Who rules America? Wealth, income and power.

April 15, 2010 7:45 PM

Who rules America? Wealth, income and power Next time you hear "Fair and Balanced" Fox News whining about the socialist wealth redistribution agenda of the Obama "regime", refer back to this. Goes a long way towards explaining why 47% of Americans don't pay income tax.
posted by Daddy-O (61 comments total)

Well this is a shocking revelation.
posted by Burhanistan at 7:54 PM on April 15, 2010

And here's me thinking like a dope that Peace, Love and Understanding rule America.
posted by Bromius at 7:57 PM on April 15, 2010 [1 favorite]

The Grar rules America.
posted by cashman at 8:05 PM on April 15, 2010 [1 favorite]

All of the people I would want to read this would find it to be "tl;dr" and go back to watching Fox News.
posted by Fleebnork at 8:06 PM on April 15, 2010 [2 favorites]

They should at least "tl;dr" and go back to reading the New York Times, like I.
posted by mondaygreens at 8:08 PM on April 15, 2010

tldr
posted by Big_B at 8:11 PM on April 15, 2010

Wow, awesome resource! Thanks.
posted by contessa at 8:13 PM on April 15, 2010

Wealth distribution became even more concentrated between 1983 and 2004, in good part due to the tax cuts for the wealthy and the defeat of labor unions

Maybe wealth distribution got more concentrated because people who were ambitious for wealth got better at accumulating it, the same way as most other crafts, professions and technologies have improved over the past 30 years. Just as people today are able to pass footballs better, play the guitar better, build faster dragsters, etc. Those who desire wealth and who are good at it have just perfected the art of making money as never before. Anecdotally, I have say that from what I know first-hand of billionaires is that they're totally focused on making money and very clever at it. Taxes and unions are minor impediments.
posted by Faze at 8:22 PM on April 15, 2010

15 Mind-Blowing Facts About Wealth And Inequality In America
posted by Abiezer at 8:24 PM on April 15, 2010 [4 favorites]

From the article: "Some of the information might be a surprise to many people."

The data are certainly useful, but a surprise? No. This professor is about 162 years late in that regard.

The United States is the only major country I know of where people are deeply affected by class but continue to deny its existence.
posted by Despondent_Monkey at 8:25 PM on April 15, 2010 [5 favorites]

Faze, I suspect that in this case "perfecting the art of making money" includes the steady demolition of structural impediments to that goal (i.e. getting rid of pesky unions and lowering taxes).
posted by AdamCSnider at 8:26 PM on April 15, 2010 [2 favorites]

Maybe wealth distribution got more concentrated because people who were ambitious for wealth got better at accumulating it, the same way as most other crafts, professions and technologies have improved over the past 30 years.
Is this that famous "real world" conservatives are alleged to be living in?
posted by Abiezer at 8:27 PM on April 15, 2010

"Maybe wealth distribution got more concentrated because people who were ambitious for wealth got better at accumulating it, the same way as most other crafts, professions and technologies have improved over the past 30 years."

Accumulating wealth is not a recognized profession, you can't legally open up a company and your "business" is simply making money. No one's regulating that because it doesn't exist.

What I mean to say is: Maybe someone should be regulating that. You know, like other crafts and activities.
posted by mondaygreens at 8:29 PM on April 15, 2010 [2 favorites]

Great lay out. Thank you, but not a shock. In '07 non wage/salary passed 48% of the aggregate for the first time since 1947 too. (I know, needs a site, but I lost some bookmarks in a computer meltdown. I'm looking.)

Oligarchy is a word that Glen Beck likes to use. But it is the destination of a road that American tax policy has since 1980.

The middle class has built every strong industrial society, and the American middle class is being devoured.
posted by Some1 at 8:30 PM on April 15, 2010

Oligarchy is a word that Glen Beck likes to use

No, no - you've got it wrong. It's OLIGARHY - and you must cry profusely before you spell it.
posted by Despondent_Monkey at 8:34 PM on April 15, 2010 [1 favorite]

Faze, I suspect that in this case "perfecting the art of making money" includes the steady demolition of structural impediments to that goal (i.e. getting rid of pesky unions and lowering taxes).

