October 01
Male, Jewish, in my fifties, married with kids (well, at this point I guess that should be "kid"). Thanks to Lezlie for avatar artwork - sort of a translation of my screen name. "Salaam" is peace in Arabic, hence the peace sign. (No, my name doesn't mean "hunk of meat" and yes, the pun is intentional.)

Koshersalaami's Links
JANUARY 24, 2013 8:03AM

What's Really Wrong with America in One Sentence

Rate: 17 Flag

previously published on OurSalon (by roughly one minute)

Out of every hundred bucks in the United States, the poorest 40% of the population collectively owns about thirty cents.

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I agree that that is really wrong with America.

Many think that wealth equals, or results from virtue. This particular notion is a pathogen with regard to ethics. As financial stakes increase, ethics decrease. Risk taking rises as the stakes rise. The facts are counter to the common perception. As such, the massive imbalance in wealth accelerates the problem. Very wrong, indeed.
I wouldn't have put it like that but I'm learning from having it put like that. Thank you. I particularly like "pathogen with regard to ethics." That whole wealth/virtue thing is so Romneyesque.
Aw kosh, you're focusing on the glass being 97% empty. Why not rejoice in the lucky few percent who are wealthy beyond anyone's wildest dreams.
Good sentence, Kosh. You’re probably right. That seems to be what is wrong with America.

Fixing that situation takes lots and lots of doing. The fringe right has no intention whatever of helping with a fix. And the simplistic notions being advocated by the vocal fringe left will never accomplish it.

I think the “fix” will only come from being forced into it by economic calamity of massive proportions.

I think I may live to see the beginnings of that calamity.

In fact, I think we already are seeing the beginnings.
I wrote about Japan's Deputy Minister Aso's comments on why the elderly should just dietoday on another network about ageism.

Another thing wrong is:

"The thing deputy Aso should worry about is that the burden is falling on all of us, not because of seniors, but because the tax burden on the rich has decreased by more than 80% in the last 50 years in the world."

Great series of comments. Abra, thank you, that cracked me up.

Frank, the very beginning of it was the S&L Crisis during the 80's. The next major event was the mortgage crisis during the Bush administration. It actually began during the late Nixon administration when middle class incomes stopped growing in real terms and haven't grown since. Occupy Wall Street is a direct symptom of this frustration.

As to its cause? A lot of it is exactly what Linda says:
"the tax burden on the rich has decreased by more than 80% in the last 50 years in the world."

If we're going to alter the course of this trend in ways other than the AA solution - let us hit bottom and realize we've hit bottom before we're motivated to change, a change which could prove extremely violent in this case - we're going to have to get the business community to understand just how badly this trend damages them. Political power isn't at the bottom any more than money is (in fact, it isn't at the bottom precisely because money isn't at the bottom); it's at the top or closer to the top, and there are a lot of people there in whose financial interest it is to reverse current trends. I don't know how to get that word out but I remain convinced that that's the key because it's the most obvious path that makes any sense.
There are worse places in the world to be poor, and note, if there were private accounts as part of Social Security, that over time would change, one reason some people have supported that, beyond aligning incentives of labor and capital, on the theory that what's good for the goose is good for the gander, and justifiable on grounds of limited rationality as to time preference in the context of non-credible threats not to assist in certain contingencies. Of course people like you and your inverses on the Right won't do that.
I'll translate - if the stupid poor who can barely manage on their lousy wages would only put a bunch of their pay into investments, they could retire whatever age their betters have decided upon by that time. So poor they really can't do that? Then surely they can afford a dollar per pay. That will really add something pitiful. Presuming they don't have to use it in the meantime for medical expenses cuz they (stupid people, not looking where they're going) got hit by a bus.

Reinstate Readers' Choice immediately so Abrawang can get his well-deserved Best Comment.
Myriad, thank you. I tried wading through it but it stopped being worth the trouble.

I agree about Abra's comment. I'm afraid I'm not about to reopen Readers' Picks (Readers' Choice is the OurS function) because I'm not interested in the work and because this is, in theory, not the primary place I post. However, on this post at least, I'm developing way more of a thread here than there, and that's without my old practice of PMing around when I posted. I'll spend time where the comments are.

You could always ask Amy. She might be amenable, particularly if you promise her that I won't be involved.
And by all means, leave ME out of it!!!!!!

Your statement is clear enough even for the likes of Paul Ryan to understand. I'd love to get a response from one of those geniuses.

We all know the 47 per cent are freeloaders. Romney told us so. And he earned every dime he inherited. R
If the Social Security system benefit formula was applied to buying not just Treasuries, it would have the effect of altering the ownership of property very slowly over time, held as individual accounts so that the State wasn't the investor. CALPERs does that, as do almost all pensions. However, it won't happen more than likely, because when that is proposed on the Right, the benefits are subtly cut more than is politically feasible, and the Left is ideologically opposed to such things and foams at the mouth, a tragedy really, as as usual, it doesn't actually solve a problem, possibly the motive all around, as people make the perfect the enemy of the good.
I left you out very intentionally. I didn't want to put you anywhere near that conversation. What are friends for? By the way, I'm apparently getting a response from our aforementioned colleague ("HAHAHAHAHAHAHA") at the other site.

