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[flagged] Stop Pretending You’re Not Rich (nytimes.com)
185 points by lorenzfx on June 12, 2017 | hide | past | favorite | 353 comments



I think the author misses some of the point of the "99%" rhetoric. It's not that someone in the 98th percentile making a 6 figure salary doesn't feel well off, it's that they don't feel any control over the political system. In the post-Citizens United landscape, multi-millionaires and billionaires who can afford to solo fund a PAC have outsized influence over politicians and government agencies. The impression that control has been ceded to such people is reinforced by their increasing monopoly on the accrual of tangible political benefits, which manifest in the forms of tax breaks and favorable regulatory decisions. And for those of us who are younger, student loan debt has delayed the meaningful accumulation of wealth via home purchases (plus not paying rent) and investment savings even when we earn such high salaries, so our annual incomes don't reflect our true economic status relative to prior generations.


Rich people has always had large influence in politics. Being rich means commanding a lot of resources, that's literally the definition. Having a lot of resources makes you influential. It's not the only way to have influence - one can be poor or average and still influential - but it's definitely one of the ways. Pretending that something - be it "Citizens united" decision or anything else - created this situation is extremely naive and ignores the whole human history and history of politics. Wealth, influence and politics are always interlinked, at least in a free lawful society - in a totalitarian one, property means nothing, and resources are distributed in other way, so influence is gained in other ways.

All that said, money don't matter as much in politics as some of the propaganda tries to tell. They are important, but they are not everything. There are numerous examples in US history alone where the candidate who spent the most lost, and the candidate who was the richest lost. By now, there's enough money on each side of any issue that the money on the sides is no longer the issue.

As for student debt etc. - this is the result of applying "feel good" solutions without considering the economic consequences. If you inject a huge stream of money into education system by providing unlimited federally supported loans, you get the prices go up, and you get the debt. And if you support home ownership and wealth accumulation by home ownership, house prices necessarily skyrocket and newcomers get priced out of the market. You can not have one without the other.


While this makes sense, I don't think you're going to make much progress convincing those suffering from oversized student loan debt that they are the expected "economic consequences" of a policy you believe to have been misguided. In this particular thread, it rings especially painful: the article discusses the way the upper 20% maintain their hold on power and resources; raising the cost of education clearly helps that goal. The poster to whom your responding points out that their loan debt is so large that they will not have the opportunity to have an income similar to those who graduated with similar credentials a generation previous, something unique in US history.

If we don't take steps to correct the situation, eventually only the upper 20% will be able to afford higher education. Regardless of how we might feel about government meddling, we all should be able to agree that it's anti-American to make higher education a privilege only the wealthy can enjoy.

You point out that the rich have always had more influence in politics then the poor, and this is obvious and has always been the case. By no means does this make the Citizens United decision less important, I'd argue that this is a tangential point. Citizens United has allowed corporations more weight to their voice then most of the US citizenry, wealthy or poor! In my opinion, the upper 20% have much more to fear from corporate interests than the lower 80%.


> I don't think you're going to make much progress convincing those suffering from oversized student loan debt that they are the expected "economic consequences" of a policy you believe to have been misguided

If they don't somehow get convinced of that, they will continue suffering, and their children would be suffering even more, until some catastrophic event forces the change of policy out of necessity. Or until some genius figures out that if we nationalize the whole thing, we could hide the spending inside the voluminous budgets nobody ever reads, and charge the same money now charged as loan payments through taxes, and everybody would be so happy for their "free" education.

> The poster to whom your responding points out that their loan debt is so large that they will not have the opportunity to have an income similar to those who graduated with similar credentials

If the price is too high, maybe it's time to stop buying and look for a different solution? Instead of declaring upfront "our aim is for everybody to buy X, no matter the price" and then acting surprised when the price of X is shooting up?

> By no means does this make the Citizens United decision less important

Oh, CU decision is very important. It recognized that if you have right to criticize Hillary Clinton privately, you also have right to criticize her collectively, i.e. band together with similar-minded people and create an organization dedicated to that goal. The alternative would be late-Soviet type of political life - where you could say a lot of things while you are in your own kitchen, but once you get out in public and try to make a difference, the state would control what you can say and how you can say it. I agree, it is a very important decision that confirmed citizens' right exist even if they start become a nuisance to the powerful people, and not only when they are inconsequential.

> Citizens United has allowed corporations more weight to their voice then most of the US citizenry,

Corporations are US citizenry (well, then can have foreign shareholders, but it's largely insignificant given US economy size dominates the rest so much). Who you think they are made of, Martians?

> Citizens United has allowed corporations more weight to their voice then most of the US citizenry,

What are "corporate interests" and why should we fear them?


Harping on the eternal boogeyman that is Citizens United, after an election where Clinton almost lost to Bernie's small donor army and Trump overcame her significantly higher spending seems a little… much.

That so many people latch on to the outcome of a case, that was fundamentally about political speech against a very contentious political family, as "clearly wrong" because they are allergic to the large, varied nature of what a corporation can be made up of and equate it to always be evil money -- well they kind of lose me there too regardless of what side of the political spectrum you fall.

If you think Citizens United is bad, are you also against companies like Apple being vocal about climate policy or state bathroom laws?


This article seems to be stretching to find reasons for its existence. I am willing to accept that I may be blinded by my own income/position. But it makes wild accusations and the backup feels very thin.

I also disagree that a "meritocracy" does not exist, at least in the IT world. In my own life (anecdote, sure, but how many stories are similar?) I was raised by a single father who made 20-30k a year. I'm now in the top 20% that the article refers to, and seems to imply as very hard to do from the way I was raised. This happened not due to luck or privilege, in my opinion. This happened because I spend 12-16 hours a day in front of a computer screen, and because I do what I tell people I will do.

My son will certainly have access to more than I had when I was a child. Maybe I'm just an evil rich guy? The article seems to be prefer that I am.


I'm not sure meritocracy is a good thing. I'd much rather have mercy as the foundational theory of democratic social organization because it's just too easy for people to make what should not be unrecoverable mistakes. I don't doubt that you worked very hard to get where you are today. I too grew up lower middle class and worked hard to get where I am today, but I also made many, many mistakes along the way. Good luck combined with privilege mitigated what could have been significant detriments to my future career (including access to funding for school, interactions with law enforcement, etc.) Should we, as a society, ignore individual potential in favor of past performance, as implied by the term "meritocracy"? I think that's a rather blinkered view, preferring something much more egalitarian based on my own life experience.


I think IT is unique in that there was a time when you could sit down and teach yourself enough to get a decent job. That's becoming less true today and I'd expect that trend to continue.

That, I think, is what this article is most concerned about: once people make it up into this fabled 20%, they (consciously or not) work to change the system in such a way that they cement their advantage for themselves and their children.

It's easy to imagine it happening; if your parents pay for an expensive education and you work hard for your degree, when you end up in the field it must seem obvious that those people from the more expensive schools are simply better prepared. Now that we're talking about it, not only professionally but even socially. And they're just a better "fit" with the rest of the team... Things become more stratified and it becomes more difficult to enter the field if you're different.

I found it interesting that the author found this to be uniquely American, that in the UK people found it much easier to admit the ways in which being wealthy was to their benefit. I had always thought it was like this everywhere.


> That's becoming less true today and I'd expect that trend to continue.

How so? I can't think of anything I know about IT and my profession that I couldn't learn from open free sources or experience. I don't say time spent acquiring degree was wasted on me, no, there are other advantages and I am not sure I could manage to gain that knowledge without the structure of the degree and peer support and so on. But it is possible to do it, at least all the means are around.

> that in the UK people found it much easier to admit the ways in which being wealthy was to their benefit.

Maybe in UK there's no consistent narrative that wealthy (and in general any well-to-do, societally adjusted) people are somehow all evil and at fault about anything wrong with the world, constantly scheming to oppress everybody else, and need to be constantly attacked, derided and shamed? No idea, I am not familiar with UK narratives, but I certainly know in some parts of the US such narrative is pretty much the default.


>How so? I can't think of anything I know about IT and my profession that I couldn't learn from open free sources or experience.

That's irrelevant to the claim being made. It's not education or knowledge that's inaccessible to lower classes, it's the stuff around it. It's nearly impossible to judge just knowledge and skills without any context, and even if you could manage it, it would be an unwise move leading to chaotic work environments. But it's also nearly impossible to judge "would this person be disruptive?" without also sneaking in strongly-class-biased culture fit screening, even if you explicitly prohibit doing so.

(Also, having the time to learn and knowledge of where to go to start learning are class biased. The founding population of tech was a different social community from previous power but still heavily upper-middle-class. (I'd guess tech workers 1990-2010 were about 60% from the second quintile and 80% in the 2nd-4th deciles.) They're skills that anyone could learn, but only in theory; in practice they're skills that anyone with the opportunity can learn, and the opportunity is not evenly distributed.)


Most highly motivated people can teach themselves IT skills. But IT skills are no longer in such short supply that salaries are crazy high.

In the Bay Area in the late 90s, if you could build and rack a PC you could get a top 10% salary with stock options. Lots of people lifted themselves to the upper-middle class that way. Now, between the high cost of living in cities with a lot of tech jobs, and declining salaries for non-specialized IT work, comparable skills only put you in the middle-middle class. If the trend continues, general IT skills won't pay any more than auto mechanic skills. Which can be decent if you hustle, but it's not the ticket to easy street that it used to be.


I disagree that there is some kind of anti-wealthy narrative that characterizes the rich as evil or at fault for the state of the nation and world. I believe there is a great deal of anti-corporate sentiment and, in my opinion, it is well deserved. But in terms of individual people who are rich, they seem as well loved and esteemed as ever. If you have some compelling articles to the contrary, I would be interested to read them.

During the past election, much was made of the wealth of the candidates. That didn't strike me as very effective... What did seem to strike a chord was the idea that some of the wealthy aren't paying taxes and that sounds entirely reasonable to me.


> I believe there is a great deal of anti-corporate sentiment

That's even weirder because "corporation" is nothing but a name that we call group of people doing some stuff together for efficiency. There are more legal aspects to it, but it's rarely what is discussed in this context. How evil is that instead of each of us making our own furniture we have people from IKEA corporation to do it for us! Makes no sense to me.

> During the past election, much was made of the wealth of the candidates.

Well, it's a convenient target. If the candidate has no money, obviously it's a loser and can't be trusted with a trillion size economy. If they do have money, obviously it was made by some kind of shady deals and they don't understand the plea of the common man. There's always something to attack here.

> the idea that some of the wealthy aren't paying taxes and that sounds entirely reasonable to me.

Overwhelming majority of the rich pay taxes, and, moreover, if taken together with upper middle class, they pay most of the taxes. If we distributed political influence according to how much taxes the person paid, the richest 1% would have 40% of all the influence, the bottom 95% would have another 40% and the middle would have remaining 20%. The rich are paying tons of taxes. Highest quintile has about 69% of overall tax burden. The next one has another about 20%. [1] This BTW undercounts corporate and other business taxes, which are not personally paid by "the rich", but paid by enterprises they own and thus diminish their income. If you count those too, the picture would be even more tilted towards most of the taxes being paid by "the rich".

Of course, that doesn't mean everybody pays the same - through some scheming, or good timing, or both, some persons may pay low marginal tax, or even for some time no tax at all (e.g. when suffering a lot of losses, but still remaining rich), or may enjoy special treatment from the government for their enterprises, including reduced tax burden. But if we look at the overall picture, it stays the same. If you take it as "somewhere, in some moment of time, I can find a rich person that doesn't pay a lot of taxes" - that would be true. If you take it as a systematic occurrence among rich people - it is completely false.

And, of course, any recent usage of this meme were complete fabrications - Romney did pay taxes, so did Trump.

So I'm not sure - which part sounds "entirely reasonable"?

[1] https://www.cbo.gov/publication/49440


I agree with this statement, but the first one:

> I think IT is unique in that there was a time when you could sit down and teach yourself enough to get a decent job.

I think can be true, but many aspects of IT are skills-based honestly. And there will always be the ability to self-teach skills-based work. Some of this skill-based work is just well-paying right now. Because everyone needs it for something.


Wait, he's arguing meritocracy exists, not that it doesn't exist.