Don't forget convincing people permanently stuck in the lower/middle class that their peers are just too lazy to make more money.
posted by one_bean at 8:38 PM on April 15, 2010 [2 favorites]

The gini coefficient is a useful measure of wealth equality (with the USA coming in 92nd out of 134 countries in terms of equality rankings). For example, Iran has a lower (=good) Gini measure than the USA.

I would love to see an infographic of this data though ( I mean that sincerely). I like graphs, but converting this to the individual's perspective would be great.
posted by a womble is an active kind of sloth at 8:43 PM on April 15, 2010

you can't legally open up a company and your "business" is simply making money.

"The purpose for which the company is formed is for the transaction of any and all lawful purposes for which a limited liability company may be organized under the Texas Business Organizations Code."

Table 5b: Amount of stock owned by various wealth classes in the U.S., 2007
...
Both tables' data from Wolff (2007 & 2009). Includes direct ownership of stock shares and indirect ownership through mutual funds, trusts, and IRAs, Keogh plans, 401(k) plans, and other retirement accounts. All figures are in 2007 dollars."

I'm betting the $0 dollar percent is lower if you include state and union pension funds invested in stocks.
posted by Jahaza at 9:03 PM on April 15, 2010

Wow.

The next time someone tells you Obama has ushered in a new post-racial era, show them this chart.
posted by problemspace at 9:03 PM on April 15, 2010

grr.... edit window! first line should be italicized
posted by Jahaza at 9:03 PM on April 15, 2010

problemspace: "The next time someone tells you Obama has ushered in a new post-racial era, show them this chart."

Of course, most of that wealth is in real estate. And priced circa 2007. If you look at Case Shiller, that's right before prices started falling and did so with haste. It's not hard for me to imagine that the subprime credit extensions helped black families move into white suburban neighborhoods where schools are better, driving up prices there more than urban areas. It might be construed as a post racial era, if poor people are ushered out of affluent neighborhoods because they stop paying their mortgage rather than because they're black.

For the Hispanic population, I'm not sure how much of that chart is racism and how much of it is immigration. The inscription at the Statue of Liberty doesn't say Give me your tired, your rich, your huddled masses yearning to shout 'Socialism!'.
posted by pwnguin at 9:52 PM on April 15, 2010

This is really a "glass half empty/glass half full" illustration. For all the people who see the top tier of Americans who hold a lot of wealth as fat cats sitting on a inverted wealth funnel keeping down the masses, there are many who see it just the other way, as a system where the funnel is worth-based and sitting in a normal funnel attitude, and which acts, through banks, government, educational institutions and philanthropy to elevate those with moxie to wealth. For the latter, the truth of the American wealth funnel is that "capital trusts capital." Once you put 6 figures in a bank account, getting a 5 figure loan on any given Wednesday afternoon is a pleasant 1/2 hour process, where you'll most likely be served good coffee or tea, and asked about your opinions on various subjects unrelated to financial matters, while Hewlett Packard printers spit out your loan agreements, and branch employees check them, to make sure your copies and the bank's match exactly.

America, for all its faults, is a hard country in which to starve, if you aren't dead set on starvation. Even folks on food stamps occasionally get smoked salmon. That's not to say that wealth comes easy, nor that it should. Real wealth requires risk, sometimes soul-searing, even sacrificial risk, and the continued preservation of wealth in a ruthlessly capitalistic society is no picnic, either. Getting $2 million is hard, but keeping $2 million, while living as most middle class Americans do, is damn near impossible. The people who prove capable of keeping $2 million, in my experience, frequently get asked to keep a lot more, and those who can't keep $2 million get a quick lesson in economics, that they might not understand or agree with, as they get that lesson.

