Why do I see this video and point as entirely meaningless?

Moreover, I would advise those who would become inequality activists to instead invest their time and efforts in their own future and wealth creation.

Of course, beware, as your wealth generation advances you'll be required to pay for more and more shares of the activists who pay nothing in taxes.

The sights and sounds of inequality in tax burdens is even more contrasting than the distribution of wealth.

Thanks Chuck I really a appreciate visual analysis. Here's another link to a great Youtube video that explain the current financial crisis: Crisis Explainer

I would like to thank Richard for reminding everyone how basic the understanding of a Democracy is. Clearly, he does not support that form of government. The establishment of a progressive tax system allowed the idea of Democracy to take root more than two thousand years ago. Today, the removal of such a system is basic to the destruction of our economy and the loss of freedom for all but a few. But I am sure that Richard will be the first in line for his enhanced driver's license.

"Why do I see this video and point as entirely meaningless?"

Because you need to pull your head out of Rush Limbaugh's butthole and start thinking for yourself!

The sights and sounds of inequality in tax burdens is even more contrasting than the distribution of wealth.

That is idiotic nonsense and you should know it. The tax rates you refer to are on wages and the vast, vast majority of income that the wealthy receive comes from capital gains, which are taxed at 15%.

Take your GOP talking points back to Redstate...

This is a very superficial take on inequality. If you really want to get a meaningful picture of inequality you should look at wealth and income for particular age brackets. Throwing the young, middle-aged, and elderly into the same group for comparison just doesn't make any sense.

Young people generally have few job skills and earn relatively low salaries. The middle aged will generally have the highest earnings and a fair amount of time to accumulate savings. The elderly will tend to be retired, but have had lots of time for compound interest to work it's magic on their investments.

As long as we have a capitalist economy differences in age and the effect of compound interest will make for large amounts of inequality. This effect becomes more pronounced as a society becomes wealthier.

We should be concerned with improving access to healthcare and education for the poor and middle class in order to for them to better off in absolute terms. Focusing on who has how much money is not and only crass and materialistic, it is the public policy equivalent of a dog chasing it's tail.

This is a very superficial take on inequality. If you really want to get a meaningful picture of inequality you should look at wealth and income for particular age brackets. Throwing the young, middle-aged, and elderly into the same group for comparison just doesn't make any sense.

Young people generally have few job skills and earn relatively low salaries. The middle aged will generally have the highest earnings and a fair amount of time to accumulate savings. The elderly will tend to be retired, but have had lots of time for compound interest to work it's magic on their investments.

As long as we have a capitalist economy differences in age and the effect of compound interest will make for large amounts of inequality. This effect becomes more pronounced as a society becomes wealthier.

We should be concerned with improving access to healthcare and education for the poor and middle class in order to for them to better off in absolute terms. Focusing on who has how much money is not and only crass and materialistic, it is the public policy equivalent of a dog chasing it's tail.

Actually, Richard has a valid point there - the inequality in tax burdens is more contrasting.

Take for example Dick Cheney. A couple of years back Cheney paid a total tax rate of about 7% on his last $1,000,000 in gross earnings while I personally paid in excess of 30% on my last $10,000.

Yup, it really pays off in the long run if you can make in excess of $10 mil a year. Especially if your boss continually shifts the tax burden to the middle class over the course of 8 years and nobody questions why a public employee is allowed to collect hundreds of millions in stock options from a company that is awarded no-bid government contracts.

This is a very superficial take on inequality. If you really want to get a meaningful picture of inequality you should look at wealth and income for particular age brackets.

So the top 1% are just all the retired senior citizens in the country? Please.

If we were talking about the top 30% having most of the income you might be on to something. The income inequality highlighted in this video is talking about the uber-millionaires. You don't get there by the "magic" of compound interest unless you start off with millions to begin with.

The overall problem is that because of declining wages normal people have less and less available income to put into retirement savings. And when we do, where does it go? Usually the stock market (through mutual funds), not something that guarantees x% of growth. The only magic is when it all goes poof and disappears. I'm sure as hell glad I'm far from retirement age right now.

