More on Taxes and "The Rich"

[Baldy]

And that brings up an important distinction. "Uber-rich" is the key word here. We're not talking about going after AZ, or Joltin Joe wealth here. They're producers. We're talking about those who actually gambled, stole, or inherited their way to wealth.

These guys would be a good place to start:
(I wonder why you they're not as popular with conks as Fannie and Freddie )

Because Fannie and Freddie is a government run entity and is in the process of getting a $1.5 Trillion taxpayer bailout.

Besides, inherited wealth and winnings from gambling and lotteries has already been taxed.

[blueballs]

Exactly what deregulation caused the economy to tank? Are you talking about the non-regulation of Fannie and Freddie?

Non-regulation is a good way to describe Fannie and Freddie and yes that contributed.

But Graham-Leach-Bliley and the deregulation of derivatives markets had more to with it.

I concur

[93henfan]

Kalm is removing mammaries right and left in this thread. Nice work!

[kalm]

And that brings up an important distinction. "Uber-rich" is the key word here. We're not talking about going after AZ, or Joltin Joe wealth here. They're producers. We're talking about those who actually gambled, stole, or inherited their way to wealth.

These guys would be a good place to start:
(I wonder why you they're not as popular with conks as Fannie and Freddie )

Because Fannie and Freddie is a government run entity and is in the process of getting a $1.5 Trillion taxpayer bailout.

Weren't Fannie and Freddie privately owned but backed by the government? Privatize the profits, socialize the risk. Is there much difference between them and bailing out Wall Street banks?

[Grizalltheway]

Because Fannie and Freddie is a government run entity and is in the process of getting a $1.5 Trillion taxpayer bailout.

Weren't Fannie and Freddie privately owned but backed by the government? Privatize the profits, socialize the risk. Is there much difference between them and bailing out Wall Street banks?

The neo-conk mantra.

[Ivytalk]

I've always wanted to be just south of uber-rich. That's my goal in life: to fly under Barry's tax radar.

[BDKJMU]

I've always wanted to be just south of uber-rich. That's my goal in life: to fly under Barry's tax radar.

Then you better make less than 200k.

[JohnStOnge]

So I decided to play nice and come up with some numbers for you by googling your phrase "If you have an inflation adjusted "wealth distribution" comparison between the "middle class" and the "rich". What I found was the following article from 2006 by Paul Krugman:

http://www.informationclearinghouse.inf" onclick="window.open(this.href);return false; ... e15923.htm



It doesn't have the raw stats you favor and I'm sure you'll heavily consider the source, but none the less, Krugman is very well researched and I'd love to see you pick his points apart.

If you REALLY want me to go through that point by point go ahead and let me know and I guess I will. But the bottom line is that there is nothing in there to support the argument that there has been a trend such that the "typical" or the "poor" American has become worse off over the past 30 or 50 or 60 or so on years.

His comparisons are innane. Like comparing automobile assembly workers from the middle range of the 20th century to retail store workers (Wal Mart) of today because General Motors was the second largest employer then and Wal Mart is the largest employer now. When you really think about, that comparison lends absolutely no insight into the question at hand.

Then there's his use of the device of the 1000 people standing in line and how tall lthey are. Nowhere during discussion of that does he even claim that anybody is worse off now than they were in the past. Instead, he's arguing that some haven't "grown much."

The only thing he demonstrates is that those at the top made more progress than those in the middle and at the lower end did. And that's consistent with the annual income figures I posted. But nowhere does he demonstrate that any defined income group is "worse off" now than it was at some point in history nor does he demonstrate that there's been any kind of "redistribution." The piece is titled "The Great Wealth" transfer but he does not document a wealth transfer. The fact that one defined income group made more progress than another does not necessarily mean there was a wealth transfer.

[Baldy]

Because Fannie and Freddie is a government run entity and is in the process of getting a $1.5 Trillion taxpayer bailout.

Weren't Fannie and Freddie privately owned but backed by the government? Privatize the profits, socialize the risk. Is there much difference between them and bailing out Wall Street banks?

Fannie was privatized to the point of being able to sell stock on the NYSE and to the point of keeping their financial activity out of the federal budget. Otherwise, it was a government sponsored enterprise with the sole purpose of giving easy credit so low and moderate income people could purchase housing. In later years it bundled those mortgages together and started selling them as Mortgage Backed Securities.

For the 10,000th time, neither Wall Street nor Fannie and Freddie should have been bailed out. Government intervention is what creates bubble economies. There is a HUGE difference between needed limited outside government oversight, and the government getting inside, stirring the pot, and disrupting the natural balance of free market economies.

[Grizalltheway]

Weren't Fannie and Freddie privately owned but backed by the government? Privatize the profits, socialize the risk. Is there much difference between them and bailing out Wall Street banks?

Fannie was privatized to the point of being able to sell stock on the NYSE and to the point of keeping their financial activity out of the federal budget. Otherwise, it was a government sponsored enterprise with the sole purpose of giving easy credit so low and moderate income people could purchase housing. In later years it bundled those mortgages together and started selling them as Mortgage Backed Securities.

