Stiglitz: wealth concentration will be America's downfall

Discuss

177 Responses to “Stiglitz: wealth concentration will be America's downfall”

  1. gwailo_joe says:

    good thread. insightful comments.

    and it’s all just tilting at windmills.

    The 1%-ers control the people that control your country!!!

    I can assure you they will not willingly hand it over, even if we ask really really nicely.

    Vote? Yeah, I vote. In a barely futile attempt to keep the most egregious villians out of office. Once, in a fit of populist whimsy I voted for Ralph Nader. Perhaps you recall how that turned out. 3rd party? Never again!

    I find it interesting that the first comment echoes my own thoughts that someday, when the inequality means survival or lack thereof: the rich will pay the hungry to kill the starving.

    We stand on a precipice. And yet. . .these are the good times! We could maybe, with our great wealth and a singular unified effort make the needed changes and hard choices that would give us a chance in hell of survival as a nation with some semblance of the prosperity and relative peace we now almost completely take for granted.

    That of course will never happen.

    From the Trojan War to the latest economic collapse to the steady examples (oil spills, meltdowns, shitty building construction) of plain old human fuckery and mischance: ‘Oops, How did THAT happen?! Ohhhh, we should have known!’ Hindsight is ALWAYS 20-20. But, as simple ass humans that think we are so smart, we go blithely along our merry way until we fall in the punji pit we dug ourselves.

    We live in a time of miracles and marvels. I am constantly amazed at the genius of my fellow man that allows me to fly across the oceans or talk to a friend around the world. And there is great compassion and humanity, love and struggle that shames me sometimes; because I want to help this planet and the people in it.

    But. The abyss awaits. Our ‘way of life’ is based on resources and forces that will dry up or wither away. Health care for all? FOOD for all? Inforced Equality is a nice thought. But not reality.

    Enjoy all this, friends. . .because to attempt to get what you think is best: there will be blood. And things will never be the same, ever.

    Have a nice day!!

  2. optuser says:

    And on to my real point for visiting this page:

    No jokes in this thread yet about everyone knowing about Joseph’s brother, Hugo? C’mon, Happy Mutants, a little humor here!

  3. Anonymous says:

    There’s an Aerosmith song that tells us precisely how to deal with this situation.

  4. museincognito says:

    As an aside:

    Driving along the long country roads to the summer house, I’ll often come up to a large plastic bag on the side. And, soon, another. And another. As a child, I most curiously asked what they were.

    “Somepeople can’t afford garbage service and will just throw it out of their cars at night.”

    The nerve of “those” people throwing garbage out soiling our view and will, if not picked up by gawdknowswho, topple or blow off the road, leech into the marshy land and eventually make it’s way, by creeks and water-going habits, to “our” privileged, pristine and private lake.

    “Those” bastards.

  5. Anonymous says:

    Sir–

    Let me be the first to say it: Thank you for your contribution to society!

    We are, on the whole, vastly indebted to the generous spirit and boundless magnanimity of souls such as yourself, the virtuous one percent of our society, who each earn several orders of magnitude more money than the rest of us. I would like to apologize for us, the other ninety-nine percent, the helpless ingrates who feel entitled to your charity. (And in truth we do compel it; but I beg you to consider that we do so only out of desperation, fearing that you will spurn us. In any event, it is my understanding that it is not so difficult for one with your resources to bypass our feeble and mean-spirited attempts at extracting money from you by force, as we cannot afford to pay our agents so well.) It is a mystery to me why we cannot emulate your success. Perhaps we are indolent, or merely stupid. In your case: if you arrived in the United States with only two suitcases and a set of clothes, and have become extraordinarily wealthy nonetheless, surely it should be possible for anyone in the country– indeed, everyone!– to do the same.

    It is only by virtue of your noble spirits that we have our roads, though they may be crumbling; our schools, though they may be dilapidated; our police, though they may be ill-trained. You carry the weight of the world on your shoulders, and society would descend into a pathetic anarchy if you were to abandon us.

    You do the work of the angels, sir– and you are paid handsomely for it. God bless you.

  6. Anonymous says:

    This is absolutely amazing – this entire thread has been nothing but discussion of taxes. Is there no other factor? It seems obvious that taxing the rich will not enrich the poor.

    What about financial regulation? There are far too many automatic money-suckers which have just become too efficient. There are still too many expensive risks and failures.

    Can anyone address this area? I’m a computer weenie…

    • spencerspencer says:

      Taxing the wealthy at a rate that is fair means that the poor can be taxed less.

      When I say ‘a rate that is fair’ I mean more than they are taxed now :)

      Tax should be balanced so that the wealthy pay more tax proportionately – but not so much that they give up their wealth generating activities.

      Companies too should be taxed more – especially those that derive their income from resources such as oil, gas and other non-renewables.

  7. rebdav says:

    Ending too-big-to fail and other mega socialism for major corporations not humans makes being rich a win-only proposition. It is like the guys running Goldman or the stock market microsecond arbitrage houses. Nearly all laws passed by both the right and left are to benefit their most wealthy contributors and thus further lock in the established class of privilege. The worst is the hyperinflation of education, if you can’t access higher education which is more and more only available to the rich and talented lower class on scholarship.

  8. awjtawjt says:

    My worry is that when that day of revolution comes, and one half of the proletariat has been hired to destroy the other half, the freedom fighters come knocking on my door and burst into my house pointing guns and shouting, “Who do you support? Which side?”

    “You, of course! I support you! Please take anything you want but don’t hurt my family,” I exclaim fearfully.

    And then my son answers, “Neither side; you’re all freaks!” And then they take him away because I was too afraid to give the honest answer.

    Revolutions are so nice to think about. I want no part of one.

  9. HereticGestalt says:

    This idea that we have to come up with an a priori argument from ethical and/or economic necessity for the single Correct distribution of wealth in order to propose taking any action regarding massive wealth inequality at all is ridiculous – anti-intellectual, obstructionist bullshit pretending to be some sort of rationalist objection.

    In the real world, good concrete policy is made by analyzing contemporary and historical information to address real situations. The attitude that any policy approaches not justified by a complete, self-consistent logical (and ideological) theory of history and human values deduced from the first principles as set forth by Adam Smith or Karl Marx is pseudo-intellectual crap, whose only function is to advertise someone’s juvenile inability to intellectually cope with complexity and uncertainty.

  10. g0d5m15t4k3 says:

    I just got done reading The Windup Girl (Recommended by BoingBoing, thanks! http://www.amazon.com/Windup-Girl-Paolo-Bacigalupi/dp/1597801577) and it is about a society who has manufactured food that will genetically not reproduce past a set number of seasons and/or dies out from a genetically modified blight that kills the food off. So they use food as a way to war with other countries. I kill off all your rice crops if I hate you and that’s your main food source.

    The way they got that sweet set up is that power hungry agricultural companies get a monopoly over farmers. No food is available that ISN’T from a genetically trademarked item. The parallel is that only a small handful of companies own all the food rights in the world. So they have a strangle-hold on all the lower class citizens. Clearly this is a worst-case scenario involving copy right laws and genetically modified foods, but there is a similarity.

    The only way you could topple such a monopoly of money/power would be from the inside. A bunch of poor people rioting isn’t going to change the laws. An actual politician needs to take it into their own hands and stop what everyone know is wrong.

  11. Anonymous says:

    Simple solution: encourage them to have more children. That way their wealth will be divided each generation. Eventually it will become (relatively) insignificant.

    Make a law that you cannot bequeath more than 25% of your wealth to a single individual (without paying 50% tax on all money bequaethed over that amount.

  12. Anonymous says:

    I don’t trust my fellow citizens much more though. If given a chance the Glenn Beck Tea-Bagging crowd would be just as bad with their archaic obsessions with communists and unfettered capitalism.

  13. spencerspencer says:

    Governments worldwide are cowed by big business and like big business treat citizens as a source of income and a means to build power.

    Governments have forgotten that they work for us. When they finally remember things may improve but they will never be perfect. That’s alright though because that’s what makes some of us strive.

  14. Emo Less says:

    If you vote for any candidate who represents one of the two big political parties, then you support this growing wealth inequality. Think about that the next time you vote. Or better yet, abstain from voting. If you don’t participate, you are not validating a corrupt, failed system. Why does the middle class continue to vote for a political system that is a puppet of the one percent and is slowly and continually eroding their quality of life?

    • g0d5m15t4k3 says:

      Is there a required percentage of the population who HAS to vote for the vote to be counted as a valid one? As in, if no one votes does that stop someone from getting elected? I don’t think so, but if there is, please let me know.

    • noggin says:

      ” If you don’t participate, you are not validating a corrupt, failed system.”

      Yeah, that always works so well to bring about change.

      It’s called tacit approval.

      • g0d5m15t4k3 says:

        Thank you.

      • Emo Less says:

        Question for all of those who voted for the “Change you can believe in” candidate — how’s that working out for ya?

        You call it tacit approval, I call it a form of civil disobedience. If you have two choices and they are both very bad ones, why not just walk away? It is your right not to choose.

