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Income Inequality

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No trust fund ("no collusion!"), but Anderson Cooper did just inherit $200 million:

https://www.msn.com/en-us/lifestyle/newsfeature/gloria-vanderbilt-leaves-her-son-anderson-cooper-almost-everything-in-her-will/ar-AADKmXr?ocid=spartandhp

 

I thought there was just Anderson and his brother who died, but there are two half brothers, one of whom will get the fancy NYC apartment and the other who gets nothing.  Who knows what that guy is up to.  

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https://www.washingtonpost.com/politics/2019/06/28/fact-checking-first-democratic-debate-night/?noredirect=on&utm_term=.b7eb8491ea82

 

Quote

“Three people in this country own more wealth than the bottom half of America”

—Sen. Bernie Sanders (I-Vt.)

 

This snappy talking point is based on numbers that add up, but it’s also a question of comparing apples to oranges. Sanders is drawing on a 2017 report from the left-leaning Institute for Policy Studies, which said that three billionaires — Bill Gates, Jeff Bezos (who owns The Washington Post) and Warren Buffett — had total wealth of $248.5 billion, compared to $245 billion for the bottom 160 million of the United States. The wealth of the three men has gone up even more since then.

 

But people in the bottom half have essentially no wealth, as debts cancel out whatever assets they might have. So the comparison is not especially meaningful. We once gave Sanders Three Pinocchios when he asserted that the six wealthiest people had more wealth than the half of the world’s population. That was an even more problematic comparison, and we said at the time it was better to focus on inequality within a country.

 

What the actual ****?

Edited by DarkandStormy

Very Stable Genius

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"Those who can make you believe absurdities, can make you commit atrocities."-Voltaire

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Today I heard an NPR feature on the co-founders of Soulcycle, some sort of exercise gym I had not heard of before.  They presented the whole thing as a sort-of rags-to-riches situation, as the founders sold the whole thing in 2011 for $180 million ($90 million apiece) after opening their first gym with $250,000 borrowed from one of the husbands, who worked at Lehman Bros. 

 

https://www.npr.org/2018/12/21/679320471/soulcycle-julie-rice-elizabeth-cutler

 

So they opened gym #1 in Midtown Manhattan with $250k, cash-flowed gym #2 (which was a summertime seasonal gym in a rented barn in The Hamptons), then opened gym #3 in Tribecca with $600,000 borrowed from -- you guessed it -- that same Lehman Bros. husband.   Somehow the damn thing took off a year or two  after that nearly $1 million outlay, and five years later they were filthy rich. 

 

So, a good old-fashioned rags-to-riches entrepreneurial story -- complete with the $1 million in no-strings-attached family money.  No way would they have been able to secure those funds from a bank or from investors without the rich hubby to nag.

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^The rich play by a different set of rules and live in an entirely different world.  This isn't new.  The gap from "wealthy" to "middle or lower class" may be expanding, and thus the extremes are becoming more apparent.  But it's not entirely noteworthy that the rich got richer in a way that wouldn't be available to anyone else.


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4 minutes ago, DarkandStormy said:

 But it's not entirely noteworthy that the rich got richer in a way that wouldn't be available to anyone else.

 

These women were probably the single greatest example of "wives starting a passion business" and actually making a lot of money.  They are a wild statistical outlier.  Most of the time when someone with no business experience starts a place like this it flounders.  We get a "survivor's bias" from people on the motivational speaker circuit who encourage us all to start our own businesses. 

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What's dangerous about passion businesses now is that young people are so accustomed to the idea that they're never going to make any money that they start passion businesses that they know aren't ever going to make anything. So businesses that do want to make money can't because they have to compete with ones that don't care if they make any.

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34 minutes ago, GCrites80s said:

What's dangerous about passion businesses now is that young people are so accustomed to the idea that they're never going to make any money that they start passion businesses that they know aren't ever going to make anything. So businesses that do want to make money can't because they have to compete with ones that don't care if they make any.

 

Yep.  There is a little bit of a gender divide in this realm because it is more socially acceptable for a woman to run a hobby business than a man.  

