Wealth creation helps the poor
“As the rich get richer, the poor get richer.”
That may sound like a ridiculous overstatement but it’s true in the sense that nations that create wealth redefine what it means to be poor. Being poor in a wealthy nation is radically different than being poor in a developing one. The above statement also challenges the zero-sum myth: “As the rich get richer, the poor get poorer,” which has so tainted the understanding of economic imaginations of those in the West.
In a new study titled “Air Conditioning, Cable TV, and an Xbox: What Is Poverty in the United States Today?,” Robert Rector and Rachel Sheffield of The Heritage Foundation demonstrate that the federal government’s definition of “poor” differs from what most Americans imagine it to be in reality.
For example, according to the most recent data (2005), the authors point out:
“[T]he typical poor household, as defined by the government, had air conditioning and a car. For entertainment, the household had two color televisions, cable or satellite TV, a DVD player, and a VCR. In the kitchen, it had a refrigerator, an oven and stove, and a microwave. Other household conveniences included a clothes washer, clothes dryer, ceiling fans, a cordless phone, and a coffee maker. The family was able to obtain medical care when needed. Their home was not overcrowded and was in good repair. By its own report, the family was not hungry and had sufficient funds during the past year to meet all essential needs.”
In fact, to be more specific, 99.6 percent of individuals the federal government defines as “poor” have refrigerators, 97.7 percent have televisions, 78.3 percent live in homes with air-conditioning, and 62 percent live in homes with washing machines. These percentages are only possible in a nation as wealthy as the United States; it certainly is not the case in Sudan.
It is important to keep in mind that “the poor” does not represent a static population of individuals over time. In the real world, individuals cycle in and out of poverty in the same way they move in and out of social classes. One of the great tragedies of our current recession is that many people are worse off than they were five years ago regardless of class. Many lower-middle-class, working-class, and poor individuals have experienced the recession in worse ways than others because they lacked the economic cushion to weather the storm. But when the economy recovers, many of the individuals currently defined as poor by government standards will likely move out of poverty and regain their standing as middle-class.
Interestingly Rector and Sheffield also point out how liberal and progressive Christians like Ron Sider are misleading the church because of insufficient economic distinctions and rhetoric detached from real facts:
“Sider begins his book [Just Generosity: A New Vision for Overcoming Poverty in America] with a chapter entitled ‘What Does Poverty Look Like?’ in which he informs his readers, ‘In 2005, in the United States, 37 million people lived in poverty in the richest society in human history.’ He asks, ‘Who are the poor? Where do they live?’ and proceeds to answer these questions with a lengthy description of the home of Mrs. Onita Skyles, a 68-year-old widow.”
The widow in Sider’s example is experiencing abject poverty, and he proceeds to use her to define what poverty means in America. “Sider is seriously misleading when he implies that such living conditions are representative of 37 million poor people,” note Rector and Sheffield. “In fact, the situations he presents are not at all representative of the poor in America. The described conditions are very unusual and probably found in no more than one in 500 households.”
Political liberals and progressive Christians are vulnerable to accepting zero-sum ideology without taking the time to test those theories against real data and facts. The argument here is not that American poverty is “OK”; the point is to highlight the fact that making public policy decisions about “helping the poor” and “ending poverty” in America needs to take into account how “the poor” actually live in reality. Otherwise we will continue to miss the mark and not help the truly disadvantaged. Our public policy needs to be directed toward people who are truly suffering and stuck in cycles of poverty so that we create the conditions that allow for the possibility of sustainable economic mobility.

















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back to top66 Comments to “Wealth creation helps the poor”
I was surprised yesterday, when I read some related articles, on how loosely the government defines “poverty”. One of those articles is:
http://www.powerlineblog.com/archives/2011/07/poverty-american-style.php
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This is one of the most insultingly clueless things I’ve ever read.
Bradley thinks that making a list of conveniences that some poor people have somehow means they’re not actually poor. Ridiculous.
Possessions can come by any number of means. Maybe as gifts or cast-offs. Maybe bought second-hand. Maybe bought years ago before misfortune struck. Just toting up a list and saying ‘you have a color TV and basic cable, so you’re not really poor’ is only a cheap excuse for mentally adding ’so you don’t deserve any help.’
Economic poverty is not about owning or not owning a few token items. It’s about how close to the bone you’re living each month. If you bought two color TVs 10 years ago and still have them, but can’t quite pay your rent on your paycheck, getting rid of the TVs won’t help.
It is true that many of the poor in America as not as dirt-scrabbling poor as the poor in third-world nations. Is that really the highest bar we want to set?
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People may be living “close to the bone” and no one even realizes it. You don’t necessarily have to be standing at a freeway exit with a hand made cardboard sign or sleeping in a doorway to be “just barely scraping by” poor. I think the government’s list is a little unrealistic.
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The problem with government help is that no one really knows the people getting they help. They crunch numbers and fill out the proper paper work then 20 year old drug addicts get X-boxes and widows go hungry.
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The above statement also challenges the zero-sum myth: “As the rich get richer, the poor get poorer,”
Sure. But what is the answer to the question: “How best to maximize the standard of living of the lowest earners?”
Is it to implement a system of taxation and benefits that results in the income of the wealthiest few growing by leaps and bounds while the income of the poorest few either flat-lines or shows only modest growth?
Could an alternate system potentially result in some portion of the gains enjoyed by the richest few falling instead to the poorest few?