        • g0d5m15t4k3 says:

          I tried going to Canada, but they won’t let people without and education in. Sucks because that’s why I want to go to Canada.

        • djn says:

          Slightly better than voting for the second-largest would have been, I guess.
          (The US election system is something I continue to be unimpressed with.)

        • noggin says:

          If your civil disobedience is indistinguishable from tacit approval, how effective do you think it will be, really? Still worth advocating?

          In the US, there are never just two choices in most elections, as long as write-ins are possible, so to generalize like you did, you presented a false dilemma and a stupid solution to it.

          Sorry, just the way I see it and from your other comments, I think you know this.

          • Emo Less says:

            “Stupid solution?” I admit, it is a principle, not a solution. And don’t you feel a bit “stupid” every time you vote for the corrupt status quo. It is best to not use the word “stupid” when replying to someone you disagree with on a civil discussion forum.

          • noggin says:

            You are absolutely right, I apologize to you and anyone else whose sense of civility was offended for use the term “stupid” in reference to your principle. I regret that the use of the term may also have closed your mind to my enlightened opinion and that I’ve lost an opportunity to show you the error in your principle.

            Let’s say I heartily disagree with the principle you advocate because, in my opinion, it makes no logical sense to advocate inaction as a means of protest if it cannot be distinguished from tacit approval. It seems that such a position does just as much to maintain status quo as the people that vote for status quo.

            For the record, I’ve never regretted or felt stupid voting, nor regretted or felt stupid for who I voted for. I have only felt like a stupid idiot when I failed to vote.

          • Emo Less says:

            I argue that tacit approval is a lesser-evil than direct approval. You particate, you validate.

            So what do think of a widespread middle-class work strike?

          • djn says:

            Regarding not voting, isn’t it a slightly stronger signal to vote blank (basically, “there are no candidates good enough”)?

            Of course, if you’re already there you’d be better off voting for a third party, if there are any you like.

          • Emo Less says:

            Good point. It’s a tough call between voting for a 3rd party that has no chance and not voting at all.

          • g0d5m15t4k3 says:

            Vote for blank and write something heinous in the blank. I try to actually pay attention to the elections and vote for who best represents my wants. But no one is going to be a perfect fit no matter what.

          • Emo Less says:

            Remember — they say one thing, and then get elected and do another. Most votes ultimately count for misrepresentation, not the representation for which they were meant.

      • Radka says:

        Well it’s the same as voting for who you really want (if they’re not one of the top two) because your vote may as well not have been cast…

    • hooch66 says:

      Many tried that in PA this past election. We were rewarded with a Republican governor who has proposed a 50% cut in funding to Higher Education (the biggest such cut in the history of this country in any state’s budget).

      The Dems are a weak bunch, but the would not ever try something like that.

    • Anonymous says:

      Does voting to minimize evil really mean you endorse it? This seems like a false dichotomy.

  15. UncaScrooge says:

    When will we hear an end to the canard that hard work is rewarded in America?

    You can argue tax structure all day long, but for every one person in this country that “made it big” through hard work and fiscal responsibility there are literally thousands that are rewarded with more hard work and Spartan living conditions.

    Folks who work hard and become successful need to realize that they have just won a game of musical chairs: Take your prize and quit demonizing the people who don’t have anywhere to sit.

  16. minder says:

    I agree that there are many big problems caused by (and soon to be caused by) the growing gap between rich and poor, however it really bothers me how much Democrats (and others) try to say the rich don’t pay their share of taxes. False arguments only lead to the opposition disbelieving everything else you say.

    The top 1% of earners payed 40.4% of all income taxes collected by the IRS in 2007.

    http://www.irs.gov/taxstats/indtaxstats/article/0,,id=129270,00.html

    •The top 1 percent: Americans who earned an adjusted gross income of $410,096 or more accounted for 22.8 percent of all wages. But they paid 40.4 percent of total reported income taxes, an increase from 39.9 percent in 2006, according to the IRS.

    •The top 5 percent: Americans who earned $160,041 or more accounted for 37.4 percent of all wages in 2007. But they paid 60.6 percent of the country’s total reported income taxes, up from 60.1 percent a year earlier.

    •The top 10 percent: Americans who earned at least $113,018 paid 71.2 percent of the nation’s income taxes, up from 70.8 percent a year earlier.

    •The top 25 percent: Americans who earned at least $66,532 paid 86.6 percent of the nation’s income taxes, up from 86.3 percent a year earlier.

    •The top 50 percent: Americans who earned at least $32,879 paid 97.1 percent of the nation’s income taxes, up from 97 percent a year earlier.

    •The bottom 50 percent: Americans who earned less than $32,879 paid 2.9 percent of the nation’s income taxes, down from 3 percent a year earlier.

    • g0d5m15t4k3 says:

      Weird. Last year I was part of the top 50% and now I’m part of the bottom 50%. I guess I’m just straddling the middle there. I am looking to buy a house right now. Being super in the middle, guess the price of the house I’m looking for. Between $50k & $80k. You know what that gets you in Columbus, Ohio? An outdated house with no appliances & no copper wiring and no plumbing in a decent neighborhood or a severely old house with maybe a new stove in the stab-you-in-the-face ghetto. And I’m in the MIDDLE! I am RICH in comparison to 49% of the population. I guess those below me are the people buying up the $10k houses around my ghetto house. With their kids eating lead paint, getting cancer from asbestos and sending their kids to the crappiest school in the city.

      I can see why people not in the top 1% are living beyond their means. If I had kids, I’d HAVE to in order to live in a safe house, safe neighborhood, and send my kid to a school with text books that aren’t 20 years old.

      • minder says:

        @g0d5m15t4k3 — I guess you didn’t read the first couple sentences of my post. I AGREE that there are huge problems caused by the widening gap between rich and poor. My only point was that these kinds of conversations always include people saying that the rich don’t pay their share of taxes, so I was pointing out that the top 1% pay 40% of all taxes, and the top 50% pay 50% of all taxes.

        • g0d5m15t4k3 says:

          I wasn’t disagreeing with what you said at all. :) I agree the rich are paying their taxes. My issue is that even though they are paying taxes, people are still suffering. Basic housing, food and safety are not being taken care of.

          I think anwaya said my point concisely in comment #38:

          “Thanks, minder. Perhaps your figures are accurate. But you know what? Stiglitz has figures too, he says one in seven Americans in, you know, the wealthiest nation in the history of civilization, need food stamps in order to eat.

          The solution is not to phase out food stamps, it’s to share the wealth more equally. The mechanism for that is taxation. The 1% doesn’t want to float all boats with their wealth, so it must be redistributed so the poor don’t drown.”

    • anwaya says:

      Thanks, minder. Perhaps your figures are accurate. But you know what? Stiglitz has figures too, he says one in seven Americans in, you know, the wealthiest nation in the history of civilization, need food stamps in order to eat.

      The solution is not to phase out food stamps, it’s to share the wealth more equally. The mechanism for that is taxation. The 1% doesn’t want to float all boats with their wealth, so it must be redistributed so the poor don’t drown.

      • minder says:

        @anwaya
        > The solution is not to phase out food stamps, it’s to share the wealth more equally. The mechanism for that is taxation.

        Taxation is not the only possible solution. And as I very clearly said, I AGREE that the widening gap causes a lot of real problems, and our society should work hard to reverse the trend.

        Solving it through taxation would just be a bandage-solution. If we tax the 1% heavily, what will our government do with the money? Most likely they’ll dump it into the defense department and other such things which will just funnel it back up. Before taxation could even begin to be a solution, we would need to restructure the entire national budget (which desperately needs doing anyway, I’ll grant) – which is looking very unlikely in any reasonable time-frame. Not to mention that money that does make it into “entitlements” is poorly spent as well. If we do it through taxation, we need to make sure the money makes it into education and other infrastructure that helps people have better communities – not funnel it into handouts.

        My post was to point out that the lack of taxing the rich isn’t the core problem. The problem is that they seek not only to be richer than us, but they’re also trying desperately to out-do each other. This causes them to do things like wanting to have their businesses have large profit margins through outsourcing while paying themselves extravagantly, and other things like hair-brained virtual investment schemes.

        We should work on the root problems, not apply a tax bandage.

        • Owen says:

          We’re aware that the system is resistant to change. The people at the top like it that way.

          Corporations (and the rich) like paying low or no taxes, and they like having money funneled to them rather than towards education or other actual priorities. Both sides of the problem need to be fixed, and neither is an easy fix. But both are real problems; fixing the tax side isn’t a ‘bandage’ but rather a part of the solution.

    • Neon Tooth says:

      The top 1% of earners payed 40.4% of all income taxes collected by the IRS……

      And the tax burden on them is nothing compared to what it is for average Americans. They may pay a large amount of *dollars* in taxes, but they make an astronomical amount to match. Their burdens have steadily decreased since the ’50s.

      This is why no billionaires have taken up Warren Buffet on his tax challenge:

      “I’ll bet a million dollars against any member of the Forbes 400 who challenges me that the average (federal tax rate including income and payroll taxes) for the Forbes 400 will be less than the average of their receptionists.”

