The Perpetually Working Poor - An Ongoing Series

[Grand Potentate]

I know most of you don't read huff post, but this series of theirs on the working poor of America has been pretty fantastic. Some of you will hate them (Harveybirdman) but I thought it might resonate with a few, and would dovetail nicely with the other thread on prosperous societies:

http://m.huffpost.com/us/entry/4602409/

THE BLOG
When Working Hard Still Means You're 'Working Poor'
Dirk Hughes 01/16/14 09:15 AM ET

Don't ever tell me that hard work is enough to make it in this life. I know the truth. Sometimes it doesn't make a difference how hard you work. Sometimes you just can't make it.

My story is not unique. It may be surprising, but it is not unique.

I have a doctorate. I have been employed full-time for the 35 years I have been of employable age with only a week or so between jobs. I have worked my butt off my entire adult life. I do not have a drinking or gambling problem. And I still live paycheck to paycheck.

I guess that qualifies me for being one of America's working poor.

Like anyone, when I was younger, I thought I could make it in the world if I just worked hard enough. I wanted to be a lawyer or a writer. I didn't care which. Both would have been preferred. But I dropped out of my first attempt at college back in the early '80s as a pre-law student. Big college temptations were too much for small town me. I traveled a bit, moving around as a bartender. It wasn't a bad life for a young man and it fit in with my other dream of being the vagabond writer. I knew all the famous writers probably paid their dues in similar ways. It was just a matter of time before I got mine.

I returned to college for a second attempt. Again, I wasn't quite where I needed to be to take it seriously, but I did meet the woman who would become my wife for the next fourteen years. We moved to Ohio so she could get her masters in human resources. I kept bartending.

Once my wife graduated with her masters, we moved to another city for her new job. This was also the time for me to go back to school and for us to start having a family. I got my bachelor of arts in English about a year after our daughter was born in the early '90s. I figured I could teach while I worked on the next great American novel.

When my wife started getting promotions regularly, we decided we should to go back to our home state to be near relatives and do what we were supposed to do -- keep careers rolling, get babies raised, get house payments scheduled.

Over the next decade, we realized life wasn't quite as easy as we thought. Though my wife was slowly moving herself into positions of higher pay and responsibility, I couldn't find a teaching job and had to rely on bartending. I eventually traded bartending in for some entry-level sales opportunities. I heard a person could make a decent coin in sales. If you can sell stuff, that is. Not just if you work hard.

In the late '90s I finally landed a teaching job with one of those for-profit colleges you see on TV. I wasn't a big fan of the corporate philosophy, but I loved the teaching. This was one of the few times in my life I actually felt I might be working well within the system professionally. Things were clicking along pretty well.

Until my divorce.

Hey, it happens.

Since my wife had been the major bread-winner during our marriage, the divorce obviously left me short on bread. My teaching salary was not enough to cover my own apartment, pay for my half of childcare (by then we had two kids -- a girl and a boy), and handle daily operating costs of living. I didn't have much time to get things in order, so I took on an additional job working third shift on an assembly line in a factory.

Some of my factory co-workers were aware of my situation. They said hello and referred to me as "the professor" as they passed by on the way to their breaks.

For the next two years I worked full-time during the day teaching at the college and full-time at night in the factory. I drank a lot of coffee. I lost a lot of weight. I fell asleep a lot when I got my children on the weekends.

Eventually, an administrative position opened up at the college. It wasn't the type of work that I felt I would enjoy, but it would allow me to only have to work one job. I took it to keep from dying of exhaustion. My factory friends were sad to see me go, but they understood.

This is around the time I met and married my current wife. We bought a house a few minutes before the housing bubble burst in 2006 and ended up juggling our finances to create a budget that would maintain it afterward. She supported my decision at the age of forty five to go to law school, to finally finish something I started 25 years before and hopefully nurture an opportunity for a life with less struggle. I spent the next three years working full-time at my college administration job while going to law school full-time on the weekends. I worked hard. I studied a lot. I drank a lot of coffee. I lost a lot of weight.

In December 2010, two weeks after finishing my final law school class, I came down with what I thought was a bad case of bronchitis. I went to the doctor, got some X-rays, then got a call from him telling me I should go directly to the emergency room. Do not pass Go. Do not collect $200. I guess those years of working hard and burning the candle at both ends finally caught up with me. I had congestive heart failure. My body was holding fluid around my heart. It was working hard to maintain 20 percent blood flow. I had the laugh at the symbolism. I spent the next week in the hospital and the next six weeks at home recuperating. I couldn't do anything, not even study for the upcoming bar exam, so I had to delay taking it and getting my attorney's license.

Hey, it happens. I would just try again later.

