New research reveals truth about inequality: When the rich get richer, everyone loses

No surprise about those out there who are treading water or sinking (to push the metaphor). For all the BLATANT defense of the vast wealth for the few, apologists and/or the status quoers KNOW this bites us on the ass. I don't know when, I doubt very far into the future, but it will bite us on the ass.


SATURDAY, OCT 4, 2014 09:30 AM EDT

Income inequality’s sick joke: A rising tide only lifts luxury yachts[/SIZE][/B]

New research reveals a startling truth about inequality: When the rich get richer, everyone else loses big
SEAN MCELWEE


For a long time, the right has argued that we shouldn’t worry about inequality because the true concern is the reduction of poverty. Conservatives also maintained that higher levels of inequality were unimportant because “a rising tide would lift all boats,” and high levels of inequality propelled the economy forward. New research by Branko Milanovic and Roy van der Weide decimates these myths. Milanovic and van der Weide find that inequality doesn’t fuel growth for the whole economy, but rather, just the rich.

Before we get to the research of Milanovic and van der Weide, it’s important to understand how mainstream thought on inequality and growth has changed recently. For a long time, mainstream economists didn’t spend much time worrying about distribution. Nobel laureate Robert Lucas declared, “Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution.”

Once rampant inequality did become an increasingly mainstream concern, Martin Feldstein insisted that the question is “not inequality but poverty.” Economists believed that redistribution slowed down economic growth, and that attempts to reduce inequality would, as a result, only worsen poverty. The reasoning had at least two strands of thought: First, since the poor tend to consume most of their income, it was good for the rich to have more wealth to invest in the future — inequality would increase savings. Second, inequality provided incentives for individuals to work harder to take home more of the pie....


http://www.salon.com/2014/10/04/income_inequalitys_sick_joke_a_rising_tide_only_lifts_luxury_yachts/

 

My first job I earned $1.50/hour when median wages were probably $4/hour. I attended and paid my way through college, working part time, and interesting to all the political BS today, never once did I feel like I was in poverty or not earning a living wage or didn't have income equality (whatever the hell this might be?). I lived within my means, which meant a 10 year old car, living with roommates, not making any unnecessary purchases, and I ate lots of macaroni and cheese. And contrary to all the freeloaders today, I also paid federal taxes on my measly income!

I knew then I did not like my job or the pay and wanted more in life. I wanted to earn $4/hour and even $8/hour and attending school was one way to achieve this. It did not happen overnight because I worked part-time and it took five years....five years of eating box macaroni which cost 25 cents each. Once I had more value in the workplace, I got better and better jobs, and I earned more and more. Eventually buying a newer car, buying a home, traveling, and investing/saving for the future.

I doubt anyone on this forum can be honest about this, but please explain what is different today from when I was young that is preventing tens of millions of Americans from avoiding crime, avoiding drugs and alcohol and gambling, achieving more education and skills, living within their means, and seeking out and competing for better jobs?

 

The rich are getting richer because of investments in the inflated stock market while business struggles to deal with increasing interference from government. Thanks Obama.

 

A rising tide lifts all boats unless a whole lot of them are anchored to the bottom by owners of other, larger, boats as the tide comes in.

 

Since you are using a computer its reasonable to believe you have electricity and internet access. This makes you a yacht owner in the eyes of people who have to walk 5 miles every day just to get water. Are you going to give up your PC and internet access and give them to people who are poor? You know end the income inequality between you filthy rich people and the truly poor.

 

Greatest separation under of income has occurred under Obama.

Greatest giveaways of taxpayer dollars to large banks, etc. has occurred under Obama.

Greatest giveaways of taxpayer dollars to FAILED "BUDDIES" of the Administration has occurred under Obama.


I know...that's "different".

 

Ahem...Democrats are the wealthier of the two major political ideologies..(take a minute or two to Google that 'factoid') OK, now you know. The right is basically the middle class. Most liberals have issues with the middle class. Lenin and Castro disliked the concept of the middle class, Marx's bourgeoisie. Those boats in the water belong to Democrats. Middle class conservatives are the ones treading that ever deepening tide. If you have a gripe you want to air dealing with 'inequity', maybe you should find out who your gripe is with.

