Invictus here, folks:

Occupy Wall Street has been the subject of debate with friends and colleagues. Some confusion and misconceptions are out there regarding the protesters’ message: I’ve heard that the OWS movement is anti-capitalist, anti-Semitic, Pro-Socialist, Pro-Marxist, or a combination thereof. Or that they’re just — as Atrios re-popularized the phrase long ago — Dirty F*ckin’ Hippies.

As Barry has described it, “there is an unfocused financial rage in the United States” — and you see it in both the Tea Party and the OWS movement. Rather than mischaracterize why so many Americans — on the Left and the Right — are unhappy, let’s go to the actual data to see what is underlying this negative general sentiment:

Gini Index

Let’s start with the Gini Index, “the degree of inequality in the distribution of family income in a country.” Here’s our place in the world:


Source: CIA Factbook
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By way of comparison, Germany is #126 (of 136) with a Gini Index of 27, and Japan is #76 at 37.6.

Within the United States, this is what income inequality looks like from a Gini Index perspective:


Source: Census.gov, Table H.4
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Well, How’d the Gini Index Get So Out of Whack?

In brief (footnotes removed):

In recent decades, CEO pay has grown dramatically in the United States. Between the 1930s and the 1970s, CEOs of the largest companies received approximately $1 million in total annual compensation (adjusted for inflation in year 2000 dollars). During this period, the ratio of CEO-to-worker pay narrowed as workers’ wages grew and CEO pay rose modestly. By the 1990s CEO pay grew dramatically. Business Week estimated that CEO pay at the largest companies grew from 42 times the average worker’s pay in 1980 to 531 times the average worker’s pay in 2000. In 2010, large company CEOs received $11.4 million, or 343 times worker pay, according to calculations by the AFL-CIO’s Executive Paywatch website.

Here are some additional tables on how executive compensation has skyrocketed over the past few decades. Additionally, I’m sure Warren Buffett’s quote resonates with OWS (frankly, it should resonate with everyone — Tea Party included): “Too often, executive compensation in the U.S. is ridiculously out of line with performance. Getting fired can produce a particularly bountiful payday for a CEO. Indeed, he can “earn” more in that single day, while cleaning out his desk, than an American worker earns in a lifetime of cleaning toilets. Forget the old maxim about nothing succeeding like success: Today, in the executive suite, the all-too-prevalent rule is that nothing succeeds like failure.”

A $1MM reduction in a CEO’s pay could be used to fund 13 jobs at $75k/year; nothing too complex about that math. Here are other jobs that could be created if we addressed the disparity.

Meanwhile, while CEOs and other executives have feathered their nests — largely by exploiting overly-friendly relationships with all-too-compliant boards to negotiate outrageous compensation and severance packages — things have not been going quite as well for the rest of the country, as those at the top continue to rise while the remainder continue to drift:


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What About Everyone Else?

While the top 1% have been doing just fine, thank you, median incomes have gone nowhere in over a decade while both poverty and food stamp usage have both been on the rise. Further, labor’s share of the spoils has fallen to all-time lows:


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(NOTE: BLS provides (and FRED captures) this series as an Index, not a Level, with 2005 = 100. BLS advises me that the 2005 Level = 60.6. Therefore, I have taken the entire Index (Series identified above) and multiplied it by .606 to get the percent Labor Share above.)

While labor’s share has been in decline, output has been outstripping compensation (natural log scale):


(Source: Monthly Labor Review, January 2011, Susan Fleck, John Glaser, and Shawn Sprague)
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Source: Census.gov
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Source: SNAP via ZeroHedge
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There’s been yet another resurfacing of a canard that goes something like this: An acknowledgement that there’s income inequality followed immediately by the claim that it’s not inequality that matters, but income mobility. Two examples of that argument can be seen here and here. It is refuted here, here and here, that last link being fully one decade old, showing how zombie lies truly never die.

I have yet to see any signs or read any reports of any of the socialist OWS protesters demanding that Personal Current Transfer Receipts — money literally “transferred” by the government to citizens under programs like the Big Three, Unemployment Insurance, and Veterans’ Benefits — be a higher percentage of income than it already is. Have you? To the contrary, actually. I’m relatively sure OWS would like nothing more than to see this chart reverse — to have the government provide less to the people because the people are doing more for themselves.


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Other Factors

Some comments on aspects of the OWS movement that are difficult, if not impossible, to quantify. I think Americans have an inherently good and reasonable sense of fair play. We’re not a people who begrudge others their wealth fairly earned — with “fairly earned” being the operative phrase. I haven’t heard many folks railing about Bill Gates, Warren Buffett or Steve Jobs. I have — and do — hear folks clamoring about the likes of Angelo Mozilo, Stan O’Neal, Lloyd “God’s Work” Blankfein. Why does Rob Gillette, former CEO of First Solar Corp., walk away with almost $40MM for 15 months (~$10,000/hr if he worked 60-hour weeks) at the helm during which the price of FSLR’s stock declined by some 60 percent? (Answer: See above quote from Warren Buffett.)

From the Wired piece linked to below:

When the rich do something to deserve their riches, nobody complains; that’s just the meritocracy at work. But when those at the bottom don’t understand the unequal distribution of wealth — when it seems as if the winners are getting rewarded for no reason — they get furious. They doubt the integrity of the system and become more sensitive to perceived inequities. They start camping out in parks. They reject the very premise of the game.

Personally, I’d argue that it’s generous to state that winners were “rewarded for no reason.” The facts at hand tell us that many have been rewarded for, at the very least, tanking our economy, and at worst criminal behavior; “no reason at all” would be an uptick.

Americans don’t condone making crappy products and then pawning them off on unsuspecting buyers, a la Goldman Sachs, et al: “Boy, that Timberwolf was one shitty deal.” In the real world, companies are held accountable for even inadvertently producing a defective product. On Wall St., doing so is apparently grounds for a round of yucks and an outsized bonus. Personally, I believe Americans have always known the system is rigged, but it wasn’t too rigged, and while prosperity wasn’t necessarily equally shared (nor should it have been), its division was such that everyone (more or less rightly) felt as if they were benefiting. Those days are gone, the illusion of any fairness stripped away, as it’s now clear that for some enough is simply not enough. It’s as though the parasites have inexplicably (and counter to their own self-interests) determined that it’s time to kill the host, but the host is determined to live on.

I believe that OWS would also like to see corporate money out of politics, as we all should. I’ll repost below a comment by Teddy Roosevelt in 1906:

As a nation we still continue to enjoy a literally unprecedented prosperity; and it is probable that only reckless speculation and disregard of legitimate business methods on the part of the business world can materially mar this prosperity. [...]

I again recommend a law prohibiting all corporations from contributing to the campaign expenses of any party. Such a bill has already past one House of Congress. Let individuals contribute as they desire; but let us prohibit in effective fashion all corporations from making contributions for any political purpose, directly or indirectly.

OWS also might not have come to pass had financial institutions, in particular, not forgotten who bailed them out a mere three years ago and returned so quickly, and with such belligerence, to their bad behavior and bonus-happy ways. A bit of humility would have gone a long way with the American people, but none was forthcoming. As with all of corporate America, the needs of the shareholders, followed closely by the needs of the corporate executives, trumped any need to be decent corporate citizens. The “heads we win, tails you lose” mindset is still very much with us.

