just can't stress enough how absurd that idea would be if someone said it out loud to my high school self. That's would be like saying hey, let's get in our space shuttle and fly to the moon for vacation this year. For me it was competing to finish high school with a diploma and then if I wanted college get a job and pay for the community college in my neighborhood. You can live at home as long as you're doing that, otherwise get a job and move in with friends. Success was defined by having *A* job, any job that wasn't dealing drugs or gang banging. A beater car was luxury. My parents had no idea how to play the game you're describing above and no money to play it even if they did.

I'm still INCREDIBLY fortunate that I had a full loving family, had some built in brainpower and my lottery ticket was a gifted program where we got early exposure to computers (Vic20 ya'll!) as well as my dad getting an early IBM 8088 from work we could play on. Most of my friends had 1 parent who barely parented, zero coaching on how to even be a normal human.

When you're in an environment like this you're very much focused on getting through the day, and getting through the day is more often than not a struggle as you reach young adulthood. I had what I now know as PTSD-like issues just from living where I lived.

If it's coming off like a 'stop whining, my life was so much tougher' blah blah that's not entirely the point. Nor is it to downplay the stress and pressure higher performing kids are put through and how they have to work early in career to 'make it'. I just want to illustrate exactly how much of an advantage it is to live in a nicer place with a family that understands the game and has SOME resources to play it. The idea that it's a level playing field or anywhere close to a pure meritocracy cracks me up whenever I hear it.

I get what you're saying. Of course one is fortunate if they don't have to worry about survival on a day to day basis and their worries can be more along the lines of -- if I don't get at top 5 class rank this year, there's no way any ivy will consider me -- than I need to leave for school to be on time but there's a lot of cop cars outside right now and something's up so maybe I should stay put . . . .

But let me ask you this -- I imagine you've done fairly well in life, no? So is your first priority to help out your kids and help them "play the game" (I don't even mean get them jobs, I mean being the one enrolling them in extra tutoring if they need it or telling them they need to make it into honor society bc it looks good to college or whatever) OR is it to help out strangers?

What I don't get about these types of articles is the negative view that people "make it" and then start to protect what's theirs by helping out their kids -- i.e. moving into the best districts; helping them get the right classes/extras for a college application; not wanting their best districts to be open to anyone other than those who can afford a house in their neighborhoods etc. -- and thereby that leaving out the others. And I'm always left thinking -- um yeah, they worked hard to get to the point that they're at and of course it's their first responsibility to make sure their kids do even better; of course they can and should protect what's theirs (i.e. their family) over worrying about strangers. I mean when you've got Bill Gates/Warren Buffett wealth, you can worry about the world -- but for those in the top 9.9% in a world that's becoming increasingly more competitive, isn't your first role to protect your kids' spot in that 9.9%?

[Malloy]

 I wanted to highlight what I thought was the most interesting thing about the article: how the 9.9% serves as a courtier class to the 0.1%.  The article makes the case that the 0.1% have grown significantly richer over the last few decades relative to even the 9.9%, but they have mostly left the 9.9% alone.  Their wealth has been transferred from the bottom 90%.  We talk about this quite a bit here.  The stock market that helps the 0.1% is a key component of wealth building for MMMers as well, and the 9.9% have seen their fortunes rise along with those at the very top.  The 9.9% is also quite useful to the class above it (above us, I guess I should say).  We excise their tumors, admit their children to Ivys and teach the classes there, write the apps they use, and serve as their most faithful managers.  The more attractive and charming among us can make suitable spouses for their children.

It's an interesting interplay.  The 0.1% and the 9.9% have different political interests.  For example, much of the 9.9% has no political stake in an inheritance tax, at the current or previous levels.   Even wealthy surgeons don't care about the carried interest loophole.  However, neither class has statistically enough members to capture the government.  So, they align with various different members of the 90% to strap on ill-fitting ideologies, and they mutually point fingers at each other.  The most chilling section of the article pointed out that, as soon as the 9.9% is an inconvenience, we'll be thrown to the wolves.  It's already started to happen.  The change in SALT treatment in the recent tax law is aimed squarely at  members of the 9.9% living in gilded zip codes.  And we are a very unsympathetic target, so it's not like anyone is going to care that the taxes on our expensive houses are no longer fully deductible. 

I have a prevailing theory that class resentment is strongest for the class directly above and adjacent to your own, just based on familiarity and the resentment for people we see as being most like ourselves, only more successful. And class snobbery is strongest against the class directly below your own (maybe the own you came from or your parents came from).  That's why we 9.9%ers are bickering about Ivy vs. UCLA in this thread.  It speaks to our own anxieties. The 0.1% bickers about Dalton vs. Collegiate.

[charis]

I don't think spending more money is necessary for academic and professional success (though we  may decide to at some point). We may move for schools or we may homeschool (like DH was).
DH and I both went to very highly ranked public universities (above most private schools) and believe we were well educated and have enjoyed enough professional success to retire at 30 and 36.
The test prep is just ridiculous. If you can't self study or use a reasonably priced tutor to get into the university of your choice, you probably don't belong there.

I generally agree with what you're saying, especially about test prep.  That being said, I don't think there's much debate that ivy league degrees lead to more opportunities.  I do appreciate you moving the goal posts though and dropping down to "most private schools" when comparing to state schools, when your initial comment specifically mentioned ivys.

Not trying to move the goalposts though I may not be expressing myself clearly. What I'm trying to say is that I don't think there's that much marginal benefit to an Ivy league education for my goals for my children (to be well educated, have access to a career of  their choosing, to meet people who broaden their experience of the world). A high quality public education is good enough for me.

And that's perfectly fine.  All I'm saying is that what you describe is not fully allowing your "kids to benefit from our advantages".  instead, you're arbitrarily deciding to constrain them into an environment that will make it more difficult (obviously not impossible, but certainly more difficult) to have a lucrative career.

I think we disagree on definitions and that's ok. I think someone with a degree from UCLA or Berkeley or Michigan or GA Tech can have a lucrative career. Lots of engineers, lawyers, doctors come from those places (and less prestigious institutions).

Furthermore, I believe (and evidence suggests) kids benefit from having educated, financially stable parents, absent any extra spending. Kids who grow up being read to, who can travel, who are encouraged to learn are advantaged.

I think being homeschooled by someone with PhD and someone with a Master's (and being able to start community college in your midteens) is an advantage. You may disagree.

I don't disagree with any of these statements on their face. 

But if you're suggesting that a degree from UCLA is just as advantageous as a degree from Harvard (all other things being equal) then you're either fooling yourself or being deliberately disingenuous.  You're clearly giving your children some/many advantages...but that's not the same thing as saying you want to give them EVERY advantage possible (which, I'll admit, you didn't explicitly state).

The OP seems to be equating advantages with values, to some extent (if I'm reading this correctly).  You seem to be equating advantages with most lucrative outcome possible.  I think your definition is quite limiting.  While you are statistically more likely, probably, to get a top paying job in a top paying field with a degree from Harvard, the case can be made that you are equally likely to become a successful person having gone to a top public university, maybe more likely, depending on your values.  For many Mustachians who value frugality, getting more bang for your buck (the good public school) will certainly be considered the greater advantage.

[fluffmuffin]

Really interesting article, thanks for posting! I'll be following the conversation with interest.

The OP seems to be equating advantages with values, to some extent (if I'm reading this correctly).  You seem to be equating advantages with most lucrative outcome possible.  I think your definition is quite limiting.  While you are statistically more likely, probably, to get a top paying job in a top paying field with a degree from Harvard, the case can be made that you are equally likely to become a successful person having gone to a top public university, maybe more likely, depending on your values.  For many Mustachians who value frugality, getting more bang for your buck (the good public school) will certainly be considered the greater advantage.

