Author Topic: "It's Good To Be The King" 1% earn biggest share since the 20's  (Read 16749 times)


chasesfish

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #1 on: September 12, 2013, 05:19:11 AM »
Welcome to the dumbing down of America

Christof

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #2 on: September 12, 2013, 05:47:10 AM »
I quickly came back to my senses and stopped reading the comments after thirty seconds, or so... But seriously: "if i were a rich person i would open new businesses and put america back to work". How about opening the business first?

hybrid

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #3 on: September 12, 2013, 11:10:04 AM »
I find this subject fascinating.  I have a saying that goes along the lines of "everybody has a line".  And what I mean by that is in many situations there reaches a point where something is acceptable and something is not acceptable.  For instance, if you are a pet owner, you probably have a line and you may not be aware of it.  Fido gets very sick and goes to the vet.  There is some sort of dollar amount in your unconscious that, even as you love Fido, you simply cannot responsibly cross.  If Fido can be cured for $100, you won't bat an eye.  But what if Fido needs $10,000?  Hmmmm, maybe not (especially if Fido is along in years).  So somewhere between $100 and $10000 lies that line.

The top 1% are always going to make significantly more than everyone else in a capitalist society, and most folks are OK with that.  But at what point are the top 1% taking home too big a piece of the pie?  For example, most people would not expect the top 1% to make 1%, that would mean everyone has the same salary and a surgeon would be the equivalent of a dishwasher.  But if the top 1% take home 80%, most people would find that wholly unreasonable.

So for most people there is a line if they stop and think about it.  It's not 1%, and it's not 80%.

Broadly speaking, I have found that liberals tend to lean toward the former, their arguments steeped in concepts of fairness.  Conservatives lean toward the latter, their arguments revolving around the right to leverage talent and ability to what the market will bear.  You will see that come out in debates about the minimum wage, the merits or demerits of progressive taxation, the inheritance (or, death, to a conservative) tax, etc.

So the question becomes dear reader, where does your line lie, broadly speaking?  That arrticle is one of may that point to the fact that wealth has been pooling at the top over the past few decades.  Is there a point where that pooling reaches an unhealthy level?     

mpbaker22

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #4 on: September 12, 2013, 11:24:27 AM »
In response to Hybrid and in general,

I think the issue is most people have the opportunity to become the 1%, maybe not the 1% in dollar value, but at least the top 10%.  But most people are so ingrained in the consumerist culture that they'll believe it when someone makes the claim that the 1% are unfairly taking all the wealth.  I've seen articles about how unfair it is that the 1% wealth is increasing too fast because home values are going up less than stocks.  Well whose fault is that?  The 1% made a choice to invest in stocks and the 99% invested in homes.  The 99% got burned and that's that.

2527

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #5 on: September 12, 2013, 02:05:01 PM »
People on this website eventually become like the 1%.  Not the 1% in dollar times, but in some ratios.  For example,  I'm clearly not part of the 1%, but 95% of my wealth is in stocks and only 5% is in my home, and about 65% of my total income comes from passive investments. 
« Last Edit: September 12, 2013, 02:10:52 PM by Jeff L »

chasesfish

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #6 on: September 12, 2013, 06:45:23 PM »
Here's my favorite part of the article:

"The gap between rich and poor narrowed after World War II as unions negotiated better pay and benefits and as the government enacted a minimum wage and other policies to help the poor and middle class."

I'd argue the gap narrowed because a ton of young men went to war and a ton of women entered the workforce, then the men came home and that generation worked their rear end off.  They saw hell and came back and wanted to better themselves.



hybrid

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #7 on: September 13, 2013, 07:37:02 AM »
People on this website eventually become like the 1%.  Not the 1% in dollar times, but in some ratios.  For example,  I'm clearly not part of the 1%, but 95% of my wealth is in stocks and only 5% is in my home, and about 65% of my total income comes from passive investments.

Hmmmmm, I'm not so sure.  My experience on these boards seems to suggest that MMM forum salaries are all over the scale, it is what folks do with those salaries that separates them from everyone else.

What I mean by that is the CEO of our local power company (Dominion Resources) has a compensation near $15 million per year.  I am betting he is not biking to work, buying a home that fits his needs, driving a beater, packing his lunch every day, etc.  And yet even with a carefree lifestyle and relatively half-assed investing said CEO is self-sufficient very quickly.  That is not the MMM guy.  No value judgments here, I'm just saying the folks with extremely high incomes really don't have to work nearly as hard outside of work to grow their nest egg.  They merely have to stay within a very comforatble budget and let their considerable income work for them.

tooqk4u22

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #8 on: September 13, 2013, 08:42:15 AM »
Short article that is borderline worthless but it made a claim (which is the only thing people read) but also included some of the reasons why:

"Economists point to several reasons for widening income inequality. In some industries, U.S. workers now compete with low-wage labor in China and other developing countries. Clerical and call-center jobs have been outsourced to countries such as India and the Philippines.

Increasingly, technology is replacing workers in performing routine tasks."

This isn't changing.  The easy answer is to get educated, work hard, and take control of your career - although the easy answer may not be that easy or practical - I mean if everyone got advanced degrees in whatever there still wouldn't be the jobs, high-paying or otherwise, for everyone.  That said, low skilled and less ambitious workers will always be at the bottom, if they acknowledge this they can change and start climbing.

Also see that transfer payments are excluded from the calculation, which is disingenuous at best as transfer payments total about $2.3trillion -  see slide show http://www.aei.org/files/2012/10/17/-have-we-become-a-nation-of-takers_170444837619.pdf. Also interesting but off topic is the trend line of defense spending vs. transfers (honestly thought growth was equal.





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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #9 on: September 13, 2013, 10:24:53 AM »
So the question becomes dear reader, where does your line lie, broadly speaking?  That arrticle is one of may that point to the fact that wealth has been pooling at the top over the past few decades.  Is there a point where that pooling reaches an unhealthy level?     
I think the answer is "yes".  Two things tend to happen as wealth to concentrates among fewer and fewer people: 1. social mobility decreases (it becomes harder and harder to raise one's economic station) and 2. the extremely wealthy turn to defending their wealth through political rather than economic means (i.e. they lobby, create super-PACs, make huge political contributions, etc).

Some inequality: good and necessary for progress. Extreme inequality: de-stabilizing and corrosive to a democratic society.

