Deflating the American Myth

[UtahBill]

No one can move up without someone else moving down, so if moving down is bad, then moving up also has to be bad.

Kind of cynical, aren't you?
There are plenty of opportunities for those who are looking for them. Problem is, too few are looking, and of those, too many are ill prepared. But we will always need the poor and disadvantaged to take the unskilled jobs.
Of course, when I say poor, bear in mind that the poor in the USA are wealthy compared to the real poor in 3rd world countries...

 

[Geo Patric]

No, you just started a thread arguing that the american dream doesn't really exist, that there's little social mobility, and that we do worse than european countries. Forgive me for interpreting that as you complaining about it.

my apologies for being away from this for so long... other duties call me away.

well, I am not, myself, in the business of forgiveness. for absolution, consult a priest. Or, perhaps .better, simply let go of your antagonism and your presumption as to my motives and consider what I was actually trying to say.

You are reading an attack on your notion of Americanism. I make no such attack. My attack is on a belief in a preposterous notion that not only cannot sustain us but contributes to our ceaseless unease.

but... allow me to address some of the other posters before i respond to the rest of this.

geo.

 

[Geo Patric]

No one can move up without someone else moving down, so if moving down is bad, then moving up also has to be bad.

now we are getting to the core of the argument.

geo.

 

[Geo Patric]

Think about your argument for a second. If I go from being in the poorest half of the country to being in the richest half, does that mean that the poorest half has one fewer person?

lets start with what I wasn't arguing, just to get rid of some of the detritus that has accumulated.

no, the OP is not about 'social mobility', which is complex phenomenon that may but does not necessarily include and is certainly NOT restricted to economic mobility. And i was not arguing specifically about economic mobility but attempting to dispell the myth of the availablilty of UPWARD economic mobility to everyone. but, i will return to that later.

the chart you provided has no provenance. i CANNOT argue it as i cannot judge its validity or determine what point the creator of the chart was attempting to make. A bit of information helps, though - the little note that tells me its creator 'adapted' the data from another report, which report i have located. The report was directed at comparing economic mobility of men to that of women - a specialty of the author. nevertheless, it contains valid data from which your chart was constructed:

ok... let's back up. the statement that 60% of poor people move up the economic ladder is absurd not in that it is 'false' but because it is imcomplete without "the middle class has no better a chance of moving UP then they did of moving DOWN."

per the same report:
The least amount of mobility exists for those whose parents are found in the lowest and highest income quartiles

this is NOT incidental. a little thinking will expose the reason - those two quartiles are closed at one end where the middle quartiles are open ended - you cannot move UP outta the top or DOWN outta the bottom. there are several interesting aspects that derive from this fact. I will come bacl to this.

another quote from the report:
the extent of upward and downward mobility is remarkably constant. Twenty-five to 29% of sons move up or down one quartile from that of their parents.

UP OR DOWN. this is the point.

The report by the Economic Mobility Project shows a rise among the poorest 20% of 9%, among the richest 20%, of 69%.

percent, not number, but percent. the divisions are defined by percentages, not dollar amounts and certainly not as REAL wealth. so. a man who made 3 million when the upper quintile ranges from 2.5m to zillions is in the upper quintile. If next year , because the economy has been doing so swell (at least for rich folk) the bottom of the upper quintile moves to 5m, our fella moves down even though he is still making the same amount of money. poor him, eh?

the same thing happens at the bottom. the economy sucks, the top of the lower quintile falls and the fella making 18k moves UP. THe change in income of more than a few in the top or bottom can have a cascading effect that seems to shift economic mobility across the entire spectrum.

baloney, you say? well, let us refer to the same report, the report from which YOU got your 60% figure ( i apologize that I cannot quote from it... it is in format that i cannot copy).

remember that 25-29 percent mobility? that was between quintiles. actual income mobility? was virtually none, changes in overall wealth simply redefines the quintiles. THIS is why the disparity in wealth and income is important to our discussion. as the number of REAL (as opposed to percentile) low income people increases, they redefine the lower quintile... and the one above... and the one above.... in each, individuals whose income has not changed move UP (statistically). Inflation and increase cost of living, though, make them poorer in fact.