You're probably a hard worker, and a capable one, but how many people were born without the proper brain power to be able to do IT? Or was not lucky enough to go to the proper school? Or was unlucky enough to have a father who'd rather gamble and drink rather than feed his kids properly. When you see a homeless or jobless person of your own age and think "Lazy bum, we're the same, why can't he be a successful guy in IT?", you're dismissing the good luck you've had in life, and the bad luck that person has suffered, and that's meritocracy...


The article is saying that people say meritocracy exists, but act in ways and expect things that contradict a meritocracy.


  This happened not due to luck or privilege, in my
  opinion. [...] Maybe I'm just an evil rich guy?
I don't think that's what the article is trying to say. I'm sure everyone has a different experience of this kind of stuff.

I'm a computer programmer, my father was a design engineer, his father was an architect.

That meant my parents could afford a house in the catchment area for a good state school, where most people's parents were university-educated, and most people were going to university. Next to no disruptive behaviour - which of course makes it much easier to retain good teachers.

My mother could take time off work after I was born, and we could always afford healthy, balanced family meals every day. My parents worked predictable, sociable hours so there was always someone to read me a bedtime story.

And it meant I was never short of educational things at home. I was one of the only people in my school to have access to a home computer; the first modem my parents brought cost $600.

Of course I could have as many books as I could read - assuming they didn't have them at the public library, which my parents had been taking to since before I could read.

I also had all the help I needed with my homework. Struggling to derive the quadratic formula? No problem, parent can do it from memory. Not doing so well in Subject X? No trouble, let's see if 90 minutes a week of private tutoring improves the situation.

I need an internship or work experience or a summer job in college? No problem, Dad can take me in where he works. Of course he made sure I knew how to behave and dress. None of my colleagues ever played pranks on the new guy or anything - after all, my dad was the manager of the design office.

There were also a bunch of less tangible things involving having seen things before and knowing not to be intimidated or feel like I didn't belong. Getting into university / starting a business might seem intimidating if you've never known someone who's done it before. I know a bunch of people who have - so when I did the same thing, it was an easy decision.

It sounds like you made it without any of those advantages - good for you!

But it'd be be pretty weird if I claimed those things I listed didn't benefit me - I plan to reproduce all of them for my children (if and when I have them), as I think they had a pretty large positive impact.


Most of the things you listed here are not that expensive. Even a lower income person can afford it. The differentiating factor is family values.


Gotta disagree with you there.

I'll agree that anyone can take their child to the library. And most families could do healthy home-cooked meals every night - unless the parents are working two jobs or unsociable hours.

But that modem? About 100 hours at minimum wage (if my country had a minimum wage at the time which it didn't - I'm using the rate from 3 years later)

The computer it was plugged into? More than three months at minimum wage - assuming you saved 100% of your income. But a luxury like a computer would come out of your disposable income, after you'd paid for food, housing, heating and travel to work.

90 minutes of tutoring a week? 11 hours at minimum wage. Did I mention that, for a time, I was being tutored in two subjects?

And that's without mentioning the opportunity costs of my mother leaving the workforce until I reached school age.


> The differentiating factor is family values.

bingo, that's the thing no one wants to talk about.


To me as well the article seems disappointing. Is not-quite-explicitly-stated assumption that most of those in the 20% income were entitled to it without doing much work is wrong. The author keeps pointing to politicians as examples of those at the top (likely because most people do not view them favorably) and ignores professionals, business owners, etc. who often built their way there without starting in the top 20%.

And the solution? "You, in the upper middle class, feel guilty!". Ouch!


I'm in a similar position to you (I grew up on free lunch and now have a well-paid engineering career). But your or my existence and success doesn't negate the trend; there will always be outliers. I don't think I've ever had a coworker who grew up anywhere near as poor as I did, and all things considered my family wasn't all that poor.


Meritocracy exists once you get to a certain class. Prior to that, it doesn't.

In IT/computer science world? Sure thing. But most likely you had a lot of advantages to get to that point.


I just want to point out that you brought the word "evil" into this discussion. I forget which logical fallacy that is... The one where you hyperbolize the other's position to draw attention away from their actual argument.

From what I can tell, without said misrepresentation your comment amounts to "yes, my relative success is fully explained by and my fathers merits"?


This article seems to posit that most people who are in this top quintile haven't had to work incredibly hard for it, or that they have worked no harder than anyone else. From what I've seen the responsibilities I have for my salary are far greater and require a far greater amount of autonomy and personal responsibility for my work than most people making 30k/year.


> a far greater amount of autonomy and personal responsibility for my work than most people making 30k/year.

I see a lot of jobs at the ... $50k-$80k mark which have a lot of responsibility but not much autonomy, and that's where I always have trouble (that mismatch).

The folks I know in the $50k-$80k range seem to work (measured perhaps by effort, stress and hours put in) at least as much as, often far more than, folks earning $100k-$200k. I don't have enough connections at the $300k and $30k ends to compare.


Many of my friends are in the $30k area, so I can put in a data point for you there. They work long hours, often on weekends, sometimes two part time jobs or one full time job and a side gig. The thing that's hard is there is more supply of unskilled workers than there is demand for them. If you don't put in the time and put up with your shitty boss and coworkers, someone else will, and now you're homeless because the US has no social safety structure. Coupled with our abysmal minimum wage, this results in working 60 hour weeks to acquire your barely-above-poverty wage. As someone with a very comfy job (hey, I'm posting on HN right now), it enrages me to see people who work harder than me paid less than half my salary. And I'm on the low end of the IT wage scale.


Thanks. I perhaps should have said I don't have many folks on the $300k side of things to compare against the $30k folks. I do know people in the $30k area, and yeah... you're spot on. And... while a few I know are just sort of 'content'(?) where they're at, most I know are wanting to "get ahead" but seem stuck - family/kids, long work hours... it's not impossible to do more, but often physically... almost impossible. Go back to school and take more classes to hope to get a new degree in 2-3 years? With 3 little kids, two adults working 4 jobs, 1 car which breaks down a lot... yeah, it gets hard to see any easy way out of that.

I tell that scenario and get people saying "doesn't matter, get out there, make it happen!" and... yeah - we all know some success stories who succeeded against the odds, but... we all know someone like that because it's still fairly remarkable in the first place.


What a lot of people miss is what advantages they had to get to that point.

People in a lower class still work hard. They might work harder than you. They just might not have had 2 dedicated parents, or a private school, or a good school system (because they were in a poorer area, so they get poor students, poor administration, poor fellow students). They don't have the freedom to take an unpaid internship to get college credits or a shot at a full-time job.


Median salary for a paramedic in the US is $40k a year (http://www1.salary.com/Paramedic-Salary.html). You got more/more important autonomy/responsibilities than trying to save someone's life? Maybe you do, I don't know. But to claim you're making more money because you have more autonomy/responsibility is arrogant and plain wrong.


You have greater responsibility and you create more value/profit for your company, but that does not necessarily mean you're working any harder than the people doing 60+ hours per week at minimum wage just to make rent.


Okay, now try getting where you are now while being black.


In what way? IT is very diverse and some places are specifically looking to hire non-Asian minorities.


If the tech/IT industry paid median wages would you still be sitting in front of your computer for 12-16 hours a day? If so, it sounds more like luck than anything that you're making decent money. I personally feel very lucky that something I would probably do anyway (coding, tech work) is paid so well. Yes, I spend an inordinate amount of time working on my skills, but I'm under no delusion that it's just those skills per se that have gotten me where I am. In many places in the world, tech jobs are not paid that much more. I simply don't see how the IT world is a meritocracy. I do see how it appears to be one, however. It's not.


You are arguing against the article's demographic arguments with your own n=1 anecdata.


Posh Brits are more likely to see that their position is at least in part the result of good fortune.

This is true, and part of the reason I prefer the UK to the US. People can be humorous about their status in the UK. I've got at least one friend, child of a zillionaire, who quite causally jokes about how he'd never be able to afford his lifestyle were it not for a judicious choice in parents. Class is so constantly talked about in the UK that you can’t really avoid the most common observations about it: it’s undeserved, and it’s hard to do anything about.

The other thing, which doesn't seem to be mentioned much in the article, is race. It's a truly unpleasant thing about America that race is a thing. I'm not psychologically scarred by it, in fact I thought it was somewhat funny, but I remember going to a NYC comedy club and the comedian started joking about me. "Why aren't you doing homework?". The point is race seems to be an alternative kind of class in America, one you can never work yourself out of. (And in that sense, class proper.) And because that’s there, everything else can be fixed with hard work. Right?

The stuff about property prices causing gated communities is quite true in and around London. Even a very highly paid banking job does not buy you much in many parts of London, and private schools are not cheap either. However there are council flats in just about every area of London; it may be unrealistic that they end up socialising, but there is at least the physical chance that children of the poor will run into the wealthy kids in Kensington.

His point about Oxbridge entrance is a positive for the UK; it is quite unthinkable that an Oxbridge don will be forced into accepting some unqualified kid. My tutor was clear that it was her and her alone who decided who got into the four spaces she had. Maybe someone has a story about it, but I find it unlikely that the swirl around Jared Kushner’s acceptance at Harvard would occur in the two British universities.


> I remember going to a NYC comedy club and the comedian started joking about me. "Why aren't you doing homework?"

I don't understand this at all?


OP probably looks Asian and comedian thought it would be funny to make a play at the whole "Asians are all super good at school" stereotype.


he's Asian? Asian parent stereotype?


Do you mean you prefer the UK to the US? Otherwise that statement seems out of kilter with the rest of your comment.


I could also see the original statement to be true. Humans are biased to believe that fortunate events are caused by their hard work and virtues. A society that constantly reminds you that the system is rigged thus causes discomfort.


Yeah typo


As a counter example, I'd like to use the Cuban-American community in the US. All of our families came to this country with little more than the clothes on their backs, starting in the early 60s. Now, half a century later, Cuban-Americans are doing as well for themselves as non-Hispanic white Americans, with equally large proportions in the middle, upper middle, and upper classes. My mom's father had a fourth grade education in Cuba and was a self-made businessman who ran a country store in Cuba and a store-fixtures store in the US. My dad's father was a middle class computer technician in Cuba, who came to the US and was never able to work in his profession again. He worked two jobs at first, sweeping floors and taking whatever other jobs came his way, and eventually rose up to running a hospital department. My father never had his own bedroom as a child. He got almost all of his schooling at very tough (in the high-crime and high-apathy sense) NYC public schools in the 60s/70s. There were no silver spoons in their mouths.

My parents have had successful careers, despite being dead broke in their 20s. They were able to stress the importance of education and hard work to me. I had a great job at Microsoft for two years, which I've now left to pursue a career in law.

And this is more or less the same family story of countless Cuban-American families. So I'm not buying this narrative of a calcified class structure built on generational wealth. The most important thing you can do for your children is not to be rich, but to be good. Values and virtues, not trust funds and special treatment.


Except for the fact that the first waves of Cuban-American migration were almost exclusively made of the wealthy and middle-upper classes who were profiting from the Batista dictatorship, therefore it's a bit disingenuous to say that they came "with little more than the clothes on their backs" in the early 60s. That's not to say that your anecdote is false or romanticized, but it is still anecdotal."with little more than the clothes on their backs" in the early 60s. That's not to say that your anecdote is false or romanticized, but it is still anecdotal.


Yes, it was the middle and upper classes that came in that first wave. But almost all of them did come with nothing, only small portions of the ultra rich were able to sneak out any signicant amount of wealth. The Castro regime did not allow you to take your worldly possessions with you. Bank accounts were frozen, homes were inventoried, and bags were searched. But they all felt lucky enough to escape with their lives and freedoms. And they did bring the values and virtues that served them well in their previous lives.

I also reject your premise that all of these people were profiting directly from the Batista dictatorship. There was corruption in Cuba, but there was also capitalism.


>And they did bring the values and virtues that served them well in their previous lives.

And the skills, education, and practical know-how: how to manage money, how to start a business, how to get your kids a good education. And perhaps in some cases the vices that had served them well: how to find a loophole, how to trade favors, how to fudge the truth to your benefit.

In other words, the intangibles of privilege.


I think both you and the original commenter agree that the "intangibles" make a significant (perhaps decisive) contribution to the heritability on outcomes. But that's where you both disagree with the article, which argues for the importance of "tangible" factors (growing up in a neighborhood with exclusionary zoning; receiving an expensive college education; etc).

Like the OC, I've seen the dramatic impact of the "intangibles" in my own homeland, a former Communist state. Many of the leading businessmen and professionals today are descended from pre-communist elites, even though these elites were not only deprived of all their material wealth but actively discriminated upon during the five decades of communism (for example, by receiving "class background" penalties for university admissions). The idea that "money breeds money" is intuitively plausible, but turns out to be largely an illusion.


