Some of the points about privilege might be accurate, but breaking economic status in to .1%, 9.9%, and 90% is arbitrary and misleading. The author tries to make the point that “the 9.9%” have the majority of the wealth and this issue is as big or bigger than the concentration of wealth at the very top. The problem is that this is largely an artifact of the division system. The distribution is highly skewed, and the much of the wealth in the 9.9 is going to actually be in that top .9.
In other words, the author just divides the top 1% into two pieces, and lumps one of them in with “the 9.9”.
Edit: I did a little research and math. The top 1% holds 40% of US wealth. The top 10% holds 77%. That’s 37% to “the 9%”. I would hypothesize that even within this 9% we’d find the wealth concentrated at the top in the “2nd 1%”, i.e., the top 2% likely make the middle class look mostly irrelevant.
Right, it obfuscates class distinctions between those who control capital and policy versus those who just have money. I'm somewhat cynical but I think this is an intended obfuscation.
It's important for petit bourgeois and wealthy skilled workers to understand their position in the class hierarchy, but calling a class whose power is dwarfed by the capitalist class an aristocracy is fluffy rhetoric.
> those who control capital and policy versus those who just have money
Controlling policy is one thing.
Who "just has money" and doesn't control capital? Anyone who has money actually has some sort of capital or an equivalently powerful financial instrument be it stocks, loans to other companies, government bonds, a house, etc.
Just because you own, e.g. stock doesn't mean you control the underlying means of production it represents a share of. Most people who own stock do so as part of a retirement fund. Those institutional investors, banks, managers, politicians, corporate board members, CEO's, etc. Are the ones who actually control capital. It should be emphasized that a lot of how capitalism runs these days is in the hands of huge bureaucracies that comprise people but don't quite act like people. There is a small class of people who operate at that level as individuals: these are the capitalist class.
This is an important distinction, don't you think?
All those people you listed are still cogs in the machine, to varying degrees. The CEOs are beholden to the boards, who are beholden to the institutional investors, who manage my 401k. Certainly, the CEOs have higher leverage over the system on an individual basis. But anyone whose wealth is increasing mainly through return on capital is a member, if not a leader, of the capitalist class.
Sure, they're all beholden to each other but they're the ones who make the decisions about how to allocate the means of production and which labor power to buy.
People who derive their income primarily from investments but don't really decide anything or buy labor power are a rung below those who do. Taxonomize it however you want provided the distinction remains.
Who would you consider more of a capitalist, the apartment block owner who contracts with a property manager or the property manager who decides who to rent it to?
The high-net-worth individual who deposits his capital with an asset manager, or the salaried fund manager who determines which securities to buy with it?
The angel investor who puts $1M of his own money into a fledgling startup, or the entrepreneur who decides how it's spent?
The hedge fund manager who has bought 40% of the company on Wall Street, or the CEO entrusted to make the daily decisions on company operation?
I'm surprised the grandparent post has been downvoted, because when you get close to how capital is actually managed and invested, it's clear that it's a lot less clear than it looks from the outside. Even people who nominally have "control" over capital expenditures are subject to market returns. If they don't invest that capital correctly, they will lose the ability to manage more capital.
> Who "just has money" and doesn't control capital?
1. The vast majority of middle class wealth is locked up in (non-investment) housing. That money provides a roof and access to quality education, but in almost all cases, it's not being efficiently deployed as capital.
2. Whatever remaining money that is deployed as capital, is not done so in a way that implies control over their chosen investments. Think "majority shareholder" vs. "just another investor". That's the difference between "controlling capital" and merely having a bit of skin in the game.
> The vast majority of middle class wealth is locked up in (non-investment) housing.
There are literally 0 people I know who think owning a house is not an investment.
If you're trying to make a distinction between income generating assets and assets that don't generate income, you're just digging yourself into a hole - housing doesn't generate income, but it does save cost - namely rental cost. In that sense, it is a better investment because the return is less risky.
> 2. Whatever remaining money that is deployed as capital, is not done so in a way that implies control over their chosen investments. Think "majority shareholder" vs. "just another investor". That's the difference between "controlling capital" and merely having a bit of skin in the game.
That's well and good, but it's just as true for most people above the 10% line as for those below. You have to get to some truly lofty heights before you find the activist investors.
> There are literally 0 people I know who think owning a house is not an investment.
I thought of my house as a "use asset", like a car. It's nice when the house appreciates. But I couldn't sell it and "cash out" if I had to use the proceeds to buy another house. But, as you said, it saved on rental costs.
Owning a house is an intergenerational investment -- your kids can sell it and make a tidy unearned profit on what you spent, or live in it and pocket that amount of money in not having to pay for another living arrangement. It contributes to the high IGE of the US the author was talking about.
There is a big difference between being in the target market for discretionary investments and small-time political fundraising, and being able to buy influence.
Divide and conquer. I think someone finds it convenient to break up the 99% narrative. It's very similar to the excoriation of public employees unions who negotiate solid living wages for their members - it makes too much of a contrast for many who are on basically a subsidence living in the private industry
I think the point TFA was making is that the 9.9% hasn’t experienced a decline in wealth in order to feed the accretion of wealth in the top 0.1%, and that such a situation creates an aristocratic attitude among that 9.9%, dulling any motivation to fix wealth inequality or economic immobility in the bottom 90%.
Three real question is what the 9.8% can do even if completely united to fix the problem that the top 0.1% cannot stop. Unless you mean politicians (who are typically in top) - because power and wealth are related but nor equivalent - and transferable plus exchangeable.
What the article is trying to point out is that the 9.9% thinks he's not so wealthy, so he is against inequality, but he still, somehow, for his own comfort and merit belief system, likes his higher income.
Trying to talk about ranges of income, would it the top N%, is pointless.
You could strip out the hypocrisy like so: "I am not at the top, so I am still against inequality, but I am comfortable, but since I AM NOT AT THE TOP, YOU CANNOT BLAME ME, so blame the richest". This is the core problem about stretching inequality, because individualism makes people work for their own selves, and NEVER encourage anyone to "take one for the team". The whole story is about how people perceives their own selves. This is an important debate.
I'm sure those 9.9% would be very surprised they belong to the top 10%. The graph of income is always growing exponentially, yet for some reason people are throwing away the idea that they might be the ones to blame, because people will naturally find argument that they're not to blame. It's always the responsibility of someone else.
I personally have not lived the wealthiest life there is in term of income, but you know, at least I don't complain, because when I compare it to the rest of the world, being in the lower 50% or 60% or 30% in a modern and developed country is still a pretty good life.
This is a big debate in the HN world too, where tech workers in that top 10% think they are working class. The real breakdown here is that in todays day and age, there's hardly a middle class, there's the working class who struggles, lives basically paycheck to paycheck, and at the age of 45 has up to 40k in wealth to their name. Then there's that top 10% whose able to afford a million dollar home, take yearly vacations, send their kids to college, ect.
The things the upper middle class think should be a given to them because they are within a certain economic strata are actually just regular luxuries.
Huh? That's entirely incorrect. There's definitely a middle class that isn't working paycheck to paycheck but can't afford million dollar homes, vacas and college for their kids.
There's also a part of that middle class who can afford vacations and college for their kids, but not million dollar homes. Even if that group is likely bigger outside of the US (since hey, college in European countries like the UK is damn cheap by comparison), it still exists over there in the US too. Neither of those things necessarily require a millionaire income.
To me the point is that "other middle class" you mention, call it lower middle class, is shrinking, falling into the lower class. Because of loss of decent paying factory jobs, retail shrinking, etc. If you are an adult today without special education, it's really hard to have a decent lifestyle. Most of my friends are programmers or teachers, and they most all of them have decent jobs. The teachers are increasingly in that lower middle class category. Software engineers are more fortunate.
We are, I earn significantly more than my partner who has a degree and I don't have a degree.
It's one of the last fields that without a degree you can still earn a good living if you can break into it somehow (in my case it was side gigs/contracting to crappy full time position to none-crappy full time position to decent full time position).
Though I'm in the UK, I gather the degree requirement is a harder line in the US, also worth noting that by and large university education has had no correlation with programmer ability (in business settings) in my experience, I've met good/bad with degree/without degree.
Interestingly the one correlation I have observed is how fascinating people find the field when they are children, young geeks become older geeks.
On an unrelated note, this is why I think the programs that encourage young girls to get into computing/programming are the ones with the best likely RoI in terms of re-balancing the field.
I think it used to be easier in the US to be a dev without a degree, but it's hard to get all the background to pass interviews without serious education, things like time complexity and their of computation.
The broader point I'm getting at is that the middle class historically didn't struggle in the way they do now. They used to be able to afford homes, vacations, college, and now that is only available to the upper middle class.
Important to note that 'historically' here probably refers to the 4 or 5 decades following the second world war, which may well turn out to have been a historical anomaly in the grand scheme of things.
Agreed that homes and college are getting insanely expensive. But as a counterpoint, a higher % of the population own homes and go to college than in decades past (though certainly accruing higher debt than was needed before).
Simply untrue. Do not change the definition of middle class. A single-wide prefab of real lumber for a family of three costs a year of wage or two for a high school graduate. Resourceful individuals can develop land cooperatives. Vacations and college aren't strictly necessary for many, nor particularly unattainable. A road trip anywhere in the USA or continental Europe is nearly free, and a four-year degree at a State U in eight years will barely touch the discretionary income of the sort of individual who has decided to pursue that objective.
The idea of a "middle-class struggle" is confused with changing standards and lifestyles of the middle class. Certainly the regular use of jet airplanes, hotel accommodations, and full-service dining may be out of reach for some, but an urban-agrarian lifestyle with the use of a motorcar and modern conveniences such as electricity and indoor plumbing is cheaper and more accessible than ever.
While I agree with you, people compare themselves to their neighbors not their ancestors so in that sense the goal posts have moved. The bar for "middle" class is higher than it used to be.
Homes today are roughly twice the size they were in the 1970s [1]. Despite that, home ownership rates are higher than they were in the '70s [2]. More people today have college educations in the U.S. than any time in U.S. history [3]. I'm not fond of the rhetoric about the poor middle class. There are issues we need to solve w/r/t poor economic mobility. We should be focusing our attention more on solving those problems, and less on complaining about things that aren't true.
The economy is a "forward-oriented enterprise." What matters is not so much where we are but where we are going. To that end it's important to understand that homeownership rates are falling fast [1], birth rate is falling [2] and "80s babies" (ie the Millenials) are much, much poorer than their parents were in their 20s and 30s.
If you're an investor (and everybody's an investor whether they like it or not) the question you should be asking is what things will be like in ten years.
That said the article (like pretty much all economics that comes out of The Atlantic) is pretty silly. The dire condition of the American middle class is completely the fault of the US government. In the last 30 years (while China has achieved world historic growth) the US has dumped trillions into wholly unnecessary wars and giveaways to international investors. The $20 trillion dollars the US government has wasted is the greatest malinvestment in the history of the world. All the money that should've been spent on vital innovations and critical investments and infrastructure was used to blow up brown people and inflate asset prices. 2008 was just the beginning; the consequences of this extraordinary malinvestment will take decades to ripple through the global economy. The 9.9% or any other arbitrary percent of Americans are only to blame to the extent that they haven't overthrown their government and executed a few politicians. Over and over electorate have failed to correct the system and so politicians like John McCain -- who helped push America into the greatest crime of the 21st century -- are widely lauded instead of arrested.
This is nothing specifically against you or your comment, but it highlights the problem with how we talk about these things. A single 25 year old making $75k in the suburbs of Youngstown, Ohio is in no way comparable to a family of 4 making $75k living in the San Francisco. We really should frame the numbers in relation to the per capita poverty line for that city/region. For example, middle class should be something approximating 2x-5x the per capita poverty line rather than any specific dollar amount.
Yep, you see it a lot in San Francisco (I've noticed it creeps into my mind a lot more frequently than I'd like to admit).
The thing is, it's like the boiling a frog in water analogy. You get desensitized to it. I tend to work with salespeople, so there's a tendency to get flashier things than a lot of my programming friends, but it manifests in things like always having the latest iPhone (or it's Android equivalent), travelling internationally a couple times a year, going for brunch whenever you feel like it, being able to save a good $10-15k yearly without really trying. Maybe hitting Tahoe a few times in the winter. Going to Soulcycle or Equinox to work out during the week. But you still can't buy a house in San Francisco. So you don't feel rich, but compared to the average American you're taking home a multiple of what they're making. It shocked me to find out the average household income is about $60k annually.
We all live in a bubble. San Francisco is a bubble. Dayton Ohio is a bubble as well. And when you live in a city with a ton of rich people (and a sizeable population probably in the bottom 10%) it gets pretty easy to forget about the other 80% who live somewhere in the middle of it all, in Concord, or Pleasanton or whatever they call it in the East Bay.
It’s relative on how you define wealth really - ability to provide stability in the form of a mortgage, or amount of money you make.
I feel like in SF or any big expensive city owning a home is not something for the middle or upper middle class - there’s a point that no matter how many brunches or vacations you can take, you can’t trade them for a house except in an area where you’ll be basically going down in economic and social class (live out in Tracy or something, have a 2 hour one way commute, far fewer vacations etc). The trade off for that “stability” isn’t one that a lot of people currently renting think is a good deal. IMO the best way to do it is keep on renting while putting as much money in investments and retirement funds as one can, with the idea of retiring somewhere else, or only buying if you get a windfall.
But I’m terms of lifestyle, those in that 9.9% have a far richer one than the rest, but they don’t have the long term security of owning their own home.
I'm not jacob019, who originally made the comment, but as I understand it, the point was not the debt. The point was the maintenance. When the basement floods, it's my problem, not the landlords. When the attic fan fails (I was surprised that attics had fans), it's my problem. When the driveway concrete starts to buckle, it's my problem.
In that sense, the house owns you, not the other way around.
The problem is, renting often ends up owning you too. I'm no stranger to the anxiety of leaky pipes, dry rot, flooded garages, water damage, crazy people you can't easily more away from. On the other hand, I know people who have had to move a few times now because their rent keeps getting jacked up. Single family houses, as well as apartments in many Bay Area cities, aren't rent controlled, so you never know when you're going to be looking at a huge rent increase.
The median household income across San Francisco and San Mateo counties is $115k. People who make close to that are entirely justified in calling themselves middle class. Spending half your take-home on a crappy $2500 apartment doesn't make you rich just because the apartment is in SF.
"But you still can't buy a house in San Francisco."
Are you in a dual income family, and have you considered buying areas like the Excelsior, Ingleside heights (excluding Ingleside terrace), Oceanview/Merced Heights, Outer Mission, Portola, Silver Terrace, or other such neighborhoods?
I don't mean to dismiss your question, these are still expensive neighborhoods, probably between 800k-1.2mil for something decent. This is tough for two incomes, as the dual income thing means you're also stuck with high childcare costs, which will probably be ~25k per kid in San Francisco (I'm talking about the kind that allows you to go to work from 8am-6pm - and even then you will have to recuse yourself from meetings to be at daycare by 6pm, officially surrendering your membership in the young people are just smarter and can focus on what's important club in Silicon Valley companies[1).
I do think this is in reach of the group you just described, though. 250k+ family income isn't unusual for two tech workers or other professionals in SF (a programmer and dental hygienist pair, for example, should exceed this).
