f

[stahleyp]

http://money.cnn.com/2014/06/11/news/economy/middle-class-wealth/index.html?iid=HP_LN

 

"Americans' median wealth is a mere $44,900 per adult -- half have more, half have less. That's only good enough for 19th place, below Japan, Canada, Australia and much of Western Europe."

 

That is just wild to me.

[jay21]

http://money.cnn.com/2014/06/11/news/economy/middle-class-wealth/index.html?iid=HP_LN

 

"Americans' median wealth is a mere $44,900 per adult -- half have more, half have less. That's only good enough for 19th place, below Japan, Canada, Australia and much of Western Europe."

 

That is just wild to me.

 

I was reading a article and it raised an interesting question.  What do you do with entitlements?  Should you capitalize the future benefit as an asset today?  Surely it affects saving decisions and if there were no entitlements, you would hope people would save more and their reported wealth would be higher. 

 

I wonder what the numbers would show if we adjusted the numbers to account for entitlements.

[stahleyp]

It wouldn't surprise me at all if things were even dire for the middle class if we got rid of entitlements. A lot of people don't "think" much about the future. That's why pensions worked so well. Companies had to think ahead and plan. People received the benefits. With 401ks, young people and old people cash out and also don't manage it properly. The more guardrails people have, the more stable the middle class.

[Gamecock-YT]

http://money.cnn.com/2014/06/11/news/economy/middle-class-wealth/index.html?iid=HP_LN

 

"Americans' median wealth is a mere $44,900 per adult -- half have more, half have less. That's only good enough for 19th place, below Japan, Canada, Australia and much of Western Europe."

 

That is just wild to me.

 

not too surprising to me. People always have to have the latest thing and accumulate so much stuff they can't park inside their garage.

[bizaro86]

I've heard arguments that assortive mating leads to higher income inequality, as a lawyer who 3 generations ago married his secretary or hairdresser marries another lawyer. There could be an evolutionary argument there as well, that 2 high income people marrying might pass on a genetic predisposition to higher income.

 

Two lawyers getting married?  How are they going to afford to have ANY children?

 

Most attorneys do not make very much money at all...

 

In Boston, the lowest paid person in the courthouse are the new PD's.

 

http://www.bostonglobe.com/metro/2014/05/21/indefensible/23OMcEGsJe1151YT0Q43PJ/story.html

 

This is not an isolated example or story.

 

Most newly minted attorneys are unemployed OR underemployed.  They also typically have $100k+ in student loan debt which makes things tricky.

 

Perhaps a better example would be doctors OR portfolio managers of people being able to afford to have children.

 

You are of course correct about lawyers, but the general point is still valid I think. For example, my supervisor at my day job is an engineer married to another engineer, and my family doctor is married to a doctor.

[turar]

And I scanned through this thread and noticed something said there will be unrest? How so? The US has not had a major riot since LA 20yrs ago. Where will the next riot happen? (well we had a big problem in New Orleans a decade ago but that was just bad planning and could have happened in any generation)

 

The only unrest are in the poorest countries that are left behind, say africa, or burma. Even china has not had destablizing unrest like tinnamen. The world is getting better and people in turn are happier.  The poorest in america are not left behind, they are better educated than two generations ago, it is progress.

 

Here's a good essay on the topic: http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014_full.html?print#.U63OsrG7Mwc

 

[frugartarian]

Bad policy is making it worse.

 

The employment stats are misleading. A lot of medium size business owners i know cut everyone's hours to avoid paying for benefits. So then they hire more people to fill in the empty slots. Many of these employers have more than one job.

 

Makes it harder on the lower / middle class to even save

 

On the plus side at least efficiency numbers are up?

[PatientCheetah]

Trust busters are sleeping on their jobs

[randomep]

And I scanned through this thread and noticed something said there will be unrest? How so? The US has not had a major riot since LA 20yrs ago. Where will the next riot happen? (well we had a big problem in New Orleans a decade ago but that was just bad planning and could have happened in any generation)

 

The only unrest are in the poorest countries that are left behind, say africa, or burma. Even china has not had destablizing unrest like tinnamen. The world is getting better and people in turn are happier.  The poorest in america are not left behind, they are better educated than two generations ago, it is progress.

 

Here's a good essay on the topic: http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014_full.html?print#.U63OsrG7Mwc

 

I am sorry, it is an essay, the person can write well but I don't think the article is good. It makes for sensationalist headlines, especially the word pitchforks. I think we have riots and pitchforks when a huge segment of society is disenfranchised or have no hope (I am thinking blacks in the 50s and 60s). Or if blacks feel Rodney King wasn't given justice. I cannot imagine people rioting because their family has one car instead of 3.