 

Exactly, if you'll notice the highest congregation of Liberals (Like here in MA) is around Boston. Strange because that's where the rich people live. Now why would liberals live and work near the evil companies they detest and why do they accept large salaries from the evil capitalists?

 

The sick joke is believing centralized redistribution will lift all boats equally, which is what the OP is (not so subtly) suggesting. It is the anti-capitalist/free market approach pushed by Obama policies that have fueled the stagnation/decline of the middle class and it's why we see the gap widening between the have and have-nots. You don't provided a climate for real economic growth by punishing business with high taxes and overly burdensome regulations, but that's exactly what Mr. "you didn't build that" has overseen. It's nuts, and so is the ridiculous notion the overlords in DC can, or will, magically lift people out of poverty via "fair and equitable" redistribution.

 

When did income equality become a legitimate concern of the US government? If you want government enforced equality of income, go to Cuba.

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Taxcutter says:
Agreed 100%.

 

Liberals really have trouble with math.

They also don't understand the rising tide parable at all.

It's mostly because they don't understand how the economy is driven by value.

Could it be because their values are so screwed up?

 

I lived the same except I was also a brat of career military (working class Amerians with a nicer uniform) so meager start. MILLIONS played by the rules and did everything you did and lost out in the end. Many in Florida busted ass to get here buy their little houses in in little beach towns up and down and across all our coasts only to get WIPED OUT with a bout of cancer or a heart attack. MANY forced out of their homes by PREDATORY lenders, EXPLODING homeowners insurance and their home values tanking. People on fixed incomes who had poured money into retirements who were WIPED OUT by companies shutting down or their company STOCK crashing. That doesn't include the 'municipal and state' pensions that said, sorry, we can't honor what we promised!

Yeah, we all paid TAXES on any income and many here paid HIGHER TAXES because they also paid state taxes where they came from, something we still don't have in Florida.

Many PLAYED BY THE RULES and still got or are getting hammered.

 

Risk cannot be eliminated by changing the rules.

And remember, a government shark can take your money just as fast as anyone else. The difference is the government shark can throw you in jail.

 

Let me assure you, DEMOCRATS know math. INVADING COUNTRIES cost money! Invading countries while CUTTING TAXES is exponentially INSANE. Invading countries, while creating (the largest in US history) a massive new governmental agency is DELUSIONAL. Cutting taxes and cutting NEEDED services is 'SHORT SIGHTED' math as we all will eventually pay and pay bigger for failed services. (CDC comes to mind this week for some reason).

Yes, we know math.

 

What does your math prowess tell you about adding millions of uneducated immigrants to our already depleted welfare and social security system ? Prediction - This wont be answered.

 

Oh, I understand the rising tide parable quite well, though apparently my little tongue-in-cheek response has you a bit befuddled, so let me clarify it for you - first, remember that money=power; second, when that money is used to bankroll those in power to do the bidding of the wealthy (legally, of course) what that amounts to is a stacked economic deck, hence the reference to anchoring a multitude of boats to the bottom. Now, we can quibble over my math abilities, but there are enough pictures (graphs) out there for even an innumerate to understand who's made out and who hasn't since 1980. As for that "driven by value" b.s., you'll have to give me a really good explanation of why the value of 90% of the population has declined when the companies they are working for are making out like bandits, yet the value of those at the top has soared.

 

Let's take all their moneys!!1!one!!

[video=youtube;661pi6K-8WQ]http://www.youtube.com/watch?v=661pi6K-8WQ[/video]

 

One of the biggest is that back when median wages were $4.00 an hour the government paid substantially more to colleges, even if you never saw it. Due to the government subsidies many more could afford to work and go to school and start out relatively debt free, even if they had to eat macaroni for a couple years.

These days many young people are trying to work, and do the same thing but can't without substantial loans, so they to eat macaroni, while accumulating 30-40-100k in debt and come out in the hole already.

A ton of people who got their degrees prior to Reagan, or even a few years after he took office take the support that Uncle Sam gave them for granted, and like to tell the youth of today that all they need to do is pull themselves up by their bootstraps like they did, when they never had to, and took advantage of the government teat, even if they never knew it.

