US Politics - Wealth Distribution

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wolph42
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US Politics - Wealth Distribution

Post by wolph42 »

Yesterday my wife drew my attention to this: http://www.youtube.com/watch?v=QPKKQnijnsM
Lets say that I was shocked by it and had a lengthy discussion about it.

As we have a General Discussion here, and a lot of RP user are of the States I would like to ask you;
1. did you know this?
2. what do you think about it?

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Jagged
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Re: US Politics - Wealth Distribution

Post by Jagged »

Ugh. I followed some of the related videos and the comment chat. Now I feel all dirty :(

PS: Seems unfair to focus on America's 1% There has been a lot of talk about the 1% here in the UK plus it's may well be worse/better/same in countries like Russia and China that also have a super-rich class.

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wolph42
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Re: US Politics - Wealth Distribution

Post by wolph42 »

Jagged wrote:Ugh. I followed some of the related videos and the comment chat. Now I feel all dirty :(

PS: Seems unfair to focus on America's 1% There has been a lot of talk about the 1% here in the UK plus it's may well be worse/better/same in countries like Russia and China that also have a super-rich class.
that may well be true, but does America wishes to compare itself with China and Russia ? So what's the top 1% in the UK then?

note that the only reason why I lay the focus on the US in the above post is because the majority of rptools users are Americans.
I did not mean to 'badmouth' the US in this respect as I'm wel aware that their are a LOT of countries much worse off. I'm just curious to their view.

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aliasmask
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Re: US Politics - Wealth Distribution

Post by aliasmask »

Yep, I've been aware of this for the last couple of years. It's like joining a monopoly game after all the properties have been given out. You have to be very lucky and have friends in high places to have a chance at income mobility. Hard work does play a role, but the working poor are probably some of the hardest working people. You can't really live by yourself in America without having a really good job. You need to have a girlfriend, spouse, family or roommates to share expenses and day to day responsibilities. And that is to just survive day to day. Economic advancement isn't even considered.

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metatheurgist
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Re: US Politics - Wealth Distribution

Post by metatheurgist »

Yep, also aware of this, but what can I do?

Economics is only good at making rich people richer. In the last few years they've had to come up with the term super-rich to differentiate from the merely rich. In Australia, I've been enjoying the spectacle of Gina Rinehart's kids fighting over a multi-billion dollar trust fund, some of the claims of what these people say they "need" to get by is hilarious.

The funny thing about America is that there's this claim of fair work for fair pay and the capitalist way, yet billion dollar companies expect interns to work for free and appreciate the opportunity and virtually all low paid service jobs have to beg for money by asking for tips.

I keep waving the flag for social revolution every so often but no one takes me seriously. :wink:

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jfrazierjr
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Re: US Politics - Wealth Distribution

Post by jfrazierjr »

Ugh... what a contentious topic. Yes, I knew about it(though It's a bit more extreme than I thought). Now... what do I think about it? Well, that's where things get really contentious.
metatheurgist wrote:I keep waving the flag for social revolution every so often but no one takes me seriously.
The problem with this is that it's fairly unlikely to actually accomplish anything in the long term. First, there are a very large number of wealth "owners" who have made their money within their lifetime(vs those who inherited it and did nothing to truly "grow" their wealth), at least here in the US. Many of those people would just end back up becoming wealthy again(yes, some via illegal means, but most due to hard work and just plain good ideas)

Second, and most important is that "broke people think like broke people". This likely sounds elitist and rude, but as a general rule, it's just simple truth. Giving poor people more money does not "usually" translate into better long term circumstances, decisions, or happiness. For example, there are tons of studies that indicate that fairly large potion of those who win large sums of money via lotteries, etc end up bankrupt. The problem is that most people just don't understand the basic concepts of how to handle money, plan for the future, and do(and stick to) a budget.

With all of that said.. I am a bit torn... yea, it's obscene that a CEO might "earn" 300 million a year.. but on the flip side, why should anyone say that from an outside perspective what others should earn except the employer? As an example, when i was much more broke, I worked in a restaurant. On a number of occasions, I talked with the guy who pumped the grease/septic tanks. He told me (this was back in the early nighties BTW), that the job itself require very little in the way of qualifications, but paid 45K TO START and went up to around 75K(if I recall correctly). The problem is that most(80% of all hires) people could not "stomach" the job and quit within the first 90 days of employment(most by the 3rd night of training). Now.. personally, I don't think I could have done that job either, but there point remains. The job require little in the way of skills and qualification, but paid a huge income. Someone looking at the job description and setting wages may look at the requirements for employment and think "this is an easy job", but without having worked in the job or in an associated industry, they really have no clue exactly how hard it is. FYI, there are some CEO's of major companies who make much more modest wages when compared to these crazy examples.

