Comments on: Rich Getting Richer, Poor Getting too Lazy

By: Marvie L Johnson

Marvie L Johnson — Mon, 19 Nov 2007 17:44:40 +0000

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By: Dan

Dan — Sat, 17 Nov 2007 19:58:54 +0000

Well, if they haven’t made any bad decisions, that’s great. But who says that just because a college graduate is making minimum wage that they are automatically “not succeeding”. Just continue to make good decisions and they won’t be making minimum wage all their lives, I can assure you.

Don’t expect things just because you’re a college graduate. All that means is you had the tenacity to go to school for four more years to get another diploma. It doesn’t entitle you to anything more than anyone else, all other things being equal.

Just keep making good decisions and before you know it, you’ll be better off than everyone you know that didn’t make good decisions.

Dan

By: Terry

Terry — Sat, 17 Nov 2007 17:32:41 +0000

There are now three college graduates where I work, earning minimum wage. To repeat my question, what bad decisions did we make?

By: Karl

Karl — Mon, 30 Apr 2007 17:39:42 +0000

Hello Dan,
This debate is quite fun. I will certainly agree with you that people who choose to have children, have addictions etc, are without a doubt creating their own problems. I also agree that government should not be burdened by supporting these people financially. However, right and wrong financial decisions are not always clear at the time they are being made. It may have seemed like a good idea to invest in Enron, Worldcom etc. It also may have seemed like a good idea for an American to get a computer science degree, only to realize that ten years down the road, IT jobs would be outsourced to Asia. These are only two examples. Remember, hindsight is 20/20.
Also, large amounts of money concentrated in the relatively small amount of wealthy people poses great problems. Today’s economy is a global one. Yes, it is true that wealthy individuals invest large sums of money into the economy. But whose economy? Investing in inexpensive Chinse and Indian labor through outsourced jobs contributes to Asian economies and puts money into the pockets of wealthy American investors. You may argue that growing economies around the world would contribute to the American economy by buying American products. This is not the case. Investments in foreign countries help to make countries like China self sufficient. We are giving them the means to make their own products and build their own strong economy. American investors are looking at the short term financial gain for a small group of wealthy people, and not the long term consequences of outsourcing jobs. The idea that investments made by the wealthy will trickle down to middle class Americans is absurd, especially in a global econmony.
Finally, do wealthy people contibute to the American economy by buying products? Absolutely. But a rich person buying a two million dollar yacht contributes much less to the American economy than ten thousand middle class americans spending a total of two million dollars on houshold items, and food. Think about the jobs that are created by building a yacht, and the jobs that are created to feed ten thousand people. Trickle down economics does not work. I prefer to think of it as economist John Kenneth Galbraith described it: Horse and sparrow econimics-If you feed the horse enough oats, some will pass through him to feed the sparrows.

By: Dan

Dan — Mon, 30 Apr 2007 03:47:24 +0000

Hi Karl,

Thanks for commenting. My example, was just that. An example. But you could give me the lifestory of any able bodied American (without health issues that have handicapped their ability to succeed) and if they are in a bad place financially, I can pinpoint exactly why they are like that based on bad decision making.

Very, very few wealthy people in the US are that way because someone gave it to them. Your example is a very skewed example and one that is not typical.

Also, the fact that a larger amount of wealth is in more hands today has absolutely nothing to do with general prosperity. This is a typical liberal mantra that is just plain wrong. Even if one person in the US owned 50% of all assets, that money would still be in circulation and being used within the economy. Prosperity of the measure of financial activity, not inactivity. In other words, if a billionaire where to bury one billion dollars in their backyard and not have it in circulation, would they still be wealthy? He might as well be the poorest person on earth since all the money is not being used. It’s only when that money is in a bank (being loaned out to businesses for capital, home loans for home ownership, car loans…etc…etc) that is becomes a measure of that person’s wealth. And when it is in the bank, it’s being earned by the average working person. It’s our productivity that measures our potential for wealth. And it’s our decisions on where to spend it that measures our debt. Poor people make bad decisions when it comes to that side of the equation. It’s a chicken and egg thing. If they hadn’t made poor decisions in the beginning to get to the poor or lower income status, they wouldn’t have to choose between healthcare and food. But once you’re in the cycle, yeah, it’s hard to get out of it.

