
One-Percenters Close to Surpassing Wealth of U.S. Middle Class - pseudolus
https://www.bloomberg.com/news/articles/2019-11-09/one-percenters-close-to-surpassing-wealth-of-u-s-middle-class
======
pytester
If past history is anything to go by they will support "moderate and
conservative" status quo politicians until the point where the people have
given up on them and started seeking more radical change - from ever more
extreme versions of the right and the left.

At that point the ultrawealthy will seek to form an alliance with the growing
popularity of the far right and seek to annihilate the left. This is simple
self preservation. The far left will, after all, seek to destroy billionaires
whereas the far right will seek out easier targets who look/sound different
(muslims, immigrants, jews, gays, people of color, etc.).

The point where things start to become terrifying will be the point where
billionaires give up on status quo politicians and start to throw their weight
behind the far right. That's when the far right switch from being a bunch of
racist, loser skinhead misfits into a well funded, slick and violent
ultranationalist nightmare.

As far as I can tell, the current weimaresque neoliberal age is sputtering to
a close and we're seeing the beginnings of this pattern re-emerging.

~~~
rayiner
> At that point the ultrawealthy will seek to form an alliance with the
> growing popularity of the far right and seek to annihilate the left.

That’s a weird characterization, given that the trend has been in the opposite
direction: [https://www.vox.com/polyarchy/2016/6/3/11843780/democrats-
we...](https://www.vox.com/polyarchy/2016/6/3/11843780/democrats-wealthy-
party)

Also, frankly, the attempt to make it seem like the “left” has a monopoly on
“people of color” and “immigrants” is offensive. Trump got almost 30% of the
Hispanic vote, and it’s not because of the lovely things he said about
Hispanic people. Abbott got over 40% of the Hispanic vote in Texas.

The idea that billionaires are going to form a coalition with nazis to oppress
“people of color” is a leftist fever dream.

~~~
MuffinFlavored
Why _did_ Trump get 30% of the Hispanic vote? In South Florida, Hispanics love
him (yet he can famously be heard talking about building a wall, which would
have kept them and their family out)

~~~
umanwizard
Hispanics in South Florida (or their ancestors) came by sea, not land. A wall
wouldn’t have kept them out.

Despite US culture’s obsession with slotting people into racial categories
like “Hispanic”, Cubans in Florida actually have very little in common with
Mexicans and Mexican-Americans in California, Texas and the Southwest.

~~~
MuffinFlavored
Excuse my ignorance but, if South Florida had a wall, couldn't people _not_
get in by sea? I know Trump was not discussing adding a wall to anything other
than the southern border. I just felt that the premise of "I want to keep
Hispanics from entering the country" would apply to people coming by sea as
well.

~~~
umanwizard
Are you asking if, theoretically, a wall could be built in the sea to keep
Cubans from reaching Florida?

Whether that’s the case or not, I’m not sure how it’s relevant to the
discussion of who Florida Cubans align with politically, since it hasn’t been
proposed or discussed by Trump or anyone else.

------
MindTooth
Someone with a beter insight: does that mean that I somehow is worse or better
off? From where I stand, I hear/read a lot of criticism, but I’ve yet to see
that Bill Gates, Jeff Bezos, e.g., is going into my account and then steal my
money which results me being in a worse position.

I am of the opinion that if we everyday feel resentment towards those who have
more, that we are in itself creating a lesser condition for ourself. Whether
that be mental illness, hate, or worse.

Your thoughts?

~~~
georgeecollins
The idea is that one person gets a great deal of wealth from the creation of
something that they were the most important in that creation. We would all
agree that what Gates and Bezos acomplished was laudable and needs to be
encouraged in society. However, in a different era Arthur Sloan (GM) or Henry
Ford actually ended up with a lower percentage of the wealth of their
companies. More of that wealth was distributed as opposed to concentrated in a
founder or CEO. Did that discourage their excellence? I don't think so. Did it
make a healthier society? I would argue yes.

~~~
akavi
Did the wealth of car companies go to labor? Or did the wealth go to the
venture capitalists (or whatever the venture capital equivalents of the day
were)?

Because those are very different situations.

~~~
aianus
The real wealth that car companies created went to consumers in form of
consumer surplus.