      “So far only three close friends, all 400 members, have made the calculation for me. They all came up with results similar to mine but have no interest in being identified.”

      http://www.cnbc.com/id/21708265/Warren_Buffett_s_Fellow_Billionaires_Don_t_Bite_on_Million_Dollar_Tax_Challenge

      • g0d5m15t4k3 says:

        The best part of that article was this:

        And B. Thomas Glissando (Tied at #239 with $2 billion) brought out the often-heard argument that while the very rich may pay lower tax rates, they’re carrying most of the burden when taxes are measured in dollars:

        “There are some facts I’d like to remind Mr. Buffet of. The top 1% of earners in this country pay 30% of the income taxes, and the top 5% pay 50% of the income taxes. Other than that, I don’t think he’s crazy.”

        Because here is a rich guy saying “The percentage of income I pay to taxes may very well be less than what a poor person pays. But I pay more dollars!” No shit you pay more because you make more. On what planet would it be fair for everyone to pay the exact same rate? Person A pays 50% of $100 is $50. Person B pays 50% of $1000 is $500. Too bad a loaf of bread costs $50 person A. Go work for person B, they might throw you a bone when they feel guilt about being richer than you.

      • Wally Ballou says:

        That’s a great argument for cutting the tax rate of the receptionists.

        • Neon Tooth says:

          That’s a great argument for cutting the tax rate of the receptionists.

          Absolutely, while increasing the rate proportionately for fabulously wealthy people.

    • Anonymous says:

      Dear Minder,

      I’ll assume that your figures are correct. They still tell only part of the story.

      1. Lots of taxes (notably sales tax) beyond income tax.
      2. As pointed out in the article, there are all sorts of “reverse taxes” (subsidies, bailouts) given to the wealthy. Writ large, that includes foreign policy and really the whole government.
      3. The economic system is being, more and more, skewed to favor the accumulation of even more wealth by the very rich. So, again, sort of a “reverse tax” in which economic benefits accrue.
      4. As also pointed out in the article, so much of the wealth accumulation by the rich is through capital gains, not income. So, to be blunt: income tax figures may be meaningless.

    • anwaya says:

      Oh, and I get it now: how do the top 1% end up paying 40% of the total income tax take when the top *marginal* rate is only 35%?

      Because there are so many more whose income is too low to pay tax.

      The injustice is not that the top 1% are paying 40% of the total income tax take, that 40% is an indicator of the growth of the divide. If you, minder, want the rich to pay a smaller percentage, then reduce the divide.

    • Owen says:

      People in higher tax brackets pay a greater percentage of their income in taxes because they can afford it, and because they wouldn’t be able to make such income without the state.

      I argue that ‘Fair share’ does not mean ‘an equal percentage’. It means that people pay based on what they can afford. The rich should pay a higher percentage – indeed, higher than they pay today. The tax rate on the highest incomes in the fifties was 90%. Today it’s 35%. The portion of US tax revenue paid by corporations has also been declining for decades, and since the Supreme Court tells us that corporations are people now, we must admit that they’re the richest people around.

      When Congress and the states refuse to raise taxes on people making millions of dollars, but are willing to cut programs that people on minimum wage depend on, then I believe that the system is being unfair. The rich can contribute more, and they should.

    • jimkirk says:

      But income tax is only part of federal tax revenue, about 45% in 2008. What are the payroll tax rates versus income? That’s about 36% of the pie, followed by corporate income tax (12%), excise tax (3%) and assorted other incomes (4%).

      NOW what are the overall tax rates?

      Oh, and let’s not forget that on average capital gains accounts for a much larger income percent for someone grossing $500,000 per year than someone grossing $50,000.

      Add in state & sales tax and, according to Citizens for Tax Justice the breakdown for 2009 morphs to

      group—tax as % of income
      top 1%—30.8%
      1~5%—31.6%
      5~10%—31.2%
      10~20%—30.2%
      20~40%—28.5%
      40~60%—25.3%
      60~80%—20.5%
      lowest 20%—16.0%

      Source: Institute on Taxation and Economic Policy Tax Model, April, 2010.

    • Anonymous says:

      What about the top 1% of revenue recipients? For example, according to GE, they didn’t make any money in the US last year, and so paid no taxes…

    • Anonymous says:

      As corporations have the rights (and ostensibly the responsibility) of American Citizens, we should really be counting those numbers when we talk income, yeh? Those big tax percentages won’t look so pretty then…

    • Baldhead says:

      I think comparing 2007 to 2006 tells very little of the story. The rich complain about being over- taxed, yet enjoy the lowest incom tax rates since it was introduced in the US. Take the recently extended tax cut for people making over $250K- 20- odd%, down almost 40% from 1960′s levels. I suspect that the reason the bottom 50% pay so little actual taxes is because they have far, far less than 50% of the money, a statistic you neglect to include.

  17. Teller says:

    Time silences the armchair anarchists. They start making some money.

  18. Anonymous says:

    Perhaps they’re paying that much, because they make that much?

  19. danfan says:

    I look forward to reading the incoherent Ayn Randian nonsense from the resident libertardarians on this one.

    d3matt has already contributed admirably to the cause, I see!

  20. heavystarch says:

    The stupid thing about this article is such an old problem. They think that the Economy is a FIXED SIZE PIE. The “rich” are keeping more of the pie for themselves while the “poor” (really how poor are the poor in the USA? – we all are on the internet arguing about this, have cell phones, eat well enough and probably live in a decent place with toilets, running water etc – what % of the people have this stuff in rural india, china, africa etc…)

    Anyway there are endemic problems in America but it isn’t entirely the fact that wealthy people are accumulating more wealth.

    He points to higher food prices, lower relative wages, higher costs of medical care, higher costs for education etc.

    Do any of you even know why this is really happening? It has nothing to do with the “rich” accumulating more wealth (tough that might be a symptom of the problem).

    The Federal Reserve is destroying the value of our currency, bailing out banks that should be failing, propping up our government that is overspending and taxing the hell out of the middle class – making them poorer.

    the Dept of Education started federally guaranteed student loans and look what happens – cost of college education goes. The exact opposite effect of what they set out to do.

    Look what happened when congress deregulated housing loans, tried to get everyone into a home (look at all the federal programs aimed at getting “poor” people into owning their own home) the Federal Reserve lowered reserve rates and Credit was easy to get on a house? Housing prices skyrocketed during the bubble making them even more unaffordable.

    Government subsidizes agriculture – food gets more expensive not less expensive. Corn EThanol raises corn prices making it more expensive to each corn based foods.

    Anytime the government meddles in the markets there are distortions in prices.

    Hell look at the damn light bulb situation. I now have to buy $4.00 CF bulbs filled with mercury…so much for environmentalism. How about just turn off the incandescent when you’re not in the room.

    When the Federal Government gets involved and starts intervening in the free market it causes distortions in price – often causing long term negative side effects that are usually counter productive to their original intent. While we’re talking about the government intervening in the market – our foreign policy shows us intervening in other countries.

    This is the problem of the Nanny State and an ever growing centrally concentrated government. IT thinks it knows best and will insert itself into every part of our lives. Spreading subsidies to companies it thinks should win, making it unfair to real free markets, stomping one dictator in the middle east while propping up two more, taxing the hell out of the middle class and businesses, driving them overseas or to look for ways to hide their income.

    The problem in America isn’t that there are Rich people or that they are getting richer (though their influence buys them lots of good things) but it is the continually increasing involvement of government bodies/entities into every part of the human experience.

    It is the fight between individual liberty and collective/centrally planned control of society.

    Freedom vs. Control

    • Anonymous says:

      I now have to buy $4.00 CF bulbs filled with mercury…so much for environmentalism.

      Oh, you’re in California. No wonder you are out of touch.

      Spend a half dozen shifts in a Philadelphia emergency room and then tell me nobody’s poor in the USA.

    • Anonymous says:

      really how poor are the poor in the USA? – we all are on the internet arguing about this, have cell phones, eat well enough and probably live in a decent place with toilets, running water etc – what % of the people have this stuff in rural india, china, africa etc…

      The article explains this. Nobody is claiming the pie is of fixed size; it turns out that when you actually factor that into account, you still see the rich getting richer and the poor getting poorer.

    • Anonymous says:

      Or, to quote it explicitly:

      With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)…

      That’s how poor the poor in the USA really are. They are out of work and hungry, and if you think awesome because there are also people suffering overseas, I don’t know what to tell you.

    • Neon Tooth says:

      The wealthy defaulted on mortgages more than anyone else.

      What think tank are you from?

    • museincognito says:

      “really how poor are the poor in the USA”

      Really? Like, really? You obviously haven’t the slightest clue. And it’s so much closer than you (any of “us”) realize. Take a walk three blocks out of your comfort zone. And then three blocks more. And then three more til you are smack dab in the middle of either rural county shit or the deep, dark urban jungle you think doesn’t exist aside from possibly entertaining you on the nightly news and perpetuating any stereotypes you may have. But, really, no – you likely wouldn’t know about the poor.