 

the great issues of our world in the next 20yrs will likely be a lot of things we cannot foresee, in the 70's virtually no one could forsee the fall of communism, no one could foresee 9/11

 

the article reminds me of Kyle Bass, saying (with obvious facts) that Japan will be torn apart, well the only thing torn apart is his Japan trade....

 

I bet against Kyle Bass (holding Japanese stocks) and I would bet if I could against the article thesis

[PatientCheetah]

And I scanned through this thread and noticed something said there will be unrest? How so? The US has not had a major riot since LA 20yrs ago. Where will the next riot happen? (well we had a big problem in New Orleans a decade ago but that was just bad planning and could have happened in any generation)

 

The only unrest are in the poorest countries that are left behind, say africa, or burma. Even china has not had destablizing unrest like tinnamen. The world is getting better and people in turn are happier.  The poorest in america are not left behind, they are better educated than two generations ago, it is progress.

 

Here's a good essay on the topic: http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014_full.html?print#.U63OsrG7Mwc

 

I am sorry, it is an essay, the person can write well but I don't think the article is good. It makes for sensationalist headlines, especially the word pitchforks. I think we have riots and pitchforks when a huge segment of society is disenfranchised or have no hope (I am thinking blacks in the 50s and 60s). Or if blacks feel Rodney King wasn't given justice. I cannot imagine people rioting because their family has one car instead of 3.

 

the great issues of our world in the next 20yrs will likely be a lot of things we cannot foresee, in the 70's virtually no one could forsee the fall of communism, no one could foresee 9/11

 

the article reminds me of Kyle Bass, saying (with obvious facts) that Japan will be torn apart, well the only thing torn apart is his Japan trade....

 

I bet against Kyle Bass (holding Japanese stocks) and I would bet if I could against the article thesis

 

Riots, probably not, but any politicians want to enact any additional tax cut is probably asking for political suicide in the current climate. In my base line case, I think we will see more regulations and higher taxes.

[turar]

The only unrest are in the poorest countries that are left behind, say africa, or burma. Even china has not had destablizing unrest like tinnamen. The world is getting better and people in turn are happier.  The poorest in america are not left behind, they are better educated than two generations ago, it is progress.

Well, there was that Ukrainian revolution that happened literally just this year in the middle of Europe. Kievans are not Africans or Burmese, their quality of life was much higher. Same with Arab Spring -- these countries were not desperately poor by any means. Libyans were relatively well off actually, and had quite a lot of government subsidies for day-today life.

 

I don't think it's the matter of absolute poverty, it's the matter of relative inequity that people observe around them, and media plays a big role in this. Right now US media is full of dumb entertainment and silly news, I think that also plays a role in placating population.

 

And it's not like the US doesn't have any history of such unrest. Kent State or L.A. come to mind. http://en.wikipedia.org/wiki/Kent_State_shootings

 

And the guy did address this in his article briefly:

 

Many of us think we’re special because “this is America.” We think we’re immune to the same forces that started the Arab Spring—or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of you tell me to my face I’m completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.

 

Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning.

[rkbabang]

And I scanned through this thread and noticed something said there will be unrest? How so? The US has not had a major riot since LA 20yrs ago. Where will the next riot happen? (well we had a big problem in New Orleans a decade ago but that was just bad planning and could have happened in any generation)

 

The only unrest are in the poorest countries that are left behind, say africa, or burma. Even china has not had destablizing unrest like tinnamen. The world is getting better and people in turn are happier.  The poorest in america are not left behind, they are better educated than two generations ago, it is progress.

 

Here's a good essay on the topic: http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014_full.html?print#.U63OsrG7Mwc

 

I am sorry, it is an essay, the person can write well but I don't think the article is good. It makes for sensationalist headlines, especially the word pitchforks. I think we have riots and pitchforks when a huge segment of society is disenfranchised or have no hope (I am thinking blacks in the 50s and 60s). Or if blacks feel Rodney King wasn't given justice. I cannot imagine people rioting because their family has one car instead of 3.

 

the great issues of our world in the next 20yrs will likely be a lot of things we cannot foresee, in the 70's virtually no one could forsee the fall of communism, no one could foresee 9/11

 

the article reminds me of Kyle Bass, saying (with obvious facts) that Japan will be torn apart, well the only thing torn apart is his Japan trade....

