It's called "capitalism".

It's the "market economy" - that's so much superior, remember?

It's "business" ...

... and guess who (almost) all get "the business" ...

or should that be "the shaft"?

ole joyful

P.S. Thanks for posting this.

o j

I'll be the devil's advocate here. I know people who fit that 99% with that income and from what I can see they work their tails off. Why should it trickle down?

I didn't go to the link, but many, many of us are in the top ten percent and we've work hard for every dime. I didn't have a dad who could leave me a million, but he instilled a work ethic which allowed me to create my own destiny.

Gloria

I'm with Gloria. I won't even go into my family's economic history but I can also say that whatever I have today is because I worked hard to earn it. I'm glad there is still an incentive and an opportunity to do that in this country. Though I think that is changing as our society changes into one where more and more people want more but do not want to be accountable for doing what it takes to earn it or save it to build wealth.

I don't spend any energy begrudging rich, super rich or whatever. I just focus on putting my energy toward what I can do to improve my position in life and in turn share part of my good fortune with others who are still struggling.

I'm not in the top 10% either. But I think there's a difference between the rich now and the rich "then". Back in the day, the Rockefellers and Vanderbilts and such created library systems and art museums and the like. Now the rich buy $15,000 umbrella stands and half the richest people in the U.S. are members of Sam Walton's family. Last time I checked, none of them worked at Wally World. And Wally World employees have ended up going to hospital ERs because of their non-existent health coverage.

Yeah, there are a few billionairs creating foundations (Bill and Melissa Gates were finally goaded into it). I'm sure back in the robber-baron days there were people who took the money and ran, too. It just seems to me that the principle of noblesse oblige counted for more back then. Now it's "everyone for themselves!"

Gloria and Gibby, I might not be explaining this well. The "trickle down" economics held that as the economy got bigger and better, everyone should gain. The money doesn't actually trickle out of the pockets of the wealthy, more like "a rising tide floats all boats" idea.

What is striking in this study I think is that it alters the common notion of an increasing gap between rich and poor. The gap really is between the super rich and *everybody* else, from the regular rich (is there such a thing?) through the poor. No one is gaining, except for the super rich. For the rest of us - the poor, the middle class and even the (regular) rich - "it is like chasing a speedboat with a rowboat." The gap just grows.

As for the super rich working harder, I doubt they truly work more than 4 x harder than someone making 100,000 or 10 x harder than someone making 40,000. And those at the very top - no way can they work 100 x harder than cops, bricklayers, nurses, teachers, mechanics, etc. Many super rich really don't work in the traditional sense at all. Think entertainers, athletes, corporation owners (not the CEO's though they can be well paid too) pyramid toppers, etc. It may be a composite income of 20-50k per board membership or consultation or speech or whatever. Not people with jobs necessarily. And I don't begrudge them their place at the top - nobody is gonna pay me to talk or sing or play football and I wasn't born a Walton. I accept that. No problem with them being up there on top, so much as with the collective effort to get that top to go higher and higher while everything and everyone else stalls. That is the point of the study.

FYI, I've attained financial security the old fashioned way too myself, and I am grateful every day. My concern is for the upcoming generations and where this is all headed. How can folks better themselves when wealth is being hoarded at the very top in a way that has never been seen before? It just seems wrong.

celticmoon - I understand what you're saying. However I don't agree that regular people are not getting ahead. I'm just a regular person and I am. It doesn't bother me if the super rich are getting richer. If you were born into it, I'm sure your wealth just continues to grow exponentially from one generation to the next. I wasn't born into it so those folks are going to continue to get farther and farther ahead of me. Or if you have the initiative, smarts and risk taking demeanor (Bill Gates) to start a business and you make a ton of money - you deserve it.

I think part of the reason some people aren't getting ahead is because they aren't making the right decisions to get there. Getting oneself in alot of debt and paying alot of interest expense doesn't get you ahead. Having a family before you get a good education so you can support yourself and your family doesn't get you ahead. Having an 8-5 mentality where you're never willing to go above and beyond the minimum requirements of your job doesn't get you there either.