That's capitalism, and you can argue about the greater wisdom of the 1% at the top of the wealth funnel, except as that they know how to amass capital in the current American environment. But in my experience, they're not that different from the folks in the bottom 1%, except in terms of fear of poverty, naked ambition, and ruthless appetite for calculated risk; and possibly, the fact that a few of 'em knowingly started up the funnel at age 7, or 8, and let nothing, nor no one, force them to look back.
posted by paulsc at 10:14 PM on April 15, 2010 [6 favorites]

Anecdotally, I have say that from what I know first-hand of billionaires is that they're totally focused on making money and very clever at it. Taxes and unions are minor impediments.

This is just, like, so true. So, so true. From what I know first-hand of poor people, for example, they're totally focused on stretching their inadequate pay to cover the cost of feeding their children and making rent and all kinds of minor impediments like that. If only they had their eyes on the prize, they'd be much more clever at it and take their place in the ranks of the general wave of onward and upward that has dominated civil society in America these last three decades.

As it is, though. Chumps. You know?
posted by gompa at 10:41 PM on April 15, 2010 [3 favorites]

gompa, that is just so rude and not at all an outcome that needs to be pulled from flash's statement.

we aren't all alike and we aren't all striving for the same thing. those of us without wealth are desperately navigating towards it or at least struggling to do better than stay above starving. those of us with great wealth strive to hang on to what we've got and go beyond.

while it is possible to construct an equivalency (stay where you are and go beyond) in the two structures it's a discredit to you to make a play at flash's thinking on this in such a manner.
posted by artof.mulata at 11:34 PM on April 15, 2010

So the meme, in Reagan's day, used to be that wealth would 'trickle down' to the middle class, that was why we should cut taxes and cut taxes and cut taxes on the wealthy. After all that wealth then created jobs and the middle and working class should just be happy they have the privilege of working for the rich.

Tonight, facing evidence that the middle class is in deep trouble, the new story is that the rich just work harder and therefore deserve everything they get, and just their unique work ethic, and ability to garner more wealth than others, means they most keep every penny.

Of course, few of that top one percent started on the same place as most of the middle class (there are exceptions due to talent in sports, the arts, or technology, but those great stories are not the majority of the super wealthy. And of we should tax estates (an idea that Henry VIII would have found radical), what then would be the point of amassing great wealth? No one would)

But the new meme, the new talk is: the rich are rich because they work so hard they need all that money. They worked hard to make sure that they never got ill and that they didn't not have any kind of impediments to the opportunities that they struggled to build for themselves. They made sure they had the social skills and family ties that give the chance to find those opportunities.

They worked hard at their universities without having to be employed at menial task to pay their on way while going to classes. They worked hard to make sure that no one in their suburban or private high schools were so disillusioned with life that they were on drugs and disrupted almost every class. They worked hard to make sure there weren't thirty or forty students in most of there classes too.

They worked hard, when they were children, to make sure they had three meals a day, while other children were so lazy that they went to bed hungry at least three nights a week, like a third of American kids do. They worked hard to make sure they had a place to study and that they got instruction and encouragement from adults that thought that was important. Unlike those lazy bums that came home to empty houses because there single mother was at her second job and never saw a book in there house.

They worked hard even before they started school to be sure they had toys to play with and the stimulation to develop cognitive skills, and opportunities to hear and practice language. They made sure they were surround by exhausted, or angry, or infirm, or uncaring, or simply unaware and ill informed adults.

Why even in utero they were toiling away. Making sure they got all of the nutrients and none of the wrong ones. They struggled to make sure their mothers got prenatal care, and did nothing to adversely effect their lives.

But their labors began even before that, didn't it. They grabbed the genes that gave avoided any kind of syndrome, and gave them innate abilities beyond those haphazardly picked by the lackadaisical embryos. Even before that, at the moment of conception they were busy and picked the better parents than those other kids did.