Unfortunately, my condition manifested itself at the end of December instead of the beginning of January, so I had to pay my insurance deductibles for both years before any insurance coverage would kick in. We had to do some creative budget adjustments to handle the extra medical costs.

Damn. We were so close to having it all happen.

The next couple of years are a blur. I failed two attempts at the bar exam by less than three points each time. Trust me, that's really close. It is difficult to find the time to study for the bar exam properly when you are working full-time. They suggest you study at least 600 hours. That's ten hours a day for two months. I was able to get in about 450 hours. And taking the test is expensive.

Excuses? Maybe. But sometimes excuses are real.

Our home dropped in value every second after we bought in 2006. When I got sick, it was worth about 50 percent of our original purchase price. That means no equity. My student loans were coming due. The parent loans I had taken out for my now college-aged children were coming due. My car broke down. My wife's car broke down. Because of my heart condition, I was taking and would have to continue taking five different medications every day for the rest of my life. Medications are expensive.

We knew we were in a bind. I borrowed every penny I could from any friend I could. Eventually, the tank just runs dry.

Hey, it happens.

I guess 2012 will be the year I say the levy broke if it wasn't my whole life already. The bank foreclosed on our house in the spring and we filed bankruptcy in the fall. My wife's parents invited us to move in with them and split the mortgage payments since they were both retired and having problems keeping their own home anyway. We really didn't have much choice. What better options did we have? We all live together now.

I still have my administrative job at the for-profit college. I recently received a $150 gift card in recognition of my fifteen years of service there. That was nice. I used it in the first couple of weeks to pay the gas for the 60 mile commute to work every day.

The bar exam has been put on hold for a while. When I was researching bankruptcy lawyers, I ran into a friend from law school at one of the firms I was shopping. He told me that it took him eight months after passing the bar to find that job, and when he was hired in they started him at a salary of... WHAT?! The number he said was about 60 percent of what I was currently making at my college job.

Damn. I thought getting my attorney's license would be my ticket to a life of less struggle. But I was obviously wrong about that. Perhaps there is no ticket to a life of less struggle -- a life of "making it". Not even hard work.

Hey, it happens.

It happens all the time.





Dirk's story is part of a Huffington Post series profiling Americans who work hard and yet still struggle to make ends meet. Learn more about other individuals' experiences here.

 

[Russell Street]

Go back much beyond a century and almost everybody was working poor. It's natural equilibrium to be at the brink of existence.
However, I'm missing the part where this man was poor. Just because you're not rich does not mean you are poor.
He clearly was able to afford a house, to raise a family. He didn't starve. Spoiled Americans.

 

[Grand Potentate]

See, I told you that you would hate this guy.

 

[Russell Street]

I was being charitable, but indeed this was not pure happenstance.
To be truly smug, remove the squandered cost of the pointless graduate degree and ask where the unreported tip income for all these years of bartending went.

 

[OfficePants]

^ This is true. Everyone gets a college degree and wants to sit at a desk. This is why Germany is better than America is now. Germans value jobs in skilled manufacturing.

Inequality for All (2013)

http://inequalityforall.com/



I watched this recently. Politics aside, the math clearly points to the corruption of the political system being behind the problems with working poor. The term wage disparity is now labeled a left wing thing, but if that can be put aside for now.

Its pretty much impossible now to do more than scrape by today with almost all jobs. In the 70's you could work as, for example, a butcher in a supermarket and with that job you could earn a decent wage, and while you weren't going to get rich, you could live. Even raise a family.

Not anymore. That job's real value is about 1/3 of what it was in the 70's. Means it pays more by the hour, but the cost of living is so disconnected with real wages that the type of social mobility that used to exist just doesn't. That butcher isn't ever going to save a dime, be able to open a business or afford to retire. He'll just become a social burden.

Unfortunately, Harv, the jobs that guy is talking about is going to just scrape people by. You can close a skills gap, but they will still pretty much earn shit. There isn't much real difference between a supermarket butcher earning 40k and a welder that might earn 55 or even 60k. And that's what the vast majority of those jobs are. Its still not livable.

Too many low IQ people getting degrees and filling up jobs in offices doing nothing. This doesn't happen in Germany. Its because in America, nobody wants to work anymore.

 

[OfficePants]

40k a year is not livable? Maybe not in midtown Manhattan but pretty much anywhere else in America that's a good wage.

EDIT - $15k a year is a livable wage in Scranton, PA. You might have an older TV and your apartment might not have a Jacuzzi but you'd be just fine.

http://livingwage.mit.edu/places/4206969000

FURTHER EDIT - But you're right, most people today don't want to work.

Says $33,926 for a family of 4 with 2 kids. That's fucking peanuts. That calculation doesn't consider even the most minor hardship either. A broken down car could sink you.

And not to mention the life of misery scraping by with no FIOS.