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“This is one of the most insultingly clueless things I’ve ever read.
Bradley thinks that making a list of conveniences that some poor people have somehow means they’re not actually poor. Ridiculous.”
By your definition of zero-sum assets, basically. Then many “rich” people are actually just as poor.
One does not have to be “poor” to be living month to month.
Poor to me, are those we saw on television, hungry, skrawny, no clothes. There are a few like this in America, the 9th ward in N.O. was pretty bad.
This country is far from poor though, if it’s people can even choose to live month to month, or they can be given things like tv’s and fridges from others.
If you go to Belize, many do not have fridges or washing machines, and they buy tv’s before the others. Why? Because they don’t see a need for them.
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Mr. Bradley’s post conspicuously says nothing. If most people living below the poverty line have refrigerators and color TVs, then…
…then what, exactly? They don’t really need food stamps because they could hawk the TV? They don’t deserve unemployment benefits because if they were really needy they’d turn off the AC and sweat? Bradley never says.
I’m suspicious of an attitude too prevalent in right-wing circles: the poor are indolent and don’t deserve help. I don’t say that Mr. Bradley espouses this view (in this article or elsewhere), but with this post simply pointing out that American poor are far better off than the Sudanese poor and having no policy argument beyond that undisputed fact, I fear it will just be more fuel on that fire.
e.g., Next time policies to help the needy are discussed (say, unemployment benefits), this will get dredged up. “They just sit on their lazy a**es drinking beer outta their cold fridge and watching Maury on their color TV, anyway. They don’t really need help.”
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I think the negative reaction to Bradley’s points based on research other than the government is just plain screwy. People living in poverty who qualify for food stamps shouldn’t be paying for cable TV or air conditioning instead of a fan. There’s also some kind of a perverse benefit for the government to show how many people they’re helping. It’s almost like a bragging point that obscures the high cost of redistribution.
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BTW, JJF, unemployment benefits are a big help in the short term. Very often, though, the longer the benefits last, the longer it takes some to find a job, assuming the jobs are actually out there.
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I didn’t read this as Mr. Bradley suggesting government not address American strata of poverty, but identify the true poverties.
The government–both the feds and the state–pour money into the inner-city, like Compton, CA, but not always with the best bang for their buck. Many in Compton are not cash poor they are housing poor. Many there can feed their kids everyday, but the kids can’t play in their front yards or at parks because of gang violence. Food Stamps wouldn’t help as much as more sheriffs on the streets. (Which they are finally do to some success). Many come to Compton because it has been home to many industries; Sacramento would do better by these working class poor to stop over-regulating and over-taxing those industries and so keep the jobs in CA. If you are living month to month imagine what having to move to Utah would do?
Anyway, that’s the way I read it.
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Beyond having the bare necessities, isn’t poverty purely relative? I thought that was one of the points being made in the article. In the U.S. most folks who are considered poor would look affluent in some third-world country.
So maybe we should stop using the word “poor” and substitute “bottom 10% by assets and income.” Once you start looking at it that way, knowing that there will always be people in that bottom 10%, you realize that nothing could or should be done about it. I’m only speaking of after life’s necessities are provided for (shelter, clothing, food). I absolutely think we should care for the old, the young, and those truely not able to care for themselves.
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What most poor folks need is an “accountability partner”
The poor client would have to explain justify his/her choices to the AP. The AP would have to hold the poor person to a higher standard and be ready to castigate the poor man or woman who has CHOSEN to deviate from the standard:
What you drank on the way to your job?
You chose to skip your GED class?
You spent money that shoulda went to your kids school uniform on booze?
A govt bureaucrat would just look up and say “Next!” with no accountability
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Well, the jobs are not there.
Mother, who lived through two world wars and a depression, use to say that what’s good for business is good for the little guy. What people need is a job.
How they spend their money is another thing entirely. I don’t have some of those conveniences, certainly not a microwave or a dishwasher. Two tvs? No.
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NJL – you don’t have a MICROWAVE?? You poor thing!
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I see the rich are still trying to justify their existence. Somehow, if the rich getting richer we all benefit — how this is is never explained — perhaps there is magic dust in the air when the rich get a tax cut.
Wages for the bottom four-fifths of Americans have barley kept pace with inflation — wage stangation has been a fact of life for over thirty years. Living standards have increased only through productivity gains and lower prices on new goods. In other words the American worker is working hard and receiving cheap electronic goods from China so it looks like he is progressing.
As wages stagnate for the majority, the rich got richer. Yet the heritage foundation and bradley wish us to believe everyone is getting rich becasue they have an xbox. However, material accumulation is done through used goods, prior wealth, loose credit, leftovers, and access to cheap chinese labour, etc.
http://epi.3cdn.net/3b7a1c34747d141327_4dm6bx8ni.pdf
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The point of the article is that “Wealth Creation Helps The Poor”.
Not “Wealth Accumulation”, which is entirely different. A tyrant can accumulate the wealth of his subjects and they will be poor indeed. That is a zero sum game.
But when people apply their talents, they can create wealth. Like creating a water reservoir to sustain people, crops, and livestock during the dry season, leading to a more bountiful harvest. More supply (wealth) means lower cost for all, including the poor.
A person can be wealthy by avarice OR by creating it. The former are evil, and the latter are to be cherished.
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“I’m suspicious of an attitude too prevalent in right-wing circles: the poor are indolent and don’t deserve help.”
I’m suspicious of your attitude.