They’re not working class, they’re the professional class, but they’re definitely not ‘wealthy’ in the sense that they don’t primarily earn income through invested capital rather than labor.
That said, anyone with a reasonably long career at the upper end of the professional class can make that transition by investing wisely.
I find HN fairly right wing economically & willing to dismiss that a large portion of the country isn't so well off right now, and has been steadily declining since the 90's.
78% currently live paycheck to paycheck, with this number rising year after year [0]. The endless consumerism that this type of unchecked capitalism needs to survive looks to have a pretty bleak future if we keep going down this path.
Yup! Asking someone "How much money makes a person rich?" is like asking someone "How many drinks makes you an alcoholic?". The answer is typically "Someone who drinks more than I do."
Actually, there is a qualitative difference in play. It is reached at millions USD in (relatively) liquid assets or highly concentrated political power.
It is the potential to do almost anything w here only another big player or a whole society can blunt it and not necessarily effectively.
It is the difference between playing the rules and making the rules.
Exactly this. I make well into six figures, but only recently. I’ve got a bunch of student loan debt to pay off, I don’t own a house. If I got laid off tomorrow, my family would have serious financial problems within a few months of living off of savings.
I’m doing well, but I’m by no means rich. Now give me another ten years and it’s a different story.
I've made six figures going on three years now. I came from nothing. I was an emancipated minor at 15, made every mistake I possibly could from there to 35(now). I'm climbing out from under it quickly in some respects. My teeth are getting fixed, I'm paying off debt, etc. I know for a fact that I'm one bad lift and twist moving a couch or peculiar mental/physical incident from being homeless.
When I fret to my partner, she says "Honey, you're being to hard on yourself, we are doing great!" But when I look at the stakes and the people I know; The only ones insulated have established families. Having established family even has it's own curse in this day and age. Insulated, sure, but kids that are too insulated via trust fund can get stuck in this weird developmental purgatory that even though they have and won't want, it's hard to find meaning or even give a shit to look for it and take on the risk for what it's worth if they weren't groomed. I've seen lack of meaning take lives.
In the next year I might break loose because I have some ownership in something interesting, but I'm acutely aware of how much it costs to transcend being the wretched of the earth. The treadmill we are on as a human race isn't sustainable. Something I think the article points out succinctly is that with greater inequality we all lose. His grandmother bet it all on the dot com boom and went to work at Wendy's. Anything that isn't an ivy league education is indentured servitude.
I'm lucky to have technology and because I have it, I guess all I can see is potentially a technological equalizer in the near future (at least I hope we can find it near), but we are all being fleeced no matter how you shake it. Globally we are in a race condition similar to a drug addict who didn't realize they were that far gone getting fired from their job. Yeah, the apartment and the girlfriend are up next. But, we have plenty of lies to stack up before then to mask like it's the status quo. This problem is going to take a good think to get solved and we'll need to get high and tight to deal with the stress.
We can still pawn grandpa's coin collection to get a fix this weekend. We'll be back on top before anyone notices.
I would say so. 23% of married retired couples and 43% of single retirees subsist on their social security; 50% or so have pensions, and some rely on their children. It's the wealthiest minority who have sufficient investments to live off of.
> I'm sure those 9.9% would be very surprised they belong to the top 10%
Someone with over $1 million in assets is going to be surprised they're in the top 10% of the country? I don't buy it.
> You could strip out the hypocrisy like so: "I am not at the top, so I am still against inequality, but I am comfortable, but since I AM NOT AT THE TOP, YOU CANNOT BLAME ME, so blame the richest"
My read of the article was almost the exact opposite, namely that the author was trying to call attention to the fact that the "top 9.9%" is in fact very much to blame, as evidenced by his concluding remarks :
"It’s going to take something from each of us, too, and perhaps especially from those who happen to be the momentary winners of this cycle in the game. We need to peel our eyes away from the mirror of our own success and think about what we can do in our everyday lives for the people who aren’t our neighbors."
> but you know, at least I don't complain because when I compare it to the rest of the world, being in the lower 50% or 60% or 30% in a modern and developed country is still a pretty good life.
On the one hand, it's nice that you have a sense of perspective and can appreciate that you live a more comfortable life than most of the world's population.
On the other, there's a fine line between a stiff upper lip and stoic complacency. There will always be a greater evil somewhere in the world. Just because Mogadishu is more dangerous than my neighborhood doesn't mean I'm cool with people getting robbed outside my house.
Put more plainly : you have the right to ignore issues in your local community, but you should not try to shame others into silence simply because they're not starving.
I see what you're saying. The next tier down from the rich are more culpable (and well-off) than they realize. I get that that is the authors point, and I agree that it's a good one and one worth making. What I'm saying, is that saying "the 9.9%" have the majority of the wealth (50-60%) is a little disingenuous, because while wealth goes up exponentially, at that point you start running out of money at the high end.
If I said that 70% of the wealth is in the 9.99% and the remaining .01% only have 20% (or whatever it is), that would seem a little odd right? Or 9.999% have 75% and .001% only have 15%? Making cutoffs like this feels like the author is mishandling the numbers in order to make his point. Because there really is a pretty big difference between $1m (90th percentile) in net-worth and $6m (99th). $1m in net-worth quite comfortable but not "rich" by even a very liberal definition of the term in most cities (remember most of that is going to be locked up in a primary residence).
And in the end, yes, it is important to recognize our wealth and privilege and the civic responsibility that comes with it. I just don't like it when numbers are mis-represented, whether the underlying point is valid or not.
"$1m in net-worth quite comfortable but not "rich" by even a very liberal definition of the term in most cities (remember most of that is going to be locked up in a primary residence)."
Selling the $1M house nets about $800k after capital gains. 5% investment interest on that nets about $40k/year without touching the principal.
It's definitely possible for a family of two to live on this amount fairly comfortably in a quite decent apartment in a quite decent neighborhood away from the coasts. I know because I was, and making debt service payments on top of it.
Get a part time job as a package handler at UPS or FedEx - for the exercise, of course - and you're sitting pretty.
A middle-income lifestyle without having to work meets the cutoff for my definition of rich.
But can't you see it's just part of the plan of the really wealthy to distract attention to themselves? "Don't blame us; blame your neighbor who has a bit more than you do".
> I would hypothesize that even within this 9% we’d find the wealth concentrated at the top in the “2nd 1%”, i.e., the top 2% likely make the middle class look mostly irrelevant.
I doubt this particular point. The 98th percentile of earners make something like $200-$300k a year, the 89th percentile make about $100k/year[0]. That's a big difference, and it will equate to an even bigger difference in wealth, but not enough that the 98th percentile will substantially outweigh the combined 89th-97th percentiles. (Arguing otherwise means assuming that the one group has 8 times as much wealth per capita as the other).
It's also true that the 98th percentile includes plenty of people in the HN crowd. That's the point: well paid professional types (or software engineers) are not being hurt by the gains that accrue to the very top of the income distribution.
So far as they/we cluster in the same industries/subsectors that are growing those billionaires, we have--to some extent--shared interests. For instance, Amazon software engineers might gain by clawing back money from Bezos and the stockholders, but they don't have a monetary interest in redirecting pay to the warehouse workers.
Note that the article and comments are talking about wealth, not income. I know a few young software engineers who are likely in the 98th percentile for income but not even the 90th for wealth.
I noted that the wealth gap would be larger, but it's still not enough to make the parent poster's comment accurate (filling in a few points, you have 93rd percentile ~ $2 million, 96th ~ $3 million, 97th ~ $4 million).
Of course, income doesn't map that directly to wealth, even after accounting for age (if your income derives from a salary/investments from savings, you expect to move up further in wealth than in income as you age). Those 98th percentile income software engineers won't be 98th percentile in wealth when they're 60 unless they save extreme amounts of money, but they'll enter that 9.9% if they're prudent.
I couldn't find any firm numbers on "the 2nd 1%", so I'd probably have to get my hands on some data to calculate it. That makes sense though. 1%, 9% and 90% may be a reasonable approximation of upper, middle, and lower classes.
And I think your point about the interests of the 9% being more aligned with the 1% than the 90% is an important one. Which is part of the author's point as well, that the 9% are really benefiting from the system in a way that those at the bottom aren't.
And I myself am an example of exactly this. I plug myself in those calculators and think "how much would I have to make to be in the 1%?" rather than "this is unfair, how do we lift more people up?"
People are wired to think of a wealth as a zero sum game. If tomorrow everybody's income will increase by 10%, people will pay much less attention at their income getting bigger, but the fact that this increase is smaller in absolute value that someone's else. Which would naturally feel to them as if they were robbed of this extra somehow.
> 1%, 9% and 90% may be a reasonable approximation of upper, middle, and lower classes.
It's reasonable to define 90% of the country as "lower class"? Sorry, no, I can't buy that definition. The top of the bottom 90% are upper middle class at least by any reasonable definition.
I'm intrigued by thinking about wealth vs income. To get to the 1% in income takes $250k a year, apparently 195k gets you to the top 2%. So in Seattle, that means that almost every software engineer at a big company (amazon, facebook, microsoft, google, etc) with 10 or 15 years of experience is probably in the 1%. Thousands and thousands of people. If I was a dental hygienist like my mom, or a teacher, I'd be middle class but not 1%.
We should constantly appreciate how fortunate we are are, those of us software engineers. I am hoping against my expectation that somehow there will be good jobs in the future for more than the 1% (bio-medical engineering maybe?).
> We should constantly appreciate how fortunate we are are
This only applies to a small fraction of engineers clustered in a literal handful of geographic areas. I personally don't know a single engineer in my country that makes $200k (and the cost of living here is just as high as any major US city). Earning half that is seen as a very good salary.
Well, I did say Seattle. Yes, I'm fortunate. I did move here for a good job 20 years ago. I would expect that west coast salary increases should also pull up the entire market.
> I would expect that west coast salary increases should also pull up the entire market.
Logically it should at least not hurt the rest of the market, but anecdotally : during my time in the midwest, salaries were stagnant / sticky around $80k so I would caution against overestimating the trickle down effect of coastal income.
Do you find topographical maps arbitrary and misleading too? 'Cause it's the same method. What alternative methodology for describing the wealth peak do you prefer? With luck, maybe we'll be able to take it and improve our maps, too.
Got it - you won't draw any line; that way nobody in particular is responsible or has to do anything. This sort of maneuver is surely just what the author means when he says a central tactic of the 9.9% is: "the pretense of being part of the middle as one of our strategies for remaining on top."
The OP argument in a nutshell:
"In the United States, it’s the children of the bottom decile and, above all, the top decile—the 9.9 percent—who settle down nearest to their starting point."
So how would using just a function, so as not to embarrass any one class, fix that?
I think this is a little different. It's not the whole methodology that's the problem. It's the non-standard bin-sizes. If he wants to do log or exponential sizes, then it's 90.1, 9, .9 or you could round it off to 90, 9, and 1. By making it 90, 9.9 and .1, then he's artificially inflated the middle bin size while simultaneously exclaiming that this bin has more wealth in it than expected.
It's like having a y-axis on a graph that reads: 10 100 5000 10000 (with equally spaced points) and then talking about how there's more action between 100 and 5000 than there is between 5000 and 10000.
9.9 is the top ten percent minus the .1 percent - he agrees the .1% are a problem, but wants to address his own class, the rest of the top 10% = 9.9%. That bin has the size it has, and the measured effects he points to presumably deduct the stats for the .1%. There's no trickery, just a stat or two to conjure with.
If you think he's skewed the measure by using mean instead of median or mode and not subtracting the contributions of the .1% that's an interesting argument but you have to make it - show evidence of that, plus make the calculation to demonstrate that the effect is large. If that's the argument I might suggest dropping "bin size" and employing the term "skew."
There are ways to estimate right bin locations and sizes given a relatively known distribution - maximising information. He's done none of them.
(As opposed to disinformation.)
You want the hair split more finely - but doing so changes nothing. Not to mention that ya need two possibly correlated variables for a PCA not one, wealth: so unless you doubt that wealth yields social power in the U.S., there doesn't seem to be any work for a PCA to do.
The premise of the article is so ridiculous that I wonder if it's a false flag. "The 9.9," by and large, are not the ones who have subverted the basic American principles of democratic governance, free markets, and equal opportunity via regulatory capture. They aren't rich enough. The 1% is.
I wonder who paid Matthew Stewart, an Oxford-educated management consultant for "large financial institutions,"[1] to write such an article.
Although I agree it is a continuum, And I would like to think I am not contributing to the problem, I will point out that we in general are not the ones to choose where the cutoff is and historically, revolutionary retribution strikes deeper than the top 1%.
I couldn't help but think of Eyes Wide Shut when reading this. For those who have seen the film, the leading character, a physician who lives in Upper East Side in Manhattan, easily fits the bill (npi) of being a 9.9%er. But as Kubrick makes it clear, he is merely a well paid servant of the true hidden aristocracy, and very much preoccupied with matters that are of no concern to the aristocratic class.
I agree with the other commentators' critique of OP here. The 9.9%ers are the new Social 'Thin Blue Line' [1].
The top 10% is 120k in income or 1.2m in net worth -- would be nice to see the demographics. In any case, 1.2m in net worth is a house with some retirement money, not exactly what I would call aristocracy.
And yet it's more than 90.1% of the population posesses...
Interestingly, some estimates of (formal) Polish aristocracy in the 17th century place it around 10% of the population. Maybe this is just some natural distribution of socio-econo-political status of human groups.
And yet it's more than 90.1% of the population posesses...
These analyses tend to overlook the age dimension. It is entirely normal that a 65-year-old about to retire would have accumulated more assets than a 22-year-old who has just graduated with student debts. So is the proportion of the population holding the wealth also the proportion of the population who has been working and saving for 30-40 years already? If so there is nothing to see here, move along...
> So is the proportion of the population holding the wealth also the proportion of the population who has been working and saving for 30-40 years already?
It's not about blaming the 9.9%. It's about convincing the 9.9% that they are part of the problem. The way the author writes, he is in that group, speaking to them. "We."
Compare to slavery. Obviously Southern slaveowners bear responsibility. But were non-slaveowners, Northerners, etc free of the taint? No. Ulysses S. Grant married into a slaveowning family and for years was supported by them. Northern factory owners turned profits off the products of slavery. Regular northerners purchased products produced by the system of slavery. Sure, some are more responsible than others, but the whole country from North to South bore the taint of slavery. Individuals giving up slaves didn't end slavery. Raising awareness of slavery's evil to the point where it hit critical mass, and then using power to force slaveholders to cease, that's how it ended.
This article is a member of the 9.9% speaking to others of the 9.9%, telling them they cannot absolve themselves; that they cannot expect to escape without consequence if the world turns again, as it has in the past.
In my mind the only question left to be addressed is how the power will be wielded. Will it be a politicolegal revolution or a violent one?
The American left is heavily reliant on contributions from the new 0.1% that is SV tech money. There's been a pretty noticeable drop in redistributive rhetoric in the last 10 years.
I blame Larry Ellison for inequality wayyyyyyy more than anyone that works for him. When you've been out of power for this long (presidency doesn't count because he has very little real power compared to the House and State Gov't) you have to be _really_ careful about biting the hand that feeds you.
yeah but you’re comparing 20 year olds with no money saved to 70 year olds who are retiring and have a house. The greatest inequality is actually between age but it’s obvious why.