 

[Russell Street]

I think a benefit of the recession is people realizing that getting dirt under their fingernails isn't so bad when the pay is right.

In the good old days, a totally unskilled person could start at the bottom of a trade/industrial job and work their way up to a pretty skilled and lucrative job. Nowadays, partially due to the legal hassle of firing an inept hire and partially because of over-embracement of the academic model, companies expect people to show up fully trained and ready for their specialized work. No, don't externalize training costs onto the applicants! Groom people for the jobs and they'll be loyal employees.

 

[Grand Potentate]

Today's David Brooks column in the NYT should be RIGHY up your alley's.

 

[Grand Potentate]

Called it

 

[OfficePants]

Brooks is an asshole, but he's not wrong here. Poor people are poor for a reason. They didn't just wake up one day transformed into a cockroach like Gregor Samsa. It's the result of a lifetime of stupid decisions.

I think its 70% IQ, then other factors.

The talking classes focus too much on socio-economics, when its more about intelligence. These people are stupid, and because of it lean on blind faith. Then everything is a result of God's will. Believe me, our owners make sure they don't get many chances to get informed and make sure we are given the illusion of choice of elected officials but if you're stupid its really hard to grasp the dynamics.

 

[Russell Street]

http://www.nytimes.com/2014/01/17/opinion/brooks-the-inequality-problem.html

The primary problem for the poor is not that they are getting paid too little for the hours they work. It is that they are not working full time or at all.

Yes, the working poor may be poor, but they get along well enough. The real name for the working poor is the middle class, who'd be doing much better if they weren't subsidizing the unworking.

There is a very strong correlation between single motherhood and low social mobility. There is a very strong correlation between high school dropout rates and low mobility. There is a strong correlation between the fraying of social fabric and low economic mobility.

YES. The underclass is not an economic issue. It is a class issue. It is not bad luck or one pitfall, it is generations of stupidity and immorality. Liberals want actions to have no consequences and are incapable of acknowledging this. Similarly, nobody got rich from one stroke of luck. This is habits, character.

BTW, note that in the original article, the author talks of "parent loans [he] had taken out for my now college-aged children" which I take to mean that he went into debt for the same 'training' that did him virtually no good at all. Stupid is as stupid does.

 

[OfficePants]

YES. The underclass is not an economic issue. It is a class issue. It is not bad luck or one pitfall, it is generations of stupidity and immorality. Liberals want actions to have no consequences and are incapable of acknowledging this. Similarly, nobody got rich from one stroke of luck. This is habits, character.

Sorta Russell... but I recall banks, GM and all kinds of other corporations being bailed out. That seems like the definition of actions without consequences to me. Worse, since the culprits are supposed to be 'job creators'. Is it liberal or conservative to privatize profits and socialize losses? The 'where's my bailout?' attitude is exactly what our owners want: a population of losers that commiserate over that red herring of a question.

Most people get rich because of inheritance. If not inheritance, then access. There are a few lucky ones that sneak into the club thru the back door, but otherwise, this is pretty much how it is.

 

[Russell Street]

The talking classes focus too much on socio-economics, when its more about intelligence.

This makes me recall a 60 Minutes episode from years back about some program where poor but smart kids were sent to a boarding school. They almost all did very well, but a surprising number would go home to the ghetto for break, meet their irresponsible underclass friends with "different" priorities, get sucked up and give up on the bright future they had. Intelligence without proper application will get one nowhere.

Good point with the (Bush*) bailouts. The left sees the poor as eternally hapless victims, the right is quick to overlook any malfeasance of the rich. I'd like to believe that so many now identify as independeants because they are wising up to these excesses at each end.

*There's an example of someone with almost no intellect whatsoever thriving on family connections and 'succeeding' despite being completely useless.

 

[Grand Potentate]

Two rebuttals:

http://www.businessinsider.com/david-brooks-is-wrong-about-inequality-2014-1

David Brooks Is Wrong About Inequality

• by Josh Barro
• Jan. 17, 2014
• 2 min read

David Brooks has a column about inequality today and it's wrong. But it's wrong in a way that helps explain why conservatives have no idea how to talk about inequality.
Brooks offers two theories of what sort of problem inequality might be: That people at the top are accruing too much money, and that people at the bottom are getting left behind. Like most conservatives, he wants to focus on the second problem. Regarding the first, he attacks the "primitive zero-sum mentality" that holds "growing affluence for the rich must somehow be causing the immobility of the poor."

The thing is, while growing affluence for the rich isn't causing low and moderate incomes to stagnate, they are to a large extent results of the same forces. There is a zero-sum tradeoff between the two, so a zero-sum mentality (primitive or otherwise) is called for.