Mmm maybe. Are those intangibles themselves sort of a shibboleth indicating class membership? Could publicly funded education help transfer those "soft skills" to poorer people or would there be class-protective resistance?


You don't think they benefited developmentally from having grown up in the upper classes?

I don't have much material wealth, but I don't think that makes me the same as someone who never did and doesn't know how they ever could.


Absolutely. But if you accept that culture, rather than material privilege, is the key to human thriving, then you come to very different conclusions about how to lift people up.


So they left their education behind in Cuba?

Or what you're saying is that they went from middle and upper class to temporarily lower class due to escaping Communism, then back to middle and upper class where they started. Pretty amazing, but it actually proves the point of the article rather than disproves is. People in the middle and upper classes stay there. Often even when they migrate to a different country. It's what happened to my parents so it's not unique to any particular heritage. It's a class phenomenon.


> Now, half a century later, Cuban-Americans are doing as well for themselves as non-Hispanic white Americans, with equally large proportions in the middle, upper middle, and upper classes.

If you view class inequality as an actual problem, the notion that it is distributed somewhat evenly depending on ethnic status isn't enormously comforting.


For anyone curious about how they are doing relative to others around their age, here are two interesting calculators.

Income percentile by age: https://dqydj.com/income-percentile-calculator/

Net worth percentile by age: https://dqydj.com/net-worth-by-age-calculator-for-the-united...


Meritocracy is an interesting "religion", which we unconsciously believe in, and one can probably argue is the basis of the Republican ideology. "You're poor? That must mean you're lazy!"

I find Alain de Botton's essays enlightening, here's a 2+ hour documentary about it: https://www.youtube.com/watch?v=t1MqJPHxy6g , and a 4 minute summary: https://www.youtube.com/watch?v=Iipn6yM43sM


>The rhetoric of “We are the 99 percent” has in fact been dangerously self-serving, allowing people with healthy six-figure incomes to convince themselves that they are somehow in the same economic boat as ordinary Americans, and that it is just the so-called super rich who are to blame for inequality. [...] The strong whiff of entitlement coming from the top 20 percent has not been lost on everyone else.

Ok, since it's not clear from the title, Richard V. Reeves is directing his tirade towards people making $100k+ and not the Bill Gates and Warren Buffetts of the USA.

Since many HN readers earn $100k+, let's ask ourselves:

Do you feel "rich"? Richard Reeves is calling you out as the class of the "rich" and to stop denying it. You agree?

Do programmers and sysadmins feel like getting the job and six-figure salary was from luck or the result of a rigged system? (Attending the 4-year college, whiteboard interviews, etc, was "rigged" in your favor.)

If you want to live in a neighborhood that prevents disassembled cars jacked up on cinder blocks, it doesn't really mean you want a nice-looking environment. Instead, you're just using the rules as a smoke screen to keep out low-income blacks and Latinos. You agree?

If you take advantage of 529 deductions for your kids' education and mortgage deductions, these are financial games to keep the low-income people from achieving what you've accomplished.

Richard Reeves says you should feel guilty? Do you feel guilty?

EDIT ADD: Since none of the replies (so far) directly engage with what I was trying to ask, I'll try to pose the question more directly: Do HN readers agree with Mr Reeves that _you_ are to be blamed for the low-income people not moving up the ladder?


Consider my friend who did as he was told but sadly in his case that was to become one of the very best dancers in his time. Dancing doesn't pay. He now works 10 hour shifts as a Chef and just about gets by to provide for his family. Conversely I put an equal amount of effort in teaching myself how to code and can pull in over four times the salary he earns with slightly less effort and when I get home my body doesn't feel fatigued. So "hahahahaha", he chose wrong and I chose right? Right? I was just lucky that the money coincided with my interest in tech.

Damn straight I feel guilty and what makes me mad is when people claim its about effort and hard work. Sure that's definitely part of the equasion but you can work twice as hard and put in twice as much effort and it doesn't mean a damn if you didn't back the "right" industry horse. Save a thought for those that chose different yet still totally as valid fields like nursing or teaching and appreciate the benefit that tech has "unfairly" brought you. Next time you're up late and working super hard just remember you're not literally cleaning up shit and piss for 1/4 of the money.


> it doesn't mean a damn if you didn't back the "right" industry horse

Was your friend bamboozled into thinking that he could earn $250k/yr as a dancer? Teaching is one thing - I think most people would like to pay (good) teachers more. Nurses are capable of making quite a bit of money between base salary and overtime, especially at higher levels of education and specialization. Despite what the folks writing VC-funded CRUD apps here would like to think, programming probably has one of the lowest effort-to-payroll ratios around. Most people work harder than us for less money. Part of that's luck but part of it is the market. And part of it is hard work, effort, and hustle.

I've worked sanitation jobs before. They suck. They pay next to nothing. But they also require next to nothing aside from the willingness to do the work. They may pay "1/4 of the money" but they require much less than 1/4 of the skill, education, or experience.


> Was your friend bamboozled into thinking that he could earn $250k/yr as a dancer?

Its more the old meritocracy adage. "Work hard and you'll be comfortable". Its more than that. Sure he could have made it dancing but not JUST dancing, if he'd gone for more a PR and choreography route, if he'd considered effectively wasting his training on doing something easy like being a backing dancer to a pop star. However all of this is very much "create a successful startup" level than "be a code monkey level". To succeed as a dancer as much as a programmer you really have to go above and beyond.

I have worked sanitation before too. Honest work though.


He was probably told to follow his passion. Probably not good advice.

https://m.youtube.com/watch?v=CVEuPmVAb8o


> Part of that's luck but part of it is the market.

I think a lot of that is the market.


> I think most people would like to pay (good) teachers more

In that case you're entirely unfamiliar with American conservative rhetoric and policy.


As an American conservative I would think I'm somewhat familiar with it. I'd love to pay good teachers more. I'd love to fire the bad ones. I'd love for good teachers to be able to earn more than bad ones, even if the good teachers have been there for less time! Imagine the horror of suggesting to a state teacher's union that someone there 10 years should make more money than someone there for 15.


Dancing does pay... if you're good enough. Basketball doesn't pay either unless your good enough and personally I don't think Lebron James or MJ should feel guilty about it. Lucky? Sure.

And back to your dancer friend, is he unhappy? If he looked at his risks, potential salaries, and happiness and chose to be a chef and amateur dancer, isn't that ok too?

I know many people who chose jobs that aren't their passion (hell, my passion is fishing and we know that doesn't pay). Instead I work a job that I enjoy while making enough money to provide for my family and my hobbies on the side. No, I don't feel guilty. If your passion coincides with a profession that makes $$ consider yourself fortunate.


> when people claim its about effort and hard work.

it's not just about effort and hard work. there are a lot of other factors, and one of those factors is his decision (for better or worse) to become a dancer vs. a doctor or lawyer or engineer. he's an adult and made his choice. we as a society cannot afford to subsidize everyone's "dream" of being an artist. someone has to actually do the work of moving us forward and keeping the lights on.


So while the ultra-rich corrupt democracy and amass ever more power, with increasing numbers of people vulnerable to their every whim, the people who work for a merely comfortable living should feel guilty?

Why this focus on guilt? Are we not allowed to be angry, as long as we still have some shred of comfort in out lives?


It's not about opposing guilt to anger. It's about pointing out that many of the public policies which most increase inequality are sops thrown by the very top to the broad class of well-off salaried workers immediately below them. Read the fine article: it's talking about things like restrictive zoning laws, 529 college-savings plans, and the mortgage-interest tax break. These are state subsidies for the well-off.

(Hell, my wife's parents saved up a 529 plan, and then she went to a state school on a full scholarship. Now we're apparently allowed to spend the 529 money to put a down payment on a house as a young couple, without any tax penalty. How is this allowed!?)

The question isn't, "Should people on HN feel guilty?". It's, "should people on HN receive a state subsidy for being fortunate?". Should we first make a nice living in tech, and then have the government write us extra little checks for all the ways we can pass our class down to our children?


> (Hell, my wife's parents saved up a 529 plan, and then she went to a state school on a full scholarship. Now we're apparently allowed to spend the 529 money to put a down payment on a house as a young couple, without any tax penalty. How is this allowed!?)

I'm not sure it is allowed. There must be some other transaction happening to make this without penalty. [1]

Also, why is everyone on this thread [not you] speaking of a 529 as if it's some elite 1% benefit? It's open to anyone. Most states have a $25 minimum, a lot of states have no minimum contribution at all [2].

[1]http://www.montereyherald.com/article/ZZ/20111006/NEWS/11100...

[2]http://www.savingforcollege.com/compare_529_plans/?plan_ques...

Edit: after some more research, it sounds like it may have been rolled over into an IRA for use with a first-time homebuyer exemption. See (http://finance.zacks.com/convert-529-ira-10479.html) under "Penalty Exceptions".


>The question isn't, "Should people on HN feel guilty?". It's, "should people on HN receive a state subsidy for being fortunate?"

The feelings of instilling guilt goes hand-in-hand with convincing the intended audience that they got to their position because of fortune instead of hard work. (The chain of thinking is then: your hard work didn't get you to the position of taking the mortgage deduction; instead it was your luck that did it.)

The writer wants workers with 100k salaries to vote for higher taxes on themselves by supporting politicians that promise to remove mortgage deductions and 529 education savings plans. In other words, he has to convince HN programmers making 100k that they are in fact, oppressing the low-income class. (E.g. Those tax deductions for home & college are subverting meritocracy and you should _feel bad_ for taking advantage of them.)

Do you think the writer's style of rhetoric was effective at persuasion? Or was he only effective at getting people who already agreed with him to nod in affirmation?


Nobody's talking about how you got into your position. We're talking about whether the government should send you free money for a position you've already got.


>Nobody's talking about how you got into your position.

Yes, the author did "talk about it" when he contends that people got that 100k jobs because of "luck" and "good fortune" instead of meritocracy. The author is throwing that premise-as-fact into the reader's face. The author has overlooked the fact that the reader must agree with that "luck" premise as a precondition of agreeing with the author's policy changes.

>We're talking about whether the government should send you free money for a position you've already got.

Ok, don't just write that sentence as some abstract credo. What does that mean in terms of concrete policy? Let's play that scenario out. That's what I tried to do with my last comment.

Are we wanting $100k job earners to vote for raising taxes on themselves via abolishment of mortgage and 529 tax deductions? Yes?

If so, you think his arguments persuasive to those who don't think those deductions were morally wrong? Did he successfully convince them that they are oppressing the low-income class?


>Are we wanting $100k job earners to vote for raising taxes on themselves via abolishment of mortgage and 529 tax deductions? Yes?

Yes, and I'd say we have pragmatic reasons to do so: the money for nice things has to come from somewhere. How is the subway system or Medicare supposed to run without tax money? If you make $100k and own a house, but have kids, where are your kids supposed to get affordable housing (and a rung onto the property ladder) of their own, without healthy pro-density zoning?


"The feelings of instilling guilt goes hand-in-hand with convincing the intended audience that they got to their position because of fortune instead of hard work."

People shouldn't feel guilty for the advantages their parents and ancestors worked hard to secure for them.


Sorry, my conjunction made that unclear.

The "guilt" is not about what their parents gave them; it's about making people feel guilt for taking the home & education tax deductions. (Although those are legal deductions, the writer wants to convince 100k earners that they are morally wrong for meritocracy.)


> Why this focus on guilt? Are we not allowed to be angry, as long as we still have some shred of comfort in out lives?

It's a manipulation tactic designed to force you to support the political aims of certain factions. While I do support the working class and poor, I, at least, decline to be manipulated.

It's a foolish tactic anyway; hammering the general public on guilt and privilege instead of focusing on sympathy and justice simply breeds resentment and will result in them silently sabotaging your agenda.


I think the point is that it's a bit of mental gymnastics to rail against "the rich" when you're a senior developer at Netflix making 10x the median household income.


cause I know the tech industry is "bubbly". Lot of people working in tech don't quite grok how tough it is for others to get by. Lets face it, while we're high enough to see the "real money" we're still a lot higher than everyone else salary and job security wise.

What if programmers were a dime a dozen and highly trained social care was where the lucra was at?


Yes, a bit.