And yes, I believe the Occupy movement would do well to situate itself outside the Capitol and the White House, neither of which have done much to change the nation’s trajectory. As John Adams so eloquently put it:

In my many years I have come to a conclusion that one useless man is a shame, two is a law firm, and three or more is a congress.

Adams is probably spinning in his grave over the uselessness of our current crop of 535, which recently found among its top priorities passing legislation reaffirming “In God We Trust” as our national motto. Important stuff, especially given the fact that no one had proposed abandoning or changing the phrase in the first place.

In summary, then, OWS is not about any one thing that is wrong with either our economic or political system. It is about the many things that are wrong with both and, more to the point, the way the ills of each are exacerbating the ills of the other in a very negative feedback loop. Their message is infinitely more complex and nuanced than, say, “End the war in [insert opponent(s) here].” Right now, we’re getting the worst of both worlds — a crappy economy coupled with crappy politicians trying to fix it (though to be fair many are only pretending). As we all well know, it’s very hard to get your message across when it doesn’t fit on a bumper sticker:


Source: How OWS Cost Me My Job, Caitlin Curran
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My bottom line: OWS is not anti-capitalist, anti-Semitic, socialist or Marxist. It is about restoring the unfortunate but somewhat necessary accepted degree of unfairness/inequality that prevailed in this country for generations and, importantly, about demanding that the rule of law be applied uniformly (a quaint notion that exited stage “right” during the Bush administration and remains MIA during Obama’s) and not selectively on the masses while the political and Wall St. elites run amok.

Also: Excellent comprehensive coverage of OWS at Fast Company.

Does Inequality Make Us Unhappy?