Productive economic activity produces returns to both labor and capital. Over the last few decades, returns to labor have fallen relative to returns to capital. This has promoted sharp rises in wealth at the top and stagnating wage income for most of the public.

Because of the declining marginal utility of money, a more unequal distribution of the returns to economic growth is undesirable, all else being equal. The question is, is all else equal? Have there been economic changes in the last four decades that make greater returns to capital necessary for innovation and growth? Or is the shift in returns just an artifact of policy choices on taxes, trade, inflation, and intellectual property that we can reverse without sinking the economy?

I think the answer is probably some of each. But "some of each" means there are a lot of policy choices that can and should be made to reduce inequality in a zero-sum manner.

For example, Brooks notes "the superstar effect": "in an Internet economy, a few superstars in each industry can reap global gains while the average performers cannot." But this isn't just a fact of life; it's in large part a reflection of intellectual property policy choices. The existence of much larger global markets greatly raises the return to producing a beloved product, whether that's a piece of software or a hit song.

Governments could react to this by weakening protections for IP, since IP protections are supposed to be just strong enough to encourage the generation of good ideas. This would be a desirable and more or less zero-sum policy to combat inequality. Instead, industry lobbies have been pushing for strengthening of IP, which will tend to concentrate wealth in the hands of superstars, at the expense of everybody else (stronger IP means higher prices, and therefore lower real incomes.)

The growth of returns to capital relative to wages is also driven in part by the fact that we have not had policies that consistently promote full employment. More aggressive monetary and fiscal policies to keep unemployment low, or direct government hiring of the unemployed, would push firms to pay workers more and hold inequality down. These policies would grow the economy overall (at least the macro policies would; direct hiring would depend on execution) but they would also reduce corporate profits as a share of the economy, meaning again that the rise in mass incomes would lead to a reduction in wealth at the top.

Policies that promote unionization would also tend to push wages upward, at least in industries with weak competition, such as the public sector, large-scale construction, or airplane manufacturing. And of course, taxes and transfers can reduce inequality.

All these policies have economic impacts beyond their distributional changes which should be considered. But adjusting them in an effort to reduce inequality isn't just an exercise in jealousy; it's an exercise in making the economy work for everybody.

There are other desirable policies that could raise the incomes of the poor by improving or better using human capital. For example, we could improve transit links between low-income neighborhoods and job centers. Brooks is right to want to explore such policy avenues. But the availability of such policies doesn't mean we can just wave away the zero-sum problems of, and solutions to, inequality.

http://prospect.org/article/david-brooks’s-worst-column-ever

David Brooks’s Worst Column Ever
Really.

• by Robert Kuttner
• Jan. 17, 2014
• 1 min read

Well, this is getting to be a habit. Alert readers may recall that a few weeks ago, I wrote a piece about Tom Friedman’s worst column ever, plugging efforts by a billionaire hedge fund friend to persuade college students that their enemy was Social Security.

Now, Friedman’s colleague David Brooks has written an even worse column. It’s really hard to determine Brooks’ worst column ever, since he seems to turn out one every week.

Brooks’ latest piece, in Friday’s Times, begins inauspiciously, “Suddenly, the whole world is talking about income inequality.” (Where has Brooks been, Jupiter?)

He goes on to argue that the inequality debate is miscast. Income inequality, according to Brooks, has two entirely different parts—the pulling away of the very top (he’s surely right about that); and the poverty of the bottom. The trouble with the bottom, says Brooks, is that poverty isn’t just economic; it has complex socio-cultural roots, etc., etc., and you don’t solve it with measures like the minimum wage.

Oy, where to start?

First of all, he leaves out about 70 percent of the population! Inequality isn’t just about the bottom and the top. It’s also about the declining middle. Wages have been flat or declining for the vast majority of workers for three decades.

The downward mobility of the working middle class is one of the great un-remedied issues of our time. Fixing it will require sharing the fruits of America’s growing productivity more equitably, so that the top one percent don’t make off with so much. Inequality isn’t just a problem of poverty.

As for the poor, right-wingers, like Charles Murray and George Gilder and Brooks in our own era have been blaming poverty on cultural deficits ever since slavery and the English apologists for poverty such as Bernard Mandeville in the early 18th century, who warned that coddling the needy would only lead to idleness.

The funny thing is that whenever sensible policies produce episodes of full employment, as in the late 1990s, the long postwar boom, or the World War II economy, the supposedly feckless poor get decent jobs and their incomes go up. Cultural deficits are a handy alibi for bad economic policies.

Friedman, at least, used to be an able correspondent in the Middle East, and is capable of turning out a first-rate column when he writes about what he knows. It’s only when he turns to trade, the flat-earth, and the case for austerity that he sounds like an idiot-savant.