I want to comment on this specifically, since people have researched this exact question (Dale & Krueger, if anyone wants to look 'em up): students who were accepted into Ivy League schools, but who elected to attend state schools instead for whatever reason, tend to end up with the same income levels as the Ivy League graduates. (This holds for white students at least, IIRC there were some different outcomes for minority students.)

The privileges and attributes that help students get accepted into the Ivies, are going to ensure that their level of privilege sticks pretty well regardless of their school choice, tying in with the Atlantic article's rubber band metaphor. For the majority of students, that's going to rely heavily on the kind of environment they grew up in, the quality of their K-12 education, having a stable 9.9% family that knew how to teach them to play the game, personal level of drive, etc.

[omachi]

What I don't get about these types of articles is the negative view that people "make it" and then start to protect what's theirs by helping out their kids -- i.e. moving into the best districts; helping them get the right classes/extras for a college application; not wanting their best districts to be open to anyone other than those who can afford a house in their neighborhoods etc. -- and thereby that leaving out the others. And I'm always left thinking -- um yeah, they worked hard to get to the point that they're at and of course it's their first responsibility to make sure their kids do even better; of course they can and should protect what's theirs (i.e. their family) over worrying about strangers. I mean when you've got Bill Gates/Warren Buffett wealth, you can worry about the world -- but for those in the top 9.9% in a world that's becoming increasingly more competitive, isn't your first role to protect your kids' spot in that 9.9%?

If you actually believe that we should be living in a meritocracy, then no, your first role isn't to protect your kids' spot in the 9.9%. Sure, encourage their development and hope they can make it on their merits. But if you believe the best outcomes for all of society come from putting the best people in the place to do the most good, then no, being overly concerned that your kid is actually mediocre and using your wealth to prevent the upward mobility that would see some other kid overtake them is a problem.

It's kinda the problem. If all these privileged people were actually the best choice for their roles, then we'd probably be pretty happy at how things were working out. We wouldn't have greedy bankers ruining the economy because they'd know better. Our politics might actually make a little sense. But no, the aristocracy is entrenched again.

[mm1970]

Definitely see myself in this article as I'm pretty close on the numbers, though I will say these types of articles -- in trying to make the point that the top 9.9% really don't get how all their problems are first world problems -- tend to go overboard in discussing the "ease" of making it into and staying in the top 9.9%. I get it, if you have a $1.2mil NW your life is undoubtedly easier bc of money bc a $500 car repair or a $200 dr. bill showing up bc insurance didn't pay all if it is no big deal; whereas for the guy supporting a family on 60k, these things could be a very big deal. So I'm not downplaying it.

But the tone of these things is always -- oh if you're born to the right parents and raised in the right suburban district with good schools, your $1.2mil NW just shows up. I -- and many of my peers -- were born to middle class/upper middle class parents -- engineer dads mostly with either stay home moms or moms who picked up office jobs; immigrant parents who came with a few thousand BUT DID have an advantage of coming to the US with a college/masters degree. Yet let's not act like it wasn't competitive as hell to end up at the top of the class at a good NJ school district; which you needed to get into an ivy; then competing to do well at said ivy -- not to mention taking out some loans bc parents couldn't pay in full; then competing to get into any ivy law school; competing to stay at the top of that class -- not to mention more loans; and then competing to get that big law firm job in NYC that would pay $$$ to reward all the years of hard work. But of course said job didn't just pay bc you had degrees -- it paid bc you worked 100/hrs week while constantly fearing being laid off -- bc those firms take associates for a time, burn them out and kick them out. And while making that $$$, you had to sacrifice to build that NW -- not living in swanky NYC apartments but a rather regular place so you could save and invest and set yourself up for the future. There was a definite divide between young lawyer friends who did that (and thus walked away from the big firm job when kicked out with a sizeable NW) vs. those who lived large on the law firm salary and then left with little to show for it financially. And maybe it's just me bc of immigrant parents, but I have never had 1 instance where a parental connection could get me a job, internship etc. I'm out there applying and getting rejected just like everyone else.

Yes you ARE at an advantage if you have 2 parents who went to college bc to them education is paramount, they'll do what they can to buy the house in the gilded district and it is an expectation since birth that you will go to college. Yet they can't provide you everything that even higher income levels can -- SAT coaching and admissions counselors costing 10s of thousands; paying in full for college; jobs/internships bc they/their families own huge businesses. I'm not seeing how most of the 9.9% has things just handed to them just for existing. Now if OTOH I CAN provide some/all of these things to my kids in the future, I surely will do so to make their life easier -- without caring about the criticism that I'm doing it to protect what's mine.

Agree that it's not automatic and we shouldn't act like you just coast into the gilded zip code lifestyle. But what you're describing above is a universe away from how I grew up. We had 6 people in a 1k sq ft house. We had a crack house across the street. We had drive bys and heard gunshots almost every night. I had to take back alleys to school so I wouldn't get jumped and have my bike stolen. Most of my neighborhood friends are dead, in jail or out of jail and underemployed. My mom had to make clothes for us or shop at goodwill. We drank powdered milk. You better believe the schools WERE NOT anything like as good as the ones in better areas. You think the best of the best teachers are in the hood?

Competing to get into an Ivy? I just can't stress enough how absurd that idea would be if someone said it out loud to my high school self. That's would be like saying hey, let's get in our space shuttle and fly to the moon for vacation this year. For me it was competing to finish high school with a diploma and then if I wanted college get a job and pay for the community college in my neighborhood. You can live at home as long as you're doing that, otherwise get a job and move in with friends. Success was defined by having *A* job, any job that wasn't dealing drugs or gang banging. A beater car was luxury. My parents had no idea how to play the game you're describing above and no money to play it even if they did.

I'm still INCREDIBLY fortunate that I had a full loving family, had some built in brainpower and my lottery ticket was a gifted program where we got early exposure to computers (Vic20 ya'll!) as well as my dad getting an early IBM 8088 from work we could play on. Most of my friends had 1 parent who barely parented, zero coaching on how to even be a normal human.

When you're in an environment like this you're very much focused on getting through the day, and getting through the day is more often than not a struggle as you reach young adulthood. I had what I now know as PTSD-like issues just from living where I lived.

If it's coming off like a 'stop whining, my life was so much tougher' blah blah that's not entirely the point. Nor is it to downplay the stress and pressure higher performing kids are put through and how they have to work early in career to 'make it'. I just want to illustrate exactly how much of an advantage it is to live in a nicer place with a family that understands the game and has SOME resources to play it. The idea that it's a level playing field or anywhere close to a pure meritocracy cracks me up whenever I hear it.

And I think this is where there is a disconnect.  People who grew up middle class and "worked hard" or even grew up poor with an intact family in a safe area and "worked hard" often honestly really cannot comprehend the difference.  I mean, someone in this thread already said "yeah, it's harder for them, and it should be."  Um, why?  I mean, I get that life isn't fair, and some people have it tougher - and it's good to understand that.  But..."that's how it should be?"  Geez, kids don't pick their parents and you can lay all the blame you want on the parents...but it's the kids who suffer.

From someone else's later comment:

But let me ask you this -- I imagine you've done fairly well in life, no? So is your first priority to help out your kids and help them "play the game" (I don't even mean get them jobs, I mean being the one enrolling them in extra tutoring if they need it or telling them they need to make it into honor society bc it looks good to college or whatever) OR is it to help out strangers?

It's not either/or.  I do both. I work hard, live frugally, and save my money so I can pay for my kids to go to college wherever they want.  Yes, I'm part of the problem in some sense, but then not in others.  My friends whose kid is going to Cal Tech?  You better believe they are paying full sticker price.  I want people who can afford that to do that.  Because that's how *I* got money in college - those rich kids paying full sticker price meant more scholarship money for me.