Deimyts

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #10 on: September 13, 2013, 11:10:18 AM »
Quote
I think the answer is "yes".  Two things tend to happen as wealth to concentrates among fewer and fewer people: 1. social mobility decreases (it becomes harder and harder to raise one's economic station) and 2. the extremely wealthy turn to defending their wealth through political rather than economic means (i.e. they lobby, create super-PACs, make huge political contributions, etc).

This is the key. The problem is not that the superwealthy have more money than me or you. It's that they have more power. And they use that power to magnanimously grant themselves more money and more power.

The law favors the wealthy because the wealthy make the laws.

ritchie70

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #11 on: September 13, 2013, 12:49:33 PM »
Another number that tends to bother people is discrepancy between line worker and CEO.

I'm in IT for a large multinational (but US-based) retailer/franchisor. Corporate annual revenue is around $27 billion. If you pretend I work the minimum number of hours required of me, I make somewhere around 10x minimum wage.

Our store associates make somewhere around minimum wage.

Using the same assumption of "works minimum number of hours" our CEO makes somewhere around 7000x minimum wage. With an 80-hour work week, it's still around 3500x minimum wage.

To me, and a lot of people, that CEO:line worker ratio feels out of line.

mgreczyn

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #12 on: September 13, 2013, 01:47:56 PM »
It gets even more fun when you start to look at the relationship between performance and compensation and what happens when people at various levels start to get laid off. 

There is apparently little correlation between executives' performance and their compensation; I recall being fascinated in business school by the concept of "compensation consultants".  These are people who's only function is to negotiate the comp packages enjoyed by top execs; they get paid based on the size of the package they negotiate, thus there is zero incentive for them not to shoot for the moon.  CEO pay has little to do with their competence / skill / what have you; it's almost all based on the effectiveness of the compensation consultant and the bar set by the industry. If a CEO in a certain industry lands an outsized package compared to peer companies, you can expect those peer companies to start increasing their CEO pay packages to retain "talent" - never mind that the talent in question may primarily be a talent for driving stock prices down.  Compare that to other levels; just because Google is paying some software engineers $300k, you don't see every other tech company doing it.  Ditto for lawyers, etc. 

When the CEO of a large company runs gets canned, they always get a hefty severance, often regardless of what happens to the performance of the company during their tenure.  This is ostensibly to keep the company from getting sued.  When a normal employee gets canned, they get a few months of unemployment.  Just try suing your company for laying you off.

Finally, contracts.  I don't have a contract; I'm at will, as I assume almost everyone else in corporate America is.  Union members get contracts, but those are rapidly dwindling.  Contract employees also get contracts, but I understand those tend to be short-term.  CEOs also get contracts; typically with golden parachute clauses. Remember the AIG takeover?  There was all this angst about the government coming in and terminating contracts because of "talent retention clauses".  What effing talent are you referring to?  A rare gift for destroying financial markets??

hybrid

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #13 on: September 13, 2013, 02:50:29 PM »
I've had similar discusssions about CEO pay with a fairly conservative peer group about Thomas Farrell, the CEO of Dominion Resources, the power company that serves much of Virginia.  His five year compensation checks in at a cool 70 million dollars.  Some of my peers see no issue with this whatsoever, I have plenty of issues with it.

http://www.forbes.com/lists/2012/12/ceo-compensation-12_Thomas-F-Farrell-II_EUA0.html

I'm sure his job is tough.  I'm sure there are only so many people qualified to do it.  I'm sure a layman such as myself cannot appreciate what it takes to be a modern CEO.  But I also know this.  Dominion Resources is a utility, the same utility that provided power for decades when their CEO wasn't making anywhere near that much money.  Is Mr. Farrell truly worth what he is getting paid, or has he (and his peers) merely found a way to get paid much more to do what CEOs like him did for decades before?

I am wholly unconvinced CEO pay is justified much of the time.  But as long as theor stock pumps out a steady dividend and the lights stay on, I don't think people pay too much attention to such things.  Until they start reading articles about how 1% of the workforce brings home 20% of the pay.

tooqk4u22

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #14 on: September 13, 2013, 03:27:57 PM »
Another number that tends to bother people is discrepancy between line worker and CEO.

I'm in IT for a large multinational (but US-based) retailer/franchisor. Corporate annual revenue is around $27 billion. If you pretend I work the minimum number of hours required of me, I make somewhere around 10x minimum wage.

Our store associates make somewhere around minimum wage.

Using the same assumption of "works minimum number of hours" our CEO makes somewhere around 7000x minimum wage. With an 80-hour work week, it's still around 3500x minimum wage.

To me, and a lot of people, that CEO:line worker ratio feels out of line.

Your example of 7000x min wage would be about $115 million of annual pay - out of line and probably not worth it.  The average of the S&P 500 is $12 million so your a little over zealous with your example - and of the $12 mill http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-You/Trends-in-CEO-Pay a lot of it is comprised of stock based compensation - I'll also bet that a few of the companies drive up the averages. Everybody loves Tesla and Elon because he is inovative and green - $78 mil comp in 2012, how do you feel about that.

The US does have a high CEO to average worker ratio - 354x for the S&P 500, which would be dramatically lower when applied to the average company or even the top 2000 companies.  Canada's ratio is 200x based on 60 companies.  Still high or is it, I don't know but I guess it depends on where your "line" is. 

I've had similar discusssions about CEO pay with a fairly conservative peer group about Thomas Farrell, the CEO of Dominion Resources, the power company that serves much of Virginia.  His five year compensation checks in at a cool 70 million dollars.  Some of my peers see no issue with this whatsoever, I have plenty of issues with it.

http://www.forbes.com/lists/2012/12/ceo-compensation-12_Thomas-F-Farrell-II_EUA0.html

I'm sure his job is tough.  I'm sure there are only so many people qualified to do it.  I'm sure a layman such as myself cannot appreciate what it takes to be a modern CEO.  But I also know this.  Dominion Resources is a utility, the same utility that provided power for decades when their CEO wasn't making anywhere near that much money.  Is Mr. Farrell truly worth what he is getting paid, or has he (and his peers) merely found a way to get paid much more to do what CEOs like him did for decades before?

I am wholly unconvinced CEO pay is justified much of the time.  But as long as theor stock pumps out a steady dividend and the lights stay on, I don't think people pay too much attention to such things.  Until they start reading articles about how 1% of the workforce brings home 20% of the pay.

Maybe but if it is so appalling shareholders can rally against the board to make a change in the compensation or the position.

