Income Inequality: Rich Get Richer Poor Ger Poorer - Myth?

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  1. GA Anderson profile image92
    GA Andersonposted 9 months ago

    I stumbled across these two videos that proclaim that thought, (rich get richer...), is a myth unsupported by factual data.

    Both are conservatively biased sources. But, is their data wrong? Does the source matter if it is only the data that is considered.

    Stossel's point claims that while the rich have gotten a lot richer, the poor have also gotten 32% richer - not poorer:

    *click image to view
    https://hubstatic.com/14524676.jpg


    Next:

    This one by a Prof. Davis speaks to the disappearing Middle Class - Yes, it has decreased, but it is because they are getting richer, not poorer. The graph in the image is hard to read, but the bars represent 10-year increments. The blue bar on the left is 1970, and the orange bar on the right is 2013

    *click image to view
    https://hubstatic.com/14524681.jpg
    *graph explanation starts at about 11:15

    I think they are worth a few minutes viewing for a good conversation. I have not checked into their claims - yet, but expect to as I see points to confirm or debunk.

    GA

    1. wilderness profile image95
      wildernessposted 9 months agoin reply to this

      I predict you're not going to find many people that agree or even understand this.

      A while back my nephew and I built a spreadsheet, comparing the ability to survive in the 60's with today.  We used both minimum wage figures and average wage figures, but when it came time to consider pricing those figures were converted to hours worked to purchase, whether a car, a home, education or a pound of hamburger.

      In very nearly every case it was "cheaper" (in terms of hours worked) to buy what we need or want today that it was in the 60's, and that did not take into account either the massive welfare entitlements we give out OR the relative quality.  Consider that cars are much cheaper to operate and maintain today, and house sizes have nearly doubled in the past 50 years - these kinds of things we did not even TRY to take into account.

      Bottom line; as a nation we are NOT getting poorer.  Instead we have riches beyond the dreams of those that lived just 50 years ago.  And it is spread over the entire range of incomes - the poor today are wealthy indeed compared to the poor 50 years ago and the same thing is found whether we're "middle class" or "wealthy".  The only thing that has really changed is our definition of poor, wealthy, etc.

      1. gmwilliams profile image84
        gmwilliamsposted 9 months agoin reply to this

        Gus, studied the graph.  My late mother made a prediction 4 decades ago that there will only two classes in America: the very rich & the very poor-no middle class.   One has to look beyond the paradigm that the so-called rich are becoming richer while the poor are becoming poorer.  Why is that?  Well, the rich have a different culture & prospective then the non-rich.  Rich people, whether inherited or self-made, see & approach society far differently than the poor & middle class.  They refuse to see themselves as victims of society.  They MAKE & OWN their lives.  They see the world as their oyster to make of it as they will. 

        The rich also view money in a positive light & know how to make money work for them.  They see opportunities when the poor & middle class see obstacles & difficulties.  The rich live in the self-actualization mode while the poor & middle class live in the security mode. On the contrary, the poor view life as a neverending purgatory, even hell.  They feel that they have to fight each day just to survive.  They also have a negative attitude towards life- they feel that the world is out to get them.  They furthermore view money as an evil.  There are poor people who see poverty & struggle as spiritually superior & see those who are affluent as somehow corrupt.   This subconscious attitude influences their success level.  Also, the poor feel that they must settle because aspiring to success is a worthless endeavor.

        The middle class, particularly the solidly middle class, don't want to rock that boat.  They want to be comfortable & follow the rules.  They want to be successful but not too successful.  They chose the safe route careerwise because they don't wish to lose what they have.  They are deathly fearful of risk. One can describe the solidly middle class as risk aversive.  They want that organizational job & go up through the ranks.  They are in jobs that they didn't make.  The middle class is a higher level wage slave while the poor are the true wage slaves.  Also, the rich will never be disposable as they have their own brand while the middle class & poor are disposable as they don't have a brand- they are OWNED.

        1. GA Anderson profile image92
          GA Andersonposted 9 months agoin reply to this

          Grace that is a very studied response, thanks, but, (I should know better than to do this), I must disagree with your mother.

          I think there will always be a Middle Class just because the physics of matriculation demands it. The Middle Class is the transition phase for both upward and downward mobility.

          Looking at the graph it does seem that the Middle Class has the most significant changes. Meaning, it is still there, but its changes are indicative of the more significant changes in the other quintiles.