Brooks, on the other and, can be reliably counted on to write one fatuous column after another. He oscillates between the faux-thoughtful essay, and simple-minded right-wing propaganda, often in the same column. Brooks’ most useful contribution to the public debate is as foil to the estimable E.J. Dionne on NPR every Friday. Dionne reliably blows Brooks away.

Remind me why the Times keeps this blowhard?

 

[OfficePants]

"t the declining middle. Wages have been flat or declining for the vast majority of workers for three decades."

This is simply false. I know it's a good talking point but it's false. When I sober up I'll find a citation.


I'm not supporting Brooks, he's a douche of the 33rd level, but even a broken clam is right once a day when used as a sun dial.

Perhaps your confusing real wages with how far that wage stretches? I don't believe that incomes have declined, but purchasing power has, and how.

You can earn a larger number compared to 30 years ago, but you can't really survive on it anymore. And at the same time the pay of executives has skyrocketed. When I look around, I don't see much middle class. I see a lot of poor pretending to be middle class, they may have a house and 2 cars, but are scraping by with $100 left in the bank every month.

The stupidity of the people living like this is really breathtaking. They don't have the first clue that they will be POOR AS DIRT when they get older and will survive on a social security check and prayer. They may get lucky that their house is paid off, but the first time they need a new roof, furnace, car, etc... look out.

Lastly, its their own fault for letting powerful people take over the government so that it works for their interests. The 90's fooled a lot of people into believing they were experiencing the American Dream.

 

[Russell Street]

When I look around, I don't see much middle class. I see a lot of poor pretending to be middle class, they may have a house and 2 cars, but are scraping by with $100 left in the bank every month.

This is so true. The hand-to-mouth lifestyle in times when a job can very much vanish overnight, and when done unnecessarily to boot, is really foolish.

The IP issue is correctly stated again. The current perversion serves to preserve a controlling interest that may profit off Beatles songs and old Disney films in perpetuity while having added nothing new in decades. As with drugs, you get exclusivity to guarantee a period of temporary monopoly and that is it.

Policies that promote unionization would also tend to push wages upward, at least in industries with weak competition, such as the public sector, large-scale construction, or airplane manufacturing. And of course, taxes and transfers can reduce inequality.

I'm all for private unions, but public sector union negotiate not against a private boss, but against the taxpayer. Taxes do not work for redistribution, because the wealthy essentially write the laws.

IMO, again, government is the problem, not the answer. Did we used to have less inequality and less government? Do we now have vast government and vast inequality?

The funny thing is that whenever sensible policies produce episodes of full employment, as in the late 1990s, the long postwar boom, or the World War II economy, the supposedly feckless poor get decent jobs and their incomes go up. Cultural deficits are a handy alibi for bad economic policies.

Well, idle hands are the devil's workshop. Less time for fucking around and being a blight when you need to toil away in the morning. Poor workers may make more money when they work, but they are still at the bottom. This in no way states that they were hard-working, responsible, or moralistic people at any point.

 

[Grand Potentate]

Maybe we should define "poor." For a single person what is poor? The government says $15k a year. Agree or disagree?

Disagree. That number hasn't been revised upwards in ages.

 

[OfficePants]

Disagree. That number hasn't been revised upwards in ages.

Maybe we should define "poor." For a single person what is poor? The government says $15k a year. Agree or disagree?

$15k is dirt poor.

For a single person, if you make under $25k, I think you're poor. You could live in the sticks, or with your parents, or all kinds of other ways to reduce your cost of living but at those income levels you have 0 upward mobility and therefore are going to be perpetually scraping by.

Also, I don't think poor is necessarily a number. It's more complex. Other measures could just as easily be whether you become destitute if you lose your job, how easily can you find another job, how exploitable are you, etc. For example, you can have 0 income but tons of land which you are capable of living off of. How many ghetto rats can do that making $25k... who would you rather be?

I have another point, but will make it a separate post.

 

[OfficePants]

In my humble opinion, similar to some of Russell Street's comments, the corporate 'income' structure is another reason this country is so blatantly favoring rich people and murdering its middle class.

The tax code favors dividend income, capital gains, and the unprecedented wave of share buybacks.

This is the corporation's income distributed to shareholders in one form or another. The buyback is a derivative of this process, since it does not go directly into the investor's pockets, but it drains the corporation's capital by reducing its float of stock, thereby making each share more valuable. Investors love all this shit.

Now, who are investors? Everything with a 401k, home-gamers, ya. But the VAST majority of this type of holding is by wealthy people, or wealthy people represented by institutions (who in turn lobby governments for laws that favor their ilk).

This is getting long winded, sorry.

