Your ascent to the 1% doesn't mean the system is fair

From Reddit's Cylinsier, a response to Occupy Wall Street critics who argue that because they somehow managed to bootstrap themselves to wealth and privilege, the system is fair and its critics are just sore losers or lazy, greedy fools.


  1. Note to Cylinsier:  a system wherein the people elect representatives to run the government for them is not a democracy either.  It is called a republic, which is what we have now, more or less.  The fact that it is geared by the rich for the rich is another matter entirely.

    1. No, a republic is when the head of state is elected, rather then inherited (see despotism/monarchy). What your talking about is a representative democracy.

    2. It was designed that way in the first place.  The “Founding Fathers” were “men of means”.  What they didn’t want was a political system where the “ordinary working people” had “a say” in things.  Because they believed that in such a society, the “mob” would vote themselves benefits through taxation of the wealthy.  They based their beliefs upon the history of Imperial Rome as was known then.  Also part of their education was the ability to read Latin and Greek, so they likely knew quite a bit about history.  The concept of a “Republic” instead of a “Democracy” was to preseve the status of the upper class of the day.  For this reason, only “men of property” were allowed the vote.  And state legislatures were given the power to select the senators who would represent the states.  The entire “operating system” was designed to “protect” the upper class against everyone else.  The system has changed of course since then, but the Republicans have returned to the sort of “America” that existed at the end of the 18th Century.

      1. re: “The entire “operating system” was designed to “protect” the upper class against everyone else… but the Republicans have returned to the sort of “America” that existed at the end of the 18th Century.”

        For give me if I am misunderstanding this, but if you are saying the Republicans are protecting the rich, but some how the Democrats are not, you are naive or delusional. There are just as many millionaire Democrats in Congress and they have their corporate sponsors as well. The Democrats don’t have problems raising millions for their campaigns.

        ETA – from a later post I think this may not have been the case. So never mind if I was incorrect in my understanding of your post.

        Also re: Democracy vs Republic

        I value a Republic over a democracy. Ideally, those we elect into office will make informed decisions. That obviously isn’t always the case. However the ability to sway the opinion of 51% of Americans one way or another is too easy too easy to do.

        You might value such things as health care or some such, but think of all of the things you WOULDN’T like that right now a 40%+ of Americans would agree with. This is especially important when you think of the times for women’s suffrage, the civil rights movement, and a current hot topic like gay marriage.  How hard would it be to, say, get 51% of Americans to pass an anti-islamic law on 9/12/2001?

        People often stereotype the average ignorant “Ugly American” – something to be ashamed of or reviled. They would be who make up your majority.

    3. Note to jeligula: a system in which representatives are directly elected by the people is called a democratic republic.   This is, in fact, the only democratic form of government that has ever been implemented by a nation-state. 

  2. I’m proud today reading about my brothers and sisters across the world fighting the oppression of the 1%. I hope it does not die. These are the days for heroes to be made.

  3. I would agree that it’s not fair, but it a great example of a natural progression of a system that is influenced by power, not fairness.

    Appealing to the fairness of a situation is all fine and good, but until that translates into real power, nothing will change.

    Now to the real question, what is power in this context? Is it awareness, political influence, money, or a blend of these and others? In this vein, can a sit in driving public awareness be expected to make a difference?

  4. I’m all for the protests but I’m also conflicted that the system has to be “fair”. That it’s not, isn’t that Capitalism? Our goverment is a Democracy/Republic, and our markets are Capitalist. So essentially, with Democracy we want everyone to have a voice and with Capitalism it’s every man for themself. I’m not sure how to reconcile the two. Do we want everyone to have a “voice” in how “everyman for himself ” plays out?

    1. I think it’s a common misconception that assumes that our system of Capitalism must be absolute. Let’s face it, we already have plenty of socialist bits here in our country, roads, police, firefighter, education, defense. The question is how the government best mediate them both so that the best of both systems flourish and help its citizens. Unchecked capitalism does not help the people (destroyed environments, etc), but conversely over-regulation harms the ability of the economy and commerce to grow. So it’s a matter of realizing that the world isn’t a black and white place, but rather all shades of gray, and absolutism in either system doesn’t help everyone.

    2. Isn’t simply a set of nested rules?

      1. Everyone should be free to do whatever he or she wants UNLESS
      2. That action affects someone else, in which case all affected parties should give their consent UNLESS
      3. There is scope for free rider benefits in which case the majority should have the power to compel the minority, with every individual having equal say in the decision.

    3. With checks and balances on the Government, and none on the corporations, the “government of the country” passes into the hands of the corporations.

      So it’s Right and proper to oppose monopolies anywhere, whether government or corporate: removing them encourages capitalism and competition.

    4. Democracy (in it’s innumerable forms) is a political system. Capitalism is an economic system. Saudi Arabia is an absolute monarchy. It’s also a capitalist country.