So...

Let's take my case for example. I started with nothing. My parents were immigrants and uneducated. they had a meager life with my dad working in the steel mill, and my mom ironed cloths and cleaned houses.

We survived; were never hungry; and certainly were not well off or even middle class.

I was the first to go to college. I did well. I had scholarships and loans to get me thru school.

I landed a job when hardly anyone in tech was hiring in the mid 70s.

I did well. I was successful. I got promotions, bonuses, and I started to invest.

I made money, got married, and my wife had similar success.

We bought our first home, then traded up in 1980 when interest rates were "very high" as was inflation. We scrimped, saved, placed more than 20% down in real money, refinanced a few times (but never took out any equity).

Success continued, and through hard work and our fair share of luck, we paid off our home, got laid off, found another job, etc.

So now, I have a lot of beans. I volunteer in schools; aid others with advice and help.

I'm not in the upper 2%, but likely in the upper 5%.

Am I now a bad guy since I navigated thru life more successfully than most others? I hired a lot of people over that time, and helped turned small business into large businesses. Overt hat time, I only had to layoff a few people; instead choosing to lay myself off and leave to move on to other opportunities rather than place a hardship on others. I only had to fire 2 people in 30 years.

So, no pity for me - I can take care of myself, as I have done throughout my life.

This "bean" video simply divides people - so...someone has more than the next guy. You don't even delve into what these "rich" folks might be doing with their money besides sitting on the beach. they might be the ones setting up foundations; funding charities; investing in new ideas; etc. And that is bad?

Like government might be a better caretaker?

Sure, there are few bad eggs out there. Sure, there are the trust fund babies at all ages.

My point: not everyone deserves this broad brush where accumulating wealth is a bad thing.

Heck, some of these truly rich people might be parking their money in tax-free municipal bonds!

Progressives believe that society is better off when we all look out for each other. Conservatives believe that society is better off when it's every man for himself.

Conservatives certainly believe that every man ought to be responsible for himself (and his family).

"When we all look out for each other" is a pretty euphemistic characterization of a system whereby the sovereign coerces people into parting with an ever more significant portion of their income.

and through hard work and our fair share of luck

You nailed it. Not only does it take hard work - but a heaping dose of good luck. Luck doesn't apportion itself fairly among the masses. Some strike it rich others get more than their share of the bad luck. It doesn't mean you're better than anyone else, or that you worked harder. You were just in the right place at the right time and made the right decisions.

No you're not a "bad guy" for being successful. And taxation is not punishment. It's the result of being successful. Government taxes those with the means to pay taxes. Is there really any other way to do it?

You don't even delve into what these "rich" folks might be doing with their money besides sitting on the beach. they might be the ones setting up foundations; funding charities; investing in new ideas; etc. And that is bad? ... My point: not everyone deserves this broad brush where accumulating wealth is a bad thing.

Yes, but wouldn't it be better for society if there were a larger pool of rich individuals who could do all these wonderful things? If you have more people funding charities and investing in new ideas then you end up with more diverse charities/ideas getting funded. Otherwise, you end up with the few pet projects of the oligarchy.

"I would advise those who would become inequality activists to instead invest their time and efforts in their own future and wealth creation."

This is what I call the Lottery Theory of Capitalism: Since everybody theoretically CAN win the lottery, everybody SHOULD win the lottery and it is THEIR OWN FAULT if they DON'T win the lottery.

You will find people getting rich in every economy, no matter what the economic system is or how well or badly the economy is doing. People were getting rich hand over fist when the Russian economy collapsed after the fall of the Soviet Union. I'm sure there are people getting rich in Darfur today.

My idea of a healthy economy is one in which working people can make a living, not one in which a handful of people can make a killing.

"Of course, beware, as your wealth generation advances you'll be required to pay for more and more shares of the activists who pay nothing in taxes."

Why do right-wingers hate "activists" so much? The American Revolution was started by "activists." RADICAL activists, in fact.

