Income Inequality

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Re: Income Inequality

Unread postby bodidley » Tue Sep 01, 2015 1:40 am

Xiahou Ren wrote:Yea, basically that's what I was trying to say.
Inequality is not the problem. It's amount is.


My opinion is sort of the opposite. I don't think it's a problem there are people who are making billions or hundreds of billions, in fact they're typically the people driving the economy and reinvesting that money into new enterprises. The problem is when people from low income backgrounds don't get a fair shake. The biggest factor crushing the middle class in America today is the education arms race. And I don't think these institutions really are providing serious training outside of academic fields. People can sleepwalk through a bachelor's degree, and master's degrees are producing mediocre business leaders. Our economy would be much better served if we used vocational aptitude batteries instead of relying on the reputation of educational institutions. The top universities are also becoming inbred cliques which are increasingly available only to the children of the wealthiest people, who in turn find mates there and concentrate wealth into fewer and fewer hands.
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Re: Income Inequality

Unread postby James » Tue Sep 01, 2015 7:16 pm

bodidley wrote:My opinion is sort of the opposite. I don't think it's a problem there are people who are making billions or hundreds of billions, in fact they're typically the people driving the economy and reinvesting that money into new enterprises. The problem is when people from low income backgrounds don't get a fair shake. The biggest factor crushing the middle class in America today is the education arms race. And I don't think these institutions really are providing serious training outside of academic fields. People can sleepwalk through a bachelor's degree, and master's degrees are producing mediocre business leaders. Our economy would be much better served if we used vocational aptitude batteries instead of relying on the reputation of educational institutions. The top universities are also becoming inbred cliques which are increasingly available only to the children of the wealthiest people, who in turn find mates there and concentrate wealth into fewer and fewer hands.

Lacking an educated workforce is not the problem by any measure I can imagine, nor is the paramount problem flaws in higher education. There are fields where demand for more workers is required, but if we're to solve that problem it will need to be through a dramatic shift in how the government views higher education, for example funding it as an investment in the country's future. Today, it is a for-profit enterprise through and through, with the government even seeking to profit handsomly from student debt.

The small lot which controls a majority of the country's wealth: they're general involvement in the government is to keep their profits high and the profits of those they utilize to build that wealth low. They oppose minimum wage increases, changes to healthcare which would increase their costs, regulations which would increase their costs (doesn't matter if it's for worker safety), regulations designed to protect the environment. This is a problem. And the amount of wealth held by this small pool of people combines with the fact that our lawmakers depend on that their to serve in office, providing this small pool of people has tremendous influence with our lawmakers. How is it that this ridiculous amount of wealth (executives making 200, 500, 2,000 times the *average* wage of their company's workers while frequently paying less as a percentage of income in taxes than those workers do) can be justified, on a government level, while so much of the country struggles financially; to simply spend a reasonable amount of time at home with their children?

And then we expect these struggling families to step outside these obligations, navigation our dramatically overpriced for-profit education system, and then find a job just so they can join the middle class? Not necessarily solving their problems, mind—they've likely arrived at this point with a great amount of bankruptcy-protected student debt.

Here's another example of how this disparity is not acceptable: in the United States we actually have a strong system in place which transfers wealth from poor Americans to the wealthy, and that is our system which allows these corporations to pay workers a poverty wage. When workers aren't paid a living wage they must necessarily depend on aid, and where that aid doesn't come from family (which it frequently does not, especially in the case of the poor), it comes from the government—including from those who support this large wealth divide while at the same time describing aid as handouts for lazy people. These are actually handouts for the corporations which won't pay people a living wage to work 40 hours a week. This is the taxpayer directly funding the profits of these corporations which, as a feature of publicly traded enterprise and a culture comfortable paying a great excess in wages to executives, goes to provide 'shareholder value' or to enrich key players in the corporation. In a publicly traded enterprise workers are not paid more than is necessary to retain their services, and in a culture where so many are struggling, you can pay less than a living wage; they typically do just that.