The automobile used to be a toy for millionaires, now even (American) minimum-
wage workers can travel daily in comfortable, individual, climate-controlled
vehicles capable of incredible speeds.

I would pay $100k for a ten-year-old Civic but I don't have to because the car
companies work hard and compete with each other and have driven down costs and
prices to the bare minimum.

Same for many of todays billionaires / huge corporations. They're generally
not stealing from us, but creating enormous wealth for all of us in the form
of consumer surplus with their desirable goods and services.

~~~
Valakas
But are the billionaires the ones actually responsible for creating all that
value? Is Bezos actually responsible for 10 000x the value of what Amazon
produces than a worker? If Bezos didn't exist, there would be another "Bezos".
He just happened to be there at the right time and do the right things. We
discount all the effects that luck and society play in making a "Bezos". The
company is what is providing that huge amount of value, not the person.

~~~
pgt
You have to apply your argument to yourself, which is "are you responsible for
creating any of the value you create?" If you didn't exist there would be
another you, so luck and society made you. But you know that is not true. You
are where you are, and you can step away at any time.

------
tobltobs
Why do such discussions on HN always end in some crude left vs. right fights?

Later addition because most answers say that this is normal for politics:

Usually on HN for other topics such a primitive black and white thinking is in
the minority and will be laughed about or just ignored. Why not if it comes to
politics?

~~~
zimbatm
The same is happening a lot in the media as well. The first step is to project
the complex problem into 2D space. Then retrofit the arguments so that they
fit the narrative. I suspect that somebody who consumes a lot of that type of
media will have their reasoning process being influenced.

The engineering approach would try and decompose the problem without
judgement. Then explore the tree of possibilities, apply weights on all the
possible outcomes and then take the best possible route, knowing full well
that an ideal doesn't exist.

I am sure it's possible to apply many more lenses to a problem, each of then
bringing more richness and understanding to the world.

~~~
claudiawerner
>The engineering approach would try and decompose the problem without
judgement.

The whole point of the existence of poilitical economy and sociology is th at
this kind of decomposition is very hard, if not impossible - without judgement
implies that those who practice this kind of thinking, or engineering, are
able to adopt a view from nowhere, but the fact is that these people belong to
groups in society, they are personally affected by the outcome, and absolutely
already have pre-existing interests. Furthermore, you automatically figure
this as a kind of balancing game with weights, but this implies that the
weighting _can_ be done (how do you weigh two qualitative choices?) and
further the utilitarian view that all that matters is the maximum weight. Both
of these problems are why there is intense debate in moral theory regarding
instrumental reason and consequentialism.

~~~
zimbatm
Weighting is certainly a difficult exercise. Even for engineers where the
problems are more concrete, it often relies on building some sort of shared
vision that is used to infer a future prediction. In fact most of the
disagreements I see is when two engineers have a different view of the future.
For sure, both quantitative and qualitative approaches are necessary to build
a proper model.

Anyways, my point was that by looking at every argument by first placing it on
a left vs right scale removes the interesting nuances that could be discussed.
I don't know that the engineering approach is necessarily the best tool to
solve social inequalities as this is not my topic at all.

------
claudeganon
There is no greater class solidarity than that of the ruling class.

~~~
liquidise
Quite. We see news articles on a daily basis proclaiming the solidarity of the
US Congress.

Really this is such an unsubstantiated comment. No one carries a card for
being a member of the “ruling class”. Instead people making this argument
simply cherry-pick from diverse groups for their purposes and claim they all
work/live/think the same: politicians, the rich, foreign interests, lobbyists,
youth activists, corporations, media, far right fringe, etc.

~~~
kunai
Congress may get into petty squabbles over issues like farm subsidies or trans
rights, but they are generally agreed on the status quo of the current United
States economy. There is bipartisan support for unfettered corporate control
over wide sectors of the economy and public resources.

I'm not saying that both sides are the same here. I'm saying that what Chuck
Schumer wants for his class and what Mitch McConnell does are broadly the
same. Chuck might pay lip service to his constituents by opposing tax
increases, but at the end of the day both would still vote to increase the
defense budget, vote against Medicare-for-All, vote against expansion of
welfare and entitlements, vote against most things that would make life easier
for the struggling majority in this country.

The exceptions, like Sanders, Warren, Ocasio-Cortez, etc., are just that,
exceptions. We often forget just how ridiculous and absurd both Sanders and
his positions were viewed in 2015 when he first entered the race.

------
lowracle
The article seems to indicate that those gains are all paper money due to the
huge inflation in the stock market. On paper they look richer, but they can't
do much with their "money" anyway. I think a more rational measure of
inequality is through the possession of "important" assets like real estate,
lands, power (political influence, ...). Of course the real problem comes when
the lower and middle class sells their real wealth for stocks at the top, and
the 1 percenters sell them their paper gains for "important" assets.

