Saturday, December 07, 2013

Wealth Inequality in America

Amazing. Gripping. I watched at 2.5x using Enounce MySpeed.

And then I began thinking about what the guy says and what the charts show. And I realized there's something slightly--or, actually, majorly--wrong about what we see and hear.

The charts have to do with wealth distribution: that's "stuff owned" v. "stuff [including money] owed." But most of us think in terms of money, cash, and, most importantly, income and cash flow.

Indeed, the presenter himself seems to be thinking about these last matters (even though he says he is focused on wealth) when he says (4:59), "While the richest one percent take home almost a quarter of the national income today, in 1976 they took home only nine percent, meaning their share of income has nearly tripled in the last 30 years." Or, "I'm sure many of these wealthy people have worked very hard for their money, but do you really believe that the CEO is working 380 times harder than his average employee? . . . --Not his lowest-paid employee. Not the janitor. But the average earner in his company. . . . --The average worker needs to work more than a month to earn what the CEO makes in one hour."

As soon as we get into earnings, we are in a very different realm from wealth. Very different. And, in fact, we may be--but probably aren't (though, I think, we should be)--talking about income and cash flow . . . which topics raise additional issues like the relative benefits of working for pay (i.e., actually earning one's money) or "simply" "enjoying" the "benefits" of taking government largesse. . . . --Which raises questions both about government- (i.e., taxpayer-) dependent bankster recipients of government-sponsored corporate welfare . . . as well as those who earn $60,000 a year or less . . . and for whom government-sponsored personal welfare is also highly attractive. (On this latter topic, see Tyler Durden's article, Is This Why Americans Have Lost The Drive To 'Earn' More? which is based largely on statistics and graphs from a presentation by Gary D. Alexander, Secretary of Public Welfare of the Commonwealth of Pennsylvania. (Pay particular attention to the graph on p. 8 in this presentation about "The Welfare Cliff"; quite eye-opening.)

[Please understand, I agree with the presenter's implicit criticism of multi-hundred-times-the-average pay-scales for corporate CEOs. Such pay-scales seem absolutely crazy to me. But let us not implicitly criticize. Let's make the criticisms explicit. And let's do it thoughtfully and in a manner that makes our thinking stand out as valid.]

Beyond the confused statements above, I would want to criticize the presenter's implicit criticism and his wording here (at 5:13): "The top one percent own half the country's stocks, bonds and mutual funds. The bottom 50 percent of Americans own only half a percent of these investments, which means they aren't investing; they're just scraping by." --Really? You have to own stocks, bonds, and/or mutual funds so as not to "scrape by"? I beg to differ!

The presenter closes, "We certainly don't have to go all the way to socialism to find something that is fair for hard-working Americans. We don't even have to achieve what most of us consider might be ideal. . . ." Agreed.

But then the last sentence: "All we need to do is wake up and realize that the reality in this country is not at all what we think it is." --And I think: Really? What difference will that (i.e., "waking up and realizing the reality") make?

I wish I knew of a real solution to whatever real problem we are seeking to address.

Still. It is pretty amazing to see how little so many seem to own . . . and how much others own.

The question is, "Then what?"
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