  5. See, I like this. This person understands that you can’t just work and/or study your butt off and automatically assume financial prosperity will be the result. He lives within his means, and makes a very valid, eloquent political statement at the end.

    I suspect a lot of people protesting feel the same way, or are in the same position. But one of the problems for me is that the people shouting the loudest in the protest are simply saying “Look how many degrees and how much student debt I have, why do I still have to eat ramen and use a second-gen iPhone?” and act as though they are automatically *entitled* as a result. Education and hard work go a tremendous way towards prosperity – and the fact that they don’t go further is something to protest – but, for example, my sister spent >5 years in school, graduated with a theology degree, wanted to be a public school teacher, and is most recently working in a secretarial position. There won’t always be enough jobs for the people who want them. Fortunes wax and wane. Some people will naturally fare better than others; these people seem to want to protest that fact, not the idea that in recent times the system has people “artificially” fare better than others (the fact that CEOs do it via incestuous border relationships is clearly a broken system). 

    I guess what I’m trying to say is I really want to hear this message more from protesters; I’m sure they’re a huge component of what’s going on. I like the protest signs saying people can’t afford their own politicians. I dislike the crony-capitalism that has become a part of the political system in this country. I *dislike* the sense of entitlement I often see and read about. Student debt is an investment that carries a risk. What’s funny is when would, in the not too distant past, explain to people at parties how lawyers were getting frustrated that graduating with a law degree no longer guaranteed work in the same way that it used to, people laughed at their misfortune..

    1. As a Occupy Wall Street protestor and now a Occupy Taipei supporter, I can tell you that we too dislike the entitled ‘activist hipsters’ among us. That said, most of us are there due to the crony capitalism. We want a strong middle class and more wealth equality and less corporatism in America.

      1. Glad to hear it. I’m not against inequality; I’m against a system that rewards the rich for being rich. Guy driving down the street in a Bentley? Fine by me. Guy who pays $10k in taxes on $3M in income? That I’m less cool with.

        I was thinking over the last few days… what about the idea of voting ALL incumbents out of national office? Wouldn’t that be a way to say “we need to change now”? Sure, you might like your Congressman, but clearly the overwhelming majority of the rest of the country doesn’t.. (or how they act as a whole, etc.)

        1. The average Congress person has a net worth of one million dollars.  So their viewpoint is not going to be the same as that of the average voter who has a net worth far smaller than that.  Plus, a lot of Congress people are lawyers.  Who deals with laws?  Lawyers.  Automatic conflict of interest.

          A solution to this would be in the form of a lottery.  Anyone who could pass a test to show that they were competent to be a Congress person could buy a lottery ticket for the Congressional lottery.  Each year half of the House would get selected.  One sixth of the Senate.  We’d probably still prefer to elect the President.  The political parties as we know them would die.  We would be represented by our “peers” instead of millionaires as we are now.  No doubt the decisions that they would make would be a lot different from the decisions made by our Representatives and Senators that we have today.  The political extremes we see now would no longer exist.  We’d be much better off represented by our “peers” (like selection for a jury) than we are now.  Check the net worth of your Representative and Senators.  Most likely they are a lot richer than you are!

    2. When I hear someone complain about entitlement, I like to agree by saying “I know!  You wouldn’t believe how many people feel entitled to get rich off other people’s work!”  “Well, uh, that’s different….”  Sure it is.

    3. With almost any group, there’s often an inverse relationship between volume and intelligence.   You really have to screen those folks out.  I would not tell a conservative friend I can’t listen to you because Glenn Beck is an ass, most of them agree with me on that.
        The demands here:
      which seem fairly central to the movement, are mature and not shrill.  This letter is more in tune with those demands than individuals you mention demanding electronics.
      I have friends both like your sister and the attorney at the party.  A patient with severe health problems is an attorney, and he’s near homelessness.  I wish the best for both. While the blame for their fate is not layed directly at the door of one individual or group, changes to the laws would likely make such misery less likely.  Best of luck to your sister.

    4. US businesses have created tens of millions of jobs.  Are still creating jobs today.  However under a capitalist system, business creates jobs where the return on investment is best.  That is not here in the USA.  Say an American worker gets $15 an hour wages and benefits.  A Mexican worker gets maybe $3 an hour and no benefits.  A Chinese worker gets $1 an hour and no benefits.  So ask yourself this question:  “Why should an American business create jobs here in the USA?”  Remember too that a capitalist’s only loyalty is to “profit”, which he or she seeks to get the highest return.  So why should they create jobs here in the USA?  Also, if you are a member of the 1%, it is likely you can make more doing “financial manipulation” than building a factory and making things and risking your assets in the free market.  Which is what the people who run “Wall Street” actually “do”.  Even Apple Computer that was based upon inventing new things had its products made in China, but most likely using parts that were made in Japan because the Japanese can do these sort of things better than the Chinese can. 

