Do the rich earn their income?

[Uncensored2008]

The operative word is "can." Many get poorer, some get wiped out completely.

The reason they (and anyone actually) has the opportunity to possibly get rich is because they take risks. Sometimes those risks pay off. Most of the time they don't. Risk vs. reward, and that helps everyone.

No one gets rich without effort. Even frauds like Bernie Maddoff and Barney Frank expend effort - defrauding suckers takes work, too.

Many people have worked hard, earned a fortune, then lost it because they didn't know how to manage it. Pete Ham of Bad Finger ended up installing carpet, despite 8 #1 hits, because he trusted others to manage his money - which they promptly stole.

 

[asterism]

The operative word is "can." Many get poorer, some get wiped out completely.

The reason they (and anyone actually) has the opportunity to possibly get rich is because they take risks. Sometimes those risks pay off. Most of the time they don't. Risk vs. reward, and that helps everyone.

No one gets rich without effort. Even frauds like Bernie Maddoff and Barney Frank expend effort - defrauding suckers takes work, too.

Many people have worked hard, earned a fortune, then lost it because they didn't know how to manage it. Pete Ham of Bad Finger ended up installing carpet, despite 8 #1 hits, because he trusted others to manage his money - which they promptly stole.

I agree, I was just countering the "hire someone to manage their money" talking point. Sure, it doesn't require effort sometimes. It always requires risk, something Progressives ignore when they go on their class warfare bents.

I had a similar discussion with a former employee, a construction worker who was a music major. He liked to use his case as an example of how unfair things were.

"I'm right here in this ditch with you, and I own the company."

"Yeah, but you're making bank."

"Not from this job, I pulled $3500 out of savings just to make payroll. You're complaining that I'm paying you market wage for your skills. I'm not even working for free, I have to write a check just to show up and work this job."

He didn't believe it.

 

[Sundial]

I'm arguing it's mostly not the rich who're doing the resource allocating. It's managers, vice-presidents, advisers, CEOs, etc. In other words, the people they hire to do it for them are the ones who are doing it.

I understand you to be saying that the rich are contributing by deciding which hedge fund to invest in, or which financial adviser to hire.

I would argue that their income comes mostly from owning things, not from settling on a particular adviser.

Finally, I'd also argue that there is not a clear and necessary connection between increasing the wealth of the wealthy, and increasing the prosperity of the country as a whole; and that hedge funds are trying to do the first, and not the second; and that it is possible to make yourself or your client rich(er) at the expense of everyone else.

And I'm asking you to look a little closer, because the connection is very real.

Where should I be looking? What is it that prevents the rich from enriching themselves at the expense of everyone?

It's not about 'increasing the wealth of the wealthy', as you phrased it, but it is about increasing the wealth of investors who make good decisions, and decreasing the wealth of those who don't.

What is a good decision? Is it one that enriches the investor, or one that benefits the country as a whole?

Does contributing to famine relief increase or decrease one's wealth?

What about establishing a monopoly?

That has a vital impact on the prosperity of the country.

Suppose there's an island where 100 people work and three guys own the land. What does their ownership contribute to production?

If they get 30% of everything, where does that 30% come from?

You've mentioned that you believe the rich get most of their income from 'owning' things, and I'd actually agree with that. But what does 'owning' something really mean? Ownership is about control. If you own something, you have the final say in how it gets used, right?

So, in your example, the 'guys' who own the land would be deciding what is done with that land.

No. They're landlords. They collect rent. They don't try to manage the renters' businesses for them.

Let's say one of them decides it would be a good idea to grow tobacco and he convinces some of the other people on the island to help him plant and harvest the tobacco (perhaps by offering them partial ownership of the end product). Another decides to plant rice, and persuades some of the other islanders to join him in the effort. The third guy can't be bothered. He just hangs out on the beach, partying with his friends.

Hopefully you get the point of my clumsy allegory: The decisions these guys make will affect the future prosperity of the island. That's what their 'ownership' contributes to production.

What you're describing is management, not ownership.

And you're assuming the owners would do better doing it themselves, rather than hiring professionals.