 

There is a bit of a phenomenon of wealthy women starting photography businesses.  They can afford the best equipment, can afford a storefront, and they take a ton of business away from people who actually went to school for it because their personal networks are full of wealthy people.  

 

 

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I know two separate women that own that exact type of photography business. 

 

What we're seeing in the game store industry is a role shift for the ownership away from somewhat wealthy, 35+ guys that were somewhat disconnected from the product in a workmanlike manner who owned several locations and made a decent living selling the products to a wide variety of customers -- instead to younger endemic product users that are there mostly to entertain other, even younger endemic product users while making little to no money.

Edited by GCrites80s

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17 minutes ago, GCrites80s said:

 

What we're seeing in the game store industry is a role shift for the ownership away from somewhat wealthy 35+ guys who own several locations and make a decent living selling the products to a wide variety of customers -- instead to younger endemic product users that are there mostly to entertain other, even younger endemic product users while making little to no money.

 

My grandmother was in the antique business and ran a store in a farm house my grandfather bought around 1986-87.  She closed the shop and sold her inventory around 2002 - just in time to avoid holding the bag on all sorts of pottery and glassware that is now more or less worthless: https://www.nytimes.com/2018/03/03/style/how-low-will-market-for-antiques-actually-go.html

 

That's what has always scared me so much about starting a business -- the need to keep adapting and the impossibility of guessing right more than once or twice when the market pivots wildly.  Eventually things will change too much and you won't have the cash on hand to reinvest.  

 

 

 

 

 

 

 

 

 

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On 6/26/2019 at 12:34 PM, DarkandStormy said:

I really don't think that one chart, devoid of virtually all necessary context, tells us much of anything about the "shrinking middle class."  Here is another one showing the top 1% consolidating even more wealth.

untitled.png

Talk about a chart devoid of all necessary context. It acts as if the pie is the same now as it was in 1962 which everyone and their mother should know is not the case.

 

Some quick math.

 

In 1962 there were approximately 53 million households. So the bottom 90% was comprised of 47,700,000 households. The total net wealth of those bottom 90%, in 2016 dollars, was approximately $4.025 trillion; i.e. ~$84,388.88 net wealth per household.

 

Fast forward to 2018. There were approximately 114,831,000 households in the bottom 90%. They held over $23.87 trillion in net wealth; i.e. ~$207,870.70 in net wealth per household. 

 

That's an increase of 146%. Of course this doesn't take into account smaller households either, so the increase is even more per capita.

 

Why should I care if the rich are getting richer if the bottom 90% is, too? This isn't a zero sum game. Someone with more time, or whose job it is to do these stats could drill it down more exactly, but the point is: everyone is getting richer.

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3 minutes ago, aderwent said:

Talk about a chart devoid of all necessary context. It acts as if the pie is the same now as it was in 1962 which everyone and their mother should know is not the case.

 

Some quick math.

 

In 1962 there were approximately 53 million households. So the bottom 90% was comprised of 47,700,000 households. The total net wealth of those bottom 90%, in 2016 dollars, was approximately $4.025 trillion; i.e. ~$84,388.88 net wealth per household.

 

Fast forward to 2018. There were approximately 114,831,000 households in the bottom 90%. They held over $23.87 trillion in net wealth; i.e. ~$207,870.70 in net wealth per household. 

 

That's an increase of 146%. Of course this doesn't take into account smaller households either, so the increase is even more per capita.

 

Why should I care if the rich are getting richer if the bottom 90% is, too? This isn't a zero sum game. Someone with more time, or whose job it is to do these stats could drill it down more exactly, but the point is: everyone is getting richer.

 

Percentages always add up to 100 if you're looking at the total picture.

 

If everyone were, actually, getting richer then I don't think we'd have nearly 14% of the population living below the poverty line.


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25 minutes ago, DarkandStormy said:

 

Percentages always add up to 100 if you're looking at the total picture.

 

If everyone were, actually, getting richer then I don't think we'd have nearly 14% of the population living below the poverty line.