How does that help anything if I start assuming what your attitude is?
Much less, assume what your saying.
Has any “right-wing” person ever said that they don’t want to help the poor?
Seriously?
Then this is an irrational assumption based on your part.
Until you can get past such rhetoric, you’ll never understand or have a reasonable conversation on how to actually help the poor.
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“In other words the American worker is working hard and receiving cheap electronic goods from China so it looks like he is progressing.”
Well, Nintendo only makes their hardware in Japan…no China. They hate the piracy issues. So for the Wii, which is still 200 bucks, plus games accessories…it didn’t require China.
“I see the rich are still trying to justify their existence. Somehow, if the rich getting richer we all benefit — how this is is never explained — perhaps there is magic dust in the air when the rich get a tax cut.”
Why do you attempt to justify an idea that they should not exist?
And exactly how would you quantify that?
The rich, invest and spend money. So although its fairly invisible, like Oxygen, it still spreads out, seeps down. It’s hardly magic.
In essence, what you should never do, is stifle anyone’s ability to grow their business, their wealth, or themselves by normal business practice and ethics. The rich can not hoard money, and remain rich for long. They must continue to invest and grow.
To deny anyone that opportunity is out of greed, envy, jealousy, covetousness, and the list goes on.
“wage stangation has been a fact of life for over thirty years”
And for at least the last 30 years, we have taught people nothing but borrowing and debt.
You can only build wealth, by not being a slave to the lender.
It’s quite simple. I really hope your not an economics teacher in high school.
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When the rich get much richer, the poor get a little richer. No one actually loses. Moreover, the percentiles might be the same but the what and the whom the percentiles consist of do change. Specifically, owning ten percent of an ocean going cruise ship is way better than ten percent of a leaky canoe. Secondly, although the percentiles into which American income is divided remain consistent, there is much movement of living human beings among those statistical categories.
The percentiles actually refer to a range of incomes, which does not correlate exactly with wealth. Were I to win the lottery, or star in a movie, or be signed to a major sports contract, my income will skyrocket me into the top percentiles. If I’m prudent, following the short term boost in income, I can live quite comfortably on a much reduced income in my paid for homes and driving paid for luxury vehicles. Although my income has dropped, my wealth is still there. Those people now in the top percentile of earners, like Bill Gates and Warren Buffet, were not inhabitants of that economoic stratoshphere fifty years ago. Those that they hurdled over did not necessarily lose income, but rather, did not gain as fast.
The initial costs of most new products are prohibitively expensive. When I was a child, air conditioning and color televisions were luxuries for the wealthy. Because wealthy people did indulge themselves, there was a market for people to develop manufacuring and distributing of such products, increasing their wealth and driving down the costs so that such things are commonplace today. One generations’s luxuries become the next generations necessities. Curtailing top earners injures all.
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Thorn
you’ve just explained why Wii is not as common as PS3 in my student’s homes.
The rich will always exist but the present inqueality in America and the obscnec amounts of wealth which are being hoarded does need justification.
For the most part the wealth accumulate by top 1% is accumulated but not invested. They are living from interest, rent, etc not from investments.
For the 30 years, people have been using easy credit to make up for their stagnatings wages and hide their poverty behing the products of 12 year old Chinese girls.
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When the rich get much richer, the poor get a little richer. No one actually loses.
There are no economic losers??????
Given the 80?% rise in productively some products became cheaper and others became cheaper through third world labour and relatively speaking cheap transportation costs. With cheap credit and cheap dollar store products, the American worker has been able to stay afloat but with the end of credit and the increase in transportation cost (and lets face it there’s a moral downside to benefiting from 12 year old girls) the end is nigh. And the rich will stay rich and the poor will stay poor living off the accumulated material goods from the past.
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That’s what Mama meant. The poor always get a little richer.
I find this offensive: “I see the rich are still trying to justify their existence.”
It is also proof positive that the goal of the Left is wealth redistribution.
Microwave: someday, I suppose. But I like to cook.
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(Though my sister would agree with you that I am behind the times.)
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JJF: I’m suspicious of an attitude too prevalent in right-wing circles: the poor are indolent and don’t deserve help. I don’t say that Mr. Bradley espouses this view (in this article or elsewhere),
Well I will. That is always the subtext to this line of rhetoric. “The poor have this, that and the other,” so … what? As you point out, it’s unstated but implied … so they don’t need or deserve help.
The whole construct is intended to generate resentment among people who earn more and pay taxes, and have some portion of their taxes used to fund social aid programs. The goal is to foster opposition to those programs by creating this myth that America’s poor are really doing just fine.
And then they have the nerve to accuse US of using ‘class warfare’ when suggesting the very wealthy should pay more in taxes.
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That sounds like communism. That didn’t work in the 20th century, and now Europe is wising it up…some seem to be behind the times in the reality department.
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When I go to the dentist, I always marvel that while I’m merely lying in a chair, a stranger is cleaning my teeth–something like the Pharoahs of old would have happen to them.
That’s how I read this; we’re wealthier than most of history just because we live in the US today. (Or Canada for HRW). When I start to whine I don’t have something, I stop to reflect on all the many things I do have (though, alas, only one TV and no playstation) and I’m thankful.
That does not negate the observation that the wages of many in the US have been stagnant for a long time–I myself have never had a raise. It’s very expensive to live on the west coast where I am. For kids struggling with student loans and needing cell phones, cars, computer access, health insurance and the like, it can be well nigh daunting. (And yes, we can argue they don’t need cell phones and transportation, but you know what? They need them to get a decent job in California).