As a simplified thought experiment, consider an a priori perfectly equal, static (equal numbers of people of all ages) society with the following characteristics:
* People are in school until age 20.
* Assets at age 20 are 0.
* People work until age 65.
* People die at age 85.
* Assets at death are 0.
Assume that inflation and investment returns are 0. After-tax income while working is uniform, say at $100k/year. Expenses are uniform. We'll pretend expenses before age 20 are 0 (covered by taxes). A really super-simplified model.
Total lifetime after-tax income is $4.5 million. This is 65 years worth of expenses, so expenses are $69231/year.
Peak wealth, at 65, is $1,384,605. Wealth around that peak is distributed like so as a function of age:
The top 10% of the population by wealth are all in that age range (because 9/85 > 1/10). Note that by construction this is a perfectly equal society.
The point is, looking at wealth numbers without considering lifecycle effects is usually pointless. Yes, having a paid-off house and a bunch of saved-up retirement money is not something most people have. It's something that generally only people approaching retirement would have. Younger folks have neither yet; someone who has been retired for a while may have the former but no longer the latter.
Now looking at wealth distributions while holding age constants is a more interesting exercise. You can still run into issues because of differences in lifeycles, of course. As a simple example, what can one say about the lifetime earning prospects of a 30-year old making $60k a year? Well, it sure depends on whether they're an elementary school teacher or a neurosurgery resident.
Unfortunately, good analysis of this stuff is hard. It's even hard to figure out what sort of questions make sense to ask....
The data source of this report is the 2016 Survey of Consumer Finance [1] and they prepared a separate report [2] looking specifically at wealth-holding by race and ethnicity.
> In 2016, white families had the highest level of both median and mean family wealth: $171,000 and $933,700, respectively (figure 1). Black and Hispanic families have considerably less wealth than white families. Black families' median and mean net worth is less than 15 percent that of white families, at $17,600 and $138,200, respectively. Hispanic families' median and mean net worth was $20,700 and $191,200, respectively.
“He neglects to mention that many of them are actually just retirees. According to Saez and Zucman, whose data Stewart uses, more than 40 percent of all wealth belonging to Americans between and 90th and 99th percentiles is held by the the elderly, meaning age 65 or older. This is what makes wealth data a tricky way to measure class below the very tiptop of the distribution. Stewart’s “9.9 percent” includes a lot of working professionals and business owners with gilded academic résumés, sure. But it also probably encompasses a lot of 75-year-old former accountants and nurses and guys with construction businesses who made a comfortable living decades ago, bought a house, and paid down the mortgage while saving for retirement. There’s no real way to tell a consistent story about who these people are, which makes it a bit hard to blame them for the death of opportunity in this country.”
This is a great rebuttal. We seem to ignore that wealth changes over a person's life.
When average wages are dropping, are they actually dropping or are wealthy people leaving the workforce at a greater rate than lower income people (just starting their careers) entering it?
Kind of what we'd expect when the baby boomers retire, no?
That doesn’t really undermine the idea that this is a set of citizens who systematically block egalitarian social change. There are many mechanisms through which that happens — local government and real estate just as much as elite academic and cultural institutions.
I don’t think that is a fair rebuttal. There has been a systemic transfer of wealth from the young to the older. Social Security and pensions get funded; universities and schools do not.
The whole she distribution gets brought up all the time, but wealth inequality is extreme in each age group. Wealth inequality isn't a lifecycle thing where it's either dominated by generational transfers or accumulation over lifetime. See, e.g., http://www.demos.org/blog/9/8/14/wealth-distributed-extremel...
Does this amount to a systemic transfer of wealth from young to old (OP's complaint?)?
Student loan growth correlates to the (seemingly unbounded) rise of college costs, along with the willingness of the Government to back loans for them?
I'd argue that college costs are rising specifically because it's so easy for students to get loans because of Government intervention. :(
Also to be considered is that it used to be the case that entire generations did not go to college (in fact we're only at 30% of folks now...).
One still has a generation who were educated on subsidised education now reducing those subsidies, per capita, to the next. The former then expects the latter to work to fund their Social Security, Medicare and pensions as opposed to working to redistribute those hand-outs over the broader population. (Not taking a stance. Simply eliding a policy theme. My bet is SS, Medicare and pensions will be dismantled within a few cycles to fund a UBI and universal healthcare, with total pay-outs to seniors going down to pay for broader pay-outs across the population.)
It has grown at an amazing rate (as have Medicare/pensions etc).
Half of the income of the middle 20% of retired folks (those making less than $65K) comes from the government subsidies you'd like to cut. The 2nd 20% gets 2/3rds their income from the government and the bottom gets practically all of it. Cuts here will materially impact the poorest elderly.
My personal TL;DR is that we've been throwing money at all these problems and they are still so far from being solved :( Actually throwing money around seems to make things much worse.
People are taking a NIMBY style stance (cut those programs I don't use and give me/people like me the difference -- definitely don't cut my programs) that is not going to achieve anything but further animosity and grief :(
But the data doesn't show that there's a bunch of rich old folks mooching on the labor of everyone else.
Basically the median elderly person has enough money to pay off the median house and then nothing else. After a lifetime of work isn't this acceptable?
"There has been no reduction of education spending on a per-capita basis (or any other form of measurement)."
You have the per student basis? And how much of this so-called "education spending" goes to things which have nothing to do with the students (such as research only loosely affiliated with a university - e.g. through its medical school)?
what's so key about that? I and many others know that the Baby Boomers hoarded wealth to create their own class that is very hard to enter into. You can certainly 'blame' them when it comes to things like Prop 13 and their inability to protect social security for future generations.
I don't think the rebuttal makes a fair characterization of Stewart's article. Slate's argument comes down to "Stewart is taking his eyes off the prize, asking us to focus on the 9.9% when the 1% are really the problem" but I didn't interpret the Atlantic piece as implying that those at the very top are innocent in all this. It was more saying that the upper class (9.9%) have been complicit as the top 0.1% have garnered an increasingly vast portion of wealth.
Stewart is asking those in the 9.9% to be more cognizant of those below them, to stop looking up at the 0.1% and realize that the actions they take to improve the outcomes for their children are reducing income mobility.
This headline feeds into knee-jerk tendency to assign a simple social class category to some combination of money, prestige, agency (ability to drive change) and status; from the ground-view, reality is nothing like that now. There is no simple formula for any of those things, being very well decoupled.
Wait, so 10% of the county is millionaires (more or less, if 9.9% are 1.2-millionaires), and these people have such “good family, good health, and good jobs” that they might as well be a different species? If I tell you how “good” someone’s family or health is, you can tell me if they are a millionaire or not?
I think the author’s intent was to acknowledge privilege, but the article is just making more weird caricatures. I think it’s better to put a spotlight on particular ways people might not be able to advance themselves as much as the usual narrative would suggest.
edit: Whoops. My recollection of the article was quite wrong!
----
No, the article states that the average wealth of the 9.9% is 1.2m. This is of course heavily influenced by people at in the top 1%; people in the 10th percentile are not all millionaires.
“As of 2016, it took $1.2 million in net worth to make it into the 9.9 percent; $2.4 million to reach the group’s median; and $10 million to get into the top 0.9 percent.”
>If I tell you how “good” someone’s family or health is, you can tell me if they are a millionaire or not?
Yes, I can. That's the point -- the rich and poor are far more visually distinct today. Take for example obesity/overweight and marriage status. The poor are far more likely to have both an elevated BMI and to be single parents / divorced / never married
I wouldn't have thought this until I had kids, who "forced" me to greatly expand my social milieu beyond my fellow geeks and musicians.
Our kids got involved in some activities (e.g., violin lessons) that are almost exclusively the domain of the upper middle class. I remember attending a large group recital with maybe 100 kids, and virtually none of them were obese.
I have young kids. If violin lessons are apparently so expensive as to require you to be a millionaire (not merely, say, a six-figure-earner), what is a class or event I can go to to see all the poor, obese kids that I haven’t come across yet? I don’t live in a frou frou part of my town. It seems more likely to me that cultural forces are at play.
> the rich and poor are far more visually distinct today.
That is one narrative - the stepford wife vs the welfare mom, the soylent drinking tech worker vs the beer drinking factory worker. True to some extent.
But it was Taleb in Antifragile that noted in a room full of banking exec and policy guys, only the wait staff will exude physical dignity. I think you can extend that observation further and see the lower working class (like waiters, personal trainers) opening up an appearance advantage on the upper intellectual class (lab rats and office workaholics). Not so for the true elite though - vc's, celeb's, etc.
To generalize: The comfortable and sedentary elite have an advantage of appearance over the comfortable and sedentary poor. But being poor and trying to escape it is a more healthy lifestyle than to be upper middle class and try to escape into the elite.
The correlation doesn't have to be exact to have explanatory power. It's much easier to be healthy and stable if you're in the 9.9%, and if you are, the odds that you're in that bucket is higher than if you're not.
Class differentiation is the central meaning of life. The struggle is the point. You get up and wear nice clothes in the morning so that you're better than the slob that doesn't. Nobody wants to be the same as everyone else.
If everyone was equal, then there would be no point in your existence. You become a bag of mostly water.
Celebrate the fact that a few billionaires and royalty and celebrities exists. Life is more interesting and surprising that way. Can you imagine how terrible and pointless everything would be if everyone was middle class?
We should focus on the very bottom, not the very top.
It's possible for us to focus both on improving conditions at the very bottom and also trying to understand how a very small percentage at the very top is siphoning so much out of our shared system.
I would argue that both issues are worth looking at.
We have people very rich, more than ever before. And that is just by itself something worth of careful examination. But a lot of that wealth is new. There are effective mechanisms to not being poor. More people can access to self-improvement tools than ever before.
So yes, we should focus on the lower end of the scale.
Where I grew up there was around 60% poverty, and most of the poverty was communicated via terrible life choices passed one generation to the next. Every one I know who left have done well and that includes people who join the military to those who went to collage. So much of poverty is about the culture you are born into which translates into bad decision and poor outcomes. If we could do anything destroying the cultures that create these conditions would get us more for our buck.
The top is predicated on the existence of the bottom. I watched some of the royal wedding the other day, that family has not worked in living memory, or perhaps even historical memory.
Heirs live in luxury without need of work because what used to be called the reserve army of labor is used as a bulwark against those working, which in cause generates those profits. Wealth created by those who work, expropriated by heirs who do not work. So, as I said, the top is predicated on the existence of the bottom.
> Class differentiation is the central meaning of life.
This is patently not true. We overthrew kings, introduced democracy, and eliminated slavery. Every time we have made people more equal, our society has become more open and less morally repugnant.
Trying to be the winner of class competition is vulgar Marxism. You don't need so many things to be happy in life, nor do you need to dominate others. You merely need your life essentials, freedom of movement, friends, family, and meaningful work. None of those things require domination.
Obviously everyone will lead a different life, but you don't need to suck up resources like a black hole to do so.
I don't care about class competition, nor do I need a "lot" (by the standards of the wealthy) of things to be happy in life. But I like things (art, collectibles) that wouldn't exist except for social competition of the rich, regardless of whether I will ever own them. I like that they exist. When people won't shut up about how terrible possessions and competition are, it tells me they are so torn up and conflicted about their own desires for money, possessions, and power, that they can't appreciate beautiful things.[1]
I mean, it's undeniable that the rich create luxury goods that are often aesthetically pleasing, but they are items that are enjoyed almost exclusively by the rich. At most, the average person might observe one of these on the street. Publicly funded art would create accessible beautiful things, not merely inaccessible toys you can dream about but never have.
EDIT: I kind of feel like this argument is like, well if we didn't have the Sun King we wouldn't have Versailles.
The art created by the rich isn't exclusively for the rich. They create art galleries and museums, as well as parks and festivals and sports and science centers and Keck telescopes and universities and other great things.
You could say the public could do those, but now you have to deal with creation by a public committee, which may water down more cutting edge ideas due to the effects of populism.
A billionaire can just make it happen, regardless of what the public thinks. They aren't responsible to the public in their art.
Can you imagine trying to gather public funds for a new university in the age of Trump & Sanders. LOL it's not happening.
Why is it impossible? We do that all the time in countries that are not USA. Sometimes it is even successful. This all depends on how budget is allocated.
The main drawback is currently that people do not vote directly on budget allocation and representatives have vested interests more often than not. (Except perhaps in Switzerland.) We could change it, but transitioning such a system would be hard and there's always excuses of "strategy" involved.
As to art itself..
Governments also sponsor some forms of art. (Sometimes this gets corrupted or politicised.)
Heck, there are private foundations too which do not have a single or small number of rich patrons.
Future Versailles isn't a justification of having the Sun King in the first place, but retrospectively it's different - judging monarchy as bad now isn't a reason to tear it down now. Nor is the fact you or I can't own it. I've been to Versailles, and while it wouldn't harm me any more to destroy it than destroying the Buddhas of Bamiyan, it does seem to me somewhat better that it continue to exist.
I'm not sure what you mean by "accessible" art. Most things that are restricted to a select few become more accessible over time. Versailles is a good example of this, since you can take tours now. I'm not sure if it is an example of what you mean by "publicly funded", either.
> Every piece of the pie picked up by the 0.1 percent, in relative terms, had to come from the people below.
this statement is literally true, but aside from "in relative terms", the wording of the whole sentence seems to evoke a zero sum game. I see this type of writing in most articles about inequality and I wish the authors would strive to be more explicit. it's an important distinction, even if we agree that relative gains are just significant as absolute gains.
The explicit invocation of the concept "zero-sum" is avoided because it's a lightning rod for criticism, where someone will inevitably chime in to point out the realization of absolute gains of utility among the losers also; specifically, that important metrics like living standards have been improving for wide swaths of the population, even those whose share of wealth declined over time.
And therein lies the disconnect: both can be true, because one of them is a tautology; and it just so happens that relative disparities in wealth among the pool of people in market for a service will cause the competition to attain some elements of an auction, and cause the poorer parties to lose out.
to be clear, I am not criticizing the author for not explicitly using the term "zero-sum game"; however dysfunctional the economy may be, it is clearly not that. I am criticizing the author for writing about relative gains using language (e.g. "pie", "taking from", "giving up") that is clearly evocative of a zero sum game. it encourages the uncareful reader to conflate absolute and relative gains.
Except it isn't really true. Much of the economic recovery post 2008 was fueled by the FED buying assets. They've been buying stocks and bonds to keep the prices rising. So the FED has been directly handing money to people who own stocks and bonds. We can argue as to whether this is better, worse or functionally equivalent to directly taking money from the middle class, but it isn't exactly the same thing.
I personally wish that instead of printing money to buy stocks and bonds, they had enacted something like UBI instead. Give the money you're printing to people who need it. I think it's actually better for a capitalist economy, because then corporations still need to compete to get that money from consumers, instead of just being bailed out, which rewards failing corporations.
Your policy preference completely misunderstands the role of the FED in the economy. Any proposal in that area would have to be run by the Federal Government, not the FED Bank.
I believe very strongly in equality of opportunity, and the liberal tendency to zone everything to prevent development and keep out the poors is a glaring example of hipocrisy. I don’t know if charter schools are the answer, but certainly letting the family choose where to stick their education dollars could alleviate the vast difference in K12 education that keeps the “9.9%” in continuous power.
