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host · 11-19-2007, 07:13 AM

Quote:

Originally Posted by Sun Tzu

At least give me the choice. If I make the choice to invest in a government program that will take care of me then take it out of my check. I would much rather invest it in ways I feel will be better for my security.

<h3>As far as distribution of wealth, then put out a product or service that will destribute it in your direction.

I dont think there is going to be any government situation that produces a utopia, but if there is an free market environment where anyone has a chance to make whatever future they are willing to work hard enough to achieve it seems as totally acceptable to me that some are mega wealthy.</h3>

--As long as national policy isnt being dictated according to the weight of someones personal vault. Perhaps the 2 go hand in hand.

Sun Tzu, US wealth inequity is at a crisis level. Canada enjoys much more equality of wealth distribution, but there is growing concern there, that the inequity trend is a problem. The momentum of the trend seems to be resistant to efforts of the Canadian government to lessen wealth inequality, compared to results in the past.

Please understand that the predictable effect of what you advocate will accelerate the trend toward further wealth consolidation. The combination of the trend and the corruption of the corporate management at even the biggest US corporations lessens opportunity for what you predict will happen.

Is there some point where you would be willing to support your opinions with links? Is there some level....say, when the top ten percent in the US own 85 percent of total US assets, compared to the 70 percent they own now, where you would revise your dismissive reaction, your "free for all", "let the chips fall where they may", advocacy?

Quote:

http://www.statcan.ca/english/freepu...6/art-1.htm#10
....Wealth inequality 1984 to 2005

As numerous studies have shown (for example, Davies 1979 and 1993), wealth is highly concentrated. In 1984, families in the top 10% of the wealth distribution held 52% of aggregate household wealth whereas the bottom 50% held only 5% (Table 1).3 Concentration increased from 1984 to 1999 and again from 1999 to 2005, as the top 10% of families came to own 56% of Canadians' net worth in 1999, and 58% in 2005.4 Over the 1984-to-2005 period, only families in the top 10% increased their share of total wealth.5 ....

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http://www.alienlove.com/modules.php...rder=0&thold=0
SPOXTalk.com: The GINI Factor

.......In an ideal country, there would be a small percentage of wealthy people, say 15 to 20%, a burgeoning middle class of around 60 to 70%, and a poorer class of around 10 to 25%. This is very important from another aspect as well. It is common knowledge that the rich don't pay taxes. That's why they hire all those tax consultants, etc. It is more affordable for the rich to pay $100,000 to $200,000 per year on consultants who will save them, in the end, $10 to $20 million or more. Likewise, the poor don't pay taxes either. THEY CAN'T. They live paycheck to paycheck. It is up to the country's middle class to pay for nearly every aspect of governmental life. The middle class earns enough money to be taxed on, yet lacks the resources to defer payment through legitimate means. In other words, they can't hire the experts to tell them how to avoid paying taxes. The middle class can't afford to spend $100,000 a year to avoid paying $20,000 in taxes. Therefore, what the GINI coefficient tells us is how well off the middle class of a country is.

First world nations are inherently better off than third world nations. Let's look at some contrasting numbers between first world and third world. Recently, Japan scored a 24.9 coefficient, one of the lowest numbers ever recorded. Sweden scored 25, Germany scored 28.3, France scored 32.7 and Canada scored 33.1. Now let's see how the third world nations scored around the same time. Argentina scored 52.2, Mexico scored 54.6, South Africa scored 57.8, and Namibia scored 70.7. This clearly shows us that the standard of living in Japan, at 24.9, is much better than the standard of living in Namibia with a score of 70.7. The distribution of wealth is much more equal in Japan than Namibia, and we can see by the effect on our global society that indeed, Japan plays a much greater role around the world than Namibia.

And this is underlying intent of the GINI factor. It rightfully addresses human conditions on a national basis through a strictly monetary viewpoint......

.......... So this brings us to the United States. Surely we have one of the best GINI factors of all, right? Don't we distribute wealth better than all the other nations?? <h3>In 1970, our coefficient was 39.4, a little worse than Canada. But by 2005, our factor had worsened to 46.9, nearly that of Argentina.</h3> It is clear that we are slipping more and more into the abyss of third world status. It is predicted that we will attain Mexico's 2000 GINI factor by the year 2046.