Yes, how can we, society, expect anything from this top one percent after all the tribulations and struggle they have already had? How can those that prepare there food for market, pave and clean there offices and streets, build their cars, or teach their children or labor in the factories that are the source of their riches , or all the million jobs that are beneath them, expect any contribution from them?
posted by Some1 at 12:57 AM on April 16, 2010 [26 favorites]

So the meme, in Reagan's day, used to be that wealth would 'trickle down' to the middle class

Otherwise known as the bukkake theory of wealth distribution.
posted by PeterMcDermott at 1:14 AM on April 16, 2010 [2 favorites]

I know tl;dr. And lots of typos too (especially annoying are the ones where the n't gets left off of were or another verb, or where a not disappears). I shouldn't type so much this late.

Short version. I think those that receive a lot from a country can be expected to give something back. It's not a new idea at all, and predate "Socialism" (even the real kind, not just the modern American talking point kind.)
posted by Some1 at 1:16 AM on April 16, 2010

paulsc - you've rehearsed two of the standard justifications for the prevailing inequality - that it rewards based on merit ("elevate those with moxie to wealth") and that the wealthy have earned what they have ("[t]hat's not to say that wealth comes easy"). Neither of these is remotely true.
For the first, any number of sociological studies (e.g. by Lisa A. Keister also) show how wealth inequalities are reproduced across generations and this then ties in to the second: that many of those who are the wealthiest are so because of their inherited connections, cultural capital and so on, not because of any hard work or talent on their own part. It's one aspect of what is called reproduction in good old Marxist terminology; the process can clearly be observed in the sociological data and fits with common sense - hardly surprising that families with wealth by and large try to hang on to it and pass it on. This has been the core of the long-standing opposition to a class society - not so much envy of the super-rich, but contempt for a set of social relationships that are predicated on reproducing exactly this kind of inequality. It has never ceased to strike me as bizarre how the type of 'conservative' mindset that admires the self-made, self-starter has been co-opted into apologising for entrenched, self-replicating unfairness.
Beyond any considerations of fairness or social justice, inequality is widely accepted as being a source of instability and various other social ills, and of course such a system constantly elevates some of the most useless and narrowly experienced to positions of power and influence, so again it's odd that 'realists' would seek to defend it.
posted by Abiezer at 1:18 AM on April 16, 2010 [4 favorites]

"... hardly surprising that families with wealth by and large try to hang on to it and pass it on. ..."
posted by Abiezer at 4:18 AM on April 16

Fails, of course, entirely to explain Bill Gates, Warren Buffett, T. "Bone" Pickens, Carl Ichan, George Soros, Richard Branson, Andy Grove, Steven Spielberg, Steve Jobs, Roger Penske or the next 10 international billionaires who today influence American society through their business interests, public profiles, and philanthropy, but who came from middle class, or even humble, and some times disadvantaged beginnings. The Horatio Alger story remains powerful, because in America, still, sometimes, it's true.
posted by paulsc at 1:59 AM on April 16, 2010 [1 favorite]

Oh yes, but this is asking us to accept a system that by and large* reproduces wealth and privilege because there are a few exceptions. That's a very thin basis on which to defend a system, and you could of course find a far larger body of anecdotal evidence concerning worthy people condemned to lives of deprivation and misery through no fault of their own if such stories sold as well.

* In fact, to a enormously preponderant extent if you look at the data, and increasingly so - the social mobility in the middle of the last century was in large part due to the shake-ups created by the early twentieth century crisis of capitalism that saw two world wars and a worldwide depression and policy responses to that.
posted by Abiezer at 2:19 AM on April 16, 2010

Well, then. From the FPP link:

"Figures on inheritance tell much the same story. According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to $100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 2000)."

What's not traced in the article, that you'd like to believe, Abiezer, is that the 1.6% of Americans getting more than $100,000 in inheritance are the wealthiest 1.6%, but frankly, if you take the most recent Forbes list of wealthiest individuals, you don't see that many who got their start as inheriting scions of wealthy families.