> letting the family choose where to stick their education dollars could alleviate the vast difference in K12 education that keeps the “9.9%” in continuous power.
Could you elaborate what you mean by this? Wouldn't the best course of action to give each school the same funding based on the number of pupils, and additional funding for troubled areas in need?
A K-12 student's performance correlates strongly with the family's wealth [1], and interacts with several other factors like race category, stable home life, and the low incidence of everyday violent crime. If rich people successfully exclude poor people, which can be done with legal price mechanisms instead of illegal discrimination, public school performance remains high.
Even without price there are other mechanisms - accumulation of rich in specific places by word of mouth alone... where the influence and money is accumulated and applied.
We see this even in primary education even in Europe, even in non-private schools.
Then there are extracurriculars which take money amd time...
A typical person out of place won't be able to keep up.
This is an interesting observation. Basically freedom of association, like many freedoms, is working against equality. I'm nowhere near the 9.9 percent, but it unnerves me to think about restricting someone's basic freedoms even if it benefits me.
Also it strikes me as odd that we focus on relative wealth fluctuations. Shouldn't we be more concerned about the number of people who can't afford basic necessities? If the poor are getting poorer, it seems like we should be concerned about that regardless of the performance of the rich. If the poor are getting richer but less slowly than the rich, isn't that still a good thing, or am I naive?
Personally, I don't need to keep up with the 9.9%, but I'm content if my family's fortunes keep improving.
Correct. This is doable but the pushback is likely to be immense.
Not to mention such a programme is quite expensive and you will have to forcibly appropriate wealth in some forms. And probably introduce major savings too.
UBI potentially would work on this, the question remains if you'd buy of masses politically that way. That could be the end of republic as is known.
I’m not even advocating for any program in particular; just curious why we are laser focused on relative wealth metrics when absolute metrics seem more significant.
I think that we should let students from poor towns go to awesome schools in rich towns even if they aren’t residents of the rich town. The wealthy self-segregate by limiting low-income housing in their area to keep out the poors.
Similarly I think it should be easy to create a new school (charter or whatever you want to call it) to compete with bad schools in poor districts.
But even without option 2, option 1 would be great. Would also let rich kids interact with poor kids which will benefit everyone.
It is not just this. Pulling strings without separating out housing is enough.
If you build a new school it will still start or with the segregated out "worse material". The only way out is indeed to forcibly randomize and disperse - Even then there will be local social clustering.
I don’t want to forcibly do anything. I want to unshackle market forces to solve the problem in a better way. Don’t ban poor people from your town. Don’t create a monopoly on local education. The rules should forcibly ensure competition rather than forcibly control how people live and get educated.
In US, each school district receives money proportional to their students, with some places raising money via levys or bonds in their district. It takes a long time to make new schools. If people could go to any school, you'd overwhelm some districts with tons of students and you can't just make a new school in a year or two, it takes a lot of time for the district to figure out they'll need one long term, raise the money, make plans, build and hire teachers. So this would just be a disaster in the say 3 year time frame.
I think a major reason some districts do better than others is that wealth of the parents is highly correlated with educational attainment of the parents and the children. It's not that the big city schools just generally suck, they have many more problems to deal with, one being older infrastructure but also a lot more poorer kids, and less parental contributions.
Being in the Seattle area, every school district is overloaded, and is struggling to plan and build new schools, and has lots of temporary buildings (aka trailers) that they have some classes in. It's true on the east side, the more wealthy side. And on the wealthy east side, it's far more conservative politically than Seattle; compare Seattle to Bellevue, Kirkland, Redmond, Issaquah. Those are still moderate to liberal cities, but as an example Issaquah has a republican US Congressman, Reichart. These places are pretty strongly supportive of keeping the public schools the way they are.
OK, so build low-income housing in rich districts (unless you are saying the presence of poor kids destroys the good school) and stop using zoning to limit what kinds of residences can be built (lot-size, multi-family, building height, etc.). In the suburb of Saint Louis where my wife grew up, each lot had to be at least 1 acre, and had to be single-family. Given how expensive it was to live there, realistically the only properties that were profitable to build were McMansions. Amazing school district though!
I think we'd be better off if poorer people were not concentrated, of course today it's economic concentration or discrimination that makes it harder to equalize things. Not only am I lucky to live in a good school district for my kids, but people in my more wealthy area are much more willing to support school levys and donate money and time.
There is some lower income housing, but in a boom town like Seattle you get a second negative impact on poorer people, which is displacement through rising prices of homes and apartments. Poorer people have to leave because they can't afford rising rents. Their old neighborhood starts to get more of the better educated people who could help the local schools with their background and money.
It's not impossible to go up, but it feels like it is harder. In my family, my grandparents were both some of the first people to go to college during the great depression, with basically no money. They came from tiny high schools but managed to make it.
The reason housing is so expensive is that there isn’t enough housing, supply and demand. If you allow developers to build housing commiserate with demand, the prices don’t get to SF levels.
The easiest way to unshackle market forces would be to ban the state legislatures from mandating the public schools' particulars.
And "forcibly ensuring competition" doesn't seem like this is truly unshackling market forces. Unlike the free market there are genuine community-wide positive-sum benefits to oligolopic cooperation between schools.
I disagree that it's segregating or done on purpose, but it is deeply unfair that the price of a good "public" education is being able to afford the real estate in that catchment area / school district.
But it's ultimately the high price of the real estate in that area that makes the schools good. We live in an economy where intelligent academic achievers do pretty well. So expensive areas are highly skewed toward intelligent academic achievers. Guess what kind of children they have...
I remain skeptical of that part. There are, however, plenty of cities in the US where the school district boundaries are drawn very precisely to enable the imposition of property taxes that support the schools. It becomes a sort of private-public school, in the sense that all the homeowners in the district pay extra and those schools have sports teams and labs and orchestra and field trips that the kids on the other side of the line can only dream of.
(This is impossible in California, however, because the property taxes are set at the county level and school districts have no control over their own funding.)
Having grown up in Los Angeles, I can tell you that the best schools there are also in the wealthy neighborhoods, despite the funding issue you mention not applying in California. And that's because the children of wealthy people have the genetics and culture to do well in school.
Oh no it's not. Plenty of rich neighborhoods in California have, or have tried, to split out their own district from the larger, more heterogenous district.
In my experience people who want charter schools want one of two things, either to send tax money to a religious school, or to destroy the public school employees. There's a lot of actual knowledge and infrastructure behind running a public school. It's sounds appealing that you can do better than some terrible big city trouble-bound public school, and we should all strive for better educational opportunities, but the charter schools consistently show now benefit and generally worse results than public schools. And that's not from lack of funding from the billionaire class. For example, see https://files.eric.ed.gov/fulltext/ED528633.pdf. That seems pretty settled.
I think a more productive question is what can we do to help under-performing public schools. My suggestion is more funding to help the kids from underprivileged backgrounds catch up. That includes free breakfast and lunch, food to take home on the weekends, pre-K education, more resources for the school including reducing class sizes.
When they create those new charter schools, they "compete" entirely on test scores. But no-excuses drill-and-kill for test scores is exactly the opposite of what's offered to the children of the elite, who get time to play and experiment, develop creativity and social skills, participate in arts and music, all in a non-restrictive environment.
I have no comments on how the charters are run, which is why I use them only as an example. I just think it's a tragedy that if you live in a district with a terrible school, with no capability of moving, your children are screwed out of an education.
You have more power to influence public institutions than you realize. In my city, we organize, attend Board of Education and PTA/PTO meetings, volunteer, raise money, lobby, write letters to the papers, and vote. We had about 400 people at the last Board meeting protesting a school closure. We'll never be a wealthy district, but an immense amount of energy is going into staving off "terrible."
In the past, nobody really attacked the rich because so many Americans think they'll one day be in their shoes. In 2003, we learned that 19% of Americans think they are in the richest 1% and a further 20% expect to be someday [1]. People have slowly woken up to the fact that their math was way off and class mobility doesn't really work that way. The brief "Occupy" movement and the identification of the 1% as a species largely unlike the rest of us shined a big spotlight on a class of people who would rather not receive so much attention. This article seems to be almost deliberately engineered to downplay the 1%-vs-99% narrative that once illustrated a distinct oil-vs-water class divide in the country. How better to confuse people about who the villains are than to muddy the water by adding "slightly richer normal people" into the mix with the plutocrats and Wall Street billionaires. This almost reads as a PR piece, straight from the desk of the Koch brothers or a Wall Street managing director: "Look over there! There's a hard working father of two who owns a few laundromats and a family doctor with a vacation home! Those guys are totally relatable to you poor people, just like us billionaires!"
> How better to confuse people about who the villains are than to muddy the water by adding "slightly richer normal people" into the mix with the plutocrats and Wall Street billionaires.
Eh, I feel that was done more by the increased focus on social issues and race/gender/whatever tensions to be honest. Isn't it super convenient that all these identity politics wars came about JUST after Occupy and the possibility the rich were going to be in the firing line? Or that class usually isn't mentioned there?
A clever manipulation piece:
It melds 1% multi-millionaires with upper-middle class to create some kind of bourgeois enemy.
In reality these 32 million people have
different lifestyles, sources of income and their networth does not indicate true wealth: they could be living in an expensive house that they bought much cheaper, but a few trips into a hospital will bankrupt them.
The whole concept of "net worth" is highly deceptive and can be manipulated into framing economic importance as function of potential wealth(if "X sold all their property" vs actual currency reserves).
Not accounting for people's home equity when determining their wealth is one of the most bonkers bougie things I've ever heard. Should we not count their 401k savings either, because "if X took the early withdrawal penalty" isn't fair either?
If you're rich, you're rich. It makes no difference if that wealth is tied up in illiquid assets. If the precarity if your financial situation is based on the fact that you're worth millions but have decided for some reason to leave it invested in one large, volatile asset, then you don't get to claim you're in the same boat as someone who is pawning their wedding ring until payday to make rent.
Being rich but poorly invested (90% of your net worth is in your home equity) is a decision you made, not a situation you found yourself born into.
If every single person in the country made exactly the same salary, and saved the same percentage of their income to cover the exact same modest retirement lifestyle, you'd still have people (close to retirement) who appeared "rich" and people early in their career who appeared relatively "poor". Using wealth data without normalizing for age you could also make it look like there was a vastly unequal society, and of course there would no policy you could adopt to "fix" the problem that wasn't there. What the author is doing here is literally the definition of bad data science.
>If you're rich, you're rich.
I'm not even middle class, i don't own a house or a car.
I just see that people easily overgeneralize the well-off 30 million upper-middle class with truly rich people who have entirely different lifestyle.
Believing the there is 32million strong aristocracy is delusional, all these SJW privilege Olympics make your kind seem insane and full of envy. You want to lump middle-class people with multi-millionaires with financial security and proclaim them the unified burgeios enemy that must be dealt with. "If they have some money, They're rich capitalist pigs"
Its like some soviet union guilt trip: If you own jeans your dangerous bourgie class traitor!
If you listen to foreign radio = capitalist lapdog.
If you own foreign currency = speculator and capitalist.
Soviet Union glamorized poverty and struggle, everyone was LARPing as some poor, honest worker despite a black market,blat and bribery being commonplace.
If you dislike Bourgeois(aka Middle class) so much, why don't take one-way ticket flight to socialist paradise of Venezuela? They're getting rid of their toxic privileged Bourgeois class.
Just for the record i'm NOT some "free-market will fix it" capitalist:
I'm in favor of sane, Scandinavian-like system of democracy(also promoted by Bernie Sanders as democratic socialism) which exist with support of high taxes. I'm against gulags, wealth redistribution and marking people as class traitors/privileged/"eat the Rich", to which any communist country eventually devolves.
Well that escalated quickly. I'm not saying "people with adequate, diversified retirement savings are evil capitalists." I'm just saying that "We shouldn't count the value of people's houses when determining how wealthy they are." is absurd. Clearly it should count. They own it.
It's not a political stance, just a pro-accuracy one.
The problem with it these people will not sell their houses.
Its not a liquid capital. Selling their only house would be something like once-in-lifetime decision.
What i'm saying, and you're failing to understand is that a
if citizen A has a million dollar house and 10K in savings but his income is very low, he is actually much much poorer than citizen B who has 1.01million in cash, 80K salary and rents an apartment.
>"Pro-accuracy"
Its clearly obvious B has more economic impact, but with networth they seem as identical.
your argument essentially reduces to "$1.01mm net + $80k salary is much more well off than $1.01mm net + low salary". unless A happens to be a financial wizard, this is always going to be true no matter how A's assets are allocated. i'm not sure what your point is with respect to counting primary residences in net worth. if A were truly worse off for having the house (and they very well may be with that lopsided allocation), they could just sell it. a typical yearly return on $1.01mm is very close to the median household income in the US.
Yeah, they have the same wealth right now. I'm not sure what "economic impact" means here, but Citizen B will likely be much much richer in the future, seeing has how his 1million in cash can basically instantly be converted to securities that allow him to live without working at all, and he can either quit his $80k/year job or save all o it.
Citizen A can likewise sell his house, buy those same securities, and also live without working, but evidently doesn't have the same option to work for $80k/year and save even more, which is all the more reason he should diversify his portfolio.
Forgetting the potential salary (assume both lose their jobs and can't work ever again), they are exactly as rich as one another, but A has foolishly constructed his portfolio such that his house is 90%+ of his wealth. Yes, he is in a financially precarious situation due to his reliance on strong housing prices, but it's totally of his own design. He can sell at any time and cash out. If he can't actually sell (no one will buy the house for what it's "worth") then his house isn't really worth a million dollars.
Also the article explains that the main wealth of the 9.9% is that they live in the best neighborhood, with the best schools and the best neighbora. They use their zip code to recognize themselves. So it make sens that they place a big chunck of their wealth into their house because your house is your social status.
"Every piece of the pie picked up by the 0.1 percent, in relative terms, had to come from the people below"
The economy is not a zero sum game. Even though inequality is counter-productive and undesirable, it does not mean that wealth has been "transferred" to the top 1%/10%. The poorest quantiles have become more wealthy over time as well, just at a slower rate. Here is some data on this:
"The poorest quantiles have become more wealthy over time as well, just at a slower rate."
For the last two decades, your source actually says the opposite.
The lowest three quintiles peaked in the dot-com bubble, with the bottom quintile losing the most (almost 10%) and only the middle quintile just recently reaching those levels again.
As all wealth that can be created comes from work, and as the heirs who mostly make up the 0.1% do not work, it follows that the wealth comes from those below.
Actually the article has a fairly conservative vantage. As the pie is not what is significant. The wealth and money and pie have little significance. What matters is the expropriation of surplus labor time, by the heir, from the one who works. It is a social relationship, expropriating the worker's time. The pie, the wealth, the product is not what has significance here.
Wealth does not come from work alone. It's possible to work very hard in ways that create no wealth or vice versa. It's just one component in addition to multipliers like knowledge, tools and capital.
I see this piece less as an identification of the 9.9% as being "the problem" so much as it is a call to get people who are doing well to acknowledge that we exist in a vortex of generational success that is rather exclusive of most of the country.
The reporting on this seems rather empty. Yes economic inequality is growing, yes the new rich are delusional about it, and yes that will lead to economic and social catastrophe. Elites like being elite because it excludes everyone else. That’s the point of it. How do you convince those in power to not consolidate it and pass it on to their offspring?