I also think our society is changing from the old immigrant work ethic where people felt they were responsible for their own success. We are now generations away from the driven, motivated people who wanted to make a better life for themselves. Now we have more people who want someone else to make a better life for them.

It's not perfect but I still opt for the opportunities capitalism affords rather than a socialist society - though I would not be surprised if future generations do not transform our country from capitalism to socialism.

But the folks with the 8 to 5 jobs have their workoads increasing everytime the employer "rightsizes" and you are expected to "do more with less!" Who still has an 8 to 5 job and goes home at 5? No one I know. Get a degree or two and you are called a "professional." What does that mean? You are salaried and not elligible for overtime pay, but have to work until the job is done, giving the employer an hour or two extra most days. For this, you get the same relative pay as before, with increasing costs for your benefits. "Professionals" in my or DH's field cannot get second jobs because you can't get out of work at job #1 on time, so cannot reliably get to the evening job! If you don't give unpaid overtime work to the company, you are not a team player. On top of that, when something goes wrong, the "professional" gets blamed for not being on top of everything. For example: a local couple was tragically killed by a man out on parole who should have been in jail for a parole violation. The parole workers have more work to do with 2/3 the staff they had a few years ago and some politician is yelling on the radio that the parole workers involved in the case must be fired. Example: a foster child was killed and the foster parents are on trial for murder. There were warning signs and the workers missed them. The foster care division was decimated by folks taking early retirement offers a few years ago and none were replaced. Foster care workers can't possibly follow eveyone on their caseloads. They are being blamed though for the boy's death. It is almost a liability to have some of these jobs - you can be sued or prosecuted or lose your job for not doing the impossibe!

Around here, the trickle is yellow and smells a bit pungent.

So where is that rising tide?

Gibby, is it really capitalism anymore if we shift to an oligarchy?

Over dinner DH was wondering why this bugged me so much, saying we are doing OK. I agreed, but said, maybe when the revolution comes, I 'm just hoping the masses don't come after us instead of that 1% that really took all the money!! He said that 1% already has it all figured out so that they don't get touched. Sheesh, I thought I was getting cynical...

And Nancy in Michigan: I am coming off 25 years in public health. You are right- it is a mess.

"Oligarchy is a political regime where most or all political power effectively rests with a small segment of society (typically the most powerful, whether by wealth, family, military strength, ruthlessness, or political influence)."

Hopefully if the majority of the population feel that this is the case they will get out and vote for a new government that makes changes necessary to shift wealth from a few to all. Consistent with my theory, many people seem to think someone else is somehow going to take care of this for them - rather than voting, contacting their elected officials, organizing, etc.

I also think our society is changing from the old immigrant work ethic where people felt they were responsible for their own success. We are now generations away from the driven, motivated people who wanted to make a better life for themselves. Now we have more people who want someone else to make a better life for them.

I think many people have had it beaten out of them.

I work at a company that has many employees who have been here 30-40 years in an area of the country known for its work ethic. Lately, as part of a "productivity" kick (don't ask how the company managed to survive and prosper for more than 100 years; we must cut now), some low-profit (not unprofitable) lines of business were shut down and folks elsewhere were "offered" early retirement. You should hear the anger in their voices, years after the fact, when they express their disgust at being laid off after years of hard work. Those of us who are left have been served notice that, unless we're one of the absolute top performers (limited arbitrarily to a certain percentage of employees), we likely won't see a raise that keeps us even with inflation.

I have worked at companies where entire divisions of people were hauled into room and told that we were all being laid off. Had nothing to do with the quality of the work we did; it was a bad business model and, so, there was no business. But we were all gone. Except for the folks in the corner offices.

You have scandals like Enron, Worldcom, Adelphia, and Tyco, in which "worker bees" got stung by management who bilked the company for millions and left the workers without jobs, insurance, or retirement savings they earned (!). The future of the bandits who led these companies may be in prison, but at least it's assured.

