Terry
True Classic
Test your knowledge, very illuminating.
http://www.pbs.org/newshour/bb/business/july-dec11/makingsense_08-16.html
http://www.pbs.org/newshour/bb/business/july-dec11/makingsense_08-16.html
Land of the free, home of the poor?
- Thread starter Terry
- Start date
usta in Portland
Daily Driver
Yeah, the whole issue....
is somewhat muted here in comparison to the general argument over taxing and spending by government. As the piece you linked shows there is not a high degree of awareness of the exact magnitude of the numbers;and as the piece pointed out too, that may be due to the peception of community equality. Also, in terms of a global frame of reference the USA (and Australia for that matter) is rather middling in it's level of inequality-the GINI ratio rankins that compare the income of the top 20% to the bottom 20% in a country with 0 being perfect equality and 100 being perfect inequality place us at about 41 (I think Australia and New Zealand are comparable but that is a statement from memory) The attached link shows the worst and best countries by GINI ratio and some of the better ones are no surprise (among rich countries, that is) Canada, Sweden, Germany.
http://www.infoplease.com/ipa/A0908770.html
Here is one isolating rankings to the rich countries. A useful comment might be that even in the presence of such inequality as these numbers show we are still talking about a level of wealth amongst the middle classes of the countries cited that is high relative to second and third tier economies.
http://finance.yahoo.com/banking-bu...s-with-the-biggest-gaps-between-rich-and-poor
So I suppose the real issue may be less about comparative inequality in the GINI sense and more about the perception of inequality within a country. Here in the US I think there is, on the one hand, this general ignorance as to the hard numbers and on the other, I believe, an attitude that there is something just and fair about people getting rich-there's nothing wrong with being or wanting to be rich. In fact this may be part of our deep underlying ethos.
The problem though is the way the inequality has become distributed over the last 30 years, and the last ten in particular. In an economy as broadly dependent on consumer spending as ours, there is a simple argument to made in favor of a broad distiribution of wealth-after all, the rich can only buy just so much stuff however profligate they may be(and America's rich aren't all that profligate as a class).
So, in the absence of this broad distribution of wealth we have substituted a broad distribution of debt. And that particular chicken has well and truly come home to roost.
is somewhat muted here in comparison to the general argument over taxing and spending by government. As the piece you linked shows there is not a high degree of awareness of the exact magnitude of the numbers;and as the piece pointed out too, that may be due to the peception of community equality. Also, in terms of a global frame of reference the USA (and Australia for that matter) is rather middling in it's level of inequality-the GINI ratio rankins that compare the income of the top 20% to the bottom 20% in a country with 0 being perfect equality and 100 being perfect inequality place us at about 41 (I think Australia and New Zealand are comparable but that is a statement from memory) The attached link shows the worst and best countries by GINI ratio and some of the better ones are no surprise (among rich countries, that is) Canada, Sweden, Germany.
http://www.infoplease.com/ipa/A0908770.html
Here is one isolating rankings to the rich countries. A useful comment might be that even in the presence of such inequality as these numbers show we are still talking about a level of wealth amongst the middle classes of the countries cited that is high relative to second and third tier economies.
http://finance.yahoo.com/banking-bu...s-with-the-biggest-gaps-between-rich-and-poor
So I suppose the real issue may be less about comparative inequality in the GINI sense and more about the perception of inequality within a country. Here in the US I think there is, on the one hand, this general ignorance as to the hard numbers and on the other, I believe, an attitude that there is something just and fair about people getting rich-there's nothing wrong with being or wanting to be rich. In fact this may be part of our deep underlying ethos.
The problem though is the way the inequality has become distributed over the last 30 years, and the last ten in particular. In an economy as broadly dependent on consumer spending as ours, there is a simple argument to made in favor of a broad distiribution of wealth-after all, the rich can only buy just so much stuff however profligate they may be(and America's rich aren't all that profligate as a class).
So, in the absence of this broad distribution of wealth we have substituted a broad distribution of debt. And that particular chicken has well and truly come home to roost.
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Terry
True Classic
Perceptions
Thanks for the excellent links and your reflection on this. They give some perspective to the article I posted. I agree with the perception of community and how we associate with our own groups and within this we perceive an equality with our peers. However, I believe this may be changing with the advent the morphing economy.
The scary aspect of the article to me was the increase in wealth of the top 2% over the past 10 years, at the same time that so many working people have lost their jobs.
What also scares me is the power that some use through wealth to influence the government and distort the democratic process.
There was an article in the news today about Warren Buffett making $357 million in ONE day on his transaction with the Bank of America.
