*great article from the economist on the wealth gap in america and how america is still THE land of opportunity!*

What widening inequality in incomes and wealth reveals about America—and the chances of it seeping into the presidential race

FOLLOW almost any Democratic presidential candidate around, and it won't be long before you hear this statistic. In 1980, the average CEO was paid around 40 times as much as the average worker; now the multiple is above 400. George Bush's tax cuts “for the rich”, say the likes of John Kerry, who formally announced his candidacy this week, must be scrapped to help those of lesser means. Meanwhile, pundits, notably Paul Krugman at the New York Times, have argued that a new “plutocracy” is rising.

The idea that America is becoming a less egalitarian place seems to worry the Republicans too. On Labour Day, the country's only official salute to the proletariat (established in 1894 to be the first Monday in September to disavow any connection with May 1st), Mr Bush donned his working-stiff outfit and baseball hat and headed off to Richfield, Ohio, to reassure his union brothers that he was appointing a new tsar for manufacturing.

Does America really have an inequality problem? Statistically, the answer is “Yes, but”. Much the same applies to the question of whether the Democrats can turn this into a winning political issue.

By whatever measure you use, the richest Americans have done very well over the past few decades. According to the Census Bureau, the share of national income going to those in the top fifth of earners rose from 44% in 1973 to 50% in 2000. The share going to the top 1% rose to 15% in 1998, higher than it has ever been since the second world war, according to a recent study of tax returns by two economists, Thomas Piketty and Emmanuel Saez.

Take wealth rather than income, and America's disparity is even more startling. The wealthiest 1% of all households controls 38% of national wealth, while the bottom 80% of households holds only 17%, according to the Economic Policy Institute (EPI). Around 85% of stockmarket wealth is held by a lucky 20%.

If the rich have been doing much better than other Americans in relative terms, the poor have failed to improve their lot as they did in the 1950s and 1960s. The wage incomes of the bottom 20% of households have barely grown in real terms since the mid-1970s. As for wealth, the bottom fifth has debts that exceed its assets, making its wealth a negative number. The bottom fifth's percentage of national wealth worsened from -0.3% in 1983 to -0.6% in 1998.

These depressing statistics, though, come with two caveats. First, poorer Americans are better off than they once were. The proportion of Americans in poverty now stands at 12%; in Mr Krugman's supposedly golden 1950s, it reached 22%.

Meanwhile, although real wages appear stagnant, poor people can buy far more with them. The combination of technology and globalisation—the very thing that has depressed some manufacturing wages—has put many more erstwhile luxuries within the grasp of poorer Americans. They now own better-quality cars and washing machines than rich ones did a generation ago; mobile phones and computers are now mass-market items.

Second, America is a remarkably mobile society. As this year's Economic Report of the President points out, 50-80% of the unfortunates in America's bottom quintile push themselves into a higher quintile after 10 years. There are worries about mobility; Chris Edwards of the Cato Institute complains that marriage patterns may now be reinforcing inequalities, since yuppies marry yuppies these days. Yet, in broad terms, the idea that America is a land of opportunity still stands.

Interestingly, Americans are usually over-optimistic about their chances of promotion. An opinion poll a couple of years ago found that 19% of American taxpayers believed themselves to be in the top 1% of earners. A further 20% thought they would end up there within their lifetimes.

Seen from an international perspective, America certainly looks an unequal country, but in a way that many of those optimistic Americans might be proud of (see chart). According to the EPI, admittedly using figures from the late 1990s, the gap between the top and bottom tenth of earners in America is wider than that in almost any other rich country. Even so, America's poorest are (in real purchasing-power terms) only a tiny bit worse-off than their peers in Sweden, Finland and Denmark; and they are better-off than those in Britain and Australia.

The relative inequality in America comes from the people at the top doing unusually well. The top 10% of Americans are nearly twice as well off as the top 10% of Nordic households. They are also much further away from the mean.

How does this translate into politics? Most Americans seem to understand that inequality is not just to do with tax cuts for the rich. The introduction of new technology—ATM machines and the like—has done far more than anything else to throw Americans out of work. Inequality is also tied up with social problems, such as the rise of single-parent households (see article). One reason, arguably, why real incomes for poor Americans rose at the end of the 1990s was because the welfare-reform law in 1996 forced them to find work.

Similarly, Americans, even in recessions, still tend to lack the deep-rooted class envy that still afflicts Old Europe. They tend to associate wealth with the people who make it rather than inherit it (hardly surprising in a country where the richest two people are Bill Gates and Warren Buffett, rather than the queen and the Duke of Westminster). As Mr Edwards points out, many of the visibly wealthy are self-made entertainers and sports stars.