I learned how wealthy, privileged, and protected even 100k is when we pulled our kids from a Catholic elementary school and moved them to an integrated urban magnet school (median income $35k). Suddenly we had some classmates who couldn't properly afford food, school clothes, and field trips. Not just one or two families, but many nice, hard-working families with smart kids. Just -- wow -- middle-class us -- we were suddenly rich, and I'd never really known it before.

My eldest will perpetuate her privilege and attend an Ivy in the fall. Her classmates, with exactly the same talent, education, hard work, and academic achievement will not, despite the availability of financial aid. Their families just didn't know how to micro-manage the application process, they couldn't afford extra-curricular enrichment, and some had other issues at home like immigration status or family health problems. Edit: and legacy preference; I am an alumn.

While I don't think it's malicious intent that "keeps low-income people from achieving what we've accomplished," there are definitely structural elements that do. I'm sure the existing system of financial games, housing, zoning, and education could be rearranged to help them much more.


Guilt is mentioned exactly once in the article: "At least posh people in England have the decency to feel guilty." I think that's rather overstating it - some people, mostly traditional aristos, feel a sense of noblesse oblige, but they're only a small proportion of the rich population.

I don't think framing it in terms of guilt is helpful, nor is trying to construct privilege as something that people should be ashamed of. It just makes people very defensive. What is better is for people to be aware of what advantages they had that other people did not, especially when they're telling other people what they should do or saying that everyone could get to their level if only they worked hard enough - hard work is not sufficient, avoidance of obstacles is also necessary.

(Private education is tax-deductible in the US? Blimey. The UK setup is slightly different - private schools are usually structured as non-profit educational charities, with tax advantages, and even that is grudgingly accepted due to the age and character of the schools.)

Did you have a computer at home as a child? That's a huge advantage that was outwith your control.


Private education is not generally tax-deductible in the US (e.g., private high school). 529 funds can be used for post-secondary education, but even then it's only the gains on the account that are exempt from tax if used for education.


> Richard Reeves says you should feel guilty? Do you feel guilty?

Close: I feel privileged. I'm a man, Eurasian ethnicity (that is: can pass for "white"), have two sisters, one of which has an "exotic" first name. And yes, I see the system being "rigged" in my favour all the time, related to the things I mentioned, and the unfairness of it all does piss me off.


Yes I feel rich. I no longer have to worry whether I can pay bills at the end of each month, despite making discretionary purchases without a pre-planned budget.

Yes I am lucky. Lucky to be both to parents who valued education, competency, and responsibility, knew how to instill those values in me, and had the capability to pull the right strings to see me through to a successful adulthood.


Crikey, what a strawman. The article isn't about making individuals feel guilty. It's about what it says on the tin: stop pretending you're not rich.

The median household income in California is $64k; across the US as a whole it's $52k. Half of all households are below these figures. If you're earning six figures, you are rich. It doesn't matter where you live, or what you spend your money on, you are rich. You're earning a minimum of 50% more than the median household income in a wealthy state. "Yeah, but my rent is high!"... well, go and see how the poor people live. Your rent may be high, but that's because you choose to live somewhere nice.

The article isn't about trying to make people feel guilty, it's about trying to pierce this bubble that the US upper middle class has (and HN has it in spades) that they're hard done by and kinda poor.


The article's conclusion is all about guilt and morality. Says so in the closing paragraphs.


It's about morality, but it's not about guilt. You don't have to feel guilty to break your own sense of entitlement. The whole theme of the article is 'stop pretending you're not rich', not 'you're rich and should feel guilty about it'.


>The whole theme of the article is 'stop pretending you're not rich', not 'you're rich and should feel guilty about it'.

The "stop pretending" is certainly the title but it's not the whole theme. He covers several themes. The author also wrote:

>The American myth of meritocracy allows them to attribute their position to their brilliance and diligence, rather than to luck or a rigged system. At least posh people in England have the decency to feel guilty.

In other words, if Americans had the right moral sense, they'd feel guilty about it too.

The theme for "pretending" is more about awareness if where six figures fits in the percentiles. Maybe people making $100k don't know or don't admit that such an income is in the top 17%. Yes, it's more than 83% others make so he advises, "don't pretend you're not rich."

The other theme is guilt and morals which the author is trying to convey to readers via claims of "luck", "good fortune", and "myth of meritocracy". This line of argument is orthogonal to the "stop pretending" theme.

At least 2 different themes with 2 different sets of supporting arguments in that blog post.


He's not trying to make people feel guilty, he's trying to make them admit some truths about the system - because until that happens, it can't be fixed. Everyone kicking back in these comments about 'being shamed' is utterly missing the point, and the 'guilt' line is a throwaway comment meaning that the upper class in England are aware of the issue, not that their emotional state is his desired target state for wealthy people to live in.

It's explicitly stated in the conclusion: For Americans to solve the problem of their deepening class divisions, we will have to start by admitting their existence and our complicity in maintaining them. The morals the author is interested in isn't "you should feel guilty", but "we need to fix this in order to even start helping the other four quintiles".

Not to mention that you're misrepresenting what he's saying, framing it as 'claims of luck', when his literal words are "in part the result of good fortune" (my emphasis). He's mirroring the same kind of thing that Warren Buffett says, yet people on HN don't complain about being guilted by Buffett's utterances.

The author isn't trying to make the reader feel guilty in that article; if the reader does feel guilty or shamed in reading it, then perhaps they're hiding something from themself? I mean, there's hard evidence right in this thread, where you see someone on $300k honestly arguing that someone on $30k is better off because they pay less income tax by percentage (!?!?). That takes a bizarre level of self-delusion.


Do I feel like the game is rigged to benefit me? Yes, to a certain (and meaningful) extent I do. I don't feel personally guilty about making decisions that are in my own best interests when the alternative would be to simply inconvenience me with no upside to any other party. I do feel some collective guilt in that we cannot get our country to do right by those coming from less advantaged positions.


Yes, to some extent.

I don't have kids yet, but when I do I will send them to public school. I had the massive advantage of being able to afford buying a house in a good school district. The money spent on housing tends to be directly proportional to the quality of schooling, which has a massive impact on income mobility.

Even if you discount better teachers and the like, going to a school where everyone's parents are invested in their kids' futures will produce very different outcomes from where parents aren't there (working multiple jobs, in jail, whatever).

So even though I am not specifically putting a boot on someone's head to keep them down, I am a willing participant in a system that effectively does that.


I'm an HN reader who does not earn $100k+.

In my view, very, very, very few programmers really deserve more than about $200k at most.

If you're earning $100k+ and you don't have children or extenuating circumstances such as disabilities that increase your non-discretionary expenditure, you're absolutely rich, and if you don't feel rich then you're either spending your money wrong or your benchmarks of wealth are waaaay off.


Outside the US, they won't. Working at Daimler for 10 years, you don't clear 80000 EUR if not moving in a managerial tier, and even then you'll have to move quite far up. (Starting nowadays, you'll have 50000 EUR starting salary as a junior developer.) And this is before taxes; even with 2 children, I'll pay upwards of 40 percent income tax in addition to 19 percent mandatory health insurance.

SV is a fantasy world.


It doesn't work like that. You don't get what you're 'worth'. You get what you negotiate. Its a market, your skills are for sale, you have to make a good deal.


Yep. I know how the market works. something something ~capitalism~


"In my view, very, very, very few programmers really deserve more than about $200k at most."

Why?


I can't say I have a particularly well reasoned argument for saying that. It's just my moral intuition. I definitely can say that I don't think that a person's wealth and well-being should be determined by "value to the market".

(FWIW I also come from a public service town, where very intelligent and talented people lead decently upper-middle-class lives, but salaries top out well below where one could get in the private sector.)


Yes, I look at the people I grew up around in a poor-to-working class neighborhood in Chicago and I feel guilty that most of them didn't get the same opportunity I did to do better. I was bused to better schools because of my test scores, I had a family that really cared and was relatively stable so while we didn't have a ton of money we had that. It's definitely not fair and not a product of anything I did other than being lucky to be born intelligent and into a caring stable family.

I'm not sure whether I should be blamed for other people not moving up the ladder, I don't have kids or a house so some of his critiques don't apply to me. But it does feel like in many cases the upper middle class stands in the way of progressive policy.


Do I feel rich? No. Do I feel the system is rigged? Absolutely not and I'm sick and tired of people who make POOR decisions complaining about other people who work hard and make good decisions .. stop whining, and take some responsibility for your decisions. No, you can't have everything you want and no, the world is not fair.


I consider myself rich. I feel guilty about it. I make far less than many on HN (but live in an area which is much more affordable than SF). By the article's definition we are not in the top 20%, but given a cost of living adjustment I'd put us near it.

Barring a catastrophe striking myself or my wife and permanently impeding our ability to work (and even potentially including a catastrophe striking only one of us) I will never have a concern about paying for food, shelter, transportation, clothing, education for my daughter, entertainment, or retirement. Nothing of any real import.

I think the most serious plausible risk would be a drawn out medical disaster occuring to one or both of us, with exotic and expensive treatments and overwhelming hospice costs. Our society deems it fit to bankrupt families in this state. The truly rich are the only ones really exempted from this potential outcome.

We have a house. It's about half paid off.

Extremely high cost luxury items (such as exotic luxury cars) are either out of our grasp or ruled to be within our grasp but miserable investments, and are not seriously considered. As an example, our primary vehicle is 8 years old, and it cost ~$20k when new. We have a "spare" vehicle which is much older but is still reliable (I commute by bike, but having a "spare" vehicle is useful for emergencies or for very bad weather (when my daughter needs transportation and cannot ride with me safely)).

We keep enough money in the bank to buy a similar new vehicle with cash if this one fails, or to pay for major problems with the house. If both occur at the same time, we would need to take out a home equity loan or an auto loan.

We donate to charity but I feel guilty about how little. We donate more since the election.

We still own luxury items. I have a $300 pair of shoes. My wife owns nice clothing. I own a $1500 bicycle (and have several more less valuable bicycles which I enjoy working on and tinkering with). I own ~$3000 worth of camera equipment.

We shop at a co-op market, we buy local organic food. We eat out at restaurants several times a week.

We travel every year, sometimes abroad.

We never have to work on weekends or holidays.

Our parents are not rich. We "earned" all of this on our own. Through, mostly, simply good fortune at being in the right place in the right time in the right generation.

What is rich? What point is there in having more than this? How would it benefit society for us to have more than this? I suppose we could work less, but we both enjoy our work.


> Do programmers and sysadmins feel like getting the job and six-figure salary was from luck or the result of a rigged system?

I'm white and male and relatively young still, so to some extent, yes, it is rigged in my favor.


>I'm white [...] rigged in my favor

Ok, how do Asians fit in that narrative? They suffer reverse-discrimination[1] and yet they are over-represented in high-paying technology jobs. Was the system "rigged" for them as well?

[1] https://www.google.com/search?q=asians+reverse+discriminatio...


Not sure how much I agree with the sentiment of this article as a relating class seemingly directly with salary.

In the UK its fairly well considered now that a working class 50 year old thats worked at UK average pay for the majority of their life, generally, has better standard of living than the 30 year old on 100k. The appreciation of housing and the current cost of things they got for free seem to matter far more than the salary you currently earn.


A factor to consider is that vast majority of people still need to work to survive. There are very few people who can live off their investments.


Your comment is a fine example of the article's point.

You (and I) may need to work. But that doesn't mean there's not a large gap between us and the "poor".

Take myself for an example - I own half my house and the bank owns the other half. So, yes, I have to work for a "survive" and pay for my mortgage and food.

But I only have to earn enough pay half the cost of housing, because the other half is provided by my capital.

A poor(er) person has to earn enough pay 100% of their cost of housing. A rich(er) person would own their house in full, so has no need to earn to pay that cost of living.

So there's clearly a scale between having to work to pay for anything, and not having to work at all because your capital pays enough dividends to cover all your bills.

The article contends that the "rich" cut off point is much lower down than we think, and that this advantage is passed from generation to generation.

The author says that in the UK this generational advantage is more recognised than in the US, because it is more formalised - which takes away some of the ability for people to be willfully ignorant of the advantage they've been given from birth compared to others.


The article is defining rich as "a privileged life that can be passed on to your descendents". That's no less a valid definition of rich than your "need to work to survive".