      Mostpeople don’t.

      There will always be rich. There will always be poor. (Trust me, we’re too retarded to figure *that* out before we blow up the planet.) If the collective we can’t see the obscene disparity between the two as anything but insanely surreal and ultimately self-destructive, we are more retarded than I think.

      By the by, with all the guns out “there,” a revolution would be beyond badass. Kidding. Sort of…

  21. Neon Tooth says:

    So “turnpiketakesitstoll”

    Do you make the coffee here: http://en.wikipedia.org/wiki/Evergreen_Freedom_Foundation

    Or where?

  22. bjacques says:

    @Owen 14:

    “Your scenario only applies to educated and experienced employees when the economy is good, and only until your job can be outsourced.” FTFY

    Stieglitz nails the real “Clash of Civilizations.” Huntingdon’s thesis was always a problem, because the “good” civilization (i.e., the West’s), having made some headway towards deserving the appellation, started rolling backwards starting the mid- to late 1970s. If a permanent Gilded Age is the best available choice, I’ll take the Caliphate (though I do love my whisky).

    The real clash is that of a civilization in which everyone deserves equal consideration, at least before the law, versus those who own the guns and hand everyone else shovels.

    But the likes of Niall Ferguson and Bernard-Henri Levy don’t seem much bothered about that clash. They are the dhimmis of plutocracy.

  23. phisrow says:

    I suppose the question becomes whether the Bastille school of inequality management or the ‘I can hire one half the working class to kill the other half’ school of inequality management will become ascendant.

    Frankly, in our brave new world of riot cops and killer robots, I’m thinking that option two is a pretty safe bet…

  24. noen says:

    In complete and total agreement with him

  25. Wally Ballou says:

    Here’s a proposal for the soak-the-rich gang on BB.

    We replace today’s tax code with the Eisenhower era tax code. All the way, bottom to top (90%) only indexing the brackets for inflation over the last fifty years.

    Several BBers seem to like this a lot, and want to suggest correlation with the US’ prosperity during those years.

    The other side of the deal? We cap government spending, as a percent of GDP, at its average level during the period those taxes were in effect. I’d like to suggest that as a correlation with prosperity…..

  26. Anonymous says:

    It seems as if some folks would like to see the US return to the Eisenhower era in terms of attitudes, laws, and morality.

    Well, let’s see what would happen if those folks also embraced Ensenhower era tax rates.

    This is what various wage earners would pay in US income tax (ignoring deductions, credits, and the like) in 1953 vs today. These are all based on head of household tax rates. I’ve adjusted the 1953 brackets for inflation to 2010 levels (I couldn’t find the 2011 numbers immediately, sorry, but I think it’s close enough to make my point).

    In 1953, when Eisenhower took office, the top marginal US tax rate was 92%. There were 24 tax brackets from 0 to $300,000+. The $300k bracket, adjusted to inflation, would be $2.4m+ in 2010 dollars.

    In 2011, the top marginal US tax rate is 35%. There are 6 tax brackets from 0 to $379,150+.

    I haven’t double checked my math, so anyone who would like to is welcome to do so. But these are the figures I found. I think they’re quite interesting. Again, remember that these are in 2010/2011 dollars.

    Salary = $16,000 –
    1953 tax = $3,552 (22.2%)
    2011 tax = $1,793 (11.2%)

    Salary = $48,000 -
    1953 tax = $11,616 (24.2%)
    2011 tax = $6,768 (14.1%)

    Salary = $144,000 –
    1953 tax = $48,416 (33.6%)
    2011 tax = $31,501 (21.9%)

    Salary = $480,000 -
    1953 tax = $264,096 (55.0%)
    2011 tax = $141,936 (29.6%)

    Salary = $1.2 million -
    1953 tax = $852,096 (71.0%)
    2011 tax = $393,943 (32.8%)

    • Raj77 says:

      Unfortunately, adjusting simply for inflation won’t work, as there are other factors affecting spending power. Interesting figures, though!

      Wally Ballou- there’s about a 10% difference (30ish in Ike’s day, 40ish now). I’d say plenty of people would be OK with that coming out of the defence allocation in particular.

  27. Anonymous says:

    A great iteration of the long known issue of classism/social stratification in America. Lets hope this “layman’s” explanation helps to open more eyes and ears the plague that’s been leading to the downfall of this great nation!

  28. djn says:

    Besides, other countries manage fine with much flatter income curves. There are fairly current numbers for Norway here – though it’s in 10% groups only, so I can’t say how the top 1% are doing.

    What I can say is that the top 10% earn about 20% of the aggregate income, and the bottom 10% earned about 4.5%; the comparable numbers in the US for 2006 were 50% to the top 10% and 3.4% to the bottom 20% in 2009 (as compared to 10.8% in Norway).

    And for the record, it’s working out fine – it doesn’t look like you need the richest few to be that rich.

  29. Anonymous says:

    #135: “the rich will pay the hungry to kill the starving.”

    Just the next step beyond what’s happening when private-sector employees are persuaded that if they can’t have good benefits, the public-sector employees shouldn’t either.

  30. Robin Masters says:

    “The tree of liberty must be refreshed from time to time with the blood of patriots & tyrants.”

    • noen says:

      Of course it’s a good idea to know who the tyrants are. If one thinks that Bush was ineffectual and Obama is the tyrant then I’d question one’s mastery of the facts.

      • Anonymous says:

        Obama continues the policies of Bush 2 who continued the policies of Clinton who continued the policies of Bush 1 who continued the policies of Reagan. (yeah, you can point out minor differences. Like, Obama is actually worse than Bush on transparency, torturing Americans, etc.)

        But none of them are/were tyrants. The presidents are/were the errand boys of the top 1%. If they’re good boys, they get admitted to the club.

    • phisrow says:

      I can hire a landscaper to refresh the tree of liberty for $5/hour, if I don’t look too carefully at their documentation, so I recommend getting back to work before your job goes to somebody hungrier than you…

  31. Anonymous says:

    good article. i say behead the pricks and let it serve as a reminder lol, theres a lot more of us, and we make up the armed forces, on second thought, considering theres way more of us, and we have all the guns, and we still keep bending over, we deserve what we get

    • Fwrk says:

      @4

      The Marxist philosopher Gramsci argued that the only reason we allow this inequality is because we believe it is for our benefit, despite the fact we could easily overthrow the bastards through sheer numbers and firepower. Bit like how the Romans and ancient Greeks were so successful at keeping so many slaves with very few rebellions – not by force but by constantly reminding them of their inferiority as a “natural slave”.

  32. madman123 says:

    Add to the mix the increasing erosion of privacy and personal liberty and you have a country that is looking more and more like one of the third world dictatorships we so despise. The one big difference between us and them being a better propaganda machine which perpetuates the myth of the American dream ,a myth generated more by it’s own citizens then the government.It’s a perfect set up. Madman123

  33. Anonymous says:

    Robert Reich’s Aftershock – touches on the same issues.. The last time there was such wealth inequality was just before the great depression. Marriner Eccles a banker and later the Fed Chairman under Roosevelt – realized that the economy wasn’t bouncing back after the 29 collapse
    because so many people were unemployed and just had no money. It wasn’t the wealthy who get the economy it is the large section of the working & middle class.
    Eccles believed in stimulating the economy to get it going. Rather like Henry Ford who announced in 1915 that his autoworkers would be paid $5 a day (about 3 times the average factory worker at the time) and the Wall Street Journal called it an ‘Economic Crime’, but Ford realized that those workers will be able to buy his cars and so in a sense he would be getting some of it back.

    It’s not just taxes, the last 30 years have seen a stagnation in income for the middle class whereas the top income earners have seen an large increase.. Used to be that a single income could feed and house a family – now both parents have to work to get by, which has kept things going but now the middle class is declining and with it – economic growth. And it is going the wrong way.

  34. Emo Less says:

    I admit that not voting won’t really change anything. It’s the principle of the thing. I just can’t stomach supporting the corrupt status quo. The middle class whines and whines but never does anything with enough critical mass and backbone to force change. What if the entire middle class, white and blue collar, didn’t show up for work for a week? That might work. Nobody would starve in a week. I just don’t think we have to guts to do anything courageous anymore. Any ideas?

    • g0d5m15t4k3 says:

      A Summary before you “TL;DR”:
      Anyone not fighting for the cause is fighting against it. By not taking action, you are siding with the status quo. In short, support your beliefs with action!

      “The American Crisis”
      by Thomas Paine
      http://libertyonline.hypermall.com/Paine/Crisis/Crisis-TOC.html

      “I shall conclude this paper with some miscellaneous remarks on the state of our affairs; and shall begin with asking the following question, Why is it that the enemy have left the New England provinces, and made these middle ones the seat of war? The answer is easy: New England is not infested with Tories, and we are. I have been tender in raising the cry against these men, and used numberless arguments to show them their danger, but it will not do to sacrifice a world either to their folly or their baseness. The period is now arrived, in which either they or we must change our sentiments, or one or both must fall. And what is a Tory? Good God! what is he? I should not be afraid to go with a hundred Whigs against a thousand Tories, were they to attempt to get into arms. Every Tory is a coward; for servile, slavish, self-interested fear is the foundation of Toryism; and a man under such influence, though he may be cruel, never can be brave.

