There’s your problem right there. This helpful video gives graphic representations of what most people think the distribution of wealth ought to be, ideally, in the country; what most people think the distribution of wealth actually is; and the actual reality of our distribution of wealth:
Our economic machine is diverting a lot of resources to a subset of people who aren’t generating commensurate value from their work or ingenuity. This is happening because they are able to leverage their position in the economy to appropriate value being generated by others. That’s wasteful and inefficient.
This is not advocacy for just giving everybody the same amount of stuff. It doesn’t even have to be precise – if the wealthy get within shouting distance of taking in something close to the value they create, we’ll be good. But, it defies belief to think that the wealthiest 1% are generating 40% of the economic activity in this country.
Throw in the middle class and slightly upper middle class that is supporting their kids, grandparents, etc. If you truly want to see the poor don’t go to the big cities just pick a small or medium size town in Indiana and drive around and see the houses. I’m from the middle of Indiana and Anderson, Alexandria, Elwood, and Frankfort (pick all most any town in Indiana) and it’s sad to see how the towns have deteriorated. Truly a sad sight!
I drove through the guts of Central indiana on Saturday Indiana 13 from Lapel, through Elwood, Swayzee and Wabash and then South Whitley. These cities are rotting from the insife out.
Guy77 is right on. But the video is most telling. My observation of the ultra rich is that the more money they earn, the less risk they take. Growth stocks to higher dividend yielding stocks. Then bonds and finally to munis.
Chip away have of the uber wealthy’s dough and put it in the hands of people that will spend it or start or expand their business, and the multiplier effect would be huge.
And while we are at it. build prgressiivity into state and federal tax codes do the poor do not pay higher effective tax rates than the wealthy.
BTW, I shared this with an acquaintance whos is hard line coversative Obama hater, tax bill complainer, and bigot. We have good comunication because he used to be anamature motorcyle racer like me and we both come from farm families.
Even he was dumbfounded by this chart. His reponse was no wonder all our friends are broke.
Which is a problem. It should be.
Wealth equality is a necessary prerequisite for a free society.
I don’t think wealth equality is appropriate unless everyone is creating equivalent wealth. I subscribe to the capitalist notion that incentives are necessary to induce effort.
Why? What is the morally-relevant link between production and right to access wealth?
The ethnographic record conclusively demonstrates that that’s not the case. At most, it demonstrates that there is no need to make access in any proportional to the amount of production.
Heinz CEO William Johnson is entitled to a $56 million golden parachute if he’s fired by the company’s new ownersThe deal lets him walk away with $40 million at any time if he chooses. He would get another $16 million if the new owners were to let him go.
In addition, Johnson is entitled to a payout of $99.7 million in vested stock and $57 million in deferred compensation benefits that he accrued over his 30-year career with Heinz. That means he could walk away with a total of $212.7 million.
Here’s a big problem if Johnson screws up he still gets 56 million dollars running Heinz. If he gets hit by a bus and dies do you think Heinz will nose dive and go into financial ruin. These guys are no where worth this kind of money, but if one company pays a CEO millions then the rest follow like sheep. It is amazing that public companies all of a sudden think that every CEO is worth millions. Until you change the way corporation board of directors hold the people running a company liable things won’t change.
CEO Gary L. Neale who talked NIPSCO’s board into buying Columbia Gas and tanked NIPSCO’s stock for a number of years after the bad decision, was able to retire with a golden parachute and was even awarded a Board of Directors seat. The rich in corporate America just seem to have no accountability for any bad decisions they make.
Joseph Stiglitz makes these points in his books and articles, as does Chrystia Freeland in “Plutocrats”, but this video shows it in a clear and visual way. Sometimes folks need to do something like this to get the message across. This is a fine public service.