Is The Economic Crisis related to the disparity of income distribution

Take from the rich, give to the poor! Obama 2008! Change! Hope! Robin Hood! Che Guevara 4EVAR!!!1eleven

 

Conservative here, and let me say that this economic crisis has left me disgusted with a lot of fellow conservatives. It cracks me up when millionaires talk about living within their means. Some supermodel was on the other day with Hannity and had the nerve to say that she's responsible, she knows she can't afford the $20 million house so she bought the cheaper one.

I mean, that's great and all, but it's incredibly easy for someone who makes millions of dollars and for whom living beyond their means entails getting toys that have all the bells and whistles to tell someone for whom it means going out to dinner twice a week, or having cable, about financial responsibility.

 

No, this economy crisis is directly related to unsustainable level of credit to everyone, consumers, businesses, government. Americans have been living beyond their means for a long time now.

 

I think this is a great question and one I've been mulling over lately.

 

I do think that as the world economy has grown in size, teh number of people taking home most of the profits has really not (taht is why CEO's now make 100 or 200x their average worker salary instead of 10x). I think the extreme concentration of money in the hands of a few did build an unhealthy appetite for risk.

 

You fail to mention the top level's income tax share also grew during that time, in fact the top 1% makes 22% of the total income while paying 40% of the total tax.

 

Related? Absolutely. A product of? Not at all.

Bubble growth is disproportionately enjoyed by the investor class and those professionals who owe their livelyhood to them. Bubble collapses disproportionately hurt the same group. (What's the line in the old country song? Somebody told us Wall Street fell, but we were so poor that we didn't know it.) Whenever the bubble finally does completely collapse, we will see quite a bit lower income disparity than before.

 

I am not sure most of us are that far above the medium range of family income here on this board. I think it pretty closely represent the country as whole. Living within your means sometimes means you have to count how much a stamp will cost you, ride a bike to buy groceries, it does not mean you go try to live off credit card which you cannot payback.

There was a CNN show where someone had to live off 168 dollars a month (food stamp ration). He make it sounds like it is such a hardship. Does he know how the poor people in other countries live like? I bet they think they are in heaven if they have the life style of people on foodstamp in this country. Everything is relative.

 

I think it inflated people's sense of the economic health of the world. In no way am I advocating socialism or communism with what I'm about to say, but let's just say I sell a modestly priced item, and I go door to door to sell it.

There are two neighborhoods I'm considering selling to, one has an average income level of 250k per household, but only because two people in the neighborhood make 20 mil a year while everyone else is under 100k. The other has an average income level of 155k per household, but nearly everyone is making 80k or better. Which neighborhood is healthier financially and a better market for my products?

 

So?

 

So, he brought up the graph showing total income share increase for the top, its an incomplete picture without also showing the total tax share.

If one group picks up more of the tax tab, doesn't it leave the other group to pay less?

 

I hate to echo Sam Fisher, but...

so?

I don't get the relevance of the point to the question posed...

 

I think there was a survey where participants were asked if they'd rather make 10 grand a year more than their neighbors or take 50 grand a year more and live elsewhere, and most chose the the first one. I'll share it if I can find it.

Relative wealth had a lot to do with this. It wasn't only that a broker or money manage made a decent profit, but rather his performance relative to other brokers was even more important.

So to break out of that mold, everyone worked a little harder, took more risks on credit, and cut some corners just to be a little better than everyone else.

 

Another point is that a big chunk of poor people's income go to rent/mortgage. This is why I think there is a positive aspect for the real estate prices to crash back to normal levels of house price to income ratios. Food and shelter is a basic need and should be affordable to all. The next generation of new home buyers will hopefully not live a life of debt and be a slave to their homes. Right now, I'm not sure how the cleaning lady or the bus driver makes it. Lower housing cost would be a boost to the poor. Obama's efforts to artificially prop up the housing market does no favors to this segment.

 

That's the Stephon Marbury approach. He would rather have made less money and been the highest paid player on a team, rather than make more money but always be behind Garnett in salary (at least this was his reasoning for wanting to leave the Timberwolves).

 

It did grow during that period, went from about 34% to 40%.

And some of that purchasing power is used to to pickup more of the tax tab so the lower income has more money to spend. Look, I don't think this income gap thing is directly related to the current crisis, but the picture you put up was incomplete information.