Instead of corporate profits being distributed to employees, or shares, or dividends, or anything, they don't. Of course the top executives get millions of shares in options but the vast, vast, vast majority of employees get shit. All this money goes to already rich people, and is re-invested. It never sees the money system on the ground, it is, and will certainly almost always stay a line on a spreadsheet.

This is where all the money is going. The tax code was changed by rich people to favor themselves. A wealthy person no longer needs to work (ha ha, job creator's my ass), they can sit back and collect virtually sure returns in their investments and pay very low taxes on them to boot. They can hoard this capital since they will never need a dime of it to live on, and they can simply play the game of compound returns to accelerate their wealth creation and use all that extra money to buy even more influence to change even more laws in their favor.

And its our own fault for letting it be this way because we believe the illusion that there is a choice between political candidates that can actually fix any of this. The Supreme Court in all their 'wisdom' made sure it won't change.

 

[Russell Street]

Instead of corporate profits being distributed to employees, or shares, or dividends, or anything, they don't. Of course the top executives get millions of shares in options but the vast, vast, vast majority of employees get shit. All this money goes to already rich people, and is re-invested. It never sees the money system on the ground, it is, and will certainly almost always stay a line on a spreadsheet.

If you can direct me to some info on this, I'd be very interested.

 

[OfficePants]

If you can direct me to some info on this, I'd be very interested.

Some of it is detailed in Inequality for All. If you actually read all of this I'd be very impressed, but if you don't just notice all the different vehicles wealthy people have to avoid taxes or defer them. None of this shit is available to average Joe's.

Mitt Romney (below) is an easy target, its not a political statement, but because his tax return was released it exposes exactly what so many more thousands of wealthy people are doing. None of them earn wages. They earn interest and dividend incomes off of their bankrolls. Romney doesn't work, neither do a large % of wealthy people.

Here are some other references:

Bosses' Pay: How Stock Options Became Part of the Problem
Once Seen as a Reform, They Grew Into Font of Riches And System to Be Gamed

http://online.wsj.com/news/articles/SB116718927302760228


CEO pay and the top 1%
How executive compensation and financial-sector pay have fueled income inequality

http://www.epi.org/publication/ib331-ceo-pay-top-1-percent/


How Retirees Pay Zero Taxes

(this doesn't get exactly to the point, but its discussing the same system the wealthy have gamed to their advantage... if you can do it at these measly levels, just imagine what wealthy people can do):

http://www.forbes.com/sites/baldwin/2013/06/05/how-retirees-pay-zero-taxes/


Mitt Romney releases tax return for 2011, showing he paid 14.1 percent tax rate

he earned $6.8 million from capital gains and $3.6 million in interest. Romney earned about $190,000 in author and speaking fees, as well as $260,390 for sitting on the board of Marriott International.

None of his income was from wages. Capital gains are taxed at a flat rate of 15 percent, substantially lower than the 35 percent rate typically levied on the wages of those with the highest incomes.

http://www.washingtonpost.com/polit...2e5096-0417-11e2-91e7-2962c74e7738_story.html


Warren Buffett says the super-rich pay lower tax rates than others

http://www.politifact.com/truth-o-m...-buffett-says-super-rich-pay-lower-taxes-oth/


How to Pay No Taxes: 10 Strategies Used by the Rich

For the 400 U.S. taxpayers with the highest adjusted gross income, the effective federal income tax rate—what they actually pay—fell from almost 30 percent in 1995 to just over 18 percent in 2008, according to the Internal Revenue Service.

http://www.businessweek.com/articles/2012-04-17/how-to-pay-no-taxes-10-strategies-used-by-the-rich

 

[Grand Potentate]

Something both Russell Street & Harveybirdman might find interesting:

http://www.oxfam.org/sites/www.oxfa...cal-capture-economic-inequality-200114-en.pdf



A quick synopsis:

Given
the scale of rising wealth concentrations, opportunity capture and
unequal political representation are a serious and worrying trend. For
instance:
•
Almost half of the world’s wealth is now owned by just one percent of
the population.
•
The wealth of the one
percent richest people in the world amounts to
$110 trillion. That’s 65 times the total wealth of the bottom half of the
world’s population.
•
The bottom half of the world’s population owns the same as the
richest 85 people in the world.
Seven out of ten
people live in countries where economic inequality
has increased in the last 30 years.
•
The richest one percent increased their share of income in 24 out of
26 countries for which we have data between 1980 and 2012.
•
In the US, the wealthiest one percent ca
ptured 95 percent of post
-
financial crisis growth since 2009, while the bottom 90 percent
became poorer

 

[OfficePants]

Why is it a concern that America has more rich people than other countries? Frankly, I would think that's a good thing.

That's not the concern he's elaborating on. The graph shows the share of national income, not numbers of wealthy people.