What can we do to stop this slide into third-world status? How can we reverse the train of destruction from taking away what our forefathers fought so hard to obtain?

It is clear that we don't need any more tax breaks for the wealthy. After all, they already avoid paying any taxes to begin with, why would we need to give them tax breaks on top of it? We are unique among nations in that we have the currency that everyone else cherishes. We can easily reduce the taxes on the middle class and thus allow them more disposable income. We have a bloated military industrial complex that, when reduced to actually required size, would save the economy over $300 billion dollars yearly. We are not the world's policeman, and therefore, the ills of the world need to be split among all countries, except those areas where we were completely stupid and caused problems to begin with.

But the GINI factor is unforgiving. It is deadly in its precision and shows quite rightly how the wealth is distributed country by country. While France has improved dramatically over the past few decades, from a coefficient of near 50 to a coefficient closer to 30, the US has slackened from a coefficient around 35 in 1945 to a coefficient near 50 in 2005. Canada has seen dramatic improvements from near 35 in 1950 to almost 25 in 2005. In fact, only China has worsened as much as the US.

Quote:

http://wallstreetexaminer.com/blogs/...p=228#more-228
« Reflections on Christmas
FCB Prisoner’s Dilemma or Musical Chairs? »
Rebuttal of GaveKal’s Bully “Wealth & Platform Theory”

The latest in misconceived bullish theories to come down the pike was espoused in this week’s Barrons, by GaveKal. A centerpiece of their theory is the “net worth” of American “households”, derived from the Federal Reserve Z1 report. In 3Q, 2006 the Fed reported that US households held $67.1 trillion in assets against liabilities of $13.0 trillion, for a net worth of $54.1 trillion. GaveKal goes on to assure us that based on this supposed solid balance sheet, the US will have little difficulty with borrowing from these foreigners, and servicing trillion dollar plus annual twin deficits......

.....What GaveKal doesn’t get into at all is who holds all this fictitious American wealth? Readers of this blog already know the answer to that. It’s in the hands of plutocrats and the elite. Therefore for purposes of my counterpoint to the “bountiful wealth” theory, <b>I am just going to acknowledge from the get go that about 10% of American households are doing fabulously indeed, at least for the moment. The next 10% may be doing well, sort of, but increasingly that’s subject to debate. It’s the bottom 80% that I worry about and will focus on here.</b> Further I advance the following question: can the US economy stay solvent and strong by depending on transitory Bubble “wealth” and the income of the top 10%, especially as “platform companies” jettison the jobs of the other 90%?

Let’s jump right into who owns the $54 trillion. Most of the breakdown is based on the Fed’s clunky 2004 survey of consumer finances. You will also find more data and background to dig deeper from a series of better written papers that I’ve linked to. As this post is long and somewhat dense, impatient “get to the point” readers who don’t care to go deep, may wish to skip to the bullet points at the end. Then you can always come back to see what the fuss is about.....

........The next focus is on the Bottom 80% who hold $8.27 trillion, or less than 15.3% of total US net worth. These are the people whose jobs are being outsourced to GaveKal’s “platform companies”, to be rehired as low paid service sector poodle groomers and swimming pool cleaners for the elite, or just as commonly, elite wannabees. Yet this group accounts for 61.3% of US consumption. The US therefore can not depend on the Top 20% for its consumption, as wealth-spending elasticity is not as strong: 84.7% of total wealth equals only 38.7% of US consumption...........

........<h3>The bottom 80% owns 9.4% of all stock and mutual funds, but 34.6% of housing equity. That’s $938 billion in shares, and $7.08 trillion in housing equity (including land and farms). In the last three years stocks have nicely appreciated, but Bottom 80s have not been there to exploit it.</h3> The bottom 80s have much more, in fact just about everything, riding on the housing Bubble. Prices there are now much more problematic, especially for those buying high and late in the cycle and using leveraged exotic (or toxic, depending on your point of view) mortgages.........
I am not concerned that there will be only a muted reaction when the bottom 80 percent of Americans "take the hit" in the real estate valuation implosion that is still only in it's infancy.....