~~~
sct202
Yeah housing prices in a lot of areas have barely recovered to the last peak
from 12 years ago (and housing equity has traditionally comprised most of the
"middle class"'s wealth), while stocks are like at least double (not even
including dividends).

~~~
adjkant
If you're focusing on houses, you're looking in the wrong place. Look at
rental property values, particularly in cities but even suburban areas.

------
vinceguidry
Sigh. Journalists have forgotten how to talk about class.

"One-percenter" isn't a real thing. It's just math. There is absolutely
nothing tying the 'one-percenter' class together. They're not banding together
to make it so their kids have a straight run into the Ivy League. They're not
trying to stay politically dominant by passing poll taxes.

One-percenters aren't doing that. The upper class is. And there's plenty of
"one-percenters" that aren't part of the upper class, most notably tech
workers.

Social classes each have their own institutions of which they dominate. They
have industry segments in which they maintain presence. But apparently we
can't talk about that anymore. Sadly it's probably less to do with anything
more nefarious than the gutting of funding for journalism, so all the stories
are getting lazier and lazier.

~~~
CPLX
> And there's plenty of "one-percenters" that aren't part of the upper class,
> most notably tech workers.

You’re going to have to back that assertion up.

~~~
casion
Well, according to income charts, thats me.

Im most certainly not upper class, as I can't even afford to buy department
store clothes or go out to eat more than once a week.

My expenses, due to my location, education, medical status and job, eat up a
lot of my income. I'm VERY thrifty and am about 75% over the poverty line
after job/education expenses. Throw in medical, transportation and the
ridiculous housing costs and I can't even afford mcdonalds for breakfast.

~~~
asjw
Classes by definition are about wealth

If you're unable to manage your money it's your fault, but you're not working
class

~~~
shantly
Income is not wealth.

~~~
base698
[https://youtu.be/bZWeFtgEAEk?t=41](https://youtu.be/bZWeFtgEAEk?t=41)

Here's the difference between rich and wealthy. Shaq, is rich, the white guy
that signs his check is wealthy.

Rich is something you can lose over the summer in Vegas with a drug habit.

~~~
CPLX
Shaquille O’Neill, with an estimated net worth of approximately 400 million
dollars, is wealthy.

~~~
base698
It's an old video, def is now wealthy.

------
seibelj
What’s better? Next year the 1% grow 20% wealth and the rest grows 5%? Or next
year the 1% lose 20% of their wealth while the rest lose 5% of their wealth?

In option 1, the pie is growing for all, but for the rich faster than for the
rest. In option 2, all of us are poorer, but we are more equal.

I would prefer option 1, while I believe many on the left would prefer option
2 given the proposals to enact socialism and seize property from those who
have it.

~~~
georgeecollins
Inequality of resources ultimately destroys equality of opportunity. If some
cannot afford to send their kids to an acceptable elementary school (no joke
in parts of the US) and some can afford to buy a college, meritocracy is a
myth.

If the choice were between no growth + equality and growth + no equality I too
would choose growth. However, the period of the fastest economic growth in the
US (1940-1950s) featured much higher taxes, much lower ratios between the
highest and lowest paid, and much more economic equality. The idea that
equality and growth are incompatible is unsupported dogma.

~~~
aphextron
>However, the period of the fastest economic growth in the US (1940-1950s)
featured much higher taxes, much lower ratios between the highest and lowest
paid, and much more economic equality.

