The Divide between the Poor and the Rich

[You-Gi-Owe]

If the poor got richer and their living standard increased, even if the rich got richer, would that be okay with you?

OR

Would you rather the difference between the poor and the rich was less, even if the living standard of the poor didn't increase?

[Skibereen]

Perception is reality.

[Neutraligon]

If the poor got richer and their living standard increased, even if the rich got richer, would that be okay with you?

OR

Would you rather the difference between the poor and the rich was less, even if the living standard of the poor didn't increase?

If everyone got richer but the prices of everything staid as they are now, why not. The problem is that is unlikely to happen.

[Romalae]

If the poor got richer and the rich got richer, then the standards of what is considered "rich" would change to fit the new circumstances. So in the end, nothing would change really.

Also, does your question apply for just America or is the rest of the world in play as well?

[Tubbsalot]

Liberals are evil.

Does that answer your question?

[Bafuria]

Income inequality tends to raise homicide rates considerably, even if the overall income level is higher.

Graph from Scientific American

So yes, I'd rather have a smaller income gap than more societal wealth.

[TaQud]

If the poor got richer and their living standard increased, even if the rich got richer, would that be okay with you?

nope. Greed & envy is a cruel...

[Vetalia]

I'm a fan of a rising tide lifting all boats so I'd go for everyone getting richer rather than some getting poorer and the others seeing no improvement.

[Northern Dominus]

I'm all for the Austin Aries route, Option C. How about we raise the standard of living for the lower and middle classes and keep the upper class standard of living right where it is. Because frankly they've been doing suspiciously well ever since the stock market crash and they really don't need ANOTHER gold-plated learjet, or whale forsekin shoes, or other idiotic things that the ultra-wealthy waste money on.

[Moving Forward Inc]

If the poor got richer and their living standard increased, even if the rich got richer, would that be okay with you?

OR

Would you rather the difference between the poor and the rich was less, even if the living standard of the poor didn't increase?

I don't care how rich or poor someone is as long as none of the money they have was gained through use of force.

[Vetalia]

I'm all for the Austin Aries route, Option C. How about we raise the standard of living for the lower and middle classes and keep the upper class standard of living right where it is. Because frankly they've been doing suspiciously well ever since the stock market crash and they really don't need ANOTHER gold-plated learjet, or whale forsekin shoes, or other idiotic things that the ultra-wealthy waste money on.

Yeah, but how do you do that? Not that I disagree, I definitely agree that a strong middle class and secure lower class is necessary for a robust economy, but how do we do it?

[Northern Dominus]

I'm all for the Austin Aries route, Option C. How about we raise the standard of living for the lower and middle classes and keep the upper class standard of living right where it is. Because frankly they've been doing suspiciously well ever since the stock market crash and they really don't need ANOTHER gold-plated learjet, or whale forsekin shoes, or other idiotic things that the ultra-wealthy waste money on.

Yeah, but how do you do that? Not that I disagree, I definitely agree that a strong middle class and secure lower class is necessary for a robust economy, but how do we do it?

First, everyone in the financial sector starts playing by the rules. Nobody is saying that you can't take risks with money, but when your massive hedge bet screws an entire companies worth of managers, accountants, and skilled laborers without so much as a slap to the face rather than the wrist, then something is seriously seriously unbalanced.

Also, invest heavily in education, especially STEM fields. We were a nation of skilled laborers, of innovators. I mean for crying out loud we're the only goddamn nation that's put human beings on the moon! And we could do it again if we invested in the future. And make sure the investing is done on the behalf of the American people, not some asshole in a boardroom pushing little trust funds and buildings around like they're pawns on a chessboard.

The short answer is invest in the middle and lower classes, re-open those avenues upwards and make sure the terrorists on Wall Street play by the rules and quit monkeying with everyone's money aside from their own. If that means fragmenting those big banks into small little companies which you can drag into the bathroom and drown in the tub, then that's what it takes.

[Mike the Progressive]

Full income equality will never happen. Ideally, what you want is a small wealthy class and a small poor class, with a large middle class. The more people have invested in property, in goods, in the economy less likely are they to take up arms in hopes of the revolution. I'd say no true capitalist society has ever produced a revolution and are usually the most stable. Russia was largely feudal and mercantilist, even though it was formally abolished years before the revolution. The same goes with China.