  6. Love the letter. An effective counter to the “fairness” arguments of the 1% in that fairness can be a systemic construct, rather than just one applied to individuals. i.e. Intelligence, drive, and opportunity are a matter of probability extruded across hundreds of millions of people. Roll the dice and only a small percentage will have the combination of circumstances to be fabulously wealthy.

    The wealthy (not all, of course) attribute this combination of things to their own existential superiority. It’s nothing short of a God complex. As if THEY were the ones who gave themselves higher IQs, or the drive (read: personality disorder) that makes them ladder climbers, or the support systems that gave them opportunity.

    I wish conservatives had the perspective to realize that their ideology was worthy but limmited. Yes.  People ARE largely motivated by their own self interest. Capitalism CAN be a useful and productive tool. But that’s all it is. One tool among many. A tool that ignores other systemic factors. But, in their mind, it is the mechanism that allowed their intrinsic superiority to thrive. Heh… just try arguing with that self-fulfilling proof.

    It should be as simple as, “the right tool for the right job.” Unfortunately, many conservatives have turned a perfectly good tool into a religion.

    1. What?  Are you suggesting that there’s more than one positive influence in the world?  Then why has there never been anything from the Political Science boys that has more than one lever in it?

      Here’s hoping they learn to count to two someday.

  7. Warren Buffet and Bloomberg made it rich. Surely that means the system works and we’re all lazy losers right? RIGHT? It’s like we can say that getting stabbed 20 times is safe and sound for everyone because in one case someone survived that.

  8. It’s ironic how the solutions that can fix a problem can be the source of new problems that come up afterwards. Individualism has helped shaped America and made it what it is today for good and bad.

    In my mind the real problem is that human value systems change a lot more slowly than the economy. It’s this change differential that drives so much of the problems that I see at least.

  9. Sorry, although frustration is warranted about the state of the economy, the Occupy Wall Street movement is simply warmed-over Marxism from people who don’t understand the causes of the crisis. See:

    There is nothing inherently unfair about unequal income distribution. What matters is how it came to be.

    Furthermore, I find it ironic to say the least when people who advocate overwhelming government power against business, and forced redistribution of wealth, complain when Wall Street gets a bailout. If you don’t like redistribution and safety nets, then stop advocating it. It was wrong, but not for the reasons progressives state. It’s wrong because it was bad economics, it rewards failure, it’s not Wall Street’s money (it’s ours) and it’s not capitalism.

    1. Ah yes, spoken like a true 1%’er and undereducated libertarian. Nothing about structural issues, just equivocation between social services and Wall Street. “See? They’re the same: they both get government money,” which says a lot about your perspective. Oh yeah, and the red-baiting “Marxism!” Bravo, threadshitter.

  10. Much of life is playing the cards you are dealt. Those who are dealt a king and an ace should not believe they are superior blackjack players than those who are dealt a king and a five.They especially should not use that feeling of superiority to justify using their winnings to pay someone to take the rest of the riffraff’s money and throw them out of the game permanently.

  11. I wasn’t able to google up a reference to the picture this posted in response to. Would someone please post a link?

    Thanks for posting.

  12. Mind you, though, that the post responds not to someone who is part of the privileged 1% (as Cory seems to suggest), but to someone who is working just as hard and barely scraping by, yet fails to see he is part of the lower 99% income bracket.

    [To bkad: the original image is at

    1. The thing is, every time I read that original letter (“I am NOT the 99%”), I keep hearing my extremely conservative in-laws, who use lines like that as well as others (think “had to walk up hill both to and from school everyday over miles of broken glass wearing shoes made out of slices of white bread! You have it so easy today!”).  That the original letter writer received two scholarships what purportedly covered 90% of their tuition just seems to further put this person deep into “clueless” territory. No, strike that; quite probably not clueless. Just inexperienced and seemingly incapable of empathy.

  13. Also, making it into the top 1% does not mean that you took unfair advantage.  I’m sure there are a great many people on Wall Street and elsewhere who went to school, worked hard, behaved ethically, and now earn a few couple hundred K per year.   Look how much entertainers and athletes make.  Do they have to cheat other people out of an honest living in order to enrich themselves?  No, they only have to enter a profession that can be lucrative for those who are good at it.

    Various people and groups of people on Wall Street have in fact behaved unethically or even illegally, but these protests seem to inevitably devolve into general complaints about people with a lot of money.

    1. Making it to the top 1% (or at least to the top 1% ‘track’) can be done without unfair advantage to a decent extent. Of course, family connections and wealth matter (and while they are not sufficient, a certain minimum level of both is all but necessary), but if you are lucky, smart, and motivated enough you can clamber up.

      The problem is that staying in the track once you get there is made significantly easier by a large number of unfair systemic advantages. Once you’ve ‘made it’ you actually don’t have to work all that hard to continue to have it made.