With regard to passing on to one's descendants, here's an interesting excerpt from Kropotkin's The Conquest of Bread:

In virtue of this monstrous system, the son of the worker, on entering life, finds no field which he may till, no machine which he may tend, no mine in which he may dig, without accepting to leave a great part of what he will produce to a master. He must sell his labour for a scant and uncertain wage. His father and his grandfather have toiled to drain this field, to build this mill, to perfect this machine. They gave to the work the full measure of their strength, and what more could they give? But their heir comes into the world poorer than the lowest savage. If he obtains leave to till the fields, it is on condition of surrendering a quarter of the produce to his master, and another quarter to the government and the middlemen. And this tax, levied upon him by the State, the capitalist, the lord of the manor, and the middleman, is always increasing; it rarely leaves him the power to improve his system of culture.


If you can't work you can't pass that on your descendants. The same is not true for capital.


You can pass values and education those are important at that level.


Of course, for the most part they're similar. What the article alludes to is the stratification of social classes. There are the wealthy rich, the professionals, and the working class (Of course there are more​ classes and this is a simplification). Children of the elites tend to stay elite, children of professionals are professionals, and so on. Regardless, vast majority of the people have to work to maintain their lifestyle. It's hard to feel that you made it if not working makes you lose your position.


Hmm, I'm missing your point. Are you saying that the definition of "rich" is "can live off their investments"? I would disagree with that.


I'm guessing his point is your lifestyle changes very little between the bottom and the top of the middle class. You have four walls and a roof over your head. Have home internet. Eat out a few times a week. Have a smart phone, etc.

You still have to go to work every day like everyone else to sustain this lifestyle. You just have nicer "things" and "fancier" experiences?


That argument is extremely broad, though. It's easy to live off your investments if you live in a hovel, eat ramen every day and never go out. Is that classified as rich?

Sure, it's a continuum, but "not having to live hand-to-mouth" is a hell of a lot closer to rich than to poor.


I would say that true wealth does not have to work


Someone needs to maintain the wealth, keep avoiding taxes, keep an eye on regulations, foreign markets, looking for new investments.


Couldn't they pay someone to do that?


Yes. But this is VERY risky.

See this as an example: https://en.wikipedia.org/wiki/Madeleine_Schickedanz The article does not give much details. But managers basically stole her wealth from her and siphoned it to themselves.

"She was supported in her claim by Thomas Middelhoff". In my opinion it was Middelhoff who badly advised her for his own gain.


Money management is a huge industry.


I've seen stats about wealth distribution in Germany and I'm in the top 7%. I could life of my saved money for 3 maybe 5 years if I'm very frugal.

I wouldn't consider this rich, wealthy yes, but not rich.

Also my money is probably more in the range of the 20% of the population that is "under me" in the stats than the 2% "over me".


It's simply a matter of definition, and the most useful one will depend on the discussion being had. You could say rich is above certain income, certain wealth, etc. I would think this is most appropriate for discussions about income and wealth inequality.

However, if we're talking about state of mind, then rich can be how secure one feels in their lifestyle. If all your family and friends are doctors/lawyers/business and owners/engineers and everyone is making $200k+, then making $100k won't feel rich. You won't be able to engage in many of the activities they can. You might also not feel rich if your income isn't secure, there is working rich and then wealthy, where you can make a few hundred thousand from investments and don't have to worry about getting sick or taking sabbaticals.


However, if we're talking about state of mind, then rich can be how secure one feels in their lifestyle. If all your family and friends are hedge fund managers/CEOs/famous athletes and everyone is worth 50M+, then having a mere 10M won't feel rich. You won't be able to engage in many of the activities they can. You might also not feel rich if your wealth isn't secure, there is wealthy and then truly high net worth, where you can make so much off the interest that you can afford multiple houses and a private jet.

If "state of mind" is your standard then almost anyone can tell a story about how they aren't really rich. And this isn't just me screwing around. There is a bunch of research about how the vast majority of people, no matter their financial situation, don't quite feel rich because they can always see "the next level up."

Perhaps we should be using a better standard than "state of mind."


> So imagine my horror at discovering that the United States is more calcified by class than Britain, especially toward the top. The American myth of meritocracy allows people on the highest rung to attribute their position to their brilliance and diligence, rather than to luck or a rigged system.

Conspicuously missing from this op-ed is the experience of millions of immigrant families who came to the United States and worked hard to make it into the top 20%. Many started with practically nothing. Did they all benefit from pure luck? Did they move to the U.S. to take advantage of a rigged system?

This seems to blow quite a big hole in the author's specious argument.


I've always defined rich by whether or not you need to work to maintain your desired lifestyle. If your desired lifestyle has you spending $30k / yr, rich means you have about $750k saved up. If your lifestyle would put you at $100k / yr in spending, you'll need $2.5m saved up.

Rich is as much about being able to manage your finances well as it is about how much money you make. If you are living from paycheck to paycheck, it doesn't matter whether your monthly check is $1500 or $10,000. If you're bad with money, you aren't rich.


So if you're a CEO who collects sports cars, you're not rich because you still need to work because you couldn't retire without selling one of your five vacation homes?


>If you're bad with money, you aren't rich.

Or if you're bad with money and can't hire people who are good with it.


It was an interesting piece but now I am interested in how sensitive the Brits are to accent. Can someone point to an example of upper class speech vs lower class speech and stuff in-between?

Accent very much colors perceptions in America as well. There are "redneck" and "urban" accents that would absolutely be a devastating red-flag in many job interview situations.


    > Posh Brits are more likely
    > to see that their position
    > is at least in part the 
    > result of good fortune
Quite, although it did take a millennium-long detour through the divine rights of royalty and so on


> So imagine my horror at discovering that the United States is more calcified by class than Britain, especially toward the top. The big difference is that most of the people on the highest rung in America are in denial about their privilege. The American myth of meritocracy allows them to attribute their position to their brilliance and diligence, rather than to luck or a rigged system. At least posh people in England have the decency to feel guilty.

Heh, riiiiiight. They feel guilty.

Color me skeptical.


I cannot stress enough how excellent this book is. It's quite sad, but stirred something in me that I've not been able to quell since reading it.

$2.00 a Day: Living on Almost Nothing in America: https://www.amazon.com/2-00-Day-Living-Nothing-America/dp/05...


these upper middle class people (we) are the work horses of the tax system, right? Not rich enough to stop working, too rich for sympathy.


And sympathy clearly makes up for the poorest 20% of the country, right?


No, not really. The top 1% pay nearly half the income taxes.


(...and take in 99% of the income. Why not 99% of the income tax? Clearly at 50%, the system is massively out of balance in their favor.)


That is incorrect. The top 1% earn about 20% of the income in the US.

They pay about 40% of the income taxes (I went and looked this up after your comment. "Nearly half" was perhaps slightly overstating the case).

Given that we have a progressive tax system it makes intuitive sense that the higher percentiles (1%, 5%, 10%, whatever) will always pay a greater percentage of total income tax than they make in total income.


Ah! I was wrong; I was thinking 'net worth' not income. And the net worth of the top 1% is around 35% of the total national wealth. (Which is curiously close to the income tax number of 40%)


Ah, yes. Stock vs flow!

I noticed that curiosity as well. Not sure it means anything in particular but it was interesting.


Why was this flagged?


From the article:

> Most of the children born into households in the top 20 percent will stay there or drop only as far as the next quintile.

And rewritten a bit, it sounds rather weak:

> More than 50 percent of the children born into households in the top 20 percent will stay in the top 40 percent.


pretending you're not rich is called SAVING UP


I was wondering how long it would take for the attack on the solidarity of the precariat:

>The rhetoric of “We are the 99 percent” has in fact been dangerously self-serving, allowing people with healthy six-figure incomes to convince themselves that they are somehow in the same economic boat as ordinary Americans, and that it is just the so-called super rich who are to blame for inequality.

7 months after the election is actually quite long.

Here is what makes me in a $300k a year household and the $30k household on the other end of town the same:

>Your home is regarded as a model home, your life as a model life. But all this splendor, and you along with it... it's just as though it were built upon a shifting quagmire. A moment may come, a word can be spoken, and both you and all this splendor will collapse.

The rich cannot be ruined. I can. If I was to be fired from my job it would be a minor disaster, if I was to get an incurable disease I would slide down the income scale without a break.

I would happily pay 80% taxes if I knew that when I needed it most the welfare state would have my back, but I know that it won't. The rentiers have shown time and time again they would rather destroy the economy than allow everyone to have the luxury of stability.

That is why I am a socialist and I know I'm not the only one.


On $300k a year, either you're not really precarious or you're making utterly reckless financial decisions.

You can comfortably afford the best available health insurance. You can comfortably afford very good life insurance and income protection insurance. You can comfortably afford to save a substantial amount for emergencies and retirement.

You're in a completely different situation from someone on $30k a year, who is undoubtedly living paycheck-to-paycheck. For you, a broken boiler or a major engine repair is a near-trivial expense. For someone on $30k, that same expense might put them into debt for months or years. If the mailman brings you an unexpected utility bill or parking ticket, you're not faced with the choice of skipping meals or going into debt.


> You can comfortably afford the best available health insurance.

Even on not-so-good insurance, isn't this why out-of-pocket maximums exists? I'm not a fan of the current system of healthcare insurance, and I'm not an apologist for how these companies push costs back onto people. However out-of-pocket maximum exists so that you don't go bankrupt for a catastrophic event that requires substantial care over the course of a year. It will vary from carrier to carrier, but I doubt a you'll ever pay more than $20k on a year of treatment for lowered tiered plans. With $300k, this person's cap is more likely to be between $5k and $10k. That's going to sting a bit, but $10k is still only 3% of the total income.

I don't deny that a disabling event can really screw things up for a family, but even insurance has its limit on how much they can screw you.

But also:

> On $300k a year, either you're not really precarious or you're making utterly reckless financial decisions.


And that's how solidarity dies. Are we going to start playing the game of "you're not oppressed enough"?

Why not start with the $30k a year household:

Hot water? What a luxury! Half the world can't afford drinking water.

Car engine? They can use a bicycle like they do in India.

Utility bills? Just bring in some chickens into your home to warm it up.

With enough will and prudent planning you can make a dollar a day stretch much further than you could imagine. Just like you are suggesting I spend my life figuring out ways to live better in a system broken by design.

In a sane country I wouldn't have to worry about insurance and the people making a tenth less than me wouldn't worry about cars, boilers or bills, because there would be public options for all of those things.


Where's the evidence that this solidarity ever existed? On the coasts at least, the people in this $300K range may talk a good talk about marginalized groups, etc, but the solidarity clearly ends at their pocketbooks.

Wealthier people skew Republican, and that's not just the 1%. OP's example of the school districts is another example. Still another is the fact that, if you look in any city in America, the wealthy (but not 1%er) areas have better roads, better parks, and better everything in terms of public infrastructure. I have a friend who works at the local power company who outright says that whenever there is a storm that takes out power, the wealthy areas come first for repairs, right after hospitals and police stations. Not, you know, the most populated areas or anything.

And it gets worse still, when the 20% try to redirect blame at the 1%. Because who are these 20%ers anyway? They're lawyers, managers, mid-level executives, financiers, maybe developers for banks, big ad firms, or VC-owned boondoggles. In short, they are the white-collar "hands" providing the services that allow the 1% to exert the level of control they do over the whole system.

To hear the 20% disclaim all responsibility for the state of inequality in the country is very similar to how the head of HR or IT tells you "well, I really can't do anything about anything, it's just Policy, set by our betters". But they are enabling all of it.


> Wealthier people skew Republican

This depends on your state's economy. "In poor states, rich people are much more likely than poor people to vote for the Republican presidential candidate, but in rich states (such as Connecticut), income has a very low correlation with vote preference" [1].

[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1010426


Very interesting paper. Two problems that jumped out at me are: 1) income is not COL-adjusted, and 2) more importantly, there is not a term in the regression for urbanization/population density.

It is well-known that urban areas lean Democratic, and richer states are more urban. Thus the phenomenon may be reflecting urbanization rather than state wealth.


http://www.financialsense.com/sites/default/files/users/u308...

Have a look at the period 1950-1970. If we were to tax corporations at the same rate as they were in that golden period we would not have a national deficit.

>Where's the evidence that this solidarity ever existed?

https://web.stanford.edu/class/polisci120a/immigration/Feder...

1950, 1960 again.


Sure, fair enough. I was implicitly talking about 1980s to present (the period when the inequality began to spike), but obviously was not clear about that.

However, in the present day, I don't think it is just the 1% who are against a corporate tax increase. That would hit IRAs, pensions, and investments for those who can afford such things.