and concentration matters too... a FEW whose income increase do NOT change the quintile definition. that 1% at the very top? They increased income 176% (according to the same report). the effect? little or no change in the number of persons in the quintile, but an enoormous change in the amount of money in that quintile... and a corresponing change in the amount of wealth in the others because the wealth is fixed - if it appears here, it came from somewhere else. so.... a lot of people lose some degree of wealth but as a result in the percentile shift downward, may in fact appear to be moving up.

again, UP or DOWN... the actual merits of the number of folks moving UP can only be properly gauged in light of the number moving down. when the number moving up across the spectrum is significantly greater than that moving down, "improvement" is illusory... all we are seeing is a shift in the levels. which is why your 60% is meaningless with the the qualifier "


the statement "The median household was no more upwardly mobile in 2003-04, a year when GDP grew strongly, than it was it was during the recession of 1990-91." should have greater meaning, now. more wealth being generated BUT NO CHANGE in economic mobility.

so, you can see how folks on either side of the border experiencing changes in income along with movement of the line dividing the quintiles can produce unreliable results if you do not look at all the relevant data.

again, if you had 60% of the poor people moving out of poverty without a (roughly) corresponding number moving into poverty, poverty would end in a very few generations, rather than increase... as it has.

but... as i say, that was NOT the point of the OP. I will return later with a post that IS the point of the OP.

geo.

 

[Geo Patric]

finally, the point of the OP was that we have perverted the American Dream into a falsehood that plays on greed.

the American Dream was originally about better lives, not just more money and better social status. It was about Liberty and independence and individualism, which many actually sacrifice in their pursuit of greater wealth. We have surrendered our sovereignty to corporations who have allegiance only to stockholders and profits. We have virtually enslaved ourselves to making others richer by buying into the myth that more money means a better life and that it is perpetually possible which only a small amount of reason will tell you is untrue.

Hesiod refers to the rise of modern civilization as the age of Iron and Dread Sorrow based mostly on the obligation to devote our lives to labor, usually in another's interest - a theme echoed in the Garden Of Eden story. He saw in earlier cultures the simple truth that real wealth is time, not possessions. The average hunter gatherer spent about 3 hours a day providing for himself and his family.

Real freedom is acting on your own initiative. The worship of accumulation is not liberating, it is the opposite.

geo.

 

[TurtleDude]

finally, the point of the OP was that we have perverted the American Dream into a falsehood that plays on greed.

the American Dream was originally about better lives, not just more money and better social status. It was about Liberty and independence and individualism, which many actually sacrifice in their pursuit of greater wealth. We have surrendered our sovereignty to corporations who have allegiance only to stockholders and profits. We have virtually enslaved ourselves to making others richer by buying into the myth that more money means a better life and that it is perpetually possible which only a small amount of reason will tell you is untrue.

Hesiod refers to the rise of modern civilization as the age of Iron and Dread Sorrow based mostly on the obligation to devote our lives to labor, usually in another's interest - a theme echoed in the Garden Of Eden story. He saw in earlier cultures the simple truth that real wealth is time, not possessions. The average hunter gatherer spent about 3 hours a day providing for himself and his family.

Real freedom is acting on your own initiative. The worship of accumulation is not liberating, it is the opposite.

geo.

when I see someone trying to belittle accumulation of weatlh I almost always see a set up to justify punitive taxes and more government

I agree, money cannot buy everything but the worship of income redistribution is far worse and far more evil than an individual wanting to make more and keep it

 

[UtahBill]

when I see someone trying to belittle accumulation of weatlh I almost always see a set up to justify punitive taxes and more government

I agree, money cannot buy everything but the worship of income redistribution is far worse and far more evil than an individual wanting to make more and keep it

IMO, income distribution should not be an after the fact issue. It should be distributed up front, in paychecks. That keeps the govt out of the loop, minimizing their "cut".
We need fewer billionaires, and more millionaires. The economy needs more consumers, and not the kind that consists of essentials only. That is the floor of our economy, we need more than that. We need consumers who have discretionary income, money to buy goods they don't really need but that keeps the unemployment rate down to reasonable numbers.

 

[Geo Patric]

when I see someone trying to belittle accumulation of weatlh I almost always see a set up to justify punitive taxes and more government

I agree, money cannot buy everything but the worship of income redistribution is far worse and far more evil than an individual wanting to make more and keep it

where, in this thread or ANY where in ANY thread have you heard me discuss 'income redistribution"? your irrational fears and dedication to an oppressive ideology have overtaken whatever reason you may once have had.

geo.