I kind of want my kids to have a normal childhood.  Music, sports - but within reason.  Free stuff at the school, local baseball - no special teams, no special tutoring.  I don't expect my kids to get baseball scholarships or get a scholarship play the flute, violin, or trumpet in an orchestra in college.  Using the district school instrument to play after school is just fine.

On the other hand, I donate big bucks to our elementary school, where 50% of the kids are bussed, 20% are considered homeless. 45% are English learners, and over 60% are eligible for free / reduced lunch, and only about 20% are white.  Yah, I could pay for private school, or could have transferred to the rich school a half mile down the road when my kid made GATE, but I didn't.  I also volunteer at the school, serve on the board to decide where the money should be spent, and have been on the PTA board.  Yep, I advocate for my kid because I don't want to see the white flight... that's simply a money thing.  20-25% of the families at the school donate 95% of the money and do 95% of the fundraising.  We need them to stay.  We need to do just enough to keep them happy - while recognizing that we REALLY need to put money on teaching English learners to read.

[Jrr85]

  If you want the benefits from not eating the marshmellow, it is undeniably simple.  Don't eat the marshmellow.  Yes, it does look like being willing to resist eating the marshmellow has a genetic component to it, in which case you can't rightfully take credit for it.  But at the same time, it doesn't mean people who resist don't want to eat the marshmellow;

No it's not "undeniably simple".  No mention of the fact that kids who grow up with untrustworthy authority figures aren't likely to trust that a 2nd marshmellow will actually be theirs? 

https://bold.expert/marshmallows-arent-likely-to-fix-low-income-kids-real-problems/

No surprise many here try to deny the points made in the article, it's too much cognitive dissonance.  It's not that difficult to increase social and economic mobility, initiate policies that result in higher mobility in other countries.  Same with universal health care.  We know what works, we just lack the want to because too many Americans are selfish assholes.

Well the article made some good points, but didn't really do a good job of emphasizing the good ones, and really spent more time on stuff that's either insignificant or just incorrect.   

The discussion on assortive mating is interesting and good.  People should be aware of the studies showing how this explains a lot of growth in inequality.  But really, what are you supposing the relevant policy prescriptions are?   

The discussion on licensing is great.  Licensing is largely an economic protectionism scam.  But it's also really popular, not just among the beneficiaries, but also among a lot of the victims. 

The discussion on housing restrictions and nimbyism is great.  But again, that's also likely to be popular not just among the beneficiaries but among the victims. 

Pointing out the negative impacts of tying school access to geographic location is great, but the author can't bring herself how abhorrent it is that a large number of the 9.9% and below consistently argue against allowing poorer people just a little bit of the choice they have with respect to elementary and secondary school? 

INstead, the author spends a lot fo time on stuff that's not that relevant.  It lumps real problems like ubiquitous licensing, housing restrictions and nimbyism, and denial of any school choice in with things like admittance into ivy league and other supposed elite schools (which is not a problem barrier for people to get into the 9.9%; college major choice is more important; that's a barrier to the .1 or .01 percent, not just in income but in influence) and enrichment opportunities and college admittance counselors. 

And the author spends a lot of time talking about relative intergenerational elasticity, which is maybe useful information, but way less than absolute mobility, and it's really stupid as a tool to criticize the U.S. for being relatively richer and therefore having wider income bands when looking at quintiles.   

Same thing with claiming every piece of the pie picked up by the .1 precent had to come from people below.  Yes, if you are allocating by percentage, there is only 100% to allocate.  That doesn't mean the income or wealth was taken.  It was probably generated.

And complaining about the fact that the nanny being advertised iwll not be able to just switch places with the high earning couple?  That's just idiotic.  Of course a person with a college degree in early child hood education (or no degree) can't just trade places with college educated professionals. Certainly credentialism is blocking more people from advancing than the value of a formal education would justify, but credentialism isn't the reason that nanny's don't wake up one day and become a corporate lawyer or doctor or financial professional. There really are skills involved with those types of jobs. Maybe a nanny could be a natural savant at marketing or advertising, and it really is lack of connections that prevent her from getting her foot in the door to prove it. But overall this is just a stupid sentiment. It would be more relevant to question whether the nanny's child could realistically make it to the 9.9%. (I assume the answer would be yes; most people I know who have somebody else raise their kid somewhat adopt the family and do things for the caregivers family; of course, that still requires that the caregiver's family be more or less functional, with children who are strivers).

And worse, the section on tax expenditures does not distinguish between actual outlays, letting people keep their money, and simply deferring a tax bill. It doesn't really talk about crony capitalism. And then there are nonsensical statements like "sweetest of all, income from watching the value of your home, stock portfolio, and private-equity partnerships grow ($161 billion)". Is the author really arguing that taxes be paid on a "mark to market" basis? That's not practical even if it were desirable.

[big_slacker]

I get what you're saying. Of course one is fortunate if they don't have to worry about survival on a day to day basis and their worries can be more along the lines of -- if I don't get at top 5 class rank this year, there's no way any ivy will consider me -- than I need to leave for school to be on time but there's a lot of cop cars outside right now and something's up so maybe I should stay put . . . .

But let me ask you this -- I imagine you've done fairly well in life, no? So is your first priority to help out your kids and help them "play the game" (I don't even mean get them jobs, I mean being the one enrolling them in extra tutoring if they need it or telling them they need to make it into honor society bc it looks good to college or whatever) OR is it to help out strangers?

What I don't get about these types of articles is the negative view that people "make it" and then start to protect what's theirs by helping out their kids -- i.e. moving into the best districts; helping them get the right classes/extras for a college application; not wanting their best districts to be open to anyone other than those who can afford a house in their neighborhoods etc. -- and thereby that leaving out the others. And I'm always left thinking -- um yeah, they worked hard to get to the point that they're at and of course it's their first responsibility to make sure their kids do even better; of course they can and should protect what's theirs (i.e. their family) over worrying about strangers. I mean when you've got Bill Gates/Warren Buffett wealth, you can worry about the world -- but for those in the top 9.9% in a world that's becoming increasingly more competitive, isn't your first role to protect your kids' spot in that 9.9%?

Trimming the quotes a little. My success criteria for parenting is that my kids are good people and happy. I want them to be self aware enough to know what will fulfill them AND clever enough to figure out how to make that happen for themselves. I'm not completely idealistic when it comes to this and know that it will probably involve work, money, compromise and realistic expectations. But truthfully I'm not about ensuring that they maintain their 'place' in this rung of society. I want them to grow up in a safe and sane place so we're here, but they'll go off to have their own journey. Of course I have open eyes about them having a better start at this than someone who grew up in a similar situation to my own.

In terms of my own vs others my answer is why not both? I'm more happy about donations and mentoring than I am about taxes but I'm super happy to talk about giving up some amount of my fairly ridiculous earnings if it truly means better opportunity for society as a whole. I'm not totally alone in this, but I do feel in the minority. ;)

I also agree about the guilt thing. I have zero guilt for living where I do or in providing opportunity for my kids to eventually live how they want to.

[SavinMaven]

Geez, kids don't pick their parents and you can lay all the blame you want on the parents...but it's the kids who suffer.

I think we can all agree that all babies are equally deserving of love, guidance, warmth, food, and safety - but how do you guarantee that to babies when their lives are run by their parents? Unless you just take over, and run the lives of the parents to ensure the children get what they need - in a country built on the notion of individual freedom, that's a really tough sell. But if you can't run adults' lives for them, you can't really influence the lives of their children that much.

[one piece at a time]

The author of the article is extremely self righteous and conceited.  They honestly postulate that political science and wealth distribution is more important and has delivered more good to society than the steam engine .

I understand that the author studied political science (likely in a formal setting that required payment) and feels they need to justify that investment. But this is just so wrong. Freeing mankind from the bondage of (often forced) physical labour remains the greatest achievement in our history. The greeks had slaves in their "democracies" largely because they lacked bright enough engineers to harness stored solar power (coal, oil etc).