Has America Become an Oligarchy?

~~~

Catch up with me on Twitter @TBPInvictus.

Category: Economy, Employment, Politics, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

69 Responses to “Meritocracy vs. Plutocracy”

  1. csainvestor says:

    It isn’t just the CEO- its the entire C suite that makes multi millions per year, cto cfo, etc etc.
    then the executive management level right below the C level makes over a million per year as well.

    the rest of the company, they make 30k a year.
    as shareholders in these companies we all know every time the BOD awards lavish salaries to the upper management suite, the shareholders and the workers suffer.

    one of the things that needs to change, is that shareholders need a larger say in executive compensation.
    lowering executive pay, and paying that money out as a dividend is one way of getting that money out of the hands of the few and into the hands of many.

  2. GeorgeBurnsWasRight says:

    And yet belief in the “American Dream” persists. Perhaps I’m taking him too seriously, but apparently “Joe the Plumber” was thinking that he was going to own the company he worked for enough that what would happen to his taxes if that happened was of more concern to him than the facts that he lacked a plumbing license or enough capital to pay his taxes.

    I also saw a recent poll that indicated that while the number had declined recently, 20% of Americans still think they’re going to be millionaires one day. It seems to me that “magical thinking” is common in this country today.

  3. Molesworth says:

    Welcome back Invictus.
    Good research. Not certain about your conclusion. It didn’t start with Bush years. As your charts show its’ been creeping up for years and years.
    I serve on 2 boards and when it comes to compensation, they bring in “experts” who show the levels of comp and the board always think their CEO is ‘above average’ so up the pay. I fight and have sometimes won but these dopes always think the CEO are worth more. It’s ridiculous.

    Invictus: To be clear: I agree the issues have been growing and simmering for decades. What I believe we got under Bush — which has absolutely continued under Obama — is a failure to investigate/prosecute wrongdoing and a look-the-other-way attitude that flies in the face of our rule of law.

  4. DeDude says:

    Unfortunately capitalism appears to be malfunctioning and it is hard to see how it could be fixed by gentle reform. It is in the nature of capitalism to suck dry everybody as fast and bad as possible, yet capitalists need costumers to have enough money to purchase the product and services they produce.

    Fact is that we are getting much more efficient at producing things and, therefore, losing jobs. The amount of work that it takes to produce all the things and services a person “needs” in his/her lifetime does not take enough human work to keep that person employed for a full lifetime career. With current wages, the money a person can earn producing all the products and services needed in a lifetime are not sufficient to pay for the actual purchase of all those products and services.

    So what can be done to ensure that a lifetime worth of work can earn you enough to cover a lifetime worth of needs?

    1) If we reduce people’s lifetime “needs” (smaller houses, cars, meals, etc.) we will reduce productivity and the size of the economy. We will also further reduce the amount of available work and lifetime incomes starting a downwards spiral (“south America in the 70’ies” here we come). Furthermore, the ability to pay down all the debt that is the legacy of the “tax-cut and borrow for spending” policies of the trickle down decades, would be seriously impaired.

    2) If we push businesses to reduce the price of things to allow current lifetime of earning to purchase current levels of “lifetime needs” we would likely see reductions in salaries as well (as businesses have the upper hand and would not sacrifice profits to lower prices). This would basically be deflation and a disaster with the current debt levels.

    3) If we push businesses to increase salaries they are likely to pass on the cost (again because they have the upper hand and will not accept reduced profits) and make the cost of a lifetimes need higher (and decreasing its affordability in spite of higher income). At least this would help with debt rather than make that problem worse.

    So how can capitalism make sure that even by the time all products and services produced takes no human effort, there will still be human costumers who have sufficient income to purchase those products and services?

  5. Bill Wilson says:

    Both capitalism and democracy are systems of creative destruction. Failure and crisis give way to new ideas and leadership.

    Nothing has changed since 2007. Obama’s change looks more like keep the change.

  6. DuchessGateau says:

    CEO compensation in the 1990s rose to outrageous levels. In hindsight this looks like a bribe to participate in the dismantling of their own country’s economy, as they shipped manufacturing and other jobs overseas to China, Mexico, and other locations.

  7. DeDude says:

    Sorry rpseawright;

    Invictus gave a link to the source of the data showing increased Gini index from 1967 to 2010. The reader can quickly click into the original data and confirm the curve that is shown. You claim that your flat curve also has the US census as its source. Yet you provide no link to the underlying data in spite of the fact that your numbers do not fit with those that can be found at the census if people follow the link given by invictus. Your information smells like a load of Foxified BS, show us where it comes from and how you massaged it so it could fit your conclusions.

  8. 873450 says:

    ” … I’ve heard that the OWS movement is anti-capitalist, anti-Semitic, Pro-Socialist, Pro-Marxist, or a combination thereof. Or that they’re just — as Atrios re-popularized the phrase long ago — Dirty F*ckin’ Hippies.”

    During the last few days media began hyping a “criminal element” narrative, portraying an identified group of predators embedded in OWS, who are assaulting the zonked out, drug-taking hippies and generally wreaking havoc and mayhem throughout the surrounding neighborhood. Their violent activities are being videotaped by, and taking place in front of, dozens of police officers watching them.

  9. Raleighwood says:

    It’s not about meritocracy or plutocracy – it’s about psychopathy.

    And apparently psychopathy is alive and well at the top – (this would also include the politicians) – so by definition they just don’t give a shit about the rest of us.

    The top 1% will continue doing Satan’s work until they have it all.

  10. frodo1314 says:

    If that were truly the attitude and desire of the majoirty of OWS I’d agree with most of what you’re saying here Invictus. I just don’t know that it is as I am hearing and reading alot to the contrary. In addition to the Washington Post and New York Times I read the New York Post (I know, shoot me). In addition to CNN and MSNBC I watch Fox News (shoot me again). Utilizing all those news outlets and then gaging where the truth lies – usually in the middle of it all – one tends to get a more balanced picture of what’s happening I think….

  11. Johnny99 says:

    Another great post, Invictus. And the links you provide for source material are excellent.

  12. rpseawright says:

    “Yet you provide no link to the underlying data in spite of the fact that your numbers do not fit with those that can be found at the census if people follow the link given by invictus.”

    DeDude — The posts I linked provide multiple links to the U.S. Census data (purportedly?) used. Did you even read them?

    “Your information smells….”

    It’s not *my* information, *my* data, *my* charts or *my* blog. Since the picture painted there is so different from what Invictus shows and due to my assumption that multiple heads are better than one (especially when those added are so often smarter than I am), I provided the links for better analysis all around.

    Political Calculations (the blog — not mine — from which the links came) also references a paper which is claimed to support its conclusions: http://arxiv.org/ftp/arxiv/papers/0811/0811.0356.pdf

    Instead of being so quick to jump to the ideologically-based rant, you might actually look at the data and see where the truth is. Since I am more interested in truth than ideology– whatever the result — I intend to do the same.

  13. [...] Meritocracy vs. Plutocracy | The Big Picture. Share this:TwitterFacebookLike this:LikeBe the first to like this post. By Colin Mackay • Tagged economy, gini index, income distribution, society 0 [...]

  14. Westbound says:

    Thanks Invictus. I too am disturbed by our Gini Co-efficient neighborhood.

    In debates with my friends on this issue, I have been shown a Gini Co-Efficient by INDIVIDUAL rather than HOUSEHOLD. The story it tells is different… a far flatter curve rather than the steadily worsening one you have shown. Unfortunately, it appears the census data does not provide that same information.

    Any thoughts/incites on the disparity?

    Invictus: Actually, yes, as I just got off the phone with the folks at Census. On a “person” level, you’re almost surely going to get a higher and flatter Gini Coefficient. For one thing, you’re capturing — on an individual basis — the 16-year-old summer lifeguard in the same data as the CEO of IBM. As I suspected, the folks at Census confirmed that for the purposes of what matters to this discussion — and to the OWS message — we should be looking at either Households or Families, not Persons. The issue of what to look at is, itself, fodder for another post.

  15. Stuart Douglas says:

    “Getting fired can produce a particularly bountiful payday for a CEO.”

    Poor John Corzine, decided he would “forgo” his 12.1 Million severance package.