Quote:

http://www.sustainablemiddleclass.co...efficient.html
<FONT SIZE=4>.....The Gini Coefficient is named after Corado Gini, an Italian economist who published it in 1912. The Gini Coefficient is derived from a statistical formula and expresses the degree of evenness or unevenness of any set of numbers as a number between 0 and 1. A Gini Coefficient of 0 would indicate equal income for all earners. A Gini Coefficient of 1 would mean that one person had all the income and nobody else had any.

Thus, lower Gini Coefficients indicate more equitable distribution of wealth in a society, while higher Gini Coefficients mean that wealth is concentrated in the hands of fewer people. More information is available at the </FONT><A HREF="http://en.wikipedia.org/wiki/Gini_index"><FONT SIZE=4>Wikipedia (Gini coefficient)</FONT></A><FONT SIZE=4>. Sometimes the Gini Coefficient is multiplied by 100 and expressed as a percentage between 0 and 100. This is called the "Gini Index". ...

Quote:

http://www.energybulletin.net/12271.html
<img src="http://www.energybulletin.net/image/articles/12275/fig4.png">

....In blunt terms, the poor are getting poorer and the rich are getting richer. In fact, except for the top 20 percent of our population, we are all getting poorer as more and more income shifts to the very top, and The American Dream becomes less and less attainable for more than 80 percent of our population.

Amazingly, the differences between the top fifth – the richest – and the bottom fifth – the poorest – is almost equal to what it was during the Great Depression, with no New Deal in sight! This discrepancy was made painfully apparent during the Hurricane Katrina disaster when the poorest of New Orleans’ inhabitants, the bottom fifth, suffered the lack of nearly all life-sustaining resources, as Federal Emergency Management Agency (FEMA) head Michael Browne consistently ignored urgent updates from his staff at the scene.
<img src="http://www.energybulletin.net/image/articles/12275/fig2.png">

The Gini Coefficient, which we’ve previously used to compare nations on a world basis, also reflects increasing inequity within the U.S. (0 corresponds to everyone having the same income, and 1 corresponds with one person having all the income. The U.S. Gini Coefficient (Figure 2) is now at the highest level since records began to be kept!3

A Gini coefficient of 0.3 or less indicates substantial equality. A coefficient of 0.3 to 0.4 is generally considered an acceptable normality and 0.4 or higher is considered too large. A value of 0.6 or higher is predictive of social unrest.4

<b>Mexico's Gini number is 54....</b>

Quote:

http://www.statcan.ca/english/resear...MIE2007298.htm
Income Inequality and Redistribution in Canada: 1976 to 2004

by Andrew Heisz
Executive summary

....We begin by examining the effect of redistribution on the level of inequality. <h3>In 2004, the Gini index based on family market income was 0.428 while on family after-tax income it was 0.315, meaning that the direct effect of redistribution was to reduce inequality (as measured by the Gini) by 0.113.</h3> In 1989, redistribution lowered income inequality by 0.104, and in 1979, redistribution lowered inequality by 0.078. Thus, redistribution lowered inequality by more in 2004 than it did in either 1989 or 1979. The study shows that changes in transfers and taxes together contributed to the rise in redistribution across the 1980s. During the 1990s, our results show that the changes in taxes and transfers described above had little net effect on overall redistribution, which remained as strong in 2004 as it was in 1989.

<h3>Table B Trends in income redistribution, 1979 to 2004.</h3> ...

Quote:

http://www.nytimes.com/2006/12/06/bu...ss&oref=slogin
Study Finds Wealth Inequality Is Widening Worldwide
By EDUARDO PORTER
Published: December 6, 2006

<br><center><img src="http://graphics8.nytimes.com/images/2006/12/06/business/1206-biz-webWEALTH.gif"></center>

....But even as income inequality has reached near record levels in many countries, the distribution of the world’s wealth — things like stocks, bonds or physical assets like land — has become even more narrowly concentrated than income, according to a new report by the World Institute for Development Economics Research of the United Nations University.

In 2000, the top 1 percent of the world’s population — some 37 million adults with a net worth of at least $515,000 — accounted for about 40 percent of the world’s total net worth, according to the report.

The bottom half of the population owned merely 1.1 percent of the globe’s wealth. The net worth of the world’s typical person — whose wealth was above that of half the world’s population and below that of the other half —was under $2,200......

