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Rich (Now with the Upper Middle Class) Rich (Now with the Upper Middle Class)

07-30-2014 , 05:29 PM
I posted this in another thread before it was available, but I think it's really worth a listen.

Author Puts Unconventional Spin On Economics

and seems pretty relevant to the discussion itt

After seeing all the charts and stats over the years, I am very surprised that two new grads working one full, one part-time job can already be in the top 25% of income in America. Dafuq?
07-30-2014 , 05:47 PM
also, thank you dib for that link, which had a link to Watch 15 Magically Awkward Seconds Roll By While A Man Panics After Accidentally Insulting America, a daily show interview

hadn't seen that, much laugh, very humor
07-30-2014 , 06:31 PM
Quote:
Originally Posted by waterwolves
This blew my mind when I first found out about it. We need a system that doesn't stifle innovation. I personally like seeing people become extremely wealthy through hard work and taking chances but at the same time it seems pretty insane to have 70-80% of the country struggling for what appears like no reason.

What scares me is when does it end? I mean it's showing no signs of stopping. People on this very board argue that unlimited greed is good. I can see greed being good to a point because it drives innovation but I see nothing wrong with putting some checks and balances in there. Unlimited greed doesn't seem healthy.
This didn't blow my mind at all. I knew it was loltastic at the top 400 people in America is equal to the bottom 150 million. Think about that in perspective. You can fit 400 people into your house (granted, it'd be in every single space). You couldn't fit 150 million people an entire ****ing state.


Quote:
Originally Posted by Low Key
After seeing all the charts and stats over the years, I am very surprised that two new grads working one full, one part-time job can already be in the top 25% of income in America. Dafuq?
This is what blew my mind. If you can graduate with 2 people at 22 years old, one with an engineering degree and one with almost any other degree and be in the top 25% of the USA is laughable.

For example, I know a waiter in a really nice place that makes about 75k a year and he's 27 years old. He told me he's made more money than his father did in his entire life, and his father is 61.

'merica
07-30-2014 , 06:34 PM
Wow. I'm kinda shocked here. I didn't want to say you couldn't fit 150 million people in NY/California/Texas, but the total population of those 3 states is 84 million people.

Oh man. That's utterly disgusting. That's as bad as the trash pile in the Pacific that is the size of Texas.

I'm gonna go have a drink now.
07-30-2014 , 06:59 PM
A great metric for rich/not rich is ability to afford British dentistry.
07-30-2014 , 07:34 PM
Quote:
Originally Posted by JayTeeMe
Apparently. They seem to spend their money on abstract concepts.
I think he was breaking out a literary reference to F. Scott Fitzgerald from "The Rich Boy"

Quote:
Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand. They think, deep in their hearts, that they are better than we are because we had to discover the compensations and refuges of life for ourselves.
07-30-2014 , 07:46 PM
Quote:
Originally Posted by O.A.F.K.1.1
What happened to working class or has that term been completely written out in American social nomenclature?

Grunched the whole thread buy what about those doing traditional working class jobs that still make the relative big bucks, still working class or LMC/MC or beyond in some cases.
Working my way through Piketty's tome (not actually a bad read for its length and subject) and he talks about how class definitions are always going to be arbitrary and there isn't really a correct answer as to what defines middle class. He uses deciles and the top centile for his comps... the top 10% he brands "upper class" with the top 1% called the "dominant class" the next 9% "well-to-do-class" the next 40% "middle class" and the bottom 50% "lower class".

As far as your question "working class" generally means working poor in American Society.
07-30-2014 , 08:01 PM
Quote:
Originally Posted by grizy
Pension plan coverage peaked ~47% of private workers in the 60s and 70s. It's still ~40% today.

The percentage of retirees expected to have investment income however is expected to rise over time as succeeding waves of baby boomers saw more and more choices with regards to saving for retirement, allowing a higher percentage to retire outright.

What has however happened is there is a clear shift from Defined Benefits plans to Defined Contribution plans as the unpredictability and potential for ruin with DB plans based on rosy projections (and a I'll be gone you'll be gone mentality) have become obvious for all to see over the last 3 or 4 decades.

Even with all that, retirees are becoming better off, partly because, yes, greater participation in owning capital (investments).
Meh, agree and disagree. DB pensions are horrible for companies, which is why they are being done away with (except the military) but they are, IMO, much better for retirees. Alot of stock market returns depend on when you invested (entry year) and even then individuals suck at investing and constantly under-preform the market.

Agree though that companies set themselves up for failure by assuming loltastic investment returns (8% annualized in perpetuity what could go wrong).

I see where you are coming from though (if baby-boom retirees had used an employee match 401K and simply pumped money into long term Treasury STRIPS through their careers they would be set at retirement but, IMO, the interest rate/ generally investing environment was different then than now, and also a big part of my family's DB plans was the health care that they could keep and use as a supplement to Medicare or use as their primary (CSRS era fed retirement if you are familiar) health care...end of life costs are brutal and long-term care insurance is very expensive...
07-30-2014 , 08:02 PM
PVN. Paging PVN to the courtesy phone.
07-30-2014 , 09:08 PM
I never said DCs make retirees better off than DBs (they do not).

I said retirees, as a group, have found other ways to compensate.

I also implied DBs were unsustainable.
07-30-2014 , 09:16 PM
Quote:
Originally Posted by grizy

I also implied DBs were unsustainable.
Oh I know, was agreeing with you on that point. Didn't know if you were trying to argue that retirees were better off managing their own money in a 401k/ IRA, which now it's clear that you were not.
07-30-2014 , 10:13 PM
All else being equal, they wouldn't be.