This is a much parroted line, but it needs to be pointed out just how
exceptional of a time period the 1940s-1950s were in the history of the world.
The US at this time was literally the only functioning industrialized economy
left on earth. All of Europe, Russia, and Japan were left in ruins. China
hadn't even remotely begun to industrialize. Southeast Asia, Africa, and Latin
America's GDPs were totally negligible. If you wanted to buy _anything_ beyond
raw materials, it came from the US.

We live in a fundamentally different world now, where we must compete in a
fully globalized economy. The US has succeeded at competing in high paid, high
technology sectors, which by their nature have contributed to the inequality
of incomes we now see.

~~~
solresol
> The US at this time was literally the only functioning industrialized
> economy left on earth. If you wanted to buy anything beyond raw materials,
> it came from the US.

Except for Australia, as manufacturing in Australia was still a thing then.
And there were a few other developed nations that survived the war with their
economies reasonably intact.

The USA wasn't a total global monopoly. Nor was international trade as common
as it is now .

------
romaaeterna
The middle class (and lower class) has suffered tremendously from the lower
cost of labor abroad and the ability to cheaply import goods and services. The
upper class has benefited tremendously from the same.

Another thing that has decimated the middle class is the general collapse of
family. Divorce is the greatest family wealth destroyer in America.

People who care especially about jobs for the lower and middle classes support
trade and immigration restriction politics. This is exactly why certain
midwest states handed Trump the election in 2016, whatever imperfect good they
got from that. I've been to these places. People in rust belt towns with
closed factories did not think that the Democrats were going to bring the jobs
back.

If free trade improves the overall economy by making the very rich slightly
wealthier, and destroying the jobs of everyone else, it is obviously not an
unalloyed good, and perhaps not in the interests of most people. Similarly
with mass immigration.

~~~
logicchains
>The middle class (and lower class) has suffered tremendously from the lower
cost of labor abroad and the ability to cheaply import goods and services.

The middle class in China and India (which barely existed a few decades ago)
has profited tremendously from this. It's a natural equalisation: why does a
worker in America deserve a better standard of living than a worker in Indian
or China when the latter is willing to work so much harder to pull his family
out of abject, mud-hut poverty?

~~~
romaaeterna
There are other groups that I would bankrupt first to help the third world
than the American middle class, if that's what it takes.

------
chkaloon
Interesting that pension assets make up such a large portion of the 90-99%
bracket. That must include self built retirement accounts, IRAs, 401ks, 403bs,
etc., and not just traditional defined benefit pensions

------
allsunny
Would be curious to know what the wealth level is at for the different
percentiles mentioned. e.g. 50% 90% 99% 99.9%. I can't find anything recent.

~~~
tejohnso
[https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2018](https://www.ssa.gov/cgi-
bin/netcomp.cgi?year=2018)

------
lr4444lr
In analyses like these I always have to ask, are they counting the pension
funds?

------
dustinmoris
What’s the income that one needs to be inside the “one percenters”?

~~~
tonyedgecombe
For income it is about $720,000[1]

For wealth it is $10,000,000[2]

[1] [https://www.investopedia.com/personal-finance/how-much-
incom...](https://www.investopedia.com/personal-finance/how-much-income-puts-
you-top-1-5-10/)

[2] [https://dqydj.com/net-worth-brackets-wealth-brackets-one-
per...](https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/)

------
fyp
Why is there an obsession over the 1% when the 0.0000001% (8 men) owns as much
as the bottom 50% of the world? [https://www.oxfam.org/en/press-
releases/just-8-men-own-same-...](https://www.oxfam.org/en/press-
releases/just-8-men-own-same-wealth-half-world)

EDIT: correct headline

~~~
harryh
1) The analysis in that report is very bad.

[https://www.bloomberg.com/opinion/articles/2019-01-24/oxfam-...](https://www.bloomberg.com/opinion/articles/2019-01-24/oxfam-
claim-of-soaring-wealth-inequality-relies-on-shaky-analysis)

2) You have taken the bad analysis and made it even worse. The headline says 8
men own as much as half the world (as much as the bottom 50%). That does NOT
mean they own half the world. Far far far from it. (EDIT: you fixed this part
with your edit)

~~~
fyp
What about this link (2019): [https://www.cnn.com/2019/01/20/business/oxfam-
billionaires-d...](https://www.cnn.com/2019/01/20/business/oxfam-billionaires-
davos/index.html)

So top 26 instead of top 8.

Anyway my point is that all these news article lump the top 1% together even
though you can make similar headlines about just the top 0.1%, 0.01%, 0.001%,
0.0001%, 0.00001%, 0.000001%.