...but sure, if only we all sat around singing communist lullabies we could all starve to death as equals.

[one piece at a time]

And worse, the section on tax expenditures does not distinguish between actual outlays, letting people keep their money, and simply deferring a tax bill. It doesn't really talk about crony capitalism. And then there are nonsensical statements like "sweetest of all, income from watching the value of your home, stock portfolio, and private-equity partnerships grow ($161 billion)". Is the author really arguing that taxes be paid on a "mark to market" basis? That's not practical even if it were desirable.

You can have a progressive land value tax just like a progressive income tax. The government simply decides the taxes it wishes to levy and you pay (or go to jail). No less fair than saying "income from $130k - $150k shall be taxed at 31.7%". The only difference is that it is a lot harder to hide land in offshore accounts.

[maizefolk]

The author of the article is extremely self righteous and conceited.  They honestly postulate that political science and wealth distribution is more important and has delivered more good to society than the steam engine .

Relevant quote from the article:

These exceptions are rare, to be sure, and yet they are the story of the modern world. In total population, average life expectancy, material wealth, artistic expression, rates of violence, and almost every other measure that matters for the quality of human life, the modern world is a dramatically different place than anything that came before. Historians offer many complicated explanations for this happy turn in human events—the steam engine, microbes, the weather—but a simple answer precedes them all: equality. The history of the modern world is the unfolding of the idea at the vital center of the American Revolution.

Note that again this position is offered with absolutely no data or reasoning to back it up (while the folks arguing that it was technological progress which enabled increases in life expectancy and material wealth do indeed have lots of data and logical models to back of their positions).

Good catch, one piece at a time. I cannot believe my eyes just skipped over this the first time I read through the article.

[mintleaf]

Geez, kids don't pick their parents and you can lay all the blame you want on the parents...but it's the kids who suffer.

I think we can all agree that all babies are equally deserving of love, guidance, warmth, food, and safety - but how do you guarantee that to babies when their lives are run by their parents? Unless you just take over, and run the lives of the parents to ensure the children get what they need - in a country built on the notion of individual freedom, that's a really tough sell. But if you can't run adults' lives for them, you can't really influence the lives of their children that much.

You can't guarantee a particular outcome, and as you suggest, to seriously attempt that would require a framework of control that is antithetical to the human experience (never mind the American one). But we could do a much better job of closing the opportunity gap, and much of that has to do with inequality of income and wealth. Sure, there will always be some level of inequality, but the magnitude matters, and right now I suspect that the inequality in the US is reaching dangerously unhealthy levels.

[4alpacas]

I wanted to highlight what I thought was the most interesting thing about the article: how the 9.9% serves as a courtier class to the 0.1%.  The article makes the case that the 0.1% have grown significantly richer over the last few decades relative to even the 9.9%, but they have mostly left the 9.9% alone.  Their wealth has been transferred from the bottom 90%.  We talk about this quite a bit here.  The stock market that helps the 0.1% is a key component of wealth building for MMMers as well, and the 9.9% have seen their fortunes rise along with those at the very top.  The 9.9% is also quite useful to the class above it (above us, I guess I should say).  We excise their tumors, admit their children to Ivys and teach the classes there, write the apps they use, and serve as their most faithful managers.  The more attractive and charming among us can make suitable spouses for their children.

It's an interesting interplay.  The 0.1% and the 9.9% have different political interests.  For example, much of the 9.9% has no political stake in an inheritance tax, at the current or previous levels.   Even wealthy surgeons don't care about the carried interest loophole.  However, neither class has statistically enough members to capture the government.  So, they align with various different members of the 90% to strap on ill-fitting ideologies, and they mutually point fingers at each other.  The most chilling section of the article pointed out that, as soon as the 9.9% is an inconvenience, we'll be thrown to the wolves.  It's already started to happen.  The change in SALT treatment in the recent tax law is aimed squarely at  members of the 9.9% living in gilded zip codes.  And we are a very unsympathetic target, so it's not like anyone is going to care that the taxes on our expensive houses are no longer fully deductible. 

I have a prevailing theory that class resentment is strongest for the class directly above and adjacent to your own, just based on familiarity and the resentment for people we see as being most like ourselves, only more successful. And class snobbery is strongest against the class directly below your own (maybe the own you came from or your parents came from).  That's why we 9.9%ers are bickering about Ivy vs. UCLA in this thread.  It speaks to our own anxieties. The 0.1% bickers about Dalton vs. Collegiate.

I also found the interactions between the 9.9% and the 0.1% to be the most interesting part of the article. 

It will be interesting if the 9.9% will be able to hold on to the same level of wealth (decreased around 1980).

[omachi]

Geez, kids don't pick their parents and you can lay all the blame you want on the parents...but it's the kids who suffer.

I think we can all agree that all babies are equally deserving of love, guidance, warmth, food, and safety - but how do you guarantee that to babies when their lives are run by their parents? Unless you just take over, and run the lives of the parents to ensure the children get what they need - in a country built on the notion of individual freedom, that's a really tough sell. But if you can't run adults' lives for them, you can't really influence the lives of their children that much.

You can't guarantee a particular outcome, and as you suggest, to seriously attempt that would require a framework of control that is antithetical to the human experience (never mind the American one). But we could do a much better job of closing the opportunity gap, and much of that has to do with inequality of income and wealth. Sure, there will always be some level of inequality, but the magnitude matters, and right now I suspect that the inequality in the US is reaching dangerously unhealthy levels.

At the very least, we could try to stop getting people to buy into the idea that those lower on the outcome scale are somehow less than those on top. The most dangerous thing about pretending we have a meritocracy when in reality it closer reflects an aristocracy is fooling ourselves into thinking those on the bottom are only there because of their own actions, while those on top just worked harder and are somehow naturally better. Then we get all sorts of distorted thinking from that premise.

[Luck12]

I think we can all agree that all babies are equally deserving of love, guidance, warmth, food, and safety - but how do you guarantee that to babies when their lives are run by their parents? Unless you just take over, and run the lives of the parents to ensure the children get what they need - in a country built on the notion of individual freedom, that's a really tough sell. But if you can't run adults' lives for them, you can't really influence the lives of their children that much.

Sure you can't guarantee anything, but certain things like universal and equitable pre-K, more equitable allocation of kids to public schools, more generous spending on food stamps, more generous spending on children's health care, etc can improve poor kids' lives and decrease social mobility.  Not to mention these things have a positive return on investment.  But you know, that actually costs rich people a point or two in increased tax rates so we can't have that. 

[mm1970]

Geez, kids don't pick their parents and you can lay all the blame you want on the parents...but it's the kids who suffer.

I think we can all agree that all babies are equally deserving of love, guidance, warmth, food, and safety - but how do you guarantee that to babies when their lives are run by their parents? Unless you just take over, and run the lives of the parents to ensure the children get what they need - in a country built on the notion of individual freedom, that's a really tough sell. But if you can't run adults' lives for them, you can't really influence the lives of their children that much.

You can't guarantee a particular outcome, and as you suggest, to seriously attempt that would require a framework of control that is antithetical to the human experience (never mind the American one). But we could do a much better job of closing the opportunity gap, and much of that has to do with inequality of income and wealth. Sure, there will always be some level of inequality, but the magnitude matters, and right now I suspect that the inequality in the US is reaching dangerously unhealthy levels.

At the very least, we could try to stop getting people to buy into the idea that those lower on the outcome scale are somehow less than those on top. The most dangerous thing about pretending we have a meritocracy when in reality it closer reflects an aristocracy is fooling ourselves into thinking those on the bottom are only there because of their own actions, while those on top just worked harder and are somehow naturally better. Then we get all sorts of distorted thinking from that premise.

Yes!