"Luck doesn't apportion itself fairly among the masses. Some strike it rich others get more than their share of the bad luck."

Most of the people who are SERIOUSLY rich got their money the old-fashioned way -- they inherited it.

A couple of years ago I checked the Forbes Richest Americans list. Of the top 20, only one -- Larry Ellison of Oracle -- was a genuine rags-to-riches story. He grew up in poverty in Chicago.

Five of the top 10 were Sam Walton's widow and his four children.

Of course the right-wingers always focus on the Ellisons and ignore the Waltons.

"You do realize that Adam Smith, considered by many to be the "father of capitalism" advocated for a progressive tax system, public education and was very much anti-trust (i.e. anti-monopoly) and was not doctrinaire laissez-faire, yes?"

The Bible and The Wealth of Nations are the two most-cited and least-read books in the Western world.

Don'tcha love it when the righties talk about "Economics 101"? Some of us went a little beyond Econ 101.

"Yes, but wouldn't it be better for society if there were a larger pool of rich individuals who could do all these wonderful things? If you have more people funding charities and investing in new ideas then you end up with more diverse charities/ideas getting funded."

And maybe if there wasn't such a yawning chasm between rich and poor we wouldn't need some of those charities because more people could afford to pay for their own food, shelter and medical care. Isn't that what the conservos want -- "personal responsibility"?

My idea of a healthy economy is one in which working people can make a living, not one in which a handful of people can make a killing.

Very well put. The "American Dream" isn't about becoming a billionaire. It's about being middle class - able to afford a house and have a decent retirement.

Kari sez:Progressives believe that society is better off when we all look out for each other. Conservatives believe that society is better off when it's every man for himself.

And that's why I'm a progressive.

Moderates believe that everyone is entitled to PURSUE the American Dream. Liberals believe that everyone is ENTITLED to the American Dream.

And that's why I'm a moderate

"Luck doesn't apportion itself fairly among the masses. Some strike it rich others get more than their share of the bad luck." Most of the people who are SERIOUSLY rich got their money the old-fashioned way -- they inherited it.

And that's as lucky as you get - born from the right womb.

Has anyone done the math?

In the video clip, I heard $167,000,000 ($167 M) per household (for the top 1%), 112,000,000 (112 M) households, and 56,000,000,000,000 ($56 T) total assets. 1% of 112,000,000 households is 1,120,000 households. Multiply that times the $167,000,000 and I think you should get $187+ Trillion. That's 3.34 times the total Assets ($56 Trillion). If the top 1% of households control over 1/3rd of all the wealth, that would mean $18.66 Trillion, not $187 Trillion.

It looks to me like the 'mistake' caused 10 times as many beans to be poured into the pot than should have been. Either I messed up the math or the video showed a calculation that was 10 times greater than it should be. Looks to me like neither Chuck Collins and the Working Group on Extreme Inequality, nor their supporters, should have any control over our economy.

@Mike: Am I now a bad guy since I navigated thru life more successfully than most others?

To MANY here, YES. To me, NO. (As my point of reference, when I commented that I made $65K, I was told by several that I didn't DESERVE that much.)

It's all nice to write platitudes about how people should focus on their own wealth creation and take responsibility for taking care of themselves, but we're moving toward a society where that's increasingly difficult. How are you supposed to create wealth if you can't get a good education? If you are bankrupted by runaway health costs? If you're treated like a disposable resource by your employer, to be laid off in a moment if it makes some guy's stock go up by 10 cents a share?

As a progressive, I believe the role of government is to help people help themselves--to give them the tools to succeed. Mike's story is a great one, and one that should be applauded. But we're moving into a world where it's a difficult, if not impossible, act to follow for some people. And that's why people are frustrated.

Posted by: lestatdelc | Mar 2, 2009 3:03:12 PM

Since we don't have a comment log (that I know of) here and the archives only go back to the start of the month, I am unable to find the specific comments I am referring to. I will be sure to bring to your attention any future comments that support my contention, that appear in this blog.