And you know what, Abiezer? Guys like Buffett, Gates, and Soros are intending not to pass on mega-wealth to their family members, believing, from what they've learned, that wealth belongs in the hands of those who can best accumulate, manage and distribute it, in their own lifetimes, and not to those who inherit it by chance. That's a state of mind, and a philanthropic strategy, that strikes directly at the heart of your thesis.
posted by paulsc at 2:46 AM on April 16, 2010 [1 favorite]

Well, you're back to attempting to refute the larger data set with lists of a few individuals; of all the messages to come away with from the link at the FPP (where we learn that 20 percent of the population own 85 percent of the wealth and that ), it's not that there's a level playing field out there. If you skim through the Keister book I linked above, where she looks at wealth rather than income, she finds persistence in wealth ownership across generations - certainly also some mobility and more than in the 19th century, but inevitably limited - and as far as I'm concerned the facts do fit with my 'thesis' - which in itself isn't actually particularly animated by the few who become very rich, but the many more whose lives are worse than they could have been for no good reason.
posted by Abiezer at 3:19 AM on April 16, 2010

and that )
Um, and lots of other stuff too. Ahem.
posted by Abiezer at 3:21 AM on April 16, 2010

Fails, of course, entirely to explain Bill Gates, Warren Buffett, T. "Bone" Pickens, Carl Ichan, George Soros, Richard Branson, Andy Grove, Steven Spielberg, Steve Jobs, Roger Penske or the next 10 international billionaires who today influence American society through their business interests, public profiles, and philanthropy, but who came from middle class, or even humble, and some times disadvantaged beginnings. The Horatio Alger story remains powerful, because in America, still, sometimes, it's true.

The pigeonhole principle proves that 300 million people cannot all be one of 20 lucky people.
posted by DU at 4:53 AM on April 16, 2010 [1 favorite]

I'd like to point out that if you don't have rich people, including insanely rich ones, who's going to finance and build the factories, create the jobs, etc? How are you going to enforce equality? Should we take away the founders of Google's wealth and by necessity their company? Do they not get a reward for creating a wonderful product and tens of thousands of jobs?

Income inequality is mostly irrelevant. It's the overall living standard that matters. I would much rather be poor in these 'unequal' societies than be a member of every mostly equal society that's been created. Judging how people have voted with their feet, I'm not alone.
posted by hylaride at 5:02 AM on April 16, 2010 [3 favorites]

Otherwise known as the bukkake theory of wealth distribution.

I prefer "trickle on theory".
posted by Evilspork at 5:16 AM on April 16, 2010

Should we take away the founders of Google's wealth and by necessity their company

Look, there's a long stretch of middle ground between progressive taxation of the rich and forced nationalization, all right?
posted by AdamCSnider at 6:36 AM on April 16, 2010 [6 favorites]

Goes a long way towards explaining why 47% of Americans don't pay income tax.

Debunking the Right-Wing "47% Pay No Taxes" Talking Point
posted by jtron at 6:40 AM on April 16, 2010 [2 favorites]

Fails, of course, entirely to explain Bill Gates

Bill Gates comes from a wealthy family. His dad was a wealthy lawyer, his grandfather was a national bank president. He attended an exclusive prep school. If this is your Horatio Alger story then that kind of says it all I think.
posted by imabanana at 7:03 AM on April 16, 2010 [9 favorites]

@AdamCSnider The more you progressively tax, the less they have to invest and create jobs. While I'm not an anarchist and believe in a basic level of government,

And these charts that show who owns what aren't going to change unless you take away people's assets - which is what wealth really is. The founders of Google get paid a rather small salary, as all their wealth is in the company. To redistribute it, you'd have to take at least some of it away.
posted by hylaride at 7:04 AM on April 16, 2010

The more lower to middle class people who have money to spend, the more potential investments there are to be made in making goods and services for them to spend that on.