>However, in the present day, I don't think it is just the 1% who are against a corporate tax increase.

As I said: I would happily pay 80% taxes if I knew that when I needed it most the welfare state would have my back, but I know that it won't. The rentiers have shown time and time again they would rather destroy the economy than allow everyone to have the luxury of stability.

The top 19% do not trust government because for the last 40 years government has been hijacked and made to work against the people.

A perfect example: would you support a 30% hike to pay for Trumps border wall? If not, why are you against tax increases?


The trouble is that it is not hard to point out flaws in any system, government programs included.

Many Republicans have taken this to the logical extreme: they say government programs CANNOT work. In solidly red areas, they justify this by pointing at how their local school districts or whatever are failing badly. Why are they failing? In large part due to lack of funding.

So, low funding creates failure which is used to justify lower funding. It's circular. In cases where there is clear evidence that a socialized alternative can work, like healthcare, the evidence is simply ignored.

This is not to say that the government cannot waste money. Of course it can: walls, military spending, and so on. But your argument is dangerously close to the hypothetical Republican one. The only solution I can see is for taxpayers to BOTH be willing to pay taxes AND demand value for their money.


But your argument is just the extreme. Everybody always wants more spending, but they always want it so more stuff is done for them.

Problem with money is that it represents economic activity. If the government spends more you need to work more (with borrowing becomes slightly more complex, working more now, or working even more in the future).

And when it comes to that, your logic would change as well. Would you work (under a bad boss, etc ... ie. work, as in actual work, whatever it takes) to improve those schools ?

For a very large majority the answer is no.


I understand your comment and your original post, and while I somewhat agree, I think you're missing the point.

You say that the super rich have something most of us don't, stability. I agree with that. The super rich often want the rest of us to lack stability, it's good for employers to have desperate workers. However, at 300k, while you do not have absolute stability like the super rich, you have something that comes very close... the ability to plan ahead.

At 300k, you can save, buy top notch insurance and whether the storms that MANY people in the US cannot. Sure, there could be financial blows that are just too large to shrug off... but those blow that you can withstand, and those of a 30k'er, are two different beasts.


The poor cannot see beyond their own noses.

The rich can see the horizon and plan ahead.

The super powerful float in space looking down on earth and place things beyond the horizon.

Planning is good, but who's game are we playing?


You want a public option for boiler repairs and parking tickets? That doesn't even make sense, and creates an obvious moral hazard because people have no incentive to make prudent decisions if there are no consequences to imprudent ones. Why do you think healthcare and education are already so expensive and inefficient?

The much better solution is to make a universal basic income the sole welfare system. Then let people make their choices.


How rich is "rich" in your mind? At what point can you never be ruined? It's always possible to piss your money away. MC Hammer filed for bankruptcy after being worth 33 million. If you want to slide the scale of "not oppressed" downward, you can just as well slide the scale of "not rich" upward.


We're not playing a game here, we're talking about facts. Whatever structural deficiencies exist in our system, you're not suffering as a result. You don't get to lump yourself in with people who are suffering. You're welcome to express solidarity with us, you're welcome to advocate for us, but you have no right to expect solidarity in return. You're a beneficiary of that broken system, not a victim.


>And that's how solidarity dies.

you've gotta be one of the most of out touch people i've ever seen express their out of touch opinions. what shows of solidarity have you made? have you ever even been to the poor part of town? if you live in nyc message me and i'll gladly take you on a tour where you can stand with your brethren.

>With enough will and prudent planning you can make a dollar a day stretch much further than you could imagine.

go ahead: plan it out for me since my imagination is so poor.


> you've gotta be one of the most of out touch people i've ever seen

Personal attacks like this are a bannable offense on HN. Please never post like this again. Instead, please (re)-read the following and follow them in letter and in spirit from now on:

https://news.ycombinator.com/newsguidelines.html

https://news.ycombinator.com/newswelcome.html

That means posting civilly and substantively, or not at all.


Here we have exhibit A on why the social contract in the US is dead. Instead of using politics to better your physical situation you use it as therapy.

I'm not virtuous enough to push for higher taxes and more welfare? By shutting me down you'll have even more poor to celebrate! Isn't virtue signalling great?


Would you please stop arguing like this on HN? It's hard enough for this place to touch on divisive topics without disintegrating. When you post in this nasty, acerbic way, you're weakening the already-fragile bonds that keep HN barely cohesive, and contributing it to it going down in flames. (That's ironic for a post that mentions social contract.) We ban accounts that do this repeatedly, so please make sure not to.

A long time ago, pg (who created HN) wrote:

A comment in reply to another comment should be written in the spirit of colleagues cooperating in good faith to figure out the truth about something, not politicians trying to ridicule and misrepresent the other side.

That's the standard we ask users here to follow, regardless of how wrong or provocative the other comment has been.


>you've gotta be one of the most of out touch people i've ever seen express their out of touch opinions.

Kettle meet pot.


I scolded that user as well of course, but you need to follow the rules regardless of who doesn't.


how am i virtue signalling on an anonymous forum? who am i signalling to? i don't even have anything identifying me on my profile? and googling this name brings up nothing. so umm maybe i actually mean what i say?


That doesn't mean you're not rich, that just means that you're spending your income on immediate comfort and flashy toys rather than security. If you lived further within your means and invested the difference wisely, within a year or two you would have far more security than the $30k household will ever have.


> within a year or two you would have far more security than the $30k household will ever have.

Within a year or two? I think you mean "after your first paycheck". The ability to have a grand or two 'cushion' money in the bank is an incredible difference between the haves and have-nots. And I don't mean "money in my day-to-day account", I mean emergency money of any kind.

It's bizarre that a 300k/yr household can even contemplate being similar to a 30k/yr one.


I popped in $300k/year into an online calculator and it suggested that would leave you with ~118k/year. Minus the ~26k/year you'd have on $30k (both household married income) is 92190

So, if you lived as a $30k/year household you'd be able to save 3.5 years worth of expenses every year, ignoring any kind of tax efficient ways of doing so. In your first pay packet you'd have a spare seven and a half thousand dollars.

At a 3% withdrawal rate you'd want to have $860k in investments, meaning you could expect to work for ~8-9 years then retire forever. Less if you can invest in a more tax efficient way, are OK with just cutting down to part time or taking on a bit more risk. Oh, and if you're comparing yourself to a $30k household that can afford to save anything, all these numbers just go up and up.

So, comparing a $30k/year household who are able to save literally nothing, you could have the same life but only have to work for less than ten years rather than 40+.

Quick numbers, but I'd be surprised if the various simplifications change the overall result particularly drastically.


Depends on where you live. 30k in the Midwest compared to 300K in San Francisco is actually not too far apart.

2 Beds 1 Bath -- 650 Jackson MO or 7800 a year or 25% of the income gross

$4940 - $5160 /mo 2 beds / 2 bath 979 sqft say 5000 a month or 60000 a year or 20% of the income

add the huge differences in effective tax rate of CA to MO combined with the jump in federal tax rates and it is arguable that 30k in MO would actually be better off


...even if we take this not-quite-equivalence at face value (note: 650 < 979 and 20% < 25%), most life expenses don't scale linearly with housing values - not even close.

Groceries may be more expensive in the big city, but not 10x more expensive. You're not paying 10x more for a car, or a plane flight. And insurance premiums / deductibles sure aren't 10x cheaper in a less expensive part of the country.

Plus, the "$300K in expensive place" household has the option of moving to the less expensive place. The reverse is hardly true.

> it is arguable that 30k in MO would actually be better off

1. No. 2. Even if we were to accept that $30K in one place went just as far as $300K in another, "better off" ignores that higher property costs are likely to indicate a more desirable place to live. (For whatever reason: access to jobs, lower crime rates, pleasant to live in, what-have-you.)


Yeah but look at the different in what you're left with after rent and taxes. It's not even close.


I just can't believe how wilfully ignorant people are about this. You're talking percentages, but ignore the absolutes. 75% of 30k buys you a lot less than 80% of 300k, even after taxes.


Medical issues (maybe legal too) seem to be the game changer. Millions can go just like that, assuming you want the best available (and who doesn't for loved ones?)


"The best available" goes far beyond the point of diminishing returns. If you're willing to settle for merely 'top tier', you'd spend a small fraction of the amount for essentially the same level of care. And that's even in a place with medical costs as insane as the U.S.

Anyway, there's no such thing as perfectly impervious to risk - even ultra-wealthy families sometimes topple. That doesn't change the fact that with careful management, a $300k/year income can rapidly feather a rather nice, rather secure nest. $30k/year cannot.


I'd like to think that there are diminishing returns, but in my experience, the biggest complaint about doctors (and from doctors) is the lack of time they get to spend on a patient. It would stand to reason that a doctor that can spend an hour talking to you, researching your condition and history, collaborate with colleagues across disciplines is going to have a much greater impact than one who sees you for 5 minutes.

And it costs quite a lot to get that level of care.

https://www.nytimes.com/2017/06/03/business/economy/high-end...


> in my experience, the biggest complaint about doctors (and from doctors) is the lack of time they get to spend on a patient.

If you talk to someone with significant health issues, it rapidly becomes, "The doctors don't have the answer".

Nobody wants to spend longer with the doctor - they want healthy, productive life outside the doctor's office.


As I understand it, medical expenses are the fastest route from "stable" as OP defines to the street. If you blew your millions on a yacht only to crumble under the load of the debt that would be one thing, but for the majority of people who lose everything they have, it was due to one disease or another, traffic accident, some other kind of ailment that they played little to no role in getting.

That's not right.


> due to one disease or another, traffic accident, some other kind of ailment that they played little to no role in getting.

How do you feel about kids born in Africa?


I'm not certain if you're trying to imply that people in the US shouldn't complain because they have it better than "kids born in Africa" or if you're implying that healthcare shouldn't be a basic human right for everyone, in the US or not.

If it's the former: Suffering isn't a contest, just because you aren't the MOST impoverished person on the face of the planet does not make your problems less real, nor does it make you less deserving of help when you do need it.

If it's the latter, I'm all for getting those kids healthcare (and food) and whatever else they might need. That's a damn sight better use of my tax dollars than numerous Government programs currently sucking up actual trillions of dollars here in the States.


You concluded your comment with "That's not right", implying that no one should ever be in that situation.

Considering that a lot of people are in that situation, I was wondering if you were advocating taking money from the rich to give it to the poor.

Personally, I don't believe in free healthcare. I accept that people who are unlucky or demonstrate poor judgement will suffer and die. However, I also believe that the market should be deregulated so that more affordable options become available.


I accept that people who are unlucky or demonstrate poor judgement will suffer and die.

Oof. That’s quite an admission.

I thank you for stating it though. I think our politics would be in a better place if people would admit things like this more.

I suspect that a lot of Republicans have the opinion that the poor don’t _deserve_ to be taken care of by society, because they believe that they are poor because of their own inaction. But it’s impossible to debate this - and change minds either way - because we don’t admit that point of view in discussion.


> implying all African kids live in shit conditions

Can we please not generalize Africa? It's the biggest continent of the world, not a giant 3rd world country plagued by famine and poverty. Some countries are, but if you mean those, please name them specifically.

(I dislike phrases like "asians" and "europeans" too, much as Americans should dislike the moniker "American")


I always liked the ring of "United Statesian".


I work in a wholesale brokerage. I try and manage the risk exposure so we won't go bankrupt tomorrow because someone couldn't tell the difference between 0 and O on their screen. I have seen trades worth hundreds of millions fail and bankrupt the people making them.

The problem isn't people not saving or investing the problem is an insane system kept afloat by greed, ignorance and fear. "Security"? what good is having paper when no one wants to buy it? October 29, 1929 is a day my grandmother remembers well and one I dread we will see again.

Government is the only insurance scheme large enough to protect us from ourselves.


No one says you need to invest it in the stock market though. There are plenty of assets one can acquire, that are not directly connected to the stock market. Use some debt to acquire them, and good returns can be made, even in small(er) deals.


>Use some debt to acquire them, and good returns can be made, even in small(er) deals.

Gambling on debt sounds like a sure-fire way to end up with even more debt. And that's what most investment boils down to: A gamble

Profit isn't generated out of thin air, somebody has to be the sucker and pay for it, those are usually the losers of aforementioned gambles.


So what? Everything in life is a gamble and involves risk. You need to learn how to live with it.