~~~
harryh
That's the same Oxfam report from another year. They keep saying the same
wrong stuff every year.

Whatever your point is, it's not very meaningful if it's supported by faulty
evidence or reasoning.

~~~
fyp
Does it materially change the conclusion whether it's 8, 26, 100, or 1000
billionares?

I am saying the top 1% is 77 million people and you can narrow that group down
by _a lot_ and still make the same headline of top X surpasses wealth of
bottom Y.

~~~
harryh
Ya, I know you're saying that. But everything specific you've stated so far
has been false.

Keep in mind that the top 1% have a combined wealth of about 35 trillion. The
combined wealth of all US billionaires is only 10% or so of that.

So the core idea that you seem to be trying to express, that the billionaires
have it all, is just not accurate.

~~~
throwawaysea
That’s not the core idea he/she is expressing. The core idea is that selecting
a certain wealth level or percentile to be outraged about is wholly arbitrary.
And therefore it doesn’t make sense to cherry pick the 1%, and if the vague
logic of what constitutes inappropriate wealth is to be used, it would make
more sense to look at the billionaires than the 1%. The billionaires have
incredible wealth per capita compared to the 1%, most of whom still have to
actively plan for retirement and worry about financial security.

Personally I think the focus on the 1% is a bad tactic since it targets people
who are everywhere all around us, whom their friends know to be talented or
hard working or to have undertaken the stress of operating a small business or
whatever. For that reason it does and will continue to come off as
inappropriate/unfair/immature to demonize the 1%, and hell probably even the
0.1%. This is why Occupy Wall Street was so easily dismissed.

~~~
harryh
1) Personally I think that you have it exactly backwards. If you look at
Western Europe and all the social services provided there, they don't do it by
going after billionaire's money because there simply aren't enough of them.
They do it by having significantly higher taxes on most above average incomes.

In the US, when we focus the discussion on the ultra rich and move it away
from the merely well to do, we take the discussion away from what has to
happen if we want things like single payer health care or vastly cheaper
college education.

2) Also, for the record this is a little questionable:

 _compared to the 1%, most of whom still have to actively plan for retirement
and worry about financial security_

To be in the 1% of wealth you've got to have over 10 million dollars. If
you've got that much on hand and you're all that worried about retirement you
either can't do math or your idea of a comfortable retirement is quite lavish.

~~~
tptacek
We don't just take the discussion away from what it will take to get what we
want; we also either:

(a) implicitly constrain our notion of what is possible ("what is possible is
what we can offset with a redistributive pay-for"), _or_

(b) in reckoning with the fact that billionaires can't (for instance) pay for
single-payer health care, force ourselves to reject entirely the notion of
accounting and economics (see MMT, which is a serious idea in academia but
finds an entirely unserious expression in public policy).

Europe doesn't seem to have this problem; they seem simply to decide that
everyone needs guaranteed-issue, subsidized, affordable health insurance (or a
single payer), and then tax the middle class to pay for it.

------
pizzaparty2
One thing being a programmer has taught me is to understand a problem if you
really want to fix it. Maybe one day I will do a deep dive in politics and
economics. Then I could have real answers and better/more-informed
discussions.

Looking at this now though I think, okay, there's more of us than them. Let's
just take it and figure out how to redistribute it. But I know most of them
are probably innocent and goood people. I suspect the real problem is our
failed government. Does anyone have any idea how we can solve wealth
inequality? Will it happen or will we keep slipping?

~~~
adaml_623
You just need to tweak the system to make accumulation a bit harder. Currently
money attracts more money. It's not rocket science to implement a plan that
means that any entity with lots of money needs to work a little harder to
retain it and grow.

Rich people always say they are smarter and deserve the money. Well that's
fine. They'll continue being smarter and continue being rich but it'll just be
a bit harder for them. Seems fair to me.