While too many company owners are being paid obscene amounts of money, I’ll posit the majority are paid a more reasonable amount. Though, wait, what would be reasonable?
And who should decide?
What I’d really like to see is an end to the class envy and incitement for resentment and covetousness.
But wait, isn’t that what advertising is all about?
Let’s instead cultivate an attitude of thankfulness in all walks of society and we may all get along–and work together-better.
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#21
“There are no economic losers??????”
If I buy a house in a run down area and fix it up, I increase my wealth, and perhaps the property values of others in the neighborhood, too.
Who’s the loser?
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Words of wisdom from Michelle
Class warfare is alive and well in America and as Buffet tells us his side is winning. In fact, its probably the easiest battle the rich have ever had to fight — its the only class aware there is class warfare in America. The other side keeps defaulting.
John, obviously not you unless of course property values crash and you lose your investment despite all the sweat equity you put into it.
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I suspect that most people would prefer to work for a rich person (or company) than for a poor one. And while I have no statistics for it I also suspect that a significant majority of employers genuinely care about the welfare of their employees; even though there are undoubtedly many stories to the contrary.
The best companies are the ones where both employers and employees truly work for the betterment of the other.
The worst place to work (and live) is in a place where the relationships are adversarial. Class envy attitudes are the cause of many work and community adversarial relationships.
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24. I don’t think anyone is saying that no poor people anywhere ever need help. Maybe what we are saying is that destroying the economy will not help the poor.
Like I tried to say before, if a Republican and a Democrat both came up on a long food line the Republican would try to speed up the line while the Democrat would waste time rearranging the people in line.
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I suspect both the Democrat and Republican would avoid eye contact and possibly cross the street to avoid the line. to
Or perhaps I lack faith. Perhaps the Democrat would be wracked by white liberal guilt and open a second food line. Perhaps the Republican would sort the deserving and undeserving poor and the line would move faster.
In any case no attempt will be made find long term solutions to the problem of poverty in America. After all, forcing change is unAmerican and making the rich responsible is class warfare. Workers need to play nice.
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The rich don’t just put their money in the bank and sit on it! It doesn’t make them any money. Interest rate is way too low. They invest it! That grows business and hires more people. They spend it! Other people have to make the products or services, more jobs.
The government takes it from them (taxes). They don’t spend it, people get laid off. They don’t have it to invest, people get laid off.
The government doesn’t create job. Rich people to!
Example: Take the tax breaks for companies’ Lear Jets.
They stop using them:
Pilots get laid off
Mechanics get laid off
Stewards get laid off
Private airports close
Ect.
Loss of tax money because people are laid off and on welfare. All so we can tax the rich.
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Over 70% of the US economy is based on mass consumption — its the working and middle classes which drive the economy not the rich who do little for the economy other than service industry. In fact its better for the economy if you took the money from the rich and gave it to the poor — at least the poor spend the money locally.
Actually, most companies will still keep their corporate jets and if they don’t they will still need to travel and thus busienss class which uses similar aircraft and similar workers will take over where the corpoorate jet industry died off.
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Who do you think the middle class work for? Who pays them and their benifits? What happens if those people have less to spend?
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“In fact its better for the economy if you took the money from the rich and gave it to the poor”
How do you know this?
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HRW (33): In fact its better for the economy if you took the money from the rich and gave it to the poor …
Frank: By what moral principle would you justify such action?
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“you’ve just explained why Wii is not as common as PS3 in my student’s homes.”
Your accusing your students of piracy now?
“The rich will always exist but the present inqueality in America and the obscnec amounts of wealth which are being hoarded does need justification.”
If the rich will always exist, then there will always be “inequality” in that sense. That’s not a bad thing.
“For the most part the wealth accumulate by top 1% is accumulated but not invested. They are living from interest, rent, etc not from investments.”
That makes no sense. Hoarding as you put it, or lack of investment, would be like burying money in your backyard. And if they are living from rent, that means they built housing, or own housing in which to rent out, which they must keep up. This is a form of investment.
Even if they bury the money in the backyard, it eventually, gets spent. They still have to eat, drive, clothe, pay for utilities, etc etc.
And so what if they live off of interest…that means they are spending the interest in order to live.
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“In fact its better for the economy if you took the money from the rich and gave it to the poor — at least the poor spend the money locally.”
Perhaps, but as Conan seems to think, the poor just live month to month.
Which means, just giving money to the poor, will not build wealth.
Rich people live locally just as much. Their investments, charities, purchases on a personal level are easily spent locally.
“its the working and middle classes which drive the economy not the rich who do little for the economy other than service industry.”
I believe consumers, which make up 70%, includes consumers…not class distinctions. Your really not on your A game today, HRW.
But I can agree that the working, middle class are a big portion of that consumerism. They are also the ones struggling the most right now.
So are you still in disagreement, that they need a big tax break to boost their income immediately? The government can’t hand them a new job immediately, but they can cut their taxes. Thus, that backbone of consumerism would be restored. Just a 50% tax cut instead of a TARP would have done absolute wonders for them.
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lloyd: Example: Take the tax breaks for companies’ Lear Jets.
They stop using them:
Pilots get laid off
Mechanics get laid off
Stewards get laid off
Private airports close
Ect.
Except it won’t happen because companies that can afford Lear jets are not depending on a tax break to make it affordable. They’ll keep using the jets even without it because they’ve determined that it’s a cost that pays for itself by creating business efficiencies, or just because the executives decide they can afford it and prefer it to commercial.