          Relative to your other point about the "solidly" Middle Class being risk-averse, I am going to have to give that some thought because it doesn't ring true to me. I don't say that as a rebuttal, but just as a point that my gut wants to quibble with. If I were forced to judge, I might say it is the Lower Middle class that might feel that way. Sort of like, "Whew, we finally made it, now let's not do anything to screw it up."

          GA

      2. GA Anderson profile image92
        GA Andersonposted 9 months agoin reply to this

        I agree with your comment Wilderness, but I am hoping to address two, (I believe), commonly held misperceptions;

        1) The rich can't get richer without the poor getting poorer.

        I think this is wrong on its face, without any data research because it is based on a misperception that the pie of wealth is static in size. Wealth is created. It is not a finite amount. The pie of wealth that both rich and poor get a piece of can, and does, expand or contract relative to our economy's performance. Somebody does not have to become poorer in order for someone to become richer. The second video does a good job of explaining this.

        I feel so sure of this basic principle that I haven't dug into Stossel's figures yet.

        2) The "Middle Class" isn't disappearing because they are getting poorer.

        I think, as the 2nd video proposes, that there is a change in that quintile of income, (upper half of the second quintile to the lower half of the 4th quintile, a 30 point range), because the Upper Middle Class range is moving upwards, not downwards.

        I think it is this second point that is most illustrated by the example of your comment.

        Without trying to take a partisan stance, I believe it is the Sanders/Progressive-types that most voice and emphasize, (in error, or perhaps purposely deceitful), this perspective. I think it is provably wrong.

        However, forever the optimist, I am hopeful that some of our more progressive friends will weigh in. (yes, that means you; Cred, PrettyPanther, My Esoteric, Islandbites et al.) ;-)

        GA

        1. wilderness profile image95
          wildernessposted 9 months agoin reply to this

          Well, there is no doubt in my mind that we, as a nation and as a people, are wealthier than we were in the past.  The "good old days" weren't so good for many.

          Add in that I have watched as the definition of "poor" and of "needy" has steadily grown over the past 50 years, getting ever wealthier and actually less in need, and it is quite obvious.

          1. GA Anderson profile image92
            GA Andersonposted 9 months agoin reply to this

            I have seen your closing comment before Wilderness, and I completely agree, and, I do understand your angst that that point seems to be ignored by those nowadays proclaiming how poor the poor are, but ...

            R3egardless of the measure of "poor" the point of both videos is still valid. The poor don't need to get poorer for the rich to get richer, and the Middle Class is not dying-out because they are getting poorer, they are changing demographics because they are getting richer - which is a point you will never see made by mainstream media.

            GA

    2. Don W profile image83
      Don Wposted 9 months agoin reply to this

      GA, that video was fantastic. It was the intellectual equivalent of an infomercial. It was hilarious and awful, and I couldn't look away.

      The 32% vs 200% checked out. That's a good start.

      But uh oh, apparently we should ignore the staggering difference in income growth, because 32% is more than 0, and hey iPhones! Started hearing alarm bells at that point, but was willing to  give it a chance.

      I was eager to learn what the economists at harvard and Berkeley found when they "crunched the numbers".

      What they found, said the presenter, was that most people in the top and bottom quintiles move to another quintile. Therefore, implied the presenter, of course income inequality isn't affecting social mobility.

      Unfortunately what the presenter didn't tell us, is that the same study also says: "High mobility areas have (i) less residential segregation, (ii) less income inequality, (iii) better primary schools, (iv) greater social capital, and (v) greater family stability"(1).

      In other words, the study being used to argue that income inequality does not affect social mobility, literally lists income inequality as one of the factors that affects social mobility.

      The alarm bells have been replaced by a klaxxon.

      Then we're told to consider the billionaires on the Forbes richest list. What a great example, the presenter suggests, of social mobility in all its glory. Then this picture is shown:

      https://hubstatic.com/14526284_f1024.jpg

      Apparently no one from any other demographic wanted to take advantage of all that social mobility. Maybe the other 50% of the population just don't like money! Who knows? Anyhoo we're not talking about diversity so let's skip it.

      We're shown these pictures and told all of these men are "self-made".

      Like Warren Buffett. Who pulled himself up by the bootstraps and got himself a job at a brokerage firm at the age of 21. Nevermind that the firm was called Buffett-Falk & Company and was owned by his father, who was also a member of Congress(2). That's not relevant. He was a "self-made" man.