      You can see something like this for an example [ ], but I speak from personal experience too. I went to a middling-level engineering school as an undergrad, and recently finished one of the most prestigious MBA programmes. The difference between the opportunities on offer (even though I finished my undergrad in a good economy and my MBA in a bust) is night and day. The difference in the average calibre of ‘talent’ is noticeable, but much less drastic. The difference in the difficulty and sophistication of the tasks I am now paid to do is non-existent. Non-existent to the point of shocking. It’s actually what made me glad to see the OWS movement when it emerged. There is no way that the current system is not fundamentally broken.

      It takes capital to make money. If capital is highly centralised, the way it is today, it means that there will be a small number of highly valuable and privileged positions, the possessors of which will basically derive most of their benefits from economic rent seeking. If capital is highly centralised, most of the economy becomes winner-take-all, but for no other reason than the winners like it that way, and it is they that have the power to set the rules.

      Your comparison with entertainers and athletes is actually very insightful – these are also winner-take-all markets, but idiosyncratically so (most people just happen to want to listen to the same music, watch the same films, and support the same teams that most of everyone else are also listening to/watching/supporting). On the other hand, the winners in those fields do not typically get to re-write the rules to suit themselves, so careers tend to be quite short. When it comes to the general economy, however, not only is there no good reason for massive capital centralisation (and therefore the artificial creation of winner-take-all markets), but the winners also get to re-write rules to keep on winning (because what they win is broad economic and political power).

      Once you know what to look for, you’ll see evidence of it everywhere. We no longer have a ‘free’ labour market where everyone plays by the same rules (if we ever did). If we did, people’s incomes would vary much more throughout their lifetimes than they do today. If we did, a person with parents from the bottom decile would be just as likely to die in the top decile as a person with parents from the top decile. We do not. This both ethically unjust and economically inefficient. It really, really needs fixing.

      Sorry for the length of the rant…

      1. Wow, just wow.  As a very well compensated technology professional that has worked at a lot of levels and in many industries; you took my thoughts on the matter and got them on the page.

        This is why I participate in the Occupy movement: the system has been rigged by those with great wealth/power to even more radically concentrate that wealth/power. In doing so, it undermines the great stabilizing force that is a large prosperous middle-class.

        Even as a relatively wealthy citizen, I recognize how it is in my best interest for affluence and opportunity to be as evenly distributed as possible. Do you love low crime, quality public schools, vibrant neighborhoods? I sure do and you get them by having a thriving middle class.

        This massive concentration of wealth/power, has happened before in our and other nation’s history and its time for another corrective measure. Occupy is that corrective.

      2. Hello, atimoshenko.

        You brought this up:
        “Of course, family connections and wealth matter (and while they are not sufficient, a certain minimum level of both is all but necessary)….”
        This is a critical point. We have a delightful little fiction that is infecting the minds of the wannabe 1%-ers and some of the 1%-ers themselves, namely that they did it all on their own.

        No one succeeds on their own, not even the super-talented (i.e. the athlete example brought up in another post). A support network made up of family, mentors, and others capable of introducing opportunities to the talented make it possible for the talented to succeed. Without the support and guidance of others, it is impossible for the talented to achieve greatness. 

        Of course, those talents we choose to support reflect our own cultural values.

        It’s quite telling that we have supported the aims of the robber barons for so very long. “With enough hard work, you too can be the next Carnegie,” is a fiction that rings as true now to the dispossessed as it did in the 19th century.

        That assumes children are still taught who Andrew Carnegie and the other robber barons were. A great way to sell a lie is to keep people ignorant of the past relevant to that lie.

    2. The term you are seeking is called “The Hollywood Effect”.  Why are some actors and actresses able to earn millions while others end up waiting tables?  Some people are simply more “talented” than others.  Can hit a baseball better.  Do certain actions better.  Part of it is “luck”.  But another part of it is “talent”.  In the case of actors and actresses, looks plays a big role.  In the case of “sports”, physical ability, fast reaction times, etc., play a bigger role.  So people who hit the “jackpot” genetically do have a head start over others trying to do the same thing.  Intelligence to a great degree is genetic.  Someone with an IQ of 80 isn’t likely to graduate from college.  So in a way some people simply get born “holding all the cards” while others get a lousy hand.  Sarah Palin’s son Trig has “Downs”.  But because his mother is “rich and famous”, he most likely will find the way smoothed for him.  Had he been born to some poor single mother who waits tables for a living, or does some other sort of minimum wage job, his chances for a “good life” would be extremely remote.  That’s the way things are.  The 1% to a great extent got “lucky”.  Born at the right time, right place, good genes, had the intelligence to exploit the opportunities they had.  In the “lottery of life”, they came out with the ten million dollar prize.

      1. If you think that being a Hollywood star has anything to do with talent, you’ve been watching movies with the sound off.

  14. Nothing wrong with one person at one point making a lot more money that everyone else. Something very wrong with that person then being in a position to continue making a more money than everyone else. Free market competition means running the race from scratch each time, not using incumbency advantages to cripple competitors before they even have a chance to start.