To Lestatdelc:

Keeping an open mind, I watched again and clearly heard that 1% of the households had an average private wealth of $167,000,000. I again heard Mr. Collins say we have $56 Trillion in total private wealth. 1% of 112,000,000 households is still 1,120,000 households and at an average of $167M, it equals $187 Trillion or three times what Mr. Collins says is the total of all private wealth. Mr. Collins also stated that the top 1% held over 1/3rd of all private wealth or about $18.7 Trillion. That is a tenfold exaggeration.

What correcting bad math has to do with taxable income, the poverty line or data from the Urban-Brookings Tax Policy Center is beyond me. I was commenting on the incorrect math and amazed that no other commenter noticed the tenfold error.

The irony in this analogy is that it equates wealth with food. For the people who generated that wealth, the bulk of it is invested in the creation of more wealth (e.g., replanting a large portion the beans if you will ).

Were it to be spread evenly among those who did not create it (and indeed know little about how it is created) then it would likely be consumed.

Of course, the progressives don't really want to go through the social experiment of cutting everybody a "fair share" check of that wealth. That would fail too quickly and spectacularly. No they'd just like "wise people" to hold those shares in trust for the rest of us. They will try to invest it and spend it in our best interests.

Lestatdelc: public k-12, private college - I was fortunate enough to get merit scholarships; I worked in the mills during the summer; and I used bank loans to fill the gaps -- something called NYHEAC in NY (commercial bank @7% interest. Also got a small stipend from Uncle Sam by signing up for ROTC - no scholarship, though - No Fed or subsidized loans. Also a state Regents scholarship - merit based)

The companies I worked for (like most other US companies) of course have a US presence and for me a state presence. The employees live locally, and pay income and property taxes.

I wasn't dissing public infrastructure investments at all; my point was that many wealthy people invest in local, state, and federal bonds and bills, that may be "tax-free".

MP97303: I'm a conservative leaning moderate

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I am all for people working and getting rewarded for their hard work and effort. I also subscribe to the thought that we make our own good luck - whether thru karma, or being basically honest. For whatever reason, some people don't get their share of luck.

Education is what helped me in my case. I went to school in a blue collar town - steel workers and auto workers. I worked in the steel mill during the summer as a union employee at union pay. I saw first hand how hard many people worked, as well as those who did not. This steel mill is still running but less than a tenth the size it used to be. Yeah, I know - imports, etc. Actually, it is less costly to recycle scrap to make steel than to ship mine and ship iron ore and coal.

Bottom line: I knew that I wasn't going to be working in the mills in my future. Only an education would get me to preferred career alternatives.

I believe that education is the key: we've got to stop coddling our students. My premise is that our students have potential, but they simply don't have to work very hard to get good grades; they don't even need good grades to graduate. And those inflated grades are not helping our students. Whether it is the goal of trying to make all our students "above average", or permitting too much time for non-academic efforts during the school day, something has to give. We have several generations of graduates now that simply do not know very much, or have an idealistic view of what is owed them. Both the NY Times and the WSJ have written about this in the past few days.

I've recruited at colleges and universities. I've volunteered in the classroom. Yes, some students "get it", but the vast majority of them may not be as successful as they would like to be.

Sure, not everyone should go to college and pursue a degree. If they don't go to college, then they had better learn some trade or they will never become a part of the middle class; nor should they. Our mortgage mess surely shows that too many people don't even know how to review a basic financial transaction, or understand basic interest rates and financing terms.

Same goes for teachers and administrators: yes, education must be funded by the public. this funding comes with responsibility - demonstrate that the money is not being wasted. Both want to be treated as professionals. Sure, they don't get to choose who their students will be. But why do they always try to lump all students into one homogeneous demographic?

But I digress.

Dividing the voters and the public by distorting the gap between the haves and the have-nots is not going to get us anywhere. There are perhaps tens of thousands who are truly rich. The millions of others have to start figuring out a solution that is not so dependent on another group giving them money.