      Or Jeff Bezos, whose grandfather was a government official with significant wealth and influence, and whose first $1 million in seed funding came from "Wall Street chums, friends of his parents, buddies from Princeton, and a small group of local investors"(3). Surely anyone can raise a quick million from friends and family. That's irrelevant. He was a "self-made" man.

      I stopped checking after the first two.

      But the best part of the video is the strawmen. The hits just keep on commin', with gems like:

      "Total equality isn't possible!"

      "Some people are just better singers than others!!"

      "The best athletes are just physically different!!!"

      "Incomes tend to be equal when everyone is poor!!!"

      And one of my favorites:

      "There's inequality in parents! I don't have any parents or grandparents!"

      And then just when you think the dumbing-down and misrepresentation can't get any worse/better depending on your perspective, we get the pièce de résistance:

      "I have two kidneys! There are people out there who need one . . . Should the government be able to take my kidney because somebody else needs it??!!!"

      No GA! They shouldn't be able to take our kidneys! Don't let them take our kidneys GA. For the sake of all that is holy, don't let the government take our kidneys!"

      You've got to admit that is . . . special.

      So in answer to your question GA, yes sources do matter.

      This video was essentially created by taking one fact, pouring a load of BS all over it, deep frying it in a verbal vomit, then seasoning it with garbage before serving.

      Here is a sensible person talking about why 32% vs 200% is, in fact, a bad thing:
      https://www.youtube.com/watch?v=cZ7LzE3u7Bw

      Now excuse me while I bleach my brain.

      (1) https://academic.oup.com/qje/article/129/4/1553/1853754
      (2) https://www.investopedia.com/university … uffett.asp
      (3) https://www.wired.com/1999/03/bezos-3/

      1. Castlepaloma profile image75
        Castlepalomaposted 9 months agoin reply to this

        GUYS GUYS GUYS DON'T like to brust your bubble. None of you have been around the world as much as I have. The US job is not to pillage and plunder the planet with the US Government Corperationism and military complex. The US Government job only is to protect its citizens. It's Not to be creative with wealthy fraud in printing money and creating wealthy digital accounts. Or join Goverment investment with banks and wall streets. 

        Most of the world is on to you and by giving the wealthy most of the tax breaks. Then taxing your citizens money to kill millions of poor people with terrorist offensive US military. You guys can't see what most of the rest of the world is aware of. This paper tiger of unhealthy products driven by greedy bastards with an exception of a few honest US billionaires and with basically good people. Is America becoming a third world country or is most of third countries ending third world countries with an exception of a few.

        You can have a few outstanding extremely tall skyscraper like Trump tower with many small buildings and rats nests. Or overall many equally tall buildings with more healthier decent size smaller buildings. I'm not popular here, yet, most of the outside world don't believe by giving it to the wealthy in hope it will trickle down to the rest of us scam. That's why most third world countries GDP growth is growing faster than the US GDP.

        Sorry, I have to say that because I am Canadian, I know we are too nice.

      2. GA Anderson profile image92
        GA Andersonposted 9 months agoin reply to this

        As usual Don, you have nailed their spinning butts to the wall. For all their biased and agenda-driven content, (the Stossel video), except for the point of the OP - that the rich are getting richer but not because the poor are getting poorer.

        That was the one point of the video, the point of the OP, that you confirmed.

        I have no argument with the rest of your analysis of the video, I agree with most of it, (your analysis), but those weren't the aspects I addressed.

        I do wish I could help you with your "kidneys" worry, but hearing some of the Democrat candidate's trail speeches, I am not so sure there is any reassurance I can offer you. ;-)

        If you felt enticed to analyze the second video, I would caution you to not waste the effort. Much of it is in the same category as the Stossel video, but ...

        The segment that deals with the point of U.S. household's migration, over the decades, from lower to upper quintiles does seem borne out by the data. Which was the only point mentioned/inferred in my OP.

        I must admit to a bit of worry that you would jump to your, (inferred), conclusion that I supported the entirety of the videos when I specifically spoke to addressing only two particular points.

        GA

      3. PrettyPanther profile image83
        PrettyPantherposted 9 months agoin reply to this

        I'm glad you weighed in on this. I couldn't bring myself to watch the second video. Hope your brain is okay. ;-)

        "Maybe the other 50% of the population just don't like money!" Priceless.