That 14% doesn't include things like Medicaid, Medicare, and food stamps. Also, it's good to look at things with some perspective:

 

overty_ratio.png?itok=bJC8-c2b

 

What that shows is that the median "poverty" income of US households is almost 2/3 that of all of the UK.

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^How is that relevant to income inequality? Because other countries don't have outrage rates of inequality our inequality in the U.S. isn't actually that bad?


Very Stable Genius

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On 7/22/2019 at 6:35 PM, DarkandStormy said:

^How is that relevant to income inequality? Because other countries don't have outrage rates of inequality our inequality in the U.S. isn't actually that bad?

1. You brought up poverty. 2. It shows our definition of poverty may need looked at. Who is defining it, and with what measures? You can't just throw a number like 14% out there and say, "Oh my gosh! What a horrific problem!" That 14% has no context, and is definitely not based on your average person's colloquial definition of poverty.

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4 minutes ago, aderwent said:

1. You brought up poverty. 2. It shows our definition of poverty may need looked at. Who is defining it, and with what measures? You can't just throw a number like 14% out there and say, "Oh my gosh! What a horrific problem!" That 14% has no context, and is definitely not based on your average person's colloquial definition of poverty.

 

Here is how poverty is defined - https://www.census.gov/topics/income-poverty/poverty/guidance/poverty-measures.html

 

To your previous points, if income inequality were actually solved, or "not that bad," I wonder why so many economists disagree and why there are so many stories of inequality and economic anxiety.  40% of Americans - let that sink in, 4 in 10 - live their lives in daily economic anxiety.  I'm sure they're not finding comfort in "the bottom 90% of Americans are getting richer" while looking at the top 1% seeing even greater levels.  We have the greatest wealth inequality since 1929, but you're here trying to argue the problem either doesn't exist or doesn't exist to the extent we need to worry about remedying it.

 

More sources: https://news.gallup.com/opinion/polling-matters/260570/despite-economic-success-financial-anxiety-remains.aspx

https://www.forbes.com/sites/jessecolombo/2019/02/28/americas-wealth-inequality-is-at-roaring-twenties-levels/#6c7354822a9c


Very Stable Genius

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On 7/22/2019 at 5:05 PM, aderwent said:

Why should I care if the rich are getting richer if the bottom 90% is, too? This isn't a zero sum game. Someone with more time, or whose job it is to do these stats could drill it down more exactly, but the point is: everyone is getting richer.

"What matters is not whether the people at the bottom are improving relative to their previous state, but relative to the state that they could be in if the economy were arranged differently. If I have my boot on your neck, I could slowly reduce the pressure and tell you your situation was improving, but the question is not “Is this better than before?” it’s “Is this as good as it could/should be?” We shouldn’t assess the condition of American poor people today by looking at the condition of American poor people during the 1700s or the Great Depression. Instead, we should assess it relative to their potential condition. People a long time ago may have had much worse teeth, but the reason it’s unjust that the American poor don’t have dental care today is that there’s no reason why they shouldn’t. It’s avoidable misery."

 

https://www.currentaffairs.org/2018/02/why-equality-is-indispensable

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"Those who can make you believe absurdities, can make you commit atrocities."-Voltaire

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"Those who can make you believe absurdities, can make you commit atrocities."-Voltaire

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On 8/19/2019 at 1:47 PM, KJP said:

 

 

That is in part due to cultural expectations of publicly-traded companies abroad. Rest of the World markets aren't as obsessed with cuts and growth as ours.

 

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On ‎8‎/‎24‎/‎2019 at 10:15 AM, GCrites80s said:

 

That is in part due to cultural expectations of publicly-traded companies abroad. Rest of the World markets aren't as obsessed with cuts and growth as ours.

 

 

...and that's in part because our super-low capital gains tax incentivizes buying low and selling high rather than buying a stock to collect dividends, as was the practice in the high-tax postwar decades.  

 

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20 hours ago, DarkandStormy said:

 

 

I don't think he's reading it correctly. Even the bottom 50% number is higher than it was before the crisis, by a bit. But that's beside the point. Lets talk about this strange graph. Why does each line represent a wildly different percentage of the population?