What that graph is saying is that of the 1%, the US has the highest percent of its national income going to it. In essence, American's love to complain about oligarchs in Russia, and 3rd world elites controlling a countries wealth and power, but its the same here now.

The 85 richest people on Earth control half of its wealth. I'm not sure how that can be viewed as anything but alarming.

 

[Russell Street]

I have yet to get to the articles you linked Office Pants, but snow should leave me bundled up reading them tonight.

Think of wealth disparity as a poker game. When one party has a dominant portion of the pot, the game is essentially over. It is no fun, there is little hope of turnover. Fluidity is lost and it becomes very polarizing.

Furthermore, technology advances are the main component of economic growth. As with the IP issue, a dominant sector has no interest in new things. They like the status quo very much.

 

[OfficePants]

Its slightly aside from the discussion as a whole, but it does help explain how banks create money. At 3 minutes+ it starts to become relevant here.

While its not exactly the pyramid scheme he puts forward, the basic economics are true. Banks invent money, and they are allowed to loan that money and collect interest on it.

Imagine you had $1,000 in your account, how would you like to loan out $50,000 based on it at, say, 5% interest? You'd be making $2,500 on your $1,000. Now you have $3,500... guess what? Now you can loan $175,000 on it. And guess what? You'd earn $8,500 in interest. And that means you can now loan over a million!

You think these numbers are outrageous? They are the ratios banks use, ratios of deposits versus what they can lend... the game is that they don't need to have the money to lend, they just need 1/50th of it. They can legally write the loan on their books as real money, and thus its invented out of NOTHING.

Yes, there are people legally allowed to print money and you don't think the deck is stacked against you? Try and open a bank... you'll see how its virtually impossible. If you are very wealthy, you can. Otherwise, ha ha.

Embedded media from this media site is no longer available

 

[Russell Street]

I've long been a fan of precious metals, like the founding fathers were!
Mr. Maloney above may be wearing a black suit and a big Windsor knot, but he knows of what he speaks. Modern currency is a house of cards. And this quantitative easing only escalates the mess faster and farther.

 

[OfficePants]

I've long been a fan of precious metals, like the founding fathers were!
Mr. Maloney above may be wearing a black suit and a big Windsor knot, but he knows of what he speaks. Modern currency is a house of cards. And this quantitative easing only escalates the mess faster and farther.

QE is an unreported global phenomena. The US eases, the rest of the world devalues as well. We have 'created' more money in the past decade than has ever existed COMBINED. This is exponential. Other countries don't want their 'investment' in American real estate, treasuries, securities, etc to be watered down so their lobby their own governments to devalue their currencies.

I didn't believe currency was a false bottom in the past but I do now. The only thing that gives it any power is the fact we all agree to believe in it. Well, the fact that you are required to pay taxes in the American dollar too. You literally must use dollars to pay taxes, gold, silver, rubles, whatever... nope... must be $.

I saw a great TED talk recently about the emergence of other currency... bitcoin, et al, but what was interesting is how things like Amazon gift cards, credit card points, Best Buy rewards, etc are all becoming currencies in their own right. The thing is, when you are forced to pay taxes in $, you must convert it, so no matter what, you're tied to a dollar economy. Whatever other value systems may emerge, they are all stifled by this fact.

 

[Russell Street]

There is also the plausible theory that most American military actions this century have been to maintain oil being traded in US dollars, as this is the main prop that keeps the fiat currency afloat.

 

[OfficePants]

There is also the plausible theory that most American military actions this century have been to maintain oil being traded in US dollars, as this is the main prop that keeps the fiat currency afloat.

Not sure its that flat. Oil in $ is not that important, I think. This economy is too diversified to let that fold it. I think its more a matter o preservation of supply. When that tool Bush invaded Iraq, we didn't have the newly realized reserves we do now.

We'll see. If the US chooses to stop fucking with the middle east, its because our own supply exists. If my theory is correct, you'll see the emergence of new dependent nations take a sudden interest in the middle east like Europe and China.

 

[OfficePants]

Fuck, I've become slightly more invested in this thread than makes sense. Oh well.

Random notes.

Talking to a friend last night, this topic came up. I'm amazed how this is viewed as a political issue. Makes no sense to me. She leans left, and immediately started entrenching herself into Demoshit talking points. It could have easily been someone on the right talking about 'job creators'.

If anyone is wondering why they are getting so many out of office emails from the elite, its because our owners are all in Davos, Switzerland. This is where they go every year to make deals, exchange 'ideas', and generally feel exclusive because they are in the club.

You won't see these people on airplanes... they all came in private jets. 7% of them made a stop to pick up a mistress. 2% made 2 stops for 2 mistresses. They will mingle, make deals, consolidate their power, and next year, when the noose is tighter, repeat.