Remember that the current financial crisis was precipitated by too much investment money and too few good investments. Of course a large portion of this was due to newly wealthy/wealth inequality in other nations such as China, India, and Arab oil states, but certainly the top heavy wealth distribution here in America didn't help.
posted by Zalzidrax at 7:33 AM on April 16, 2010

It's okay though because Hollywood is allatime telling me that rich people are very unhappy and would trade it all in a second for the simple pleasures we all enjoy.
posted by Legomancer at 8:09 AM on April 16, 2010 [3 favorites]

America's public infrastructure is falling apart. Bridges collapse, roads falling apart, cities are falling into ruin, the healthcare system is a shambles, the quality of education has taken a steep dive, the existing rail system is in poor shape, the environment is going to crap.

It is going to be very difficult to pull oneself up by the bootstraps, when those bootstraps have rotted right out.

But, hey, at least you won't be taxing the rich.

Feet, meet bullets.
posted by five fresh fish at 8:35 AM on April 16, 2010 [2 favorites]

And these charts that show who owns what aren't going to change unless you take away people's assets - which is what wealth really is. Well, yeah, taking people's assets is pretty much the definition of any form of taxation. In physics, the greater mass an object has, the greater gravitational pull it has. In economics, the greater amount of wealth one has, the greater the amount of additional wealth that is pulled towards it. Without progressive tax rates and estate taxes, the wealthy acquire more and more of our nations wealth and the greater the wealth disparity becomes. Obviously, this is not healthy for a nation. Look south to Mexico where there are a few wealthy people, many impoverished people, and not much in the middle. Are the very wealthy in Mexico investing in businesses and creating more jobs? No so much, and that's why the impoverished Mexicans are fleeing across the northern border where opportunities are better. We are haeding towards the Mexican model of wealth distribution. As Will Rogers said, "It's not a crime to be poor, but it might as well be".
posted by Daddy-O at 8:53 AM on April 16, 2010 [1 favorite]

Fails, of course, entirely to explain Bill Gates, Warren Buffett, T. "Bone" Pickens, Carl Ichan, George Soros, Richard Branson, Andy Grove, Steven Spielberg, Steve Jobs, Roger Penske or the next 10 international billionaires who today influence American society through their business interests, public profiles, and philanthropy, but who came from middle class, or even humble, and some times disadvantaged beginnings. The Horatio Alger story remains powerful, because in America, still, sometimes, it's true.

not one of the men you mentioned fits into the Horatio Alger narrative of rags to riches. To quote George Carlin, there's a reason why they call it the American Dream - because you have to be asleep to believe it...
posted by any major dude at 8:55 AM on April 16, 2010 [3 favorites]

One of the most critical aspects of "perfecting the art of making money" is the staggering knowledge and education gap between those above the inflection point and those below it. Basic numeracy, time value of money, compound interest, how mortgages work, how banks work, all these fundamental bits of knowledge that many of us take for granted are absolutely critical to getting past making ends meet and they're not being taught anywhere that I've heard of.

Obviously there are vastly more (and more dire) impediments to self betterment but thats a big one to me. If we're going to pursue the idea that the US is a meritocracy we need to be religious about giving everyone the same tools and comprehension of the rules that those on top do.

Of course there are plenty of structural issues preventing that from happening without invoking a conspiracy to keep the proletariat oppressed and plenty of would-be oligarchs actively doing the oppressing anyway.
posted by Skorgu at 9:23 AM on April 16, 2010 [2 favorites]

This is the real reason The Right is anti-intellectual. Discredit information based rational decision making, and you can get away with murder.
posted by Xoebe at 10:10 AM on April 16, 2010 [2 favorites]

paulsc: Fails, of course, entirely to explain Bill Gates, Warren Buffett ... [etc] The Horatio Alger story remains powerful, because in America, still, sometimes, it's true.

When you talk about the top 1% of the American population, you're talking about a group of three million people. We all know the names of a few exceptional members of that group precisely because they are so exceptional even within that group, rather than typical.

