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posted by
martyb
on Saturday January 27 2018, @12:43PM
from the I-got-mine!-And-Yours.-And-Yours.-Annnnnd-yours,-too. dept.
from the I-got-mine!-And-Yours.-And-Yours.-Annnnnd-yours,-too. dept.
The 1% grabbed 82% of all wealth created in 2017
More than $8 of every $10 of wealth created last year went to the richest 1%.
That's according to a new report from Oxfam International, which estimates that the bottom 50% of the world's population saw no increase in wealth.
Oxfam says the trend shows that the global economy is skewed in favor of the rich, rewarding wealth instead of work.
"The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system," said Winnie Byanyima, executive director of Oxfam International.
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Only 1% of World's Population Grabbed 82% of all 2017 Wealth
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(Score: 0) by Anonymous Coward on Saturday January 27 2018, @01:30PM (5 children)
Disagree with Oxfam but this assertion is supportable, rent seekers do not create wealth. It's the job of national governments to prevent these bubbles from forming and it's imperative they restrict trans-national entities in order to do so.
(Score: 1) by khallow on Saturday January 27 2018, @02:16PM (4 children)
No, it's not. And there's a good reason why. Because those governments are a big source of such bubbles. I guess the dotcom and real estate bubbles of the past two decades are a bit ancient for you to remember. When we give them the power and authority to prevent bubbles, it turns out we give them the power and authority to make them.
(Score: 0) by Anonymous Coward on Saturday January 27 2018, @02:23PM (1 child)
??? [adamsmith.org]
(Score: 1) by khallow on Saturday January 27 2018, @05:10PM
So first, we have use of future contracts, high leverage, high prices, and a triggering shock (surge in popularity), classic ingredients of a bubble (the actual paper [chicagobooth.edu] then goes on to mention gambling in the pubs as well - widespread involvement by a clueless public is another warning sign) Yet it can't be a bubble because? Apparently, because the financial information is no longer there to show exactly what happened. Classic argument from ignorance.
Then we see that the blogger claims the dotcom bubble and the real estate crisis weren't bubbles because of some pretty lame reasoning (from an earlier post [adamsmith.org]):
The problem with that assertion is that it was quite clear beforehand that most of the junk in the dotcom stocks didn't have the potential to become the next Microsoft. Similarly, he rationalizes the real estate crisis away:
But looking at the actual charts shows that mid 2000s real estate was higher than earlier in the 2000s and the 1990s, just as one would expect from oversupply followed by a sharp drop during the recession that followed in 2008. Further, these figures don't show what the blogger wants them to show. A better figure is the home ownership [wikipedia.org] rate. For the link which shows the US rate, this peaked in mid 2000s with a decline starting around the beginning of 2007 with a large 4% drop from that time (69% peak home ownership rate to 65% today).
(Score: 0) by Anonymous Coward on Saturday January 27 2018, @04:53PM (1 child)
dude you are blind if you can't see governments are in place so they can bail out the mega banks and corporations that very few of that 1% own
(Score: 1) by khallow on Saturday January 27 2018, @05:48PM
Insurer of last resort is generally considered a legitimate function of government. So some level of "bail out" is expected when things go really bad on a large scale. What sets the bail outs of past decade (for example) apart is that the bailouts depended on political connections (Bank of America and the United Auto Workers doing preferentially much better than the buyout targets of BoA during 2007-2010 period or the bond holders of General Motors and Chrysler who should have been ahead of the UAW in the bankruptcy proceedings).
(Score: 1) by khallow on Saturday January 27 2018, @02:11PM (15 children)
First, why aren't they measuring income, a better measure of wealth creation? Just because you create wealth, doesn't mean that you keep it (such as paying for basic necessities).