    1. Also, if the wealthy get to make their voices/votes carry more weight — essentially, guiding policy — simply because they have more money, then the U.S. government devolves from a democratic republic into a plutocracy.

      The government is not a free market. The hand that guides it should not be invisible; it should be the people.

  15. No, fuck that. Whether or not the crash was “caused” by Wall St, you’re an idiot if you expect markets and economies to always “just go up” while you sit on the 401k you ignorantly thought was safe or your advanced degree you correctly suspected might be useless in the corporate world. 

    The American dream is not about “working your ass off” and expecting to get paid what you “deserve,” it’s about the legal right to play it harder and smarter than the next person.

    The dollar is a retarded fictitious element that only carries the value we let our government assign to it, so figure out how to get more of it and stop expecting the next person to figure out how to do it for you.

    I’m not part of the 1% or the 99%, I’m part of the 10.93% upper-middle class that makes more than $75k and gets taxed to fuck because of it. And the only reason I shut the fuck up and pay those taxes which I’ve seen both put to good uses, and abused as free party money is because I accept our system as imperfect (like ALL economic systems), but the best one in the world so far. Do not lump me in with the low earners because you want to create national class warfare against a small percentage of people who will ALWAYS be rich, whether the market is up, down or dissolved. Take that socialist or anarchic bullshit somewhere else.

    There. I’ve been waiting to say that all month.

    1. I’m in the census income group above you, I get taxed to fuck because of it and the only reason I don’t fucking whine about it is because I don’t mind doing my part. Strictly speaking, compared to me, you are one of the “low earners”.

      And yet, I recognize that I’m the 99%. So excuuuuuse the rest of us for being pissed off about things you should be but are too disinterested/confused/selfish to care about.

    2. You don’t get “taxed to fuck.” Here are 2008 income taxation numbers for some industrialized nations: ; you can see that the US is in the bottom third. In fact if you look at the US tax rate historically, it is currently _very_ low, especially for the top 1%.

      It makes simple sense that everyone needs to be taxed for some services that help the Commons. I agree that there is overspending on tax dollars for defense (it’s not clear to me that our large defense outlays have improved the US now that the Cold War is over). In fact, that excess spending has made our plight that much worse since we don’t then spend it on things that help the economy like infrastructure.

      Nonetheless, one thing that amazes me is the misconception of “Oh my God, we can’t raise taxes on those who earn over $1,000,000 — that might affect me someday.” First off, it in all probability it never will, secondly, even if it did, after you end up making more than, say, $500,000 (depending on where you live), all the rest is “gravy” that you won’t notice having (or not having) nearly as much, and third, progressively taxing the wealthy has made our economy grow the most. If you are a “job creator” and you see that you’re going to be taxed, you tend to reinvest in businesses instead of holding onto it unlike the case we have now.

      (And *I’ve* been waiting to say this for some time too)

      1. A chart will always seem to win the popular argument but it takes a resident of a nation to see all the ways the rich can generate tax-defered income. The government tax code will never find a way to identify wealth and enforce a tax structure equally, so people better get on board by building a modern financial education to manage their assets and liabilities.

    3. it is not about expecting the market to always go up, but one aspect is not wanting a few to crash it in a big way to the ruin of everybody else, only to have it smugly shrugged off as a “correction”.  

      it is about lobbyists out to curb safety measures with sweet sounding terms as “deregulation” (enron, oil/bp, the bank collapse, media consolidation, more), bills pushed through such as the gramm-leech-bliley act that made banks/insurance co’s “too big to fail” capable of failing (again, lobbyist driven: citigroup, BoA, AIG, more), companies cooking the books to make themselves appear temporarily profitable (common shareholders take note: enron, worldcom, adelphia, more), ce0’s driving the company into bk with impunity while retaining their status as they receive sweet bonuses for restructuring in ch11 (rite aid, kmart, united, global crossing, more), the allowance of subprime mortgaging with the added insult of investment firms taking side bets, industries allowed to cut corners so that major, avoidable catastrophes occur (bp spill, massey coal explosion).  the list is never ending, and this is with just a feeble memory blindly recalling bits of news over the years.  forget the perceived threat of anarchists and socialists, that is background noise for the bigger issues, the 1% that can sink us without a concern and still getting their bonus because it is in their contracts.

    4. The American dream is neither of the two “dreams” you suggested.  
      Wikipedia:  In the definition of the American Dream by James Truslow Adams in 1931, “life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement” regardless of social class or circumstances of birth. ability or achievement” regardless of social class or circumstances of birth.”
      You know, Life, Liberty and the pursuit of Happiness. 

    5. I’m not part of the 1% or the 99%, I’m part of the 10.93% upper-middle class that makes more than $75k and gets taxed to fuck because of it.

