Viral video shows how wealth is really distributed

http://economy.money.cnn.com/2013/03/08/wealth-video/

by sonabinu • 13 years ago

28 21 13 years ago

economy.money.cnn.com

matterhorn• 13 years ago

Good ole socialist wealth envy class warfare blah blah blah.

Wealth is produced. If there were a fixed amount of it, we'd all still be nomadic hunter-gatherers. Therefore, the gain of wealth is NOT a zero sum game. When some CEO (good, bad, or hopelessly incompetent) makes 14 bazillion dollars, that does nothing whatsoever to take anything from you. You don't need to worry about what that CEO makes. You need to worry about what YOU make.

Consider the White House Chief Calligrapher makes $96,725 per year. What a complete and utter waste of tax money. If it were not for the fact that its our tax money, it wouldn't matter a hill of beans. If Microsoft or Apple wanted to hire a Chief Calligrapher at $96,725 or $967,250 it wouldn't matter a hill of beans except to the shareholders of each company who might not think such an expenditure is going to pay off all that well.

I recommend reading Henry Hazlitt's Economics in One Lesson: http://www.fee.org/library/detail/economics-in-one-lesson-pd...

cpursley• 13 years ago

"If there were a fixed amount of it, we'd all still be nomadic hunter-gatherers."

Exactly - how do so many miss this basic economic truth?

intopieces• 13 years ago

Of course There isn't a fixed amount of wealth. But when a small number of people possess a vast majority of the wealth that is currently in existence, they also possess the means of wealth production and therefore control. By worrying about what the CEO makes, I'm worrying about what I make, too, because their influence directly affects my ability to create wealth for myself.

Please don't tell me that I shouldn't worry about the telecom CEO because I can just start my own telecom. I know the start up culture allows certain adventurous and well-funded white people to take a stab at their dreams, but let's not pretend there aren't a handful of very wealthy pulling the strings.

rm999• 13 years ago

The underlying issue with inequality isn't that some people are rich (although many progressives fall into the trap of making it about this), it's about how to alleviate the unfortunate fact that some people will always be poor because they aren't capable of generating much wealth.

It doesn't take a 'socialist wealth envier' to realize there are serious problems with large imbalances in wealth. This turns into the classic liberal (as in libertarian) vs modern liberal debate. A classic liberal will claim inequality is a natural consequence of an open market and therefore doesn't need to be fixed. This is an increasingly fringe opinion that even most economists disagree with. A classic liberal believes in redistribution of wealth, which unfortunately doesn't fix the underlying issue.

The sad fact is, there may be no clean solution. But that doesn't mean people shouldn't discuss it. Inequality is getting worse, and it looks like it will continue to get worse. This is a problem.

stefantalpalaru• 13 years ago

You're mistaking wealth and the money supply. It's the good ol' "let's live in a scarcity driven economy even if we don't have to". Because schadenfreude.

macco3• 13 years ago

> Wealth is produced. If there were a fixed amount of it, we'd all still be nomadic hunter-gatherers. Therefore, the gain of wealth is NOT a zero sum game.

Sure, but if the 1%er have gains above average growth, they taking it from the rest. A simple fact, that has a lot to do with interest Tt doesn't make them bad people. It ist just a mathematical fact.

The US have a big problem with wealth distribution (the biggest in the western world). The US has a higher GDP per capita then Switzerland, Germany, Austria, Netherland, Sweden, etc. Do you really believe the US has a higher avarage living standard?

kokey3• 13 years ago

> Sure, but if the 1%er have gains above average growth, they taking it from the rest. A simple fact, that has a lot to do with interest Tt doesn't make them bad people. It ist just a mathematical fact.

So by your logic if the 1% of runners run faster than the average person, they are taking running speed from the rest?

I would suggest to rather see it this way: If they are making above average gains they are probably better at investing their capital than the average person, but also helped by the increased bargaining power of the amount of capital that they have.

> The US have a big problem with wealth distribution (the biggest in the western world). The US has a higher GDP per capita then Switzerland, Germany, Austria, Netherland, Sweden, etc. Do you really believe the US has a higher avarage living standard?