Finally, last week the WSJ did run an op-ed exploring how much tax revenue can be extracted from these truly rich people. If all their income (not assets) were taxed at 100%, it still would not be enough to finance our future at the proposed budget expenditures and projected deficits.

My worry is what we will do when income tax revenues are not enough.

Taxing property will not fix things - ever hear of illiquid land holdings? It doesn't matter if you have a few hundred thousand dollars of real estate; dirt won't pay the tax man. If the property doesn't produce income, anyone would be hard pressed to pay taxes on their holdings. Sometimes the only option is to sell off part of the property to pay property taxes. This happens a lot when property is inherited.

Extrapolate the above to assets any of you may hold. Again, it is possible to be rich, yet have no income; just living off the money you may have stashed in your mattress. Once the government has exhausted the income and property tax revenue sources, they'll be coming after your assets next.

Surely, I am exaggerating to make this point.

I will continue to look out for my fellow neighbor, but only to a point. I know how hard I worked to get this far; I'll expect similar hard work from those who are capable. But I'll cast a stink eye to those who dug their own hole, and are now at the trough that I am filling with the taxes I willingly pay.

Lestatdelc:

Thanks for looking again. I think this is fairly important since his entire argument is based on invalid data.

But I'll cast a stink eye to those who dug their own hole, and are now at the trough that I am filling with the taxes I willingly pay.

Are you referring to the banking and auto industries?

"Progressives believe that society is better off when we all look out for each other."

OK, that explains why multi-millionaire progressive Earl Blumenauer

http://www.washingtonpost.com/wp-srv/politics/congress/fin_dis/2007/b000574.pdf

Helps his good buddies Rick Gusatfson is on the board of Portland Streetcar, so each streetcar deal makes more money for his firm. He's done deals with him and Ron Beltz for 20+ years. Lets not forget his other buddy John Ashforth who wants to make money too.

http://wweek.com/editorial/3345/9589/

Don't start with ultra-progressive George Soros who does everything he can to avoid payin US income taxes.

You should realize a progressive just covers his tracks better, otherwise they are as greedy as any of the rich you rail against.

oh and this:

I also subscribe to the thought that we make our own good luck - whether thru karma, or being basically honest.

is something people who have been blessed with good fortunes say. Like the earlier lottery example - if you're not lucky enough to have won it's your own fault.

Posted by: Richard | Mar 2, 2009 8:14:14 AM

Why do I see this video and point as entirely meaningless?

What a Dick! Plus what Kari said.

Don't know who said it, but:

"Modern conservatism: The search for a superior moral justification for selfishness"

While I have no data supporting this proposition, my hunch is a vast majority of those unable to support themselves have suffered "bad luck" and would much prefer to be self sufficient. Those of us fortunate enough to have avoided catastrophic illness or some other misfortune should not begrudge the less fortunate by considering them less worthy of success or as a slacker parasite. Realize that with relative wealth comes responsibility to help those that, but for the grace of good fortune, are us.

"Modern conservatism: The search for a superior moral justification for selfishness"

Nah, that's the libertarian mindset. Modern conservatism is The Church of Limbaugh.

I think Milton Friedman provides the perfect counterpoint, and he doesn't need sound effects.

http://www.nmatv.com/video/1115/Milton-Friedman-and-Phil-Donahue--1979

Personally, I subscribe to the airline safety speech method of wealth accumulation and distribution: "Make sure your mask is secure and oxygen flowing before helping those sitting next to you." I applaud charitable giving and activism, but if we all were to spend all of our time and effort being activists and redistributing our (or other people's) wealth, we would never create new wealth. And that's how we improve the plight of the have-nots - not through wealth redistribution, but through wealth creation.

It seems to me that many people are missing the message here. From World War II until Mr. Reagan became our president the distribution of wealth in the United States was much more even than it is today. The goal of eliminating the middle class and, therefore, reducing its share of the wealth has been a goal of the wealthy ever since. Their ability to control the information we received via the broadcast media has led to a significant number of our population aping the mantra of the ultraconservative right. Why do some of us feel it is necessary to pick apart the data when the basic message is so "spot on."

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