      I love these internet tough guys who hippy punch all day long, whine about other people acting entitled and then bitch about having to pay taxes.  You know who else paid taxes?  Pretty much every single human being who has ever lived in historical times.  There’s even an idiom about it: “The only two certainties in life are death and (say it with me folks) taxes!” 

      You can take your bullshit pragmatism and shove it up your own ass.  Once you’ve got your colon wrapped around it you may notice that your arguments apply just as well to your righteous fury about taxes: a clever person would expect to pay taxes and factor that into what his or her actual income is. 

      Also, the income tax has only been lower once or twice in the history of the twentieth century for very short periods of time (a few months or maybe a year).  Top earners of the 1950’s paid a 90% top margin income tax and you’re complaining about what…25% (assuming you’re WAY over the $70,000 figure you mentioned)?

      Taxes are the price you pay for living in a relatively free, open society where people engage in business daily without routinely fucking each other over.  As far as I’m concerned, yours is the anarchic bullshit.  And whining about how badly you’re taxed makes you as bad as the most privileged little iPhone wielding socialist hypocrite at OWS.

    1. Problem is, many of the people who need to read this won’t read this, even if it were pasted on all of their walls; it violates their belief systems. This is about empathizing with the plight of others, and sadly some people just don’t get that.

  16. What kind of world do you want to live in?  Would you want to live in a gated enclave surrounded by slums – even if that wealth and that poverty were acquired according to merit?  (Of course this never happens:  throughout the world the societies with such gaping inequality are those that are the most corrupt and unjust.)  Or do you want to live in a society where people are educated: where they care about their neighbors and the spaces they live in: where they participate in politics and in culture: where making money is not the only measure of human genius:  where people can realize their diverse individual potentials and associate with each other in liberty and in peace:  where contributing to the welfare of others is at least as valued as acquiring personal wealth?

    The myth of merit is at odds with reality.  It relies on and propagates the false claim that selfishness is the central human drive.  In  pre-modern societies it was not;  the belief that the greed makes social social Darwinism necessary confuses cause with effect.  The ideal of the rich society, and the image of Western civilization at its best, is of one  in which human beings can be liberated from need and put aside selfishness for better things.  Even if – like me – you are one of the lucky 99%, what kind of world do you want to live in?

  17. Thanks for the great blog post, Mr. C.

    What many are still confused about is the enormity of this scam:  for every $1 of debt on hand, the banksters sold from $100 to $1,000 in debt (averaging toward that $1,000 quantity), making billions and billions off of peddling hundreds of trillions of dollars worth of debt-financed financial instruments (i.e., securitized debt).

    Therefore, whether or not a single default ever occurred on any of those loans (and it actually began with commercial loans defaulting, followed by tightening up of LIBOR as directors at the banks realized they all had the same worthless credit derivatives on hand), the meltdown would have occurred at 2007-2008 period as such a scam was unsustainable, as any such Ponzi-Tontine scheme normally is.

    Which was a replay of what occurred during the Roaring ’20s, leading up to the Great Crash of 1929.

    1. So, sgt, what you’re saying is that this has probably only just begun? Great… where’s John Steinbeck when you need him? 
      (I kid; I have the misfortune of working in the system and he has a very valid point)

  18. Around and around we go.  I just wish more people read Vonnegut.

    “The what?”

    “The Money River, where the wealth of the nation flows. We were born on the banks of it–and so were most of the mediocre people we grew up with, went to private schools with, sailed and played tennis with. We can slurp from that mighty river to our hearts’ content. And we even take slurping lessons, so we can slurp more efficiently.”

    “Slurping lessons?”

    “From lawyers! From tax consultants! From customers’ men! We’re born close enough to the river to drown ourselves and the next ten generations in wealth, simply using dippers and buckets. But we still hire the experts to teach us the use of aqueducts, dams, reservoirs, siphons, bucket brigades, and the Archimedes’ screw. And our teachers in turn become rich, and their children become buyers of lessons in slurping.”

    “I wasn’t aware that I slurped.”

    Eliot was fleetingly heartless, for he was thinking angrily in the abstract. “Born slurpers never are. And they can’t imagine what the poor people are talking about when they say they hear somebody slurping. They don’t even know what it means when somebody mentions the Money River. When one of us claims that there is no such thing as the Money River I think to myself, “My gosh, but that’s a dishonest and tasteless thing to say.”

    “It’s still possible for an American to make a fortune on his own.” said his father.

    “Sure–provided somebody tells him when he’s young enough that there is a Money River, that there’s nothing fair about it, that he had damn well forget about hard work and the merit system and honesty and all that crap, and get to where the river is. ‘Go where the rich and the powerful are,’ I’d tell him, ‘and learn their ways. They can be flattered and they can be scared. Please them enormously or scare them enormously, and one moonless night they will put their fingers to their lips, warning you not to make a sound. And they will lead you through the dark ot the widest, deepest river of wealth ever known to man. You’ll be shown your place on the riverbank, and handed a bucket all your own. Slurp as much as you want, but try to keep the racket of your slurping down. A poor man might hear.'”

