Re: how to compare living standards


"William F Hummel" <wfhummel@xxxxxxxxxxx> wrote in message
news:v29i52lrfkqi6grf6ebqn3s3lrc5sqoeq5@xxxxxxxxxx
On Wed, 3 May 2006 12:45:32 -0500, "Jim Blair" <jeb@xxxxxxxx> wrote:

"William F Hummel" <wfhummel@xxxxxxxxxxx> wrote:

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

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.

This is a classic example of anecdotal evidence proving nothing.

Hi,

If Andy Grove were the only poor immigrant who became rich, you would have a
point. But you can find many such examples.

And if you expand that to people born to "not rich families" who became
"rich" (or at least became millionaires), then the major study indicates
that means 80% of current millionaires.

http://www.geocities.com/capitolhill/4834/106.txt


....For
every immigrant like Andy Grove, there are tens of thousands of
immigrants who work their tails off producing goods and services for
the rest of us at near minimum wages and are never able to accumulate
any significant wealth.

Think millions of people move to the US every year so they can work all
their life at dead end jobs paying what critics call "*** wages"?

But look at the status of 2nd generation immigrants. Or even of those who
have been here for a decade or more.


...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.

As I pointed out in the part you deleted, our capitalist system is
basically unstable without governmental constraints. The rich get
richer .....

Yes.

....and the poor have been getting poorer in real terms.

Not according to the US Census data.

http://www.census.gov/hhes/income/histinc/f03.html

.....The
wealth gap has been widening for 25 years ...

Driven in part by a constant stream of poor immigrants, that both depress
wages at the low end, and replace the poor who do move up the ladder.

But note that many low wage workers who are in the US legally demonstrated
to keep their wages depressed. They are less concerned about that "wealth
gap" than they are about "fairness" to illegal competition for their jobs.

....and is now reminiscent of
the robber baron days a century ago.

Also a time of high immigration?

...Political power and wealth go
hand in hand when there are no real constraints against it, as we can
see quite clearly in today's Washington scene.

I think that is a separate problem.


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.

Social friction arises when there are unseemly inequalities in various
areas -- wealth, income, civil rights, political power, educational
services, etc. In this exchange I have been referring to the unseemly
inequalities in wealth and income.

But note that it is those on the bottom mostly who march for a policy to
keep their wages down.


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.

Be careful how you say that. Not "other than" but in "addition to."

I have yet to see any evidence of "social friction" in the US that is based
on wanting to close the wealth or income gap. All I see are demonstrations
aimed at expanding it.

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.

We are talking about conditions in the US, so the other named places
are irrelevant.

I say we must look at other places for comparison before we can know how
good or bad we are doing.

.....We have not had such blatant corruption connecting
moneyed interests and political favors for a very long time. That
results in a positive feedback system in which incumbents can always
out spend challengers, making incumbency almost a guarantee of
re-election.

I agree that this is a problem. A Congressman or Senator has a better chance
of dying in office than of losing an election. This is partly the result of
"Campaign Finance Reform" and partly of districting. Note that most of the
incumbants who lost in 2004 were Democrats from Texas where the
congressional district lines were changed by Republicans.

....The only way a positive feedback loop like that can be
broken is through some drastic change in the system or a major scandal
that throws the rascals out, ala Nixon.

Everyone says that money wins elections, but that is not obvious in
Wisconsin where Bill Proxmeyer won a senate seat spending only about $200,
and Russ Feingold (poorest guy in the senate) spent the least to win his
primary, and to win the election. And remember when Howard Dean had the
Democratic nomination in the bag because he had the most money? Or that CA
senate seat that Michael Huffington paid $30 million for?

....
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.

The premise is wrong. One does not move up simply by working hard and
following the rules.

It helps to start your own business. And to know how to save and invest.

And the point here is less that "work hard" IS true than that it is thought
to be true.

...There are millions of workers who can attest to
that.

I say there are millions who work hard and get promotions, or learn enough
to start their own business, or move on to a better job.


....Wealth begets wealth.

Which is why knowing to save and invest matters.

....You need the best legal, accounting, and
political services that money can buy.

Only AFTER you have moved up

And the political influence you cite is less "rich individuals" than
"special intrenched interests" that are often composed of individuals that
aren't so rich. Like corn and dairy farmers.


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.

Fine. I am not proposing a system in which those with ambition and
talent can't move up.

Move up how far?

....That is indeed necessary ...

I agree.

....but not a sufficient
condition.

Maybe. That is not clear.

....You should start to worry about the future now because the
wealth gap in the US has been steadily worsening over the past 25
years.

I say that bigger is not "worse".

....Today the top 5% own more than half of all wealth.

Depending on how you define "wealth".

http://www.geocities.com/capitolhill/4834/wealth.txt


....This
inequality obviously cannot increase indefinitely, ....

Why not? Especially when the largest source of "wealth" for the top 1% is
Unincorporated Business .

...but what is there
to stop it?

Good question.



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jim blair (jeblair@xxxxxxxx) Madison Wisconsin USA.
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