Davos is the rich's equivalent of prison... when a ghetto rat goes to jail he comes out with all kinds of new ideas on how to rob you. Its the same for these rich fuckers.

I may have posted this somewhere else here, but this is one of my favorite pieces of social commentary ever. In fact, we need (now have) a social commentary thread.

 

[Russell Street]

I can't remember the specifics, but the world trades oil in US dollars, and that requires every nation to maintain a hefty reserve of Federal Reserve* notes. But when OPEC winds up with all these greenbacks, they tend to use a large chunk of them for US Treasury bonds. A kind of kinancial tautology.

* Remember that the Federal Reserve is a private bank and is no more governmental than Federal Express.

 

[OfficePants]

I can't remember the specifics, but the world trades oil in US dollars, and that requires every nation to maintain a hefty reserve of Federal Reserve* notes. But when OPEC winds up with all these greenbacks, they tend to use a large chunk of them for US Treasury bonds. A kind of kinancial tautology.

* Remember that the Federal Reserve is a private bank and is no more governmental than Federal Express.

Interesting. I didn't realize a reserve was part of this. That does change the math.

This guy... ha ha. Wow.

 

[Russell Street]

That's the old Rush Limbaugh talking point, and some Joe Plumbers buy into it.
If you have a rusty old Mustang, you aspire to buy a newer Mustang, not a Pagani Zonda. If anything, you're more likely to steal that car that earn it. The working stiff would aspire to own a local hardware store or something, but there are almost no local hardware stores anymore...
The vast gap between the middle and the top is in no way a motivator. It is a Maginot line of a buffer zone, an unreachable rung.
"But please, huddled masses, accept this carrot on a stick and keep slaving away under delusions of eventual grandeur!"

 

[OfficePants]

That's the old Rush Limbaugh talking point, and some Joe Plumbers buy into it.
If you have a rusty old Mustang, you aspire to buy a newer Mustang, not a Pagani Zonda. If anything, you're more likely to steal that car that earn it. The working stiff would aspire to own a local hardware store or something, but there are almost no local hardware stores anymore...
The vast gap between the middle and the top is in no way a motivator. It is a Maginot line of a buffer zone, an unreachable rung.
"But please, huddled masses, accept this carrot on a stick and keep slaving away under delusions of eventual grandeur!"

The problem is, people believe it. The working stiff can only survive at this point. They used to aspire. My parents did, and succeeded. But I've told them if they had to do it again today, forget it... they'd be a pair of postal workers.

 

[Russell Street]

OfficePants has already stated that the bulk of the so-called middle-class are pretty damned poor. Yet almost everyone defines themselves as middle-class. Perpetually poor people that think they are, not only middle-class, but in line to be rich makes for a complacent populace that should be rioting. A generation of this stratification and that myth will be dead.

 

[Grand Potentate]

OfficePants has already stated that the bulk of the so-called middle-class are pretty damned poor. Yet almost everyone defines themselves as middle-class. Perpetually poor people that think they are, not only middle-class, but in line to be rich makes for a complacent populace that should be rioting. A generation of this stratification and that myth will be dead.

This has more to do with our indoctrination as good American robots.

 

[Grand Potentate]

The bulk of the working class may be overextended and drunk on credit but it's really not truthful to call someone with a mobile computer in his/her pocket, indoor plumbing, and plenty of food to eat poor.

Sneakers with lights in them?

 

[OfficePants]

The bulk of the working class may be overextended and drunk on credit but it's really not truthful to call someone with a mobile computer in his/her pocket, indoor plumbing, and plenty of food to eat poor.

That's kinda the illusion. Even Africans wearing "3" Iverson jerseys in the village have cell phones. It doesn't mean you're upwardly mobile.

 

[Russell Street]

Maybe I was wrong about all this, we 99%ers need to rise up against the elite and redistribute their wealth. Fight the power!

That is the ultimate threat. And honestly, I'm positive that rioting proletariat would do a better job of breaking up ill-gotten wealth than any governmental scheme ever will.

However, back when a thing called Air America existed, Sam Seder and Janeane Garofalo would remind us that the middle class is a contrived and unnatural thing propped up by unions, government. The natural order is a vast majority of mankind living toiling in miserable squalor and a tiny minority being the luxurious overlords. However, absent government, the minority was regularly ... shall we say dealt their due?

 

[Russell Street]

http://www.gallup.com/poll/166904/dissatisfied-income-wealth-distribution.aspx

January 20, 2014
In U.S., 67% Dissatisfied With Income, Wealth Distribution
Democrats and independents are more dissatisfied than Republicans
by Rebecca Riffkin
WASHINGTON, D.C. -- Two out of three Americans are dissatisfied with the way income and wealth are currently distributed in the U.S. This includes three-fourths of Democrats and 54% of Republicans.