Also part of the reason why CEO pay is so high is they take on far more personal liability now.

grantmeaname

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #15 on: September 13, 2013, 03:35:58 PM »
Also part of the reason why CEO pay is so high is they take on far more personal liability now.
Personal liability is right - and personal risk. The vast majority of CEO pay today is stock options, so if the share price doesn't go up, no matter whose fault it is, the CEO makes little or nothing.

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #16 on: September 13, 2013, 03:49:17 PM »
This is the key. The problem is not that the superwealthy have more money than me or you. It's that they have more power. And they use that power to magnanimously grant themselves more money and more power.

So how exactly is this different from say unions using their political clout to grant themselves more money and more power? 

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The law favors the wealthy because the wealthy make the laws.

Nice theory, but - from my purely objective and totally unbiased viewpoint :-) - the laws currently do not favor the wealthy.  It's true that they are not as confiscatory here in the US as in some other places, but is taking only 47% (per http://money.cnn.com/2013/04/01/pf/taxes/top-income-tax/index.html ) of a person's income, rather than 60-90%, really favoring the wealthy?

Undecided

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #17 on: September 13, 2013, 04:53:54 PM »
This is the key. The problem is not that the superwealthy have more money than me or you. It's that they have more power. And they use that power to magnanimously grant themselves more money and more power.

So how exactly is this different from say unions using their political clout to grant themselves more money and more power? 

Quote
The law favors the wealthy because the wealthy make the laws.

Nice theory, but - from my purely objective and totally unbiased viewpoint :-) - the laws currently do not favor the wealthy.  It's true that they are not as confiscatory here in the US as in some other places, but is taking only 47% (per http://money.cnn.com/2013/04/01/pf/taxes/top-income-tax/index.html ) of a person's income, rather than 60-90%, really favoring the wealthy?

Does "the laws" only mean "the tax laws" to you? What if other governmental action increases their gross incomes, say by using the nation's military for operations that disproportionately financially benefit the wealthy? I'm not saying that's the case in the U.S., but "the laws" aren't just the tax laws. Nevermind things likes treating carried interest as capital gains, taxing fiscal capital returns at lower rates than human capital returns, or whatever.

2527

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #18 on: September 13, 2013, 05:11:28 PM »
Debating politics and economic theories doesn't have much to do with supporting each other in our goals to achieve financial independence.

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #19 on: September 13, 2013, 07:20:29 PM »
Does "the laws" only mean "the tax laws" to you?

No, it's just that tax law is the area where it's easiest to show that the law is in fact biased against the wealthy.

For another example, consider a person accused of a crime.  If the person has a middle-class income or above, or substantial assets, it's quite possible that he will beggar himself paying for a defense.  If he is poor, he will have that defense provided at government expense.

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What if other governmental action increases their gross incomes, say by using the nation's military for operations that disproportionately financially benefit the wealthy?

Sure, if that was the case, then you could validly say that the laws are biased in favor of the wealthy.  The problem you face there is in finding any evidence at all to demonstrate that it is in fact the case.

And note here that "the wealthy" who benefit should be all, or nearly all, wealthy people, not just a small subset who happen to be political buddies of whatever administration is in power.

Undecided

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #20 on: September 13, 2013, 09:42:07 PM »

Focusing on tax laws may seem to you to help your claim, but it's obviously incomplete and there's no reason to presume it's representative of the overall system.  I wouldn't point at TARP and claim that to be conclusive evidence that "the laws" favor the wealthy. But even within the tax system, consider that even more fundamental than progressive "income" tax rates (your evidence of the laws disfaboring the wealthy) is that we treat return on fiscal capital far more favorably than return on labor, which obviously "favors" those who have money over those who deploy effort or skill. And then when a hugely wealthy group that sells its services as being skill-based structures its income through a claim that it's a return on capital (carried-interest compensated advisers), congress lets them get away with it.

For the record, I don't think any economic group in the U.S. consistently has it so bad, I just think that only looking at tax rates is a very narrow view.

Deano

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #21 on: September 13, 2013, 09:55:36 PM »
Also part of the reason why CEO pay is so high is they take on far more personal liability now.
Personal liability is right - and personal risk. The vast majority of CEO pay today is stock options, so if the share price doesn't go up, no matter whose fault it is, the CEO makes little or nothing.

And so the CEO is concerned with short-term stock performance, for a big time lotto win, little thought seems to be given to long term viability of the company. As this phenomenon in it's current form is maybe 10 to 15 years old, we haven't seen all of the disaster yet (big taste in 2008 mind you).

They take no risk either, if the stock prices goes down too much, they get canned, but with a HUGE golden parachute.

Undecided

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #22 on: September 13, 2013, 10:24:33 PM »
Also part of the reason why CEO pay is so high is they take on far more personal liability now.
Personal liability is right - and personal risk. The vast majority of CEO pay today is stock options, so if the share price doesn't go up, no matter whose fault it is, the CEO makes little or nothing.

And so the CEO is concerned with short-term stock performance, for a big time lotto win, little thought seems to be given to long term viability of the company. As this phenomenon in it's current form is maybe 10 to 15 years old, we haven't seen all of the disaster yet (big taste in 2008 mind you).

They take no risk either, if the stock prices goes down too much, they get canned, but with a HUGE golden parachute.

And executive compensation has more and more been in the form of restricted stock, not options, so it's no like the execs get nothing from their equity grants in the absence of share-price increases.

The asymmetric nature of options (no cost to the execs if price declines, potentially large gains if the price increases) over-encourages risk-taking by execs, from a shareholders' point of view.

hybrid

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #23 on: September 14, 2013, 08:45:24 AM »
This is the key. The problem is not that the superwealthy have more money than me or you. It's that they have more power. And they use that power to magnanimously grant themselves more money and more power.

So how exactly is this different from say unions using their political clout to grant themselves more money and more power? 

I'd argue the most significant difference is the ascension of the superwealthy and the continuing decline of unions.  It's the difference between success and failure.  Union gains are few and far between these days while their numbers continue to shrink.  Union power is a fraction of what it once was.

Deano

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #24 on: September 14, 2013, 10:46:13 AM »
This is the key. The problem is not that the superwealthy have more money than me or you. It's that they have more power. And they use that power to magnanimously grant themselves more money and more power.

So how exactly is this different from say unions using their political clout to grant themselves more money and more power? 

