

Americans Want to Live in a Much More Equal Country (They Just Don't Realize It) - tankenmate
http://www.theatlantic.com/business/archive/2012/08/americans-want-to-live-in-a-much-more-equal-country-they-just-dont-realize-it/260639/

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shasta
What definition of wealth is being used here? If wealth just measures value of
assets over debt, then there can be a huge difference in quality of life
between two people who both have approximately zero wealth.

My guess is that such a definition is what's being used, and really what's
being polled here is understanding of the relationship between income,
consumption and wealth (surprising conclusion: most people aren't very good at
anything involving math). Of course people in the bottom tiers will have
almost no wealth -- they spend their entire income on consumption. People
responding to the poll are probably thinking of things more in terms of how
resources should be allocated. It would be more interesting to see some
measure of consumption among the various tiers.

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arrrg
Here is the paper (cited in the article):
<http://www.levyinstitute.org/pubs/wp_589.pdf>

Quote: “The principal wealth concept used here is marketable wealth (or net
worth), which is defined as the current value of all marketable or fungible
assets less the current value of debts. Net worth is thus the difference in
value between total assets and total liabilities or debt. Total assets are
defined as the sum of: (1) the gross value of owner-occupied housing; (2)
other real estate owned by the household; (3) cash and demand deposits; (4)
time and savings deposits, certificates of deposit, and money market accounts;
(5) government bonds, corporate bonds, foreign bonds, and other financial
securities; (6) the cash surrender value of life insurance plans; (7) the cash
surrender value of pension plans, including IRAs, Keogh, and 401(k) plans; (8)
corporate stock and mutual funds; (9) net equity in unincorporated businesses;
and (10) equity in trust funds. Total liabilities are the sum of: (1) mortgage
debt; (2) consumer debt, including auto loans; and (3) other debt.

This measure reflects wealth as a store of value and therefore a source of
potential consumption. I believe that this is the concept that best reflects
the level of well-being associated with a family’s holdings. Thus, only assets
that can be readily converted to cash (that is, ‘fungible’ ones) are
included.”

Please note that this is only the source of the numbers The Atlantic used in
their comparison. The Atlantic did the actual poll asking people for how they
think the distribution looks.

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shasta
Thanks. So, it's assets less debt. This is a huge flaw in the study. Even if
everyone in the country had exactly the same income and savings rate, you'd
still expect a triangle distribution of wealth because of differences in age
(graded by years of saving followed by years of retirement on the downward
slope). In reality, you have a huge number of people living with a high
quality of life with almost no savings (house fully mortgaged, some small
equity in their car maybe). Any measurement that counts these people the same
as homeless is deeply flawed.

And then we're going to compare that bogus metric with what random people
think it might ought to be after a few moments of thought. How many of the
respondents do you think asked for a paper and calculator before giving their
answer? This whole article is terrible rhetorical slight of hand.

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ClHans
Of course we do.

There's a substantial and growing body of social science research that
indicates that inequality leads to a whole host of social ills--see Wilkinson
and Pickett.

There's also an intuited sense that when so very many people (1 in 4 children
now!) are underfed, and so very many have no real access to medical care (1 on
6 americans), when education is becoming ever more inaccessible, and when the
few institutions that have successfully defended workers from a hardscrabble
life of hopeless poverty are virtually destroyed, AND there are a few people
who don't really work harder (and certainly NOT billions of times harder!)
than the rest of us, but enjoy quirks of market, law, and birth to amass vast
wealth, that something might be wrong with the system that allows them to do
that.

We're trapped in an economic system that concentrates resources and power,
whose foundations we have been so thoroughly indoctrinated to accept that we
treat them as immutable laws of nature, rather than inventions to serve us--
all of us, not just the ultra-wealthy. Laws of nature, we might be stuck with.
Inventions of our own making, we might could improve upon.

Yeah, we'd like a more equal country.

~~~
Turing_Machine
Of course, there's also a substantial and growing body of research that
indicates that ill-advised attempts to "equalize wealth" also lead to social
ills, such as a pile of 100 million or so dead bodies.

<http://www.hawaii.edu/powerkills/20TH.HTM>

~~~
ClHans
Ah, yes, the brutal regimes of modern-day Norway, Sweden, Iceland, and others
in Northern Europe!

where people aren't routinely bankrupted by medical debt, and don't enter
adult life or the adult workforce straddled by terrible student loan debt, and
workers have rights!

Obviously, the sort of inequality we have in the U.S.--now greater than that
of imperial Rome--obviously that's the right way to be, and the only way
society (or at least a tiny fraction of it) can thrive. Right? That's what
you're saying, right?

~~~
Turing_Machine
"where people aren't routinely bankrupted"

You haven't been following the latest economic developments in the Eurozone, I
see.

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aneth4
I must have seen polls like this 5 times in the last year. They don't reveal
much except that people are very bad at comparing large numbers with small
numbers.

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dancole
But what assumptions are people making? It's easy to say you want equality of
wealth, but life is more complex than that. There are clearly paths in life
that can take you down to the lowest low or to the highest high, both from the
same starting point. I went to high school with kids who's parent all had
similar social status and weath, but our personalities created a wide wealth
gap between us.

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tankenmate
This post seems to have been deep-sixed about 1 hour ago (about 2 hours after
it was posted). How common is it for this to happen?

EDIT: I realise that the premise of the article has has flaws, but shouldn't
it be a starting point for debate?