This helps explain why Al Gore's “People v the powerful” campaign failed to catch fire in 2000. Yet, three years later, Mr Bush looks more vulnerable on two fronts. First, the current jobless recovery is hitting poor America particularly hard—and prompting comparisons with the golden years of Mr Clinton's presidency. Although the recession technically ended in November 2001, unemployment has risen from 5.6% to 6.2% since then. The EPI calls this the worst recovery for job creation since records began in 1939. For those still in work, real wages since the end of 2001 have fallen by about 1%, says the institute.

Second, the tax policies of the Bush administration will probably only exacerbate the already wide gap between rich and poor. The inheritance tax has been all but scrapped. Marginal rates on top incomes have come down. Most important may be this year's reduction in capital gains and dividends taxes which, by some estimates, will provide a windfall to just the top 20% of households.

It is these “giveaways” that the Democrats are now concentrating on. But raising marginal tax rates, the Democrats' traditional solution to inequality, usually hits many people who regard themselves as middle-class, and does nothing to reduce the vast fortune of true plutocratic families, such as, well, Mr Kerry's.

Indeed, is the Harvard-educated Mr Kerry, who is married to a Heinz heiress worth $600m, any more an homme du peuple than George II, as some Democrats like to call Mr Bush? Howard Dean, the Democratic front-runner, may stress his occupation as a humble doctor, but he grew up in the Hamptons and Mr Bush's grandmother was a bridesmaid to his granny. As long as the presidency remains the shuttlecock of different scions of the north-eastern aristocracy, Americans may have a hard time thinking of any party as the champions of the poor.

>Howard Dean, the Democratic front-runner, may stress his
>occupation as a humble doctor, but he grew up in the
>Hamptons and Mr Bush's grandmother was a bridesmaid to his
>granny. As long as the presidency remains the shuttlecock of
>different scions of the north-eastern aristocracy, Americans
>may have a hard time thinking of any party as the champions
>of the poor.

Wow....

But back to the main point, which is that scrapping the inheritance tax, further reducing the income tax rates on the wealthiest, and scaling back regulations on workers' rights and corporate mega-mergers, Bush's policies have a long-term effect of creating a plutocracy that is well-nigh impossible to break into even with extraordinary wealth -- how much influence does either Gates or Buffett really possess? And for the last GD time, more people voted for Gore in 2000 -- his "people vs. the powerful" schtick worked!

Bush's policies have a
>long-term effect of creating a plutocracy that is well-nigh
>impossible to break into even with extraordinary wealth --

thats like saying liberalism has a long term effect of creating communism which will end up killing tens of millions.

>Bush's policies have a
>>long-term effect of creating a plutocracy that is well-nigh
>>impossible to break into even with extraordinary wealth --
>
>thats like saying liberalism has a long term effect of
>creating communism which will end up killing tens of
>millions.

Bush is a classical conservative -- a reactionary even, or at least many on his team are -- and I'm fundamentally opposed to his (their) vision of a hierarchical, traditional society where only the lucky few can promise a better life to their children than they had, because I think that our mission should be to improve the world as a whole and not just safeguard our privileges and wealth for our progeny. I also believe that it is necessary to have a solid social safety net because, in a law-based capitalist society, there are winners and losers, and the winners benefit disproportionately from the protection that the legal structure provides for property and person, so they have an obligation to make sure the losers can at least minimally survive.

But back to the original point about the increasing concentration of wealth in this country and "class mobility" -- whatever happened to concepts like the common good, charity, and justice? If people rich and poor let those things guide them I think you might see a lot less carping about the wealth gap.

>But back to the original point about the increasing
>concentration of wealth in this country and "class mobility"
>-- whatever happened to concepts like the common good,
>charity, and justice? If people rich and poor let those
>things guide them I think you might see a lot less carping
>about the wealth gap.

these concepts are alive and well. you dont see them?

Thanks. Is this from the most recent issue? I haven't picked up last weeks (for shame!).

n/m

really depresses me nowadays.

If the Republican is going to act like a Democrat, then why have a Republican?

"Then the idiot who praises with enthusiastic tone,
All centuries but this and every country but his own"
Gilbert and Sullivan, The Mikado

how?

outside of tax cuts.

Not to mention he constantly touts leftist policies just to neutralize Democrats on that issue, i.e. the ass kissing he was doing to the unions at the beginning of this article.