I'd argue the most significant difference is the ascension of the superwealthy and the continuing decline of unions.  It's the difference between success and failure.  Union gains are few and far between these days while their numbers continue to shrink.  Union power is a fraction of what it once was.

It's odd that people love to point at unions as some sort of equal actor in the grand scheme of things, when in reality their power has been marginalized to the point of near irrelevance. Their decline is precipitous, in both public and private sector. Still, they serve as as useful bogeyman for the elite.

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #25 on: September 14, 2013, 11:09:57 AM »
But even within the tax system, consider that even more fundamental than progressive "income" tax rates (your evidence of the laws disfaboring the wealthy) is that we treat return on fiscal capital far more favorably than return on labor...

But note that those who have only a small amount of capital (or more precisely, income from capital gains) are still treated much more favorably than those who have a lot of capital.  One might almost think that the goal is to encourage people to become, if not precisely wealthy, at least FI in the Mustachian sense.

Jack

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #26 on: September 14, 2013, 05:35:26 PM »
So how exactly is this different from say unions using their political clout to grant themselves more money and more power? 

A union may contribute a million dollars to a political campaign, but that million dollars is allocated based on the results of a vote of the union membership. In contrast, a CEO may contribute a million dollars to a political campaign, and that million dollars is allocated however he wants, everybody else's opinion be damned. In a society that's supposed to run on democratic principles, that is harmful.

It's true that they are not as confiscatory here in the US as in some other places, but is taking only 47% (per http://money.cnn.com/2013/04/01/pf/taxes/top-income-tax/index.html ) of a person's income, rather than 60-90%, really favoring the wealthy?

Compared to 90% (or higher!), as it was back in the '50s (when there was a huge economic boom -- providing a counterexample to the claim that low taxes are necessary)? Yes, yes it indeed is favoring the wealthy!


Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #27 on: September 14, 2013, 10:49:37 PM »
A union may contribute a million dollars to a political campaign, but that million dollars is allocated based on the results of a vote of the union membership.

Crap.  Union bosses give the money to their favored political causes, which are often opposed by the majority of union members, who're forced to join the unions and give them money as a condition of employment.

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In contrast, a CEO may contribute a million dollars to a political campaign, and that million dollars is allocated however he wants, everybody else's opinion be damned. In a society that's supposed to run on democratic principles, that is harmful.

Not at all.  If the CEO is giving his own money... well, it's his money, and he should be able to do whatever he wants to with it.  If he's giving corporate money, then if that doesn't benefit the shareholders, they are free to vote in new management.

Now whether it's harmful or not might be somewhat subjective, but I'd argue that the overall effect of political contributions from the wealthy has had a more positive effect that the contributions from e.g. labor unions.

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Compared to 90% (or higher!), as it was back in the '50s (when there was a huge economic boom -- providing a counterexample to the claim that low taxes are necessary)? Yes, yes it indeed is favoring the wealthy!

How?  You are still taxing the wealthy far out of proportion to any conceivable benefit they get from the government.  It is not favoring the wealthy at all (otherwise they'd be paying lower taxes than the rest of us), it is just not penalizing them quite as heavily. 

Nor were these lower tax rates enacted out of any desire for fairness: they were part of a calculated plan to extract the maximum possible tax revenue.  See e.g. the Laffer Curve.

Jack

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #28 on: September 14, 2013, 11:25:27 PM »
Crap.  Union bosses give the money to their favored political causes, which are often opposed by the majority of union members, who're forced to join the unions and give them money as a condition of employment.

Example?

Not at all.  If the CEO is giving his own money... well, it's his money, and he should be able to do whatever he wants to with it.

Taking that argument to the extreme, the CEO should be allowed to buy his own private army and set himself up as a dictator. You can at least see why that's a bad idea, right? Well, I say large individual political contributions differ only in magnitude, not essence.

How?  You are still taxing the wealthy far out of proportion to any conceivable benefit they get from the government.  It is not favoring the wealthy at all (otherwise they'd be paying lower taxes than the rest of us), it is just not penalizing them quite as heavily. 

Nor were these lower tax rates enacted out of any desire for fairness: they were part of a calculated plan to extract the maximum possible tax revenue.  See e.g. the Laffer Curve.

Government is not some sort of service designed for individual benefit. The wealthy shouldn't be getting benefits in proportion to their tax; that's not the point! Government is supposed to benefit society as a whole, and a more egalitarian society is a social good.

Taxes (and inheritance taxes, especially) should be at least a little bit confiscatory for the ultra-wealthy for the explicit purpose of preventing the creation of an aristocracy.

By the way, extracting maximum possible tax revenue shouldn't be the goal either (the Federal government is way too damn big and doing a whole bunch of stuff that should be handled by state government, local government, or not handled by the government at all) -- but that's another argument for another time.

Mike

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #29 on: September 15, 2013, 12:09:23 AM »
Government is not some sort of service designed for individual benefit. The wealthy shouldn't be getting benefits in proportion to their tax; that's not the point! Government is supposed to benefit society as a whole, and a more egalitarian society is a social good.
Looking at it from the standpoint of incentives, do you think it's a good thing to levy an extremely high tax rate on the wealthy to subsidize various types of welfare?  You have to draw the line somewhere; if you don't, you end up with people who have little or no desire to work milking the system for benefits.  While concentrated wealth and power in the hands of a few is unsustainable for a democratic society, the other extreme of too many people on the public dole sucking the tax dollars out of a shrinking pool of productive workers is also unsustainable.  I want a society where everyone who is of able body and mind pays into the system and is productive in some way. 
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Taxes (and inheritance taxes, especially) should be at least a little bit confiscatory for the ultra-wealthy for the explicit purpose of preventing the creation of an aristocracy.
I've always hated the idea of inheritance, so I agree with you on the estate tax.  If anything, passing off millions to offspring is counterproductive and removes a major incentive for them to work / make a name for themselves.
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By the way, extracting maximum possible tax revenue shouldn't be the goal either (the Federal government is way too damn big and doing a whole bunch of stuff that should be handled by state government, local government, or not handled by the government at all) -- but that's another argument for another time.
Government revenue goals should be balanced with economic growth goals.  More revenue is needed in the short term (next few years) to reign in the debt and start paying it down.  However, we can't go crazy on austerity either, as that tends to put the brakes on growth, sending us back toward / into recession (which in turn depresses tax revenue).