Dating? Hell, you can't even get to know someone properly in 6+ months. Taking a job? It's all rainbows and unicorns unless you work there for a 6-12 months, etc.

You act as if investing is bad. You're never going to make any meaningful amount of money if you don't invest (in the broadest sense, this could be in yourself, in your business, in the stock market, in alternative assets, etc).

Debt magnifies the result of your investment. Whether you make a good or bad investment is ultimately up to you. Moderate debt isn't a real issue. The interest is often also tax deductible. It sure as hell makes more sense taking on debt for investing than it does taking on debt to (excessively) spend (as most Americans do).


>So what? Everything in life is a gamble and involves risk. You need to learn how to live with it.

Indeed, it's all about risk-management and in that regard gambling on debt represents a way higher risk, one I would not take, than gambling on savings you actually own.

With the latter, you at least have some control over the worst case scenario, while gambling on debt throws any control like that straight out of the window as debt can spiral out of control very quickly that way.

> The interest is often also tax deductible. It sure as hell makes more sense taking on debt for investing than it does taking on debt to (excessively) spend (as most Americans do).

Sure, it does make more sense but consumer credits are mostly short-term and as such somewhat more manageable for debtors with no real income security. Long-term investment credits, which usually have way better interest rates, are simply out of reach for many of these people because they lack the secure long-term income and/or can't make the required deposit.


Sure. It also depends on the point in time and the asset. If the market has just crashed down 30%, I would probably be comfortable making an investment using significant debt in certain individual shares if the interest rate is low. At the moment? not so much.

Also, say you can acquire a plot of land you want to hold for a long time, and you can acquire it with 10% cash down + pay < 1% annual interest on a secured loan, you'd be an idiot not to take on the debt. Take the remaining cash and invest it somewhere with a higher yield.

It depends, is probably the correct answer here. :)


The one option is real estate (which isn't feasible for some who aren't staying in a place for long to manage). What else do you have in mind?


Real estate and land, patents, royalty rights, investing in small businesses, interest bearing securities (bonds, CDs, CoCos, etc), etc.


What investments are you suggesting?


Treasuries, CDs, et cetera. You should be able to build, over a few years, a decent rainy-day fund on $300,000 a year.

Disclaimer: this is not investment advice. Do not take investment advice from Internet comments.


The return on treasuries and CDs is ridiculously low, less than 3%. Bond funds are not much better.

Unless you're talking short term, put it in a total stock market index fund and forget about it.


>Government is the only insurance scheme large enough to protect us from ourselves.

Maybe the culture you come from is very new.


Security is defined by some assumptions. The stability of society and the ability of the government to enforce that through the military and police. Very fragile the things we take for granted.

When there systems fall, only those with either high enough walls around them with ability to sustain independently within those walls, or at least the ability to escape to another currently stable situation will be secure.

When a Gotham'esque hell breaks loose, where is your security then?


Well yeah, if society collapses you'd better be a prepper. Most reasonable people however think that you're very secure financially once you have saved enough for ~30 years of average spending. Barring major market disaster you could then continue living from your capital gains indefinitely.


Sure, but this is the precariat. Most excellently pointed out be korrachs.

This autonomy is the line.

It doesn't have to be total anarchy or civil war either. Imagine food shortages or media propaganda or government policy changes.

Again, all very fragile. The distinction is what controls you, and what autonomy you retain.

Categories: every day is a living fuck all, I depends on the systems around me, I have autonomy myself, I have autonomy over others as well.


How does that have anything to do with the current discussion?


Because this is one way of seeing security. If I have a private jet and runway, I can fly away when war breaks loose.

Can you see the line?


We're talking about financial security. Not security when there's an apocalypse.


i_cant_speel> Not security when there's an apocalypse.

One man’s apocalypse is another man’s civil war. I will let the more knowledgable reference history here.

On what we’re speaking about:

korrachs> I was wondering how long it would take for the attack on the solidarity of the precariat:

korrachs> The rich cannot be ruined. I can.

taneq> within a year or two you would have far more security than the $30k household will ever have.

Although you could argue that I’m cherry picking to make my point, I will so bold as to allude that perhaps we are missing the larger argument here.

The solidarity of the precariat under fire is an excellent way to consolidate power amongst the influential. A little something called divide and rule.


Yeah.

There's a strata of poor to somewhat rich, but they're all in the same bucket of the grander wealth scale: workers. They must keep doing work in order to maintain their lifestyle, the only thing their relative income difference dictates is the quality of that lifestyle and how long they can maintain it after losing income.

After that comes 'i don't need to work again' wealthy. Then 'fuck you' wealthy. Then 'I can ignore the law' wealthy. Then 'I can buy the law' wealthy. The 99% sits on the lowest rung on the meaningful wealth scale.


I find interesting your wealthy classification.

What is the difference between the first two? I can't figure it out.


It's the difference between someone who can maintain a comfortable lifestyle for the rest of their life if they don't go overboard, and someone who has enough money to start pursuing other ventures at cost. This comes with a whole lot of changes like losing most of your 'poor people' friend circle and rubbing shoulders with impactful people.

As the creator of Minecraft put it:

>Once I realized I had fuck-you money and didn't care about my public image any more because it didn't affect my day to day life in any way


Everything you said can be applied either to the 1% in America or the Americans in the world. Both are about in the top 1% of richness and both have those privileges among their respective 99%s.


The average American can't change the law in an arbitrary part of the world.

Lloyd Blankfein can.


You're pulling that quote out of context there, the previous paragraph grounds the statement into something entirely different than attacking the precariat:

> Beneath a veneer of classlessness, the American class reproduction machine operates with ruthless efficiency. In particular, the upper middle class is solidifying. This favored fifth at the top of the income distribution, with an average annual household income of $200,000, has been separating from the 80 percent below. Collectively, this top fifth has seen a $4 trillion-plus increase in pretax income since 1979, compared to just over $3 trillion for everyone else. Some of those gains went to the top 1 percent. But most went to the 19 percent just beneath them.

Nothing about what you state goes against the spirit of the article, which between the lines mainly seems to be about wealth redistribution.

Also, while I agree with all of your points, putting yourself in the same boat as the precariat, the most vulnerable underbelly of modern society, is a bit crass.


> I would happily pay 80% taxes

That's ridiculous. No government services costs that much. No insurance for any event costs that much.

If you live in richest country in the world and citizens pay 30% taxes and government can't provide free education and health care then it's something wrong with the government itself and artificially inflated prices on education and healthcare.

Instead of raising taxes, you need pop healthcare and education bubble first.


Denmark and Sweden's top marginal tax rate is around 60%, which doesn't include value added taxes of about 10%.


And that's why I left Sweden to the Netherlands because the Netherlands offers huge tax discount - 30% rulling. In other words, Sweden lost me as a software developer.

And it looks like it's not only me how doesn't like high taxes in Sweden:

https://www.wsj.com/articles/spotify-founders-blast-swedens-...


Or you use the taxes to transfer wealth from the richest to the poorest, for example by paying everyone a basic income.


In Hungary you pay 54% of it + 27% VAT.


>Here is what makes me in a $300k a year household and the $30k household on the other end of town the same:

You and the $30k household are both in the global 1%. Over 80% of the world's population lives on less than $10/day. Both of you have social safety nets for food, housing, and healthcare. You live better lives than virtually everyone in the history of the planet has ever lived. That's what makes you the same.

>That is why I am a socialist and I know I'm not the only one.

Capitalism with relatively free trade is the only mechanism in the history of the world to be able to pull massive numbers of people out of grinding poverty. Socialism has tended to result in the opposite outcome. If you need a refresher course, watch Venezuela unfold right now in real time.


>Capitalism with relatively free trade is the only mechanism in the history of the world to be able to pull massive numbers of people out of grinding poverty.

What does this even mean? Rome pulled massive numbers of people out of grinding poverty with the free grain dole, not at all capitalist.

>If you need a refresher course, watch Venezuela unfold right now in real time.

Yep, socialism is the cause of all their problems. In no way is this situation caused by the huge drop in oil prices, something almost entirely outside their control. And Capitalism has never experienced a collapse like theirs...


> >Capitalism with relatively free trade is the only mechanism in the history of the world to be able to pull massive numbers of people out of grinding poverty.

>What does this even mean?

It means that the reason there was grain for Rome to give was because of trade and capitalism (as well as some slavery and conquering which impoverish some populations to enrich others).

Capitalism (private ownership of means of production) means that I benefit if I provide things that other people want.

Trade allows individuals to make exchanges that benefit them.

Free trade ensures that exchanges benefit both parties, resulting in an increase of total well-being.

> Rome pulled massive numbers of people out of grinding poverty with the free grain dole, not at all capitalist.

And Rome periodically put them back into grinding poverty by reducing the size of the grain dole because it was too expensive? Funding consumption can't reduce long term poverty (give a fish vs teach to fish).


Calling the Roman economy "capitalism" seems like a bit of a stretch, given things like the Emperor's ultimate control over anything. If you roll with it you're doing a massive white wash of history to praise capitalism for eventually improving problems it faced.

>as well as some slavery and conquering which impoverish some populations to enrich others).

Massive understatement, roughly 15% of the population of Rome were slaves and the Pax Romana is often seen as one of the causes of the breakdown of the economy. This is a common theme with capitalism and it's enrichment periods. It's very hard to argue that most of the world benefitted from colonialism.

>And Rome periodically put them back into grinding poverty by reducing the size of the grain dole because it was too expensive? Funding consumption can't reduce long term poverty (give a fish vs teach to fish).

And capitalism periodically put them back into grinding poverty with massive crashes or unchecked greed. Teaching a man to fish isn't that helpful if you then own all of the poles and materials to make the poles and refuse to share.


>Teaching a man to fish isn't that helpful if you then own all of the poles and materials to make the poles and refuse to share.

In a world with free markets and free trade how would this be possible? I'm having a hard time imagining a single person or even a corporation owning, for example, all of the iron across the entire globe.


It was about the grain dole, the rich bought all the land that the soldiers owned while they were off at war and then forced the state to auction the land won to the highest bidder. This led to the free market and free trade of soldiers, where competition is not at all in the public interest.


Sorry, but stealing someone's land and turning them into a slave is not a free market. No one is putting Rome up as an ideal for its economic or political freedom. But why would the wealthy people even bother stealing the land in the first place? Because once they were able to control that capital (the land) they could produce more grain than subsistence levels and turn a profit. This incentive allowed Rome to produce so much grain they could offer a public dole in spite of its other ethical problems.


They didn't steal the land, that came later afterwards the republic fell. They used their wealth in a free market political field to start wars that the citizen army left to fight, then stepped in to buy the land that the owners were too busy at war to maintain.

And no, control of that land isn't what enabled the grain dole. The lands won by the army did.

This isn't that different than capitalist Venezuela. Loan someone in Venezuela a bunch of arms, they fight, then they have to repay you and look at those discovered oil fields they have!


Describing Rome as "capitalist" in the modern sense is a gross misrepresentation of what is known about the ancient economy, ignoring the work of Finley and Polanyi.

(Also, you spotted that Rome was a slave society, but failed to make the obvious conclusion that slavery precludes free exchange of labour!)


>Describing Rome as "capitalist" in the modern sense is a gross misrepresentation of what is known about the ancient economy, ignoring the work of Finley and Polanyi.

Government took only 5%.

https://en.wikipedia.org/wiki/Roman_economy#GDP_and_income_d... In the Scheidel–Friesen economic model, the total annual income generated by the Empire is placed at nearly 20 billion HS, with about 5 percent extracted by central and local government.


What does the marginal tax rate have to do with it? The economic structure was not similar to modern industrial organisation.


I don't understand how that's relevant. The citizens of Rome were able to keep 95% of the results of their labor. I'm certainly open to any suggestions you have about reducing my marginal tax rate to 5% if you think Rome is a good example of bringing people out of grinding poverty.


"Citizens of Rome" meaning what? As the traditional meaning is literally the residents of Rome until 90 BCE, then reluctantly Italians. Provincials weren't citizens until 212 AD, and that still left out slaves.


Venezuela seems to be more straightforward corruption and incompetence, the sort of thing that can ruin any political system left or right.


This is precisely why socialism is a bad idea. Bad people will always get elected eventually. The solution to this problem is not to hand more control of the nation's capital to a nice pretty centralized target for evil/imcompetent people.


Bad actors are a problem in any system, which is why the system should be pluralist; but it's entirely possible for bad right-wing actors to get elected. Argentina, rather than Venezuela.