....Americans have amassed much of the world’s treasure. According to the report, in 2000 the United States accounted for 4.7 percent of the world’s population but 32.6 percent of the world’s wealth. Nearly 4 out of every 10 people in the wealthiest 1 percent of the global population were American.

The average American had a net worth of nearly $144,000, losing only to the average Japanese, who had $180,000, at market exchange rates; the average person in Luxembourg, who had $183,000; and the average Swiss, who had $171,000.

By contrast, in 2000 the average Chinese had a net worth of roughly $2,600, at the official exchange rate. China, home to more than a fifth of the world’s population, had only 2.6 percent of the world’s wealth. And India, with 16.8 percent of the world’s people, accounted for only 0.9 percent of the world’s wealth.

Among Americans, wealth is distributed about as unequally as it is around the globe. The new study cited data from the Federal Reserve’s Survey of Consumer Finances, which found that the richest 1 percent of Americans held 32 percent of the nation’s wealth in 2001. (This excludes the billionaires in the Forbes list, who control roughly another 2 percent of the nation’s wealth.)

This tops the inequity in every country but Switzerland, among the 20 nations that measure these wealth disparities and are cited in the report. And it vastly outstrips the inequality in the distribution of income. A recent study by Emmanuel Saez of the University of California, Berkeley, and Thomas Piketty of the École Normale Supérieure in Paris, found that in 2004 the top 1 percent of Americans earned a higher share of the nation’s income than at any time since the 1920s. Still, that share was only 16 percent.

The authors of the new study acknowledged that their results were a little rough. Wealth is difficult to measure accurately, and many countries do not even try. For many countries, the authors had to impute data, making several assumptions......

I recently documented that the chairmen of the largest US bank and the largest brokerage, blatantly lied about the earnings prospects of their companies, going forward, complete with accompanying news reports quoting their false assurances, followed by announcements, just weeks later, of additional multi billion dollar losses:

Quote:

http://www.tfproject.org/tfp/showthr...ll#post2342762

.....We've experienced, in less than the last 60 days, the spectacle of the largest US Bank, Citigroup, the largest financial brokerage, Merrill, and the largest industrial corporation, GM, all experience significant up moves in the prices of their common stock, on public assurances of their CEOs or CFOs, that "the worst is over". The stocks have all declined at least 25 percent in price, since, rocking the markets. Government regulators have done nothing in response, even though the false pronouncements of these giants greatly influenced the broader move up to new October 9 record highs on both the Dow 30 and S&P 500 stock indexes. Blatant manipulative, criminal fraud, and no federal regulators have announced objection or an inquiry.....

<h3>Your "leave it to the freemarkets" opinion does not do well if you click the preceding link and read my post, and it's not a new problem. The predecessor of Citicorp, National City Bank, was rife with similar corruption, 75 to 80 years ago:</h3>

Quote:

Jackie Corr: Ferdinand Pecora, an American Hero
Scheduled to follow Mitchell was National City Director and Anaconda Copper Chairman John D. Ryan. ... But others would come before Pecora and the Senate. ...
www.counterpunch.org/corr01112003.html - 27k - Cached - Similar pages - Note this
Damnation of Mitchell - TIME
Few hours later the directors of National City Co. accepted the resignation of President Hugh Baker. Mr. Mitchell and Mr. Baker returned to Washington for ...
http://www.time.com/time/magazine/ar...5272-4,00.html - 36k - Cached - Similar pages - Note this
Citibank - Wikipedia, the free encyclopedia
In 1933 a Senate investigated Mitchell for his part in tens of millions ... By 1969, First National City Bank decided that the Everything Card was too ...
en.wikipedia.org/wiki/Citibank - 57k - Cached - Similar pages - Note this

Sun Tzu, your solutions do not even acknowledge, much less address the problems. The only recourse "the rest of us" have in responding to the problems of growing (and already, in the US, obscene) wealth inequality and the chronic corruption in the largest corporations (it's assumed that the largest are less corrupt than the less prominent corporations) is government.

There is no level playing field, and there is no inertia for the lower three quarters of us to reverse the wealth consolidation trend. The regulatory laws are being dismantled by lobbyists of the financial industries, and there is lax enforcement, and you seem to want that to continue.