Why the (US) Rich Are Getting Richer

http://www.foreignaffairs.com/articles/67046/robert-c-lieberman/why-the-rich-are-getting-richer

by boredguy8 • 16 years ago

36 49 16 years ago

foreignaffairs.com

sophacles2• 16 years ago

I thought it was because the rest of us were just lazy freeloaders or otherwise morally undeserving!

T-R2• 16 years ago

Sarcasm? Not Sarcasm? Purposefully ambiguous?

barrkel• 16 years ago

From where I sit, it's very clearly sarcasm.

lotusleaf19872• 16 years ago

| Income inequality in the United States is higher than in any other advanced industrial democracy and by conventional measures comparable to that in countries such as Ghana, Nicaragua, and Turkmenistan. It breeds political polarization, mistrust, and resentment between the haves and the have-nots and tends to distort the workings of a democratic political system in which money increasingly confers political voice and power.

Queue the libertarian rhetoric to rationalize this with another meritocracy (blame the poor) argument.

hnal9434• 16 years ago

How about the Paul Graham argument that income inequality is not a problem if it means that everyone's standard of living is raised?

http://www.paulgraham.com/gap.html

forensic• 16 years ago

See the other thread about wealth where people's standard of living is measured mainly by how much richer they are then their friends.

It is pretty easy to make the argument that someone 5,000 years ago who was at the top of his tribe is happier than someone today at the bottom, even though the guy at the bottom today has far more comforts than the 5,000 year old.

lotusleaf19872• 16 years ago

I like PG but that doesn't mean he's infallible. Income inequality to a degree isn't a problem when and if the tide does float all boats, so to speak, but the problem is the tide doesn't seem to be raising all boats and that the middle class has all but vanished in America and what's left are the upwardly mobile upper-middle class and the working poor. Kudos to them they can now DVR a show and have broadband internet available at an affordable rate, but when you're essentially a wage slave, it means very little. When the top 20% have 85% of the wealth in America, the other 80% are left to fight over the crumbs. That is a terrible foundation for a supposedly democratic nation.

sleight422• 16 years ago

Clearly everyone's standard of living is not going up when approximately 10% of the nation are unemployed.

chailatte• 16 years ago

Income inequality can be ignored (by politicians) until a large segment of the population cannot find jobs and can't afford food/gas/healthcare. Oh wait, we're there.

Census estimates suggest 1 in 6 Americans live in poverty

http://www.latimes.com/news/nationworld/nation/wire/sns-ap-u...

1 in 7 Americans rely on food stamps

http://money.cnn.com/2010/12/21/news/economy/food_stamps/ind...

Labor Force Participation Rate Drops To Fresh 25 Year Low, Adjusted Unemployment Rate At 11.7%

http://www.zerohedge.com/article/labor-force-participation-r...

martythemaniak• 16 years ago

You (and Paul Graham) need to look into the studies that very clearly show people's happiness is a relative measure, not an absolute one.

rmah2• 16 years ago

That would be nice if it were true. But it's not.

bocajuniors• 16 years ago

As long as people's basic needs are fullfilled I think it really is the relative wealth that decides their happiness.

CWuestefeld4• 16 years ago

Your statement makes a nice, pandering story, but it's really a very complex issue.

There's some truth in the idea that the rich get richer, faster than the rest of us. But today, in a practical sense, what does it mean for someone to have much more money than I do?

And what causes it? It's certainly not that some plutocracy is holding our heads below water, as much some people like to paint that picture.

I'd encourage you to read this article, which has a pretty insightful analysis of where this inequality originates, and why: http://www.the-american-interest.com/article-bd.cfm?piece=90...

bitwize• 16 years ago

Actually the Foreign Affairs article makes it pretty much as simple as that. We were going pretty good in the 1960s and the moneyed plutocracy, angry that they were losing power, financed and fomented a conservative counterrevolution to undermine all the progress that had been made. They got obscenely wealthy, while we got the shaft. Pretty cut and dry.

impendia• 16 years ago

Something I've long been curious about, as an academic who is removed from the startup culture and never really gave a damn about getting rich.

Suppose that the (US) marginal tax rate on income or capital gains over $500K was raised to 75%.

How much would this affect entrepreneurs' willingness to work their asses off on their startups?

charlesdm• 16 years ago

Well, I guess a lot of people do it for the money as well as the fulfillment of building a great company.