I'm afraid Treasuries are, for the time being, a safer investment, safety is an issue here, and there may be tax vehicles other than just Social Security to help even things out over time.
A commenter using CalPERS as an exemplar of responsible retirement income policy made my nose expel coffee.

Let's eschew obfuscation!
It's about five dollars by the way, not thirty cents.
Wealth accumulation is very different in distribution than income, for a variety of reasons, partly inheritances yes, but also because of differences in savings rates that go with higher income, since it is easier to save, ceteris paribus, the more one earns. Of course, some have argued that for a variety of reasons, Keynesian demand management in one view, that since WWII, we have effectively speaking encouraged consumption over investment. American culture is also somewhat different, as if you go back in time, Americans have not been quite as big savers as other places, as to percentages of income. Wealth everywhere is much more concentrated than income, for reasons of differential ability to save out of income, although culture matters too, as to pressures identified by Thorstein Veblen to "keep up with the Jones's," which apply across the income distribution, especially many would say in America, because we lack an aristocracy in the formal sense, and so put much weight, possibly too much, on possessions marking social status, as opposed to higher status for what passes for the American intelligentsia. On the other hand, we also are a wealthy place too, even with inequality, if it's not fun here being poor either.
Dont you dare! She'll just go around prefacing everything with "since I'm an admin", like she did before.
Jesus Christ! Don't you freak'in people have anything better to do than throw insults and harassment my way?

Obsess much? Geez...
3.0% 3.3% 3.6% 3.0% 2.8% 2.5% 2.5% 1.1
That would be the correct number, years 1989 to 2010, which I had to high, 2010 being the last one, for 0-50 percentile, in which median wealth at that level is also $77,000, not that poor. one dollar out of 100 to get to fiftieth percentile, if again, at 77,000 median.
CRS examination of why wealth is and what it is, concentration included, and median at $77,000.
CALPERs is good enough for the faculty, and total risk aversion has a price too.
I'm not going to knock Amy's work on Readers' Picks. She actually did a good job there. I don't want to get involved again but if she does that's her business. I do get questions about reviving it from time to time and I suspect those requests may accellerate now that OS is back up. Given that I don't want to get involved, she is the most logical person to ask.

I compartmentalize my objections. Amy did great in that compartment.
As I've said previously, because the dataset I'm working with is based on Quintiles, I didn't have the 50% figure because 2 doesn't divide evenly into 5, and the assumption that the middle quintile should be divided in half is way, way off base.

Income is one issue, but accumulated wealth also affects expenses, such as mortgage payments, so I'm not sure income is the most valuable metric.

That part of the problem is true enough, but the real problem isn't wealth, but how that wealth is acquired. I don't mean value judgments about the “worth” of various occupation, on the order of why should a popular actor make millions more than a teacher- but rather is the wealth acquired by actual production of a good or service or is it acquired through market manipulation and cronyism.

In fact, the outrage over income tax rates is ta camoflge dodge the already wealthy use to prevent others from becoming wealthy by EARNED income, rather than inherited wealth, much as agribusiness loves to hide it's corporate depredations behind the image of good old farmer Borden and his cow, Elsie.

The already wealthy don't pay income tax, because they don't EARN anything, they own tax-free municipal bonds, pay capital gains tax and live off corporate “business expenses” Similarly, huge multinational corporate “Persons” mix themselves in and confuse things by encouraging everyone to go after “joe the Plumber” and his $250, 000 a year corporate personage, meanwhile playing golf with the president and securing unbid $250,000,000 grants for “non-profit” development of . say. solar panels, ( For which a grateful nation will grant the select CEO's living expenses on the order of $25,000,000 each) ( kicking back, say $500,000 to a select re-election campaign fund)

One might think that as a bloodsucking bankster CEO the Presidents good buddy Jamie Dimon of Chase Bank would be absolutely against food stamps, and for letting the undeserving poor starve. But, turns out jamie's Bank ( Chase) administers the Food Stamp debit cards and makes millions off the administration. Check out ANY federal “welfare” program. They ALL administered by “Greedy Bloodsucking 1%ers. ( do you here the Insurance companies complaining about Obamacare anymore?- guess who worked out a deal insuring that insurance ( an hence Insurance company profit) is mandatory?