[Vazeckta]

If the poor got richer and their living standard increased, even if the rich got richer, would that be okay with you?

Why not, better standards of living are always great.
The gap in wealth I don't think is the issue, more the gap of living standard.

[Frisivisia]

So what you're saying is that we should impeach Obama?

[GCMG]

Ultimately, if everyone is better off than everyone is better off. That's the idea of a materialistic standard of living. However, as my textbook points out if, for example, one now spends twenty minutes longer in traffic as a result are they actually better off? Probably not.

So, it's not so much how wealthy one is it is where that wealth slots into an overall picture. Being poor tends not to help, being wealthier tends to (help). As such, it is better to encourage everyone to become wealthier but focus on the poor as the rich will get richer anyway.

Now, the second option is evil. The reason being is that it runs counter to the idea of economic equality.

[Northern Dominus]

Full income equality will never happen. Ideally, what you want is a small wealthy class and a small poor class, with a large middle class. The more people have invested in property, in goods, in the economy less likely are they to take up arms in hopes of the revolution. I'd say no true capitalist society has ever produced a revolution and are usually the most stable. Russia was largely feudal and mercantilist, even though it was formally abolished years before the revolution. The same goes with China.

Screw equality for now, I just want the lower and middle classes to have a fighting chance again. As I mentioned before one of the gateways to upward mobility is of course education, and that's been under assault from the likes of the Koch Brothers and their continued assault on public education in one form or another. And then there's the predatory school loans and the explosion of for-profit institutions, and how that bubble hasn't exploded and rained crap back down on everybody below a certain standard of living I have no idea.

This isn't anything new of course. The upper echelon terrorists went after skilled laborers heavily in the 70s and 80s, pushing through free trade agreements and lowering tariffs on companies that sent jobs overseas, and sooner or later it's going to come back and bite them in the ass. Frankly I'm surprised they haven't been dragged on hurdles out of their estates in the Hamptons among other places and shot in the streets for their complete screwing of the American Dream by now.

[Mike the Progressive]

Full income equality will never happen. Ideally, what you want is a small wealthy class and a small poor class, with a large middle class. The more people have invested in property, in goods, in the economy less likely are they to take up arms in hopes of the revolution. I'd say no true capitalist society has ever produced a revolution and are usually the most stable. Russia was largely feudal and mercantilist, even though it was formally abolished years before the revolution. The same goes with China.

Screw equality for now, I just want the lower and middle classes to have a fighting chance again. As I mentioned before one of the gateways to upward mobility is of course education, and that's been under assault from the likes of the Koch Brothers and their continued assault on public education in one form or another. And then there's the predatory school loans and the explosion of for-profit institutions, and how that bubble hasn't exploded and rained crap back down on everybody below a certain standard of living I have no idea.

This isn't anything new of course. The upper echelon terrorists went after skilled laborers heavily in the 70s and 80s, pushing through free trade agreements and lowering tariffs on companies that sent jobs overseas, and sooner or later it's going to come back and bite them in the ass. Frankly I'm surprised they haven't been dragged on hurdles out of their estates in the Hamptons among other places and shot in the streets for their complete screwing of the American Dream by now.

Probably because most in the US don't view it that way. I am not opposed to free trade and lower/no tariffs. Whether we like it or not markets have to change. We couldn't remain in manufacturing forever. New technologies are introduced, more people enter the work force, you can't stop it. It's chaotic yet it's also beautiful.

However, I do agree that the government should not take sides. On labor or capital. Both should be left to their own interactions without the third party interfering or if they have to, by treating the two equally. Of course, I'm skeptical of the latter, regulators have been in bed with those they are suppose to regulate. New laws aimed to prevent another market failure seems to only guarantee big businesses of a bailout.

[Zijeme]

Hey look, YGO has taken a tiny break from spamming stuff copy-pasted from Free Republic and is now trying to fabricate a dichotomy that will prove his 'point' once and for all. Well done!

[Northern Dominus]

Screw equality for now, I just want the lower and middle classes to have a fighting chance again. As I mentioned before one of the gateways to upward mobility is of course education, and that's been under assault from the likes of the Koch Brothers and their continued assault on public education in one form or another. And then there's the predatory school loans and the explosion of for-profit institutions, and how that bubble hasn't exploded and rained crap back down on everybody below a certain standard of living I have no idea.