We need to start teaching teenagers about decisions and hitting it hard. They shouldn’t be marrying until they are over 28. Even the poorest of poor people can earn money and put themselves through college if they don’t have credit card bills and the distractions of family/kids…etc.

I could go on. But all other things being equal, it’s our own decision in the US to be poor. IT’s just that most people don’t know it, so therefore don’t know that they shouldn’t do those things that will perpetuation poverty. It’s a vicious circle.

Best,
Dan

By: Karl

Karl — Mon, 30 Apr 2007 03:24:04 +0000

Dan,
You are absolutely incorrect in your assessment of the rich getting richer and the poor getting too lazy. Allow me to explain why your arguement is not convincing.
First, the problem is not that the rich are getting richer than the poor, the problem is that the rich are getting richer than the majority of the population, the middle class. Second, your little anecdote regarding Alice is an extreme example of poor choices that people can make, and it does not reflect the majority of people struggling to merely scrape by. Many struggling people today are in that position because they simply cannot afford the exorbitant and rising costs of necessities such as healthcare, housing, and heat for their homes. Without money for these basic necessities, there is surely no money available for great expenses such as higher education.
Also, in today’s corporate world, even people with advanced degrees are not guaranteed to keep their jobs, and are constantly in danger of unemployment. Corporations are so concerned with profit for shareholders, that they will gladly outsource jobs to foreign countries.
Today people are making increasingly more money with investments. I will certainly agree with you that direct money productivity certainly creates more money. However, what do you do when you don’t have enough money to invest because you are worried about putting food on the table and cannont risk the gamble of investment? The more money you have, the more money you can risk. Your arguemnt fails because you equate a lack of productivity with laziness. But let me ask you this, who is lazy?: 1) A forty year old man with a wife and baby child who makes $40,000 per year and works 55 hours per week. 2) A 25 year old from a wealthy family who does not work but invests $2 million of inheritance. The answer is clear.
Now, due to decreases in taxes, rich people who invest their money in the stock market can keep more of the returns on their investments. According to MSN Money(http://moneycentral.msn.com/content/invest/extra/P143548.asp) “The richest 1% of households — those with incomes above $237,000 for 2003, the latest year analyzed — owned 57.5% of all income from capital gains, dividends, interest and rents in 2003, the CBO analysis found. That was up from 53.4% the year before and 38.7% in 1991.” Also, “Long-term capital gains were taxed at 28% until 1997, and at 20% until 2003, when rates were cut to 15%. The top rate on stock dividends was cut to 15% from 35% that year.” Clearly, rich people are making more money by not working. But you can’t invest money if you don’t have money in the first place. If I were lucky enough to be born into a rich family, I could be “sitting in my comfy easy chair, inside my air conditioned house, eating chips and drinking diet pepsi, watching cable tv, smoking cigarettes that cost me $5 a pack.”

By: Jean

Jean — Mon, 16 Apr 2007 00:00:59 +0000

Does anyone know where to find National statistics for graduate destinations eg. whether graduates in undergraduate or graduate studies found employment related to their training after graduation ? I want a better understanding of the National underemployment situation eg. college degree’d workers having a job at McDonalds 2 years after obtaining degree.

Also, are there any higher education statistics reporting the number of individuals who seek secondary training because of downsizing, outsourcing etc.? I am especially interested in older adults returning to school and their age ranges. It would be interesting to see how individuals who retrain later (and get saddled with debt) fair in their retirement years.

It might be eye-opening to see whether the statistics show whether a 40 year old worker who used to work in manufacturing should get a job at McDonalds or return to school to try and train for a more lucrative career. What would be the smart decision?

Merely curious, Jean

By: Jean

Jean — Sun, 15 Apr 2007 23:52:28 +0000

I think that the most difficult decisions are ones where there is no clear cut black or white answer.

Double edged sword:
In the case of society supporting education, welfare, housing or educational assistance programs it is clear that if you are in a high-tax bracket it can be disconcerting to think that you are supporting others in society who you feel did not make smart decisions. However, if the social cost to not having these programs in place is increased unemployment and crime then there is a social benefit also that we all have some obligation to recognise. You may define this as a sense of entitlement but humanity also has some desire to influence its environment so we all don’t live like our animal ancestors. People throughout history have resorted to cannibalism, violence and social disintegration when there were not enough resources to go around. Durkheim (a sociologist) linked both crime and suicide rates to social decline and a society where people have trouble gaining access to opportunities. Note China high suicide rates and 3/10 post-secondary graduates unemployed there. Peace is maintained only because of the police state. This means that societies do have carrying capacities.