You have union agreements which remove any incentive to do something "above and beyond." For that matter, there are non-union jobs which are the same. They want everyone to do the same thing all the time -- even if coloring outside the lines a little bit would keep a customer. There is no incentive there to do that better job.

There certainly are people who are overloaded, burned out, unmotivated, and just sucking in oxygen for their 40 hours a week. There are others who were fine, but no longer see any linkage between the quality of the work they do (beyond a certain minimal level) and their ability to get ahead. As Pogo said, "We have met the enemy, and he is us."

The corporate gang talk a good deal ... "good deal" - don'tcha like that term ...

... about how competition keeps the tigers in line.

And - they love competition ... among their suppliers, os they can play one off against the other to get a deal that means that the supplier makes almost no profit. Especially if they're a big enough customer that the supplier will do almost anything to avoid losing them.

Also - they love competition among their customers. Especially if they are big enough, e.g. nationwide or international, and thus enjoy mass purchasing power, so that they can sell lower than the purchase cost that many of their competitiors face.

But - these guys hate competition on their own level, and will do whatever is necessary to get rid of it.

Buy out the competition, or squeeze them out, or encourage regulatory bodies to make decisions that favour you, etc.

How many fields of enterprise are there in our countries where something like 80% of the market is not controlled by about half a dozen companies or so?

Our governments have conducted several inquiries into the prices of petroleum products - and always comclude that there really is competition.

Yeah, right!!!

And - who believes them?

Maybe about half a dozen people, in this city.

As I said in another thread - how many millions does it take just to get nominated to run for President? And how many more millions in the run-up to the election - or for a seat in the Senate, or Congress, for that matter.

Who pays almost all of the shot?

It isn't John Q. Public.

And who benefits?

John Q. Public???

Yeah - right!!!

Have a happy weekend, everyone.

ole joyful

I'm grateful we live in a country where, for the most part, we're a product of our decisions. I am, and I'm not complaining about anything. Guess I made good decisions.

Reminds me of the New Yorker cartoon with the big fish eating the middle sized one eating the littlest: The big fish's thought bubble was "Life is fair, the middle one, "Life is somewhat fair," the littlest, "Life isn't fair."

If only our lives were entirely a product of our decisions. Most of us do not, alas, choose to have the early death of a parent or a chronic disease. If your choices have worked out for you, that's marvellous. And of course your decisions have an impact on the outcome, but it always struck me as particularly smug to assume that because things have worked out for you financially (or emotionally or any other way) it is entirely because of your own wisdom. Wisdom helps a lot-- but it can't protect you from a catastrophe, or supply the place of a little luck.

What a pity I am not wise enough to be, say, the president of Tyco, using $1 million of company money to throw a birthday party for my spouse. Or an Enron executive creatively juggling my books so that the unenlightened public keeps buying the stock. The gap between very richest and the very poorest is worse than ever in this country. I'm not talking about ordinary millionaires-- the ones I know fit into the little-bit-of-luck-worked-hard-for-it category. I'm just doubting if any executive is worth, say, 3000 times the lowest paid worker. The culture of this country is highly tolerant of that kind of thing and obviously I am in no position to change it, but I will never agree that it is justified because, by gum, that Tyco exec made such wise decisions and gosh does he *work hard*.

Yeah, Demeron, it is that ever expanding gap that is the issue I meant to highlight. When the profits are sucked and consumed nearly entirely by the very, very top tier - as is practice of late - something is amiss.

Hard work + talent + opportunity + luck will surely still lead to the good life. Miss one componant though, and this developing constriction in what is left out there to go around could really hurt.

Good news from Detroit and Stutgart:
Next year the DaimlerChrysler white collar workers (non union) will pay more for their health care benefits based upon their pay rate. The big guys will pay up to all of their own health insurance costs, while DH's will rise a few hundred dollars. This year we have a plan with a $2400 deductible and 20% copay, so we are paying more for our health insurance benefits already.