Jack

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #30 on: September 15, 2013, 01:42:10 AM »
Looking at it from the standpoint of incentives, do you think it's a good thing to levy an extremely high tax rate on the wealthy to subsidize various types of welfare?  You have to draw the line somewhere; if you don't, you end up with people who have little or no desire to work milking the system for benefits.  While concentrated wealth and power in the hands of a few is unsustainable for a democratic society, the other extreme of too many people on the public dole sucking the tax dollars out of a shrinking pool of productive workers is also unsustainable.  I want a society where everyone who is of able body and mind pays into the system and is productive in some way.

Who said anything about welfare?

I certainly didn't; I'd be perfectly happy for most of that sort of thing to be abolished. Then the feds could either give the funds back to the taxpayers or spend them on something worthwhile, such as paying down the national debt or enhancing the commons (infrastructure, the environment / parks, NASA/NOAA/NSF, etc). (In fact, I'm rather pissed off that we can manage to pay out an explosion of bullshit, fraudulent disability claims, but at the same time we can't be bothered to stop our infrastructure from crumbling.)

Low taxes are fine; I just want them to remain sufficiently progressive.

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By the way, extracting maximum possible tax revenue shouldn't be the goal either (the Federal government is way too damn big and doing a whole bunch of stuff that should be handled by state government, local government, or not handled by the government at all) -- but that's another argument for another time.
Government revenue goals should be balanced with economic growth goals.  More revenue is needed in the short term (next few years) to reign in the debt and start paying it down.  However, we can't go crazy on austerity either, as that tends to put the brakes on growth, sending us back toward / into recession (which in turn depresses tax revenue).

I think you misunderstand me. I'm not saying that the Federal government should cut implement "austerity," I'm saying that the Federal government should abolish entire bureaucracies and hand control back to the individual states. All that stuff should still get done, but it should be done under more local control. It's a lot easier for me get a hold of my representative in the Georgia General Assembly than it is for me talk to my Congressman.

Instead of paying 25% of my income to the Federal government and 3% to the state of Georgia, I want to pay 3% to the Federal government and 25% to the state of Georgia. Besides, all the Federal government does is dole all that money back out to the states with a bunch of strings attached. I think we should cut out the middleman.
« Last Edit: September 15, 2013, 01:52:37 AM by Jack »

mpbaker22

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #31 on: September 15, 2013, 08:22:08 AM »
Government is not some sort of service designed for individual benefit. The wealthy shouldn't be getting benefits in proportion to their tax; that's not the point! Government is supposed to benefit society as a whole, and a more egalitarian society is a social good.

Yes, but this doesn't respond to the original point made.  The poster was simply pointing out that the wealthy pay more in taxes than they receive back.  This means that the government's policies clearly don't benefit the wealthy.

Undecided

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #32 on: September 15, 2013, 10:00:17 AM »
Government is not some sort of service designed for individual benefit. The wealthy shouldn't be getting benefits in proportion to their tax; that's not the point! Government is supposed to benefit society as a whole, and a more egalitarian society is a social good.

Yes, but this doesn't respond to the original point made.  The poster was simply pointing out that the wealthy pay more in taxes than they receive back.  This means that the government's policies clearly don't benefit the wealthy.

Claiming, not pointing out. Selling public natural resource rights by bid, rather than retaining ownership; establishing limited-liability entities; establishing a currency; enforcing property rights, etc., are all government policies, too.

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #33 on: September 15, 2013, 11:38:31 AM »
Crap.  Union bosses give the money to their favored political causes, which are often opposed by the majority of union members, who're forced to join the unions and give them money as a condition of employment.

Example?

A) Teacher's unions: ask your average teacher whether they agreee with the union's political actions.

B) The Teamster's Union.  Long history, see Wikipedia, Google, etc.

C) The Southern California construction worker's union (I've forgotten the name) that I was forced to join and pay dues to, back in the late '70s.

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Taking that argument to the extreme, the CEO should be allowed to buy his own private army and set himself up as a dictator. You can at least see why that's a bad idea, right? Well, I say large individual political contributions differ only in magnitude, not essence.

I don't see that it's any different from unions having their own private armies of enforcers - which they have done, see B & C above.

And if it's only a matter of magnitude, where exactly do you draw the line? 

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Government is not some sort of service designed for individual benefit.

Then why on earth should we have it?  If government doesn't ultimately benefit me, then it is nothing more or less than forcibly-imposed tyranny.

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...and a more egalitarian society is a social good.

That is your personal belief.  Many people - me among them - do not share it.   So why is a government that imposes your beliefs on me something I should support?

Further, as has been pointed out, it's not responsive to the question of whether the government favors the wealthy.  If they are taxed more, or at a higher rate, than the non-wealthy, then clearly they are not being favored.  If the purpose is to prevent the wealthy from becoming an aristocracy, then that's further evidence that they're not being favored.

Beyond that, wealth and aristocracy are two fundamentally different things.  If you look at history, the aristocracy were often relatively poor, with real wealth being held by non-aristocratic merchant & banking families.  It's not much different today, when most of the great fortunes were earned by people who started out as anything but wealthy.

hybrid

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #34 on: September 15, 2013, 04:55:02 PM »
Further, as has been pointed out, it's not responsive to the question of whether the government favors the wealthy.  If they are taxed more, or at a higher rate, than the non-wealthy, then clearly they are not being favored.  If the purpose is to prevent the wealthy from becoming an aristocracy, then that's further evidence that they're not being favored.

If the only measure of favor is the tax rate on earned (see below) income one pays, then I would agree with you.  But the wealthy have access to government politicians via campaign financing, just as one example, where the wealthy have distinct advantages over the lay person.  That trend that favors the wealthy has continued with the recent SC decision regarding campaign financing.  Is anyone remotely surprised that all of the conservative justices sided with the notion that opened up the spigot which made it easier for the wealthy to contribute to a political campaign buy votes for causes they support? 

Also, the tax rate one pays on earned income is not the same one pays on capital gains, the vast majority of which is concentrated amongst the extremely wealthy.  Also, FICA tax rates are actually lower for very high earners as one does not pay FICA beyond a certain point.  So a trust fund baby may pay a lower tax rate than a plumber.  Warren Buffett pointed out how is tax rate was lower than his secretary.

In short, it's much more nuanced than just what one pays in income tax, and I think that line between who gets the bigger advantage blurs considerably.  The election of 2000 was a good example of this.  Bush campaigned on tax cuts which were shown to benefit the wealthy far and away in gross dollar amounts, and who do you suppose financed his campaign?  Certainly not the labor unions....  And Bush promptly delivered on that promise.