Second, wealth on the high end is of notoriously dubious value. For example, capitalization [blockchain.info] of Bitcoins surged from somewhere around $10-15 billion at the start of 2017 to well over $300 billion by December. That doesn't mean that $300 billion in wealth was created over the time period, but it's the sort of thing that would be treated as wealth creation. It's not clear to me whether Credit Suisse [credit-suisse.com] (the originators of the wealth data) did count Bitcoin and other cryptocurrencies, but their definition of wealth is merely (page 11):
With total wealth creation estimated to be of $8.5 trillion (page 4) for 2017, Bitcoin would actually be a significant contributor, if it is being counted. It didn't stay above $300 billion in capitalization, but I think they could managed 2-3% of all wealth creation of last year.
Moving on, we have the usual problem with a vast number of people being uninterested or unwilling to keep wealth. If the first thing you do with any wealth you receive is give it all away to friends and family (for example, a common occurrence with lottery winners in the US), then why should we consider your lack of wealth accumulation to be significant?
Finally, once again, what exactly is wrong with the current level of wealth inequality? It's not even remotely relevant how many zeros someone has in their wealth when it doesn't affect you. You still have just as much trouble feeding yourself, if they're worth a few zeros less.
(Score: 0) by Anonymous Coward on Saturday January 27 2018, @02:37PM
Not if you get one of those zeros.
(Score: 5, Insightful) by AthanasiusKircher on Saturday January 27 2018, @02:41PM (10 children)
This strikes me as incredibly naive. If a company makes X profits, and they decide to distribute those earnings so that executives earn hundreds of times more than the average worker, it most certainly creates a difference compared to if they distributed things so executives only earned on the order of ten times more than the average worker, for example. And this trend toward inequality among salary has worsened significantly over the past 50 years or so. So yes, it CAN significantly affect poorer people when work they do (they are participating in the company too) isn't as valued, so they share less in the profits.
Note that I am NOT at all arguing for EQUAL distribution. Some workers are clearly worth more to a company than others should be paid more. But there's little evidence that paying a CEO 200 times the average worker rather than 100 times the average worker salary is actually making companies better or more successful or more efficient or whatever. To the contrary, there are studies suggesting the opposite: that CEO pay correlates very little with company performance, and that bonuses or salary increases to lower-level workers are perceived as so much more significant to them that they can create much stronger incentives for improvement.
Yes, I'm using the example of a company here, but a similar argument can be made for the population of a nation as a whole. As I noted in a post above, wealth provides incentives for innovation, but at some level of concentration it stops benefitting the rest of society. There are arguments to be made that society progresses better overall when quality of life improves for everyone (including the poor and middle classes).
(Score: 0) by Anonymous Coward on Saturday January 27 2018, @02:56PM
Male 400M record (43.03s), female 400M record (47.60s), female 4x100M relay team world record (40.82s). No one person is worth 200x average salary and the only way to make that money as an individual should be a result of taking on risk.
(Score: 3, Interesting) by Whoever on Saturday January 27 2018, @03:59PM (4 children)
There is evidence that better paid CEOs actually perform worse.
(Score: 1) by khallow on Saturday January 27 2018, @06:23PM (2 children)
(Score: 2) by Whoever on Sunday January 28 2018, @06:35AM (1 child)
Perhaps you should look at my comment [soylentnews.org] and Sulla's reply.
(Score: 1) by khallow on Sunday January 28 2018, @11:47AM
(Score: 2) by AthanasiusKircher on Saturday January 27 2018, @10:28PM
Yeah, it's a mixed bag. I've read a few of these studies including ones that claim the negative correlation as you do. My take is that it's mostly random. I'd really like to see a company secretly run by Magic 8 Ball making decisions and offering advice. See how it performs compared to average high-paid CEOs. I'm not hopeful that CEOs will come out ahead.
(Score: 2, Informative) by Sulla on Saturday January 27 2018, @05:38PM (2 children)
Sarbanes-Oxley allowing criminal prosecution of CEOs would have driven CEO wages up as they want additional pay to make up for the liability. I am not saying SA is bad, but now you are paying for a fall guy instead of an actual leader.