This isn't anything new of course. The upper echelon terrorists went after skilled laborers heavily in the 70s and 80s, pushing through free trade agreements and lowering tariffs on companies that sent jobs overseas, and sooner or later it's going to come back and bite them in the ass. Frankly I'm surprised they haven't been dragged on hurdles out of their estates in the Hamptons among other places and shot in the streets for their complete screwing of the American Dream by now.

Probably because most in the US don't view it that way. I am not opposed to free trade and lower/no tariffs. Whether we like it or not markets have to change. We couldn't remain in manufacturing forever. New technologies are introduced, more people enter the work force, you can't stop it. It's chaotic yet it's also beautiful.

However, I do agree that the government should not take sides. On labor or capital. Both should be left to their own interactions without the third party interfering or if they have to, by treating the two equally. Of course, I'm skeptical of the latter, regulators have been in bed with those they are suppose to regulate. New laws aimed to prevent another market failure seems to only guarantee big businesses of a bailout.

You're right about one part of manufacturing. Unskilled labor is something we should probably get rid of and that could go overseas. Or we could keep it here and used skilled labor to build robots, skilled labor that came from the unskilled ranks because they had access to education because it wasn't routinely fucked over by the likes of the Koch brothers and their obscene uses of their trust funds. That technology has come from the US in the past and it can again, we just need to make sure we encourage the production in the first place.

As far as the government taking any sides, you're right. What it SHOULD do is learn from its history and force, at gunpoint if nessecary, companies to compete with each other openly rather than collude to screw us over. See, I don't want to beg the banks to give me a pithy loan at a high rate. I have a helluva credit score, so I want the banks to beg me to take a loan from them and give me the lowest possible number, and I want them to do the same for my friends. That's called competition, being forced to offer a better product, and if you do it well enough then more people buy your product.

Instead our pensions get turned into 401ks, invested in some hairbrained scheme that we had no say in whatsoever, and then when things go to hell suddenly its our money rather than the investment banks that has evaporated.

How exactly is that fair to anybody?

[Vetalia]

As far as the government taking any sides, you're right. What it SHOULD do is learn from its history and force, at gunpoint if nessecary, companies to compete with each other openly rather than collude to screw us over. See, I don't want to beg the banks to give me a pithy loan at a high rate. I have a helluva credit score, so I want the banks to beg me to take a loan from them and give me the lowest possible number, and I want them to do the same for my friends. That's called competition, being forced to offer a better product, and if you do it well enough then more people buy your product.

The bigger problem now is banks aren't lending because interest rates are too low to make it worthwhile...who in their right mind would lend out money at 3.5% for 15 or 30 years when they could just park it in cash or invest it otherwise?

Instead our pensions get turned into 401ks, invested in some hairbrained scheme that we had no say in whatsoever, and then when things go to hell suddenly its our money rather than the investment banks that has evaporated.

How exactly is that fair to anybody?

I'd definitely take a 401(k) over a pension; I at least own that money contributed (as well as the company's money after it vests) and can roll it over into an IRA after leaving the job. Plus, those investment plans give you the choice of where to direct your money within the scope of the options offered; if you want to be conservative you can focus on conservative investments and if you want to take on risk you can do so.

With a pension, you're not only basically trusting that the company will remain financially healthy 50 years from when you start paying in with absolutely no guarantee that you'll ever see any of it but also that they'll keep the plan funded enough to actually pay out benefits. Even worse, you're also trusting that the company's plan manager will invest its assets prudently to generate the best return for its members...one of the big reasons for the pension problems in recent years is those plan managers invested the funds unwisely and lost a ton of money. Worst case, they end up dumping it on the PBGC and if you're lucky you get 30 cents on the dollar of what you were supposed to receive.

I'd never go for a company with a pension plan unless I was being paid more than what I'd receive via a company with a 401(k).

[Northern Dominus]

The bigger problem now is banks aren't lending because interest rates are too low to make it worthwhile...who in their right mind would lend out money at 3.5% for 15 or 30 years when they could just park it in cash or invest it otherwise?

Which more to the point is a big middle finger to the American taxpayer.