If a company did give up its private jet, its executives would fly commercial first-class, which would benefit commercial aviation employees. And if they gave up travel altogether, they would turn to videoconferencing or other communication forms to facilitate meetings between far-flung sites, benefiting the makers and vendors of those technologies.
The problem isn’t that people are rich; the problem is that a very small number of people own a vast chunk of the wealth. In EVERY CASE in history when that disparity has passed a certain ratio, the civilization has collapsed because that is simply not a sustainable situation.
Those who stand up to defend the poor downtrodden mutli-billionaires are really on the wrong side of the issue.
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llyold
Who do you think the middle class work for? Who pays them and their benifits? What happens if those people have less to spend?
You’re right the peasants need to remember who pays them and be respectful and allow the aristorcrats to have most of the wealth. After all, most lords of the manor give out Christmas turkeys.
And without the conspicous consumption of the top 2% what would the tradesmen do?? who would they serve?
Honestly, you actuallly think we need an elite which owes most of the wealth in order for an economy to function???
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35 and 36
The poor spend all their money — this keeps it circulating. None of their wealth is spent outside of the local economy. None of their wealth is spend on “rents” ie interest bearing investments or speculative investments. Nor do they poor store money away for an other day.
pragmatism Frank — there are no moral principles in capitalism thsu why should there be moral principles expressed by its opponenets.
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What goes unremarked here is that the “poor” as defined by the government is relatively fluid: people enter and exit poverty all the time. That is, there is a population that is at or slightly above the poverty line that can fall below that line rather easily, and just as easily also exit. This population more than most would be the source for the list of possessions (note the underlying report gives the percentages “on average” so skewing the data towards the most well-off).
How big are the numbers in question? A 2006 study found that roughly 30% of all adult workers would fall below the poverty line for at least two months over a six year period; 12% of adult workers spend at least sometime above the poverty level, but have average income over the six years below the poverty line; and 5.5% had an income below the poverty line for the entire six year period. (R. G. Valleta, “The Ins and Outs of Poverty in Advanced Economies: Government Policy and Poverty Dynamics in Canada, Germany, Great Britain, and the United States,” Review of Income and Wealth 52, No. 2)
This data is for adults, so children could be disproportionately affected. I would suggest the impact of poverty on children is an area where the faith community can play an important role
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38
video/game/music piracy is the norm. But no — Japanese made Wii is more expensive than Chinese made PS3. The kids from the projects have PS3 (they proably bought it stolen) and the kids from suburbia (white bread land according to my s/s) have Wii
Obscene levels of inequality are unsustainable.
The rich don’t spend nearly the same percentage locally as the poor. The poor will go to the beer store and buy the local discount beer while the wealthy will purchase Stella from Belgium.
TARP was the Bush adminisgtration’s last inside job. Michael Moore accurately describes it as a Brinks truck pulling up to the Treasury and walking out with the cash — his attempt to do the reverse — pull up a Brinks drug to Wall Street and ask for the money back is one of the more amusing sketches in Capitalilsm: A Love Story.
A tax cut instead of TARP would probably be more effective. A one year mortgage holiday woudl also have been helpful to stablize the markets. Anything but giving away freshly printed money to the banks
Conan accurately describes the fallacy of the corproate jet tax deduction argument.
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“Perhaps the Democrat would be wracked by white liberal guilt and open a second food line.”
Which he would then expect the Republican to pay for.
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“Japanese made Wii is more expensive than Chinese made PS3.”
Seriously? You realize Nintendo made a profit from day one selling each unit. They sold it for half the cost of the PS3 practically. PS3 still hasn’t broken even. I’m not sure how your coming up with your numbers.
“The rich don’t spend nearly the same percentage locally as the poor.”
They don’t have to. A lower percentage for the rich, can still be the same amount as a higher percentage from the poor/middle class.
5% of 200,000 is 10,000 dollars. 5% of 50,000 is 2500 dollars. See how that works? It takes 4 people to make up one rich guys spending. If you raise the percentage, to 20% of 50k, thats 10k right? This is why a rich guy can still spend just as much, at a lesser percentage of his income.
“while the wealthy will purchase Stella from Belgium”
And Belgians don’t need to eat too?
“Michael Moore accurately…”
I’d get your resources from someone else.
“Conan accurately describes the fallacy of the corproate jet tax deduction argument.”
No, he doesn’t. For he steps on his own feet. By raising taxes on jet purchases, means that the price goes up, the demand goes down. Sure businesses will spend money elsewhere as they need to such as videoconferencing as the example he uses.
Without a tax hike, they are free to do all of the above. There is more income to do so with. So where as Conan rightly points out that money gets spent elsewhere, your only proving the point that tax hikes will only impede on personal and business’ ability
to spend elsewhere.
Further, why are we playing favorites over jets vs. the internet? Is that the government’s job to decide? Or the consumer?
“Honestly, you actuallly think we need an elite which owes most of the wealth in order for an economy to function???”
No, but you need freedom. Freedom, inevitably will result in a man who offers a product that everyone wants, thus they buy, thus he gets wealthy. There is nothing wrong with that.
It benefits everyone. The consumer has a new product they wanted, the producer has money in which to grow his business,invest, or spend however else he pleases. Which goes right back into the economic machine.