The USA has a much lower GDP per capita than most of those countries you have mentioned.

kyllo• 13 years ago

The question isn't whether wealth is zero-sum or not. It is already super-obvious that wealth is not a zero-sum game.

The issue is that a certain small percentage of people are using positions of political power and influence to capture an unjustly large share of the wealth that is created by others.

Or do you honestly think that a Fortune 500 company CEO's yearly marginal product of labor is actually an 8 figure amount?

jiggy20114• 13 years ago

Inflation?

yequalsx• 13 years ago

The GDP of the U.S. grows, generously, at 3% per year. Wealth is a zero sum game in that the 3% gain must be distributed amongst the 300 million people in the country.

When wealth is concentrated in too few people it does take away from others. Particularly since they get an inordinate share of the gain (in usual times). The distribution of resources, consumption of resources, and benefits of resources in the world is grossly unfair.

In your example of the Calligrapher the shareholders of Apple play the same role as taxpayers. It's just a matter of scale. It makes no sense to see a difference between the two situations. U.S. government is a corporation for purposes of the analogy. It has a revenue, shareholder, and expenses. It's not possible to say in one case it doesn't matter if such a position exists but it does in the case that it's government providing the paycheck.

bryanlarsen• 13 years ago

Wow. In my opinion, the discussion on CNN is better than it is here. If this becomes popular here, this might change but at the moment Disqus is doing a great job of filtering a large number of comments. Kudos to Disqus on making popular media comments work well.

nextstep• 13 years ago

For those on a mobile device (the "Join the Conversation" feature wasn't working for me on my phone), here is the top comment at time of writing this. User 'spm' writes:

I think people are missing the larger point these type of graphs show. Of course there has always been rich and poor in America. And the bottom poor in America are doing better than the "middle class" in Zimbabwe or some other third world country. But the real point of these type of graphs is that return on PRODUCTIVITY has skewed exponentially toward the wealthy. It's evidence that supply side economics does not work. THERE IS NO TRICKLE DOWN lol. The rich just get richer while inflation and stagnant wages make the poor get poorer. This is not political rhetoric or demonization of the wealthy. It's simply reality and can be substantiated with data and numbers.

People also need to stop with this logical fallacy about the wealthy working hard for their wealth. Typically that's not how it works , wealthy people typically increase their wealth exponentially by NOT working hard...instead choosing to use this little thing called....the stock market. The whole point of the stock market is to make your money work for you...and get more of it. That little 15K you've slaved to get into your 401K, yea someone makes that in a week....off of dividends lol. Even CEOs who make hundreds of millions of dollars do not work in the traditional sense. They get paid to make decisions, and often times those decisions are out right HORRIBLE affecting the lives of the middle class and poor who work under them(if they don't get laid off). Luckily many CEOs have golden parachutes which takes care of that pesky notion of accountability which they can then use to make investments(and continue to grow their wealth exponentially) in the case that they are fired

jiggy20114• 13 years ago

You have to be a bit careful talking about things in terms of "working hard" since this is hard to define.

Apart from a few who have inherited enough wealth to throw it all at a financial advisor and say "Keep me solvent so I can chill and do coke for the rest of my life" you're going to have to do something.

Some might consider spending long hours doing research as to the best way to get the most growth out of your money to be hard work. Whereas others may think that anything which isn't back breaking manual labour isn't really work at all.

kokey3• 13 years ago

You mention that their wealth is put into the stock market, which is only part of the story since most of that wealth is in a variety of investments with a potential return of which the stock market is only one example. That wealth also provides the capital that funds many startups or help other companies grow. Some of these investments are rubbish, as you say, but the rubbish investments reduces the value of the portfolio. The wealth that remains and grows are because they are generally managed well by the wealthy individuals or whoever is managing it for them, picking the right investments. This is a good thing and there is a kind of trickle down that results because of this, in the form of investments being allocated to people worthy to invest in.

RyanMcGreal• 13 years ago

Maybe Sam Harris should have used the reality vs. the perception of inequality rather than firewood for his case study in how people can become irrationally attached to a comforting idea.

Viral video shows how wealth is really distributed

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