If you pick 4.73% or 17.23% as the cutoff point you will reach the same conclusions, the numbers behave as you would expect. I read a similar article once that focused on the top 20% by income, this one focuses on top 10% by wealth... The reality is that there is no "aristocratic cutoff point" - people get richer (and their incomes go up) faster smoothly as you go towards the right on the curve.
I don't understand why the author feels his "top 10%" cutoff is somehow especially insightful and "smarter" than the 1% one. It is entirely arbitrary.
He says:
“We are the 99 percent” sounds righteous, but it’s a slogan, not an analysis.
But if you do an analysis of the 1%, the advantages you ascribe to the 9.9% will hold much more strongly. If you do it for the top 20% they will also hold, but less strongly. You just picked a number and ran with it. There is nothing insightful there.
Income inequality has been growing but what the author is attempting to do is childish, although the article is surprisingly well-written considering how stupid the core idea is.
because it gives him a nice chart: the top 0.1% have been taking the gains away from the bottom 90% -- while that 9.9% in between has been holding steady.
Most readers aren't in the 1%, but most (Atlantic Monthly) readers are in the 10%. Articles about the 1% are about "them"; articles about the 10% are about "us". That's a reasonable premise for an article: move the goalpost and show what it's like to be on the other side of it.
It's meant to expand the class warfare numbers, that's the sole purpose of moving the goalpost from the 1% to the 10%.
You could just as easily set the line at the top 1/3, because that group in the US is better off than any top 1/3 in any other nation. The US controls ~35% of all wealth on earth, with 4% of the population; that wealth is almost all stacked among the top ~85 million adults - a bit more than 1% of the world's population. Among those 85 million adults, there are over 11 million millionaires [1]. Nothing like that mass affluence exists anywhere else. So if you really wanted to push the class warfare game to its inevitable conclusion, you'd pit the majority bottom 2/3 against the minority top 1/3. If you were a nefarious type, this also works particularly well because it pits whites & asians against blacks & hispanics, as those groups largely divide by those income/wealth lines.
Which form of society would allow for complete equality?
Where everyone has the same things to eat, drink and learn and everyone is missing the same things (usually luxury).
I can’t think of any social system like that mostly cos it all involves people and not all people are the same and will behave differently inevitably wanting different stuff which will lead to more more inequality over time.
Socialism, Communism? The workers owning the means of production and abolition of private property? Cuba is doing fairly fine despite decades of American propaganda & the embargo. It has its problems, but so does USA or any country for that matter.
Not necessarily existing system. Any system where people are truly equal.
Even in communism you will have leaders, and leaders will enjoy some form of higher privilege. So collective ownership of the, in lack of the better word, stuff would still not abolish social privileges, which people renowned in some manner would have.
Likewise, different responsibility instiled in people by any means, will undoubtedly lead to different performance in the work place, which will, in some way or other, separate them from general social or material status.
So, it seems to me, best we could do is some form of society wich has low band of frequency in which people can move in any type of self emerging hierarchy so everyone enjoys nearly the same status.
But how do you deal
with over achievers then? There would inevitably be people who, with their performance, go out of that band.
You might start by separating achievers that contribute or take from society which would then lead to having some form of arbitars which would in turn again enyjoy some type of higher status.
And so on... the only truly equal society is the one where everyone share the same thoughts and goals and do the same things, as any deviation into something new could spell special privileges for that individual.
And i do this only as a thought experiment, cos I am stuck in the loop of if not all people think and do the same thing how can we expect them to be same... So maybe someone has ideas about this. Maybe I am just crazy.
Isaac Asimov's short-story "No Connection" features a race of intelligent descendants of bears who basically treat each other equally, with equal dignity.
If a bear feels called to a particular vocation, that vocation is equally respected whether it is ditch-digger or administrator (which is just another job). If no bear feels called to a particular community need then the bears perform that job on a rotating basis. The story didn't describe what would happen if a lot of bears felt called to a particular job, but I presume there would just be very little work for any of them to do in that job, and that most of their time would be spent on the "community jobs".
I really enjoyed reading this piece. The author poses several rhetorical questions that I think could use evidence to support their assumed conclusions, but overall this piece seems very well informed and sheds light on a class of people that I am very familiar with but had never divided out in my head.
This was a very long article so it doesn't surprise me that most people are commenting on the 9.9% figure while missing the authors point. I've seen a similar point made several times recently and it goes something like this:
The "true elites" have constructed a social and economic system that syphons off the majority of wealth. The "wannabe elites" at the top of the remaining pile are actually complicit servants of the elite (who cares if it is 9%, 11% or whatever). These wannabes enjoy their privileges but realize their position is precarious. Their anxiety at losing this position makes them more eager servants to the elites and they become highly protective of their own positions. Maintaining wannabe elite status is more important than effecting societal change and it consumes all of their available resources and time.
The people at the bottom of the system are always upset and spend most of their time fighting amongst themselves and scheming on how to get into the privileged wannabe group. They spend all of their resources and time just trying to survive. There is a constant threat that if this rabble becomes angry enough then they will violently revolt. The elites like to remind the wannabes that when the pitchforks come out then it will be for the wannabes, those soft/weak knowledge workers who are unable to fly to their second home in Europe. So, it is really in the wannabes best interest to quell the dissent.
In this narrative, the alliance between the insanely rich and the dirt poor makes sense. The real elites let the educated wannabes know they have their finger on the button. They do so in subtle think pieces in the kind of magazines the rabble won't read. Don't forget, your comfortable lifestyle is predicated on serving the elites. If individually you rebel then you will lose your privileges. If en-masse you rebel then there will be a violent revolt directed at you. Good luck finding a way out of all of this is what the author leaves us with.
The wannabes are the dupes in a con-game. We think we are in on the con and yet we also realize that if things go bad then we'll be the ones left holding the bag. We're being taught to accept an inherit complicity as a means to convince us to keep going along with it. You already knew everything there was to know before you read this article.
This tripartite split (elite, bourgeois, poor) is a very old one. I am sure I read a paper in an undergrad poly-sci course that analyzed the fate of nations based on which two teamed up against the third. Elites+poor is a pretty dangerous combination because they end up catching civil society in the pincers.
The author did make the argument that revolutions that start from the middle are usually less violent and chaotic. I don't have the relevant education to know if that is true but I do know that I'd rather lead a revolution than be the victim of it. To be fair to the author, that is his ultimate point.
It feels to me that the idea of sacrifice has become a secular heresy. Humility as well. If the middle class has any hope of allying with the lower class then those two traits will have to ascend from ashes. The real questions is: are we too far gone and is it too late?
> If the middle class has any hope of allying with the lower class then those two traits will have to ascend from ashes. The real questions is: are we too far gone and is it too late?
I'd honestly ask a slightly different question : how much longer will the lower and middle classes pose a realistic threat to the elites?
To date, economic and social elites have always been at the theoretical mercy of the masses simply by virtue of vastly inferior numbers. We're not that far off from a day when - as a result of technological advances of various kinds - a small minority could feasibly defend themselves both physically and politically against the rest of society.
To me, that's honestly the real ticking time bomb. People can change, grow and adapt to any number of situations - and are remarkably good at finding common ground with their neighbors when necessity dictates. However, once the masses lose their ability to meaningfully threaten the elites, the entire question becomes moot and the ship will have sailed for a long, long time.
> small minority could feasibly defend themselves both physically and politically against the rest of society
Look no further than China. They've already instituted a social credit system to control the masses' political discourse, and to prevent dissidents from gathering together and to have neutral groups turn against them for fear of reprimands.
The future does not look good for the poor, and unlike yester-century, theres enough surveylance technology and automation to snuff any rebel group before critical mass.
>I'd honestly ask a slightly different question : how much longer will the lower and middle classes pose a realistic threat to the elites?
As long as weapons of mass destruction can be engineered by a person with a couple of thousand in resources. Bioweapons are technologically getting easier and easier to make.
The lower classes may have fewer really smart people, but they are not totally lacking.
And never forget that the upper classes do occasionally spawn a class-conscious wannabe hero.
Reading this article makes me think of the word choice that new button on Facebook that lets you report that a link is a "false" news story. Notice the subtle shift away from the populist phrase — the accusation is not that the news is "false", but rather "fake".
The facts in this piece are by and large true (although if you look closely you can see a few opinions and judgement calls that have calcified into facts). However, Stewart's class confessional is the essence of "fake news", in that it assumes a viewpoint, speaks authoritatively and factually from it, and ignores the gaping details that would contradict his story.
The assumed viewpoint gets slipped into the middle of a sentence like this: "Every piece of the pie picked up by the 0.1 percent, in relative terms, had to come from the people below". Read: increases in absolute wealth do not matter; it's all about the Joneses. Just as when postmodernists academics obsess over power hierarchies, you can see the hunger for power at the core of their doctrine, so it is here: when pop-socio-economists talk to no end about inequality, you can see that they are driven not by a desire to improve conditions, but by envy and by (as Stewart projects onto the Trump base) resentment.
Where is the discussion of poverty here? Stewart cares not a whit about poverty. Ctrl-F for it: the single instance of is in the phrase “relative poverty”.
Thus we get a sentence such as “We are the staff that runs the machine that funnels resources from the 90 percent to the 0.1 percent”, which is dynamite verbiage if you clicked on this article in order to wallow in your upper middle class guilt. But read closer: the wealth of the 90% has, in point of fact, not gone down, merely stagnated. They have not been funneled from, except in these relative, zero-sum terms.
As far as the “gaping details”, any discussion of inequality that is so myopically focused on one country in the global system is missing the big picture. Here’s what’s been going on with actual, absolute wealth since the 70’s: huge swaths of the developing world have been raised out of poverty. A few lucky, skilled, well-positioned, and/or hardworking elites, both in the US and abroad, have gotten fabulously rich off the new global economy. And yes, incomes for the bottom 90% in the US and Western Europe, far from keeping pace with this global growth, have risen hardly at all.
(How does this story of massive poverty relief play out for the secondary concern of inequality? Exactly as advertised in every true-but-fake screed, wealth inequality has skyrocketed within the United States, and within China, and within [insert your country here, probably]. What is scrupulously avoided by Stewart and others is that, as the gap between countries narrows, the overall contour and slope of the global wealth distribution has remained roughly constant).
If you do care to grapple with the messy data, you could pick worse starting places than here: https://ourworldindata.org/income-inequality (although you can see in the title that Roser and Ortiz-Ospina are already starting from two wrong premises: that “inequality”, not poverty, is the topic at hand, and that “income”, not wealth, is the natural locus of that inequality).
However, Stewart mentions none of this. If we assume good faith, we can chock the omission up to Stewart’s ignorance and his meager qualification to preach on this topic. If we assume bad faith, then his careful aggregation of confirmatory true facts and dismissal of the big picture data is straight up mendacious, or as the tweeter of the best words puts it, fake.
Note that this characterization is not personally specific to Stewart. It applies also to the fake rebuttal from Slate in the link above. Both magazines assume the premise that inequality is the problem, not poverty, and then they bicker about ...
I totally agree that we've made great progress in providing material abundance since the start of the fossil fuel era.
Unfortunately, we're heading toward the end of this era. Without some kind of miracle (this isn't totally unlikely, but we can't exactly count on it), we will have to either dramatically lower our average standard of living, or reduce our population, in order not to totally overwhelm the planet's carrying capacity and therefore die out totally. Most likely, we'll need to do a bit of each.
The trouble is that it's hard to get most people behind a plan that says, basically "We are reducing everyone's standard of living, including those of you making $1/day and those of you making $100,000 a minute. We all have to do our part."
A still-difficult but much easier sell is "We're reducing inequality by giving some of us a hand up, and the richest of us are going to pitch in to help. We can't all live like Trump or the Sultan of Brunei but we can all be free from want without destroying the planet or suffering any mass-genocides."
The easiest sell of all is "We can all be rich and live like modern-day Americans for eternity! All we need to do is de-regulate all of these job-creating, wealth-producing industries and boom! Invisible hand!" But that's a lie.
Unfortunately, the easiest sell is the one that gets sold, but that's not to say that the middle one isn't something we can shoot for when the Plan A status quo becomes coming apart at the seams. Whether that will be too late remains to be seen.
The embrace of neoliberalism in the 80s decimated the traditional middle class. Wages stagnated and labor share of income has taken a hit [1] while capital ascended.
Debt has become the biggest product leading to wide scale financialization and rent seeking. Lobbying and revolving doors has further added to entrenched interests benefiting at the cost of the whole.
This is at the heart of how you define a country, a collection of economic interests arbitrated by the market as an end in itself, or a 'society' with larger goals. The neoliberalism agenda has convinced many of the first.
It is entirely possible to get a good education at the many schools that don’t count as “good” in our brand-obsessed system. But the “bad” ones really are bad for you. For those who made the mistake of being born to the wrong parents, our society offers a kind of virtual education system. It has places that look like colleges—but aren’t really. It has debt—and that, unfortunately, is real. The people who enter into this class hologram do not collect a college premium; they wind up in something more like indentured servitude.
Many commenters have highlighted faults in this article. Maybe the 9.9% aren't to blame; maybe they aren't a meaningful classification to begin with; maybe there is more to the story than people hauling the ladder up after themselves. Yet these criticisms miss the author's warning: regardless of the causes, when substantial inequality obtains, opting into the social contract looks like a good idea for a smaller and smaller subset of people. That's when civil society falls apart. To not beggar thy neighbor is not only generosity, fairness, respect for human dignity -- it is also prudence.
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[ 4.0 ms ] story [ 228 ms ] threadIn other words, the author just divides the top 1% into two pieces, and lumps one of them in with “the 9.9”.
Edit: I did a little research and math. The top 1% holds 40% of US wealth. The top 10% holds 77%. That’s 37% to “the 9%”. I would hypothesize that even within this 9% we’d find the wealth concentrated at the top in the “2nd 1%”, i.e., the top 2% likely make the middle class look mostly irrelevant.
It's important for petit bourgeois and wealthy skilled workers to understand their position in the class hierarchy, but calling a class whose power is dwarfed by the capitalist class an aristocracy is fluffy rhetoric.
Controlling policy is one thing.
Who "just has money" and doesn't control capital? Anyone who has money actually has some sort of capital or an equivalently powerful financial instrument be it stocks, loans to other companies, government bonds, a house, etc.
This is an important distinction, don't you think?
People who derive their income primarily from investments but don't really decide anything or buy labor power are a rung below those who do. Taxonomize it however you want provided the distinction remains.
The high-net-worth individual who deposits his capital with an asset manager, or the salaried fund manager who determines which securities to buy with it?
The angel investor who puts $1M of his own money into a fledgling startup, or the entrepreneur who decides how it's spent?
The hedge fund manager who has bought 40% of the company on Wall Street, or the CEO entrusted to make the daily decisions on company operation?
I'm surprised the grandparent post has been downvoted, because when you get close to how capital is actually managed and invested, it's clear that it's a lot less clear than it looks from the outside. Even people who nominally have "control" over capital expenditures are subject to market returns. If they don't invest that capital correctly, they will lose the ability to manage more capital.
1. The vast majority of middle class wealth is locked up in (non-investment) housing. That money provides a roof and access to quality education, but in almost all cases, it's not being efficiently deployed as capital.