  19. The problem with bragging about how you are perfectly content to work your ass off, sit in your tiny apartment, never go out to eat, don’t own any fancy gadgets, etc, is that those people are not the ones that the economy runs on. Unfortunately Capitalism requires people who have extra income to spend on the extra things in life which they enjoy. Those people have lost their jobs, lost their homes, or buttoned down so tight all they can afford is the minimum things to live on – even if they are highly skilled or highly educated. So small businesses all over the country have gone down the toilet in the last few years as customers have dried up and quit buying stuff.

    Fighting over who can be more minimalist is fun, but it’s not what’s going to get our economy rolling again.

    1. Economies do not by necessity depend upon conspicuous consumption. Such consumption is only a requirement for extreme growth in economies. An economy is capable of functioning without such spending, it’s just that an economy that was previously addicted to such consumption is going to temporarily shrink in its’ absence, and such shrinkage is going to leave in the lurch a lot of people for whom there was previously an (artificial?) niche to habituate comfortably.

      Restarting that consumption is one way to try and fill the void, yes… but there are side effects to that kind of consumption (for example: the incentive to buy on credit) and they are dangerous. By extension, that kind of consumption is fully capable of creating exactly the disease for which it is prescribed as a remedy.

  20. What I’d like to see more of from the 99% movement are arguments for fiscal/economic reform based less on a sense of fair play and “goodness,” and more on the fact that it just makes fracking sense, market-wide, to provide better/more resources for the largest number of people. And that it makes sense for the richest people, too, when that happens.

    Throughout history, the greatest expansions in personal wealth have come about when the folks on top had to dilute *some* of their control/wealth and let it be absorbed by many, many more people. It happened in Rom when rules for citizenship were loosened, it happened after the plagues in Europe, it happened here after FDR’s administration.

    Here’s the short-hand for why this works: you can’t have billionaires until you have thousands of millionaires.

    Wealth, when concentrated, has a much, much smaller chance of growing. Two main reasons:

    1) In the hands of the wealthy, any specific increment of wealth is less apt to bring about a state-change (moving up the ladder, getting an education, taking a risk on a new business) than it is for a number of folks at lower levels. The difference between having $100 million and $101 million in the bank is not going to significantly affect that one person’s life or prospects. It’s a 1% difference in static (largely) wealth that brings no major progress. Take that $1 million and distribute it to 1,000 people whose income is in the bottom — in the form of educational assistance, for example — and the odds are excellent that it will, in time, end up adding more to the wealth of the entire country.

    2) Concentrated wealth favors conservative investments, which tend to bring about less overall change/improvement.

    I happen to think it *is* fair to give more people more resources to help them do better; whether that’s public education, healthcare, infrastructure, etc. But I also think it makes good sense for the economy, because when a LOT more people do a little bit better, the whole thing improves for everyone, including the wealthy. Rising tide lifts all boats, trickle-up economics, etc.

    My argument to the 1% would be this: if you want to hold onto your wealth as part of a system where it means anything (or even grow it), consider supporting policies that make things better for everyone. As the whole pie gets bigger, your part will be worth more.

    And the villagers will use their pitchforks for making hay, rather than stabbing you to death. That’s a nice side benefit.

  21. I’m glad someone got around to posting something like this, because the steady stream of “We Are the 53%” photobombs have been driving me to pace and swear- because I can’t imagine more people having more fundamental misunderstandings about the state of the politicoeconomic system and their place in it. People that were in the military or are retired asserting their lack of government subsidies, people clearly in need of instance throwing in their lots with the fiddling Neros of the world… it all just makes me hurt.

    It gets even weirder when they turn into polemics against mixed markets of any kind- as if such a position made an iota of sense in the post-game-theory era. Markets are not magic fairy dust inherited in perfect form from on high- they are technologies constructed to allocate goods and services, and it doesn’t take very long to find instances in economies or mathematically analogous situations like ecologies where they wedge in a suboptimal state that the “drunkard’s walk” cannot escape and some forcing gets the damn thing out of the ditch, or to prop it on the precarious mountaintop of a global maximum. We know this. It’s fact. Somehow, though, the theoretical underpinnings of mixed markets end up in the sights of middle Americans who seem to have forgotten they got Pell grants as college kids and will get social security and lost their 401(k) to Enron, and it drives me to drink.

    So here’s what else we know. Countries with shitty income distributions produce shitty life outcomes- even for rich people. America has a shitty income distribution, and predictably has shitty life outcomes, even for rich people, compared to countries with similar mean productivity. There are so many poor in America that it’s not a good place to be rich. The instances of greatest American productivity growth have been associated with considerably more aggressive upper tax brackets, capital gains, and financial regulatory environments- and while this only proves the weak case- that such actions do not stifle growth- there is modelling to suggest the strong case- that they might encourage it.