  16. DeDude says:

    frodo1314;

    No sorry if you mix your sources between those that deliberately lie and distort facts with those that try to find and present the truth you end up with a much less balanced picture of reality than if you just stick to sources that rarely have been proven to lie or distort the truth. It requires a little more work to evaluate the quality of news media but the result is so much better than to just take the average of right wing corporate media and extreme right wing corporate media. Remember that with any story about attack on our corporate masters all corporate media is likely to present a picture that is way to the right of the truth. Any bad thing done by a single individual will be blown out of proportion and used to smear the whole movement.

  17. peter north says:

    “Dirty F*ckin’ Hippies” is great, but we really need to bring back the term “Jive Turkey.” I miss that one.

    Great post, as usual, Invictus.

  18. ghawk132 says:

    I really enjoyed this post. I actually agree with many of the points above. Where our opinions diverge, however, is in your attribution of these problems to the OWS movement. I’ve been following the movement from afar (reading articles, watching reports, visiting the scene, etc.) and haven’t once had the problems as clearly put in front of me as in this post. And I think therein lies the main problem with the whole “Occupy” movement. While these problems do exist and I would imagine many Americans feel the same way, I find it impossible to relate to the “99%” hanging around Zuccoti Park. Such a disjointed movement is just asking to be marginalized by many of the things plaguing them now.

    Where OWS will really pick up steam will be when the vocal and less than helpful minority camping out in Zucotti Park move on and some actual leadership takes over. There are some serious issues out there that need fixing, and I do believe we have men and women capable of coming to a solution, but first we need cohesion and actual discussion. Having every liberal talking point being bandied about does nothing for the cause. At this point the Occupy Wall Street group has done its job of getting everyone’s attention; Now it is up to a coordinated, focused effort from those who can lead to get the job done.

  19. Lukey says:

    I’m getting up there in years so maybe I’m “mis-rememnbering” this, but didn’t this skyrocketing of CEO pay really start in earnest subsequent to the Clinton era regulation that limited the corporate tax deduction to $1 million? Once they took their pay off the income statement by by using stock options is was like they were spending monopoly money. I think they have to run some hind of expense through the income statement now but it hasn’t changed the perception that this is a “non-cash” transaction (and therefor nmf). Why do we keep thinking we can legislate good behavior?

    ~~~
    BR: Roger Lowenstein, in Origins of the Crash, uses Tony O’Reilly, the CEO of Heinz, as an early example of insane CEO comp, when in 1991 he received the then outrageous comp of $71,000,000

  20. DeDude says:

    Sorry rpseawright;

    I now see that it was not your data but that it came from some right wing moron. Let me just point out where this clown goes wrong. He used income data that has 40 income groups dividing people with income of $0-$100,000 and one income group for everybody who have income above $100,000. So if your income is 100K or 100 million it is all considered “the same” for the purpose of calculating his “Gini coefficient” (for income less than 100K). The fact that he can show us that income inequality amongst those making less than 100K/year has not changed much is rather irrelevant for the debate about income inequality in the country as a whole. We do not have a problem with the middle class robbing the poor, we have a problem with the rich robbing everybody else.

    I is hard to say if the guy presenting this crap is deliberately distorting the data to make an argument and that he understand it leaves a false impression, or if he really is stupid enough to present Gini coefficient data not understanding what it is, and why you cannot get insights for the countries income enequity from data that does not granulate on the top 10% of the income curve. Either way he has branded himself as someone who should not be cited or linked to for anything else than as a prime example of right wing morons Foxifing the facts.

  21. Concerned Neighbour says:

    With respect to the board member who posted above, corporate boards have been doing a horrible, horrible job for many years. There are plenty of bad CEO’s/upper management types out there, yet they all get paid exhorbitant salaries.

    I can’t count the number of times a new CEO comes in, one year later has wrecked the place, and then gets fired so s/he can enjoy a multi-million golden parachute for a year’s work well done. Unbelievable.

  22. ironman says:

    DeDude:

    It looks like you missed the links provided to the U.S. Census data at the article links rpseawright provided. The first link provides the Gini data to all the tables for Individuals, which is only available back to 1994 (in easily accessible digital format):

    http://politicalcalculations.blogspot.com/2011/10/shocking-trend-in-us-individual-income.html

    Links are provided in the second post to the U.S. Census’ family and household data. Since you missed them, here they are:

    http://www.census.gov/hhes/www/income/data/historical/families/2010/F04_2010.xls
    http://www.census.gov/hhes/www/income/data/historical/household/2010/H04_2010.xls

    Note that all three of these sources were linked in the second paragraph of this post (rpseawright’s second link).

    If you’re interested, here’s a link to where the U.S. Census has made all the data easily available in digital format (as opposed to scanned PDFs) for Individuals, Families and Households (note that this is why the analysis only covers the years from 1994 through 2010 – you have to drill down through the links for each year in the left hand table):

    http://www.census.gov/hhes/www/income/data/incpovhlth/2010/index.html

    Hope this helps with your data issues!

    Invictus:
    I’m curious as to why you undertook to examine Gini on a “Person” level vs. on the Household or Family level, which seems more intuitive to me. See, for example, this comprehensive Census piece on inequality from 2000 (yes, it was even an issue back then, though less so). It’s all about the Household. I called Census today to inquire about the more appropriate measure for these circumstances, and was told to look at Households or Families. I respect the work you do, but would like to understand your logic and reasoning.

  23. DeDude says:

    Why does the board see it as their job to compensate the CEO relative to the compensation of other CEO’s? The CEO will hire people at as low a salary as the market price allows. Why would the board not use the same principle. Hire a CEO for the lowest possible price the market will offer them a qualified candidate.

  24. cooper says:

    Marx always said capitlism would destroy itself by so concentrating wealth that people would not be able to afford what the system produced. It is popular to say that capitlism has proved Marx wrong, but capitalism has never fixed itself when Marx’s perdictions began to come true. Theodore oosevelt and the progressives saved capitalism in the early nineteen hundreds and Franklin oosevelt and the new deal again saved capitalism from its self. What has been strikig about our current situation is how long it has taken for a movement to arise to once again try to save capitalism from itself. We certainly know a number of things that need to be done, but whether we have the polical will certainly remains an open question. apologies for my sticky capial r.

  25. ironman says:

    DeDude,

    My apologies – I hadn’t seen your follow up post! I’m afraid I can’t claim credit for the Gini coefficient calculation – that belongs to the U.S. Census, so you’ll have to direct your criticisms directly to them. You should be aware before you do however that the household and family data would be the same as what Invictus has done an excellent job in presenting, with which you would appear to have no issues.

    And although it seems that the Census capped everything off at $100,000 – they really didn’t. They went up much higher, to at least $250,000. Since those with incomes above this amount represent about 0.6% of all those with total money income (at least, in 2010), the Gini coefficients being presented with this data is factoring in a big portion of the incomes of the people in the Top 1% that people seem to care about these days.

    The PINC-01 tables are simply a standardized presentation that have always only gone up to $100,000 for breaking out the number of individuals with incomes at a given level.

    But really, the Census’ practice of top-coding data is only relevant if you’re comparing the Census’ data with other sources, such as the IRS’ (which the CBO compiles as part of their analyses). As for the individual level data, since that was prepared by the U.S. Census using the same methodology they used in reporting the family and household data, it is perfectly valid to compare these datapoints to each other to compare trends over time.

    Just remember that if you have any issues with the data, you need to take them up with the U.S. Census. Running around accusing people of mishandling data without knowing how the data is actually handled can create problems for your own credibility.

  26. wkevinw says:

    No new concepts here, as the post points out. This stuff was warned about decades ago, and the charts show that it has been going on for a very long time.