2. Whatever remaining money that is deployed as capital, is not done so in a way that implies control over their chosen investments. Think "majority shareholder" vs. "just another investor". That's the difference between "controlling capital" and merely having a bit of skin in the game.
There are literally 0 people I know who think owning a house is not an investment.
If you're trying to make a distinction between income generating assets and assets that don't generate income, you're just digging yourself into a hole - housing doesn't generate income, but it does save cost - namely rental cost. In that sense, it is a better investment because the return is less risky.
> 2. Whatever remaining money that is deployed as capital, is not done so in a way that implies control over their chosen investments. Think "majority shareholder" vs. "just another investor". That's the difference between "controlling capital" and merely having a bit of skin in the game.
That's well and good, but it's just as true for most people above the 10% line as for those below. You have to get to some truly lofty heights before you find the activist investors.
I thought of my house as a "use asset", like a car. It's nice when the house appreciates. But I couldn't sell it and "cash out" if I had to use the proceeds to buy another house. But, as you said, it saved on rental costs.
That was exactly the point the GP was trying to make...
I believe that the term 9.9% is a slogan though.
Three real question is what the 9.8% can do even if completely united to fix the problem that the top 0.1% cannot stop. Unless you mean politicians (who are typically in top) - because power and wealth are related but nor equivalent - and transferable plus exchangeable.
What the article is trying to point out is that the 9.9% thinks he's not so wealthy, so he is against inequality, but he still, somehow, for his own comfort and merit belief system, likes his higher income.
Trying to talk about ranges of income, would it the top N%, is pointless.
You could strip out the hypocrisy like so: "I am not at the top, so I am still against inequality, but I am comfortable, but since I AM NOT AT THE TOP, YOU CANNOT BLAME ME, so blame the richest". This is the core problem about stretching inequality, because individualism makes people work for their own selves, and NEVER encourage anyone to "take one for the team". The whole story is about how people perceives their own selves. This is an important debate.
I'm sure those 9.9% would be very surprised they belong to the top 10%. The graph of income is always growing exponentially, yet for some reason people are throwing away the idea that they might be the ones to blame, because people will naturally find argument that they're not to blame. It's always the responsibility of someone else.
I personally have not lived the wealthiest life there is in term of income, but you know, at least I don't complain, because when I compare it to the rest of the world, being in the lower 50% or 60% or 30% in a modern and developed country is still a pretty good life.
The things the upper middle class think should be a given to them because they are within a certain economic strata are actually just regular luxuries.
We are, I earn significantly more than my partner who has a degree and I don't have a degree.
It's one of the last fields that without a degree you can still earn a good living if you can break into it somehow (in my case it was side gigs/contracting to crappy full time position to none-crappy full time position to decent full time position).
Though I'm in the UK, I gather the degree requirement is a harder line in the US, also worth noting that by and large university education has had no correlation with programmer ability (in business settings) in my experience, I've met good/bad with degree/without degree.
Interestingly the one correlation I have observed is how fascinating people find the field when they are children, young geeks become older geeks.
On an unrelated note, this is why I think the programs that encourage young girls to get into computing/programming are the ones with the best likely RoI in terms of re-balancing the field.
The idea of a "middle-class struggle" is confused with changing standards and lifestyles of the middle class. Certainly the regular use of jet airplanes, hotel accommodations, and full-service dining may be out of reach for some, but an urban-agrarian lifestyle with the use of a motorcar and modern conveniences such as electricity and indoor plumbing is cheaper and more accessible than ever.
[1] http://www.aei.org/publication/todays-new-homes-are-1000-squ...
[2] https://en.wikipedia.org/wiki/Home-ownership_in_the_United_S...
[3] https://www.statista.com/statistics/184272/educational-attai...
If you're an investor (and everybody's an investor whether they like it or not) the question you should be asking is what things will be like in ten years.
That said the article (like pretty much all economics that comes out of The Atlantic) is pretty silly. The dire condition of the American middle class is completely the fault of the US government. In the last 30 years (while China has achieved world historic growth) the US has dumped trillions into wholly unnecessary wars and giveaways to international investors. The $20 trillion dollars the US government has wasted is the greatest malinvestment in the history of the world. All the money that should've been spent on vital innovations and critical investments and infrastructure was used to blow up brown people and inflate asset prices. 2008 was just the beginning; the consequences of this extraordinary malinvestment will take decades to ripple through the global economy. The 9.9% or any other arbitrary percent of Americans are only to blame to the extent that they haven't overthrown their government and executed a few politicians. Over and over electorate have failed to correct the system and so politicians like John McCain -- who helped push America into the greatest crime of the 21st century -- are widely lauded instead of arrested.
[1] https://www.ft.com/content/51771766-7c7c-11e7-9108-edda0bcbc...
[2] https://www.vox.com/science-and-health/2018/5/22/17376536/fe...
[3] https://www.stlouisfed.org/~/media/Files/PDFs/HFS/essays/HFS...
The thing is, it's like the boiling a frog in water analogy. You get desensitized to it. I tend to work with salespeople, so there's a tendency to get flashier things than a lot of my programming friends, but it manifests in things like always having the latest iPhone (or it's Android equivalent), travelling internationally a couple times a year, going for brunch whenever you feel like it, being able to save a good $10-15k yearly without really trying. Maybe hitting Tahoe a few times in the winter. Going to Soulcycle or Equinox to work out during the week. But you still can't buy a house in San Francisco. So you don't feel rich, but compared to the average American you're taking home a multiple of what they're making. It shocked me to find out the average household income is about $60k annually.
We all live in a bubble. San Francisco is a bubble. Dayton Ohio is a bubble as well. And when you live in a city with a ton of rich people (and a sizeable population probably in the bottom 10%) it gets pretty easy to forget about the other 80% who live somewhere in the middle of it all, in Concord, or Pleasanton or whatever they call it in the East Bay.
I feel like in SF or any big expensive city owning a home is not something for the middle or upper middle class - there’s a point that no matter how many brunches or vacations you can take, you can’t trade them for a house except in an area where you’ll be basically going down in economic and social class (live out in Tracy or something, have a 2 hour one way commute, far fewer vacations etc). The trade off for that “stability” isn’t one that a lot of people currently renting think is a good deal. IMO the best way to do it is keep on renting while putting as much money in investments and retirement funds as one can, with the idea of retiring somewhere else, or only buying if you get a windfall.
But I’m terms of lifestyle, those in that 9.9% have a far richer one than the rest, but they don’t have the long term security of owning their own home.
My home was about $120k. It’s easily affordable on a tech industry salary. The median household income in my county is under $30k...
In that sense, the house owns you, not the other way around.
Choose your poison.
The median household income across San Francisco and San Mateo counties is $115k. People who make close to that are entirely justified in calling themselves middle class. Spending half your take-home on a crappy $2500 apartment doesn't make you rich just because the apartment is in SF.
Are you in a dual income family, and have you considered buying areas like the Excelsior, Ingleside heights (excluding Ingleside terrace), Oceanview/Merced Heights, Outer Mission, Portola, Silver Terrace, or other such neighborhoods?
I don't mean to dismiss your question, these are still expensive neighborhoods, probably between 800k-1.2mil for something decent. This is tough for two incomes, as the dual income thing means you're also stuck with high childcare costs, which will probably be ~25k per kid in San Francisco (I'm talking about the kind that allows you to go to work from 8am-6pm - and even then you will have to recuse yourself from meetings to be at daycare by 6pm, officially surrendering your membership in the young people are just smarter and can focus on what's important club in Silicon Valley companies[1).
I do think this is in reach of the group you just described, though. 250k+ family income isn't unusual for two tech workers or other professionals in SF (a programmer and dental hygienist pair, for example, should exceed this).
[1] https://venturebeat.com/2007/03/26/start-up-advice-for-entre...
That said, anyone with a reasonably long career at the upper end of the professional class can make that transition by investing wisely.
Measuring income per year misses the richest group of all. Those who would look down on anyone working.
78% currently live paycheck to paycheck, with this number rising year after year [0]. The endless consumerism that this type of unchecked capitalism needs to survive looks to have a pretty bleak future if we keep going down this path.
[0] https://www.cnbc.com/2017/08/24/most-americans-live-paycheck...
People must be insane thinking this is some kind of luxury for rich people, not basic human needs.
It is the potential to do almost anything w here only another big player or a whole society can blunt it and not necessarily effectively.
It is the difference between playing the rules and making the rules.
I’m doing well, but I’m by no means rich. Now give me another ten years and it’s a different story.
When I fret to my partner, she says "Honey, you're being to hard on yourself, we are doing great!" But when I look at the stakes and the people I know; The only ones insulated have established families. Having established family even has it's own curse in this day and age. Insulated, sure, but kids that are too insulated via trust fund can get stuck in this weird developmental purgatory that even though they have and won't want, it's hard to find meaning or even give a shit to look for it and take on the risk for what it's worth if they weren't groomed. I've seen lack of meaning take lives.
In the next year I might break loose because I have some ownership in something interesting, but I'm acutely aware of how much it costs to transcend being the wretched of the earth. The treadmill we are on as a human race isn't sustainable. Something I think the article points out succinctly is that with greater inequality we all lose. His grandmother bet it all on the dot com boom and went to work at Wendy's. Anything that isn't an ivy league education is indentured servitude.
I'm lucky to have technology and because I have it, I guess all I can see is potentially a technological equalizer in the near future (at least I hope we can find it near), but we are all being fleeced no matter how you shake it. Globally we are in a race condition similar to a drug addict who didn't realize they were that far gone getting fired from their job. Yeah, the apartment and the girlfriend are up next. But, we have plenty of lies to stack up before then to mask like it's the status quo. This problem is going to take a good think to get solved and we'll need to get high and tight to deal with the stress.
We can still pawn grandpa's coin collection to get a fix this weekend. We'll be back on top before anyone notices.
Not sure I agree though. So someone who makes $1M per year from their work, but has no investments isn't rich?
Clearly someone who makes $1M could live of their investments.
By your definition, everyone who retires and lives off their investments is rich as well.
A pension should be considered equivalent to the assets that would produce the same returns.
Accountants have ways of accounting for pension/annuity returns. Their accounting tricks should be used in these cases.
Someone with over $1 million in assets is going to be surprised they're in the top 10% of the country? I don't buy it.
> You could strip out the hypocrisy like so: "I am not at the top, so I am still against inequality, but I am comfortable, but since I AM NOT AT THE TOP, YOU CANNOT BLAME ME, so blame the richest"
My read of the article was almost the exact opposite, namely that the author was trying to call attention to the fact that the "top 9.9%" is in fact very much to blame, as evidenced by his concluding remarks :
"It’s going to take something from each of us, too, and perhaps especially from those who happen to be the momentary winners of this cycle in the game. We need to peel our eyes away from the mirror of our own success and think about what we can do in our everyday lives for the people who aren’t our neighbors."
> but you know, at least I don't complain because when I compare it to the rest of the world, being in the lower 50% or 60% or 30% in a modern and developed country is still a pretty good life.
On the one hand, it's nice that you have a sense of perspective and can appreciate that you live a more comfortable life than most of the world's population.
On the other, there's a fine line between a stiff upper lip and stoic complacency. There will always be a greater evil somewhere in the world. Just because Mogadishu is more dangerous than my neighborhood doesn't mean I'm cool with people getting robbed outside my house.
Put more plainly : you have the right to ignore issues in your local community, but you should not try to shame others into silence simply because they're not starving.
If I said that 70% of the wealth is in the 9.99% and the remaining .01% only have 20% (or whatever it is), that would seem a little odd right? Or 9.999% have 75% and .001% only have 15%? Making cutoffs like this feels like the author is mishandling the numbers in order to make his point. Because there really is a pretty big difference between $1m (90th percentile) in net-worth and $6m (99th). $1m in net-worth quite comfortable but not "rich" by even a very liberal definition of the term in most cities (remember most of that is going to be locked up in a primary residence).
And in the end, yes, it is important to recognize our wealth and privilege and the civic responsibility that comes with it. I just don't like it when numbers are mis-represented, whether the underlying point is valid or not.
Selling the $1M house nets about $800k after capital gains. 5% investment interest on that nets about $40k/year without touching the principal.
It's definitely possible for a family of two to live on this amount fairly comfortably in a quite decent apartment in a quite decent neighborhood away from the coasts. I know because I was, and making debt service payments on top of it.
Get a part time job as a package handler at UPS or FedEx - for the exercise, of course - and you're sitting pretty.
A middle-income lifestyle without having to work meets the cutoff for my definition of rich.
I doubt this particular point. The 98th percentile of earners make something like $200-$300k a year, the 89th percentile make about $100k/year[0]. That's a big difference, and it will equate to an even bigger difference in wealth, but not enough that the 98th percentile will substantially outweigh the combined 89th-97th percentiles. (Arguing otherwise means assuming that the one group has 8 times as much wealth per capita as the other).
It's also true that the 98th percentile includes plenty of people in the HN crowd. That's the point: well paid professional types (or software engineers) are not being hurt by the gains that accrue to the very top of the income distribution.
So far as they/we cluster in the same industries/subsectors that are growing those billionaires, we have--to some extent--shared interests. For instance, Amazon software engineers might gain by clawing back money from Bezos and the stockholders, but they don't have a monetary interest in redirecting pay to the warehouse workers.
[0] immediate googled source: https://investormint.com/investing/how-much-does-the-top-1-m...
I always thought the 99th percentile started a bit higher, but this is roughly in line with what I've read before.
According to https://dqydj.com/net-worth-percentile-calculator-united-sta..., the ratio between the 98th and 89th percentile of wealth actually is roughly 5-6x. (89th is around 1.1 million, 98th around 5.8 million).
I noted that the wealth gap would be larger, but it's still not enough to make the parent poster's comment accurate (filling in a few points, you have 93rd percentile ~ $2 million, 96th ~ $3 million, 97th ~ $4 million).
Of course, income doesn't map that directly to wealth, even after accounting for age (if your income derives from a salary/investments from savings, you expect to move up further in wealth than in income as you age). Those 98th percentile income software engineers won't be 98th percentile in wealth when they're 60 unless they save extreme amounts of money, but they'll enter that 9.9% if they're prudent.
And I think your point about the interests of the 9% being more aligned with the 1% than the 90% is an important one. Which is part of the author's point as well, that the 9% are really benefiting from the system in a way that those at the bottom aren't.
And I myself am an example of exactly this. I plug myself in those calculators and think "how much would I have to make to be in the 1%?" rather than "this is unfair, how do we lift more people up?"
It's reasonable to define 90% of the country as "lower class"? Sorry, no, I can't buy that definition. The top of the bottom 90% are upper middle class at least by any reasonable definition.
We should constantly appreciate how fortunate we are are, those of us software engineers. I am hoping against my expectation that somehow there will be good jobs in the future for more than the 1% (bio-medical engineering maybe?).
This only applies to a small fraction of engineers clustered in a literal handful of geographic areas. I personally don't know a single engineer in my country that makes $200k (and the cost of living here is just as high as any major US city). Earning half that is seen as a very good salary.
Logically it should at least not hurt the rest of the market, but anecdotally : during my time in the midwest, salaries were stagnant / sticky around $80k so I would caution against overestimating the trickle down effect of coastal income.
It's a arbitrary, but it's also useful to have a cutoff point. And due to power laws, as you observed, falling below that is already too low.