 

I bet against Kyle Bass (holding Japanese stocks) and I would bet if I could against the article thesis

 

Riots, probably not, but any politicians want to enact any additional tax cut is probably asking for political suicide in the current climate. In my base line case, I think we will see more regulations and higher taxes.

 

One way to alleviate this somewhat while producing economic growth at the same time would be to lower taxes on the middle class and small business.  Think about it. What does it help a small business owner or a family of 4 living on $75K/year if some rich CEO pays more in taxes?  Of course since the middle class and small business pay the majority of the taxes (simply because of their greater numbers) this will never happen. 

 

[DTEJD1997]

Hey all:

 

I would suggest is that the problem is not so much income inequality...it is about the lack of  earnings & ability to "move up".

 

At the legal project I am working at...the woman sitting in the cubicle next to me is well dressed, articulate, etc.  She is in her late 20's?  She claims she was #4 in her graduating law skewl class.  This is the first job she has been able to get.  She has sent out just over 100 resumes and applied to dozens of jobs.  She had two other interviews before taking on this job, which is temporary in nature.

 

She has WELL over $100k in student loan debt.

 

You have people who are educated, intelligent, hard working and wanting to work in the field for which they studied & trained, but there are few jobs available.  They are also hopelessly buried in debt. 

 

This isn't limited to the law field.

 

I would say the problem is that a huge amount of people are not employed, are underemployed, have huge amounts of debt, AND NO CLEAR PATH FOR ADVANCEMENT.

 

 

[Morgan]

Hey all:

 

I would suggest is that the problem is not so much income inequality...it is about the lack of  earnings & ability to "move up".

 

At the legal project I am working at...the woman sitting in the cubicle next to me is well dressed, articulate, etc.  She is in her late 20's?  She claims she was #4 in her graduating law skewl class.  This is the first job she has been able to get.  She has sent out just over 100 resumes and applied to dozens of jobs.  She had two other interviews before taking on this job, which is temporary in nature.

 

She has WELL over $100k in student loan debt.

 

You have people who are educated, intelligent, hard working and wanting to work in the field for which they studied & trained, but there are few jobs available.  They are also hopelessly buried in debt. 

 

This isn't limited to the law field.

 

I would say the problem is that a huge amount of people are not employed, are underemployed, have huge amounts of debt, AND NO CLEAR PATH FOR ADVANCEMENT.

 

Agreed that it is harder to move up in society now than it used to be. If I remember correctly, social mobility is now less frequent in the US than in Britain.

 

From what I have read, the legal profession is the worst for the type of situation. High education costs and limited jobs. I'm sure other industries have similar issues, but just not as extreme. I had a similar issue with finance when I graduated in 2011. Applied to 70 job openings and didn't get anything. I was fortunate to have my little company which has grown nicely since then, but other friends have been less fortunate.

 

If the higher ed system could pump out well educated people but with way, way less debt it'd be easier for graduates to take risks and be entrepreneurs. With 100k debt load and zero hope of debt relief from bankruptcy people can't do anything. It's a tough situation. I don't know how to change it really. Even if the answers were obvious, I'm skeptical the political system would actually make meaningful changes.

 

So who knows.

 

 

[jay21]

The anecdotal high student debt loads distort the true picture of student debt.  The median is pretty low as the majority of loans are <10k.  The bigger problem might be drop outs with student debt as people with high debt loads should have professional degrees (medical, business, etc) and be a little more well off in terms of job prospects. 

 

DTEJD1997 - I am not sure about the law job market, but I think it's much worse than other professions.

 

Here's a good article: http://www.nytimes.com/2014/06/24/upshot/the-reality-of-student-debt-is-different-from-the-cliches.html?_r=0

 

 

[turar]

The anecdotal high student debt loads distort the true picture of student debt.  The median is pretty low as the majority of loans are <10k.  The bigger problem might be drop outs with student debt as people with high debt loads should have professional degrees (medical, business, etc) and be a little more well off in terms of job prospects. 

 

DTEJD1997 - I am not sure about the law job market, but I think it's much worse than other professions.