      But, before the line of irrecoverable separation be drawn between us, let us reason the matter together: Your conduct is an invitation to the enemy, yet not one in a thousand of you has heart enough to join him. Howe is as much deceived by you as the American cause is injured by you. He expects you will all take up arms, and flock to his standard, with muskets on your shoulders. Your opinions are of no use to him, unless you support him personally, for ’tis soldiers, and not Tories, that he wants.”

  35. Anonymous says:

    I rather pity the 1%. I mean, it’s pretty much psychopathic to have that much wealth while millions of people starve, isn’t it? Isn’t it really? They should be pitied for their illness. The responsible thing to do would be to relieve them of this burden that weighs on them so, and get them some help! Poor, sick bastards.

  36. Anonymous says:

    Why don’t you all just eat cake?

  37. Shay Guy says:

    Several people have recommended voting for neither Democrats nor Republicans.

    Scenario:

    In an upcoming U.S. election, 49% of voters have decided to vote for Candidate A.

    48% of voters have decided to vote for Candidate B.

    3% of voters remain. They regard Candidate C as vastly preferable to Candidate B, who they in turn regard as preferable to Candidate A.

    If they vote for Candidate C, Candidate A will have a plurality of the votes and will win the election. If they vote for Candidate B, Candidate A will lose to Candidate B, who will have 51% of all votes. Thus, it is in the best interest of the 3% to vote for Candidate B. This is because U.S. elections work on a first-past-the-post system.

    • Anonymous says:

      That’s of course the short term interest. In the long term, their interest is to vote for candidate C, enabling them to work their way towards a position where they might someday win. The sacrificing of long term for short term interests has a lot to do with why America has so many problems, incidentally.

  38. SeattlePete says:

    I think we can all agree that as a percentage of total income, the top 1% do not pay their fair share in taxes. All taxes are felt more when you are making less money. A rich guy who “pays a lot” in taxes may actually have to send the government tens of thousands of dollars every year – a lot of money! But when you make tens of millions…not so much.

    So no, I am not going to go run out to my local rich guy and thank him for contributing to society. I am not going to do this because my local rich guy doesn’t contribute ENOUGH to society. Which is the point of TFA.

    • g0d5m15t4k3 says:

      Right. The proportion we should be evaluating is the amount they pay to taxes versus their total take home income.

  39. Anonymous says:

    Well, as to the blood of tyrants and patriots, blood meal is a pretty good high-nitrogen, fast-acting fertilizer. What it does is help trees green up again fast, recovering from nitrogen deficiency.

    But if you really want your tree of liberty to flower and fruit, you need a more slow-acting, nourishing fertilizer. I recommend a strong foundation of equality, economic equity, collective bargaining and the Bill of Rights. Bone meal and salts.

  40. Anonymous says:

    How about raising the minimum wage to about $18 a hour? I want to see some trickle up economics!

  41. bcsizemo says:

    I’m wondering how long before we have some major civil unrest here….and who’s going to butt into our business and try and stop it.

    I’m not sure if I fear the zombie uprising more or less than the impending future others are building for us.

    • IronEdithKidd says:

      I’ll take the zombie apocalypse for $1000, Alex.

      • bcsizemo says:

        The more I think about it, zombie apocalypse is the way to go. At least in that future hard work, quick thinking, and a can do attitude are all things that are going to reward you.

        @d3matt

        Yeah I live in a right to way state as well. It’s nice in theory, but in the REAL world things don’t work like that.

        In theory if you are a suck ass employee the company should can you, but they won’t because you could sue them for wrongful termination.

        In theory hard work and dedication to a company should give you some bonus points, but instead the company just gets more work from you for the same price and you get shown the door when it’s time to pack it up and head for Asia or South America.

        If you are say something like a free lancer who has built a good reputation and has a higher end and varied work client list then you are on the upper side of that right to work idea. Most everyone else isn’t going to fair as well.

        I had a job, until it was shipped off to Mexico. So, sorry, your message is falling on deaf ears right now.

  42. karl_jones says:

    I’m currently reading Michael Parenti’s excellent study The Assassination of Julius Caesar, subtitled “A peoples history of ancient Rome.”

    Great wealth and great poverty: the more things change, the more they remain they same!

    Perhaps the big difference between ancient Rome and our modern empire this this:

    If an eminent Roman citizen had complained in the manner that Stiglitz has complained, the optimates (“best men”) would by now have sent death squads to silence the upstart.

    • Anonymous says:

      Now the optimates have learned they don’t have to, because they can shout so much louder. It’s sort of progress.

  43. minder says:

    One of the first things we need to do to reverse this trend is to quit electing Democraps and Republicants who are rich and in-bed with the rich (or the corporations of the rich).

    Refuse to vote for ANYONE (yes, even the savior Obama) who receives contributions from large corporations and/or wealthy individuals.

    Pass laws that make campaign contributions fully transparent – no limits on amounts, but FULLY transparent and published for easy accessibility.

    • spencercat says:

      “Pass laws that make campaign contributions fully transparent – no limits on amounts, but FULLY transparent and published for easy accessibility.”

      1. We already know that US corporations and Wall Street own Congress body and soul.

      2. Who do you think will pass these laws? Congress? LOL.

      • ADavies says:

        Yeah, but I’d like to know more specifically which politician is owned by who, and at what percentage. Some members of the political system are more owned than others.

      • Radka says:

        I also think that those things are very important, critical more accurately.
        I think that we need to demand it with how we vote, and more importantly, how we vote with our dollars. Keeping informed is incredibly difficult, but the internet is an amazing resource (if we can keep it open).
        I was growing up when Guess and Nike and the like were being boycotted for child labor issues and I feel like it made a difference then.

  44. Brainspore says:

    So I want to know how many rich people are tolerable according to Stiglitz? And when should we have put our foot down to put a stop to all this wealth concentration, anyway?

    I don’t believe Stiglitz argues that the problem is that there are too many rich people. Quite the contrary, in fact: the problem is that an ever-shrinking number of very rich people control an ever-growing portion of the wealth, and as a result the people who wield the bulk of power and influence are getting more and more out of touch with what life is like for the rest of us.

    The important and serious question at the heart of this discussion is “where does it end?” Would it really be possible to have anything approaching a true democracy if a dozen billionaires had as many resources at their disposal (including political influence) as all other Americans put together? How about one Trillionaire?

    Reasonable people can disagree about how to deal with the growing gap between rich and poor, but the people who don’t see that gap as a problem in the first place kind of freak me out.

  45. Emo Less says:

    So not voting wouldn’t work. Mass tax protest wouldn’t work — they would just take money from your bank account or garnish your wages. The only form of non-violent protest I see that would work would be to stop working. The one percent has to have the worker bees. Without us, they become us.

    • g0d5m15t4k3 says:

      And that is why I support working the system from the inside out. Really though, I feel like only MAYBE terrorist attacks might get the government’s attention. Attacks on the US by the US. But who has the biggest balls and is willing to give up their life for their liberty? Not a lot of people. Its a tough decision to make and you are right that protest doesn’t seem to work. We would need a revolution but everyone is too afraid (and reasonably) to do anything other than protest about it. Maybe a bigger protest? Riots?

      • Emo Less says:

        Middle class work strike, I say. Must be non-violent. I know you’re just throwing around ideas, but be careful with posting ideas of terrorism on the internets — you’ll have the gestapo knocking on your door.

        • g0d5m15t4k3 says:

          No gestapo for me thanks. I’m a good little monkey. I don’t make a lot of money and I only shout on the internet. I fall into that category of people who think too much but have little action. Perhaps jaded and annoyed, yeah, but too afraid and not in the position to take action. I’m sure a lot of people are in the same boat. Read this comic and this is basically my life in regards to pretty much anything: politics, money, school, helping others: http://overcompensating.com/posts/20110401.html

          But if I don’t post for a week, someone send search & rescue.

          • Emo Less says:

            I know how you feel. Good comic. :)

          • g0d5m15t4k3 says:

            Anyway, I’m on board with anyone who can successfully organize and execute a middle class strike (protesting that the 1% should pay MORE taxes) across the board. It would hurt a company like the one I work for if every single person who earned under $35k a year called off sick. No questions asked. And hey, I have a sick day I can spare. Get on this internets, I know you can do it. Make people Facebook like it or something.

          • Emo Less says:

            The Teamsters could have a powerful influence with a nationwide, multi-industry strike. But the Teamsters’ main focus is the short-term wealth of their workers and their leadership, not the long-term wealth and health of the country.

  46. Nash Rambler says:

    What a terrific and harrowing article; Stiglitz has put a name to the nagging discontent I have long felt.

  47. Ambiguity says:

    Foreign policy, by definition, is about the balancing of national interests and national resources. With the top 1 percent in charge, and paying no price, the notion of balance and restraint goes out the window.