He’ll go buy a house, which requires a house builder, which requires materials, which creates a need in other markets. The bigger the house, the bigger the needs. He needs a new factory to increase his production, this leads to more material needs, more workers needed, etc etc.
What stifles the flow of money, is when someone else sticks their hands in between business and consumer. By someone else, it’s usually the government. They levy a tax against jets, which hampers production costs, and stifles demand for jet makers. Why do they have any business playing favorites between jet makers, and Skype?
It’s because they allow their hand to be turned by money, lobbyists, and of course, rich men. The whole point of having representatives is to elect men, who will not be swayed by such greed themselves. This is why there is a growing elite vs. poor disparity. Creating dependents and levying taxes against specific businesses to promote others (intentionally or not) is socialism. This is what China does. You can call it a statist capitalistic system, but so long as the government is about accepting manipulation of the market, your gap is only going to grow larger.
What we want is not the government picking between Boeing and Skype, but ensuring the freedom of the consumer to pick between Boeing and Skype.
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#41
“The poor spend all their money — this keeps it circulating. . . . Nor do they poor store money away for an other day.”
I see. Spend it all now! And if spending it all now is good, why not borrow more and spend it, too! So much the better! Right??
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Further, why are we playing favorites over jets vs. the internet? Is that the government’s job to decide? Or the consumer?
by having a coproate jet tax credit the gov’t is playing favourites. they are subsidizing corporate jets. get rid of the tax credit and let the corporation/consuemr decide.
taking awayh a credit is not the same as levying a tax.
There is no freedom when 2% owe the majortiy of the wealth — feudalism was less hierarchial. When your gov’t is owed and dictated to by the elite as they were by the TARP program then there is no freedom. Its not what China does its what both the Republican and Democratic parties in the US do and as long as the average American accept the current tax structure and gov’t system the average American is free only to incur medical bankruptcy, ingest glucose fructose, fight for the Empire, and enjoy the bread and circuses.
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“As the rich get richer, the poor get richer” is only true in a free capitalist society. In a socialist society, the rich get richer and the poor way poorer. The rich in this case being the govt bureaucrats who get ever higher salaries and perks and bribes, while the poor continuously get poorer.
This issue is interesting to me, because most of the time since I got married, I have been below the poverty level. I do have some of the things on that list, some I don’t have because I wouldn’t even choose to buy them if I was rich (like a dryer and tv). I give at least 10% of my income to charity, and when I give to the poor, it’s usually to people that make more than I do, but have higher bills. God is gracious to us, and we have never gone hungry. Still, a trip to the grocery store is frightening because the food prices keep going up, and that’s our biggest bill by far.
Alot of the poor people I know are really angry about the democrats causing more inflation and precarious debt – it hurts us the most. Gas prices are making it almost impossible to go to work and the doctors. Used car prices make old, used cars almost unattainable. Food prices are really stressing us already – soon our power company will shut down lots of their power plants because of the EPA – our power bills will be unpayable. Alot of us poor people don’t like the effects of socialism at all.
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Thorn: Further, why are we playing favorites over jets vs. the internet? Is that the government’s job to decide? Or the consumer?
It’s not a literal jet. The corporate jet is symbolic of an entity that can easily afford to pay more in taxes than it does … if you can afford a jet, you can afford a 2 or 3 percent tax hike.
But the conservatives would rather take benefits away from those who have very little than ask more from those who have very much.
“Christian views.”
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HRW, how is it pragmatic to take wealth away from one group and give it to another?
The moral principle underlying capitalism is freedom. People are free to do as they wish, as long as they do not infringe on the right of other people to do as they wish. People are free to keep what they earn and to earn as much as they want with only their own abilities and motivations limiting them.
True capitalism, laissez faire capitalistm, is not so much a system as a non-system. It is letting people be free and allowing them to do whatever they want with their lives–which includes nothing, if they so choose.
All systems that redistribute wealth or that abrogate private property ownership are immoral because they are based on theft. They are based on the idea that those powerful enough have the legal power to steal from some in order to give to others–usually to keep those that they give to their loyal, grateful subjects.
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Conan, you could not have it more backwards if you tried. The “benefits” you talk about are not assets that some people earned and that other people want to steal. The “benefits” are from wealth stolen by the government to give to those who did not earn them.
And yes, it is a Christian view that it is wrong to steal. It does not become right just because a state is doing it.
It is Christian to help the poor. It is not Christian to steal from other people in order to do it.
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It’s not really a question of whether certain people can afford to pay more in taxes. We should ask by what moral authority does anyone have the right to force them to do so.
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“if you can afford a jet, you can afford a 2 or 3 percent tax hike.”
But then you possibly put jet makers out of business. Which is also a loss of tax revenue from jet makers.
“by having a coproate jet tax credit the gov’t is playing favourites. they are subsidizing corporate jets. get rid of the tax credit and let the corporation/consuemr decide.”
Why not just lower taxes for everyone else to make it equivalent?
You accomplish the same thing.
Plus, HRW, as you go on to accurately describe the filth of our government, why would we ever give them more money when your agreeing they can’t use it properly?
I fail to see how you can recognize their irresponsibility, and how they’ve helped to contribute to the 2%, and then still argue they need more money.
That’s like arguing for a gambling addict to have more money, as if it would help his addiction or make him an accountant.
You avoid TARP situations by simply giving a tax cut to everyone. The consumer knows where the money is needed the most. They won’t play favorites with failures, they’ll invest in what they know is stable. Stable grows, expands, replaces the failures.