Relocation to a different country is always an option.

noarchy• 16 years ago

It is an option, but an intentionally-difficult one. It is often easier to move products across borders than people. The nice thing about the Internet is that you don't always have to care.

rmah2• 16 years ago

Yes. However, increasing it from the current 15% to 35% or 38% probably wouldn't affect it much.

rbranson• 16 years ago

To be honest, probably nothing. Rich people are pretty much pros at operating tax shelters, which explains the famous Buffet quote about how he pays a lower tax rate than his secretary.

boredguy8• 16 years ago

No, it's better/worse than that. Long-term capital gains (held more than one year) are taxed at 15% for someone like Buffet. He paid a lower rate (17.7% combined short-term and long-term) on taxes than his secretary without trying to avoid taxes.

yeahsure• 16 years ago

I invite you to read this article about Denmark ("The happiest place on earth") circa 2007: http://abcnews.go.com/2020/story?id=4086092&page=1 From the article: "The happiest people in the world pay some of the highest taxes in the world -- between 50 percent and 70 percent of their incomes"

I know this thread is not related to happiness, but I do think there is a correlation between poverty and happiness. It's hard to be happy when you can't put food on the table (let alone pay for an education) for your children.

akamaka• 16 years ago

This is just another in a series intellectually feeble articles on the wealth divide. Compare this recent study from Canada: http://www.policyalternatives.ca/publications/reports/rise-c...

Both of these pieces offer no in-depth analysis of the data and almost no international perspective. Without offering any justification, they quickly point the blame at the typical scapegoats of "the bankers who caused the crash", high CEO pay, and tax rates. They rely on broad and readily available statistics, and haven't done any genuinely new groundwork.

I'd like to see a better study which considers these factors:

* Choosing a meaningful dividing line (Why choose to compare the top 1%, and not some other fraction?)

* Breaking down sources of income (Investment income, regular pay, stock option grants)

* Breaking down income by industry (Medical, law, engineering professionals; public servants; finance professionals; entrepreneurs; corporate managers; entertainment figures)

* Detailed comparison of wealth divides in other countries

If anyone can point us to this sort of study, please speak up!

BarkMore• 16 years ago

Yes, it's feeble. The article does not connect some of the trends it discusses to the problem of income inequity.

For example, there's no discussion of how increased taxes will fix income inequity nor is it obvious why it will. Gates, Buffet and other superrich got to where they are through long term capital appreciation. Increasing taxes will have an impact on them, but they will still be superrich.

elai• 16 years ago

How many high paid ($1million+) CEOs are there?

mattmcknight• 16 years ago

What's also interesting is the national wealth divide is more or less a fake issue, because the economy is global. The really important divide is between wages for unskilled workers in the US and western Europe versus wages for unskilled workers in developing economies. You can't ignore the "Designed in California, Made in China" differential.

CWuestefeld4• 16 years ago

Getting tired of the inequality articles.

getsat3• 16 years ago

This coming from someone who lives in a city (Milford, NJ) with a median family income of $62,167 USD that is 97% white. Ouch.

(Also, today I learned about HackerNewsers from your profile. Very cool site!)

CWuestefeld4• 16 years ago

If you're expecting to get me upset by looking up my demographics, you're wrong. I wouldn't have posted that if I cared. But it's funny how much you think you know about me and how wrong you are.

For example, I don't live in Milford, NJ. That is, in fact, my mailing address, and if you plug that into your GPS you will indeed arrive at my house, but the world is slightly more complicated than that -- as is the topic of the OP. I'll leave it to you to puzzle out how both of those might be.

Your statement about Milford being "97% white" reveals more about you than it does me, I think. It reveals that, for some reason, you believe that race is important; why else would you go looking for the racial makeup of my (purported) community? It reveals little about me, since you'll find that (assuming you're using Wikipedia's numbers) my household would make up over 3% of the town's non-white population (if I did indeed live in Milford).

I happen to fall into the largest age cohort cited. And if you knew my address, you'd also see that my property is actually smaller than the minimum zoned acreage, being grandfathered in.

What the heck does any of this have to do with (a) equality of Americans; or (b) the fact that we've seen so darned many of these articles recently on HN?

exit• 16 years ago

i don't care. neither do all the people who voted up the original post. there's a lot of stuff on the front page - funny how you just couldn't avoid spending time in this article.

cgrubb• 16 years ago

Author's reasons for phenomenon in brief: (1) tax system not progressive enough; (2) govt hard on unions.

Why the (US) Rich Are Getting Richer

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