    Balancing interests with resources seems like a pretty sound thing, but he loses me a bit in the implication that if the other 99% were “in charge,” that there would be more balance and restraint. In fact, he himself argues against that when he talks about the trickle-down lifestyle, so he seems to be talking out of both sides of his mouth.

    If the rich are in control they like the poor to pay. If the poor were in control they’d want the rich to pay. It seems that, no matter were a person stands in the economic continuum, the problem is always with the folks at other places in that continuum.

  48. Yamara says:

    Some people have Too Many Things.

    There are several cures for this affliction.

  49. shannigans says:

    My kids school: 20% kids below the poverty line; low income neighborhood. No teachers union. School is in the Top 100 high schools in the US. Teacher’s salary is augmented by fund raising driven by the families (with a 98% contribution rate). All graduates go to a 4-year college. All.

    Thanks for making your lies perfectly obvious. Note for the future: maybe saying 90% attend a four year college would be more believable. Really, even in the most perfect of educational systems not every student is qualified, motivated and/or interested in university.

    • grimc says:

      No, I’ve heard of this school. It’s Unicorn Sparkle Fart High in Candyland.

    • Turnpiketakesitstoll says:

      Summit prep in Redwood City CA. Go check it out for yourself. Was featured in the movie “Waiting for Superman”. It’s a public Charter high School. http://www.summitprep.net/results/

      “Summit Prep Top 1% in the Nation on Academic Performance

      In 2009, Summit received a score of 826 out of 1000 on the California Academic Performance Index, placing it in the 90th percentile of schools statewide and in the 100th percentile of schools with similar student demographics.

      Summit Prep in Top 100 National Schools by Newsweek
      In 2010, Summit was ranked the 76th best high school in the United States by Newsweek magazine.”

      • Radka says:

        This is a pretty interesting and thorough criticism of ‘Waiting for Superman’ and the charter school system in general:

        http://www.nybooks.com/articles/archives/2010/nov/11/myth-charter-schools/?pagination=false

      • Antinous / Moderator says:

        I guess the turnpike really does take its toll if your children are going to school in Redwood City, CA and you’re posting from Seattle. That’s a hell of a commute.

        • Neon Tooth says:

          I guess the turnpike really does take its toll if your children are going to school in Redwood City, CA and you’re posting from Seattle. That’s a hell of a commute.

          lol! I knew it. I wonder which think tank this guy is an intern/hanger-on at….

        • g0d5m15t4k3 says:

          831 miles according to Google. That sounds like a reasonable commute to me. That’s also a hell of a charter school to accept out of state. And if there is any truth to their story… perhaps their children live with another parent? Still, for someone taking so much pride in where their child attends school, you could think they would possibly relocate for the betterment of their child(ren).

        • SeattlePete says:

          Saw that one coming from a mile away…

      • Anonymous says:

        Ah, Redwood City CA, where the median income level is $43K while the median CA and National levels are at 26K and 25K respectively. The poverty level in Redwood City is 55.7% less than the California average and 51.2% less than the national average.

        So it would appear economic advantages rule again. Also, I’d still like to see evidence that 100% of students attend a 4 year college.

      • Neon Tooth says:

        Many of the charter myths put forth in the movie have been easily discredited, as have charter myths in general. As I mentioned above: The school in Chicago that claims the same college rates, you can see how easily that’s done. The weeding out and transferring of ‘problem’ and ‘under-performing’ students by draconian rules and fees and so on. Oh and who gets those problem students? They become the regular schools problems. The lying, false reporting/claims by statistics etc. There are so many bogus factors associated with charters that it’s staggering.

        Also well done on trying to portray Redwood City as an impoverished town……

      • shannigans says:

        It doesn’t look like that school is so successful because of a magic model and lack of unions, but rather that they are student selective. Yes, it looks like admissions is performed by a non-selective lottery but to put your name in the lottery you have to go through the “scared straight-our school is tough as hell academically” process first. They also ask under performers to leave throughout the year. While it looks like a great school I don’t think you can use it as a model for all schools.

        Show me a school that has the same success rate that has to take all students who show up at their door and I’ll take note.

        It also doesn’t say that 100% go to college, just that they are college ready.

    • optuser says:

      “Thanks for making your lies perfectly obvious.”

      It isn’t a lie if the answer is not obvious to closed minds like yourself. Know how you get 100% college acceptance for your high school graduates? Only graduate students who have been accepted to college.

      How do you do that? Spell it out in the policy book for the school that college acceptance is a condition of graduation. Expel kids who have no interest in going to college. Hold students and parents accountable to the policy. If the parents are giving that much money to the institution you’d better believe they are involved and have goals for their student/child in mind.

      I’m not saying this policy is a good idea for all schools. I’m someone who thinks a high school diploma is a measure of “something” as opposed to “nothing.”

      • shannigans says:

        I know, I know… I missed the obvious. In my silly naivety I gave him the benefit of the doubt that he was actually showing a libertarian principled school model that achieved amazing results. I also forgot about Unicorn Sparkle Fart High in Candyland. These two together resulted in a knee jerk, “oh, come on with those ridiculous claims” reaction. Note to self: always remember sparkle farts.

  50. Anonymous says:

    From the writeup, it seems the top 1% are not a problem at all, other than symbolic. The bigger cause of problems would seem to be the 99 percenters, who live beyond their means (is this really the top 1% fault?) whose elites are still mostly isolated yet call the shots. As for the cards being stacked against the poor, do we really need a Nobel Prize winner to make this argument? Was there ever a time in history when this wasn’t the case?

  51. Art says:

    Wealth concentration and the trajectory of plutocracy are not driving us toward the cliff representing the end of the United States — they have already taken us over the edge — all four tires of the modern American nation-state have nothing but air below them now.

    We need to shake ourselves out of our soporific, consumerism-induced state and take democratic control of our lives and communities. The collapse of the modern capitalist way of life is at hand. Fossil fuels, the lifeblood of modern capitalism, are more than half gone. By burning so much carbon and creating and releasing so many chemicals, we have disrupted natural systems beyond our capacity to repair them. Nature on Earth will survive, though not in its present form. The human future is less certain, but to whatever extent we survive, it will not be in the present form of centralized, totalitarian plutocracy. The plutocrats trashed the globe with their industrial-financial ponzi scheme. As it collapses, they lose their power. The democracy demanded by free people doesn’t take power from the plutocrats and does not assume the power the plutocrats lose. Instead, it constructs new societies in which the kind of power plutocrats wield does not exist – it constructs true democracy.

    http://democracylight.blogspot.com/

  52. d3matt says:

    So I can blame steve jobs when I live beyond my means by buying the ipad nano 6? So much for personal responsibility!

    Also, this whole BS about collective bargaining… I live in a right to work state and when I feel like I’m not making enough, I look for a new job and offer my boss a choice: more money or I’m on the way out the door. It also helps us find better employees… Someone doesn’t work out, we can show them the door that day… In both cases, the professional thing to do is offer notice, and every company/individual I know of does so. To me, this system is the most fair. Companies have to work hard to keep their employees and employees have to work hard to stay desired.

    • Neon Tooth says:

      So much for personal responsibility!

      I know right? How about taxpayers being personally responsible for bailing out the financial oligarchs who crashed the economy? How about those oligarchs taking responsibility and falling on their swords for that? Nope, record bonuses all the way round. Now taxpayers have do face job cuts and austerity measures because of the actions of the top 1%.

      Surely if your negligence causes the horrific deaths of 11 people and the largest oil spill in U.S. history, then you’ve got to pay the piper right? Wrong: http://www.nydailynews.com/news/national/2011/04/03/2011-04-03_transocean_executives_get_bonuses_despite_massive_gulf_spill_company_lauds_best_.html#ixzz1IZfmDXqy

      Capitalism, privatization, and ‘personal responsibility’ for us.
      Socialized losses, and bonuses for them.

    • friendpuppy says:

      “In both cases, the professional thing to do is offer notice”

      BS. If a company can fire/lay me off without notice I can quit with no notice. It’s said to be inconvenient for the company if I suddenly quit, but I can tell you it’s a lot more inconvenient when my income is suddenly taken away from me. Companies don’t give notice except in the smallest number of cases before they let you go.

      Companies don’t have to work hard for employees now. There’s scores of folks waiting to fill positions.

      • Turnpiketakesitstoll says:

        “it’s a lot more inconvenient when my income is suddenly taken away from me”

        You mean “when I lose the income that I earn in exchange for my labor”

        It’s not “your” income, it’s not “your” job – income and jobs are offered in exchange for something (work in this context).

        (oh, and I arrive in the US 20+ years ago with 2 suitcases and the clothes on my back, so believe me when I say I have worked damn hard to get into the 1% and I *do* care about equality. I also pay a crap load of taxes. So a “thank you for your contribution to society” would be polite.)

        .

        • Anonymous says:

          Well, it’s not the company’s labor, it’s something they’re offered in exchange for income. So why do they deserve notice?

          As for the crap load of taxes, maybe you are an exception, but most of the 1% have been paying less and less and society is suffering for it.