 

Jack

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #35 on: September 15, 2013, 06:07:51 PM »
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Taking that argument to the extreme, the CEO should be allowed to buy his own private army and set himself up as a dictator. You can at least see why that's a bad idea, right? Well, I say large individual political contributions differ only in magnitude, not essence.

I don't see that it's any different from unions having their own private armies of enforcers - which they have done, see B & C above.

And if it's only a matter of magnitude, where exactly do you draw the line? 

I'm not drawing a line; that's the point. Private armies are bad (including alleged ones controlled by unions) and large individual political contributions are bad.

You're the one who seemed to have been trying to draw a line.

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Government is not some sort of service designed for individual benefit.

Then why on earth should we have it?  If government doesn't ultimately benefit me, then it is nothing more or less than forcibly-imposed tyranny.

Because the purpose of government is to increase the collective good. Government doesn't ultimately benefit imprisoned felons either, but that's a good thing!

Doing things for individual benefit is what the market economy is for. Government exists to solve the problems the market fails at. (This is a self-evident tautology, by the way: if the government was supposed to act like the market then it wouldn't need to exist, now would it?)

See also: The Tragedy of the Commons.

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...and a more egalitarian society is a social good.

That is your personal belief.  Many people - me among them - do not share it.   So why is a government that imposes your beliefs on me something I should support?

You should go find a monarchy/dictatorship to live in, then. In this country, we fought a war and defeated the "many people" who think like you. Try reading the Declaration of Independence sometime. Those are the beliefs I'm trying to "impose" on you, and I'm damn sure not going to make any apology for it!

Further, as has been pointed out, it's not responsive to the question of whether the government favors the wealthy.  If they are taxed more, or at a higher rate, than the non-wealthy, then clearly they are not being favored.  If the purpose is to prevent the wealthy from becoming an aristocracy, then that's further evidence that they're not being favored.

You're accusing me of failing to answer a question I never intended to answer in the first place. Discussions progress from one topic to another; deal with it.

In my comparison of current tax rates to 1950s tax rates, I was making the point that wealthy are becoming increasingly favored (or decreasingly disfavored, if you prefer). I wasn't trying to make a claim of favor or disfavor on some sort of absolute scale.

Beyond that, wealth and aristocracy are two fundamentally different things.  If you look at history, the aristocracy were often relatively poor, with real wealth being held by non-aristocratic merchant & banking families.  It's not much different today, when most of the great fortunes were earned by people who started out as anything but wealthy.

Sure they were poor, after they were replaced due to the shift from feudalism to mercantilism. But I'm not talking about nominal "aristocrats," I'm talking about aristocrats in the functional sense (where those with wealth and power use it to perpetuate it amongst themselves, while throwing up barriers to prevent "commoners" from getting into the club). The essence of aristocracy is that oligarchic attitude, which applies just as well to the merchant and banking families you mention as it did to the feudal lords they make obsolete.

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #36 on: September 15, 2013, 10:21:35 PM »
Also, the tax rate one pays on earned income is not the same one pays on capital gains, the vast majority of which is concentrated amongst the extremely wealthy.

Not true.  I think you'll find that most stocks, and thus most capital gains, are actually held by IRAs, 401ks, pension funds, and so on.  Also note that the non-wealthy get much more favorable tax rates (zero for the lowest bracket) on their capital gains than do the wealthy. 

Now you can argue about whether treating capital gains differently than ordinary income is a good idea or not, but that's a different topic.  The plain fact is that, just as with income, the wealthy are taxed at a higher rate.

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Also, FICA tax rates are actually lower for very high earners as one does not pay FICA beyond a certain point.

True, but that's because it's not supposed to be an actual tax, but a (non-voluntary) contribution to a pension fund.  So every person who contributes qualifies for benefits in proportion to how much they've paid in.


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Warren Buffett pointed out how is tax rate was lower than his secretary.

This has been discussed before.  As was pointed out then, either he was honestly mistaken, or he lied.  His tax rates on various kinds of income are as high, and probably higher, than his secretary's.  Further, the rates are beside the point: the plain, inescapable fact is that he pays a heck of a lot more in tax than the secretary.

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The election of 2000 was a good example of this.  Bush campaigned on tax cuts which were shown to benefit the wealthy far and away in gross dollar amounts...
Quote

But again, your premise is faulty.  First, any cut in tax rates is obviously going to save a wealthy person more than it would someone of lower income.  This is simple arithmetic: 1% of $1 million is more than 1% of $50K. 

Second, you're assuming that the prior tax rates were equitable, so the tax cuts favor the wealthy.  But in fact, they merely reduced their disproportionate burden somewhat.


Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #37 on: September 15, 2013, 10:29:32 PM »
But I'm not talking about nominal "aristocrats," I'm talking about aristocrats in the functional sense (where those with wealth and power use it to perpetuate it amongst themselves, while throwing up barriers to prevent "commoners" from getting into the club). The essence of aristocracy is that oligarchic attitude, which applies just as well to the merchant and banking families you mention as it did to the feudal lords they make obsolete.

I suggest you look at who actually has the major wealth in this country today.  Take the Forbes list of the wealthiest Americans: is there anyone in the top 100 who was on the list (or had parents on it) 50 years ago?  I don't think so, but if they are, they're vastly outnumbered by the people who came from nowhere and built fortunes.  (Then there are those of us who may not have billions, but still went from utter poverty to financial independence.) So even if your economic "aristocrats" are trying to enforce this oligarchic attitude, they've failed miserably.


Jack

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #38 on: September 16, 2013, 03:00:10 AM »
Also, the tax rate one pays on earned income is not the same one pays on capital gains, the vast majority of which is concentrated amongst the extremely wealthy.

Not true.  I think you'll find that most stocks, and thus most capital gains, are actually held by IRAs, 401ks, pension funds, and so on.  Also note that the non-wealthy get much more favorable tax rates (zero for the lowest bracket) on their capital gains than do the wealthy. 

Now you can argue about whether treating capital gains differently than ordinary income is a good idea or not, but that's a different topic.  The plain fact is that, just as with income, the wealthy are taxed at a higher rate.

If you want to start talking about that kind of thing, then we have to consider the effect of sales and property taxes too. A person with no savings is (by definition) spending 100% of his income, which means that he's paying 8% (or whatever) of his entire income as sales tax. In contrast, anyone who saves at least 88% of their income pays (effectively) less than 1%, and for the ultra-wealthy sales tax is likely negligible.