Ceterum censeo Sinae esse delendam
(Score: 2) by Whoever on Sunday January 28 2018, @03:05AM (1 child)
So what you are saying is that higher paid CEOs are being paid to break the law?
If they are not breaking the law, then there is no additional risk.
(Score: 1) by Sulla on Sunday January 28 2018, @06:12AM
Thats pretty much the assumption that I have always been under.
Ceterum censeo Sinae esse delendam
(Score: 2) by Arik on Sunday January 28 2018, @12:09AM
This is a very good and underappreciated point.
The sort of naïve libertarian view that one hears at times is that the fact they are able to find work at that pay shows they are worth it, and there is a level of truth to that. We don't have a better definition of value than what we're willing to pay for something. In theory, if companies are overpaying for certain positions this should work itself out in the long run as they fail or improve. In practice this is no free market and some companies are 'too big to fail.'
"As I noted in a post above, wealth provides incentives for innovation, but at some level of concentration it stops benefitting the rest of society"
Does it really? I'm not sure that's proven.
But at any rate, assuming it does, it remains that society benefits very much from respect for private property, and it's virtually impossible to implement any sort of top-down redistribution scheme without brutally violating that principle. So it's clearly better to focus on *preventing* criminal concentration of wealth from occurring than on breaking up existing concentrations (minus proven derivation from criminal activity, of course.)
If laughter is the best medicine, who are the best doctors?
(Score: 3, Insightful) by NotSanguine on Saturday January 27 2018, @07:20PM
I'd argue that isn't really the case. I'm all for profit-based economies (in most areas, there are a few where that doesn't make a whole lot of sense) and the incentives that such an economy places on innovation, efficiency and productivity are, in general, really good things that are and should be encouraged.
There comes a point where more money and resources doesn't really add to the quality (whether it be material, emotional or intellectual) of your life and/or your family's.
What's more, once you've passed that threshold where more money won't improve your life, it's often invested in new and existing ventures which can have a net-positive effect on the economy through innovation, efficiency and productivity. All to the good so far.
The rub is when more and more resources are funneled into fewer and fewer hands. When the bulk of the resources (85% held by 10% of the population [wikipedia.org]) are in a very few hands, this creates a bottleneck for economic growth and innovation.
Once you're in that place, adding more money to your coffers won't improve your life or make you more productive. In fact, it removes resources from the economy and negatively impacts growth and innovation. That's where "how many zeros someone has in their wealth" does, in fact impact the ability of others to meet their own needs.
This has nothing to do with taxes and everything to do with economic resiliency, growth and civilizational maturation. From a short-term (on the order of a generation [isogg.org]) perspective, the concentration of resources isn't necessarily harmful to the economy at large. If this concentration continues, however, it will produce a drag on the economy, as those with more and more resources have their needs and desires sated, while those with few (and fewer) resources, find it difficult to have their desires (and in some cases, even their needs) met.
From a longer term perspective, this will reduce overall economic activity, as more and more resources sit idle -- once those with most of the resources are sated and those with few resources are less able to contribute to economic activity due to their static or declining level of resources.
As such, higher wages for those with fewer resources would make for stronger economies, better growth and more innovation and productivity -- without any real impact on the lifestyles and recognition of those with the most resources.
This isn't a capitalism vs. socialism issue, nor is it a taxation issue. it's a long-term economic growth in a capitalist system issue.
No, no, you're not thinking; you're just being logical. --Niels Bohr
(Score: 2) by Joe Desertrat on Saturday January 27 2018, @11:52PM (1 child)
Wealth is the accumulation of assets beyond the costs required to sustain oneself. If you create 100k in income but it costs that much to sustain oneself over the same period, one is not accumulating wealth. The problem with excess wealth accumulation on the scale we have it today is manifested in two ways. One, by excess withholding of income from the laborers that worked to create the income in the first place. This essentially leaves the vast portion of productive society at, when compared to the wealth accumulators, a subsistence level in that continuing their standard of living requires continued labor producing wealth for the accumulators with only a portion of the fruits of their labors being returned to them as income. Two, by simply manipulating the wealth one has in a manner that creates no real product (and thus no real income for anyone) but still results in an increase in wealth. The second method is increasingly common and is destined to result in the sort of economic crash that hurts everyone. However, the truly productive members of society, the laborers, are usually hurt far worse.