  2. Castlepaloma profile image75
    Castlepalomaposted 9 months ago

    I see in my lifetime most boarder gone.
    There is already less wars then any other time in history. Third world countries GDP is growing faster than US. Most third world countries are saying they better off than 50 years ago. Not so in America

    Pew centre research say not everyone is convinced that life today is an improvement over the past. Americans are split on this issue: 41% say life is worse while 37% say better. Meanwhile, half or more in countries ranging from Italy (50%) and Greece (53%) to Nigeria (54%) and Kenya (53%) to Venezuela (72%) and Mexico (68%) say life is worse today.

  3. PrettyPanther profile image83
    PrettyPantherposted 9 months ago

    I watched the John Stossel video. It's easy to argue against a misrepresentation. I don't know anyone who believes we need to make everyone equal, so who is he arguing with?

    I started the second video and couldn't get past the first "myth," that profit and plunder are the same thing. Who says that?

    Maybe I'll have the patience later to watch the whole video, but I'm not interested in defending positions that I and most progressives don't hold in the first place.

    1. GA Anderson profile image92
      GA Andersonposted 9 months agoin reply to this

      You have confused me PrettyPanther, the second video made a point of declaring "profit" and "plunder" are not the same thing.

      The video's point was that too many folks equate them to be the same. The point was that "profit" is not evil whereas "plunder" is.

      GA

      1. PrettyPanther profile image83
        PrettyPantherposted 9 months agoin reply to this

        Right. But for it to be a "myth," it must be widely believed , right? I don't know anyone who equates profit with plunder, so I question the premise that it is a myth at all.

        1. GA Anderson profile image92
          GA Andersonposted 9 months agoin reply to this

          Okay, I see your point, but I would disagree. I think a lot of people of Liberal views see profit as nearly the same as plunder.

          GA

          1. PrettyPanther profile image83
            PrettyPantherposted 9 months agoin reply to this

            Who? I hang out with a lot of liberals and I don't know anyone who says that.

            I believe conservative media often distort progressive views to make them seem more extreme than they are.

            1. GA Anderson profile image92
              GA Andersonposted 9 months agoin reply to this

              Here is one example PrettyPanther. The word "plunder" isn't actually used, but the thought is certainly obvious.

              https://www.warren.senate.gov/newsroom/ … talism-act

              You may not hear the word plunder used, but all those other words; excessive, disproportionate, record, maximized, etc. give you the idea.

              "To fix this problem we need to end the harmful corporate obsession with maximizing shareholder returns at all costs, which has sucked trillions of dollars away from workers and necessary long-term investments," said Senator Warren."

              Sounds like a euphemistic way of saying "plunder" to me.

              GA

              1. PrettyPanther profile image83
                PrettyPantherposted 9 months agoin reply to this

                If I say my husband's investment of thousands of dollars per year into his hobby of restoring old cars is sucking thousands of dollars away from his family and necessary investments into long-term savings, and that I would like to set some rules and limits on how much he puts into his hobby versus how much is reinvested in his family and savings, am I accusing him of "plunder"?

                1. wilderness profile image95
                  wildernessposted 9 months agoin reply to this

                  Probably.  He is, after all, "plundering" the family finances to support his hobby.  Of course that means that those "family finances" belong to you as well as to him; they are not his to take as he wills.

                  Perhaps your disagreement here comes from a different idea of what "plunder" (or possibly even "profit") means?

                  1. PrettyPanther profile image83
                    PrettyPantherposted 9 months agoin reply to this

                    Plunder means to steal or is property acquired through stealing. That is already covered under the law.

                    Edit: Re family finances, either of us could, if we wanted to, spend as much money as we want without legal consequence. If I took all our money and lost it gambling, that would be perfectly legal but most people would agree it wouldn't be morally right to intentionally leave my family with no means of support. So, my husband could take any number of measures to regulate how much money I could spend, and would be smart to do so.

                    If he does nothing, and I continue to spend all the family money, the family will inevitably fall apart, just as our capitalist system will eventually collapse if nothing is done to reign in the excesses of capitalism.

                2. GA Anderson profile image92
                  GA Andersonposted 9 months agoin reply to this

                  I did try to look at your analogy as a comparable statement, but I just don't see it. SO I am unable to answer your question - relative to this topic.

                  GA

                  1. PrettyPanther profile image83
                    PrettyPantherposted 9 months agoin reply to this

                    Okay.

                    "To fix this problem we need to end the harmful corporate obsession with maximizing shareholder returns at all costs, which has sucked trillions of dollars away from workers and necessary long-term investments," said Senator Warren."

                    Sounds like a euphemistic way of saying "plunder" to me.