Sure you can't guarantee anything, but certain things like universal and equitable pre-K, more equitable allocation of kids to public schools, more generous spending on food stamps, more generous spending on children's health care, etc can improve poor kids' lives and decrease social mobility.  Not to mention these things have a positive return on investment.  But you know, that actually costs rich people a point or two in increased tax rates so we can't have that.

And this.

[sherr]

What I don't get about these types of articles is the negative view that people "make it" and then start to protect what's theirs by helping out their kids -- i.e. moving into the best districts; helping them get the right classes/extras for a college application; not wanting their best districts to be open to anyone other than those who can afford a house in their neighborhoods etc. -- and thereby that leaving out the others. And I'm always left thinking -- um yeah, they worked hard to get to the point that they're at and of course it's their first responsibility to make sure their kids do even better; of course they can and should protect what's theirs (i.e. their family) over worrying about strangers. I mean when you've got Bill Gates/Warren Buffett wealth, you can worry about the world -- but for those in the top 9.9% in a world that's becoming increasingly more competitive, isn't your first role to protect your kids' spot in that 9.9%?

You and the people like you who have voiced similar opinions are missing the point.

People should—and presumably always will—pursue happiness in this way. It’s one of the delusions of our meritocratic class, however, to assume that if our actions are individually blameless, then the sum of our actions will be good for society. We may have studied Shakespeare on the way to law school, but we have little sense for the tragic possibilities of life.

People hear the world "privilege" and assume that they are being shamed for having an unfair advantage. But that's not it at all, it's just the other side of the coin of talking about how some people are "disadvantaged", which is a fairly uncontroversial statement. No one is looking down on the 9.9% for looking out for their kids, or for having "made it". When the author describes the actions of the 9.9% he's not saying they're bad for doing those things. But the collective result of the blameless actions that they rightfully pursue results ends up having negative repercussions for society.

It's not a matter of taking people's kids from them or having the government be the "all seeing all dancing benevolent big-brother". But that doesn't mean that there aren't knobs and incentives that we could tweak to lead to a better, more equal, more merit-based world. A world where hopefully the privileged can reach a helping hand down to pull up the disadvantaged instead of building a wall to separate them.

[DreamFIRE]

This reminds me of the old Dream Hoarder thread.

https://forum.mrmoneymustache.com/welcome-to-the-forum/are-you-a-dream-hoarder/

[TempusFugit]

Geez, kids don't pick their parents and you can lay all the blame you want on the parents...but it's the kids who suffer.

I think we can all agree that all babies are equally deserving of love, guidance, warmth, food, and safety - but how do you guarantee that to babies when their lives are run by their parents? Unless you just take over, and run the lives of the parents to ensure the children get what they need - in a country built on the notion of individual freedom, that's a really tough sell. But if you can't run adults' lives for them, you can't really influence the lives of their children that much.

This reminded me of a podcast i recently heard
http://freakonomics.com/podcast/early-education-rebroadcast/

Its both encouraging and depressing.   An encouraging part is how effctive it can be to get parents more engaged in the childs develoment and learning. 

One of the big points is that by the time a child is pre-k age, the damage is done.   If the parents are not exposing the child to lots and lots of words and interactions, the brain simply doesnt develop as much as it could.  Thats a gap that will never close.

How can we possibly address the issues that result from poor parenting (even if it is understandable, it is poor parenting by definition), and yet remain a free and ethical society?   

Thats just one part of the differentiators in our society of course, along with the greater access to education and good food and safe neighborhoods.   It does, however, make it seem that much more difficult for us to address the hardening stratification of our society if some of our weakest members are perhaps permanently, due to early childhood environments, unable to compete in even a true meritocracy. 

Granted that this is really more of a look at the bottom 20% not the top 9.9%;  the kids whose parents not only cannot give the hand up in terms of extra tutors and prep courses or study abroad trips, but can't provide the basic human interaction needed to foster healthy neurological development. 

[Irregular Joe]

Here's an article from Slate responding to this one:

https://slate.com/business/2018/05/forget-the-atlantics-9-9-percent-the-1-percent-are-still-the-problem.html

[MrUpwardlyMobile]

Here's an article from Slate responding to this one:

https://slate.com/business/2018/05/forget-the-atlantics-9-9-percent-the-1-percent-are-still-the-problem.html

Slate dissects it pretty well.  All of the things people were alluding to as problems are pretty promptly identified by the Slate retort.

The humorous thing about their wealth accumulation theories are that there is a ton of data (anecdotal and empirical) indicating that wealth dissipates at an appallingly high rate from generation to generation in the United States.

[Bucksandreds]

I wanted to highlight what I thought was the most interesting thing about the article: how the 9.9% serves as a courtier class to the 0.1%.  The article makes the case that the 0.1% have grown significantly richer over the last few decades relative to even the 9.9%, but they have mostly left the 9.9% alone.  Their wealth has been transferred from the bottom 90%.  We talk about this quite a bit here.  The stock market that helps the 0.1% is a key component of wealth building for MMMers as well, and the 9.9% have seen their fortunes rise along with those at the very top.  The 9.9% is also quite useful to the class above it (above us, I guess I should say).  We excise their tumors, admit their children to Ivys and teach the classes there, write the apps they use, and serve as their most faithful managers.  The more attractive and charming among us can make suitable spouses for their children.

It's an interesting interplay.  The 0.1% and the 9.9% have different political interests.  For example, much of the 9.9% has no political stake in an inheritance tax, at the current or previous levels.   Even wealthy surgeons don't care about the carried interest loophole.  However, neither class has statistically enough members to capture the government.  So, they align with various different members of the 90% to strap on ill-fitting ideologies, and they mutually point fingers at each other.  The most chilling section of the article pointed out that, as soon as the 9.9% is an inconvenience, we'll be thrown to the wolves.  It's already started to happen.  The change in SALT treatment in the recent tax law is aimed squarely at  members of the 9.9% living in gilded zip codes.  And we are a very unsympathetic target, so it's not like anyone is going to care that the taxes on our expensive houses are no longer fully deductible. 

I have a prevailing theory that class resentment is strongest for the class directly above and adjacent to your own, just based on familiarity and the resentment for people we see as being most like ourselves, only more successful. And class snobbery is strongest against the class directly below your own (maybe the own you came from or your parents came from).  That's why we 9.9%ers are bickering about Ivy vs. UCLA in this thread.  It speaks to our own anxieties. The 0.1% bickers about Dalton vs. Collegiate.

+1. Well thought.

[big_slacker]

Here's an article from Slate responding to this one:

https://slate.com/business/2018/05/forget-the-atlantics-9-9-percent-the-1-percent-are-still-the-problem.html

Thanks for posting, it's always nice to see someone dig into the details a bit more for a rebuttal.

[Fomerly known as something]

Personally what I take away from the article and all similar articles is that I am not "middle class," even thought I may look it and at times feel it. I find them to be a good counterpoint to the "I make $300,000 and I'm just middle class" articles.

I realized early on that even if my NW or my salary really didn't reflect it yet, I was on my way to eventually becoming "upper middle/ upper class" so long as I didn't mess it up.

They also remind me that the system is working for me and I need to remember that as well.

[badassprof]

I especially appreciated the observation, “what we have here is a listening problem. Americans have trouble telling the difference between a social critique and a personal insult.” It is what prevents us from talking about anything on the Internet, let alone someplace more meaningful and impactful.

[mathlete]

Here's an article from Slate responding to this one:

https://slate.com/business/2018/05/forget-the-atlantics-9-9-percent-the-1-percent-are-still-the-problem.html

Thanks for posting, it's always nice to see someone dig into the details a bit more for a rebuttal.

+1

Totally agree!

"Slate" and "The Atlantic" aren't exactly my favorite publications, but this is excellent communication. Someone writes a think piece, someone else writes a well-mannered rebuttal.