Personally, I am a huge fan of Ross Perot, at least in terms of his business life and philosophies(not quite as much for the political life). He had a belief(or at least said the words and did the actions), that CEO's were no more or less important than any other worker in his company. His company(when he was in charge) did not have executive parking(ie, if you wanted a good parking spot, get to work early!), executive bathrooms, or executive dining rooms.
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Re: US Politics - Wealth Distribution

Post by Vhex »

I've seen this video a few times and I agree with jfrazierjr on pretty much all points.

I disagree that you have to get lucky or know someone in order to achieve income mobility. I don't disagree that a comfortable lifestyle requires multiple incomes. I'm also a big proponent of hard work and the capability it has to move you up in the world.

What a lot of people don't understand about business is that you don't advance by being good at what you do. You don't even advance by being great at what you do. You advance by being great at what you do and working hard to learn more than your job. Don't get me wrong, you can remain in the same position for the rest of your life and be quite happy -- I know a lot of people who did and are. But advancement is usually how you accrue wealth.

I've seen the argument rehashed over and over that CEOs make too much money. But the CEO also holds a lot of power in an organization, not as much as most people think, but they do control the direction of the company. It requires experience, usually in that industry, and a vast knowledge of business. When the CEO makes bad decisions, that impacts every worker. Not every CEO makes good decisions, but the good ones do and that keeps the company growing.

There's an interesting dichotomy in the United States in that there is a lot of vitriol toward corporations as entities -- corporations lay people off, corporations only want money, corporations hurt people. But take it down from a macro level and look at it on an individual company level. Say a company employees 10,000 people at a fair wage. In general, market forces ensure that you will get a fair wage for your skills in the United States or you will go to another company that will pay you a fair wage. Note that this doesn't mean that you'll get what you think you're worth, it means you'll probably get what someone else with your skills gets. Now, that company lays off 10% of their workforce (that's a huge cut). This will get bad press. ("A thousand people laid off!") The CEO is demonized for cutting so many jobs. ("He's moving those jobs to China!") You get the idea. But look at it at the company level -- if the option was to lay off 1000 people now, or take the company under and lay off 10000 people two years from now? Which is the better option?

It's easy to second guess decisions after the fact, but if I'm putting my livelihood in someone else's hands I want the most qualified person that I can afford, whatever my income level is.

As for the wealth -- the wealthy in the United States are also the reason that we have so many charitable organizations that remain funded. The comment is always brought up that he President paid less in taxes than his secretary. However, in order to do that, he had to give quite a lot of money away to charity (quite a bit more than his secretary). Philanthropy has tax benefits and it makes that comparison a bit harder to match up, dollar for dollar.

Assuming no charitable donations (which doesn't happen), the wealthy also contribute a much larger portion of their income to taxes. Even taking into account the wealthy getting tax breaks, the top (wealthwise) 1% of Americans average paying 30% of all taxes collected. The bottom (wealthwise) 20% of Americans average a negative tax rate (meaning they receive more in government subsidies and tax credits than they pay in). That's not a judgement on either side, but break that 1% down into 1 person and imagine that you are that person. There are 100 people living in your building and part of your common maintenance fees include Cable TV, Water, Sewage, and Electricity. You pay for yours, and then you pay for 30 other people's. Do you feel like you should be paying for more? How many of your neighbors should you cover for it to be fair?

Redistribution of wealth is an interesting idea. If everyone worked equally hard in the world and was equally skilled, it would be a perfect system. But that's not the case, no matter your community. And it's true, some people do just get lucky. I don't believe in the class system, but one of the great things about the United States is that you can change your class.

Since this is a tabletop gaming forum I'll leave with two references that I really like. The first is A Knight's Tale -- a leopard can change his spots. That's the United States, you can be born into a lower class and work your way out of it. The second is Terry Goodkind's book Faith of the Fallen. I think Goodkind is preachy and I don't like the way he pushes his ideas onto his readers, but I do like the commentary on the aspect of socialism outlined in that book. I believe it's an extremist view of socialism, but it does resonate with the idea that people can be more than what they're forced into.

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Re: US Politics - Wealth Distribution

Post by CoveredInFish »

I am afraid the data in Europe wont look so much better. Better yet, i guess, but we are getting closer and closer.

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Jagged
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Re: US Politics - Wealth Distribution

Post by Jagged »

Vhex wrote: I've seen the argument rehashed over and over that CEOs make too much money. But the CEO also holds a lot of power in an organization, not as much as most people think, but they do control the direction of the company. It requires experience, usually in that industry, and a vast knowledge of business. When the CEO makes bad decisions, that impacts every worker. Not every CEO makes good decisions, but the good ones do and that keeps the company growing.
The problem there is that you have real trouble finding examples of CEOs whose pay goes down when their companies don't perform. In recent years the pay of CEOs both in the UK and the US has been completely out of proportion with economic growth and bears no relation whatsoever with company performance. There are also far too many examples of incompetent CEOs getting massive pay-offs to ****off and keep quiet.