 

Here's a good article: http://www.nytimes.com/2014/06/24/upshot/the-reality-of-student-debt-is-different-from-the-cliches.html?_r=0

 

Comments to the article have criticisms of its validity. $10K debt for 58% of population that they cite is for a sample of "households led by 20-40 year olds". So, half of their sample are 30-40 year olds -- one would hope they have lower debt by now. Second, boomerang kids living with their parents are probably either not counted or their parents (those leading the household) distort the statistics by not having any debt. Third, many 20-30 year olds can't afford to live on their own, and have multiple roommates. Those are not considered as households. And then the source is of course, Brookings, the right-wing think tank.

[randomep]

The only unrest are in the poorest countries that are left behind, say africa, or burma. Even china has not had destablizing unrest like tinnamen. The world is getting better and people in turn are happier.  The poorest in america are not left behind, they are better educated than two generations ago, it is progress.

Well, there was that Ukrainian revolution that happened literally just this year in the middle of Europe. Kievans are not Africans or Burmese, their quality of life was much higher. Same with Arab Spring -- these countries were not desperately poor by any means. Libyans were relatively well off actually, and had quite a lot of government subsidies for day-today life.

 

I don't think it's the matter of absolute poverty, it's the matter of relative inequity that people observe around them, and media plays a big role in this. Right now US media is full of dumb entertainment and silly news, I think that also plays a role in placating population.

 

And it's not like the US doesn't have any history of such unrest. Kent State or L.A. come to mind. http://en.wikipedia.org/wiki/Kent_State_shootings

 

And the guy did address this in his article briefly:

 

Many of us think we’re special because “this is America.” We think we’re immune to the same forces that started the Arab Spring—or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of you tell me to my face I’m completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.

 

Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning.

 

Ukraine is making progress over the past. 40 years ago they were a communist state, now they are a (pseudo democratic) country, the protest was a political one. What they were protesting was very different from the income inequalify of the article in question. I argue that in general most countries are making progress towards betterment of its people including US.  The article is saying that the US is going backwards in terms of social progress.  Who knows maybe the next Arab spring is in Russia.

 

Kent state to me was the culmination of protests over a bad war. The war was sending 100 americans home in body bags per typical week. Today I can imagine we'd have kent state if 100 american's came home in body bags in a week. But Iraq was nothing close to that. Today soldiers are all going volutnarily, and the government spends $1Mil per soldier per year! So the country is saying the lives of soldiers are worth more today than back then.

 

Yes I know I know you think I am in a dream world..... I guess I just agree with Warren Buffett on this point.

 

cheers

 

 

[DTEJD1997]

The anecdotal high student debt loads distort the true picture of student debt.  The median is pretty low as the majority of loans are <10k.  The bigger problem might be drop outs with student debt as people with high debt loads should have professional degrees (medical, business, etc) and be a little more well off in terms of job prospects. 

 

DTEJD1997 - I am not sure about the law job market, but I think it's much worse than other professions.

 

Here's a good article: http://www.nytimes.com/2014/06/24/upshot/the-reality-of-student-debt-is-different-from-the-cliches.html?_r=0

 

Once again, the NYT is a week late and $1,000 short....

 

The article is complete BS.

 

I know several people in the last 24 months who are starting college.  They are going to "in state" skewls.  They are ALL projected to have $100k+ in student loan debt FOR UNDERGRADUATE DEGREES! 

 

One of these persons is going to University of Texas, and two others are going to lesser known skewls.

 

The legal project I am working at has a tremendous amount of attorneys.  Most of them are young.  The ones I've spoken with ALL have tremendous amounts of educational debt.  The older attorneys generally don't.

 

The "edukational" system in the USA has gone completely crazy.  In the near future, I hope people will come to the realization that it is one of the major factors leading to income inequality.

[DTEJD1997]

Hope I don't come across as a "fire brand".  Here is a link to an article about a professor in charge of a "Poverty Center".  Crazy thing is, he is a central factor in creating poverty!

 

http://www.thecollegefix.com/post/18167/

 

He gets paid over $200k to teach ONE CLASS PER SEMESTER!

 

How many students are hopelessly buried in debt because of this guy?

[SharperDingaan]

It has long been understood, in virtually all cultures, that when you are poor - swell the numbers in your group as much as possible. Birth, migration, aging, etc. - any way possible.

 

5 poor people in a suburb means you get hurt; 500,000 in that same suburb makes it a ghetto - & you the king of that ghetto (mafias, hongs, etc); 50,000,000 makes it a political force strong enough to feed at the trough - & you a playa in deciding who the next prez will be. Lose the numbers, & you lose power & privilege.