This part from Slate is particularly good:

This gold line hovering above the others may look reasonably convincing, but there are problems. First, the 9.9 percent aren’t really who Stewart claims them to be. He describes the cohort (based on what, I don’t know) as “a well-behaved, flannel-suited crowd of lawyers, doctors, dentists, mid-level investment bankers, M.B.A.s with opaque job titles, and assorted other professionals—the kind of people you might invite to dinner.” He neglects to mention that many of them are actually just retirees. According to Saez and Zucman, whose data Stewart uses, more than 40 percent of all wealth belonging to Americans between and 90th and 99th percentiles is held by the the elderly, meaning age 65 or older. This is what makes wealth data a tricky way to measure class below the very tiptop of the distribution. Stewart’s “9.9 percent” includes a lot of working professionals and business owners with gilded academic résumés, sure. But it also probably encompasses a lot of 75-year-old former accountants and nurses and guys with construction businesses who made a comfortable living decades ago, bought a house, and paid down the mortgage while saving for retirement.

The thrust of Stewart's article is in the right place. Successful people should recognize all the benefits they've had, and they should recognize the fundamental inequity of those benefits passing down to their children. But even if Stewart's characterizations were correct, I don't know if it'll be all that successful to drum up resentment against the (often times dual income) working-class professionals.

I think most people would look at a couple in their fifties who built wealth while working 12 hour shifts doing important and specialized labor as a nurse, or who stayed at the office dotting Is and crossing Ts during tax season and think, "Yeah, this is who the economy should be rewarding." They may be resentful that they weren't afforded the same opportunities, but they understand it.

It is unfair that people with privilege are more easily able to train for high-paying jobs. But at the end of the day, it makes sense.

It is both unfair, and nonsensical; however, that people who own capital pay less marginal taxes than people who work, and that they get to rewrite the rules to benefit themselves.

[ysette9]

The two biggest points that struck me reading this article were first, that we solidly fit into this “9.9%” class, at least as described in the article, and not the wealthy retirees part of that cohort. We have unquestionably benefited from privilege of going to the best schools and working at the best companies and being able to buy (just barely!) in a good zip code. Our kids already have a leg up on so many others and even our own upbringings. They live in a smaller house and don’t have any more toys than I did growing up, but their parents don’t worry about money except to talk about how to optimize our asset allocation and whether we need to work 3 or 4 more years until calling it quits. That is amazingly privileged and all I have to do is look around in my neighborhood to see the immense stratification and those who will never have the same opportunities as my girls have by virtue of being born to us.

The second point that really sticks is the level of inequality we have reached and how it was last this high in the late 1920s or even in the south before the civil war. At a gross level that feels very chilling to me. Is the recent presidential election an aberration or the start of a trend by which the resentment starts to erode the foundation of what we have built, and instead of addressing inequality, pulls us all down? I agree that we have fundamental issues that are unfair and need to be addressed, but I am not seeing anything to positively address them, only fear mongering and entrenching us into our feuding tribal camps. I’d love to see us experiment with a Bernie-style campaign to level the opportunity playing field a bit, but I am more and more pessimistic that we collectively have the appetite for that.

[Luck12]

I especially appreciated the observation, “what we have here is a listening problem. Americans have trouble telling the difference between a social critique and a personal insult.” It is what prevents us from talking about anything on the Internet, let alone someplace more meaningful and impactful.

What's funny is many of these people are the same ones calling anyone left of center oversensitive snowflakes. 

[mak1277]

I especially appreciated the observation, “what we have here is a listening problem. Americans have trouble telling the difference between a social critique and a personal insult.” It is what prevents us from talking about anything on the Internet, let alone someplace more meaningful and impactful.

What's funny is many of these people are the same ones calling anyone left of center oversensitive snowflakes.

Oh, I think the bolded quote transcends party lines.

[Chris22]

I especially appreciated the observation, “what we have here is a listening problem. Americans have trouble telling the difference between a social critique and a personal insult.” It is what prevents us from talking about anything on the Internet, let alone someplace more meaningful and impactful.

I think there’s an element of expecting the other shoe to drop. If you spend 5 years telling me I am privileged, when you get to step 2, remove some privilege, you can count on me to have submitted to the idea I’ve been privileged so maybe I deserve to lose some because I’ve been brainwashed for the last 5 years that it exists.

[Acastus]

Overall, I think this article give the aristocracy a pass, whether that starts at 1% or 0.1%. It diverts anger away from the top to some fabricated demographic group.

Rather than say the upper 9.9 has 60% of the wealth, I think it is better to show that each decimal place in the demographic has more than the previous one. So at a guess, the lower 90% has 20%, next 9% has 30%, next 0.9% has 30%, next 0.09% has 15%. Since there are fewer people at every step, you get much richer as you climb the ladder. I am not sure it ever stops until you get to Jeff Bezos at the tippy top.

It would be illuminating to learn the wealth of each 9 x 10^-x population decimal.

The same has happened to salaries, but it is not as severe. The average wage keeps rising, and the higher up the ladder you are, the bigger your raise.

[TheWifeHalf]

We consider we lost this life game if we become dependent on others - government, charity, etc.

Some good people I've encountered are dependent on the government.
Go visit a VA hospital sometime......you'll see what I mean.
I don't consider them having " lost at the game of life ".

So much is just a crap shoot and good luck.  No matter how smart you think you are and no matter how many things you think you've mastered and no matter how hard you think you've worked it could all be gone in an instant.   
Wouldn't make you any less.   

Especially for those who left someone with a smile when they were sad, or helped someone without being asked, or just did the right thing because they don't know any other way to do things.     They'll be remembered by how they made others feel not much else.

I agree. Notice I said "WE"
Judging others is not our way either. We know our lives are possible because of those in the VA hospitals, in fact all the military. You will not hear us complain about the taxes we pay. Maybe the way it's spent, specifically, but not the fact that we have to pay

I get the feeling you took my comment as a way of saying we think we are better than someone else. Again, we don't compare.  We know in many ways we have been fortunate, most recently surviving a traumatic brain injury. Please reread it again - I said WE, and meant only TheHusbandHalf and I.

[TempusFugit]

... I’d love to see us experiment with a Bernie-style campaign to level the opportunity playing field a bit, but I am more and more pessimistic that we collectively have the appetite for that.

I think that part of that issue is the utterly ridiculous proposals that come from Bernie.  Government jobs for every person!  Don't worry about the cost!    Don't concern yourselves with the predictable move from productive private sector employment to make-work, zero-accountability government jobs! Forget what we learned about Soviet style economies! 

Come on.  That sort of nonsense immediately loses a huge portion of the public audience to anything of potential merit that you might have to say. 

[ysette9]

I was thinking ideas like junior college education and healthcare for all. I know that sounds radical in the US, but they are taken for granted in many of our neighboring European countries.

[DreamFIRE]

... I’d love to see us experiment with a Bernie-style campaign to level the opportunity playing field a bit, but I am more and more pessimistic that we collectively have the appetite for that.

I think that part of that issue is the utterly ridiculous proposals that come from Bernie.  Government jobs for every person!  Don't worry about the cost!    Don't concern yourselves with the predictable move from productive private sector employment to make-work, zero-accountability government jobs! Forget what we learned about Soviet style economies! 

Come on.  That sort of nonsense immediately loses a huge portion of the public audience to anything of potential merit that you might have to say.

Agreed.  And I think Bernie's suggestion was to pay far more than minimum wage for these unneeded taxpayer funded government jobs - like $15/hr or some BS like that.  Many of these unemployed people don't even want to work - they want to live off the government dole.

[ysette9]

Might be a better use of our tax dollars than paying to feed and house them in prison for minor drug crimes....  but there I go risking to derail this thread, which was not my intention.