But not all else is equal. Retirees for the next 30 years or so (and beyond really) are projected to have more and more investment income in their retirement due to having more disposable income to invest and more choices to invest with.
07-31-2014 , 08:25 PM
Quote:
Originally Posted by grizy
All else being equal, they wouldn't be.

But not all else is equal. Retirees for the next 30 years or so (and beyond really) are projected to have more and more investment income in their retirement due to having more disposable income to invest and more choices to invest with.
And yet the elderly are a growing demographic in regards to poverty.

Market crash hurt quite a few of them, too. But yep, disposable income, as a percent of income, has dropped from 8% to 4%. Quite a bite especially as cost of goods has gone up.

b
08-01-2014 , 04:06 PM
What I don't understand is isn't it all relative? I mean the better the middle and lower classes are doing the better the rich will fair as well right? Obviously the wealthy in this country are doing great right now so maybe I'm wrong but what if they choke the economy to the point that it crashes? How much is their money going to be worth then?

Read this and thought about this thread.

http://www.nytimes.com/2014/07/27/bu...less.html?_r=1
08-01-2014 , 04:29 PM
Quote:
Originally Posted by waterwolves
Obviously the wealthy in this country are doing great right now so maybe I'm wrong but what if they choke the economy to the point that it crashes? How much is their money going to be worth then?
Well a while back an internal "Plutonomy" memo circulated by Citigroup got a lot of attention. It posited that the US is a plutonomy (economy driven by the wealthy few) and therefore the consumption of the rest of the masses was largely irrelevant - and would become moreso as income inequality increased.

Quote:
We project that the plutonomies (the U.S., UK, and Canada) will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization.

[...]

In a plutonomy there is no such animal as "the U.S. consumer" or "the UK consumer", or indeed the "Russian consumer". There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the "non-rich", the multitudinous many, but only accounting for surprisingly small bites of the national pie. [...] i.e., focus on the "average" consumer are flawed from the start.
Quote:
RISKS -- WHAT COULD GO WRONG?
Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as was -- one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation on the rich (or indirectly though higher corporate taxes/regulation) or through trying to protect indigenous [home-grown] laborers, in a push-back on globalization -- either anti-mmigration, or protectionism. We donít see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.
http://www.dailykos.com/story/2009/1...-Michael-Moore
08-02-2014 , 12:59 AM
So if we all agree income inequality is out of control? What is the solution?

Wealth distribution through taxation alone isn't the answer.
Another problem is with taxation you endup just raising taxes on high end professionals and small business owners which isn't really the issue. The issue is the richest 500k or so households that get 50-60% of all capital gains, etc...
08-02-2014 , 02:23 AM
0% unemployment?
08-02-2014 , 03:00 AM
Has any society really had truly 0% unemployment?
08-02-2014 , 03:10 AM
Super low unemployment isn't all it's cracked up to be. The late 90s in SF/Bay Area were a customer service nightmare. Anyone with half a brain was making $50k+ working as an admin assistant in a startup. That left the sloths and malcontents to work in book stores and coffee shops. There's definitely some % of society that are just going to be worthless no matter what they do. Personally I'd rather have them just getting by on the margins of society than ****ing my latte.
08-02-2014 , 03:34 AM
Lower unemployment isn't going to change the fact the top .01% are getting a bigger slice of the pie than ever.

Economic equality for all isn't feasible, that is basically socialism. What we need is more mobility/opportunity for all through better education, infrastructure and overall societal structure (less crime, 2 family homes, etc)

I dunno the most efficient way to execute that plan or if it is even possible at this point tho.
08-02-2014 , 03:51 AM
Why can't we have the government just give everybody a job that wants one. Pay them a living wage to do whatever. That would lower the unemployment rate to 0 and it should drive wages up for everybody.

Deficits supposedly don't matter so end the Bush tax cuts for the top 2% and keep printing money.
08-02-2014 , 04:33 AM
Quote:
Originally Posted by kimoser22
Working my way through Piketty's tome (not actually a bad read for its length and subject) and he talks about how class definitions are always going to be arbitrary and there isn't really a correct answer as to what defines middle class. He uses deciles and the top centile for his comps... the top 10% he brands "upper class" with the top 1% called the "dominant class" the next 9% "well-to-do-class" the next 40% "middle class" and the bottom 50% "lower class".

As far as your question "working class" generally means working poor in American Society.
Well the thing is and perhaps its purely a Euro/USA difference, but in Europe class has a values element attached to it. You can still have lots of money and be working class.

It probably has something to do with the Aristocracy. Sometimes someone in the Aristocracy who is definitely upper class might go broke, still upper class though by definition. In fact perhaps one the most delineated lines in the class structure by values is the line between upper middle class and upper class.
08-02-2014 , 05:40 AM
Yeah that makes sense, bloodlines and what not.

In the US its just you a baller or you ain't..
08-02-2014 , 06:45 AM
Quote:
Originally Posted by Onlydo2days
So if we all agree income inequality is out of control? What is the solution?
Burn it to the ground and start over.
08-02-2014 , 12:34 PM
Quote:
Originally Posted by Onlydo2days
So if we all agree income inequality is out of control? What is the solution?
Tax capital gains like ordinary income. Make a new tax bracket at ~$2M or so and hit it around 45%. Cut checks for hoi polloi.

      
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