        • jimh says:

          So a “thank you for your contribution to society” would be polite.

          No, THAT’S WHAT THE MONEY IS FOR. I don’t have to thank you for getting rich and paying your share of taxes.

          • Turnpiketakesitstoll says:

            Ingrate.

          • djn says:

            Eh, all your money is from other people. You’re just making sure it passes through you on the way, so you can retain a share.

            (For what it’s worth, I’ve chosen to work in cancer research – in a few more years, I might approach the average starting salary for my education. Shush with your self-righteousness, I can play in that class as well.)

          • jimh says:

            You say I should be grateful to you for your ability to climb to the top of the economic ladder.
            I think you should be grateful that there was a ladder to climb.

            Is the same ladder here now, as it was twenty years ago?
            Do you really think you do it again today, starting with nothing?

          • Neon Tooth says:

            That account smells very astroturfy…. not sure we’ll get a reply on what school that is. In Chicago a school made similar claims. Their scam was to have (make) all their students apply to *any* schools until they were accepted at *any* school. Thus you have a magically high college acceptance rate. Of course they did not account for whether or not those students actually ended up going to those schools or managing to stay in them….

            I also don’t buy that most of the posters who claim to be wealthy 1%-ers really are. Much like how freaky Libertarians always seem to show up on such discussions claiming that they’re supermen who support everyone else.

          • Anonymous says:

            I profoundly doubt that he came into the US with no connections, no wealth, and subsequently joined the elite of elites.

        • djn says:

          The job and income is very much “mine” as long as it exists – at least in the same way that the work is “theirs”: Both parties expect continued delivery until further notice, and plan upon having access to it … which makes it one of “their” resources to be planned around.

          Of course, it still hits the average employee harder than the average employer when the other part stops the agreement with short or no prior warning; mostly because I would lose 100% of my income but they would lose a much smaller fraction of their work done.

    • Nonentity says:

      “Companies have to work hard to keep their employees and employees have to work hard to stay desired.”

      Sure they do. And I’m sure both sides have to work equally hard in that. That’s why unemployment is so low, after all – all of those companies are working hard to keep their employees from running off to better paying jobs!

    • Brainspore says:

      So much for personal responsibility!

      “Personal responsibility” doesn’t explain the growing gap between the rich and poor unless you believe either:

      A) Rich people have all started working a lot harder lately
      B) Poor people have all been getting really lazy lately

      Personally I don’t find either of those theories very credible so I lean toward

      C) There is a more fundamental problem with our economic system that has nothing to do with personal responsibility.

    • Owen says:

      “I look for a new job and offer my boss a choice: more money or I’m on the way out the door.”

      Try that as a janitor, or food-service employee, or truck driver, or engineer at a tech company that’s having layoffs.

      Your scenario only applies to educated and experienced employees when the economy is good.

      • Neon Tooth says:

        Your scenario only applies to educated and experienced employees when the economy is good.

        And an increasing permanent underclass has less and less access to quality education.

        • zanbowser says:

          Part of your argument – all the arguments on offer, really – needs the assumption of “equality of motivation,” and we all know (since I’m sure I can safely assume we’re all of equal social status and intelligence, here ::snicker::) that we’re certainly making an ass out of umption.

          If everyone had such a useful outlook, unencumbered by reality, we’d all have a “quality education” (as well as infinite wealth, happiness, etc.), surely! ::double snicker::

          • Neon Tooth says:

            What exactly is your argument? That because all citizens aren’t equally motivated, the ever increasing cost of education, despite wage stagnation doesn’t matter?

      • phlavor says:

        Better yet, try that as a teacher. A job where the people who pay you don’t particularly care whether you do a good job or not.

        • Turnpiketakesitstoll says:

          “Better yet, try that as a teacher. A job where the people who pay you don’t particularly care whether you do a good job or not.”

          My kids school: 20% kids below the poverty line; low income neighborhood. No teachers union. School is in the Top 100 high schools in the US. Teacher’s salary is augmented by fund raising driven by the families (with a 98% contribution rate). All graduates go to a 4-year college. All. That’s one way to break the cycle of poverty + I see it in action every day. Oh, and if a teach fails to perform – they are fired. So the people who pay you do care if you do a good job or not.

          • Neon Tooth says:

            What school is that? I don’t buy it. Have seen the same phony arguments here in Chicago. The biggest factor for kid’s success in schools is their wealth and parents.

  53. Steamboat_Sister says:

    The problem with clinging to the hope that the PTB will someday wake up to the fact that we can’t buy their stuff anymore is, the global marketplace cuts both ways.

    *We* may no longer be able to buy the latest gadgets and gizmos, but the upwardly mobile folks in China and India can. We’re basically screwed on both the front end and the back end.

    Strikes won’t work, they’ll just replace us with people who want the job more. Boycotts won’t work, they’ll just sell their stuff to people who want it more. Really, the only thing to do at this point is get used to being poor.

  54. facetedjewel says:

    I still think my best bet in fighting the privileged insularity of this system, is in who I vote for and how much I participate in choosing and financially supporting what candidates run for office in the first place. The obscenely wealthy can do little without their government enablers.

    Also, the media conglomerates have been on my shit list for some time. Campaigning door-to-door two years ago, I found voters are really paying more attention than we give them credit for, but my! there’s alot of dis/misinformation out there. The collusion of the media in that power/wealth trifecta have everything to do with the voter’s failure to boot the truly rotten and fubared from office. Assuming said officials were ever competent to represent the voters. The wool needs to be pulled from the voter’s eyes, so they might vote in their own best interests. They need to be better educated as to what their options are and, of course, they just plain need options, besides ‘bad’ and ‘worse’.

    I also like the advantages of being even a minor stockholder in a publically traded company. It gets you into the stockholder meetings, where you may combine your voice with those other penny-ante stockholders who showed up, and collectively through one speaker for the group, effect the decisions the CEOs and minions make in directing the company. I’ve always been curious as to what might happen if enough stock wealth were dispersed evenly amongst the ‘simple folk’.

    We simple folk are not without power; we’re failing to utilize the power we have (short of revolution) to bring the wealthy to heel.

  55. Anonymous says:

    Well, yeah. Excessive wealth concentration always leads to instability and ineffectiveness, and if left unchecked long enough, collapse. This is well written, but it’s surprising it needs to be pointed out that America isn’t an exception.

  56. Anonymous says:

    I disagree with the author.

    The “richest %1″ of Americans didn’t decide to bomb Libya while deciding not to get involved in Iran.

    The goal of a free market economy isn’t to eliminate poverty or have wealth trickle from the richest to the poorest, though it has done more to raise the standard of living for the common man than any other economy in history.

    The purpose of a free market economy is to keep people free. You can’t have freedom without a free market.

    • Anonymous says:

      A free market is a market that is free from all interference and distortions. Interference and distortions, of course, come not only from the government, but from anyone with the power to tilt the market to their favor. So, the more powerful the person or the group of people, the more they are the source of market distortions. The top 1%, therefore, are at least as much a threat to the free market as governments are. The problem with big government is not that it is government, the problem with big government is that it is big.

  57. Anonymous says:

    THEY TOOK OUR JERRRBS..

  58. Anonymous says:

    …the people who wield the bulk of power and influence are getting more and more out of touch with what life is like for the rest of us.

    More than that, they hold us in complete derision.

    A while back, the public radio program This American Life (episode #415, “Crybabies”) interviewed a group of very well paid people employed in the financial sector. Every one of them not only had no sense that the federal bailout of the financial sector had saved his or her skin, they universally believed that they were smarter and better than people who didn’t have as much money as they did. It’s a real eye- and ear-opener. You can find the episode on the TAL website.

  59. Blammar says:

    The “rich” usually pay less than the top marginal tax rate because they have mostly unearned income, i.e., capital gains or dividends from their investments. As your income becomes mostly salary, your tax rate will increase, and then decrease again as your salary drops low enough for the smaller tax rates to trigger. So there’s an apparent inequity in the middle, but there’s nothing stopping you from making your own investments and reducing your tax rate.

    Oddly enough, my parents were poor and now I’m in that top 1% — I got there by owning a percentage of a successful business. Of course I’m going to do what I can to stay in that 1% — the next few decades are going to be the most “interesting times” that humanity has faced so far, and I want my children to survive. Having capital makes that more likely to happen.

    • Anonymous says:

      So there’s an apparent inequity in the middle, but there’s nothing stopping you from making your own investments and reducing your tax rate.

      Lack of money, or even not having enough to be able to risk it, usually stops people pretty effectively.

  60. Anonymous says:

    The biggest question about wealth and power has been relevant ever since we stopped being hunter-gatherers and started to create systems for the accumulation of both. Namely, what happens to our accumulated wealth and power when we die?

    If they are transferred, in a largely unchanged form, to one or two select individuals, then these individuals will start their own life-long efforts of accumulating wealth and power with the transfers already in their arsenal. Everyone else would start from scratch. Under such conditions, an exponential increase in wealth and power concentration becomes unavoidable.

