Re: how to compare living standards


"William F Hummel" <wfhummel@xxxxxxxxxxx> wrote in message
news:sacf52thm5okk0aou1irgstjrb3jm6n7qg@xxxxxxxxxx


On Tue, 2 May 2006 12:44:27 -0500, "Jim Blair" <jeb@xxxxxxxx> wrote:

I think the real concern is not with the wealth or income distribution
at
a
given time, but with the degree that individuals change their location
in
the distribution with time. If few young people own a house free and
clear,
or have a high income job, but if most of them do when they are 50+,
then I
don't see that as being a "problem".

Well, you have assumed away the problem with your premise.

Hi,

Does that mean you agree that mobility is more important than inequality?

First tell me how to compare apples and oranges.

Hi,

While wealth and income distributions are different factors than wealth and
income mobility (apples and oranges), it is the latter that I claim is the
more important.
More on that below.


And do you agree that wealth increases with age as a generalization?

Most people accumulate wealth with age, but that is pretty modest for
the immigrant worker supporting a family. I'm sure you wouldn't be
happy with their growth in wealth.

Depends. Recall that Andy Grove (his Americanized name from his Hungarian
original name) arrived in the US pennyless, but he did OK in the computer
business.
I would be delighted with his income or wealth, or even his Intel stock.
;-)


....There are
a great many poor elderly folks who have never had enough money to buy
a house.

Of course. Just as there are many heavy smokers who live to 100. But I
am
looking at correlations and general patterns, not unusual exceptions.

A "great many" does not equate to "unusual exceptions". You are
looking at the scene from the wrong end of the telescope.

An undefined "great many" can be "unusual exceptions" in a set of 300
million.

Note that consumption is distributed more evenly than wealth.

.....

But the elderly are the richest age group in the US. The "wealth gap" is
in
part a measure of how much wealth people do accumulate during their
lifetime.

Yes, but a minor part.

Is it? Was it for Andy Grove?

...The problem is in our system.

Actually I don't see "our system" as being a "problem", but rather as a
pretty good solution to the problems of wealth and poverty.


...What was it that Marie Antoinette said
about the poor?

In the France of her day, I think the problem was less the gap between
rich
and poor than the lack of opportunity for the poor to move up.

Was the lack of opportunity for the poor to move up why the French
people deposed the royalty? I don't think so.

I say that it was. The US today has a larger "wealth gap" than France had
in the 1780's.

....France was basically a
feudal society before the revolution. You were either very rich and
drank the finest wine or very poor and made your own brew, ...

I agree (and I brew my own beer, which is better than most commercial beer.
I tried wine but that didn't turn out to be very good)

..and never
the twain did meet.

And THAT is what I think the problem was. As would be the case in any
feudal society where wealth is tied to land and inheritance and nobility
title.


Speaking of France, isn't France supposed to be a lot more egalitarian
than
the USA? So why do they have so many more riots and strikes than we do?

The current riots are mainly about securing their place in a welfare
state for those who have jobs. For the 10+% who don't have jobs, the
movement is precisely the wrong message to the government.

I agree with that. And the previous riots (last month's) were really about
religion. And next months will be about someting else (or maybe religion
again). But note that income distribution has not been, and likely won't be
the cause.

.....The inequality is no doubt worse in 2006.

Er, you mean in the USA? Because that is not the case world wide.
The
world has been getting a lot "more equal", and I think that is good.
And the growing worldwide equality is related to the growing
inequality
in
the USA.

Yes, I do mean the USA, and that is precisely what is worrisome. We
are headed toward greater social friction every year that the wealth
and income gap widens.

"Social Friction" You mean like they have in France?

No, social friction like we have growing in the USA.

If by "social friction" you don't mean what France has now, but what the US
has more of than France, then I don't know what you mean by the term.

And do we have more of that Social Friction now than we did during the
1960'
and 70's, when the wealth and income gaps were much smaller but major US
cities were being burned?

The 1960s were all about our revolution over civil rights and fairness
regarding the military draft for a bloody Vietnam War. It had very
little to do with the wealth gap.

Exactly my point. Social Friction in both the US and France (and many other
places as well) is caused by many factors other than a wealth or income
gap.

...The (adult) immigrant worker, with little
wages and no wealth but playing a significant part of wealth creation
in the USA, is even today showing us what may be in store down the
road.

Looks like lots of people are eager to move here for those low wages and
that hard work.

Yes indeed. Life is a lot tougher in Latin America.

And in China and India and Viet Nam and Africa and Russia and Iran and Iraq
and .....


And one cause of the wage gap here is the large inflow of immigrants.

That doesn't explain the obscene increase in executive incomes
relative to average worker income that has been going on for the last
25 years. Let's face it, our free market capitalist system is
basically unstable.

I don't think so. In fact, I say the US is probably more stable than the
above named places.

.....
Pass the word that lowering the taxes on the highest income sector
while hardly changing taxes on the middle and lower income sector is
not the way to run the system.

It has been working in the US since JFK lowered the top income tax rate from
90+%

I see things this way. A large wealth or income gap can be a stabilizing
factor IF those on the bottom who have ambition and talent think that they
can move up by working hard and applying themselves and by following the
rules. The large gap provides incentive by showing what is possible.

There will always be some on the bottom because they lack ambition or
ability. And they are not a threat because they lack ambition and ability.

But a society where those with ambition and talent see that they CAN'T move
up within the system is unstable, because then they must replace the system
to advance. I'll start to worry about our future when people born poor, or
poor immigrants, are no longer becoming multi-millionaires.



,,,,,,,
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(_)
jim blair (jeblair@xxxxxxxx) Madison Wisconsin USA.
This message was brought to you using biodegradable
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Relevant Pages

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