He said recently that he believes he should be paying much more tax but us not obliged to do so. Surely this is seen as an unfair situation by most people not in the Tea Party?
On a lighter note, I visited the beautiful city of Portland recently and went to the "Allure of the Automobile" exhibit at the Portland Art Museum. The day I was there (Saturday) there was also an "Italian Cars on the Park." What a great display it was! If you have not seen it make sure to have a look.
Thanks for the excellent links and your reflection on this. They give some perspective to the article I posted. I agree with the perception of community and how we associate with our own groups and within this we perceive an equality with our peers. However, I believe this may be changing with the advent the morphing economy.
The scary aspect of the article to me was the increase in wealth of the top 2% over the past 10 years, at the same time that so many working people have lost their jobs.
What also scares me is the power that some use through wealth to influence the government and distort the democratic process.
There was an article in the news today about Warren Buffett making $357 million in ONE day on his transaction with the Bank of America.
He said recently that he believes he should be paying much more tax but us not obliged to do so. Surely this is seen as an unfair situation by most people not in the Tea Party?
On a lighter note, I visited the beautiful city of Portland recently and went to the "Allure of the Automobile" exhibit at the Portland Art Museum. The day I was there (Saturday) there was also an "Italian Cars on the Park." What a great display it was! If you have not seen it make sure to have a look.
usta in Portland
Daily Driver
I walk by the museum daily...
and daily remark to my long suffering wife that I really need to go in see the cars. Haven't done it yet though! This summer there has been a car show in that location every Saturday (I missed the Italian one
) and they have all been very impressive. Yesterday's was an all Chrysler or Mopar day-some beautiful Dodge Challengers!
Yes, I agree that the perceptions are likely to evolve on the inequality issue. Regardless the outcome of either the election or the fate of our so-called Super Committee on deficit reduction, the cards are simply stacked for a decade of unwinding debt across the whole economy. With no obvious market generated bubble on the horizon or any killer technological breakthroughs mooted at the present we don't have much in the way of spurs to our overall growth. Consequently what growth there is will likely be disproportionately in the financial sector owing to the global mobility of capital. Labor (meaning any of those who work for a living) are just plain stuck-they can't really move to where the jobs are either globally or even here to some extent due to their shackling to underwater mortgages. Even if that impediment were removed there is the simple fact that many who lost their jobs are now virtualy unhireable;a recent study showed that those out of work for more than 6 months were three times less likely to get a job when in direct competition with shorter term unemployed,some of this owing to age
A side effect of this or perhaps a cause(hard to unravel what is chicken and what is egg) is the phenomena of historically low rates for mortgages and the decreasing number of mortgages for home purchase rather than for refinancing-we are at a decades low on the former and on a 15 year low on the latter. Theory would suggest that supply and demand would eventually couple on this front but it hasn't happened yet. Then there is a new wrinkle reported from the Federal Reserve that as our 80M strong Boomer generation starts taking out significant funds from 401k accounts this will result in a 20 year downward pressure on stock prices. All of which leads to the obvious question of how, under those circumstances the inequality can do other than increase.
One issue with the Gini Index is that it grabs 20% of the data from the bottom incomes and 20% from the top, this leaves a lot of room for flex in the actual level of inequality, especially when it is the upper 0.1% where a lot of the money is going. But other issues impinge too-for instance our GDP/head is a problem in two ways;first GDP growth stinks but our population growth goes on;second and associated is that the GDP/head today as against the trend line of growth for the ten years leading up to the crash is fully 10% behind and getting worse. So, that trend line hovers like the Ghost of Expectations Past coloring, unconsiously, our perceptions of the economy. Needless to say, perhaps, all of this looks like an atmosphere in which the rich will indeed get richer and the poor poorer, all of the political polemics nothwithstanding.