"Then the idiot who praises with enthusiastic tone,
All centuries but this and every country but his own"
Gilbert and Sullivan, The Mikado

seriously, this I wanna hear. Paying lip service to workers and working families does not mean the same thing as making "Democrat-style" policies that will benefit them.

campaign finance, little to no spending cuts, inflating the Dept. of Education, prescription coverage and medicare (even saying "just give me a bill and I'll sign it"), federalizing airport security, creating another wasteful bureaucracy in the Dept. of Homeland Security, increasing foreign aid, trade tariffs, spend spend spend spend spend...

"Then the idiot who praises with enthusiastic tone,
All centuries but this and every country but his own"
Gilbert and Sullivan, The Mikado

campaign finance, what did he do? The airport and homeland security, I dunno that the dems would've been so quick to do that, all that post-9/11 security stuff is his baby and the dems just didn't dare stand in the way (gutless bastards). And you're forgetting the unjustified wars that are really gonna blow the budget (and have us caught with no clear exit strategy, once again). But then again, I dunno that Democrats would've been so quick to jump on Iraq. Trade tariffs and foreign aid? I dunno about that. But how much is that, stuff, anyway? It is ironic that he's making government even bigger though (don't forget all he's done for the Justice Dept).

"The era of big government, if it ever went away, has returned full-throttle under President Bush (news - web sites), who came to office championing "conservative ideas" as an alternative.

A report released on Friday by the Brookings Institution think tank and New York University said the "true size" of the federal work force -- which includes employees for federal contractors and grant recipients -- grew by more than one million, to 12.1 million, from October 1999 to October 2002."

... article continued here: http://www.okayplayer.com/dcforum/DCForumID1/16323.html#0

------------------------------------------------------------
It's only natural, actual facts are thrown at you
The impact'll blow trees back and crack statues
Million dollar rap crews fold, check the sick shit
Explicit, I crystalize the rhyme so you can sniff it

- Inspectah Deck, "It's Yourz"

But then flip flopped when it garnered popular support?

if I'm not mistaking, the first reference to a Dept of Homeland Security was when during his State of the Union address.

Besides, he never went against it, advocated it and created it with his people in there. That's his baby all the way.

"Then the idiot who praises with enthusiastic tone,
All centuries but this and every country but his own"
Gilbert and Sullivan, The Mikado

.......did you get that America is still the land of opportunity in face of widening wealth/income gap?

The fact that people are optimisitic with regards to their mobility, or that the poor have more buying power, or a good chance to go from the bottom 20% to the bottom 40% (which is a group that is still considered low income and many people in that group lack health insurance) doesn't indicate opportunity.

If anything, the article indicated that the greatest amount of opportunity exists for those who are affluent, because they're best positioned to take advantage of what the nation has to offer.

Taking the five income quintiles, with the bottom being #1 and the top being #5 - I would say that people in quintiles 2, 3 & 4 stay in the quintile they were born in, with the people in four as the ones that are most likely to jump to five.

Blue Collar people typically stay Blue Collar.

People who are just regular middle class typically stay that way too.

The only people who really have a chance of social mobility or the sons/daughters of Yuppies or people who are close to being Yuppie Spawn - E.g. #4.

According to this:

http://www.usatoday.com/news/education/2002-06-05-education-census.htm

15% of people 25 or older, have college degrees - a sure indication of the people who have the most mobility.

I'm not saying that there isn't an "opportunity" to live a comfortable life in this country, but in terms of mobility and the chance to end up in Quintile 4 & 5 - if you weren't born into that life, chances are, you won't get there.

Peace,








M2

and the poverty line is determined (somewhat) arbitrarily by the government, so saying there are less Americans in poverty now is as much a reflection of where the line is drawn as anything else. Technology is good and all, but the article doesn't really have much to say about class mobility, aside from the prospect of being able to move from the very lowest class to the second lowest class (which is not that big a leap, and doesn't really represent much, if you look at how median income and wealth actually shake down for those quintiles).

... I liked the article because it read largely non-biased (Economist is pretty neutral, IMO), and it made some interesting points.

But here's what I've been thinking since:

Given that the poverty line is arbitrarily determined by the government, couldn't statistics be permanently skewed to reflect this? I mean, a President can step up, say "look, I've eliminated poverty!" by re-drawing the boundaries that define it?

I mean you can't get away with making it $1 per year, but you can keep it from adjusting to rising costs, in, say health care, or child care, so that it doesn't really reflect the minimum standard of living that it should.

compare america with other countries in its league like the article does. of those countries, the poor are much better off and 50-80 percent of them will move up a class in 10 years.

