
Viral video shows how wealth is really distributed - sonabinu
http://economy.money.cnn.com/2013/03/08/wealth-video/
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matterhorn
Good ole socialist wealth envy class warfare blah blah blah.

Wealth is produced. If there were a fixed amount of it, we'd all still be
nomadic hunter-gatherers. Therefore, the gain of wealth is NOT a zero sum
game. When some CEO (good, bad, or hopelessly incompetent) makes 14 bazillion
dollars, that does nothing whatsoever to take anything from you. You don't
need to worry about what that CEO makes. You need to worry about what YOU
make.

Consider the White House Chief Calligrapher makes $96,725 per year. What a
complete and utter waste of tax money. If it were not for the fact that its
our tax money, it wouldn't matter a hill of beans. If Microsoft or Apple
wanted to hire a Chief Calligrapher at $96,725 or $967,250 it wouldn't matter
a hill of beans except to the shareholders of each company who might not think
such an expenditure is going to pay off all that well.

I recommend reading Henry Hazlitt's Economics in One Lesson:
[http://www.fee.org/library/detail/economics-in-one-lesson-
pd...](http://www.fee.org/library/detail/economics-in-one-lesson-pdf-doc-
audio#axzz2NEqtKsCL)

~~~
macco
> Wealth is produced. If there were a fixed amount of it, we'd all still be
> nomadic hunter-gatherers. Therefore, the gain of wealth is NOT a zero sum
> game.

Sure, but if the 1%er have gains above average growth, they taking it from the
rest. A simple fact, that has a lot to do with interest Tt doesn't make them
bad people. It ist just a mathematical fact.

The US have a big problem with wealth distribution (the biggest in the western
world). The US has a higher GDP per capita then Switzerland, Germany, Austria,
Netherland, Sweden, etc. Do you really believe the US has a higher avarage
living standard?

~~~
kokey
> Sure, but if the 1%er have gains above average growth, they taking it from
> the rest. A simple fact, that has a lot to do with interest Tt doesn't make
> them bad people. It ist just a mathematical fact.

So by your logic if the 1% of runners run faster than the average person, they
are taking running speed from the rest?

I would suggest to rather see it this way: If they are making above average
gains they are probably better at investing their capital than the average
person, but also helped by the increased bargaining power of the amount of
capital that they have.

> The US have a big problem with wealth distribution (the biggest in the
> western world). The US has a higher GDP per capita then Switzerland,
> Germany, Austria, Netherland, Sweden, etc. Do you really believe the US has
> a higher avarage living standard?

The USA has a much lower GDP per capita than most of those countries you have
mentioned.

~~~
macco
> I would suggest to rather see it this way: If they are making above average
> gains they are probably better at investing their capital than the average
> person, but also helped by the increased bargaining power of the amount of
> capital that they have.

Again you ignoring mathematics. The interest function is an exponential
function. It transfers money from borrowers to lenders - it's a law. It has
nothing to do with wiser investment decisions. If don't have savings you can't
invest.

> The USA has a much lower GDP per capita than most of those countries you
> have mentioned.

I am sorry, that is not right. All countries that I mentioned have lower GDP
per capita that the US.
[http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...](http://en.wikipedia.org/wiki/List_of_countries_by_GDP_\(PPP\)_per_capita)
There are only 3 countries in Europe who have a higher GDP per capita:
Lichtenstein, Luxenbourg and Norway. The economic power of the US is immense,
but the allocation should be optimized.

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bryanlarsen
Wow. In my opinion, the discussion on CNN is better than it is here. If this
becomes popular here, this might change but at the moment Disqus is doing a
great job of filtering a large number of comments. Kudos to Disqus on making
popular media comments work well.

~~~
nextstep
For those on a mobile device (the "Join the Conversation" feature wasn't
working for me on my phone), here is the top comment at time of writing this.
User 'spm' writes:

I think people are missing the larger point these type of graphs show. Of
course there has always been rich and poor in America. And the bottom poor in
America are doing better than the "middle class" in Zimbabwe or some other
third world country. But the real point of these type of graphs is that return
on PRODUCTIVITY has skewed exponentially toward the wealthy. It's evidence
that supply side economics does not work. THERE IS NO TRICKLE DOWN lol. The
rich just get richer while inflation and stagnant wages make the poor get
poorer. This is not political rhetoric or demonization of the wealthy. It's
simply reality and can be substantiated with data and numbers.

People also need to stop with this logical fallacy about the wealthy working
hard for their wealth. Typically that's not how it works , wealthy people
typically increase their wealth exponentially by NOT working hard...instead
choosing to use this little thing called....the stock market. The whole point
of the stock market is to make your money work for you...and get more of it.
That little 15K you've slaved to get into your 401K, yea someone makes that in
a week....off of dividends lol. Even CEOs who make hundreds of millions of
dollars do not work in the traditional sense. They get paid to make decisions,
and often times those decisions are out right HORRIBLE affecting the lives of
the middle class and poor who work under them(if they don't get laid off).
Luckily many CEOs have golden parachutes which takes care of that pesky notion
of accountability which they can then use to make investments(and continue to
grow their wealth exponentially) in the case that they are fired

~~~
kokey
You mention that their wealth is put into the stock market, which is only part
of the story since most of that wealth is in a variety of investments with a
potential return of which the stock market is only one example. That wealth
also provides the capital that funds many startups or help other companies
grow. Some of these investments are rubbish, as you say, but the rubbish
investments reduces the value of the portfolio. The wealth that remains and
grows are because they are generally managed well by the wealthy individuals
or whoever is managing it for them, picking the right investments. This is a
good thing and there is a kind of trickle down that results because of this,
in the form of investments being allocated to people worthy to invest in.

~~~
jiggy2011
What is the difference between a good investment and a rubbish one? A good
investment is one where you invest in a company that produces a product for
which there is demand greater than supply. And where does demand come from?

~~~
kokey
You have to be able to produce the product or deliver the service at a lower
cost than people are willing to pay for it. Demand is just one factor that
affects how much they are willing to pay. The most basic example is an
investment in an invention that saves people time and money, so people are
willing to pay a portion of the time and money they are saving. Demand is then
influenced by various things, including how important or significant this
saving is, and how many other options they have to achieve similar savings,
including alternatives from competitors. A good investor would be someone who
understands and consider all these factors.

~~~
jiggy2011
When you have a large wealth gap it simply becomes less profitable to produce
goods that are of high utility to those with less money.

So you may get more bang for your buck by investing in companies that give
labour saving benefits to the already wealthy, thus net increasing
unemployment. With less income disparity the best goods to invest in may be
ones which provide quality of living improvements across the spectrum.

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RyanMcGreal
Maybe Sam Harris should have used the reality vs. the perception of inequality
rather than firewood for his case study in how people can become irrationally
attached to a comforting idea.

