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Wealth Disparities worse since the Real Great Depression

Discussion in 'Economics and Financials' started by padre31, Feb 25, 2010.

  1. padre31

    padre31 Premium Member Luxury Box

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    http://seekingalpha.com/article/189...s-approaching-1920s-levels?source=from_friend


    [​IMG]

    Nice system, this is causing instability in the US economy and will be resolved one way or another, in my view the best way to deal with it is for costs to be reduced on Institutional Services that provide access to the upper range of earnings potential.

    A risky strategy to be sure, however the alternative will be a Nation that is deeply unstable.
     
  2. Vengeful Odin

    Vengeful Odin Norse Mod Staff Member

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    Pads, here's an interesting chart my wife came across a few weeks ago. This chart shows you how much CEOs and top are making in relation to the average joe.

    I'd link the chart as a graphic, but it's huge.

    http://graphics8.nytimes.com/images/2006/04/08/business/pay.graphic.jpg

    EDIT: I uploaded the chart to Photobucket ... not as big but you get the idea.

    [​IMG]
     
  3. padre31

    padre31 Premium Member Luxury Box

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    A dead link VO, but the information is an established fact, what is worse is "Avg yearly salary" has shrunk 4k from 44k to 41k.

    The real question is what to be done about it?

    There are not enough wealthy to tax to pay for vast public benefit programs, and the FedGov and the majority of Stategov's are running huge deficits as it is.

    So the question then becomes "what now"?

    It is my view that College Education costs are simply not connected to reality, and I also have the view that lower taxes help everyone.

    But I also think in a RealPolitik sense that the reason why Govt jobs are paying far more on average than private sector jobs is they are the last bastion of well paying employment with decent prospects.

    But someone gotta pay for them, and higher taxes are now causing Capital Flight from places such a NJ and even NY so what States are doing is issuing Debt to make up the difference between Revenues and Outlays, and that will not work longterm and is the road to ruin for nearly everyone.
     
  4. Vengeful Odin

    Vengeful Odin Norse Mod Staff Member

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    I think you have the NY Times blocked on your computer ... :lol:

    I agree with your general premise though. Wealth Disparity might be the single-most important issue facing us if we want to get this economy moving on the right track.

    Unfortunately, my experience in economics consists of a total of 5 college courses ... and even with that little bit of understanding I don't know how we put the genie back in the bottle.
     
  5. padre31

    padre31 Premium Member Luxury Box

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    Probably, any organization that employs Frank Rich and the computer just refuses to load the page..


    Well, to me the acknowlegment of the issue is the first step, where things go from there is where the discussion is.

    To me, don't let the short term difficulties color the logic behind long term descisions, that is a sort of "patriot act" way to to deal with things, passed in a hurry, not well thought out, with mixed to just poor results.

    Sometimes in a tight spot the best thing to do is nothing and see how things play out.
     
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  6. Stitches

    Stitches ThePhin's Biggest Killjoy Luxury Box

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    Could you elaborate?
     
  7. padre31

    padre31 Premium Member Luxury Box

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    [​IMG]


    ....
     
  8. Stitches

    Stitches ThePhin's Biggest Killjoy Luxury Box

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    Ok that makes sense. You could've meant a number of things from just that sentence IMO.
     
  9. padre31

    padre31 Premium Member Luxury Box

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    Understandable, though the value of some college degrees is not neccessarily connected to future earnings potential, the plain fact is virtually all degrees in whichever field are quite expensive to obtain.

    Which creates a sort of trap, can't afford college, cannot earn enough money to afford college, debt is an option that many students take, but the tuition costs are rising so quickly a graduate can finish college and owe more in education related debt than the cost of a new home.

    You'd know better than myself, but back in the day when I went to College the average Doctoral student owed something like 200k or so?

    Back then BA's on average owed 25k or so.
     
  10. Stitches

    Stitches ThePhin's Biggest Killjoy Luxury Box

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    That's very close to what I graduated owing.
     
  11. padre31

    padre31 Premium Member Luxury Box

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    iirc, your situation was not typical?

    And your field paid well (Dr.?)
     
  12. Stitches

    Stitches ThePhin's Biggest Killjoy Luxury Box

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    lol. I'm not a Dr.

    My field pays well enough.

    I would think my debt was typical for a BS degree. I had some scholarship money, and paid what I could on my own through working, so maybe it was lower than some people. But pretty close to most probably.
     
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  13. padre31

    padre31 Premium Member Luxury Box

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    Hmm...if not a medical Dr than a Dr of the English Langauge perhaps?


    :lol::lol:
     
  14. Stitches

    Stitches ThePhin's Biggest Killjoy Luxury Box

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    Haha. Mom's a teacher and my fiance has a BS in English Lit.
     
  15. padre31

    padre31 Premium Member Luxury Box

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    Apparently teaching English Lit pays better than bucthering English the way I do...:lol:

    The real problem with those tuition costs taking off is it slams the door on people going to college, or those who do manage to go end up entrapped in huge debts.

    I owed 10k and it took me 5 yrs to pay it off.
     
  16. Stringer Bell

    Stringer Bell Post Hard, Post Often Club Member

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    Sounds like we need to "spread the wealth"...
     
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  17. padre31

    padre31 Premium Member Luxury Box

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    Sure...beginning with you...:shifty:
     
  18. Stringer Bell

    Stringer Bell Post Hard, Post Often Club Member

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    Unfortunately I can't create policies to prevent the concentration of wealth.
     
  19. unluckyluciano

    unluckyluciano For My Hero JetsSuck

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    i agree college tuition is going way up. I actually think it has less to do with academics and more with athletics.
     