[TempusFugit]

I was thinking ideas like junior college education and healthcare for all. I know that sounds radical in the US, but they are taken for granted in many of our neighboring European countries.

Trying to apply something that works in a more homogeneous and much smaller nation to a huge nation such as the US generally doesn't work.  That doesn't mean we shouldn't experiment and explore options at the state level and then find and fund the things that work on a larger scale. 

Some states are now offering free tuition at community college, for example.  I think that's a great idea. Unfortunately, it is largely funded by the most regressive tax possible - the state lottery. Nothing like government run casinos! 

But my point was that when Bernie (or others) spout such utter nonsense as the government jobs thing, most of us just start ignoring everything else he says. 

[emduck]

All this stuff about trips to France looking good on your application is really weird to me.  Is that really what colleges are looking for these days?  The experience I had going through the applications process was that things like working and volunteering counted for a lot.  The conversations I had with my interviewer were more about things that demonstrated hard work, taking initiative, and creativity, not whether my parents could send me to Iceland. 

I applied in the mid '00s.  I was the first person in my family to finish college (dad went to mid-tier state school and dropped out, no one else even went).  No one even knew how to help me apply--I did everything myself, including figuring out how to sign up for (and get a fee waiver for) the SATs.  No one proofread my personal statement.  I had never been out of the country.  There was no fancy test prep or interview coaching.

What I did do was study for the SATs with books from the library, work and volunteer, start the science club and volunteering club at our school with friends (since we didn't have either before), play sports (not the expensive ones), re-write my essays what felt like a thousand times, and attach the first few chapters of the shitty novel I was writing to my application.

My interviewer never asked me about whether I'd been to France or anything like that.  He asked me about my job and my volunteering and my favorite classes and what I wanted to study.  Four years later when I graduated and started doing interviews for prospective students, that was the kind of thing we talked about, too. 

I didn't apply to Ivies, but I got into the best public school in the state and an out of state mostly STEM school that's on par with the Ivies for name recognition.  Total money spent outright on applications/prep was stamps for letters of recommendation (and I guess gas money), because we were poor enough to get everything else waived. 

[Cgbg]

Merit money is less available nowadays and yes parents do all sorts of things to help their kid’ applications look better. There are college consultants that you can pay $3-5k to help “package” your kid to look better.

College is just way more expensive than it was when I graduated back in the mid-90s. I fondly recall paying $1500/term at the end.

Now the all-in costs at the state flagship universities are approaching $25k/year. My kids go to out of state public universities and the costs are $44k/year and $36k/year. We pay a tiny potion of that because of merit.

(No trips to France in school here at our house but we are privileged to live in one of those good school districts where 99%+ of the kids graduate each year and most go on to college.)

[emduck]

Merit money is less available nowadays and yes parents do all sorts of things to help their kid’ applications look better. There are college consultants that you can pay $3-5k to help “package” your kid to look better.

College is just way more expensive than it was when I graduated back in the mid-90s. I fondly recall paying $1500/term at the end.

Now the all-in costs at the state flagship universities are approaching $25k/year. My kids go to out of state public universities and the costs are $44k/year and $36k/year. We pay a tiny potion of that because of merit.

(No trips to France in school here at our house but we are privileged to live in one of those good school districts where 99%+ of the kids graduate each year and most go on to college.)

The school I went to was about $40-45k/year "all in" in the mid-late 2000's.  I can't remember the exact breakdown, because they changed the financial aid formula between my second and third year, but working multiple part time jobs, with a small amount of help from my parents (like, really small), and cutting corners wherever I could on things like books and food, I graduated with just over $12k in debt total. 

I got a couple small outside merit scholarships, but everything else was "need based" through the school.  It was actually slightly cheaper for me to go to the out of state private school than the in state public school because the financial aid was so good.

I actually work at a public university right now (one of the better ones in the state, the top one for a few majors).  Our "all in" cost is around $25-30k in-state depending on where you live, but the financial aid seems to be quite generous.  At least, I've mentored several undergrads, and they say that grants, scholarships, and work-study are pretty darn good for lower income students.  The people who run into real problems are the ones whose parents make a ton, but won't or can't contribute. 

[FINate]

Interesting article and agree on certain points. In particular with the 9.9's tendency to ignore their own part in the problem. As someone who grew up lower/lower-middle class (poor, low education) I'm tired of this new aristocracy looking down condescendingly at others while claiming their shit smells like roses. It's annoying and unhelpful. However...

Economists are prudent creatures, and they’ll look up from a graph like that and remind you that it shows only correlation, not causation. That’s a convenient hedge for those of us at the top because it keeps alive one of the founding myths of America’s meritocracy: that our success has nothing to do with other people’s failure. It’s a pleasant idea. But around the world and throughout history, the wealthy have advanced the crystallization process in a straightforward way. They have taken their money out of productive activities and put it into walls.

I'm sorry, you can't just hand wave away the problem of correlation vs. causation, it's intellectually dishonest. Not saying the author is wrong on this point necessarily, but requires a stronger argument than "around the world and throughout history" - essentially taking conventional wisdom (with a nugget of truth) and then smearing it around with a broad brush.

Things end on a similar note

Policy wonks have taken aim at the more-egregious tax-code handouts, such as the mortgage-interest deduction and college-savings plans. Good—and then what? Conservatives continue to recycle the characterological solutions, like celebrating traditional marriage or bringing back that old-time religion. Sure—reforging familial and community bonds is a worthy goal. But talking up those virtues won’t save any families from the withering pressures of a rigged economy. Meanwhile, coffee-shop radicals say they want a revolution. They don’t seem to appreciate that the only simple solutions are the incredibly violent and destructive ones.

Hmm, nice straw man you have there. If you think Conservatives only focus on traditional marriage and religion then you need to expand your social circle. Besides, what the hell is wrong with emphasizing marriage? Some years back The Economist explored the economic benefits of marriage. Bringing it back to correlation vs. causation, it's worth asking if the poor are more likely to divorce or if the divorced more likely to be poor? If I'm recalling correctly, The Economist argued that there is truth to both, yet people of all socioeconomic status benefit from getting and remaining married. As for religion, done right it may benefit people individually and society as a whole in a number of ways. Although anecdotal, I know many lower-class families for whom religion is a foundation of strength - it provides a strong social network, purpose, peace, contentment, and has kept them from many of the vices that harm poor people the most. So yeah, stop with the elitist snobbery.

[Mikenost12]

A modest proposal…

  Capital in the Twenty First Century by Piketty, I believe discusses the problem being that income from capital gains/ownership have grown and multiplied faster than wages. The problem isn’t egregious CEO salaries, specialists or highly paid experts, the real issues is investment income turning society more into a system of haves and have nots, many into serfs or wage slaves. People generating much more wealth based on what they own rather then actual work, and getting tax breaks on this kind of income. While wanting us to take back democracy and have a more equitable system, I agree with what most everyone else said it also scares me to do my best to get to and maintain personal economic security.

 It isn’t necessary to especially incentivize investments, with low Capital Gain taxes, it’s already extremely rewarding and with interest rates near zero and companies flush with cash they have nothing to do with (buy competitors or stock buybacks). Low capital gains taxes, efforts to eliminate estate taxes on 12 million plus inheritences, loopholes for pass-through income, and other ways they system gets set up are just a giveaway to people that need it the least but wield the most political and economic power, exacerbating the situation.

 Solutions might include taxing capital gains at the same rate as regular income, raising rates of top income brackets back to levels of say Reagan at least, and getting the money out of politics. The idea that not allowing the ultra wealthy/corporations to contribute tens of millions of dollars regularly to politicians somehow infringes on their free speech is insane.

  Of course the government doesn't make decisions that make sense, are good for most Americans, our planet, future generations or our County strength in the future, logic or scientific fact (global warming anyone). The government's actions only make sense when view through the lens of the people paying for it, the very very very rich, not us squabling 15% or top 5%'s online feeling hurt because we worked hard and feel the article doesn't give us enough credit.