Meanwhile, your Australia looks like, and in most ways is, a model of a well run modern democratic republic. Right now, I for one, would gladly trade our basket of problems for yours:wink2::wink2:
and daily remark to my long suffering wife that I really need to go in see the cars. Haven't done it yet though! This summer there has been a car show in that location every Saturday (I missed the Italian one
) and they have all been very impressive. Yesterday's was an all Chrysler or Mopar day-some beautiful Dodge Challengers!Yes, I agree that the perceptions are likely to evolve on the inequality issue. Regardless the outcome of either the election or the fate of our so-called Super Committee on deficit reduction, the cards are simply stacked for a decade of unwinding debt across the whole economy. With no obvious market generated bubble on the horizon or any killer technological breakthroughs mooted at the present we don't have much in the way of spurs to our overall growth. Consequently what growth there is will likely be disproportionately in the financial sector owing to the global mobility of capital. Labor (meaning any of those who work for a living) are just plain stuck-they can't really move to where the jobs are either globally or even here to some extent due to their shackling to underwater mortgages. Even if that impediment were removed there is the simple fact that many who lost their jobs are now virtualy unhireable;a recent study showed that those out of work for more than 6 months were three times less likely to get a job when in direct competition with shorter term unemployed,some of this owing to age
A side effect of this or perhaps a cause(hard to unravel what is chicken and what is egg) is the phenomena of historically low rates for mortgages and the decreasing number of mortgages for home purchase rather than for refinancing-we are at a decades low on the former and on a 15 year low on the latter. Theory would suggest that supply and demand would eventually couple on this front but it hasn't happened yet. Then there is a new wrinkle reported from the Federal Reserve that as our 80M strong Boomer generation starts taking out significant funds from 401k accounts this will result in a 20 year downward pressure on stock prices. All of which leads to the obvious question of how, under those circumstances the inequality can do other than increase.
One issue with the Gini Index is that it grabs 20% of the data from the bottom incomes and 20% from the top, this leaves a lot of room for flex in the actual level of inequality, especially when it is the upper 0.1% where a lot of the money is going. But other issues impinge too-for instance our GDP/head is a problem in two ways;first GDP growth stinks but our population growth goes on;second and associated is that the GDP/head today as against the trend line of growth for the ten years leading up to the crash is fully 10% behind and getting worse. So, that trend line hovers like the Ghost of Expectations Past coloring, unconsiously, our perceptions of the economy. Needless to say, perhaps, all of this looks like an atmosphere in which the rich will indeed get richer and the poor poorer, all of the political polemics nothwithstanding.
Meanwhile, your Australia looks like, and in most ways is, a model of a well run modern democratic republic. Right now, I for one, would gladly trade our basket of problems for yours:wink2::wink2:
ianlawson
ian - NZ
Hey Terry, mate..............!!
...........how about undoing some of that "distortion of the democratic process", and let us poor Kiwis sell our beautiful apples in South Australia?? :wink2:
cheers, Ian - NZ
...........how about undoing some of that "distortion of the democratic process", and let us poor Kiwis sell our beautiful apples in South Australia?? :wink2:
cheers, Ian - NZ
Terry
True Classic
Well
I'm all for importing NZ apples Ian! In fact the first shipment arrived this week, but was found to be contaminated by customs and not allowed entry, not sure what the problem was?. We pay way too much for our local apples here. And how about bananas at $15 a Kilo!! (about $3 per banana!!!) The banana growers here evidently have a monopoly on the market as none are allowed to be imported. Due to the cyclone the banana crop was devestated. When I travelled to the USA recently they were 49 cents a pound there.
I'm all for importing NZ apples Ian! In fact the first shipment arrived this week, but was found to be contaminated by customs and not allowed entry, not sure what the problem was?. We pay way too much for our local apples here. And how about bananas at $15 a Kilo!! (about $3 per banana!!!) The banana growers here evidently have a monopoly on the market as none are allowed to be imported. Due to the cyclone the banana crop was devestated. When I travelled to the USA recently they were 49 cents a pound there.
ianlawson
ian - NZ
Hmmmm, can't help thinking........!!
........that there is a "smattering" of protectionism from the SA apple growers in this matter, Terry!
The recent shipment (many containers of fresh apples) was deemed "contaminated" by the local SA inspection bureaucrats, who immediately banned any further importation of NZ apples "until further notice".
The "contamination" was fragments of ONE leaf, + ONE dead insect in the total shipment.
Dunno what's going to happen to the now banned "contaminated" shipment - probably get dumped in the Gulf now!
So much for CER (Closer Economic Relations)!
cheers, Ian - NZ
........that there is a "smattering" of protectionism from the SA apple growers in this matter, Terry!
The recent shipment (many containers of fresh apples) was deemed "contaminated" by the local SA inspection bureaucrats, who immediately banned any further importation of NZ apples "until further notice".
The "contamination" was fragments of ONE leaf, + ONE dead insect in the total shipment.
Dunno what's going to happen to the now banned "contaminated" shipment - probably get dumped in the Gulf now!
So much for CER (Closer Economic Relations)!
cheers, Ian - NZ
ianlawson
ian - NZ
Hey Matthew............!
.....how big is your garage, buddy??
Big enough to store 30 containers of apples until winter? :shock2:
This could be your money-making venture of the century!!
cheers, Ian - NZ
.....how big is your garage, buddy??
Big enough to store 30 containers of apples until winter? :shock2:
This could be your money-making venture of the century!!
cheers, Ian - NZ