  20. Fin D

    Fin D Sigh Club Member

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    Monopoly (the game) is a pretty accurate analogy here.

    By the time the game is over one person has all the money. Its pretty much the same in capitalism.
     
  21. maynard

    maynard Who, whom?

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    its a big problem. but what do we do about it? how did it get this way?

    not enough blue collar jobs? too many people with college degrees?
     
  22. daphins

    daphins A-Style

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    Working within a budget seems to be a foreign concept to colleges.

    I just graduated 2 years ago with a 5 year degree and 60k in loans. It sucks but there really was no way around it. My degree was a full 5 years leaving little time to work on the side (I did as much as I could, and every summer) as i had 18+ credits per semester at a public school where I got residency. Out of state students ended up owing 100k+.

    Tuition at my school went up every semester, yet enrollment stayed the same. Infact enrollment is nearly the same as it was when my dad went to the same school 30 years ago, yet tuition has climbed to an astronomical rate.

    With the same amount of students one would think that tuition would be roughly the same (plus inflation of course) but that's nowhere near the case.

    The only conclusion I can come to is that schools are fiscally irresponsible because programs like Federal student loans allow them to be. Universities are made up of many students with access to large amounts of federally backed loans. As long as we have access to that kind of money they have no need to scale back costs at the university.

    If loans weren't there they would have to find ways to cut money and lower tuition....less they lose the vast majority of their student body.

    This is just one of my theories, but that's where I saw the money coming from. Obviously I'm not advocating cutting student loans altogether (I needed them to get my degree), but I think it is a problem.
     
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  23. BigDogsHunt

    BigDogsHunt Enough talk...prove it!

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    BO isnt spreading the wealth fast enough....another lie!!!

    heehehehehe...:pointlol:
     
  24. FinSane

    FinSane Cynical Dolphins Fan

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    Pretty simple explaination here.

    1940s-1960s: Top tax rate 90%

    1960s-1970s: Top tax rate 70%

    1970s-mid 1980s: Top tax rate 50%

    1980s-present: Top tax rate 36%

    Meanwhile, Average pay for workers has mostly flatlined in the past 30 years while those at the top saw their incomes vastly increased. Add in factors such as deindustrialization, outsourcing, cost of living increases, and fewer opportunities to earn a middle class income, especially for those in my age group who are entering the work force(or trying to at least).

    Some helpful charts:
    [​IMG]
    [​IMG]
    [​IMG]

    Because banks were able to convince people that their houses were like large piggybanks, people took our second mortgages on their houses to pay off other debts or to start new businesses. We all know what happened next.
    [​IMG]

    There's alot more to it, but begin to understand, what this means for everyone as were completing the transformation of the economy from a manufacturing and consuming economy to a service economy.
     
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  25. bakedmatt

    bakedmatt Well-Known Member

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    :up:
     
  26. Jimmy James

    Jimmy James Ron Swanson

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    What Padre is selling is absolutely what I'm buying. The idea that everybody needs a college education is ludicrous. It's appalling. It's completely wrongheaded thinking based on the premise that people with a college education make something like 90% more (or about $1 million more) than those with a high school education (or those who drop out -- whatever the figure is, the concept is the same).

    The problem is that if you send everyone to a system that was built for 50% of the population to use, there is a need for huge capital improvements, costs soar, and the price soars. At the same time, the reality is that we need low paid laborers and workers. We can't be a nation of CEOs. People need to be aggressively routed into the level of their ability. By not doing so, we're sending marginal prospects to college. Colleges can't fail them, so they eventually graduate most of them. The value of that degree suffers. The earning potential suffers. The answer is seen as more education, further burdening the system. They end up in jobs that reflect their true level of ability, and they struggle to pay for loans and to make up for the lost earning potential they had during the 2, 4, or 6 years of education they got.

    If we reversed this trend or at least abated any growth, we could probably afford to pay the less skilled workers more and address that issue in that way. The idea that everybody is a special star is a lovely one in theory, but it's creating a lost generation of people and complicating our society in ways that just aren't necessary.
     
  27. my 2 cents

    my 2 cents Well-Known Member

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    Great post.

    We are currently in the process of it being very easy to get a degree and the differential from HS diploma to bachelors is not so much any more. The Masters is going to become a minimum IMHO. With the USG "taking over" of student loans directly then there are only two outcomes and either one lead to more dependence on the government and from a macro POV the government "wins" because the "reinvestment" in student loans in the form of loan repayment interest will outstrip those that pay majority of the taxes that will repay their loan anyway....and who will pay the student loan defaults...new loan recipients and those paying the taxes......so I strongly agree with you........in essence there is no way that the result of all of this will not be a "lost generation" as you say.

    I do think though that "unskilled" labor and blue collar labor will be effected by this particular phenomenon.....IMO unskilled labor and blue collar labor is more about supply and demand and differential education while it may create a further dispaity in real income, it only slides the pay scale in its entirety and does not necessarily compress the pay scale (only moves the e4ntire scale).

    IMO the everyone having a degree idea only further creates income disparity and is less about the macro level effect of GDP/Production than the declining production base. We are a consumption based economy, declining production base in a world where there are tremendous technological advances, a growing consumption base in China, India and third world countries........that is not a great place to be and to have a tremendous income disparity...............
     
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  28. gafinfan

    gafinfan gunner Club Member

    I wholly agree with you both and again point tothe thinking that was prelavent when I was growing up. There were several different directions one was pointed into during their HS years that put them into the job market place where they were best suited and most capable of making a good living. College, while a great goal for some, was not the end all it seems to be today.

    One tends to forget a master brick layer is just as important to a house as the architect who drew it up. Dreams converted into reality by hard work, it can't get done anyother way.
     

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