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“But the conservatives would rather take benefits away from those who have very little than ask more from those who have very much.”
Still with attacks, rather than substance?
Are all programs, actually beneficial? Are you saying that there are not any programs that we can do without or restructure while in a recession, so that important benefits that work can still be given?
Heavily taxing the wealthy is fruitless, esp during a recession. They don’t like profit loss either, so your just going to encourage them to move their money elsewhere, so they can keep growing their business.
This is a global world of competition. If you want to keep the tax revenue to yourself and away from India, you have to give the wealthy a reason to stay here, ESPECIALLY DURING A RECESSION when you need them the most.
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If the money is used in a more useful elsewhere than redistribution is pragmatic
There are no moral priniciples underlying any economic system. If it doesn’t work, than the economic systen should be changed. Morality plays no role — this is a mistake many leftist make when discussing economcis and one I see repeated here as many attempt to justify the American economic system as morally right. Its niether right nor wrong, its just not working and will not work due to massive inequality,lack of tax revenue and an over-extended military empire.
Economic freedom is not a moral principle and not exclusive to capitalism. In fact in today’s capitlism economic freedom has been bastardized to consumer choice. You are free to choose A or B.
A famous anarchist, Proudhoun, once declared “Property is theft”. For him the theft starts when one person declares exclusive use of an item. Theft ends when its taken back. A rather radical idea but one that should make you realize that the nature of property is not a nartual or god given right but rather based on societal acceptance and recognition. IF your porperty rights are dependent on sociatal recognition than taxes can be seen as a “fee” to ensure your property rights continue to be recognized. You may see this as extortion but when tax cuts lead to a bankrupted gov’t your exclusive rights to certiam items may no longer be recognized by your neigbours. Taxes and even a certain amount of wealth redistribution are the means by which you live in a civilized society.
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Thorn
your gov’t is being bought and controlled by corporate elites. Howevefor this doesn’t mean you have to agree with the corporate elites and thier ideology and thus limit gov’t and their revenues. You might start by contradicting the corporate elite and their ideolgogy by demanding that increaesed revenues be used to balance the budget. You may start by demand a gov’t for the people by the people and of the people instead of giving up on gov’t and allowing it to be the playthings of the corporate elite.
And you can start by re-examing the notions that tax cuts actually work — hint they don’t
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here’s an example of a tax break which didn’t work
http://www.rollingstone.com/politics/blogs/taibblog/holiday-in-scambodia-20110720
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HRW (41): … there are no moral principles in capitalism [thus] why should there be moral principles expressed by its opponents.
Frank: Moral principle No. 1 regarding property ownership:
Coming from God the Son, that’s more authoritative than “the famous anarchist, Proudhoun,” I’d say.
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Thorn: But then you possibly put jet makers out of business. Which is also a loss of tax revenue from jet makers.
If your ability to buy a jet is so tenuous that a minimal tax increase is what makes the difference, you’d be foolish to buy one even without it.
Do you have a better argument than fearmongering? The overall thrust I get from your posts is a sense of ‘we better kowtow to the rich or they might take away some people’s jobs.’
Which is the attitude the rich like to encourage, but I’m not convinced it’s a necessary one.
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Thorn
“But the conservatives would rather take benefits away from those who have very little than ask more from those who have very much.”
Still with attacks, rather than substance?
Are all programs, actually beneficial? Are you saying that there are not any programs that we can do without or restructure while in a recession, so that important benefits that work can still be given?
There’s no attack there. That’s the reality of your side’s argument. If you don’t like it, change it.
Secondly, no I wouldn’t say that all programs are essential, or couldn’t be improved. That’s never been the argument. That doesn’t mean that we should try to balance the budget solely by cutting spending.
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Thorn: This is a global world of competition. If you want to keep the tax revenue to yourself and away from India, you have to give the wealthy a reason to stay here, ESPECIALLY DURING A RECESSION when you need them the most.
Whatever happened to the patriotic ideal that they stay here because America is their home and they desire to add to its strength, rather than do only what’s best for their own bottom line?
Because see, the consequence of thinking like you do is to take us down. If companies can hire people more cheaply in China or Malaysia, the conservative answer is: lower American wages.
If companies can operate a manufacturing plant more cheaply in India due to less regulation, the conservative answer is: Remove safety and environmental regulations.
If companies can pay less in taxes by locating elsewhere, the conservative answer is: Don’t tax the rich.
All of that drives us down to be closer and closer to the level of those third-world countries, complete with lower standards of living (for all but the rich) and an overall smaller economy (lower wages for workers = less spending on consumer goods = fewer jobs for the makes and sellers of those goods.)
I don’t see any wisdom at all in going down that road. Short-term it may look like we’re saving American jobs, but long-term, it leads to ruin.
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Lots of different perspectives shared here. I myself agree with Mr. Bradley. Outside of having a net for those who truly are incapable of moving out of their situation, we need to encourage individuals to strive and work hard and take self responsibility as much as possible. Our country is still the land of opportunity. I find it interesting that everyone of us would likely agree that when raising children, as they grow we as parents seek to encourage the taking on of more responsibility in order to become self sufficient adults, and the mantra “don’t do for your kids what they can do for themselves” has been stated for decades. Yet, our government does the opposite by having a safety net for every individual who hits a certain level, regardless of their ability. Our government is enabling citizens to be dependent and that dependency is increasing rapidly. At some point unproductive, non-wage producing, citizens will outnumber productive wage producing hence taxpaying citizens. We may already be there.