    The markets will work. How? When the incentives get fouled up, as they are now, eventually some competitive force will fill the vacuum. For example, if this is a US problem, we’ll trash our businesses/corporations/economy (due to poor executive performance being rewarded), and foreign competition will win. There are other scenarios (if I knew which one was going to pan out, I would invest based on that- I don’t).

    It incredible to me that a system has gotten into place where powerful people are actually rewarded for poor performance. The risks in that are huge, and we’re living with the consequences.

    Thanks for the post Mr. Invictus.

  27. Julia Chestnut says:

    Thanks, Invictus. I believe extreme income inequality always wrecks the rule of law eventually: you simply have people who can afford (without flinching) to pay off too many others to keep from feeling the effects of their crimes. Once people realize that they can commit crimes with impunity – so long as they just rake in enough money before the gravy train comes to a halt – it’s all over but the crying. And the top .1% won’t be crying.

    At this point, we’re Mexico. Unfortunately, Mexico is currently – what, Cote d’Ivoire? A failed state at least.

    As Jesse so succinctly puts it, “The Banks must be restrained, and the financial system reformed, with balance between individuals and the corporations restored to the economy, before there can be any sustained recovery.” Poor OWS just want a sustained recovery. I guess at this point we’re all dirty hippies.

  28. prsnr24601 says:

    I think that it was 15 or 20 years ago that the method of computing executive pay was changed so that stock options were treated as income. Can anyone confirm this? If it is true then this would taint this data.

  29. xnycpdx says:

    “Why does the board see it as their job to compensate the CEO relative to the compensation of other CEO’s?”

    logrolling, pure and simple. most of the people on corporate boards i personally know are – surprise – current or former CEOs somewhere else. heaven help you if you need another job someday, and your peers on the board remember you as the ‘sane CEO pay guy!’

    these people are also victims of the ‘joe the plumber’ syndrome: someday, THEY might be in line for that $xxMM pay package – as long as they get there before some buttwipe convinces the board to cut CEO pay!

  30. romerjt says:

    rpseawright Says: offers links to Political Calculations . . . DISREGARD their data, they make their own calculations and ignored the published info.

    But there is another side to this coin. It’s a point made by Heritage Foundation who I hate to agree with because I do agree with this article almost entirely . . . .

    The data is driven down by the increase in single mothers as heads of household = a poorer household. In 2003 there were 10 million single mother households with children, up from 3 million in 1970. The break up a man-woman household is almost instant poverty for mom and with the increase in cohabitation vs marriage, the family ties are not getting stronger. In our local paper there are just as many or more birth to those who are not married and to those who are . . . and probably everyone who commented here knows this situation first or second hand. I don’t know if it’s still politically incorrect to say this is not a good thing . . but this is not a good thing.

  31. constantnormal says:

    Here’s another link illustrating just how bad things are in Bananamerica …

    US pension system holds onto Top 10 ranking in global index – but reform needed

    We got some big problems. Bananamerica is horribly ill, rotten throughout its political and economic system, a disease that promises to destroy us in the decades to come. I figure we’re at the equivalent of a Stage 4 cancer patient, with our disease of corruption and monetary influence having metastasized to multiple systems (political, health care, financial industry, retirement, employment, educational, …), and is deeply entrenched in all of them. There is no Stage 5.

  32. UncleMilty says:

    A couple bones to pick…

    1) Do you really expect us to believe that the OWS folks are in favor of significantly fewer gov’t transfer payments to the low and middle classes? I hear a lot about school loan forgiveness, socialized medicine and never ending unemployment benefits and very little about structural entitlement reform.

    2) Even if CEOs got paid less, would that really raise the compensation of the average Joe? For most middle-income workers, their pay is pretty closely tied to the supply and demand for their labor and if that labor is profitable for the company. The inequality would go down, but that doesn’t neccessarily help the average Joe…other than making him less jealous of rich people.

    3) If CEO pay is excessive, than we should propose rules about corporate governance. I don’t see how taxing the crap out of top earners fixes the problem, unless you are planning on giving that money to everyone else, which I suspect is the real motive for most of the OWS protesters (see #1 above).

    4) The third link refuting the income mobility arguement is a great read. But the point it makes, which is lost on this post and most of the OWS talking points, is that income is a difficult thing to analyze. Why is it that this post, and most media accounts, continue to base it’s conclusions on median household income rather than average full-time worker income? Why do their measures exclude health and SS/FUTA taxes, which have become a large part of middle-class income? Why are transfer payments and refundable tax credits excluded, which have exploded for the lower and middle classes since the 1970s? Why is there no acknowledgement that demographics play a role here. If we compare apples to apples, the disparities get smaller and we find that certain groups (married, college, etc.) get rewarded for increased productivity.

  33. prsnr24601 says:

    romerjt: Yes, you are right. The trend toward single head of household does skew these calculations and lots of other calculations. You’re also right about it not being a good thing.

    However, the trend toward more working women may make a rise in single head of household unavoidable both because it makes more women financially able to head a household and gets them out of the house so that they can meet more men. As you can probably tell I’m an old fart.

  34. rktbrkr says:

    Those pushing for some sort of flat or consumption tax that will institutionalize the disparities are really asking for social unrest. It’s bad enough payroll taxes almost equal personal income taxes but to layer a flat consumption tax on top is just brutal. And now the payouts from the payroll taxes (SocSec& Medicare) are being labeled entitlements that the taxpayers aren’t entitled to!

    Evrywhere I hear the sound of marching, charging feet, boy
    Cause summers here and the time is right for fighting in the street, boy
    But what can a poor boy do
    Except to sing for a rock n roll band
    Cause in sleepy london town
    There’s just no place for a street fighting man
    No

    Hey! think the time is right for a palace revolution
    But where I live the game to play is compromise solution
    Well, then what can a poor boy do
    Except to sing for a rock n roll band
    Cause in sleepy london town
    There’s no place for a street fighting man

  35. Julia Chestnut says:

    But, romerjt: the increase in single heads of household also coincides with the explosion of the prison population because of the criminalization of possession. It’s not like the poor suddenly decided to stop forming man/woman families, it’s that the prison industrial complex was privatized.

    So I don’t exactly think that Heritage is on the side of God and the angels there. “Gee, we have this problem that increases child poverty,” but they are unwilling to look at the root causes for that when they could just blame loose women instead.

  36. DeDude says:

    romerjt;

    The fact that more woman work for income will increase the household income and the fact that more families are headed by single mom/dad rather than a two income family will reduce household income. So I don’t think the number of single mothers heading households is particularly relevant (except to demonstrate that woman are not fairly paid). You would have to look at the average number of income earners per household. If that is going down because of social factors then those social factors may contribute to more low-income households. If there is an increase in number of income earners per household then the injustice in income is actually being masked by people sending both spouses to work (or adult children failing to move out and form their own household).

  37. rpseawright says:

    I tried to post earlier in response to DeDude making the point that the links I provided weren’t mine but were designed to foster discussion as to the best interpretation of the data (as to which I don’t think there is a disagreement). But my post didn’t “take.” Is something wrong?

    Invictus: Since I could never do the explanation justice, I’d suggest you call the folks at Census at (301) 763-3243 to learn why using “Persons” is not the appropriate measure here and was misused by Political Calculations.

  38. carleric says:

    I spent some time in Italy some years ago and at the tme was struck by the economic disparity between the very rich and the not so rich. We have a similar situation in this country today. There are three simple changes which could improve the outrageous compensation paid both so-called competent and the obviously incompetent CEOs and the laughable severance rewards. One: stop option rewards for the highest compenated 80% of managment. Make them focus on the long term benefits for the compay Two: Stop severance packages….why pay some clown for f**king up your company (see Nardelli at Home Depot). Three: Stop allowing comingling CEOs with Board members. If you sit on a board you can not appoint or arrange to appoint the sitting CEO to your board. This won’t fix everything. Only a shareholder revolt will do that but it is some small steps that make sense to me.