Right now, the popular trend is to say that to remain competitive Americans need to become better educated. But is is really that simple? Would a nation of 100% college educated citizens really mean the productivity of the nation would rise or that there would be greater opportunities for better paying jobs? And if not, how much can the competition for higher paying jobs grow? Will college tuition hikes, limited enrollments and credential inflation make people turn away from their dreams of competiting for the American dream?

I do agree that there is a potential problem for society if there are people willing to have many children without having the money to pay for their upkeep. But, the cost of post-secondary education and healthcare consumes much more than what many lower and middle income families can afford these days and their costs are inflating even more (see higher educ.stats). Because of this, one can argue that the poor will never be able to afford having children and this is not acceptable. People should be able to have families with at most 2 children without being overly penalized. Larger family sizes I do have a problem with and the best policy solution I can think of would be to create financial disincentives for more than 2 child families eg. they have to pay portion of public education bill etc. and be denied child care deductions or child tax credits (excepting multiple birth cases).

There is a balance that needs to be maintained and unfortunately we are entering a historical period where the current generation of college graduates face more debt and a tougher job market than their parents. The babyboomers who did not save enough for their retirement need to support themselves somehow. New college graduates need to pay off their extensive debts due to inflation. At the same time wages have not kept up with inflation. Such costs prevent people correcting mistakes because it is too expensive to return to school to retrain - sometimes I wonder where all the laid-off people go to work who were affected by outsourcing or downsizing. Older workers have an especially hard time and could not have anticipated the workplace changes occuring today when they first entered their professions. I am sympathetic to the difficulties faced by individuals affected by these displacements.

There is also the problem of credential inflation and so many people requiring advanced degrees for what required less than a high school education a few years ago. The risks are all being passed onto the pre-credentialed individual in order to maintain the professional aspirations of lawyers, teachers, psychologists, social workers etc who require consumers of their services. For instance, (i)lawyers provide services to criminals who engaged in propery crime because *potentially* they could not find legitimate way to keep up with the “Joneses” in their neighbourhood or (ii) 20%-30% of all college graduates go back into teaching profession to teach others merely to maintain an institutional system that may not be a necessity for a well functioning society and (iii) psychologists provide mental health services for the depressed but depression may merely be a form of “learned helplessness” as the brain encounters life situations that it has no control over and thus is more of a social condition than an illness (again, one of Durkheims suggestions). On top of this, Professional associations, governments and institutions have a vested interest in limiting access to credentials and denying true competition so that wages in these professions do not drop but this cannot be sustained over the long term as it is not possible for the profession of janitor to ever require a PhD.

I don’t have the answers but I do not believe that the trickle down theory will rescue the American economy.

By: Dan

Dan — Wed, 11 Apr 2007 22:08:57 +0000

I didn’t say all people without money are lazy. You’re assigning meaning where it does not belong.

People find themselves in unfortunate situations all the time. When it happens, it’s tragic and sad. What I’m saying is, people in America have the best opportunity out of anyone else in the world to get themselves ahead. If they simply make good choices in life.

It’s hard to tell someone that’s made poor choices (voluntarily) that their situation in life is due to those poor choices, but that doesn’t make it any less true.

I don’t know your situation, Robert. But I would venture to guess that many of your current woes stem from making poor choices when you were younger. Again, that doesn’t make it any less tragic… but why should people who made good choices when they were young be made to pay for the mistakes of those that made bad choices in life, in the form of public assistance and welfare?

You should read my other posts about choices.

Regards,
Dan

By: Robert Hillman

Robert Hillman — Wed, 11 Apr 2007 20:57:30 +0000

thats right after raising four children alone for 12 years without support

and without a dual income

I am lazy

sure

I have lost two of my children to people with money

and the other two I cant help

my daughter has mouth pain because she needs 3000 dollars worth of work

but i am lazy

we need a 2000 dollar furnace but i am lazy

and i have no van insurance on my van because I am lazy

well WOE UNTO YOU THAT ARE RICH FOR YOU HAVE RECIEVED YOUR CONSOLATION

Integrity@cyg.net

any rich people want to help us?