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“your gov’t is being bought and controlled by corporate elites. Howevefor this doesn’t mean you have to agree with the corporate elites and thier ideology and thus limit gov’t and their revenues.”
What control do they have, if they can not find someone to manipulate in the government?
This is why, minimizing federal activity in the market is important, because it’s the only way to minimize corporate elites.
You don’t encourage more federal activity, or activity that partakes with manipulative corporations.
Why would you ever argue, to just let the politicians have more money, when they act the same as corporate elites?
We want the middle class, the poor to have more money…not less.
“here’s an example of a tax break which didn’t work”
Which isn’t a problem because of the tax break, but because of off shore avoidance.
Tax raise, or tax cut, you don’t get the elite’s money, now do you?
You cut taxes, they bring it in for themselves..according to your article. You raise taxes again, they just avoid again.
So how do you fix this?
If you threaten they can only manufacture in the U.S., they’ll just leave. There is too much demand elsewhere.
But if you keep taxes low, not just a holiday, but low and simple, without loopholes. Then avoidance is minimized.
Sure, initially, they’ll pay out their dividends/bonuses, and the immediate job rebound may not occur by their company. However, that money will get reinvested and spent. It doesn’t get buried in the back yard.
This is why after the 2004 holiday…we sure did seem to come out of a stagnant economy, now didn’t we?
Making them happy, has a way of if nothing else, stabilize the market, and their fears.
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“If your ability to buy a jet is so tenuous that a minimal tax increase is what makes the difference, you’d be foolish to buy one even without it.”
I don’t get you here. Increase cost to companies products, lowers demand. A 10% increase on a million dollars is another 100k. That is expensive.
It’s not like pennies over candy at Walmart.
“‘we better kowtow to the rich or they might take away some people’s jobs.’”
I do want you to understand, that this is in general. To compete, doesn’t mean giving Google an advantage over Yahoo for instance.
However, you must compete against other nations, for business. If you are not competitive, they will go elsewhere, easily.
“Which is the attitude the rich like to encourage, but I’m not convinced it’s a necessary one.”
It isn’t a haughty attitude necessarily. It’s simple wisdom, that being able to produce for less cost, allows you to make more money, and thus grow and expand. If India offers better incentives to manufacture, then India will win that business. India needs better and more jobs for its people too.
If you want to compete against India, you have to offer better incentives. Those can vary, from lower taxes, better transportation access, better facilities, better workers, better economy etc etc. But demanding they owe it to you, is a fruitless endeavor anyone would ignore.
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“Whatever happened to the patriotic ideal that they stay here because America is their home and they desire to add to its strength, rather than do only what’s best for their own bottom line?”
Patriotism is a fine incentive. However, perhaps they have had to go elsewhere, because they couldn’t add to our strength anymore due to costs. Would you rather them lose everything, or could their business be beneficial elsewhere? If you can save 20% in US by sending 80% to China, is it worth doing, instead of losing it all soon enough?
A company always has to do what’s best for it’s bottom line (legally of course), because a company must always seek to grow. You can’t be stagnant. There’s no middle ground.
“Because see, the consequence of thinking like you do is to take us down. If companies can hire people more cheaply in China or Malaysia, the conservative answer is: lower American wages.”
Lowering our wages is probably impracticable at this point. We must offer other incentives to compete.
“If companies can operate a manufacturing plant more cheaply in India due to less regulation, the conservative answer is: Remove safety and environmental regulations.”
Safety, no, some environmental regs? Yes. Some of them are over burdening. Is 1 in a million risk to high? Maybe it is. Perhaps we should allow 1 in 100,000. It’s a reasonable discussion.
“If companies can pay less in taxes by locating elsewhere, the conservative answer is: Don’t tax the rich.”
If the above incentives you mentioned are being won by India, then you’re down to just about this option.
“I don’t see any wisdom at all in going down that road. Short-term it may look like we’re saving American jobs, but long-term, it leads to ruin.”
But the other option is that your going to raise taxes. This sends every rich person running away to the 3rd world countries or India or China.
So now that you’ve run them off, who will pay for anything? How will you sustain anything?
The major difference in between the two, is that so long as the rich stay here, no matter how much they keep for themselves, they end up spending it here.
It doesn’t have to show up in Dupont’s employee numbers, to know that it’s getting spent elsewhere in the community.
They like making money, it doesn’t sit buried in their back yard.
The only entity that loses out, becomes the feds. And we don’t need the feds, to have jobs or money circulating around. Their added hands raise cost, reduce our income.
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“There’s no attack there. That’s the reality of your side’s argument. If you don’t like it, change it.”
My argument has been to lower taxes for those on the bubble of having very little. They assumption that the conservative is arguing to take away benefits to purposely hurt the poor is an attack.
Your middle class who are struggling the most, who’ve had little influence or participation in all this mess, but they are the very backbone of consumer spending.
CUT THEIR TAXES. Give them an immediate income boost.
Heck the rich would settle down, the moment the base stabilizes.
The feds bring in 4.5t. 1.5t of that is income taxes. Can we reduce spending by 25-33%? I think so. We need to spend at least that much less.
I believe that can all be done, by reducing programs that aren’t beneficial, bringing the military home over time, and not adding new promises until we are out of debt.
You won’t get more money out of the rich, it’s all charades in that regard. Your only going to get more money, is if and when your economy begins to grow again. That will only happen anytime soon, is if you cut taxes for the middle class.
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