    By the way Invictus, this is your firsr contribution that makes any sense to me….maybe I am getting soft or you are getting smarter…ROTFLMAO

    Invictus: Well, thanks. I think.

  39. Molesworth says:

    Thanks for clarification.
    Happy to see you back.
    Thanks for the good post.

    I am delighted to see kids protesting again. They didn’t protest the wars bec no draft. I didn’t know what would getting them riled up. Now I know. Maybe they can force the change, move the hand, make the difference, the one BHO promised but hasn’t delivered.

  40. BTUR says:

    “Even if CEOs got paid less, would that really raise the compensation of the average Joe? For most middle-income workers, their pay is pretty closely tied to the supply and demand for their labor and if that labor is profitable for the company.”

    Well, it would change the demand forces at least somewhat. Not sure how significant the change would be, but a reduction in CEO pay means an increase in supply (more money to work with) or less overhead for a given business line/job, depending on how you look at it.

  41. BillG says:

    @ DeDude “Why does the board see it as their job to compensate the CEO relative to the compensation of other CEO’s? The CEO will hire people at as low a salary as the market price allows. Why would the board not use the same principle. Hire a CEO for the lowest possible price the market will offer them a qualified candidate.”

    I’ve often wondered that myself. This whole overpaid CEO problem could be solved if the candidates for the job were required to spell out what their minimum acceptable salary would be before they were even granted an interview. That’s how it works for any other job. The only time pay consultants come into play is if turnover is high and management wants to find out why everyone is leaving. Even then they can always match or beat a better offer and if the board wants to do that with a good CEO then I don’t have a problem with that. The problem is most of these people are rarely getting better offers.

    @ UncleMilty “2) Even if CEOs got paid less, would that really raise the compensation of the average Joe?”

    Well, the money would end up going somewhere. It either goes to the employees, the shareholders, or the customers. Pick any of the three or a combination thereof and the average Joe ends up better off than he is now.

    “3) If CEO pay is excessive, than we should propose rules about corporate governance. I don’t see how taxing the crap out of top earners fixes the problem, unless you are planning on giving that money to everyone else, which I suspect is the real motive for most of the OWS protesters”

    Again, the money has to go somewhere. It will go to someone else in some form. They’re not going to just light it all on fire though using it for more corporate welfare is always an (undesirable) option. Taxing would solve the problem somewhat. I like the idea about changing corporate governance though. I’d like to see employees have some representation on the board and the compensation committee – preferably a union leader if its a union company but any non-management employee elected by the employees would be fine too.

  42. Greg0658 says:

    longtail gradual increase’g redistribution to pay for base infrastructure > allows small company’s to get into a competition with whales (a good thing) (M&A bad)

    1 or 2 (or more*) breadwinner households > more breadwinners = more disposable cash to redistribute into the capitalist system

    *coda – budding (bud’g) musicians find a coexist place to reside = your best play with the present game

    ps .. ‘g = ing follow’g the base word for the foreign budding english followers of our complex language (or bunk)
    pss .. coda (dont know if I ever stated) http://en.wikipedia.org/wiki/Coda_(music)

  43. AtlasRocked says:

    These are best 20 Gini nations, at the bottom, best is last.

    I put their nation debt as a % of GDP beside them, 9 of the best 20 are the worst nations in debt in the world. All of the big European nations in the best 20 Gini are in massive debt per GDP.

    nation GDP%
    Ireland 1382%
    Cyprus
    Denmark 310%
    Slovenia
    Serbia
    Belgium 335%
    Iceland
    Ukraine
    Belarus
    Germany 185%
    Finland 271%
    Kazakhstan
    Austria 261%
    Slovakia
    Luxembourg
    Malta
    Czech Republic
    Norway 251%
    Hungary 120%
    Sweden 282%

    US 101%

  44. victor says:

    I read that most the super rich’ wealth in the US, some 80% of it was created in the last 2-3 decades and further, most of it was “self made”. So, how do we separate Steve Jobs, Bill Gates, Larry Ellison types (jolly good men) from say Bob Nardelli, Bob Rubin, Hank Paulson types (the epitome of the unjust)?

    Invictus: any opinions on this question?

    I have mixed feelings about Buffett: he invests in near monopolies, buys tax credits for BRK, but makes great business sense and will give it all away anyway via the Gates foundation. To feed further the outrage about those scoundrels CEO’s, here are some excerpts about one who has broken several records in my book, Michael Eisner:

    Incentivizing Michael Eisner
    Paul Hodgson, 04.01.04, 1:13 PM ET

    Between 1998 and 2000, Michael Eisner, chief executive of The Walt Disney Co., famously made more than $680 million from the exercise of stock options. Almost $570 million came in 1998 alone. This scale of compensation would cast a long shadow over any chief executive. Still, the real question is not whether Eisner was worth it, but could the Disney board have got the same performance out of its chief executive for less incentive? And here’s something about illegal legal crimes against capitalism:

    Ovitz lasted only 14 months and left Disney in December 1996 via a “no fault termination” with a severance package of $38 million in cash and 3 million stock options worth roughly $100 million at the time of Ovitz’s departure. The Ovitz episode engendered a long running derivative suit, which finally concluded in June 2006, almost 10 years later. Chancellor William B. Chandler, III of the Delaware Court of Chancery, despite describing Eisner’s behavior as falling “far short of what shareholders expect and demand from those entrusted with a fiduciary position…” found in favor of Eisner and the rest of the Disney board because they had not violated the letter of the law (namely, the duty of care owed by a corporation’s officers and board to its shareholders).

  45. AtlasRocked says:

    Top 1% get $368,238 (20.9% of income) :

    307M citizens * .01 (percent*100) * 368k = $1.13 trillion in total to the top 1%

    There are approximately 80M kids under 20, if we distributed this money to all of them, they’d get $14,131 each.

    All those kids owe the US gov’t around $50,000 a piece, and they never have had a chance to vote on it.

    So if the millionaires took all their money from the kids who have never voted, those under 20, they’d take $14,131 from each child, for each year of salary.

    The nation has indebted **4 ** times ** that amount from each child **right**now**, and it’s going up exponentially.

    Why isn’t OWS pointing their fingers at the government, and the older generation, for taking this money from the kids without them even getting to vote? They owe us not a single dime, and they will have a serious case for violent revenge on us as they grow older. You just don’t do this kind of fiscal sodomy to a large group of people and expect a graceful acceptance over the long run.

  46. Lukey says:

    Point taken BR! But weren’t we really better off when these obscene payouts were front and center on the income statement? Tony O’Reilly (with whom I am very familiar as a long time Pittsburgh homeboy) was criticized for that but it was a one-time event where he cashed in stock options garnered over a career where he oversaw a twelve-fold increase in Heinz’s valuation. The next year he made a more pedestrian $1.3 million. I’m not sure Sir Anthony is the poster boy for undeserved executive compensation. When you oversee a $14 billion increase in corporate valuation, what is a fair compensation for that feat?

    I think therein lies the rub. As corporations have gotten bigger, there is still only one CEO, CFO, etc., and while the workers on the factory floors are producing more value (due to higher productivity) it’s not 15 fold more value. Maybe we should do something to create incentives for businesses to stay smaller (a progressive corporate tax maybe or less mindless regulation?) and that might help alleviate some of this. But regardless, the move to pay people primarily through “non-cash” compensation is likely the culprit for much of the undeserved pay for (non) performance.

  47. ironman says:

    Invictus asked:

    I’m curious as to why you undertook to examine Gini on a “Person” level vs. on the Household or Family level, which seems more intuitive to me. See, for example, this comprehensive Census piece on inequality from 2000 (yes, it was even an issue back then, though less so). It’s all about the Household. I called Census today to inquire about the more appropriate measure for these circumstances, and was told to look at Households or Families. I respect the work you do, but would like to understand your logic and reasoning.

    Good question. Believe it or not, we stumbled into the data by accident. Since we have an ongoing focus on the economic plight of teens and young adults (individuals between the ages of 15 and 24), the Person data is the only dataset where we can extract the income data that would fully capture what’s going on within this age group. Since the Census calculates the Gini coefficient for this age cohort, it was natural go back through the data for the years they make it easily accessible to see how it might be changing over time.