For the 10,000th time, neither Wall Street nor Fannie and Freddie should have been bailed out. Government intervention is what creates bubble economies. There is a HUGE difference between needed limited outside government oversight, and the government getting inside, stirring the pot, and disrupting the natural balance of free market economies.

Alright Baldy, please explain, in five condescending remarks or less, precisely how the federal government was directly responsible for creating the dot-com bubble.

[biobengal]

You should have stopped there..... your data are the perfect rebuttal

No, they are not. The myth is that the rich have become better and better off as the middle class and poor have become worse off. Part of the myth is that the middle class and poor have become worse off because the rich have become better off. Those data are not consistent with that outlook. There is no evidence, at all, in that data that the middle class and poor are worse off now than they were in 1979. They suggest that, instead, the poor are about in the same place and the middle class are substantially better off. There is no evidence in those data of a "redistricution" from the middle class and poor to the rich.

John, I've assumed or presented no part of this myth. I don't believe income for the poor must decrease for the fundamental treatise to be true. Tell me, sir, I know your a biologist and a supporter of statistical probability, do you honestly assume a decrease in wages for the poor is the only way to show "the rich gettin' fat on the backs of the poor"? For example, you've assumed all things are equal monitarily (dollar for dollar) between the rich and the poor. Further still, the institution that may increase upward mobility, college, has increased at a rate FAAAARRRR beyond inflation. Yet..... I'm to assume inflation adjusted income for a wide swath of the U.S. will tell the whole story?

[AZGrizFan]

Fannie was privatized to the point of being able to sell stock on the NYSE and to the point of keeping their financial activity out of the federal budget. Otherwise, it was a government sponsored enterprise with the sole purpose of giving easy credit so low and moderate income people could purchase housing. In later years it bundled those mortgages together and started selling them as Mortgage Backed Securities.

For the 10,000th time, neither Wall Street nor Fannie and Freddie should have been bailed out. Government intervention is what creates bubble economies. There is a HUGE difference between needed limited outside government oversight, and the government getting inside, stirring the pot, and disrupting the natural balance of free market economies.

Alright Baldy, please explain, in five condescending remarks or less, precisely how the federal government was directly responsible for creating the dot-com bubble.

He said "economic" bubble, not "industry-specific" bubble.

[Grizalltheway]

Alright Baldy, please explain, in five condescending remarks or less, precisely how the federal government was directly responsible for creating the dot-com bubble.

He said "economic" bubble, not "industry-specific" bubble.

So, when the dot com bubble burst, it didn't lead to an overall economic downturn?

[AZGrizFan]

He said "economic" bubble, not "industry-specific" bubble.

So, when the dot com bubble burst, it didn't lead to an overall economic downturn?

I don't know...did it? All by itself?

[Grizalltheway]

So, when the dot com bubble burst, it didn't lead to an overall economic downturn?

I don't know...did it? All by itself?

I'd imagine it played a pretty big role, and it sure as hell played a bigger role than Bill Fucking Clinton.

[AZGrizFan]

I don't know...did it? All by itself?

I'd imagine it played a pretty big role, and it sure as hell played a bigger role than Bill Fucking Clinton.

you got that name right....Bill Fucking Clinton.

[Grizalltheway]

[kalm]

I've always wanted to be just south of uber-rich. That's my goal in life: to fly under Barry's tax radar.

Privatize the court system.

[Baldy]

Fannie was privatized to the point of being able to sell stock on the NYSE and to the point of keeping their financial activity out of the federal budget. Otherwise, it was a government sponsored enterprise with the sole purpose of giving easy credit so low and moderate income people could purchase housing. In later years it bundled those mortgages together and started selling them as Mortgage Backed Securities.

For the 10,000th time, neither Wall Street nor Fannie and Freddie should have been bailed out. Government intervention is what creates bubble economies. There is a HUGE difference between needed limited outside government oversight, and the government getting inside, stirring the pot, and disrupting the natural balance of free market economies.

Alright Baldy, please explain, in five condescending remarks or less, precisely how the federal government was directly responsible for creating the dot-com bubble.

As AZ taught you, the dotcom mess was a segment of the economy. More precisely it was a stock market bubble. A minor blip in the grand scheme of our economy. But, a major factor of in the mess was the government foolishly declaring Microsoft a "monopoly" and taking them to court in a bogus antitrust trial.

[JohnStOnge]

You should have stopped there..... your data are the perfect rebuttal

Bio, I'm going to talk about some stuff I can assume you understand given your background. It's correlation analysis. The myth is that some great "transfer" has gone on whereby those in the lower and middle classes have gotten worse off as the "rich" who have "taken" from them have gotten better off. If the income data in that linked report supported that view, one would expect negative correlations between average incomes of lower and middle class household incomes and "rich" household incomes over time.

But that is not the case. If you run all the correlations between inflation adjusted incomes for the various income groups over time as indicated by the bottom table on page 15 of the overall pdf document (second set of Table 3), you get 55 correlation coefficients. All of them are positive. Moreover, all of them are significantly positive for each individual comparison. They range from +0.724791013 for the correlation between incomes over time of the top 0.01 percent and the lowest quartile to +0.998518324 for the correlation between incnomes over time of the 91st through 95th percentile and those of the 81st through 90th percentile. The p value for an individual comparison for the lowest coefficient is 1.0E-5. That means that even if one applies the Bonferroni correction to account for 55 comparisons the p value would be 0.00025. And, really, that would be overly convervative due to the fact that every single one of the OTHER 54 coefficients is even higher than that one.