Even if your list contained a thousand names, it would cover just 0.033% of the top 1%. Would you trust an investment advisor who was promising returns based on 0.03% of his investment decisions? Would you encourage your children to take up acting as a career choice, on the basis of Brad Pitt's income?
posted by Western Infidels at 10:16 AM on April 16, 2010 [2 favorites]

Hear, hear @ Xoebe!
posted by mondaygreens at 10:20 AM on April 16, 2010

Very interesting article, though I looked in vain for the evidence that the wealthy are also the most powerful. (I believe that is likely so, but I like actual evidence.)

America's income and wealth differentials are in my view the greatest threat to maintaining the American Dream, i.e. a country of real opportunity for all. I respect the Marxists and socialists among us, but I actually prefer a (regulated) capitalist model myself, assuming we can preserve real opportunity. I'd suggest that the major reason the gap is wide and widening isn't just Bush style tax policy, but ongoing lack of access to quality education, and that in turn is directly tied to our reliance on a school funding formula in every state which lets rich communities enjoy the very best schools and educational resources, while schools in poor communities are dreadful. (Some1 says it well in the comment above.)

If we don't figure out how to provide real access, from the earliest ages, to top quality education, we are never going to correct our income gaps, and we really will just be a land of serfs supporting the privileged classes.
posted by bearwife at 10:29 AM on April 16, 2010

lower (=good) Gini measure....

Surely, at some point a lower Gini measure is worse. Ideally, wealth is the recompense for valuable work, and it stands to reason that not everyone's work is equally valuable, nor is everyone equally ambitious.

I think a much better measure of a system is whether a provides opportunities for the production of valuable work, and then fairly rewards it.

America definitely rewards a lot of kinds of valuable work. America could improve the overall quality of education and access to healthcare and sufficient nutritious food, and so on.

For America to try and tax its way to the "ideal Gini measure" is stupid. It's just stealing from the hard-working and giving to everyone else. Why should anyone work in that case?
posted by esprit de l'escalier at 12:29 PM on April 16, 2010 [1 favorite]

I think a much better measure of a system is whether a provides opportunities for the production of valuable work, and then fairly rewards it.

Define "valuable."
posted by contessa at 12:40 PM on April 16, 2010

If we don't figure out how to provide real access, from the earliest ages, to top quality education, we are never going to correct our income gaps, and we really will just be a land of serfs supporting the privileged classes.

Totally agree.
posted by esprit de l'escalier at 1:10 PM on April 16, 2010

Tony Judt points out that the US and UK -- the most right-wing, limited governments in the developed world -- observe, by far, the lowest social mobility and the greatest income inequality, among developed economies.
posted by Philemon at 1:29 PM on April 16, 2010

Excellent link, Philemon.

For America to try and tax its way to the "ideal Gini measure" is stupid.

No, letting the public infrastructure fall to pieces is stupid. Stupid is thinking that the country can succeed when the infrastructure is crap. Really stupid.
posted by five fresh fish at 2:44 PM on April 16, 2010 [1 favorite]

47% of Americans don't pay income tax.

Shockingly, 100% of estate taxes are paid by multi-millionaires. Just as shocking, 0% of multi-millionaires sleep under bridges.
posted by JackFlash at 3:48 PM on April 16, 2010 [1 favorite]

No, letting the public infrastructure fall to pieces is stupid. Stupid is thinking that the country can succeed when the infrastructure is crap. Really stupid.

Did you read what I wrote? That's exactly my argument -- that we should protect and measure the infrastructure, rather than defending an imagined, "idealized" wealth distribution curve.
posted by esprit de l'escalier at 6:31 PM on April 16, 2010

So your down with progressive taxation? Then we are, indeed, in agreement.