And this disparity is growing—has been growing—quickly.
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Re: Income Inequality

Unread postby WeiWenDi » Wed Sep 02, 2015 12:28 am

bodidley wrote:My opinion is sort of the opposite. I don't think it's a problem there are people who are making billions or hundreds of billions, in fact they're typically the people driving the economy and reinvesting that money into new enterprises. The problem is when people from low income backgrounds don't get a fair shake. The biggest factor crushing the middle class in America today is the education arms race. And I don't think these institutions really are providing serious training outside of academic fields. People can sleepwalk through a bachelor's degree, and master's degrees are producing mediocre business leaders. Our economy would be much better served if we used vocational aptitude batteries instead of relying on the reputation of educational institutions. The top universities are also becoming inbred cliques which are increasingly available only to the children of the wealthiest people, who in turn find mates there and concentrate wealth into fewer and fewer hands.


James wrote:Lacking an educated workforce is not the problem by any measure I can imagine, nor is the paramount problem flaws in higher education. There are fields where demand for more workers is required, but if we're to solve that problem it will need to be through a dramatic shift in how the government views higher education, for example funding it as an investment in the country's future. Today, it is a for-profit enterprise through and through, with the government even seeking to profit handsomly from student debt.


Ultimately, I don't agree with bodidley on the education gap being that big a factor in the death of the American middle class. The decline of unions and the transpacific flight of well-paying manufacturing jobs, I think, had more to do with that; and the billionaire and multibillionaire classes didn't help one bit with that. However, he does raise a few good points. One big problem is that people still view baccalaureate education as the middle-class meal ticket that it had been for the baby boomers, when in fact the economic support structure which would have guaranteed that is long gone. I essentially agree with you, James, that universities both 'non-profit' and for-profit are taking obscene liberties with this reality and essentially conning young people into thinking they're preparing themselves for economic success but instead fleecing them with high-interest debt, whilst throwing them out into a labour market where the white-collar jobs the baby boomers once had either don't exist anymore, or pay a heck of a lot less than they used to. Combatting this, though, will require some kind of cultural shift along the lines of what bodidley is beginning to describe: revaluing vocational trades as respectable middle-class professions, and getting back to inventing, building and fixing things as a means of putting our economy on a sounder and more stable footing.

Tying the currency to the productive capacity of the nation as a whole instead of to the interest rates preferred by private speculative and banking interests, and guaranteeing each person access to debt-free credit, though not of course a perfect solution, would also go a long way toward solving some of the intractable problems of inequality.

James wrote:The small lot which controls a majority of the country's wealth: they're general involvement in the government is to keep their profits high and the profits of those they utilize to build that wealth low. They oppose minimum wage increases, changes to healthcare which would increase their costs, regulations which would increase their costs (doesn't matter if it's for worker safety), regulations designed to protect the environment. This is a problem. And the amount of wealth held by this small pool of people combines with the fact that our lawmakers depend on that their to serve in office, providing this small pool of people has tremendous influence with our lawmakers. How is it that this ridiculous amount of wealth (executives making 200, 500, 2,000 times the *average* wage of their company's workers while frequently paying less as a percentage of income in taxes than those workers do) can be justified, on a government level, while so much of the country struggles financially; to simply spend a reasonable amount of time at home with their children?

And then we expect these struggling families to step outside these obligations, navigation our dramatically overpriced for-profit education system, and then find a job just so they can join the middle class? Not necessarily solving their problems, mind—they've likely arrived at this point with a great amount of bankruptcy-protected student debt.


I don't disagree with any of this, as is probably clear from above. Ultimately these are symptoms of capitalist structures of financing and capital ownership, though. We can manage them, more or less, through finical controls, selective taxation and transfer payments, and regulatory structures operating through an independent civil service - which is basically what we did do between 1933 and 1980. Or we can attempt to reform the monetary system to make cheap, low-interest or no-interest credit available to a wider range of people, but that hasn't been really tried on a national level, nor proposed on a serious basis since 1896. Nowadays Zimbabwe gets invoked, even though that's not really a good example of social-credit theory in practice.

James wrote:Here's another example of how this disparity is not acceptable: in the United States we actually have a strong system in place which transfers wealth from poor Americans to the wealthy, and that is our system which allows these corporations to pay workers a poverty wage. When workers aren't paid a living wage they must necessarily depend on aid, and where that aid doesn't come from family (which it frequently does not, especially in the case of the poor), it comes from the government—including from those who support this large wealth divide while at the same time describing aid as handouts for lazy people. These are actually handouts for the corporations which won't pay people a living wage to work 40 hours a week. This is the taxpayer directly funding the profits of these corporations which, as a feature of publicly traded enterprise and a culture comfortable paying a great excess in wages to executives, goes to provide 'shareholder value' or to enrich key players in the corporation. In a publicly traded enterprise workers are not paid more than is necessary to retain their services, and in a culture where so many are struggling, you can pay less than a living wage; they typically do just that.