Clearly, there is a strong association between everybody else's income rising as the incomes of the "rich" rose.

What that means is that it is ridiculous....RIDICULOUS...to suggest that there is any evidence in those data to suggest that a "transfer" from "poor" and/or "middle class" went on such that the "poor" and "middle class" became worse off because the "rich" took something from them.

The demogoguery that goes on in that regard is just outrageous. It really is.

[Ivytalk]

I've always wanted to be just south of uber-rich. That's my goal in life: to fly under Barry's tax radar.

Privatize the court system.

I'll handle the IPO!

[JohnStOnge]

John, I've assumed or presented no part of this myth. I don't believe income for the poor must decrease for the fundamental treatise to be true. Tell me, sir, I know your a biologist and a supporter of statistical probability, do you honestly assume a decrease in wages for the poor is the only way to show "the rich gettin' fat on the backs of the poor"? For example, you've assumed all things are equal monitarily (dollar for dollar) between the rich and the poor. Further still, the institution that may increase upward mobility, college, has increased at a rate FAAAARRRR beyond inflation. Yet..... I'm to assume inflation adjusted income for a wide swath of the U.S. will tell the whole story?

I didn't see that post before I made my last one. But I had so much fun with it I'm going to leave it.

Remember, what I was responding to prior to your first post is the idea that there has been a wealth redistribution from the middle class to the upper class so that the middle class is now worse off because the upper class took something from it. There has been a wealth"redistribution" to the "rich." The income data dont' get to that directly because income is not wealth. But I think that it IS closely related to it and it just doesn't support that view. I have no doubt that if we had data on average net worth broken down by similar percentiles we would see the same picture. Net worth for every group would be higher at the end of the period than it was at the beginning; though the increase would be greater as one moved up the scale.

The question of whether or not the rich got "fat on the backs of the poor" is a different question and the answer is more difficult to get to. I think the fair answer is "no." But that is another subject.

What I'm talking about is the popular mythology that the "typical middle class" American of, say, 1950 was better off materially than the "typical middle class" American of today and the reason for the change is that wealth, etc., was redistributed to the rich. The first component of that myth is that the "typical middle class" American of back then was better off materiallly and I don't think that's true. I think the "typical middle class" American of today has a higher inflation adjusted income, is more likely to live in their own house, has better health care, better food, better entertainment options, is more likely to own a motor vehicle, more likely to have air conditioning, and on and on. Then there are things that the "typical middle class" American has nowadays, like computers and cell phones, that were totally unavailable to the "typical middle class" American of the 1950s. I think that if the "typical middle class" American of today had to live the life of the "typical middle class" American of 1950 they'd feel miserably deprived.

What we have here is an "envy" situation. Some people are "more better off" than others.

[kalm]

What I'm talking about is the popular mythology that the "typical middle class" American of, say, 1950 was better off materially than the "typical middle class" American of today and the reason for the change is that wealth, etc., was redistributed to the rich. The first component of that myth is that the "typical middle class" American of back then was better off materiallly and I don't think that's true. I think the "typical middle class" American of today has a higher inflation adjusted income, is more likely to live in their own house, has better health care, better food, better entertainment options, is more likely to own a motor vehicle, more likely to have air conditioning, and on and on. Then there are things that the "typical middle class" American has nowadays, like computers and cell phones, that were totally unavailable to the "typical middle class" American of the 1950s. I think that if the "typical middle class" American of today had to live the life of the "typical middle class" American of 1950 they'd feel miserably deprived.

What we have here is an "envy" situation. Some people are "more better off" than others.

That has always been the case. But it's a matter of degrees.

Your point makes sense if you define "better off materially". But if you consider personal debt (especially the foreclosure crisis), and as cited earlier, the cost of higher education, healthcare, gasoline, food, lack of pensions, pending cuts in social security and medicare...I'm not convinced.

Perhaps not as many households should be able to afford a McMansion with 5 TV's, 3 laptops, 4 cell phones, 2 gaming systems, 600 channels, air conditioning etc. But tell that to the construction industry and Best Buy. The same materialism that has improved the standard of living has also contributed to the problem as people prioritize toys over savings. Is there a happiness index available where we could compare 1950 and today? (Channeling my inner Cleets here)

Here's a quote from my favorite Republican President that sums up what we as a nation should be able to afford:

In the third place, certain industrial conditions fall clearly below the levels which the public today sanction.

We stand for a living wage. Wages are subnormal if they fail to provide a living for those who devote their time and energy to industrial occupations. The monetary equivalent of a living wage varies according to local conditions, but must include enough to secure the elements of a normal standard of living--a standard high enough to make morality possible, to provide for education and recreation, to care for immature members of the family, to maintain the family during periods of sickness, and to permit of reasonable saving for old age.

Is this still available for many today? Sure. The question is whether or not it's sustainable.