At least somewhere, someone is paying more for some perks!

Last night I visited my daughter to pick up her ("dog" - but that's a word denoting males, and she's not, so she's a Female Canine, i.e. F C) F C, as daughter's going a way for a week holidays, this being her SO's slack season.

While there I picked up an interesting book, titled "The World is Flat", written by Thomas (he may be a hot property) Fried-man (no, the name is really "Friedman").

It tells of some of the speedily changing realities that are facing us in the 21st century.

Says the internet is demolishing the old hierarchies, and democratizing the world - making us a lot more equal.

Which can cause some serious dislocations for us, who have been at the top of the heap for a few generations - but there are opportunities for us.

But - we'll have to pull up our socks.

I'm finding it an interesting book.

I think that a number of you might find it so, as well.

I'm thinking that it should be required reading for all of our young people.

Good wishes for what's left of the weekend, everyone.

ole joyful

The issue isn't that the people in the top percent haven't worked hard (most of them) and made smart decisions to get there. It's that the same amount of hard work and smart decision making that puts them into that top percent are now earning them about twice as much as it would have a couple decades ago. Meanwhile, the same amount of hard work and smart decisions that place the rest of us where we are earn the other 99% of us about the same as it would have a couple decades ago.

No one's saying we shouldn't have rich people. But there has been a shift in our economy that is now giving a bigger share of the pie than ever to the people at the very top of the ladder. Yes, by and large they may have earned their place at the top of ladder. Working hard still lets us climb the ladder, and individuals can make choices that allow us to earn more or less money by changing our spot on the income ladder. But somewhere along the line we started giving the people at those very top rungs more and more money for the same success and hard work (thus the comparison to productivity gains), without similarly rewarding the rest of us also for our same success and hard work that puts us at our respective rungs on the ladder.

It helps if you're a member of the old boy network.

o j

I agree that it's a lot of breaks that get you up on top, not necessarily hard work. A top guy of our company was hired in and received a huge signing bonus. Paid very well in the couple of years he was here. Did he work hard for it? No way. He was always on vacation or playing. There definitely wasn't any respect for him. He ended up leaving the company and was paid millions to do so to get rid of him. Others put in 80 hours a week working hard and making the company successful and all they get is a 2% increase in wages each year and a 15% increase in their monthly cost of health care coverage. Fair? I don't think so.

I know of a fella with good ties to the "old boy network." He went to college, did okay, but did not excell in anything. He worked in a couple of businesses that were related to his father's field and his dad's friends mentored and babyed him through. He'd get loans or even handouts to start a business with a sharper pal of his dad, work a bit in the field, then sell and move on - always at a profit. It was like cronies were jumping out of the woodwork to offer him co-ownership in things! Some of the businesses did okay, some not, but he always sold out in time and got to keep all of the profit he made. He never really had to struggle - to work for what he got. So now he says he's a self-made man and everyone else should be able to do the same thing. Problem is, he now has the power to make decisions about programs that were built to help those without "a hand up" to rely on. So he cuts these programs because they are breeding "dependency" in those they helped and makes sure everyone in his cronys' tax brackets gets huge tax cuts.

I guess you can't understand what it is like to be a just plain regular guy unless you've been one at some point.

That fella you know is a poster child for the "old boy network." Another comment I heard about him is that he "was born on third base but thinks he hit a triple." Uh-huh.

Do I note a touch of cynicism around here?

We in the rich part of the world have to learn how to navigate in tomorrow's world - and changes are happening at tremendous speed.

The book, "The World is Flat" that I spoke of above, by Thomas Fried-man (that's really "Friedman") gives us some useful navigational aids in sailing that uncharted world, I think.

He's talking of a great levelling of the worldwide playing field, with the reduction of traditional hierarchies.

More opportunity for smart individuals - that are knowledgeable, and quick on their feet.