And this disparity is growing—has been growing—quickly.


Thank you. You said it, James. It's amazing how many people's heads that insight goes straight over - though I imagine it's probably happened to you more often than it's happened to me. Transfer payments will take over when wages get too low; that's how the system was designed - if you don't want poor people to be a burden on the taxpayers through food stamps &c., then tell the government to stop subsidizing corporate wages that are too low for a family to live on!
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Re: Income Inequality

Unread postby James » Wed Sep 02, 2015 6:18 pm

WeiWenDi wrote:Ultimately, I don't agree with bodidley on the education gap being that big a factor in the death of the American middle class. The decline of unions and the transpacific flight of well-paying manufacturing jobs, I think, had more to do with that; and the billionaire and multibillionaire classes didn't help one bit with that. However, he does raise a few good points. One big problem is that people still view baccalaureate education as the middle-class meal ticket that it had been for the baby boomers, when in fact the economic support structure which would have guaranteed that is long gone. I essentially agree with you, James, that universities both 'non-profit' and for-profit are taking obscene liberties with this reality and essentially conning young people into thinking they're preparing themselves for economic success but instead fleecing them with high-interest debt, whilst throwing them out into a labour market where the white-collar jobs the baby boomers once had either don't exist anymore, or pay a heck of a lot less than they used to. Combatting this, though, will require some kind of cultural shift along the lines of what bodidley is beginning to describe: revaluing vocational trades as respectable middle-class professions, and getting back to inventing, building and fixing things as a means of putting our economy on a sounder and more stable footing.

Hmm... I agree with everything here.

If we're to follow in the direction you suspect bodidley was headed, I'd point out that even if we took this course and it ended well, it would still prove to be only one small part of the income inequality problem in the United States—and that little will serve to address the problem to a greater extent as long as lawmakers depend so extensively upon massive sums of money and massive sums of money remain in the hands of those in a position to influence lawmakers on legislation directly relevant to how much money they make or must pay out to workers (whatever form that compensation may take).

Another problem I'd toss out with many modern-day jobs is that a number of them are increasingly requiring extensive technical education which really should benefit from a higher education system (and presumably the need for this specialization will only grow going forward while 'simpler' jobs are increasingly outsourced or replaced by machines and computers—however unfortunate that situation may seem in a given field). At the same time, the government is in a good position to do a great deal to protect a range of American jobs while at the same time curtailing exploitation of workers in other countries. Not even sure which rabbit hole to jump down here...

WeiWenDi wrote:Tying the currency to the productive capacity of the nation as a whole instead of to the interest rates preferred by private speculative and banking interests, and guaranteeing each person access to debt-free credit, though not of course a perfect solution, would also go a long way toward solving some of the intractable problems of inequality.

What do you suppose the viability of breaking and rebuilding our debt-driven financial system—especially with its international ties and foundation—happens to be? However nice it would be to see the corruption and flaws in this system crumble away? At least on any timeline which could serve to help with our present-day economic troubles? I imagine heavily curtailing the amount of money in politics would be a far more likely objective, and the United States is presently moving in the wrong direction even here.

WeiWenDi wrote:I don't disagree with any of this, as is probably clear from above. Ultimately these are symptoms of capitalist structures of financing and capital ownership, though. We can manage them, more or less, through finical controls, selective taxation and transfer payments, and regulatory structures operating through an independent civil service - which is basically what we did do between 1933 and 1980. Or we can attempt to reform the monetary system to make cheap, low-interest or no-interest credit available to a wider range of people, but that hasn't been really tried on a national level, nor proposed on a serious basis since 1896. Nowadays Zimbabwe gets invoked, even though that's not really a good example of social-credit theory in practice.

Yes, there are deep flaws and potential downfalls inherent to a capitalist system. Although for what it's worth, the United States is not fully a capitalist system as it also incorporates socialist elements and is governed by political ideology which pulls in multiple directions. Regardless, I agree that the capitalist system pitfalls remain a threat—present as current problems—but I also believe the United States system can drag its wounded self through them to create something somewhat serviceable as it has done in the past. I also think the growing dissatisfaction with the income divide is a representation of just what can potentially correct this behavior. I've actually enjoyed seeing the likes of Hillary Clinton have to backpedal because she was, in my estimation, caught off guard by the amount of support someone like Bernie Sanders has been able to garner.