 

[Geo Patric]

IMO, income distribution should not be an after the fact issue. It should be distributed up front, in paychecks. That keeps the govt out of the loop, minimizing their "cut".
We need fewer billionaires, and more millionaires. The economy needs more consumers, and not the kind that consists of essentials only. That is the floor of our economy, we need more than that. We need consumers who have discretionary income, money to buy goods they don't really need but that keeps the unemployment rate down to reasonable numbers.

and... ICE CREAM! i like strawberry, best.

do you ever deal in what actually is? how reasonable are the unemployment numbers when you are unemployed? why should any number of unemployed be considered reasonable when employment is the only alternative to degradation and humiliation, not to mention starvation.

that was not a purely rhetorical question, btw... there really IS an answer that forms a central motif of capitalism.

geo.

 

[UtahBill]

and... ICE CREAM! i like strawberry, best.

do you ever deal in what actually is? how reasonable are the unemployment numbers when you are unemployed? why should any number of unemployed be considered reasonable when employment is the only alternative to degradation and humiliation, not to mention starvation.

that was not a purely rhetorical question, btw... there really IS an answer that forms a central motif of capitalism.

geo.

Not sure what your issue is here. Do you expect full employment? If so....."your irrational fears and dedication to an oppressive ideology have overtaken whatever reason you may once have had".

 

[Geo Patric]

Not sure what your issue is here. Do you expect full employment? If so....."your irrational fears and dedication to an oppressive ideology have overtaken whatever reason you may once have had".

full employment is not impossible. more importantly the degradation and humiliation and starvation that result from unemployment are not necessary.

geo.

 

[UtahBill]

full employment is not impossible. more importantly the degradation and humiliation and starvation that result from unemployment are not necessary.

geo.

I could introduce you to at least 2 of my siblings. One couldn't keep a job due to sticky fingers, the other won't take a job unless it pays well and is within a few miles of his house, which is out in the sticks of east Texas....that one has all of 2 years employment on his record, the rest of the time he lived with our parents til they died and then he inherited their "house". Otherwise he would be on the street. Because it is Texas, he can't be taxed out of his house, but by now the house isn't his anymore, it belongs to Texas as soon as he dies. The state will most likely condemn it and tear it down.
There are plenty of people who have a very abbreviated vision of the American Dream....they don't want jobs....believe it or don't.

 

[imagep]

No one can move up without someone else moving down, so if moving down is bad, then moving up also has to be bad.

Maybe realitive to each other. Some people may think of $$$ as points in a game, personally I think of money as a way to have a better life.

If our society increases production then we can all move up, not realitive to each other, but still up.

We have to consider if seizing wealth (taxation) from one person to distribute (in the form of lower taxes) to others, does our overall economy good or bad - not just whether it harmed that one person.

Lets say that today a law was passed and Warren Buffet had to pay an extra billion dollars in taxes and that everyone elses tax obligation would be reduced by the billion dollars. Regardless of whether or not it was "fair" to Buffet (life is not fair), how would it effect the economy? I would assume that he would have to sell a billion dollars worth of stock, which would initially cause a slight dip in the value of that stock but would be rapidly purchased by stock bargain hunters and the stock would soon rise back to it's natural market value. This would not neccesarally be a bad thing as it would create profit opportunities for some. Then the remaining 300+ million americans would have their taxes cut by an average of $3 each. Certainly not a fortune, but even $12 (family of 4) in the pockets of the middle class would spur spending, which would create jobs AND profit opportunity, which would then result in more spending and jobs and profits, on and on ad infinitum. Due to the amplifying effect of money circulating, that billion dollars could create many billions in profits. The overall economic effect would most likely result in a higher standard of living for everyone.

Now was how much did this actually "harm" Buffet? Did it take any food off his table? Did he have to sell his car? Did it cause his house to be foreclosed on? All very unlikely. But maybe it discouraged him from future investing? Actually, thats quite unlikely also. When people have "extra" money they will always seek the best investment opportunity. If Buffet had an investment opportunity that would result in a $100,000,000 profit but cost him $500,000,000 in taxes would it be to his advantage to invest (despite the taxes)? Yes, absolutely. That best yield is rarely going to result from burying money in the back yard, so quite naturally he will continue doing what he has always done - invest his extra money in a manner which he feels will result in the highest return, depite having to pay taxes on that return.