Hope you're enjoying spring - I had some ice on the windshield this morning and a bit of snow falling, but it is melting (mostly).

ole joyful (thankfully enjoying pension[s], as a retiree)

yeah, Steve, and some yahoos keep electing him!

Ole Joyful, we keep thinking of defecting to Canada.

Here, my crocuses are trying to bloom (at the old house I am trying to sell) and the eranthus have been in bloom for a few weeks. Spring is here,,, if you look hard enough.

yeah, Steve, and some yahoos keep electing him!

If the poster child's poll ratings are anything to talk about, the clouds are parting for some of those yahoos and they're thinking better of their decision .... Maybe there is hope after all.

I wonder to whom these guys might be referring?

Someone whose face we see on TV from time to time, possibly?

Sure is great ...

... making the world (well, part of it, anyway) safe for business (well, some of them, anyway).

Have a happy weekend, everyone.

ole joyful

More developments - this from Wednesday 3/22 paper:

A study by Harvard and Cornell reported on exponential rise in CEO's pay:
1993-1995: the top 5 executives in publicly held US companies took 4.8% of company profits.
2001-2004: the top executives took more than 10% of net income of the companies.

The article noted that now even the (wealthy) stockholders are taking notice and saying, "Hey, wait a minute!"

Peter Buffet (who FYI earns $100,000 running the famed Berkshire Hathaway 137 billion investment firm) states: "Too often, executive compensation in the US is ridiculously out of line with performance. The upshot is that a mediocre or worse CEO - aided by his handpicked VIP of human relations and a consultant from the ever accomodating firm of Ratchet, Ratchet and Bingo - all too often receives gobs of money from an ill designed compensation arrangement."

In 1990, CEO's made 107 times the avearage production worker's salary.
In 2004, CEO's made 431 times the avearage production worker's salary.

This is a problem.

Meaning the very very rich are getting much much richer, and not much is trickling down at all.

One fatal flaw. Krugman tends to make a lot of these by the way. The top earners are usually different people every year. The WSJ did a piece on this a couple of years ago. Seems people play all kinds of games to mess with their stated incomes and defer paying taxes.

Then the top tax rates get cut and taking that defered income suddenly seems like a good idea.

They sure are good at navigating, tough.

And have a lot of help in doing so.

Not like your average Joe/Jill.

o j

Do you think those people spend alot of that money in such a way that they purchase stuff that helps other companies thrive and employ people? Or do you think they hoard it in some way that does not contribute to the economic benefit of others? I'm thinking it's gotta' trickle out in some way - albeit not directly in the form of proportionately greater pay and benefits for the lower level people working at the same place.

And even if they don't pay as much tax as some people think they should, they probably still pay millions in taxes. Which could contribute to something good for someone less wealthy - granted alot of tax revenue is wasted by our inefficient government bureaucracy.

Use it to build a plant in a low-wage country, maybe?

o j

joyful - I doubt they'd use their personal income to build a plant in another country. Buy a new car, yacht or build another home - maybe.

I get amused by people that like to judge how 'hard' others work and whether or not they deserve their salary. I think one thing that very few take into account is the sacrifice that one makes in order to get wealth. Maybe "sacrifice" is not the right word, perhaps 'choice' would be a better one. I look at people that are 'super rich' and would not want to be them for anything. Sure, they have money, but I have a functional family and I get to go home every night and see them at 5:00 PM. I don't have a lot of wealth, but I also don't work real long hours. I don't have a bunch of people whining about wanting my money that truly don't have a clue about how I got it. And I have my privacy.

And back to the idea about who works harder and how they should be compensated. Who is it that you would like to step in, evaluate everyone's job and work performance across the country and determine your salary based on how "hard" you work?

There isn't one person who is entitled to another person's wealth (unless the person had it stolen from them by that wealthy person).