"Seen from an international perspective, America certainly looks an unequal country, but in a way that many of those optimistic Americans might be proud of (see chart). According to the EPI, admittedly using figures from the late 1990s, the gap between the top and bottom tenth of earners in America is wider than that in almost any other rich country. Even so, America's poorest are (in real purchasing-power terms) only a tiny bit worse-off than their peers in Sweden, Finland and Denmark; and they are better-off than those in Britain and Australia."

First of all, the Article was discussing purchasing power - and said America's Poor a a little worse off than people in some countries and better off than others, but that's just in purchasing power.

It said nothing about a comparison in terms of health care and education.

A country that provides health care, education and social mobility beyond going from "below the poverty line" to "member of the working poor", has poor citizens who are better off than the ones in the US, even if they have less purchasing power.

If you're in the bottom Quintile, chances are, there is little chance of you getting in one of the top 3, let alone top 2. That's true social mobility - not going from really poor to just poor.

14k/year and you're below the poverty line - 22k/year and you've moved up to the next rung - but you're still poor.



Peace,







M2

I posted before I'd seen yours. You said it better than I did.

>First of all, the Article was discussing purchasing power -
>and said America's Poor a a little worse off than people in
>some countries and better off than others, but that's just
>in purchasing power.

yea i know. did i not say it wasnt?
>
>It said nothing about a comparison in terms of health care
>and education.

yea i know.
>
>A country that provides health care, education and social
>mobility beyond going from "below the poverty line" to
>"member of the working poor", has poor citizens who are
>better off than the ones in the US, even if they have less
>purchasing power.

yea i know.
>
>If you're in the bottom Quintile, chances are, there is
>little chance of you getting in one of the top 3, let alone
>top 2. That's true social mobility - not going from really
>poor to just poor.

yea i know.
>
>14k/year and you're below the poverty line - 22k/year and
>you've moved up to the next rung - but you're still poor.

yea i know.

are you replying to boast your knowledge of the subject or to just act like an ass? i was just restating what the article said

that kind of class mobility doesn't really do anyone any good, except people who want to claim that America is still "the land of opportunity", because people can move so freely among the bottom two quintiles

So Fox, stating that the article said that "America is still the land of opportunity" is grossly incorrect.


I would say that America is truly the land of opportunity for the children of affluent, well educated parents who are able to get into one of the nation's top schools.

Not the average joe.




Peace,







M2

dude, the article said america is still the land of opportunity. did i imply anything beyond that? you are putting words in my mouth.

this right here:
*great article from the economist on the wealth gap in america and how america is still THE land of opportunity!*

looks more like your own words than the economist's. I don't think they refer to their own articles as "great" or capitalize entire words like that.

cause if you did you would have read this line...

"Yet, in broad terms, the idea that America is a land of opportunity still stands."

see, thats what i was refering to this whole time. jeez, i make a comment and i get jumped all over by people who didnt actually read the entire article, or who atleast have poor reading comprehension.

and aside from those sweeping generalizations, there's very little evidence in the article to back up those grandiose claims. Aside from it being relatively easy to move up from the bottom quintile to the 4th quintile, and some claims that America's poor are better off in purchasing power than some countries, worse off than others, mostly thanks to technological advances, I didn't see any evidence. And the poverty-line thing can just as easily reflect a lagging poverty line, that doesn't take into account things like health care and child care and rising real estate/rent costs.

But since you're so well-versed in the article and comprehend it so fully, maybe you'd like to cite some.

>and aside from those sweeping generalizations, there's very
>little evidence in the article to back up those grandiose
>claims. Aside from it being relatively easy to move up from
>the bottom quintile to the 4th quintile, and some claims
>that America's poor are better off in purchasing power than
>some countries, worse off than others, mostly thanks to
>technological advances, I didn't see any evidence. And the
>poverty-line thing can just as easily reflect a lagging
>poverty line, that doesn't take into account things like
>health care and child care and rising real estate/rent
>costs.
>
>But since you're so well-versed in the article and
>comprehend it so fully, maybe you'd like to cite some.

ha, i think your beef is with the author of the article and not with me. ive never claimed to be overly knowledgable about this subject. i simply pulled a quote from this article and you had to jump on me. if you have a problem with what the article points out then you should email the author.

you say things like "you obviously didn't read the article", but when you realize that the article doesn't support the conclusions that you claim it does, you switch the blame to the author. Classy. If you don't understand this, don't post it and then claim that other people aren't getting it just because they're actually reading it and not taking the interpretation that you want 'em to.