What's a topological map?
The OP argument in a nutshell: "In the United States, it’s the children of the bottom decile and, above all, the top decile—the 9.9 percent—who settle down nearest to their starting point."
So how would using just a function, so as not to embarrass any one class, fix that?
It's like having a y-axis on a graph that reads: 10 100 5000 10000 (with equally spaced points) and then talking about how there's more action between 100 and 5000 than there is between 5000 and 10000.
If you think he's skewed the measure by using mean instead of median or mode and not subtracting the contributions of the .1% that's an interesting argument but you have to make it - show evidence of that, plus make the calculation to demonstrate that the effect is large. If that's the argument I might suggest dropping "bin size" and employing the term "skew."
Even simple PCA would figure it out.
I wonder who paid Matthew Stewart, an Oxford-educated management consultant for "large financial institutions,"[1] to write such an article.
[1] http://mwstewart.com/about/
The government holds most of the wealth.
I agree with the other commentators' critique of OP here. The 9.9%ers are the new Social 'Thin Blue Line' [1].
Here's the recruitment advert in case you are interested :) https://youtu.be/LHtNFZ6K0pE
[1]: https://en.wikipedia.org/wiki/Thin_blue_line
Interestingly, some estimates of (formal) Polish aristocracy in the 17th century place it around 10% of the population. Maybe this is just some natural distribution of socio-econo-political status of human groups.
These analyses tend to overlook the age dimension. It is entirely normal that a 65-year-old about to retire would have accumulated more assets than a 22-year-old who has just graduated with student debts. So is the proportion of the population holding the wealth also the proportion of the population who has been working and saving for 30-40 years already? If so there is nothing to see here, move along...
I doubt it: https://www.cia.gov/library/publications/the-world-factbook/...
90.1% possess about 30% of the wealth.
9% possess another 30% of the wealth.
The remaining 0.9% possess the rest.
Is the 9% to blame for inequality?
For the last 30 years, that tiny fraction (0.1%, correcting what I assume was a typo/misread) has seen their overall share grow.
Thirty years ago, that 90% possessed 35% of the wealth. Today, that 90% possesses 20% of the wealth.
The 9.9% near (but not at) the top has maintained their wealth over the last 30 years.
The culture problems of this tier of American society may not be as obvious to you, but I assure you, the answer to your question is yes.
Compare to slavery. Obviously Southern slaveowners bear responsibility. But were non-slaveowners, Northerners, etc free of the taint? No. Ulysses S. Grant married into a slaveowning family and for years was supported by them. Northern factory owners turned profits off the products of slavery. Regular northerners purchased products produced by the system of slavery. Sure, some are more responsible than others, but the whole country from North to South bore the taint of slavery. Individuals giving up slaves didn't end slavery. Raising awareness of slavery's evil to the point where it hit critical mass, and then using power to force slaveholders to cease, that's how it ended.
This article is a member of the 9.9% speaking to others of the 9.9%, telling them they cannot absolve themselves; that they cannot expect to escape without consequence if the world turns again, as it has in the past.
In my mind the only question left to be addressed is how the power will be wielded. Will it be a politicolegal revolution or a violent one?
I blame Larry Ellison for inequality wayyyyyyy more than anyone that works for him. When you've been out of power for this long (presidency doesn't count because he has very little real power compared to the House and State Gov't) you have to be _really_ careful about biting the hand that feeds you.
* People are in school until age 20.
* Assets at age 20 are 0.
* People work until age 65.
* People die at age 85.
* Assets at death are 0.
Assume that inflation and investment returns are 0. After-tax income while working is uniform, say at $100k/year. Expenses are uniform. We'll pretend expenses before age 20 are 0 (covered by taxes). A really super-simplified model.
Total lifetime after-tax income is $4.5 million. This is 65 years worth of expenses, so expenses are $69231/year.
Peak wealth, at 65, is $1,384,605. Wealth around that peak is distributed like so as a function of age:
The top 10% of the population by wealth are all in that age range (because 9/85 > 1/10). Note that by construction this is a perfectly equal society.The point is, looking at wealth numbers without considering lifecycle effects is usually pointless. Yes, having a paid-off house and a bunch of saved-up retirement money is not something most people have. It's something that generally only people approaching retirement would have. Younger folks have neither yet; someone who has been retired for a while may have the former but no longer the latter.
Now looking at wealth distributions while holding age constants is a more interesting exercise. You can still run into issues because of differences in lifeycles, of course. As a simple example, what can one say about the lifetime earning prospects of a 30-year old making $60k a year? Well, it sure depends on whether they're an elementary school teacher or a neurosurgery resident.
Unfortunately, good analysis of this stuff is hard. It's even hard to figure out what sort of questions make sense to ask....
> In 2016, white families had the highest level of both median and mean family wealth: $171,000 and $933,700, respectively (figure 1). Black and Hispanic families have considerably less wealth than white families. Black families' median and mean net worth is less than 15 percent that of white families, at $17,600 and $138,200, respectively. Hispanic families' median and mean net worth was $20,700 and $191,200, respectively.
[1] https://www.federalreserve.gov/econres/scfindex.htm
[2] https://www.federalreserve.gov/econres/notes/feds-notes/rece...
https://slate.com/business/2018/05/forget-the-atlantics-9-9-...
“He neglects to mention that many of them are actually just retirees. According to Saez and Zucman, whose data Stewart uses, more than 40 percent of all wealth belonging to Americans between and 90th and 99th percentiles is held by the the elderly, meaning age 65 or older. This is what makes wealth data a tricky way to measure class below the very tiptop of the distribution. Stewart’s “9.9 percent” includes a lot of working professionals and business owners with gilded academic résumés, sure. But it also probably encompasses a lot of 75-year-old former accountants and nurses and guys with construction businesses who made a comfortable living decades ago, bought a house, and paid down the mortgage while saving for retirement. There’s no real way to tell a consistent story about who these people are, which makes it a bit hard to blame them for the death of opportunity in this country.”
When average wages are dropping, are they actually dropping or are wealthy people leaving the workforce at a greater rate than lower income people (just starting their careers) entering it?
Kind of what we'd expect when the baby boomers retire, no?
http://www12.statcan.gc.ca/census-recensement/2016/dp-pd/dv-...
It's quite a stark difference in the percentiles from 20 to 40 to 60.
Slate is absolutely right that without further controls for things like age, these percentiles are misleading
Education is the 2nd largest expenditure in California:
https://www.usgovernmentspending.com/piechart_2018_CA_statel...
Number 1 expenditure in Texas:
https://www.usgovernmentspending.com/piechart_2018_TX_statel...
People perceive education to be underfunded, but digging at the data it definitely is one of the Government's highest spending priorities...
Student loan growth correlates to the (seemingly unbounded) rise of college costs, along with the willingness of the Government to back loans for them?
I'd argue that college costs are rising specifically because it's so easy for students to get loans because of Government intervention. :(
Also to be considered is that it used to be the case that entire generations did not go to college (in fact we're only at 30% of folks now...).
https://www.usgovernmentspending.com/spending_chart_1970_202...
It has grown at an amazing rate (as have Medicare/pensions etc).
Half of the income of the middle 20% of retired folks (those making less than $65K) comes from the government subsidies you'd like to cut. The 2nd 20% gets 2/3rds their income from the government and the bottom gets practically all of it. Cuts here will materially impact the poorest elderly.
Citations: https://usafacts.org/reports/annual/2018
My personal TL;DR is that we've been throwing money at all these problems and they are still so far from being solved :( Actually throwing money around seems to make things much worse.
People are taking a NIMBY style stance (cut those programs I don't use and give me/people like me the difference -- definitely don't cut my programs) that is not going to achieve anything but further animosity and grief :(
I think we agree this is a national conversation.
Basically the median elderly person has enough money to pay off the median house and then nothing else. After a lifetime of work isn't this acceptable?
Secondary source: http://cepr.net/blogs/beat-the-press/time-to-bury-pew-report...
On mobile otherwise I would link in the primary data.
You have the per student basis? And how much of this so-called "education spending" goes to things which have nothing to do with the students (such as research only loosely affiliated with a university - e.g. through its medical school)?
I don't think the rebuttal makes a fair characterization of Stewart's article. Slate's argument comes down to "Stewart is taking his eyes off the prize, asking us to focus on the 9.9% when the 1% are really the problem" but I didn't interpret the Atlantic piece as implying that those at the very top are innocent in all this. It was more saying that the upper class (9.9%) have been complicit as the top 0.1% have garnered an increasingly vast portion of wealth.
Stewart is asking those in the 9.9% to be more cognizant of those below them, to stop looking up at the 0.1% and realize that the actions they take to improve the outcomes for their children are reducing income mobility.
Without that the piece is worthless blame shifting. Calls to action are pointless when no action is suggested.
Or is he asking us to figure it out? That worked well so far... /s
I think the author’s intent was to acknowledge privilege, but the article is just making more weird caricatures. I think it’s better to put a spotlight on particular ways people might not be able to advance themselves as much as the usual narrative would suggest.
----
No, the article states that the average wealth of the 9.9% is 1.2m. This is of course heavily influenced by people at in the top 1%; people in the 10th percentile are not all millionaires.
Yes, I can. That's the point -- the rich and poor are far more visually distinct today. Take for example obesity/overweight and marriage status. The poor are far more likely to have both an elevated BMI and to be single parents / divorced / never married
Our kids got involved in some activities (e.g., violin lessons) that are almost exclusively the domain of the upper middle class. I remember attending a large group recital with maybe 100 kids, and virtually none of them were obese.
they are poor. they don't go to events or extracurricular classes...those cost money.
That is one narrative - the stepford wife vs the welfare mom, the soylent drinking tech worker vs the beer drinking factory worker. True to some extent.
But it was Taleb in Antifragile that noted in a room full of banking exec and policy guys, only the wait staff will exude physical dignity. I think you can extend that observation further and see the lower working class (like waiters, personal trainers) opening up an appearance advantage on the upper intellectual class (lab rats and office workaholics). Not so for the true elite though - vc's, celeb's, etc.
To generalize: The comfortable and sedentary elite have an advantage of appearance over the comfortable and sedentary poor. But being poor and trying to escape it is a more healthy lifestyle than to be upper middle class and try to escape into the elite.
If everyone was equal, then there would be no point in your existence. You become a bag of mostly water.
Celebrate the fact that a few billionaires and royalty and celebrities exists. Life is more interesting and surprising that way. Can you imagine how terrible and pointless everything would be if everyone was middle class?
We should focus on the very bottom, not the very top.
It would be a vast improvement over the status quo, where most people are either working class or underclass.
> We should focus on the very bottom, not the very top.
They aren't separate issues, they are aspects of the same issue.
I would argue that both issues are worth looking at.
So yes, we should focus on the lower end of the scale.
Where is the "new" wealth coming from?
> There are effective mechanisms to not being poor.
That seems like a generalization to me that doesn't factor in location, race, access to good education, medical conditions, existing debt, etc.
> So yes, we should focus on the lower end of the scale.
Why not both?
'All of the struggle in life comes from the fact of not being able to stay quiet in a room for a long time'.
Heirs live in luxury without need of work because what used to be called the reserve army of labor is used as a bulwark against those working, which in cause generates those profits. Wealth created by those who work, expropriated by heirs who do not work. So, as I said, the top is predicated on the existence of the bottom.
Some rich heirs still prefer to work.
The question is, what happens to the bottom when it gets automated away...
This is patently not true. We overthrew kings, introduced democracy, and eliminated slavery. Every time we have made people more equal, our society has become more open and less morally repugnant.
Trying to be the winner of class competition is vulgar Marxism. You don't need so many things to be happy in life, nor do you need to dominate others. You merely need your life essentials, freedom of movement, friends, family, and meaningful work. None of those things require domination.
Obviously everyone will lead a different life, but you don't need to suck up resources like a black hole to do so.
[1]https://bringatrailer.com/listing/1941-packard-120-convertib...
EDIT: I kind of feel like this argument is like, well if we didn't have the Sun King we wouldn't have Versailles.
You could say the public could do those, but now you have to deal with creation by a public committee, which may water down more cutting edge ideas due to the effects of populism.
A billionaire can just make it happen, regardless of what the public thinks. They aren't responsible to the public in their art.
Can you imagine trying to gather public funds for a new university in the age of Trump & Sanders. LOL it's not happening.
The main drawback is currently that people do not vote directly on budget allocation and representatives have vested interests more often than not. (Except perhaps in Switzerland.) We could change it, but transitioning such a system would be hard and there's always excuses of "strategy" involved.
As to art itself.. Governments also sponsor some forms of art. (Sometimes this gets corrupted or politicised.)
Heck, there are private foundations too which do not have a single or small number of rich patrons.
I'm not sure what you mean by "accessible" art. Most things that are restricted to a select few become more accessible over time. Versailles is a good example of this, since you can take tours now. I'm not sure if it is an example of what you mean by "publicly funded", either.
this statement is literally true, but aside from "in relative terms", the wording of the whole sentence seems to evoke a zero sum game. I see this type of writing in most articles about inequality and I wish the authors would strive to be more explicit. it's an important distinction, even if we agree that relative gains are just significant as absolute gains.
And therein lies the disconnect: both can be true, because one of them is a tautology; and it just so happens that relative disparities in wealth among the pool of people in market for a service will cause the competition to attain some elements of an auction, and cause the poorer parties to lose out.
I personally wish that instead of printing money to buy stocks and bonds, they had enacted something like UBI instead. Give the money you're printing to people who need it. I think it's actually better for a capitalist economy, because then corporations still need to compete to get that money from consumers, instead of just being bailed out, which rewards failing corporations.
The FED's assets are nearly all in US Gov't Treasury Bond's & Mortgage backed securities.
https://www.federalreserve.gov/monetarypolicy/files/quarterl...
Your policy preference completely misunderstands the role of the FED in the economy. Any proposal in that area would have to be run by the Federal Government, not the FED Bank.
Could you elaborate what you mean by this? Wouldn't the best course of action to give each school the same funding based on the number of pupils, and additional funding for troubled areas in need?
[1] https://www.nytimes.com/interactive/2016/04/29/upshot/money-...
We see this even in primary education even in Europe, even in non-private schools. Then there are extracurriculars which take money amd time...
A typical person out of place won't be able to keep up.
Also it strikes me as odd that we focus on relative wealth fluctuations. Shouldn't we be more concerned about the number of people who can't afford basic necessities? If the poor are getting poorer, it seems like we should be concerned about that regardless of the performance of the rich. If the poor are getting richer but less slowly than the rich, isn't that still a good thing, or am I naive?
Personally, I don't need to keep up with the 9.9%, but I'm content if my family's fortunes keep improving.
Not to mention such a programme is quite expensive and you will have to forcibly appropriate wealth in some forms. And probably introduce major savings too.
UBI potentially would work on this, the question remains if you'd buy of masses politically that way. That could be the end of republic as is known.
Similarly I think it should be easy to create a new school (charter or whatever you want to call it) to compete with bad schools in poor districts.
But even without option 2, option 1 would be great. Would also let rich kids interact with poor kids which will benefit everyone.
If you build a new school it will still start or with the segregated out "worse material". The only way out is indeed to forcibly randomize and disperse - Even then there will be local social clustering.