                    Please explain how that is saying "plunder" because I don't see it. What I see is a statement about how corporations are prioritizing shareholder returns over workers and long-term investments. It is implied that this is a bad thing for the future of our capitalist system, but nowhere does it say anything that would imply plundering, which is stealing.

              2. Castlepaloma profile image75
                Castlepalomaposted 9 months agoin reply to this

                Agree

          2. Ken Burgess profile image91
            Ken Burgessposted 9 months agoin reply to this

            That is part of the problem isn't it.

            When more and more of the population expect/demand that their government supply them with food, housing, medical care, schooling...

            It appears the beliefs of progressing generations are shifting further and further from a 'earn what you have' merit system, to a 'its my right to have everything given to me' without effort system... which of course isn't economically maintainable for any meaningful length of time.

            I would say in general we are far richer across the board, I grew up in a house with one color tv, my kids grow up in  a house with 3 color tvs, 4 computers, 4 cell phones and multiple other devices (IE - Nintendo, Ipad, etc.).

            But 'richer' is relative...

            I grew up in a home where a parent was always there.  My kids grow up in a home where both parents now work.  I grew up in a neighborhood where people knew me, my parents, where I was relatively safe to go anywhere, and my cousins, uncles & aunts, grandparents were close... this generation is scattered across the country and its not so safe to be wandering around anymore.

            I also know that healthcare insurance was far more affordable back then and covered nearly everything, if you had a good plan your deductible was almost nothing (in comparison to today).

            New vehicles did not cost nearly as much as a home/dwelling, today they do.  I just bought a townhouse for what some people pay for a new pickup truck.

            There is more 'wealth' out there in the world... and there are far more dollars than there ever was, the banks keep churning out new money... but I am not sure we are better off, even if we have more things.

            1. gmwilliams profile image84
              gmwilliamsposted 9 months agoin reply to this

              Ken, my sentiments exactly.  It used to be that people worked & sacrificed for what they wanted.  They knew that they weren't entitled to housing, healthcare, & education.  They knew that they if wanted the best, they had to earn the money to afford the best or settle for less than the best, or even do without.  Nowadays, there are people are proclaim vehemently that they are entitled to housing, healthcare, & education.  Something has gone amiss here!  Ken, you are correct in your premise that some have regressed to infantilism instead of being mature grown ups.

    2. wilderness profile image95
      wildernessposted 9 months agoin reply to this

      "I started the second video and couldn't get past the first "myth," that profit and plunder are the same thing. Who says that?"

      Are you sure?  Given that no one actually says that, we all get the very strong impression that the two words are interchangeable whenever the "profit" is larger than we think it should be.  Whenever profits are used to pay enormous CEO salaries.  Whenever profit is not used to increase bottom salaries (think WalMart here).

      When these things, and others, happen don't you think that "profit" is being used as a polite euphemism for "plunder"?

      1. PrettyPanther profile image83
        PrettyPantherposted 9 months agoin reply to this

        No.

        And I wonder how conservatives go from getting a "very strong impression" (because, as you admit, no one says that) to believing that "profit is plunder" is a widely held liberal belief?

        1. wilderness profile image95
          wildernessposted 9 months agoin reply to this

          I suppose because of the continual complaint about excess profits.  While (nearly) all liberals appear to understand, and accept, that profits are necessary to operate a business, there is always an outcry when giant businesses generate giant profits commensurate with their size.  Or perhaps when a new product is designed and copyrighted, with high prices to with the lack of competition. 

          It seems that those "excess" profits are viewed as "plunder" even if the word is never used.  Indeed, we see it every day with efforts to tax the rich more - that "plunder" they make from profiting in their various enterprises should not have happened anyway, so take it away.

          1. PrettyPanther profile image83
            PrettyPantherposted 9 months agoin reply to this

            Profits are good. Using your wealth and power to gain disproportionate advantages that result in continuing exponential growth in wealth and power will eventually destroy our capitalist economy.

            A much more subtle argument than "profit is plunder" which is why a conservative will twist it into a simplistic sound bite to serve two purposes: making progressives look more extreme than they are, and facilitating a simplistic counterargument easily comprehended and regurgitated by their base.

            1. Castlepaloma profile image75
              Castlepalomaposted 9 months agoin reply to this

              Over profit can be plunder. I simplified everything to manage and fit my world. Yet to over simplistic for your group would not work out flexible enough for the majority capitalists.

 
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