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19 minutes ago, Ram23 said:

Why does each line represent a wildly different percentage of the population?

 

You break up the higher wealth-holders into smaller groups in this country because there is such a big discrepancy from the other higher-wealth families. The bottom 50% is more homogeneous than the top 50%. Breaking that up would be great, but it's less important. The bottom 1% doesn't skew the results of the bottom 50% like the top 1% would skew the results of the top 50% (or even the top 10%). 

 

It's a pretty simple idea. The graph below is pulled from wikipedia. I didn't look at the underlying data to this particular graph, but the general idea isn't wrong.

 

https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States

 

image.thumb.png.150c2b13afaa04efd3986d3c6f51feff.png

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"Those who can make you believe absurdities, can make you commit atrocities."-Voltaire

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“Reaganism has begun to justify any concentration of wealth, as if the billionaires were our saviors,” he said. “Reaganism has shown its limits: Growth has been halved, inequalities have doubled. It is time to break out of this phase of sacredness of property. To overcome capitalism.”

 

https://www.cnbc.com/2019/09/12/billionaires-should-be-taxed-out-of-existence-says-thomas-piketty.html


"Those who can make you believe absurdities, can make you commit atrocities."-Voltaire

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At least part of that is due to Wall Street not caring about "tech" losses which allow execs who own a lot of internet garbage to only pay capital gains while forgoing salaries. "But these 'tech' companies have a lot of users and high revenue! Just give them more time!"

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LOL....wait, that's not funny 

FB_IMG_1570481530386.jpg


"Those who can make you believe absurdities, can make you commit atrocities."-Voltaire

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On 10/8/2019 at 10:51 PM, MyTwoSense said:

 

Nothing wrong with being a single digit percenter!  

 

As long as you pay your share of taxes....

 

 


"Those who can make you believe absurdities, can make you commit atrocities."-Voltaire

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On 10/12/2019 at 8:40 PM, MyTwoSense said:

I always do.  

 

No, you pay the wealthy person's rate. That's not the fair share. In my book, you owe America a lot of money. 

 

14 minutes ago, Watertiger1962 said:

The tax code also put money in 90% of the middle class pocket. And tremendously helped mom and pop and small business up and down my neighborhood. That comment comes directly from the business owners I know and talk to. Sure big business got a big break but don’t they hire A large percentage of people in America anyway?  Also the Deregulation’s and red tape he removed from doing business helps tremendously. You can not argue with the market( as you mentioned), unemployment, and GDP’s positive numbers. America is at full employment with wages rising. 

BTW- If you liked the Economy in 2011, then you must really love it now. 

 Sorry for going off topic. If you would like to continue this conversation privately that’s fine.

 

If you won't believe the NYT, maybe you'll believe the business publications

https://www.bloomberg.com/graphics/2018-tax-plan-consequences/

https://www.forbes.com/sites/teresaghilarducci/2019/04/09/five-good-reasons-it-doesnt-feel-like-the-trump-tax-cut-benefited-you/#2b826abc13e0

 

Corporations have used the money for stock buybacks, not to hire people.

 

And if you still believe in the trickle-down theory, there's only way the trickle-down theory has "worked," then I don't know what to tell you. I'll leave you with this...

 

0106-ainequity-richest-getting-richer-g1

 

It never ceases to amaze me how naive the wealthy are, and how little they pay attention to how well they are doing, how poorly everyone else is doing, and how little they actually pay in taxes. Well, when campaign contributions are weakened, you're going to pay your fair share and then probably some punitive because you also underestimate how angry people are at you. Get an open mind, then get to know the low- to middle-class if you really want to act responsibly. Remember, these  eras of extended tax holidays for the rich in America never last. These always run in cycles. Either volunteer to pay more or be prepared to have it taken from you, violently if necessary. They will be coming for you.

 

Edited by KJP

"Those who can make you believe absurdities, can make you commit atrocities."-Voltaire

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