I think a major reason some districts do better than others is that wealth of the parents is highly correlated with educational attainment of the parents and the children. It's not that the big city schools just generally suck, they have many more problems to deal with, one being older infrastructure but also a lot more poorer kids, and less parental contributions.
Being in the Seattle area, every school district is overloaded, and is struggling to plan and build new schools, and has lots of temporary buildings (aka trailers) that they have some classes in. It's true on the east side, the more wealthy side. And on the wealthy east side, it's far more conservative politically than Seattle; compare Seattle to Bellevue, Kirkland, Redmond, Issaquah. Those are still moderate to liberal cities, but as an example Issaquah has a republican US Congressman, Reichart. These places are pretty strongly supportive of keeping the public schools the way they are.
What is your proposed means of oppression to not make them move?
Next, even if housing is mixed, rich can pool resources and start smaller scale private schooling. Results in Japanese model.
You will have to prevent it by force as well.
It doesn't take much to outdo people who are preoccupied trying to make ends meet and being distracted with better education amd more attention.
There is some lower income housing, but in a boom town like Seattle you get a second negative impact on poorer people, which is displacement through rising prices of homes and apartments. Poorer people have to leave because they can't afford rising rents. Their old neighborhood starts to get more of the better educated people who could help the local schools with their background and money.
It's not impossible to go up, but it feels like it is harder. In my family, my grandparents were both some of the first people to go to college during the great depression, with basically no money. They came from tiny high schools but managed to make it.
And "forcibly ensuring competition" doesn't seem like this is truly unshackling market forces. Unlike the free market there are genuine community-wide positive-sum benefits to oligolopic cooperation between schools.
(This is impossible in California, however, because the property taxes are set at the county level and school districts have no control over their own funding.)
Oh no it's not. Plenty of rich neighborhoods in California have, or have tried, to split out their own district from the larger, more heterogenous district.
Here's a random article which shows that often it's done on purpose: http://hechingerreport.org/wealthy-towns-able-secede-higher-...
I think a more productive question is what can we do to help under-performing public schools. My suggestion is more funding to help the kids from underprivileged backgrounds catch up. That includes free breakfast and lunch, food to take home on the weekends, pre-K education, more resources for the school including reducing class sizes.
1: https://www.nytimes.com/2003/01/12/opinion/the-triumph-of-ho...
Eh, I feel that was done more by the increased focus on social issues and race/gender/whatever tensions to be honest. Isn't it super convenient that all these identity politics wars came about JUST after Occupy and the possibility the rich were going to be in the firing line? Or that class usually isn't mentioned there?
If you're rich, you're rich. It makes no difference if that wealth is tied up in illiquid assets. If the precarity if your financial situation is based on the fact that you're worth millions but have decided for some reason to leave it invested in one large, volatile asset, then you don't get to claim you're in the same boat as someone who is pawning their wedding ring until payday to make rent.
Being rich but poorly invested (90% of your net worth is in your home equity) is a decision you made, not a situation you found yourself born into.
Just for the record i'm NOT some "free-market will fix it" capitalist: I'm in favor of sane, Scandinavian-like system of democracy(also promoted by Bernie Sanders as democratic socialism) which exist with support of high taxes. I'm against gulags, wealth redistribution and marking people as class traitors/privileged/"eat the Rich", to which any communist country eventually devolves.
It's not a political stance, just a pro-accuracy one.
What i'm saying, and you're failing to understand is that a if citizen A has a million dollar house and 10K in savings but his income is very low, he is actually much much poorer than citizen B who has 1.01million in cash, 80K salary and rents an apartment.
>"Pro-accuracy" Its clearly obvious B has more economic impact, but with networth they seem as identical.
Citizen A can likewise sell his house, buy those same securities, and also live without working, but evidently doesn't have the same option to work for $80k/year and save even more, which is all the more reason he should diversify his portfolio.
Forgetting the potential salary (assume both lose their jobs and can't work ever again), they are exactly as rich as one another, but A has foolishly constructed his portfolio such that his house is 90%+ of his wealth. Yes, he is in a financially precarious situation due to his reliance on strong housing prices, but it's totally of his own design. He can sell at any time and cash out. If he can't actually sell (no one will buy the house for what it's "worth") then his house isn't really worth a million dollars.
The economy is not a zero sum game. Even though inequality is counter-productive and undesirable, it does not mean that wealth has been "transferred" to the top 1%/10%. The poorest quantiles have become more wealthy over time as well, just at a slower rate. Here is some data on this:
https://www.advisorperspectives.com/dshort/updates/2017/09/1...
For the last two decades, your source actually says the opposite. The lowest three quintiles peaked in the dot-com bubble, with the bottom quintile losing the most (almost 10%) and only the middle quintile just recently reaching those levels again.
Actually the article has a fairly conservative vantage. As the pie is not what is significant. The wealth and money and pie have little significance. What matters is the expropriation of surplus labor time, by the heir, from the one who works. It is a social relationship, expropriating the worker's time. The pie, the wealth, the product is not what has significance here.
> YOU'RE PROBABLY PART OF THE PROBLEM
> YOU'RE PART OF THE PROBLEM
> YOU'RE THE PROBLEM
Take up the White Man’s burden—
Send forth the best ye breed—
Go send your sons to exile
To serve your captives' need
-- https://en.wikipedia.org/wiki/The_White_Man%27s_Burden
I don't understand why the author feels his "top 10%" cutoff is somehow especially insightful and "smarter" than the 1% one. It is entirely arbitrary.
He says:
“We are the 99 percent” sounds righteous, but it’s a slogan, not an analysis.
But if you do an analysis of the 1%, the advantages you ascribe to the 9.9% will hold much more strongly. If you do it for the top 20% they will also hold, but less strongly. You just picked a number and ran with it. There is nothing insightful there.
Income inequality has been growing but what the author is attempting to do is childish, although the article is surprisingly well-written considering how stupid the core idea is.
And I agree, it's a stupid core idea.
You could just as easily set the line at the top 1/3, because that group in the US is better off than any top 1/3 in any other nation. The US controls ~35% of all wealth on earth, with 4% of the population; that wealth is almost all stacked among the top ~85 million adults - a bit more than 1% of the world's population. Among those 85 million adults, there are over 11 million millionaires [1]. Nothing like that mass affluence exists anywhere else. So if you really wanted to push the class warfare game to its inevitable conclusion, you'd pit the majority bottom 2/3 against the minority top 1/3. If you were a nefarious type, this also works particularly well because it pits whites & asians against blacks & hispanics, as those groups largely divide by those income/wealth lines.
[1] https://www.cnbc.com/2017/03/24/a-record-number-of-americans...
Where everyone has the same things to eat, drink and learn and everyone is missing the same things (usually luxury).
I can’t think of any social system like that mostly cos it all involves people and not all people are the same and will behave differently inevitably wanting different stuff which will lead to more more inequality over time.
Maybe someone has ideas?
Even in communism you will have leaders, and leaders will enjoy some form of higher privilege. So collective ownership of the, in lack of the better word, stuff would still not abolish social privileges, which people renowned in some manner would have.
Likewise, different responsibility instiled in people by any means, will undoubtedly lead to different performance in the work place, which will, in some way or other, separate them from general social or material status.
So, it seems to me, best we could do is some form of society wich has low band of frequency in which people can move in any type of self emerging hierarchy so everyone enjoys nearly the same status.
But how do you deal with over achievers then? There would inevitably be people who, with their performance, go out of that band.
You might start by separating achievers that contribute or take from society which would then lead to having some form of arbitars which would in turn again enyjoy some type of higher status.
And so on... the only truly equal society is the one where everyone share the same thoughts and goals and do the same things, as any deviation into something new could spell special privileges for that individual.
And i do this only as a thought experiment, cos I am stuck in the loop of if not all people think and do the same thing how can we expect them to be same... So maybe someone has ideas about this. Maybe I am just crazy.
If a bear feels called to a particular vocation, that vocation is equally respected whether it is ditch-digger or administrator (which is just another job). If no bear feels called to a particular community need then the bears perform that job on a rotating basis. The story didn't describe what would happen if a lot of bears felt called to a particular job, but I presume there would just be very little work for any of them to do in that job, and that most of their time would be spent on the "community jobs".
The "true elites" have constructed a social and economic system that syphons off the majority of wealth. The "wannabe elites" at the top of the remaining pile are actually complicit servants of the elite (who cares if it is 9%, 11% or whatever). These wannabes enjoy their privileges but realize their position is precarious. Their anxiety at losing this position makes them more eager servants to the elites and they become highly protective of their own positions. Maintaining wannabe elite status is more important than effecting societal change and it consumes all of their available resources and time.
The people at the bottom of the system are always upset and spend most of their time fighting amongst themselves and scheming on how to get into the privileged wannabe group. They spend all of their resources and time just trying to survive. There is a constant threat that if this rabble becomes angry enough then they will violently revolt. The elites like to remind the wannabes that when the pitchforks come out then it will be for the wannabes, those soft/weak knowledge workers who are unable to fly to their second home in Europe. So, it is really in the wannabes best interest to quell the dissent.
In this narrative, the alliance between the insanely rich and the dirt poor makes sense. The real elites let the educated wannabes know they have their finger on the button. They do so in subtle think pieces in the kind of magazines the rabble won't read. Don't forget, your comfortable lifestyle is predicated on serving the elites. If individually you rebel then you will lose your privileges. If en-masse you rebel then there will be a violent revolt directed at you. Good luck finding a way out of all of this is what the author leaves us with.
The wannabes are the dupes in a con-game. We think we are in on the con and yet we also realize that if things go bad then we'll be the ones left holding the bag. We're being taught to accept an inherit complicity as a means to convince us to keep going along with it. You already knew everything there was to know before you read this article.
It feels to me that the idea of sacrifice has become a secular heresy. Humility as well. If the middle class has any hope of allying with the lower class then those two traits will have to ascend from ashes. The real questions is: are we too far gone and is it too late?
I'd honestly ask a slightly different question : how much longer will the lower and middle classes pose a realistic threat to the elites?
To date, economic and social elites have always been at the theoretical mercy of the masses simply by virtue of vastly inferior numbers. We're not that far off from a day when - as a result of technological advances of various kinds - a small minority could feasibly defend themselves both physically and politically against the rest of society.
To me, that's honestly the real ticking time bomb. People can change, grow and adapt to any number of situations - and are remarkably good at finding common ground with their neighbors when necessity dictates. However, once the masses lose their ability to meaningfully threaten the elites, the entire question becomes moot and the ship will have sailed for a long, long time.
Look no further than China. They've already instituted a social credit system to control the masses' political discourse, and to prevent dissidents from gathering together and to have neutral groups turn against them for fear of reprimands.
The future does not look good for the poor, and unlike yester-century, theres enough surveylance technology and automation to snuff any rebel group before critical mass.
As long as weapons of mass destruction can be engineered by a person with a couple of thousand in resources. Bioweapons are technologically getting easier and easier to make.
The lower classes may have fewer really smart people, but they are not totally lacking.
And never forget that the upper classes do occasionally spawn a class-conscious wannabe hero.
The facts in this piece are by and large true (although if you look closely you can see a few opinions and judgement calls that have calcified into facts). However, Stewart's class confessional is the essence of "fake news", in that it assumes a viewpoint, speaks authoritatively and factually from it, and ignores the gaping details that would contradict his story.
The assumed viewpoint gets slipped into the middle of a sentence like this: "Every piece of the pie picked up by the 0.1 percent, in relative terms, had to come from the people below". Read: increases in absolute wealth do not matter; it's all about the Joneses. Just as when postmodernists academics obsess over power hierarchies, you can see the hunger for power at the core of their doctrine, so it is here: when pop-socio-economists talk to no end about inequality, you can see that they are driven not by a desire to improve conditions, but by envy and by (as Stewart projects onto the Trump base) resentment.
Where is the discussion of poverty here? Stewart cares not a whit about poverty. Ctrl-F for it: the single instance of is in the phrase “relative poverty”.
Thus we get a sentence such as “We are the staff that runs the machine that funnels resources from the 90 percent to the 0.1 percent”, which is dynamite verbiage if you clicked on this article in order to wallow in your upper middle class guilt. But read closer: the wealth of the 90% has, in point of fact, not gone down, merely stagnated. They have not been funneled from, except in these relative, zero-sum terms.
As far as the “gaping details”, any discussion of inequality that is so myopically focused on one country in the global system is missing the big picture. Here’s what’s been going on with actual, absolute wealth since the 70’s: huge swaths of the developing world have been raised out of poverty. A few lucky, skilled, well-positioned, and/or hardworking elites, both in the US and abroad, have gotten fabulously rich off the new global economy. And yes, incomes for the bottom 90% in the US and Western Europe, far from keeping pace with this global growth, have risen hardly at all.
(How does this story of massive poverty relief play out for the secondary concern of inequality? Exactly as advertised in every true-but-fake screed, wealth inequality has skyrocketed within the United States, and within China, and within [insert your country here, probably]. What is scrupulously avoided by Stewart and others is that, as the gap between countries narrows, the overall contour and slope of the global wealth distribution has remained roughly constant).
If you do care to grapple with the messy data, you could pick worse starting places than here: https://ourworldindata.org/income-inequality (although you can see in the title that Roser and Ortiz-Ospina are already starting from two wrong premises: that “inequality”, not poverty, is the topic at hand, and that “income”, not wealth, is the natural locus of that inequality).
However, Stewart mentions none of this. If we assume good faith, we can chock the omission up to Stewart’s ignorance and his meager qualification to preach on this topic. If we assume bad faith, then his careful aggregation of confirmatory true facts and dismissal of the big picture data is straight up mendacious, or as the tweeter of the best words puts it, fake.
Note that this characterization is not personally specific to Stewart. It applies also to the fake rebuttal from Slate in the link above. Both magazines assume the premise that inequality is the problem, not poverty, and then they bicker about ...
Unfortunately, we're heading toward the end of this era. Without some kind of miracle (this isn't totally unlikely, but we can't exactly count on it), we will have to either dramatically lower our average standard of living, or reduce our population, in order not to totally overwhelm the planet's carrying capacity and therefore die out totally. Most likely, we'll need to do a bit of each.
The trouble is that it's hard to get most people behind a plan that says, basically "We are reducing everyone's standard of living, including those of you making $1/day and those of you making $100,000 a minute. We all have to do our part."
A still-difficult but much easier sell is "We're reducing inequality by giving some of us a hand up, and the richest of us are going to pitch in to help. We can't all live like Trump or the Sultan of Brunei but we can all be free from want without destroying the planet or suffering any mass-genocides."
The easiest sell of all is "We can all be rich and live like modern-day Americans for eternity! All we need to do is de-regulate all of these job-creating, wealth-producing industries and boom! Invisible hand!" But that's a lie.
Unfortunately, the easiest sell is the one that gets sold, but that's not to say that the middle one isn't something we can shoot for when the Plan A status quo becomes coming apart at the seams. Whether that will be too late remains to be seen.
Debt has become the biggest product leading to wide scale financialization and rent seeking. Lobbying and revolving doors has further added to entrenched interests benefiting at the cost of the whole.
This is at the heart of how you define a country, a collection of economic interests arbitrated by the market as an end in itself, or a 'society' with larger goals. The neoliberalism agenda has convinced many of the first.
[1] https://www.nakedcapitalism.com/2018/05/capitals-share-incom...
A surreal and sad vision.