So back to the issue of "fair", yes, to single him out for one time taxation of a billion dollars may be very unfair, but to simply raise the tax rate of the very rich may not be unfair at all. Since money (profits) do almost always trickle up, it is not inconcievable that the wealth of billionairs may actually increase due to paying higher taxes. Multipy that "billions in profits" from the one time taxing of Buffet times hundreds of billionairs and tens of thousands deca-millionairs and we will find that there is quite a bit of extra profit to flow upwards, while at the same time significantly reducing our unemployment rate and providing additional goods and services for the general public.

I would gladly pay higher taxes if I knew that it meant I could make more money - it's not much different that spending money on advertising, you put out some cash now and reap the rewards later. Taxation of the rich to a certain extent, is an investment, maybe even insurance, increasing the likelyhood of them remaining rich and growing even richer.

 

[TurtleDude]

Maybe realitive to each other. Some people may think of $$$ as points in a game, personally I think of money as a way to have a better life.

If our society increases production then we can all move up, not realitive to each other, but still up.

We have to consider if seizing wealth (taxation) from one person to distribute (in the form of lower taxes) to others, does our overall economy good or bad - not just whether it harmed that one person.

Lets say that today a law was passed and Warren Buffet had to pay an extra billion dollars in taxes and that everyone elses tax obligation would be reduced by the billion dollars. Regardless of whether or not it was "fair" to Buffet (life is not fair), how would it effect the economy? I would assume that he would have to sell a billion dollars worth of stock, which would initially cause a slight dip in the value of that stock but would be rapidly purchased by stock bargain hunters and the stock would soon rise back to it's natural market value. This would not neccesarally be a bad thing as it would create profit opportunities for some. Then the remaining 300+ million americans would have their taxes cut by an average of $3 each. Certainly not a fortune, but even $12 (family of 4) in the pockets of the middle class would spur spending, which would create jobs AND profit opportunity, which would then result in more spending and jobs and profits, on and on ad infinitum. Due to the amplifying effect of money circulating, that billion dollars could create many billions in profits. The overall economic effect would most likely result in a higher standard of living for everyone.

Now was how much did this actually "harm" Buffet? Did it take any food off his table? Did he have to sell his car? Did it cause his house to be foreclosed on? All very unlikely. But maybe it discouraged him from future investing? Actually, thats quite unlikely also. When people have "extra" money they will always seek the best investment opportunity. If Buffet had an investment opportunity that would result in a $100,000,000 profit but cost him $500,000,000 in taxes would it be to his advantage to invest (despite the taxes)? Yes, absolutely. That best yield is rarely going to result from burying money in the back yard, so quite naturally he will continue doing what he has always done - invest his extra money in a manner which he feels will result in the highest return, depite having to pay taxes on that return.

So back to the issue of "fair", yes, to single him out for one time taxation of a billion dollars may be very unfair, but to simply raise the tax rate of the very rich may not be unfair at all. Since money (profits) do almost always trickle up, it is not inconcievable that the wealth of billionairs may actually increase due to paying higher taxes. Multipy that "billions in profits" from the one time taxing of Buffet times hundreds of billionairs and tens of thousands deca-millionairs and we will find that there is quite a bit of extra profit to flow upwards, while at the same time significantly reducing our unemployment rate and providing additional goods and services for the general public.

I would gladly pay higher taxes if I knew that it meant I could make more money - it's not much different that spending money on advertising, you put out some cash now and reap the rewards later. Taxation of the rich to a certain extent, is an investment, maybe even insurance, increasing the likelyhood of them remaining rich and growing even richer.

IN reality taxing Buffett that amount so that a ton of voters can keep getting government goodies without paying more taxes despite wanting more goodies is putting a bandaid on a tumor that will continue to grow

that tumor is people expecting that what they want given to them by the government will not come out of their own pockets or from their own work but from others and after a while the malignancy is unstoppable

lost in all the posts demanding the rich pay more or the assinine claims that the rich actually use 40 or more percent of the government services funded by the income tax and the death confiscation tax is that fact that telling the average voter that they won't have to pay any more taxes for the massive expansion of government spending is a one way road to ruin.