Our system is broken and corrupt. We just can't think of anything better.

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Re: US Politics - Wealth Distribution

Post by Vhex »

I don't think you can argue that a CEO's pay bears no relation to a company's performance. Even if your belief is that corporations are all run out of greed -- a CEO's pay and benefits all come out of the pockets of the shareholders. No private board of directors is going to let their CEO continually tank the company while raising that CEO's salary. Primarily because it's not in the company's best interest to do so, but also because it's not in THEIR best interest to do so.

You're also treating "CEO" as if it were a generic job, but they're people. Poor CEOs very rarely work for more than 2-3 companies before they can no longer find work due to their reputation. It isn't in the best interest of any company to hire a poor CEO. Companies are driven by revenue (and shareholders are driven by dividends which are derived from profit). Poor CEOs don't make companies profitable.

As far as incompetence goes, it's never in a company's best interest to air its dirty laundry in public. There are also quite a few examples of CEO's not getting any severance package at all (even though it's in their contract) due to breach of trust.

But then, I also don't believe that money = evil = corruption.

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Re: US Politics - Wealth Distribution

Post by Jagged »

Vhex wrote:I don't think you can argue that a CEO's pay bears no relation to a company's performance.
You can, because all evidence points that way. A Forbes report last year even showed an inverse relationship between CEO earning and company earnings! You won't find any evidence linking CEO pay to company performance or CEO pay to shareholder voting patterns or even shareholder voting patterns to company performance.

Vhex wrote:But then, I also don't believe that money = evil = corruption.
Neither do I. Not sure how that's relevant?

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Re: US Politics - Wealth Distribution

Post by metatheurgist »

Credit Suisse report says just 110 people own 35 per cent of Russia's wealth

Apparently all capitalists require to own everything is for socialists to disappear.

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Re: US Politics - Wealth Distribution

Post by Xaelvaen »

I'm absolutely confused by this video; as a working-class American for more generations than I can fathom (Blue-Collar if you will), this seems like a fact I've been taught since I could speak. *shrug* While the people who make it possible for the country to function, at all, destroy their bodies physically 40+ hours a week make next to nothing on hourly wages, those who 'think' they know how to tell them to do it better make triple this value. That's where only the first fault lies.

Most Americans are whining so much about the bloody 'socialism' of the Healthcare Act, but as a blue-collar, its a God-send. If you ask me, the 3% tax hike on the top 20% (top 1%) wasn't enough.

So, um... where was that point again... right! This distribution just seems all too familiar. Lets not forget credit-rating; the ability to buy a house is determined on how much total money the banks have made off of you in interest over the course of your lifetime; paying off debt at no interest barely improves your score, in example. Honestly, the distribution isn't the fault of any one singular thing; its a culmination of 600 million+ people all having a different definition of freedom. Personally, mine doesn't include the trampling and destruction of the working-class for a 1.8 million dollar a year income just because I came up with a 'nifty' idea. I'm quite content to save for the next 20 years, buy a farm in a grassy county, jack the solar panels and wind farm, and just stay the hell away from society. Ahh, retirement with a collection of -actual- books, a rocking chair, and a screened front porch =)
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Re: US Politics - Wealth Distribution

Post by aliasmask »

I often think about the sustainability of our society. If you've ever played monopoly, then you know, who ever starts advancing ahead of the others will soon crush everyone else. They have more opportunities and have the power to limit the growth of others until they crush everyone else and win the game. It's an over simplification of our economics, but I think it is very representative except for one thing... government. Government doesn't want any one winner and wants everyone to play the game. Government is supposed to be impartial to the individual and focus on the society as a whole. Certain demographics may benefit more, or be sustained by other demographic but in the end the society as a whole benefits. As soon as the game becomes unbalanced, it ends.

For monopoly, you can declare your winner and then play another game and redistribute the starting funds, lands and housing, but you can't do that in real life without calling it a revolution. Now I've played monopoly with friends and family where I wanted the game to last longer or have certain people remain in the game and the best way to do that is to give them a break. Give them a free pass on my property, buy a property from them without taking advantage of their circumstance, stuff like that. That's how I feel the Dems play the game. GOP is in it to win it and end the game so they can then set up a new game with their own rules where they have everything they want. Then they can be entertained by everyone else fighting over their scraps with no chance of affecting or ending their game. At least, that's how I feel.

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Re: US Politics - Wealth Distribution

Post by metatheurgist »

Funny you should mention Monopoly. It was created to teach kids the evils of greed and rampant capitalism. Of course, now they think owning everything and reducing everyone else to poverty is the point of the game. :P

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