    The use of such methods for transferring power was greatly reduced by revolutions to overthrow feudal monarchies when the power disparities became too absurd and the behavior of the elite became too disconnected from reality. The use of such methods for transferring wealth remain de rigeur. (On a side note, power, of course, is but a generalised form of wealth).

    The problem is as valid at the individual level as it is at the organisational one. New industries, for instance, always start out with a large number of small, innovative players. As industries mature (and up until the point they are disrupted), they gradually but inevitably become dominated by a handful of sclerotic behemoths. Similar problems face empires as well…

    Not all of the reasons for such concentrations are totally bad, however. A massive size does enable one to, say, take on massive R&D challenges. Or, a comfortable, carefree lifestyle does indeed give one more opportunity for intellectual growth… Nevertheless, these reasons pale in comparison to the advantages of inheriting an eventually insurmountable head start.

    The focus on income, therefore, is a bit of a misdirection. Given our underlying biological similarities, it is impossible for one person to consistently be tens of thousands of times more talented or more hardworking than another. The only way such income disparities can arise is through the deployment of wealth and power to tilt the playing field. Either one is the direct recipient of pre-acquired wealth and power, or one enters one of the institutions (government, finance) that have spent decades, if not centuries, centralising wealth and power onto themselves.

    The diagnosis seems clear. The question is how can we treat it?

  61. Anonymous says:

    Secretly looking forward to this (the storming of the Bastille that is). I walk through the office and I know who will make it and who will not. Better park your LX300 and start exercising!

  62. Stefan Jones says:

    I’m in the top 2%.

    I don’t begrudge the taxes I pay.

    I want a strong social safety net. I want well funded public schools, childhood nutrition and enrichment programs, and whatever else it takes to preserve social mobility and to end ingrained, inherited poverty.

    I want old people to be able to retire in dignity and security.

    I want clean air and clean water and a sustainable energy future. Even if it means paying more in taxes and more for energy.

    I’d be willing to pay more taxes to have an actual national health care system, one that actually provides health care rather than funds the scam that is health care insurance.

    And before some weenie libertarian fan-boy gobbles something like “you can do what you want with your money” . . . oh, put a sock in it. We’re dealing with big problems that can’t be addressed on a volunteer basis. Problems that will, no matter how hard you try to rationalize, deny, or miniminze them, bite your ass along with everyone else unless they’re addressed. Get over yourself. We’re members of a civilization. We are parts of a society. We have duties and obligations to those who came before us and those who come after us.

    • noggin says:

      Whew! Fortunately you are safe and have done nothing to with the erosion of our sense of identity.

      But your good will and sentiments account for nothing because after the Stiglitz redistribution, you will be in the 1% and so will be screwed. Enjoy it while it lasts because the revolution is coming–just like in Egypt and Yemen and Libya. You see Gaddafi hiding in his bunkers? That will be you, one day, after Stiglitz gets his way.

      Now, anyone want to raise their hand that is in the top 3%?

      • Anonymous says:

        You could reduce the wealth of the top 1% by a huge margin, and they would still be the top 1%. Revolution is a strawman: Stiglitz is arguing for political change so there won’t be the need for one.

      • Anonymous says:

        noggin – your posts are threaded with fear. You write about how if someone accepts the idea that the top 1% need to be taxed more, then they will be forced to live in a bunker like a Libyan dictator. A most certainly does not follow B.

        If this is fixed, there is no need for violence. Let me tell you this though, if I ever have to watch my daughter starve to death, I am going to steal as much as I can from the rich.

  63. Emo Less says:

    Another opinion on the consequences of wealth inequality …

    http://www.marketwatch.com/story/story/print?guid=CA183FE6-5966-11E0-9F0E-00212804637C

  64. noggin says:

    Ok, so how flat does Stiglitz want the wealth distribution bell curve? There will always be a top 1% unless income and wealth distributions are the same for everyone.

    • Anonymous says:

      Looking at other countries in the world today and throughout history would give a good idea of what sort of wealth inequalities are tolerable, and what sort create unrest and structural problems. There will always be a top 1%, but they don’t always have to be a completely separate society from the others.

    • Brainspore says:

      Ok, so how flat does Stiglitz want the wealth distribution bell curve? There will always be a top 1% unless income and wealth distributions are the same for everyone.

      The top 1% has not always owned such a large proportion of the wealth. There can still be rich and poor without such a gigantic and ever-growing chasm between the two.

      • JeffF says:

        “The top 1% has not always owned such a large proportion of the wealth.”

        Yep. They did in the 1920′s though. That didn’t turn out so well.

        Also countries like Brazil.

      • noggin says:

        So after a hypothetical Stiglitz wealth redistribution utopia, amended by the Brainspore distribution curve that permits a distinction between rich and poor, is it any consolation to a hungry child to tell them “at least Bill Gates has to drive a Ford Topaz, now”? Hungry is still hungry.

        Let’s say Stiglitz wrote this same article 25 years ago with the statistics adjusted for 1986. Wouldn’t he still be hoping back then that we’d all say “Tsk, tsk, something must be done”? So I want to know how many rich people are tolerable according to Stiglitz? And when should we have put our foot down to put a stop to all this wealth concentration, anyway?

        • djn says:

          The idea is that if you even the curves out a bit, the poorest 10% won’t have to go hungry. In many comparable countries, not affording food is basically limited to drug addicts and illegal immigrants.

          Another thing is that the distribution has been getting more skewed the last two-three decades. It’s one thing that some rich people have more than the rest of us; that’s sort of expected. The more worrying trend is that their fraction of the total has been growing as an increasing rate – where is that going? How much will they end up with before it reaches a plateau? How much is it good for society as a whole that they have?

          Again, you’re now in a state where the top 10% earns about half the total income – or put another way, 90% of the population are sharing 50% (and decreasing) of the income. I don’t know how far in the other direction it would best to push it, and there’s probably no easy way to decide. But wouldn’t it be a good start to at least slow down the rate of change?

    • Nonentity says:

      “how flat does Stiglitz want the wealth distribution bell curve?”

      I can’t look it up right now, so this unsourced, but the last numbers I saw were that the top 1% of wage earners in the U.S. get 20% of the total wages paid each year. That was up from roughly 12% 20 years ago.

      Is the question “how flat should it be” or is it “should it really be changing this way, this quickly?”

      • noggin says:

        You are certainly forgiven for not looking up any references–Stiglitz didn’t provide any, either, but I believe he can back them up and I’ll take yours as accurate as well.

        But I’m not sure I buy your replacement question, anyway, at least not with Stiglitz premise that the wealth concentration we have is bad and getting worse. He doesn’t seem to care at all how quickly the wealth concentrates because as long as this disparity exists, he says, it costs us “the erosion of our sense of identity, in which fair play, equality of opportunity, and a sense of community are so important.”

        I just want to know when Stiglitz thought that the division of wealth was at a good, healthy level, if ever; or, if never, then what he does think is a good distribution? It seems he advocates changes in laws because what we have is bad, but he doesn’t offer any numbers to say how many rich people we should tolerate and how rich we should let them be.

        When Stiglitz advocates a change and warns us “or else…”, but then fails to provide a wealth distribution goal, then his article just comes off as a lot of envy-driven, whiny FUD.

        • Nonentity says:

          “You are certainly forgiven for not looking up any references [...] I’ll take yours as accurate as well.”

          Please, by all means, don’t take my word for it. I want to be upfront with the fact that I’m in “grain of salt” territory, and I’d love to see sourced numbers that are more accurate.

          “But I’m not sure I buy your replacement question, anyway, at least not with Stiglitz premise that the wealth concentration we have is bad and getting worse.”

          That’s basically what I pointed out – that it’s getting worse. I may not be asking precisely the same question that TFA asks, but I think that it’s worth looking at the question in a way that takes the historical situation under consideration. After all, are the top 1% increasing in value at that rate? And should the percentage of what they make that they pay back to the country that supports them be dropping at the same time as the percentage they take is increasing?

  65. RhinoAK says:

    Great Thread! Love to hear people talk about class and wealth in society with to vigorous back and forth.

    I just found out I’m in the top 10%! I have always felt affluent, but not rich, but expenses are high where I hang out, so maybe put me in the top 25% to be safe.

    I think its safe to say that statistics are prone to distortion, so I thought I would pose a philosophical question:

    It’s well documented that the tax burden has been shifted off the wealthy and the corporations to the working individuals starting in the 70′s or so. The effective result of this is that we are needing to cut social programs and this includes health and education.

    My question is why doesn’t the full spectrum of population (rich AND poor) agree that this is detrimental to our long term interest as a nation (and planet)?

    Is it because corporations are now people and and they have an inherent mandate to maximize short term gains?

    My opinions:
    It started a while ago, but in the last few years things are snowballing because of our (speaking of the U.S.) foreign policy and further distortion of the political process via the Citizen United ruling.

    Why is our long term economic need to have a viable, competitive society being subjugated to to our short term needs for access to energy?

    I think we the people need to focus primarily on regaining control of the political process and this will continue to be tagged as class warfare by those currently in positions of power. I think a mental revolution is necessary among the population in general, but not necessarily a violent one.

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