(Score: 1) by khallow on Sunday January 28 2018, @03:16AM
No real product and no real income for anyone? Then why are we counting it as wealth?
(Score: 2) by mmcmonster on Saturday January 27 2018, @04:37PM (1 child)
Worldwide Top 1% Income = $32,400
Worldwide Top 1% Wealth = $770,000
Most people don't have a lot of money.
Obviously the top 1% wealth is skewed upwards dramatically by the billionaires.
(Score: 1) by Sulla on Saturday January 27 2018, @05:34PM
I was wonderng about this as well, at 350 million the US is about 5% of the worlds population? US average income in 2015 was 67.5k, so more than double the average of the worlds top 1%. So looks like almost all the wealth growth in the past year was American.
Ceterum censeo Sinae esse delendam
(Score: 5, Insightful) by RedBear on Saturday January 27 2018, @06:02PM (4 children)
I often wonder if there is a point where a worshipper of unregulated capitalism will finally acknowledge that it is an unhealthy, self-destructive economic system. If one of these days it is reported that ten ultra-wealthy individuals control 99.99999% of all the world's wealth, will that finally be enough to get people to see that an unregulated capitalist system is incompatible with a functional, free human civilization? Every year the system gets more and more skewed toward people already who have so much money they literally have no idea what to do with it, and could never spend it all in their lifetime. Yet the faith that rudderless profit-maximizing capitalism is the ultimate economic system never seems to waver. No matter how many times a capitalist economy is allowed to run amuck and destroy itself, it's never capitalism's fault.
Whenever we have this conversation it's extraordinarily idiotic. It mostly comes down to people getting their panties in a twist and screaming that communism is evil, and that everything besides chaotically unfettered capitalism equals "communism". That is the overly simplistic viewpoint of a child. Nobody wants to destroy capitalism. Nobody wants the rich people to stop being the richest people in existence. In fact, nobody really cares that rich people are rich. What we want is for capitalism to be regulated so that it stays healthy and is more compatible with humanity, with human beings getting treated as something other than robots to be abused and discarded.
Imagine one of those big fancy courtyard water fountains. You put water in the pool at the bottom, turn on the pump, and water sprays out the top, in an endless loop. Sometimes the pool is full, sometimes the water goes down from evaporation or a leak, but generally the cycle just goes on and on. But the way we are implementing capitalism, it's like a bunch of selfish jerks are diverting most of the water spraying out the top of the fountain into a separate tank. They pour a little bit back in the pool now and then, but most of it just sits there in the separate tank, stagnating. And then we wonder why periodically the fountain starts to struggle and fail to pump water.
The wealthy aren't job creators, they are wealth hoarders. Small businesses are job creators. The wealthy are literally just siphoning off wealth from everyone below them in the capitalist hierarchy and amassing huge personal fortunes. They invest some of it, sure, to make themselves even more money. But most just sits idly in banks not doing a damn thing to help the economy grow and continue functioning.
Here's the funniest part. Those same rich people would still be the richest people on Earth even if they were siphoning off a much smaller percentage of global wealth, and reinvesting or redistributing much more of what they are currently hoarding. Not only would all of us lower classes be so much better off because there would be more capital to work with, but the wealthy themselves would be healthier and happier, and safer, and still ridiculously wealthy. There are a number of wealthy people who understand this, and they advocate for higher taxation of the highest income brackets. Rising income inequality is bad for rich people too. The only thing they get out of it is money, and every other measure of life is negatively affected for rich as well as poor.