    So we did that and graphed it. It seemed to be relatively stable, but high (above 0.510). The next step was to compare it to all people (Age 15 and higher) – so we did, and were genuinely shocked that the data was essentially flat over time (around 0.500), which was very contrary to what we would have predicted. We posted what we found for all people (Age 15+) the next day.

    The next post (the next day) is our attempt to wrap our heads around why the data is so different from individuals to families and households and what might account for that difference, with changing household composition over time best seeming to describe the patterns evident in the data. We knew that others had previously hypothesized that it might be a significant factor behind the increase in income inequality for families and households over time, but weren’t aware of any data that supported the hypothesis.

    For a brief time, we thought we might be the first to have ever put that picture together, but then we ran across Ivan Kitov’s 2005 paper. If there’s anything earlier, I’m not aware of it.

    As for the Census, I can appreciate their position. Using 2010 as an example, it’s a lot easier to count the household income of 118+ million households than it is 308+ million individuals (or rather, the income earning individuals within the households.) So much so that a lot of other countries don’t even break the data down to the individual level, which means that you can only compare the household data for the U.S. with international data.

    Invictus: I appreciate — and thank you for — your response and explanation.

  48. [...] this intelligent review for more understanding of the issues before us:  Meritocracy vs. Plutocracy. Recommend on Facebook Share on Linkedin share via Reddit Tweet about it Print for later Tell a [...]

  49. Julia Chestnut says:

    Ironman, I suggest you read the work of Elizabeth Warren. It appears from her research that the worst thing a person can possibly do from a financial point of view is have children. If your cohort, 15-24, are not reproducing (or when they do, failing to form a separate household and staying put with their parents), of course their income is fairly flat.

    The reason people are getting hammered isn’t really income: it’s outlay. When you have inflation in the triple digits in necessities of life like insurance, health care, and education, that flat income becomes a death sentence. In effect, you work just as hard as you always did, harder even — and keep falling further and further behind.

  50. DeDude says:

    AltlasRocked@10:35;

    As usual from you that is a load of BS. And with no reference to methods or sources of the information (for good reason since nobody want a link to some morons dumb ass). As pointed out multiple times on this blog the national debt of countries like Denmark, Norway and Sweden is much less as a % of GDP than that of US. Furthermore, if you are talking about total debt (private plus public) the US is somewhere around 350%. But I guess an honest “apples to apples” comparison didn’t produce the desired result so you had to fix it.

    victor@10:40;

    You should ask your sources how they define the word “self made”. Is money made by speculating in stocks and commodities considered “self made”? If a CEO goes into a company and increase its stock value 10-fold by a strategy that ultimately destroy the company, is the money he sucked out of the company just before it collapsed considered “self made”. If money was made on the government tit leaving future generations with $14 trillion in debt was that money “self made”.

    ironman@8:40

    The fact is still that by using data that fails to granulate any income >100K you are presenting a “Gini coefficient” that has little connection to the current issue of income inequity. The Gini coefficient is basically a mathematical tool that looks at how much a distribution (on an X, Y graph) is “sinking down” from a straight line. The use of set interval income brackets rather than % brackets on the X-axis create a huge error. To talk about a “Gini coefficient” that is relevant to the issue of inequality in income (or inequality in any other type of distribution) you have to plot the cumulative % of people (with a given income) on the X-axis against their cumulative share of the total income. That is the only method that mathematically can give you a value that is relevant to “inequality of distribution” (% people on the x-axis vs % of total income harvested by those people on the y-axis). I realize that your mistake is partly caused by the source of your data failing to specify (or perhaps understand) what was presented. The fact remains that what you present may be called a “Gini coefficient” if you torture the definition but it has little if anything to do with inequality of income.

  51. AtlasRocked says:

    @Dedude: BR pasted a link to Gini list, and the other was

    http://www.cnbc.com/id/30308959/The_World_s_Biggest_Debtor_Nations

    a liberal news outlet that also used the CIA fact book. The debts are normalized to % of GDP, so you blew that one too, I normalized the data to the form you said was most informative.

    Thanks for asking me, and allowing me to show I don’t need to call you a name or put pejoratives next to anything I say about you in order to make my points. The more you react, the closer I’m getting to proving my point. You are my favorite poster here, “low hanging fruit” for debate.

  52. DeDude says:

    AtlasRocked;

    OK, so you are using a corporate media journalist as your source, but with the link we can at least track down the information. The “debt” you are citing from that source is actually a measure of foreign liabilities (not “nation debt” as most people would understand and define it). The more other countries invest in a country (e.g., Switzerland the third worst), the bigger its “nation debt” according to your definition. What you actually are showing is that the better a country is at distributing income the better it is at attracting foreign capital – if that was what you wanted to say then you should have said it in a more direct way. Your presentation gave the completely false impression that the more equal income is distributed, the more indebted the country and its citizens. Furthermore, rather than Cherry-picking nations you should have taken all 20 nations from from the CNBC list and listed them according to worst “debt” (1. Ireland, 2. UK, 3. Switzerland, etc.) and then listed their “Gini Index next to them.

    Sorry about the pejoratives, sometimes the lose narrative driven debates get to me.

  53. AtlasRocked says:

    I’m not here to engage in personality contests, DeDude. I’m here to point out what has worked or is working now, and to point out grotesque moral violations if they are apparent and visible.

    Debt is *not* an accepted measure of attracting foreign capital, bro. “External debt is a measure of a nation’s foreign liabilities, capital plus interest that the government and institutions within a nation’s borders must eventually pay. ” Right from CNBC, not Fox. To measure attraction of foreign capital, you talk about foreign properties bought, or factories built. That’s an investment, a foreign owned asset.

    Yes the country’s liabilities are a measure of how many external interests have “invested” in a manner of speaking, but this doesn’t show up as an asset, it’s a liability. It’s like saying if I owe you a million dollars, you’d say its a measure of how much you believe in me. But I can’t write “DeDude thinks I’m worth a million dollars” on my accounting ledger. I have to write “I owe DeDude $1 M. That’s my external debt.

    Sound right?

  54. victor says:

    @DeDude: do you have a breakdown between the good guys and the bad ones?

    Nassim Taleb voices concern about “the growing separation of the ethical and the legal.” He writes :
    “Former U.S. Treasury secretary ‘bankster’ Robert Rubin, perhaps the biggest thief in history, broke no law.”

    And please the Left vs. Right is so passe; the new paradigm is now Up vs. Down as Ratigan reminds us.

  55. DeDude says:

    AtlasRocked; yes and that is why a country like Norway with a huge sovereign wealth fund show up at 251% CNBC defined “debt” much higher than the “debt” of Greece (182%) and the “debt” of Germany (185%). If you want to present a flawed concept of “debt” the least you can do is pointing out its flaws. Otherwise you may be accused of Foxifing the debate with distortions.

    Ironman; sorry I missed some of you previous post because they were delayed and then popped up higher up. So they granulate up to the top 0.6% then that is not the error. The increase in income disparities is well documented on individual level, pre or post tax, IRS data etc. However, you slice it, the top 1% has increased its % of the total income (as demonstrated here at TBP in the past few years). So the question is why does that one Gini coefficient calculation by the census fail to show this fact, even though the Gini ccoefficient is designed to capture the exact type of inequality where the top 1% captures a higher % of the total. That is a question the census need to answer (I understand you just recited their error, you did not make it).

  56. AtlasRocked says:

    @Dedude?

    Where is the ratio of the sovereign debt to foreign pensions stated?

    What do think is in those sovereign wealth fund that guarantees they won’t crash when Italy does?

    Are Norwegians pensions “defined benefits” like so many of the far underfunded ones here in the US?

    Can Norwegians work overtime and drastically boost their pension in the last few years of work?

    Can Norwegians get “disability” designations like 92% of LIRR workers do, to secure extra retirement $?

  57. AtlasRocked says:

    @Dedude? For the first question I meant:

    Where is the ratio of the sovereign pension assets to external debt stated clearly?

  58. AtlasRocked says:

    @Dedude:

    If someone tells me a fact from Rolling Stone, I go read it, I don’t label it and treat it second tier just because Rolling Stone Magazine is typically disparaging of anything conservative (except for music IP protection.)

    Two disturbing trends I’m observing: One faction of American politics is using a phrase “world view” or “Fox News” with “facts”. Something like this: “Those facts support your world view but not mine.” “Oh, you heard that on Fox News.”

    You see, some facts are getting “second tier” status, and they just happen to be conservative views or facts on Fox News or from Glenn Beck. Those facts are then labeled facts of shame, because of their source.

    Meanwhile the same group is arguing as if their opinion trumps facts – You can provide ten historical and contemporary reasons why a policy they want has failed miserably and spectacularly, but if they view their policy as benevolent, then their opinion trumps facts.

    I see where this is going. This is how great lies are propogated. By blurring what is a fact, then trumpeting what is opinion. That is what you are doing, DeDude. I’m on to it.

    Beware – these are bad manners of debate and positioning you are adopting, Dedude. Stop labeling facts and trumpeting your opinion as superior to a body of contradictory facts.

  59. victor says:

    @AtlasRocked: well put you read my mind; there is news, opinions, commentaries out there and it is up to us to discern which is which. I like your civil, elegant and eloquent way of putting these issues in the right perspective. We should all avoid being enchained to our ideologies and at least attempt to shake off the chains of cognitive dissonance.

  60. DeDude says:

    @Victor;

    Unfortunately I don’t have a breakdown but I am only aware of less than a handful of “good” self-made billionaires – so based on “sampling” my guess is that most are bad. When your source is using the word “self-made” and manage to get it to 80% my guess is that call anybody who didn’t inherit their whole fortune, “self-made”.

    The idea that there is no left or right anymore is dead wrong. However I agree with those who say that GOP and democrats as parties no longer represent the left and right (they represent the extreme right and the right). The left is the progressive minority in the democratic party, and they are the only tiny little group of our representatives who work for the “down”.

    @AtlasRocked;

    There are sources that have consistently and on a weekly basis been exposed as Cherry-picking information and distorting facts to support a specific narrative. Among the big corporate media outlets, Fox is the worst of that – some say they are the inventors of the opinion peddling “faux news”. When a source has been consistently exposed for that kind of dishonest agenda driven distortion of reality, they earn the right to be considered unreliable and second tier. It is not the actual true “facts” that get second tier, it is the source that eventually earn that status. When such a source present facts in support of their usual agenda the natural question is: how did they bastardize the language and definitions or cherry-pick a small part of all of the available data to make it look like facts were supporting their usual narrative and agenda. This is the exact approach that you did on 11/9 @10:35 with your incomplete list citing only 9 of the 20 countries from the CNBC source and failing to specify what “massive debt per GDP” actually was a parameter that manged to put Norway and Germany up higher than Greece and Italy. There was no direct lie, just a “foxification” of facts such that they left a completely false impression in support of your opinion and agenda.

    The difference between us is that you are right wing because you go out and search the world for information in support of your right wing ideology, and simply dismiss or ignore any data in conflict with your ideology. I am left wing progressive because the data and facts support my views and whenever I look a little further under the blanket of “facts” supporting the opposite (right wing) views I seem to find a load of distortions, lies and BS. Yes there are parts of the “classic” left views that I reject and part of the “classic” right views that I accept – those “diversions” from sterotypes are based on facts.

  61. AtlasRocked says:

    @Dedude: I asked you for facts to support your case. So far you’ve tried to say a country’s debt was an asset, then you switched to saying that 1 country has a big asset pool that makes up for the debt.

    OK, so now, Show us the size of the Norwegian asset pool relative to their debt, and you begin to score points with facts.

    You are executing a shoot and run debate tactic – throw out a bogus reason why my facts are poor, then when I ask you to back it up, your retreat to a new diversion. You’re now at level 2 in your retreat. Show us the data you said proves Norway’s huge deficit is not important because their pension fund is much bigger.

    Norway has oil, so …. uhhhh … you might be cherry picking the one large oil exporter in Europe to show they have a big asset pool. What about the others?

    If you do show Norways pension size and investments, I’ll have more questions about how secure and honestly valued Norway’s pensions are, so be ready for that too.

  62. AtlasRocked says:

    @Victor, thanks for your kind words. I spend a lot time trying to find language that is not pejorative to either partisans, or self proclaimed “non-partisans”.

    To find solutions, we have to stop talking like they do in DC, a torrent of strawman attacks. DeDude is a fine example of someone who spends all his energy assigning bad intentions to everyone instead of talking about their facts and solution ideas as they are brought forth.

    @DeDude – please, Dude, lose that strawman attacks, they are a double lie: you lie about what i’m up to, and you deceive when you build a case based on the lie you just told. I haven’t listened to Fox news in years, I don’t like any live news programs. Google my words, see if you get hits suggesting I plagiarize or copy from any conservative news site, it’s easy to check to see if I’m regurgitating, right? It’s 2011, bro, if you have an accusation, check it yourself before you post it and document you are making up accusatons w/o foundation, and making conclusions on the contrived accusations.

  63. DeDude says:

    @AtlasRocked;

    You have back-peddled so far away from your original intend of showing correlation between equality in income distribution and “massive debt per GDP” that it becoming more a waste of time than I can afford. Any reader who is still ideologically blocked from understanding my points, is a lost cause and a waste of time. So I will stop here and leave you to post the last “nah-nah-he-is-giving-up-so-I-won” contribution to the debate.

  64. AtlasRocked says:

    @DeDude – I guess the Norway data didn’t show what you wanted it to show. Challenged on one simple fact check – you white flagged. In ghetto basketball they call this REJECTED. You challenged me for sources and I got them for you, bro.

    I was actually open to being persuaded with your data, and still am. I’m here to learn about other data I might have missed, as much as to promote good ideas that my research shows has worked best.

  65. monkframe says:

    Great article.
    For further reading, I recommend “The Spirit Level” by Richard Wilkinson and Kate Pickett.
    Great book packed with data from many studies showing how greater income inequality causes societies to go downhill. Less inequality seems to help strengthen societies.

  66. AtlasRocked says:

    It doesn’t do me any good to make you an adversary, DeDude, I’m hoping to promote cerebral and linear dialogue here, dialogue that leads to solutions.

    If we spend all our time discussing who has the best intentions, or the highest ideals, based on the false notion that the one who can claim the best intentions must have the best solutions, we’ll have made 2 critical errors in our path to solutions. Neither the first or second item I mentioned here points in the direction of problem solving – indeed these are two characteristics of failed organizational behaviors.

    I highly recommend you take an oath never to claim you have the best intentions, and never to disparage the intentions of others trying to converse. Let’s assume we all want good, and spend time searching for solutions that have worked, ok?

  67. victor says:

    OK, back to the business of inequality. So, we have no qualms with the good guys, but we will tax them at least to levels pre Bush 43 just like the Quran imposes on those infidels (Christians and Jews) who wouldn’t convert. But what about the bad guys? They break no law (see Rubin and Grasso below). Do we write new laws and enforce them draconically? Will this make inequality less than it is now?

    Here’s a couple of Wiki excepts about Dick Grasso:

    Richard A. “Dick” Grasso became embroiled in controversies and lawsuits about his excessive pay package and $140million golden parachute. On July 1, 2008 the New York State Court of Appeals dismissed all claims against Grasso and ruled that Grasso was entitled to the entirety of his compensation.

  68. victor says:

    Here’s a list of US billionaires as per Forbes 400 covering a range of 377 pretty people from #1 Bill Gates $57B, to #163 Michael Milken $2.5B and all the way down to poor #377 Sandy Weil with a measly $1.3B.

    http://www.forbes.com/lists/2008/54/400list08_The-400-Richest-Americans_Rank.html

    Those so inclined could Google/research these billionaires and decide if they’re good or bad or in between.
    As for their political leanings, one can go to HuffPost’s link below and gleam where they make their political donations. Interestingly, some show good knowledge of hedging and donate to both parties.

    http://fundrace.huffingtonpost.com/