 

And in typical liberal fashion, the subject changes all over the place with no understanding of these new topics anywhere in sight.

Your thread is ostensibly about the economy. The economy only improves when participants of the economy generate value. This is the tide that lifts boats.

Government jobs are valued by liberals, but not because government jobs generate value for the economy.

I wonder where "DEMOCRATS" think money comes from?

Rich people blood, I think.

 

Equal Misery with no chance of ascension is the Liberal way.

The Government is not supposed to be involved in our prosperity other than to stay out of the way. It's their intervention that often causes the barriers to economic success.

 

No, money is an instrument of value. It's exactly like a ruler or measuring cup.

I don't know if you noticed, but all those democrats you keep voting for are filthy rich. How did that happen, I wonder?

The answer to your question can be found in all the handouts that your buddies keep dishing out to their friends. Government is the BIGGEST most powerful monopoly. Why in the world would you think that they have your best interest in mind? Do you really think that Walmart is scared of a raise in the Federal minimum wage? Don't you wonder why Obamacare shovels billions of dollars into insurance company pockets? Doesn't it bother you that truck loads of tax money is dumped into private businesses? These are the fruits of a bloated and over reaching Federal government. You don't have any money in your pocket because it's ALL their money, Grizz, at least, they think it is.

 

And why is Obama going to endless fundraisers to get money from those evil rich people that he despises so much? Has anyone clued Obama in that HE is one of those 1 per centers that he says are so bad?

 

OK, fine. And those with the biggest cups use that money to enact laws which clearly benefit them at the expense of everybody else.

So? I don't give a rootin', tootin' rat's patoot how much money they have as long as most of the laws they support benefit the many and not just the few.

See answer above.

Because that's the type of government I, and tens of millions of others over many years have wanted and created. And it works, not perfectly, but a darned sight better than the oligarchic form supported by today's Republicans.

Yep.

Nope. I know.

Those truck loads of tax money flowing to private businesses is the result of the Republican belief that the private sector can do it better and cheaper than government. Sometimes, maybe, it can but it seems what really happens is that we're getting financially raped by these contractors. And, yes, I do have money in my pocket, but thanks to the invisible taxes caused by Republicans, it is diminishing faster than I'd like.

 

Look at these two answers together. Seriously. No..no... Look again. Really. You're arguing that rich people enact laws that benefit themselves at the expense of everybody else AND you're arguing that rich people enact laws that benefit many, not just a few. Which is it, guy? Do you think they are acting on your behalf simply because they're saying things you want to hear? 6 years of Obama and things are WORSE for poor. Things are WORSE for minorities. Things are WORSE for the middle class. Get a grip, Grizz. They don't care about you. All you are is a vote. What's one vote worth? Jack and Squat, that's what it's worth.

Define "works" because you clearly have a different understanding of what that word means. Liberals love to deride "trickle down" economics, and then they stand on their soap boxes and scream for trickle down government. I'm not satisfied with the scraps that government allows me. I'd much rather be free to cultivate my own dinner, thank you very much.

I'm sorry, what? Obamacare shoveling billions of public dollars into the hands of insurance companies is the result of Republicans? And you've got it wrong. The Republican belief is that government spending is inherently wasteful, and that private commerce is inherently more efficient. What makes you think that the government dumping money into private industry changes the reality of government spending? Do you understand the difference between an education voucher, and a billion dollar gift to an energy company? Do you understand the difference between the privatization of retirement planning and Obama's GM union payoff? On one side, the government gives the individual back their OWN money to spend as they wish. In the other the government hands out OTHER people's money to their friends to spend as they wish. Guess which party loves to spend other people's money the most....

Oh, God. Invisible taxes. Your money is disappearing because of very visible actions of the cronies in government. Stop giving them more power to take it from you.

 

Yep....you might want to call out your prez on this one. The rich are getting richer under his presidency thanks to his policies of continuing to prop up the fed with borrowed money, in order to keep inflation low and the stock market high during his presidency.

The next president will have to fix his mess.