How can you be more pluralist than by letting each citizen keep their own power?


That's a nice slogan, but empty without an analysis of power relations. Participants in a market are not automatically equal in power!

Especially important in the sub-discussion about healthcare that's going on here. There's disparity of information (not every citizen has a complete knowledge of all possible medical specialisations), disparity of capability (medical conditions can be literally incapacitating), and disparity of risk (most medical conditions are mostly randomly distributed).


>Participants in a market are not automatically equal in power!

Yes, that's true. The world is not fair and we're not all equal in power. How is the solution to that to take 80% of everyone's income and hand over control of it to a select few in government?

In a free market system at least each participant is free to walk away from any given transaction. Now you want to take away even that.


By taking that statement to it's logical endpoint for a start, rather than the crazy libertarian version where "keeping your own power" includes a government that is ensuring what you call your own power stays your own power. Or, "What is Property?"


Would you let Donald Trump personally manage your 401k? Do you believe, in doing so, that he would have your best interest at heart? If not, then why would you think it'd be a good idea to let him have control over your Social Security?

Who do you think is better capable of making decisions about your own children's best interests when it comes to getting educated: you or Betsy DeVoss?

The more centralized power/money is, the more ripe it will be for corruptive forces. The less powerful the government, the less damage a bad actor can do when they inevitably get elected.


>The more centralized power/money is, the more ripe it will be for corruptive forces.

If this is the basis of your argument, then again there is only one logical endpoint. "What is property?... Property is theft!" Ownernship centralizes power over that thing in the hands of a person or small group.

The US libertarian view is anarchy with property rights stapled on, which does nothing except help the rich get more powerful. They use the same arguments about how freedom is essential and government interference is bad, but ignore how there is no freedom on private property and want government guaranteeing their status.


> I would happily pay 80% taxes if I knew that when I needed it most the welfare state would have my back, but I know that it won't. The rentiers have shown time and time again they would rather destroy the economy than allow everyone to have the luxury of stability.

Nothing prevents you from moving in a more socialist country. Why don't you? There's plenty of choice out there.


Actually, quite a lot does prevent Americans from moving -- namely the work permits and job offers that are generally required -- just as America limits immigration, so do other countries. I actually have lived and worked in other countries myself, but my employers had to write justifications as to why they were hiring me rather than one of their countrymen.


>Nothing prevents you from moving in a more socialist country.

Countries can control who moves into them, you know.


Language and nationality would be two significant obstacles.


You would pay 80% to have your healthcare paid for, but we already spend double, as a percentage of GDP, vs. any other country for health care and we have worse outcomes by many measures. More government spending will just make the problem worse. Something, anything, besides spending more money has to be done to solve the health care crisis but political thinking is so calcified that we can't imagine a solution that doesn't involve spending more money.


FWIW there are some studies that try to break apart health outcomes caused by health care vs those cased by lifestyle. Most of these seem to indicate that we are actually getting something for our extra money in the US. Cancer recovery rates, for example, are very good in the US compared to elsewhere.

Many of our poor health outcomes seem to be due to lifestyle issues (obesity, drugs, lack of exercise, etc) not our actual health care system.

Not disagreeing with your comment as I think you are mostly right. Just thought you might find this interesting.


It would also be interesting to see where income lies in those lifestyle issues as well before and during the downturn.


Would be interesting to see a breakdown of your spending vs the 30k household here.

After all, if you always adjust your spending to your income, you will never be rich in any 'cannot be ruined' sense. Consequently, it would be unfair to compare situations to the 30k family and conclude you are in the same boat.


> I would happily pay 80% taxes if I knew that when I needed it most the welfare state would have my back, but I know that it won't.

No, you wouldn't.

If you lived on 20% of your income ($60,000 - still double that $30k household that you claim is the same), you could retire in 5.5 working years and have that nest egg sustain you forever - no welfare state needed.

If you drop it down to the $30,000, saving 90% of your income, you could retire in 3 years.

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

Your lifestyle is preventing you from doing that, and your lifestyle and the fact that you can choose whether or not to live the $30k lifestyle is how you are not the same as that $30k household on the other end of town.

> That is why I am a socialist and I know I'm not the only one.

You're still only a socialist as long as you're spending other people's money.


Everyone is looking for security. Security from physical violence, security from medical issues bankrupting them, security for their children to be successful (of which living in a high income high expense neighborhood is apparently a huge factor).


Dividing the world into the 1% who "own" and the 99% who must sell their labor is useful on one level, but obscurantist on another.

The question is not one of abstractions, but of political realities. What exactly has this so-called "solidarity of the precariat" wrought? The author's point is precisely that the upper-middle class actively work against the interests of the 80%. Do you disagree that 30k/yr private schools, Ivy League legacies, and these suburban enclaves are also "an attack on the solidarity of the precariat"? Only that the 80% only have their words and their votes, whereas the 20% have real political power?


"I would happily pay 80% taxes if I knew that when I needed it most the welfare state would have my back, but I know that it won't. "

It sounds like you should buy insurance.


> I would happily pay 80% taxes if I knew that when I needed it most the welfare state would have my back, but I know that it won't.

What's stopping you from saving up same amount of money?

> if I was to get an incurable disease I would slide down the income scale without a break.

...as would your utility to the society. It's understandable, from basic moral instinct, that society would continue to provide you with basic food and shelter, would such a thing happen. But why on Earth would I, for example, be compelled to continue pay you your former salary (since we're on HN, I'd assume you're on senior software engineer level) after you can no longer provide the relevant service?


> What's stopping you from saving up same amount of money?

The fact that it would put him at a significant relative quality of life disadvantage compared to his peers. A widespread 80% tax would not.


Slightly OT: I'm really glad my parents raised me not to judge my "quality of life" based on how much money my peers spend. This way I can save hard, and get off the wage slave treadmill early.


Which drives home the most important point about socialism. While capitalism is keeping up with the joneses, socialism is about making sure the joneses are kept in their place.


All that an 80% tax would do is suck the wealth away to the 1% even faster. No one is minding the store--the money the federal government takes now at 25-33% is mostly wasted on nonsense that benefits the war machine, the healthcare machinery (think: rent seekers) and all manner of pork projects. I can't see forfeiting even more to them, I just wouldn't bother to work at all. Enough is enough when it comes to this socialist utopia dream--it doesn't exist, it has never existed, it will never exist.


Hi, I went to a doctor this morning and recieved a prescription for which I will pay nothing. Apparently I don't exist?


That money came out of someone else's pocket! It is not free. The free lunch is what doesn't exist and has never existed.


> That money came out of someone else's pocket!

This is also true of insurance systems.

Nobody's pretending that socialised systems magic healthcare out of thin air, it's more a question of total resources spent by society and distribution of outcomes - including whether certain people get rationed out of the system because they can't afford it.


Insurance is voluntary--you can opt out. I can't opt out of taxes and put that money to other uses. It is am matter of economic freedom of choice.


WE NEED SOCIALISM for the following.

Transportation

Post

Healthcare

Emergency Services

Basic Welfare

For everything else there's capitalism.


I would add utilities to that list, at least to a certain extent. It's impractical to have multiple electricity/water/sewage grids in the same city.


Competition?

Although I've never had the option to choose these utilities in the cities I've lived in. I haven't lived in a ton of cities, but enough to wonder.


but the consumption of utilities varies great from household to household and it would be abused. but a capped subsidized amount would make sense.


yes, the grids should be the same company, but who bills you varies.


Education


yes that's another one.


Can't you afford health insurance?


> I would happily pay 80% taxes if I knew that when I needed it most the welfare state would have my back, but I know that it won't.

This crucial point of yours seems to have been missed by the author of the article. I wonder if that has something to do with them being from the UK, which has nationalized healthcare and some sort of a welfare state.


> I would happily pay 80% taxes if I knew that when I needed it most the welfare state would have my back, but I know that it won't. The rentiers have shown time and time again they would rather destroy the economy than allow everyone to have the luxury of stability.

Oh and by the way, countries like the Soviet Union have never been known for providing good healthcare solutions or even producing remotely interesting new drugs for their population.

Are you sure you really want socialism for health care? Seems like the facts don't really align with your idealized version of socialism.


One of the things that makes me flinch: When people on the internet are shouting each other about a topic without realizing they are talking about completely different things.

When everybody in this thread are advocating for socialism, are using the word in the European sense, socialism as in social-democracy [1], as have many leading European parties in their names [2][3]. Its tenets are as many as there are people using the word, but usually involve a strong safety net with a publicly owned healthcare system, strong redistribution by taxing the rich and companies, and generally having corporations on short leash. For a successful implementation, see the Nordic countries.

In the US, the word socialism is used as a synonym for communism, that is the word that would be used in Europe for the kind of government that ran all those countries you mentioned, is responsible of all those awful things and shares nothing with socialism but a far historical background, lost in the mists of the late XIX century.

In real life (in Europe), it would be hard to find anybody that goes by socialist or votes a socialist party that would advocate for anything remotely similar to a full fledged Communism.

[1] https://en.wikipedia.org/wiki/Social_democracy [2] https://en.wikipedia.org/wiki/Social_Democratic_Party_of_Ger... [3] https://en.wikipedia.org/wiki/Socialist_Party_(France)


That distinction is lost on me: Either you are voting to strip the wealth of people under the color of law or you aren't.


"All taxation is theft" is a ridiculous position which if implemented leaves you without a functioning society.

I can see that lots of Americans refuse to acknowledge the difference between different kinds of political systems, or look at Europe as it actually is. It's disappointing that even on HN people can't see past their prejudices.


It's not ridiculous as a basis for policy. The idea that the money belongs to the government has to end.

I can't figure out "Europe as it actually is." I have concluded that peasants like to be ruled and cradle to grave socialism is what people clearly prefer despite the negative effects it has on real personal freedom.


Socialism != soviet union.

The world is full of countries with more equally distributed healthcare systems than the US with better public/private balance. The one that gets brought up most often here is the UK NHS, but there are plenty of others.

(Ironically, even if you limit yourself to actual communism, Cuba has quite an effective healthcare system. It just relies on not having freedom of movement so doctors can't move to better paid countries)


Cuba does not have an effective healthcare system. I, for one, would like my hospital to have air conditioning and stable electricity, two things Cuban hospitals don't often have.


I'm going by e.g. http://www.huffingtonpost.com/salim-lamrani/cubas-health-car...

"The infant mortality rate in Cuba is lower than it is in the United States and is among the lowest in the world"

Not perfect, but far better than you might expect.


Have you been to Cuba? It's more decrepit than one might expect.


Its just about as effective as the USA's according to the World Health Organization.


> The world is full of countries with more equally distributed healthcare systems than the US with better public/private balance. The one that gets brought up most often here is the UK NHS, but there are plenty of others.

How many countries with socialist health care systems then produce new drugs for patients? I can tell you, it's about none. Most of the new drugs worldwide come from the US market. There's no way going around that fact.


Some major medicinal companies here in socialist Denmark are:

Novo -- focusing on diabetes; about 15,000 employees in Denmark: https://en.wikipedia.org/wiki/Novo_Nordisk

Novozymes -- enzymes; about 6,500 employees in Denmark: https://en.wikipedia.org/wiki/Novozymes

Coloplast -- colostomy bags etc. https://en.wikipedia.org/wiki/Coloplast

Genmab -- cancer etc: https://en.wikipedia.org/wiki/Genmab

These are 4 directly medical companies that also are all 4 part of the OMX 20 stock market index (similar to NASDAQ 100, the most 20 valuable public companies). That index also has 2 hearing aid companies (GN and William Demant)

One source estimates 44.000 employees in biotech/medtech in the Copenhagen/Sweden "Medicon Valley" area.


So what are all these medical researchers in the EU doing? I have a suspicion that much of this stuff is fully international and it's the final steps of trial, patenting and bringing to market that happen in the US, causing research to be over-attributed to the US.

There's also the question of what kind of research is prioritised by the profit motive.

(Human Genome Project is probably the flagship example of such international public research)


Their research is only possible because they know they will be able to recoup costs in the US.


Saying Soviet Union is socialism is like saying China's government really cares about communism.


Hey so where is the real socialism yet? you don't seem to realize that all socialism leads to a construct like Soviet Russia. Everything was nationalized, which is basically what Socialism advocated all along. The effects are well known, let's not pretend there was ever a "no true scotman" effect for socialism in Russia.


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