I agree that the distribution of wealth is unconscionable - but please consider a little more carefully WHY that is- Obama's redistribution of wealth is the same as bush's redistribution of wealth. Out of the public coffers and into the pockets of preferred cronies and market manipulators. The only thing that has changed the preferred cronies, and that Obama is more blatant about it.
Please don't get the impression that I think income polarization is strictly a Republican problem or that Pres. Obama doesn't have a hand in it. Though the rank and file of Democrats is more sympathetic to this cause than is the rank and file of Republicans, this is by no means a strictly partisan issue. In fact, in the 2008 Presidential elections, the two candidates who acknowledged polarization as a major problem best were Edwards and Huckabee. Both imploded, for entirely different reasons, and I'm not saying I'd have voted for Huckabee because I wouldn't be able to stand the guy on a civil rights basis, but at least he recognized the problem.

The ways the problems have been addressed so far have been ridiculously inadequate and some of the budgetary suggestions I've heard would aggravate the problem at a time when we can't afford its increase. As I have said to you many times in many contexts: I'm not married to solutions, I'm married to the effort to find good ones. You'll notice that during the last gun control discussions I didn't have a lot to say about confiscating classes of weapons; in fact, I used concealed carry as a model for increasing safety. (For those reading who didn't follow that, I mean from the standpoint of using regulation and training, both of which are integral components of concealed carry, to increase safety.)
Here is a quote from a Business Week article on Greenspan's views after the banking meltdown in response to what would have been different for him had he not met Ayn Rand:
"I would probably have stressed mathematical economics and model building more than trying, as I am today, to figure out how cultural issues affect economic policy and especially how fear, euphoria, and herd behavior significantly affect modern economies. Such issues I trace back to my relationship with Ayn Rand. "

Interesting read:
Median wealth is still 77,000 for households, not that poor. The reason for the increase in inequality is that the top end's income has gone up more, as have asset prices, not that people in the lower part of the distribution are being made impoverished as the main force. Of course, it's human nature to resent that too, if that is often called envy, and therefore a sin. We live in Progland now, so you will get more of what you like, you think, noting that the People's Republic of Cambodia was very equal, as is North Korea, should one apply those principles to their logical conclusion, which doesn't mean you think Ayn Rand is some secular God either, if she's a popular trope that way, an early version of Ann Coulter some wags might wonder.
Hasn't that always been what is wrong with the human world since time began? Communism tried to fix that. Socialism tries to fix it. Democracy tries to fix it but it still is the status quo. Maybe we should just relax and when it really gets bad storm the castle gates.
First I need to have my twelve year old daughter teach me to knit. Then I'll found an organization called the DeFarge Knitting Society. Charter members?

The contention that the differences in income/wealth are due entirely to growth in the top is just not accurate. Median income in constant dollars hasn't risen since the Nixon administration but expenses have, particularly in health care, higher education, energy, and banking (borrowing). The result is that standards of living have been dropping steadily. The first adjustment was when families went from single earner households to dual, a change attributed to feminism but really due at least as much to economic necessity. Then we saw average debtloads increase. Then we saw children moving home. Then we simply saw mass forclosures. This isn't about jealousy, it's about disposable income and financial security decreasing.
Hitler made the trains run on time, but I would not accept his application for Department of Transportation. Some people lack the character to be among other people.
If I did still "do math" in public, this would not make me happy.
Here's a recent headline from Bloomberg News:

"McDonald’s $8.25 Man and $8.75 Million CEO Shows Pay Gap"

That's $580.00 for every $1.00 earned.

That's $4,785.00 for every $8.25 earned..

That's $23,200.00 shoved into one pocket, and $330.00 shoved into another pocket, per every 40 hour 'work' week.

But here, let the Bloomberg article explain the pay difference:

"...Johnson [the burger flipper portrayed in the story] would need about a million hours of work -- or more than a century on the clock -- to earn the $8.75 million that McDonald’s CEO Jim Skinner [earned] last year. Johnson’s work flipping burgers and hoisting boxes of french fries, like millions of other jobs in low-wage industries, helps explain why income inequality grew after the 2007-2009 recession ended.

"The wage gap between CEOs and store workers wasn’t always so wide. Twenty years ago, when Johnson first started at McDonald’s, the CEO’s compensation was about 230 times that of a full-time worker paid the federal minimum wage. The $8.75 million that Thompson’s predecessor as CEO, Skinner, made last year was 580 times, according to data compiled by Bloomberg.

"McDonald’s is part of a larger trend of Standard & Poor’s 500 companies, according to data from the American Federation of Labor-Congress of Industrial Organizations. The pay gap between the average S&P 500 CEO and the average U.S. worker, which was 42 times in 1980, widened to 380 times in 2011 from 325 times in 2010..." ---quotes from Bloomberg News
that's a lot of bang for your buck of a line. R
I stand by what I wrote, if this is a pointless exercise.
What you wrote is an inaccurate reflection of the financial plight of most of the population. Stand by it if you like.
Everyone who doesn't have a hundred bucks in their pocket right now agrees.