This is the point where the Treasury Department should tap those particular entities hard on the shoulders and remind them that it's American taxpayer money that helped kept them out of the red, so either they start getting that money back out there and help rebuild America or they're going to find all federal funding yanked and their companies broken up so quickly that the line of tow trucks to haul away their BMWs, Mercs, Rolls and other fancy cars will be only slightly less head-spinningly massive than the rate at which their private business jets get impounded after the government calls in all of their debt. Oh and by the way, while that's going on Glass-Steagal is going back into full effect with a few updates so this kind of crap doesn't happen again.

I'd definitely take a 401(k) over a pension; I at least own that money contributed (as well as the company's money after it vests) and can roll it over into an IRA after leaving the job. Plus, those investment plans give you the choice of where to direct your money within the scope of the options offered; if you want to be conservative you can focus on conservative investments and if you want to take on risk you can do so.

With a pension, you're not only basically trusting that the company will remain financially healthy 50 years from when you start paying in with absolutely no guarantee that you'll ever see any of it but also that they'll keep the plan funded enough to actually pay out benefits. Even worse, you're also trusting that the company's plan manager will invest its assets prudently to generate the best return for its members...one of the big reasons for the pension problems in recent years is those plan managers invested the funds unwisely and lost a ton of money. Worst case, they end up dumping it on the PBGC and if you're lucky you get 30 cents on the dollar of what you were supposed to receive.

I'd never go for a company with a pension plan unless I was being paid more than what I'd receive via a company with a 401(k).

But see, the 401k was never supposed to be an alternative to the pension. It started out as a perk for executives. Furthermore, pensions can still be moved to companies with little trouble, and they're managed by people who know what the hell they're doing most of the time, rather than joe schmo who is equally well served with investments using a coin or a crystal ball because financial planners that have reasonable rates are hard to find these days.

I'm not opposed to 401ks, but unless you dedicate every minute of your free time to figuring the market out they're not a good alternative to the pension. Maybe as a half/half deal or an option, but not the standard.

[Yumyumsuppertime]

My choice is to not answer a theoretical question not based in reality.

[Vetalia]

This is the point where the Treasury Department should tap those particular entities hard on the shoulders and remind them that it's American taxpayer money that helped kept them out of the red, so either they start getting that money back out there and help rebuild America or they're going to find all federal funding yanked and their companies broken up so quickly that the line of tow trucks to haul away their BMWs, Mercs, Rolls and other fancy cars will be only slightly less head-spinningly massive than the rate at which their private business jets get impounded after the government calls in all of their debt. Oh and by the way, while that's going on Glass-Steagal is going back into full effect with a few updates so this kind of crap doesn't happen again.

The Federal Reserve isn't going to raise rates enough simply because they assess that the economy isn't strong enough to weather it....it's also independent from the US government as a whole. And, of course, the elephant in the room is the government debt itself; every 1% the Fed raises rates, that's another $160 billion in expenses charged directly to the deficit. We pissed away enough money on nothing in the past decade and now we have a nightmarish bill to pay when the time comes.

While I firmly respect the Federal Reserve and the work they've done to handle the crisis, I do believe a program of draining liquidity and tightening to a 2% Fed funds rate is necessary...we need to get back to normalcy asap.

[Neu Leonstein]

The problem is not inequality of wealth, but inequality of opportunity. The two are somewhat connected, of course, but in principle if institutions don't favour those who are already wealthy (eg China, Greece and to a lesser degree the United States) then some people becoming very rich is a symptom of innovation and having provided some value to other people.

Mind you, policies that blindly favour those who are wealthy already generally aren't actually that fantastic at actually making the economy or society as a whole better off. That's a myth propagated by those who have the most to gain from such policies, and to which the GOP latched on for some reason.

Oh and by the way, while that's going on Glass-Steagal is going back into full effect with a few updates so this kind of crap doesn't happen again.

Not again. Bank bashing can be done in a sophisticated way. Talking about Glass-Steagall just reveals ignorance of the issue at hand.

I'm not opposed to 401ks, but unless you dedicate every minute of your free time to figuring the market out they're not a good alternative to the pension. Maybe as a half/half deal or an option, but not the standard.

There are products out there that try and take the effort and time out for the individual investor. Of course there are risks, but it still seems far more sustainable than the systems they have in Europe.