P.S. Yes I think a small wealth tax is a good start. Little tweaks

~~~
zdw
Rich people aren't smarter as a whole - they may be slightly smarter than
average but much luckier, which is what the literature supports:
[https://hbr.org/2015/11/are-successful-ceos-just-
lucky](https://hbr.org/2015/11/are-successful-ceos-just-lucky)

What they do have is more luck, either by their location of birth or
parentage, being in the right place at the right time, and so on. There's no
outsized intrinsic merit to the wealthy, as much as members of that class
would prefer to believe.

Taxing the lucky to spread the luck around seems like a reasonable and
commendable approach.

~~~
throwawaysea
That HBR article is poorly written and doesn’t support your comment. An
example of poor quality - it mentions taller men are more likely to be CEOs,
which implies causality but it offers no data or statistical analysis to
support such a claim. A simple correlation may warrant investigation into
causality but isn’t causal itself. Additionally that entire article is about
CEOs and not “the rich”, which are two different categories. The CEO of a
well-funded startup isn’t necessarily rich, for example.

Most wealthy people I’ve met may have had occasional luck but they’ve also had
bad luck. But they are smarter, work harder (more intensely and longer hours),
and put themselves in positions to encounter luck/opportunity with high
frequency. By and large I’ve observed it to be a result of their innate traits
and active decision making.

This recent cultural obsession with claiming that merit isn’t real and that
meritocracies are a myth is itself a feel-good myth with little basis in
reality. Every piece I’ve read with such claims either rests on dubious
statistics or pontificates endlessly to ultimately state personal opinion.

~~~
zdw
Says the throwaway who is ignorant of the etymology of "meritocracy"

------
js2
Some links on wealth inequality that I've read/watched recently:

\- _Income Inequality and the Taste for Revolution_

[https://www.jstor.org/stable/10.1086/426881](https://www.jstor.org/stable/10.1086/426881)

(Study based on global survey data and GINI coefficients.)

\- _Robert Reich: Everything You Need to Know About the New Economy_

[https://www.youtube.com/watch?v=fMmH_2EYohQ](https://www.youtube.com/watch?v=fMmH_2EYohQ)

\- _The dirty secret of capitalism -- and a new way forward | Nick Hanauer_

[https://www.youtube.com/watch?v=th3KE_H27bs](https://www.youtube.com/watch?v=th3KE_H27bs)

\- _Why Free College Could Increase Inequality_

[https://www.thirdway.org/memo/why-free-college-could-
increas...](https://www.thirdway.org/memo/why-free-college-could-increase-
inequality)

------
ofweijOISDFJ
Un-paywalled version: [https://outline.com/2DXFqv](https://outline.com/2DXFqv)

------
whereareyouwow
elizabeth warren 2020

------
jgalt212
QE/ZIRP over fiscal policy.

Obama, who during his first term could have chosen fiscal policy and tax
policy, instead decided to take on health care. Obamacare also weakened the
middle class.

~~~
shigawire
>Obamacare also weakened the middle class.

Care to elaborate?

~~~
jgalt212
skyrocketting premiums

[https://www.washingtonpost.com/national/health-
science/aca-p...](https://www.washingtonpost.com/national/health-science/aca-
premiums-rising-beyond-reach-of-older-middle-class-
consumers/2019/03/04/bdd07d9e-3e9a-11e9-922c-64d6b7840b82_story.html)

[https://nypost.com/2017/09/06/obamacare-is-making-the-
middle...](https://nypost.com/2017/09/06/obamacare-is-making-the-middle-class-
the-new-uninsured/)

~~~
lotsofpulp
A more accurate statement would be forcing health "insurance" companies to
accept sick people and therefore pay for their care, and limiting the ration
of highest premium to lowest premium so that sick people don't have to pay for
their own healthcare caused premiums for the healthy middle class to rise.

More people are getting healthcare, hence more money is needed, and instead of
raising taxes to pay for taxpayer funded healthcare, the US government decided
to force health insurances to cover people who had to raise health "insurance"
premiums.

More people were never going to get healthcare without an increase in either
taxes or insurance premiums. Complaining about higher premiums is therefore
complaining about more people getting healthcare, unless you would have rather
higher taxes on the wealthy to pay for taxpayer funded healthcare for
everyone.