Acknowledging that capitalism needs regulation to be stable is not about hating capitalism itself. It's about acknowledging that capitalism plus natural human greed and capitalistic competition leads to an unhealthy consolidation of too many resources in too few hands, and such systems tend to collapse spectacularly. The alternative is not totalitarian forced communism but capitalism with some relief valves built in that keep resource consolidation from getting completely out of hand. There is a reason Congress finally passed the Sherman Antitrust Act, and a reason that we don't speak of the Gilded Age as a happy or stable historical period.
How is this such a difficult concept? Why is this such a terrifying concept? How is it possible to think that allowing a single human being to "own" our entire planet could ever be beneficial for humanity or the economy? Why should any sane person want that to occur? We aren't there yet, but that is the end point of the path we are traveling. Eight wealthy individuals now hold 50% of the wealth of our entire nation. That's not a good thing or a healthy thing. That's nuts.
¯\_ʕ◔.◔ʔ_/¯ LOL. I dunno. I'm just a bear.
... Peace out. Got bear stuff to do. 彡ʕ⌐■.■ʔ
(Score: 1, Touché) by Anonymous Coward on Saturday January 27 2018, @11:56PM (2 children)
Because duh, I might be one of those 1% one day and if not, Jesus will reward me after I die for being poor.
(Score: 2, Insightful) by Anonymous Coward on Sunday January 28 2018, @03:05AM (1 child)
Actually, it's consumers that are the job creators.
That empty space on the shelf after you've picked up something and taken it to the checkout counter represents a need for a worker to make another widget to fill that space.
When the Capitalist exploiters won't pay a living wage to their employees, The Workers don't have money to buy that widget, there's no need for another widget to be produced, and the consumption feedback loop breaks down.
That's called an economic downturn.
Keep it up and you have a depression.
Oh, and Henry Ford had this stuff figured out over a century ago.
The latest batch of "geniuses" are oblivious WRT the wisdom of George Santayana and they refuse to learn from the past.
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Sunday January 28 2018, @10:11PM
That's silly. Do you think people were crying out for light bulbs, auto-mobiles or washing machines before these things were commercialized? You may as well say it's the advertiser that is the job creator for convincing the consumer to purchase items they do not need.
(Score: 3, Interesting) by acid andy on Sunday January 28 2018, @04:42PM
This right here is the best post in the whole thread. Shame the Scaley-Footèd One probably missed it.
Master of the science of the art of the science of art.
(Score: 3, Interesting) by aristarchus on Saturday January 27 2018, @08:01PM (4 children)
Could we please have some analysis of this discussion? My guess, just eyeballing it, is: 50% TMB, 10% khallow, 30% AC, 20% other Soylentis. And yes, SoylentNews goes all the way to 11, or to 110%, at least on topics like this.
(Did anyone else notice that there is a growing perception the SN is just TMB's personal blog?)
(Score: 3, Insightful) by Maddog on Saturday January 27 2018, @08:50PM (1 child)
^THIS
Apparently I don't have enough karma to "downvote", as I was trying to balance out this discussion to help things along and keep it lively. But this whole discussion has devolved into "Here's a valid point" versus "I won't argue that point, it doesn't have merit to me".
Eventually enough saltwater bags leave the room and all that is left is a nice echo chamber...
(Score: 0) by Anonymous Coward on Sunday January 28 2018, @01:10AM
Soon it will be khallow and TMB just patting each other on the back while civilization moves on. It is easy to get caught up in this bubble here, but take comfort that the vast majority of people absolutely do not hold the same twisted beliefs.
(Score: 1, Informative) by Anonymous Coward on Sunday January 28 2018, @01:51AM (1 child)
That would explain his little argument with janinrok about what should/shouldn't be allowed on SN. He has more in common with mad Kim than he realizes.
(Score: 0) by Anonymous Coward on Sunday January 28 2018, @09:25AM
Really? And what was the conclusion?