 

Privilege corrupts across generations, & in-breeding accelerates it. But it is the same as the thieves problem - steal from the bank & the full force of law will hunt you down; steal from the thief & what can he really do. The good thief puts up gates & uses the state to keep the rabble out. The really good, use the FSB & divide the pie into oligarchs.

 

But .. your population has to play the game. Keep people content, do it over a long time, & folks don't notice how hot the water has become - because they adapt. But take away/reduce the subsidy, or change social structure rapidly, & you get almost instant rioting & revolution. In the old world one simply disappeared the reporters, removed the cameras, & none were the wiser - in the new world you cant remove the cameras fast enough, or reliably enough. So .... you get to see the bullets & bombings.

 

The US & UK financial markets have long been corrupt, but it was stable, contained & controlled. White-wall firm partners usurped the Dons role, but ruled their hierarchy's along the same lines, & spawned generations of over entitled. Problem was the entitled weren't that smart (1st copy degeneration) - f'kd up badly, & couldn't contain the instability that selling the jewels (via IPO) generated. The result has been the ongoing financial crisis.

 

There will always be unrest as those with lots to lose, bump up against those with nothing to lose.

You don't have to play the same game.

 

SD

 

 

 

 

 

 

 

 

 

 

 

 

[Gamecock-YT]

The anecdotal high student debt loads distort the true picture of student debt.  The median is pretty low as the majority of loans are <10k.  The bigger problem might be drop outs with student debt as people with high debt loads should have professional degrees (medical, business, etc) and be a little more well off in terms of job prospects. 

 

DTEJD1997 - I am not sure about the law job market, but I think it's much worse than other professions.

 

Here's a good article: http://www.nytimes.com/2014/06/24/upshot/the-reality-of-student-debt-is-different-from-the-cliches.html?_r=0

 

They are ALL projected to have $100k+ in student loan debt FOR UNDERGRADUATE DEGREES! 

 

One of these persons is going to University of Texas, and two others are going to lesser known skewls.

 

 

 

So the person is paying 'in state' tuition to go to UT and is going to have 100k in debt? I find that hard to believe. My guess is the person paying out of state tuition, which is their decision. There aren't any good schools in their own state? Sounds like a poor decision on their part.

[SharperDingaan]

Most cultures segregate schooling by gender, stratify by some kind of test, & include some kind of boarding school. Education to some minimum age is usually mandatory, if you don't agree; either don't have kids - or live someplace else without these terrible restrictions.

 

Boarding schools are great levelers, they set-up routine, instil responsibility & create stability.

State-run boarding schools for under-privileged kids attending school probably ranks right up there as one of the best things you could do for them. Give tough kids extended respites, allow them to learn, & let the magic happen. Play yard hazing usually wilts under the fists of my army & I, & we know that snide comments produce the Al Capones of the world. Everybody gets to be very good, very quickly ... & knows who their friends are in high & low places - for later.

 

Hard to think you're smart when everyone around you is also smart. But what you will learn, & very quickly, is that there are many kinds of smart - & that you need to be better than your peers (ie: master) in at  least one or two of them.

 

Put 1000 senior school boys or girls in a same gender school, & there will be fights. Pecking order is being established, & everybody learns how to deal with the bullying, drinks/smokes/money lending/drug dealing businesses, theft, & gay bashing that is everyday occurrence. Crème rises very quickly, & matrons are there to clean up the blood & broken bones along the way.

 

Boys & girls learn differently, get over it.

Focus on the physical, application, applied projects, let them fail, & make them compete against each other in supervised competition. There would be a lot more lady engineers if girls were allowed to build cars, robots, or machinery with female classmates; & put their brainchild up against their male counterparts - with full intent to win. Hormones, & brotherly/sisterly pride working for you, not against you.

 

Kids aren't pets, don't smother them to death.

 

SD

 

[peter1234]

Here is an interesting editorial by Seattle based entrepreneur Nick Hanauer.

 

http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html

[ERICOPOLY]

I've bought into the argument that the only way to force Walmart off it's government subsidies is to raise the Federal minimum wage.

 

Their workers are not getting by on Walmart's wages alone, they also get subsidies (like foodstamps) from the government.  Thus, the government is pushing Walmart's profits up by taking on part of the cost of keeping their workforce alive. 

 

So if you force them to pay a living wage, you can then take the workers off of government assistance. 

[PatientCheetah]

Maybe a tiered system will work better. E.g. companies with revenues < 10 mil $10/per hour, <100 mil $11, <1000 $12, everyone else $13. A more fragmented industry generally creates more employment if employment maximization is the goal.