    How? In the case of income, decreasing the incentive to extract capital from company as wages on the part of executives increases the fraction that remains for equipments, investment, and wages for productive underlings.

    In the case of financial services- it’s because it’s just a bloody utility, and anytime you see it operating as something else, you can be sure it’s broken. Markets, to run, need sinks for excess capital and loans for insufficient capital, and turning one into the other should extract profits that are a low fraction of the total economy- otherwise, it is by definition inefficient- and unlike other utilities, like a power company, who make one thing (power) and want another (cash) they have a rather strong desire for what passes through their hands, and that’s the point of bloody financial regulators- to keep the financial services sector from robbing everyone and thus be globally efficient. But financial services generate a fraction of total US profits that isn’t reflective of a healthy economy (and that the history of other empires suggests is associated with looming radical decreases in productivity) and that tracks back pretty well to the dismantling of regulations forbidding the union of commercial and investment banks.

    What else do we know? That a country whose foundational underpinnings were unfriendly to aristocracy has the lowest social mobility of any developed country. The indignant “53%” admiring their shiny bootstraps are inherently self selected- because there is no well-off country where it is worse to get somewhere by pulling on them. We know that the fraction of GDP our government spends is pretty well in line with other developed countries- it would seem that countries with similar sociotechnological bases encounter similar kinds of externalities, though by sector it is impressively skewed towards defense- but we are impressively unwilling to pay for it with taxes instead of debt in comparison. We know that their is no appreciable difference in corporate outcomes between companies that hire managers internally from those experienced in the field and those that receive business educations, and that executive compensation exhibits strong growth regardless of individual corporate performance and the market as a whole- and that should be a clear sign that what is being displayed is not the fruit of competition, but of pre-existing status- and that’d give Adam Smith a coronary.

    There seems to be this widespread, quasi-feudal imagination that being an executive means you’re functionally a king, but in a truly competitive, efficient market, *it’s just another job,* and anytime you see someone getting a $300 million executive bonus in a company filled with engineers that make $100K and craftsmen that make $50K, and they are are actually responsible for the goods and services, *it should be immediately clear that the allocation of wages was not free and competitive, because no one is that hard to replace.*

    It’s just not that bloody complicated. The “free markets” that we marvel at, for their ability to make jobs and cheap shit to buy with those jobs- the glittering dioramas of the Cold War, of earned wealth and uniform comfort and open avenues of opportunity- are things that take lots and lots of maintenance in the form of sufficiently progressive taxes and sensible regulation and aggressive enforcement and earnest, adequate spending on the public good- and the increasing lag between restored productivity and full employment in each successive recession means the smart move is to admit that the needs for flexibility-enhancing public spending measures, like unemployment and higher education, are going to increase in the future.

    It all plugs together pretty damn obviously, don’t you think?

  22. We could tax everyone 100%.  The fact will still remain that our government is the most wasteful, crony-ridden system in human history.  All your cash will be pissed away in a war, into a Halliburton pocket or into an Air Force ashtray.  Caveat emptor.

    1. That’s a very nice strawman you’ve got there.

      I didn’t see anything in the original post about taxing people 100% or anything like that.  Mainly, I think Cylinsier is busting the myth that rich people are all rich because they deserve to be rich, and poor people are poor because they deserve it.

      What I think is that people should get equal opportunities, and that while we all might be different (including different incomes) when income inequality gets too out of whack it’s a sign of something gone wrong.  The government stops serving the interest of the nation at large and starts serving mainly the corporations and rich people.

    2. We could tax everyone 100%.  The fact will still remain that our government is the most wasteful, crony-ridden system in human history.  All your cash will be pissed away in a war, into a Halliburton pocket or into an Air Force ashtray.  Caveat emptor.

      More wasteful, crony-ridden systems in (recent) history:
      -The Indian government
      -The Iraqi government
      -The Afghani government
      -One has to suspect Russia

      I can go on and on.  However much waste and corruption there is in the U.S. federal bureaucracy it’s a much lower proportion than exists in most state bureaucracies around the world.  (I’m not going into corporate bureaucracies because they tend not to generate as much data.  Suffice to say that I suspect many large corporations are even more wasteful and corrupt than your average government.)

  23. Call our system of government what you will. But something is seriously wrong when it takes 60 votes in the Senate just to open debate on bills, and when members of Congress can vote on legislation that directly benefits companies from which they accept campaign contributions from and own stock in.

  24. It’s amazing that someone can get rich without the mathematical background to realize that 99% of people will remain in the bottom 99% even if EVERYONE WORKS HARD ALL THE TIME. If the vast majority of people aren’t getting a fair share then that doesn’t mean it’s because they are lazy.

  25. Is it just me, or is there something crazy that someone making 350,000$ is part of the 99%? I think that is much an indication of something wrong as anything else.

Comments are closed.