Re: how to compare living standards


"William F Hummel" <wfhummel@xxxxxxxxxxx> wrote in message
news:racv52tnpcmoom0ohbl5k1doajqk4dai92@xxxxxxxxxx


On Mon, 8 May 2006 13:55:17 -0500, "Jim Blair" <jeb@xxxxxxxx> wrote:

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

WFH:

More anecdotal evidence which points to a small fraction of the
population.

Hi,

I would not call a survey of 11,000 millionaires anecdotal evidence. Isn't
it the largest such survey?

And note that the result that about 80% were from "not-rich" families agrees
with the earlier study of 4000 American millionaires.


... How about the millions of families who work hard but
never manage to become "rich"?

So only about 3.5% of US families qualify as "millionaires" in the Danko &
Stanley survey, but I read somewhere that the percent has increased since
then.

....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.

What are the facts?

Yes, what are the facts? Do you doubt that the longer an immigrant lives
here the higher their income, on average? Do you doubt that second
generation immigrants move higher on the income and wealth ladder than their
parents, on average?

...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 data shows the _mean income_ for each quintile, not the _low end_
of the quintile. Even so, the mean of the lowest quintile lost in
absolute income in 2000-2001 according to the data.

Yes, the pattern is a long term increase with short term declines (typically
associated with a recession).

It also shows that the annualized gain in income by the lowest
quintile was 3.7% over the last ten years of the data,

Note: GAIN.

....which is close
to the average increase in the cost of living.

Er, aren't you using the CPI inflation corrected data from the second table
down? So the GAIN is in "constant dollars" already corrected for inflation.

....Compare that with the
topmost 5% which gained income at an annualized compound rate of 6.6%
over the same period. ...

Yes those at the top gained more than those at the bottom. (which is one
reason that they were in the top ten years later)

....If you put gain that in dollar income over ten
years, the comparison becomes nearly obscene.

So "everyone" gained, but it is "obscene" that some gained more than others?
Or that those that gained the most moved to the top?

WFH:
.....The
wealth gap has been widening for 25 years ...
jeb:

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.

What are the facts?

???? Didn't you see those thousands demonstrating in favor of illegal
immigrants on your TV?
.....
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.

Are you serious?

I am. The question is are the demonstrators?

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.

WFH:

Which demonstrations are aimed at expanding the wealth and income gap?

???? Do you agree that the inflow of unskilled workers reduces the wages for
those competing for low skill jobs? HINT: supply and demand--or read the
Paul Krugman essay in the recent NY TIMES. The immigrant flow benefits the
US rich by reducing the cost of child care, lawn and laundry and other
services, used mostly by the upper incomes to free up their time--in part so
they can earn even more.

And did you see the massive demonstrations by mostly low skill workers and
immigrants demanding that immigration not be restricted and that those here
illegally be allowed to stay? Were they not demonstrating in favor of
policies that will in fact increase the US "wage and income gaps"?

......

.....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?

Obviously there are exceptions that are useful for anecdotal
"evidence." Do I need to identify all the multi-millionaire
Congressmen and Senators in office now and in the past?

While the poorest Senator is (I think) Wisconsin's Russ Feingold, one of the
richest is our other- Herb Kohl. But he was rich before he decided to run
for the Senate. This is the more common situation. The same ambition that
result in someone getting rich also makes them interest in politics.

....Or worse,
those who became multi-millionaires on a Congressman's salary?

The "Randy Cunningham Effect"?

But you didn't comment on my claim that it is not "rich individuals" so much
as "intrenched interests" that influence legislation. I cite farmers (corn,
dairy, sugar), lawyers (litigation, estate, tax), unions, Pharmacutical
companies (patent extensions), etc.




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jim blair (jeblair@xxxxxxxx) Madison Wisconsin USA.
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