And any politician who tells you that he/she is going to raise the taxes (or remove those 'tax-breaks') on the superrich and give the non-rich that money is just trying to get the vote from the non-rich. You see, there are far more non-rich than super-rich, so they are an easier target by politicians for votes. Those politicians have been playing this game for a long time, yet isn't it interesting that nothing has really changed?

I've said for years that it's important for a group, say fifty non-partisan people who are politically aware in a constituency, to subscribe to the transcripts of deliberations in Parliament, etc. and increase their knowledge of what's going on in the political realm.

Then to call public meetings on occasion where they asked a number of searching questions of the sitting representative, plus some leading local representatives of other parties. Refusing to pay attention to bafflegab, etc.

Should we do that - we'd get more responsible representation.

In this portion of the democratic world - them with the money don't got many votes.

And them with the votes don't have a lot of money.

And are getting less, for millions of desperately poor peole in distant countries are delighted to work for much less than $20. per day, while people in this part of the world feel badly used if they make under $20. per hour.

Guess who'll be getting more and more of the available work?

ole joyful

And back to the idea about who works harder and how they should be compensated. Who is it that you would like to step in, evaluate everyone's job and work performance across the country and determine your salary based on how "hard" you work?

Agree. Generally I think people feel they work hard. However it is usually WHAT you are working hard at doing, and how valuable the economy thinks that job is, and how hard it would be to replace you, that drives compensation. I can guarantee the guy doing landscaping in 100 degree Florida heat is in fact working very hard, but if there are 1000 other people who can dig a hole to put in a tree, he is still going to get minimum wage.

Precisely.

And while there was a scarcity of labour in our part of the world, labour unions could have some teeth.

But now that there are millions elsewhere willing to build stuff ...

... the plant closes here - and guess where a new one opens?

When I lived in Korea, where there was (not counted, but probably) 35% or higher unemployment, what chance do you think there might have been of telling an employer that if the workers didn't get a better deal (no matter of what kind) - they'd go on strike?

Not many could afford to read papers, but the bosses didn't need to advertise.

All they had to do was tell half a dozen people that they had openings for workers and ...

... a thousand people would be waiting at the gate, the next morning.

Many of our workers are now in that kind of competition.

Enjoy your weekend.

ole joyful

And any politician who tells you that he/she is going to raise the taxes (or remove those 'tax-breaks') on the superrich and give the non-rich that money is just trying to get the vote from the non-rich. You see, there are far more non-rich than super-rich, so they are an easier target by politicians for votes. Those politicians have been playing this game for a long time, yet isn't it interesting that nothing has really changed?

That's because, at least in the U.S., we are truly conflicted about what we say we want and what we do. Especially where money is concerned. Ask people -- rich and not-rich -- what's most important to them in their lives, and they'll most likely tell you that they want to be safe against crime and physical danger; they want their kids to get a good education; and they want to know they can get older without worrying about the roof over their heads or whether they can afford to be ill. Folks who really are thinking about it probably will tell you they want to be able to live their lives in peace.

But our elected representatives are busy chopping away at all of that. Tax cuts and other budget priorities remove cops from the street; take inspectors out of meat-packing plants and slum housing; keep trimming programs like Head Start and after-school programs for kids with nothing better to do. Politicians refuse to consider a single-payer health plan based on the ideas that it will make them look like a shrill Senator from New York or that it would take away from our "best health care in the world" (which objective measurement will verify is no longer so). Politicians are busy approving reductions of income during wartime; subsidizing huge public corporations, and funding bridges to nowhere instead of supporting education and health initiatives. And, as a public, we have collectively up-ended our priorities and pay people millions of dollars a year to catch a ball or sing a song -- while poorly-paid public-school teachers are digging into their own pockets to fund school supplies. What the he!! is wrong with us?

Every rich person has a vested interest in seeing the non-rich do decently -- because, if they don't, there won't be anyone making enough money to pay the rich's Social Security come the time, there will be much more crime on the streets, and this country will be much less attractive to those folks who we wish would move here and add to our culture.