  Erosion of tax basis, declaring war on government for the past 40+ years, taking away laws protecting workers, prohibiting monopolies, priviatizing utilities, etc  have taken their toll, with targeted legislation benefiting corporations and special interests. For all the Constitutional Originalists mental gymnastics, I can’t see the Framers thinking legal bribery (Citizens United) was good for our democracy, and endorsing the current plutocracy/oligarchy.

  We can hope more of the rich are like Buffet, who says he will be giving away 99% of his wealth, Andrew Carnegie and the notion of Noblesse Oblige,  building us librarys, parks, and whatnot, that your duty as ultra wealthy is to help the serfs. I wouldn't hold my breath as it is more likely for the .001 of a percent to not be philanthropists giving away most of their dynastic wealth but instead feel extra super duper better than everyone else, like the Walton family or Koch Brothers, paying people as little as possible, influencing legistlation to further enrich themselves, with a kinda of cynical cruelty that belies a contempt for their fellow human beings,

in short, I'm gonna be smart, save, invest, work hard, help others, and well, their must be a punk band with a better way to say it but
It
 
  The system is fixable, our society was far more equitable before, just undo the policies of the past 40+ years that the elites lobbied for. Reverse engineer what they did, I fear it has to get much more unequal, with alot more suffering before people realize government can be a force for good and we get New Deal 2.0

[Malloy]

Unsurprising that this thread has lots of sidebars on college costs and how to pay.  This is my take on that as it relates to the article:

Transition from 90% to top 9.9%: college education is very helpful, some majors have an easier path than others,  peers at college help with assortative mating that accelerates the process.  You don't need an Ivy or equivalent to make this change.  Hard work and luck have interplay, but you don't need an absurd amount of luck.  Hard work and a few breaks can get you there.  My impression is that many of us on the forum are the children of 90%ers who are now in the 9.9% through exactly this process.  Now that we are living in gilded zip codes, we are surrounded by people who are thinking about the next transition for their own kids into the top 0.1%.  Spoiler: most of them won't make it, but MMM could help them be a lot happier with what they do have.

Transition from top 9.9% to 0.1%: this is where Ivys help.  By definition, the odds are stacked against making the transition.  However, there are a few career paths that can vault you into this group, like i-banking.  And the banks hire out of the Ivys.  A computer science major at Stanford has a better shot at knowing someone who will hire them as an early employee at the next google.  Assortative mating at Harvard could see you married to the heir to a 7 figure estate rather than the heir to a house in a dying town full of cat figurines and Medicaid debt.

That being said, it's worth it to think about what your goals for your kids are.  Do you want then to join or stay in the top 9.9%?  Then don't sweat it.  There are lots of options.  Only bust your ass to pay for Harvard if it your (and their) goal to be really, really rich.  Or if you are already rich.  And, just to add to that, most kids of the .1% end up back in the 9.9%.  Spreadsheets to spreadsheets in 3 generations.

[profnot]

 [/quote] It's not that difficult to increase social and economic mobility, initiate policies that result in higher mobility in other countries.  Same with universal health care.  We know what works, we just lack the want... [/quote]

ITA

We can make minimum wage higher.
We can invest in REITs for more affordable housing development.  Yes, we get a smaller return but we can afford it.
We can make local government hire more permit office workers and have them prioritize applications for affordable housing.
We can raise the pay for public school teachers and budgets for all schools in all zip codes.
We can pay our gardeners, nannies, and others higher than the going rates.
We can demand more transparent health care costs and options.

Each one of us just needs to make a few changes to make a big impact.

Great article.  Thanks, OP, for starting this thread.

[anonymouscow]

I only had a minute to scan the article, sorry if it's been mentioned, are they including primary residence into the net worth? And is it household or individual?

I don't think it's unreasonable that privilege leads to more privilege, it's that part of what rich dad poor dad / Outlier's go into? My SO and I both started at $0.00, maybe someday we will get up to the 9.9% (of course the marker is always moving). You can still live a comfortable, meaningful life and not be in the top 10%.

Is government really the best option? Look what has happened to education and healthcare, maybe those are good things for the very poor, not so much for those that see the increases but don't get the subsidies / tax breaks.

[bacchi]

All this stuff about trips to France looking good on your application is really weird to me.  Is that really what colleges are looking for these days?  The experience I had going through the applications process was that things like working and volunteering counted for a lot.  The conversations I had with my interviewer were more about things that demonstrated hard work, taking initiative, and creativity, not whether my parents could send me to Iceland. 

The clever millionaire aspirant does double duty by "volunteering to build houses in Honduras," because if there is one thing that the people of Honduras are crying out for, it is the unskilled manual labor of weakling children.

And it's also tax deductible!

[Kyle Schuant]

This. Historically speaking the only way to get mega-wealth away from entrenched elites is to kill them. This generally results in a new set of entrenched elites not a sudden flattening of the wealth curve.

Well the curve does flatten because much of that wealth is destroyed by fire and looting... but that's probably not ideal, either.

It's not well-known, but the arch-conservative Bismarck of Prussia was the first European leader to put in workplace injury, old age pensions and the like. It wasn't out of love for the poor. He'd started his career as an MP in the Prussian parliament, and within a year there was a revolution in Germany, which was partly nationalistic (they want to unite Germany) but also essentially socialist. This revolution fizzled out, but Bismarck remembered it, and later put in those policies, saying something to the effect that if you do not throw the poor a few crumbs from your table, they may step up and seize the whole loaf.

Forward-thinking wealthy people understand that if they get too greedy, they'll eventually lose it all, as you describe. Unfortunately, it is in the nature of elites to insulate themselves from reality. Emperors and Presidents and CEOs surround themselves with layers of eunuchs and flunkies who tell them what to hear, and anyone presenting them with unpleasant reality is fired. Further down the chain, people tend to associate only with members of their own class, and are thus startled when someone they dislike is elected to parliament or the like, "but nobody I know likes them!" Chinese Emperors had the Forbidden City, the modern upper class has gated communities, and the poor have ghettoes.

Pay your taxes, guys.

[Kyle Schuant]

The system is fixable, our society was far more equitable before, just undo the policies of the past 40+ years that the elites lobbied for. Reverse engineer what they did, I fear it has to get much more unequal, with alot more suffering before people realize government can be a force for good and we get New Deal 2.0

I think a large part of it is the type of economy we've chosen to have in much of the Western world - a service economy, not a manufacturing or primary sector economy. A service economy is divided into well-paying jobs for well-educated people, and poor-paying jobs for poorly-educated people; a manufacturing economy offers well-paying jobs for well-educated people, but not as well-paying as the top service jobs, and the poor-paying jobs of a manufacturing economy pay better than those of a service economy. That is to say, a lawyer is paid more than a manufacturing engineer, but a burger flipper is paid less than an auto builder. In other words, a service economy is less equal than a manufacturing one.

However, free trade has inevitably led us there, since in the West we can't compete with a worker living in a dormitory in Guangzhou on $150 a month, or a child in Bangladesh on $50 a month. (Not so long as we have cheap oil, anyway - though that'll likely change in the coming decades.) Because it's given everyone cheaper consumer goods most people don't mind that part, and because it's kept manual labour cheap here the middle and upper classes don't mind too much, either - cheaper gardeners, housekeepers and drycleaning.

A manufacturing economy makes everyone richer. That's why India, China and Brazil are racing so hard to build theirs up. And that's why our killing ours off is - ultimately - making us poorer overall. But as the real economy shrinks, the wealthy can no longer invest in factories and the like, so they have to invest in real estate - driving up the cost of housing for all - and speculative and essentially nonsense, like CDOs - thus the unstable economy, kept going only by printing money - er, I mean, "quantitative easing."