Further, the rates are beside the point: the plain, inescapable fact is that he pays a heck of a lot more in tax than the secretary.

But again, your premise is faulty.  First, any cut in tax rates is obviously going to save a wealthy person more than it would someone of lower income.  This is simple arithmetic: 1% of $1 million is more than 1% of $50K. 

On the contrary, the rate is the fair basis for comparison.

Take the Forbes list of the wealthiest Americans: is there anyone in the top 100 who was on the list (or had parents on it) 50 years ago?  I don't think so, but if they are, they're vastly outnumbered by the people who came from nowhere and built fortunes.

According to this article, somewhere between 30% (according to Forbes itself) and 40% (according to a "left-leaning group") inherited their wealth. Either way, the old money is not "vastly outnumbered."

Not to mention, I'd be interested to see the statistics for a more inclusive group: the wealthiest 1000, or the wealthiest 10,000, or something like that. (The "1%" is probably too inclusive, though.)

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #39 on: September 16, 2013, 12:43:16 PM »
According to this article, somewhere between 30% (according to Forbes itself) and 40% (according to a "left-leaning group") inherited their wealth. Either way, the old money is not "vastly outnumbered."

I'd say that a ratio of about 2:1 is pretty well outnumbered.  If it was really a case of "old money" trying to keep everyone else out, you might expect 10% or less of the fortunes to be new.

As for the inherited wealth on the list (or elsewhere), how long does it take for money to become old money?  I don't think it really counts as old money if (as with the Waltons) the current crop inherited it from a parent who started out from scratch. 

Even if we don't look at the ultra-wealthy, there's still considerable room for us ordinary types to make a considerable change in our financial circumstances.  I've certainly increased my net worth by at least a thousandfold during my adult life.

Jack

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #40 on: September 16, 2013, 02:02:01 PM »
I'd say that a ratio of about 2:1 is pretty well outnumbered.

But not "vastly" so.

As for the inherited wealth on the list (or elsewhere), how long does it take for money to become old money?  I don't think it really counts as old money if (as with the Waltons) the current crop inherited it from a parent who started out from scratch. 

You know, I think somewhere along the line I've been maneuvered into categorizing the issue in terms of inherited wealth, when I didn't necessarily intend to make that distinction (since "new money" exerting undue influence on politics is just as problematic).

The fundamental concern here is undemocratic distribution of power. Money only becomes involved due to the transitive property.

I've certainly increased my net worth by at least a thousandfold during my adult life.

If you start at $0, earning a single penny increases your net worth infinitely. Your statement is not particularly meaningful.

More to the point...
 
[T]here's still considerable room for us ordinary types to make a considerable change in our financial circumstances...

I like your choice of the word "still" there: it implies that the situation isn't as good as it used to be, and (in turn) that it could be better. Watch out, because you're subconsciously trying to agree with me.

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #41 on: September 16, 2013, 02:29:10 PM »
But not "vastly" so.

Depends on your definition of "vast".  But such nit-picking aside, it's pretty clear that the current (or recent past) holders of wealth are not able to effectively prevent other people from acquiring equal, or even greater, fortunes, even if they really are trying to do so.

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You know, I think somewhere along the line I've been maneuvered into categorizing the issue in terms of inherited wealth, when I didn't necessarily intend to make that distinction (since "new money" exerting undue influence on politics is just as problematic).

I think you maneuvered yourself into that position, with the so-far unsubstantiated claim that the wealthy are trying to turn themselves and their descendents into an aristocracy. 

Now I think you have several problems here, the first of which is that you're describing not an aristocracy (which depends on inherited social status, not wealth per se: http://en.wikipedia.org/wiki/Aristocracy_(class) ), but a plutocracy: http://en.wikipedia.org/wiki/Plutocracy

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The fundamental concern here is undemocratic distribution of power. Money only becomes involved due to the transitive property.

But again, that's your concern.  I myself think that the ability to amass large sums of money is at least as valid a justification for holding political power as is being born with sufficient charisma to attract the votes of the (mostly) ignorant masses.

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I like your choice of the word "still" there: it implies that the situation isn't as good as it used to be, and (in turn) that it could be better. Watch out, because you're subconsciously trying to agree with me.

Wrong.  You're reading something into the word that I never intended.  In fact, I seriously disagree: there have been few better times - certainly not in the last century or so - for a determined and/or ingenious person to make great improvements in financial status.  Even if we disregard the number of new fortunes among the Forbes 400 (and the much more numerous lesser fortunes gained by those who rode along - e.g. an estimated 10,000 "Microsoft Millionaires", a thousand or so Google millionaires, Facebook millionaires, etc.), this very site is devoted to the proposition that almost anyone can accumulate enough wealth to become financially independent, and a member of the leisure class long before normal retirement age.
[/quote]

Deimyts

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #42 on: September 16, 2013, 05:38:52 PM »
The point still remains, James, whether you call it a plutocracy or aristocracy, and whether or not social mobility exists to a greater degree than in the feudal era, that a billionaire has far more power over the political system than you or I, and that is fundamentally undemocratic. And, even more than individuals, enormous companies wield far more influence than any one member of their organization, because they represent their entire company (and the money behind it).

Having more money shouldn't give you a more influential vote. But it does.

hybrid

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #43 on: September 16, 2013, 06:18:06 PM »
The point still remains, James, whether you call it a plutocracy or aristocracy, and whether or not social mobility exists to a greater degree than in the feudal era, that a billionaire has far more power over the political system than you or I, and that is fundamentally undemocratic. And, even more than individuals, enormous companies wield far more influence than any one member of their organization, because they represent their entire company (and the money behind it).

Having more money shouldn't give you a more influential vote. But it does.

Exactly.  Money is the lifeblood of politics.  Recall in 2012 when Newt Gingrich's campaign was nearly dead in the water he was saved by Sheldon Adelson, who pumped a badly needed 10 million dollars into his campaign.  Without that benefactor Gingrich was done.  Instead he went on to win South Carolina fuelled by an extensive negative ad campaign, damaging the Romney candidacy in the process.  Rather ironic how unlimited donations to Super PACs came back to haunt the party that backs them the loudest.

http://www.slate.com/articles/news_and_politics/politics/2012/01/sheldon_adelson_newt_gingrich_and_the_largest_campaign_donations_in_u_s_history_.html   

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #44 on: September 16, 2013, 10:28:38 PM »
The point still remains, James, whether you call it a plutocracy or aristocracy, and whether or not social mobility exists to a greater degree than in the feudal era, that a billionaire has far more power over the political system than you or I, and that is fundamentally undemocratic.