Seems to me, though, that progressive taxation helps improve the Gini coef.
posted by five fresh fish at 6:58 PM on April 16, 2010

For America to try and tax its way to the "ideal Gini measure" is stupid. It's just stealing from the hard-working and giving to everyone else. Why should anyone work in that case? The richest among us who aren't paying their fair share of taxes are the ones who are stealing from the hardworking and the generations to come who will be stuck with this enormous national debt. Did you read what I wrote? That's exactly my argument -- that we should protect and measure the infrastructure, rather than defending an imagined, "idealized" wealth distribution curve. I read what you wrote and nowhere did I see mention of infrastructure in your argument. If 47% of Americans aren't even able to earn enough to pay income taxes, there's something wrong with the wealth distribution curve. It's not because they are "welfare queens" who sit at home collecting entitlements, it's because they are working single mothers, low income families, and retirees. The days of "welfare queens" ended during the Clinton administration. Just wondering, did you click on the link in the OP and look over the data?
posted by Daddy-O at 7:19 PM on April 16, 2010 [2 favorites]

"Fails, of course, entirely to explain Bill Gates, Warren Buffett, T. 'Bone' Pickens, Carl Ichan, George Soros, Richard Branson, Andy Grove, Steven Spielberg, Steve Jobs, Roger Penske or the next 10 international billionaires who today influence American society through their business interests, public profiles, and philanthropy, but who came from middle class, or even humble, and some times disadvantaged beginnings."

I don't know where this wide spread belief that Bill pulled himself up by his boot straps came from but Bill Gates came from a wealthy family: "His family was upper middle class; his father was a prominent lawyer, his mother served on the board of directors for First Interstate BancSystem and the United Way, and her father, J. W. Maxwell, was a national bank president. This allowed him to get early exposure to computers: At 13 he enrolled in the Lakeside School, an exclusive preparatory school.[13] When he was in the eighth grade, the Mothers Club at the school used proceeds from Lakeside School's rummage sale to buy an ASR-33 teletype terminal and a block of computer time on a General Electric (GE) computer for the school's students.

Warren Buffet's father was a four term congressman and owned a stock brokerage and investment firm.
posted by Mitheral at 11:22 AM on April 17, 2010 [1 favorite]

I read what you wrote and nowhere did I see mention of infrastructure in your argument. If 47% of Americans aren't even able to earn enough to pay income taxes, there's something wrong with the wealth distribution curve. It's not because they are "welfare queens" who sit at home collecting entitlements, it's because they are working single mothers, low income families, and retirees. The days of "welfare queens" ended during the Clinton administration. Just wondering, did you click on the link in the OP and look over the data?

Did you skip over this part?

America could improve the overall quality of education and access to healthcare and sufficient nutritious food, and so on.

Clearly these things constitute infrastructure.

What I'm saying is that there is no way we can know what an ideal Gini coefficient looks like because we'd have to account for the relative value of people's work, and their relative ambitions, which are very difficult to measure.

Since we don't know what an ideal Gini coefficient is, what do we really care about? Equal opportunity; defending individual meliorism. After that, what people do with their opportunity is their own business.

I have friends who are highly motivated by money and took advantage of their opportunities to become financially successful. When I want to go out, they tell me they have to take work calls at 10pm. They work on weekends. They dedicate themselves to jobs. I turned down similar opportunities. How can I then say that they should be taxed more than me for the mere reason that they earn more? Sure, someone else who didn't have the same opportunities as us -- he can rightly ask for redistribution. But wealth itself is no crime: Inequity is.

That's the problem with this facile thinking: "progressive taxation helps improve the Gini coef." I am not sure that Gini coefficient will move. In fact, it might move the other way as the brilliant members of our society, unimpeded by average, rich children, find their proper places at the heads of industry, and collect the fair reward of their genius.

Whatever happens to the Gini coefficient, we can all agree that inequity must be repaired, primarily in education.

As for the heritability of success, I imagine that a lot of that is due to good parenting. The parents know what made them successful, and they pass on the values to their children. It could be curiosity about the world, or the significance of education. Heritability of success is probably immutable.
posted by esprit de l'escalier at 6:25 PM on April 19, 2010