>you say things like "you obviously didn't read the article",
>but when you realize that the article doesn't support the
>conclusions that you claim it does, you switch the blame to
>the author. Classy. If you don't understand this, don't post
>it and then claim that other people aren't getting it just
>because they're actually reading it and not taking the
>interpretation that you want 'em to.

wtf are you talking about? when did i ever state anything beyond what the article said?

because the article doesn't really support that. when you said "article that shows how America is still THE land of opportunity", you imply that this article shows that America has unparalleled economic mobility. The article doesn't support that conclusion. Then you say "well uh, I don't really know the subject, you should email the author". Instead of making a counter-argument (like "well actually, this evidence from the article shows it to be true", and then citing some evidence), you just fall back on a statement from the article. If you don't understand it in the first place, don't try to pretend like you do. Do you believe everything you read?

Just because the article has this line in it:
"Yet, in broad terms, the idea that America is a land of opportunity still stands", doesn't mean the article actually supports that conclusion. So next time you wanna say "yea, what's your point" or "did you actually read the article?", make sure you yourself understand it and what it's really saying first.

just misunderstood me.

with your little commentary?

what commentary. explain to me where i said anything beyond what the article stated????? please inform me where i am in the wrong. is there no middle ground with you people!!!! i cant even make a simple statement before i paste an article without being misundersootd or jumped all over. there was no fucking hidden agenda with my words or with what i posted!! i have nothing to gain by posting it. im not trying to boast any knowledge. im only trying to supply an article that i found was interesting. jesus christ you people piss me off to no end.

'cause you're pretty damn frustrating too at times. If you don't know what the article really means, don't pretend to. And you know damn well what you meant with your little commentary, you're just trying to back out now.

because you assume i have some hidden agenda. good day, sir!

You just like to come in here and provoke all the left-wingers.

and still be poor. If one guy moves from $13,000 a year to $17,000 a year, but another guy makes the same move downwards, they might flip quintiles, but do you really think it's class mobility? Did you read the part in the article about how Americans are overly optimistic about their chances of reaching the higher classes?

what it says in the article man

Moving up a quintile is not a huge deal over 10 years. All it really takes is a promotion or two. You're still struggling if you move from 1 to 2.

I'd also be willing to bet that a large amount of the quintile jumping is done by college grads who start out somewhat poor after college and then land good jobs and snap out of it. More quintile jumping is caused by marriage--which can more than double your household income/welath. Im not sure if this survey took that into account.

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"My Gun Go" Rmx - 8Off Agallah f. Juelz Santana & Jim Jones
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You can be someone working your way through college/grad school and surviving off of a part time job, pulling down 12k or so - graduate and start making 40k - bingo - a jump.

Or you don't work in college, start work in September and make 10k for the year, but when you actually work for a full year, you make 40k.

Then you have peoeple who were laid off, who go back to work and make good money.

Marriage often equals a quintile jump, even if you alread make a good living.

If you're making 60k, you're in Quintile 3 - you marry someone who makes 40k - and know you're in #5 - as in the top 10%.


Peace,








M2

top 10%,that's not that much in retrospect

it only seems like a lot...but that's still middle class & highly taxed.

and now:

♥ ♥ ♥ ♥
- ρδω

♀¤º°`°º¤ø,¸¸,ø¤º°`°º¤ø¤º°`°º¤ø,¸¸,ø¤º°`°º¤♀

.........as only 4.2% of the population either make on their own, or have a household income of 100k or more.

As for taxes -

http://taxes.yahoo.com/rates.html

If you're married filing jointly, you're enjoying a 100k income and paying 27% on it, while a single person with that income pays 30%. The same rate that married people only making 48k or single people making 68k are paying...


So it's still a lot, especially if you manage it right.

If you rake that in for 15-25 years, only have two kids, manage your money/invest wisely - you stand a VERY good chance of retiring a millionaire, or at least close to it.

So I don't feel "sorry" for people in that income bracket



Peace,





M2

thanks for the wakeup call...

fox, i don't care too much bout politics nomore. but.

"Would you like your class war shaken or stirred, sir? "

that was a hot title. PEACE PLAYA! ha

I'd like my class war shaken! Seriously though I personally believe that what truly seperates rich and poor is education and opportunity. Rich is not all about dollar signs, but more less how much know. The poor needs knowledge, and I don't mean a getting a degree. The poor needs as much investment and business education as they can get. This means those who have the knowledge, or should I say those who give a darn about people who stuggle everyday need to invest money, time, and resources to help bring the classes closer together. By doing this it should allow for opportunities to become available the poor people in this country.