That said, I'd love to see a superior, new system replace the heavily flawed current system, while at the same time addressing some of its deepest grievances, but (as mentioned above) I wonder just how viable that line of reasoning is. It strikes me as more philosophical than practical in terms of an objective which can be fought for and implemented at this stage. Not that I'd mind being wrong.

WeiWenDi wrote:Thank you. You said it, James. It's amazing how many people's heads that insight goes straight over - though I imagine it's probably happened to you more often than it's happened to me. Transfer payments will take over when wages get too low; that's how the system was designed - if you don't want poor people to be a burden on the taxpayers through food stamps &c., then tell the government to stop subsidizing corporate wages that are too low for a family to live on!

Yep—you may be right. In my mind it seems like such a simple concept, such a glaringly obvious conflict of interest. When I first came to understand it myself it was almost like a switch flicked in my head and some previously muddy concepts became clear as water. And I think I can actually explain it quite clearly in person! But when I do, even if it's to someone barely surviving in this very system under the notion that hard work is what creates wealth (or simply allow them to thrive), it's as if they won't even think of the concept if it happens to disagree with their political ideology. And it's similarly useless to point out that the political ideology in question is framed by the very people who stand to benefit from this system and those who depend on such individuals to hold office.

Perhaps it seems more obvious from the outside looking in.
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Re: Income Inequality

Unread postby bodidley » Sat Nov 03, 2018 9:12 am

WeiWenDi wrote:Ultimately, I don't agree with bodidley on the education gap being that big a factor in the death of the American middle class.


Just to clarify the point, I wasn't arguing that the middle class are under educated, I was arguing that universities have turned into a Ponzi scheme and that the pursuit of academic achievement has turned into a cargo cult.

If you come from a working class or working poor background and you went to, say, NYU which is ranked as the 30th best university, and you're paying your own way, then you wind up with up to $200,000 in debt (let's say you don't have any scholarships, GI Bill or aid for the sake of argument). And let's say you major in literature or a foreign language and you end up with a middle class salary, and you get married and settle down in Long Island and have three bright kids. For the sake of argument you met your spouse in school and said personage is in the same situation. The two of you end up with $400,000 in your own student debt, you're looking at another $600,000 in tuition for your kids' bachelor's degrees at least, and your mortgage is $600,000. If you have a median household income then those two types of expenditure are going to cost you 28 years of your labor, and God forbid you get divorced. I would argue the price of those items is mostly the result of social phenomena, rather than mechanical restrictions.

But I'm not particularly gloomy about the prospects for the future. One of the unintended side-affects of exporting labor to developing countries is that as those countries develop, the price of labor and demand for goods worldwide is skyrocketing as those countries turn from markets for labor into markets for consumer products. The reason Fox Conn is opening factories in the U.S. is that the lack of access to reliable parts in China results in a defect rate of about 10%. It costs so much money it's actually cheaper to manufacture in the U.S. The main problem is trying to keep companies from using Ireland as a tax haven.

There will also be progress on the education bubble. As university administrators continue to ramp up costs at a reckless rate, they have started to die off. Half of them may be gone in 15 years. That's terrible news for people who got a degree from those institutions, but it will alleviate the problem of people spending inordinate amounts of money on mediocre educations which confer little to no benefit, so in the long run fewer people will be exploited.

So what will we do about wealthy people using the remaining universities as a means to insert their mediocre kids into the top-paying positions in society? Well, here are some ideas: 1. Stop flooding their coffers with federal loans for degrees that don't produce critical skilled labor in the STEM fields. 2. Regulate the way universities do business in order to retain their tax-exempt status. 2a. Require universities with a sufficiently large endowment of say $500 million or more to give a certain portion of their students full-ride scholarships. 2b. Require universities with an endowment of $1 billion or more to also operate high schools with a large portion of the students on full-ride scholarships so that students with a failing public school have a chance to get into university in the first place. 2c. Clamp down on predatory behavior like professors forcing students to buy their books at the university library 2d. Ban legacy admissions and make it illegal for parents to make generous donations to universities within two years of their children applying for the school. 2e. Audit the quality of research from universities receiving public funds for their work.
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