I know that.  It's simply that I don't think it's bad.  I am not exactly a fan of unlimited democracy, especially when concerted efforts are made (and not by the really rich, either) to keep the masses as ignorant as possible.

There's a considerable difference between equal rights, which includes the right of any person to try to raise themselves to the level of the "aristocracy", and an enforced egalitarianism which tries to drag everyone down to the cultural, intellectual, and financial least common denominators.

Deimyts

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #45 on: September 17, 2013, 08:18:42 AM »
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I know that.  It's simply that I don't think it's bad.  I am not exactly a fan of unlimited democracy, especially when concerted efforts are made (and not by the really rich, either) to keep the masses as ignorant as possible.



A few questions, James.

What do you mean by unlimited democracy?
What limits do you propose, and what is the purpose of those limits?

You say concerted efforts are made to keep the masses ignorant. Can you elaborate on this? What efforts do you mean, and who is making them? What is the result of these efforts?

Quote
There's a considerable difference between equal rights, which includes the right of any person to try to raise themselves to the level of the "aristocracy", and an enforced egalitarianism which tries to drag everyone down to the cultural, intellectual, and financial least common denominators.

With regard to equal rights, where do they come from, and how are they maintained?
At what point does enforcement of rights begin to have a negative outcome, rather than a positive one?






ritchie70

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #46 on: September 17, 2013, 10:44:27 AM »

Your example of 7000x min wage would be about $115 million of annual pay - out of line and probably not worth it.  The average of the S&P 500 is $12 million so your a little over zealous with your example - and of the $12 mill http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-You/Trends-in-CEO-Pay a lot of it is comprised of stock based compensation - I'll also bet that a few of the companies drive up the averages. Everybody loves Tesla and Elon because he is inovative and green - $78 mil comp in 2012, how do you feel about that.

Looks like I flubbed my math, off by a 0. I also used the wrong number for minimum wage. He makes roughly 800x minimum wage, around $13 million.

Keep in mind that our official work week is 37.5 hours.

Luck better Skill

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #47 on: September 17, 2013, 12:27:47 PM »
  I think a CEO should never get a bonus.  If a CEO is worth 40 million a year pay them 40 million.  A CEO can legally manipulate the value of company stock to increase his bonus.  The temptation to take a multimillion dollar payout knowing it will hurt or bankrupt the company in a few years is too great for many to resist. 
  examples:  AIG, Lehman's, all the mortgage back securities.

  In western society it feels inherently wrong if the bottom worker of a company is at $7.25 an hour and the top live as royalty of the past centuries.  I am not against high pay but I do not buy the lie the king has new clothes, that only a handful of people can do the job.  Maybe only 20% of the population has the ability not the fraction of 1% with royal midichlorian blood.

Jamesqf

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #48 on: September 17, 2013, 03:27:24 PM »
What do you mean by unlimited democracy?
What limits do you propose, and what is the purpose of those limits?

Take for one instance Obamacare.

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You say concerted efforts are made to keep the masses ignorant. Can you elaborate on this? What efforts do you mean, and who is making them? What is the result of these efforts?

I don't have time or ambition to write a whole sociopolitical treatise, but consider, for one blatant example, the fact that close to 80% of Americans reject evolution, and believe that humans walked around with dinosaurs.

Deimyts

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Re: "It's Good To Be The King" 1% earn biggest share since the 20's
« Reply #49 on: September 17, 2013, 10:17:12 PM »
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Take for one instance Obamacare.

Okay, we'll leave the rest be for now, but what? The fact is that you didn't give me enough information about your opinions to form an argument against you without a whole mess of assumptions, but we'll go ahead and try anyway. 

I assume when you refer to "unlimited democracy", you mean democracy as rule of law by majority opinion, rather than the more general usage of the term used to refer to any system of rule of law that involves the majority of a nation's populace having the ability to vote, either on their leaders or on policy itself. If that assumption is wrong, please correct me.
Are you saying that Obamacare is an example of unlimited democracy? A law imposed through majority opinion and not filtered through elected representatives, corporate lobbyists, and courts? Otherwise, I'm not sure what you mean.

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the fact that close to 80% of Americans reject evolution, and believe that humans walked around with dinosaurs.
Yes, large numbers of people are wrong about large numbers of things. So it is and so it shall be. How does this relate to whether or not the super wealthy are exploiting the system for their own gain, and whether or not this is a bad thing?

As for the other questions, about equal rights, you said that cited that anyone could raise themselves to the height of the 'aristocracy' (meaning plutocracy, as you insisted earlier), and implied that this right should be protected, although you did not say that outright.
You brought as an example many individuals who have proved that social mobility exists by rising to wealth and power from various positions on the ladder.

I say that those few exceptions don't change the rule: i.e., if you're born in poverty, you're far more likely to die in poverty, or at least near the level you started, than rise above it. And I say this is a direct result of our society, our government, and most importantly, our government's attitudes toward wealth.

If you are in fact arguing that democracy should be distorted by wealth to serve the interests of large corporations and a few billionaires over those of ordinary citizens...

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I am not exactly a fan of unlimited democracy

(which is the only way I can interpret this in the context of the discussion, although I also do not agree with unlimited democracy, which is why I hoped to get you to tell me what limits you approved of)

...than Obamacare is a prime example of the opposite happening. A single-payer, government funded option would have been much more palatable than the current mandate to hand money to insurance companies. However, some of protections put in place to ensure that people can get care covered by insurance at all are certainly a step in the right direction. However, political dissent, backed by corporate opinion, has left us with a law demanding we give money to insurance companies.

At any rate, the question we're really arguing, is, "Should wealth grant greater influence on democracy than nonwealth?"

 I say it should not. It is easy for the wealthy to perpetuate unjust laws which increase the influence of their wealth. It is difficult for a nonwealthy individual to pass laws which decrease the influence of the wealthy. This difficulty is an artificial constraint which impedes social mobility, which is in turn detrimental to society as a whole. While restraints should be imposed upon democracy (and are, through mechanisms such as republican government and a (nominally) fair judicial system) those restraints imposed upon democracy by the wealthy are not beneficial, as they cause harm to the nonwealthy to a greater extent than they benefit the wealthy.