And that the owners would do better than the people who live there.

And that there's a direct connection between rents and the productivity of the people. (Ordinarily rents are a set price, regardless of the tenant's income. Charging a percentage would be more like a tax, not rent.)

And that they wouldn't drive up rents by (for example) keeping large tracts of land for themselves.

Your contention seems to be that there is no justification for pure 'profit' - at least not the kind that comes from investment. You write off investment profits as income from 'owning things' - as though that's inconsequential. But owning something IS an activity. It entails the responsibility to decide how the things you own are used. Those kinds of decisions, especially at the scale of capital investment, have a tremendous effect on all of us. It's crucial that they're made well.

I'm making a distinction between managing resources and owning them. Sometimes they go together. Often they don't.

 

[Gadawg73]

Let us see if I earned my income yesterday.
I drove to Atlanta, 42 miles, and did research in the Fulton county courthouse. Traffic was horrible and $12 to park and dealing with government workers to search for closed files and make copies. Then I drove to Lilburn, Ga. to interview witnesses, 35 miles from Atlanta, then to Watkinsvile, Ga. another 45 miles to interview 2 more witnesses, then to Athens, Ga. 15 more miles to take care of some other business, then to Gainesville, Ga. another 50 miles looking for a defendant in a civil case and then to Murrayville, Ga. another 12 miles to look further and then back to the office another 50 miles away.
A 10 hour day plus mileage of 232 miles plus the parking and lunch comes to almost $1000.
I busted my ass for that $$$ and my clients are glad to pay it and yes, I am rich.
Because I EARNED THE $$$ THAT MADE ME RICH.
Same as 95% of all the other rich folks.
Amazing how many dumb asses there are out there that believe $$$ falls from trees.

 

[Gadawg73]

The ONLY place wealth comes before work is the dictionary.

 

[asterism]

Let us see if I earned my income yesterday.
I drove to Atlanta, 42 miles, and did research in the Fulton county courthouse. Traffic was horrible and $12 to park and dealing with government workers to search for closed files and make copies. Then I drove to Lilburn, Ga. to interview witnesses, 35 miles from Atlanta, then to Watkinsvile, Ga. another 45 miles to interview 2 more witnesses, then to Athens, Ga. 15 more miles to take care of some other business, then to Gainesville, Ga. another 50 miles looking for a defendant in a civil case and then to Murrayville, Ga. another 12 miles to look further and then back to the office another 50 miles away.
A 10 hour day plus mileage of 232 miles plus the parking and lunch comes to almost $1000.
I busted my ass for that $$$ and my clients are glad to pay it and yes, I am rich.
Because I EARNED THE $$$ THAT MADE ME RICH.
Same as 95% of all the other rich folks.
Amazing how many dumb asses there are out there that believe $$$ falls from trees.

Damn straight. That's the problem with these wide proclamations the Progressives make. They automatically assume that the "rich" are the "family welfare" types who either inherited it or got lucky because Daddy played golf with some big wig.

Most of the people I encounter either busted their asses to get it or they have busted their asses to keep what their parents left them. In the end nobody is better off if we seize wealth just because another set of progressive spending plans have failed. We're all better off doing are best for ourselves and being compassionate and helpful to those in need. Outsourcing our moral obligations to the government is neither effective nor sustainable.

And that's why Warren Buffett says one thing but does the opposite, like most Progressives.

 

[Uncensored2008]

Where should I be looking? What is it that prevents the rich from enriching themselves at the expense of everyone?

Bill Gates and Paul Allen write MSDOS, they get very rich.

Explain to me how this is at your expense, or the "expense of everyone else?"

Sure, you're jealous and pout that it's "NO FAIR," but explain exactly what expense his success laid on you?

What is a good decision? Is it one that enriches the investor, or one that benefits the country as a whole?

So what you demand is that when each of us get up in the morning, we ask ourselves "how is what I do today going to benefit Sundial?"

No. They're landlords. They collect rent. They don't try to manage the renters' businesses for them.

So, the house that I sweated to raise enough to buy, that I spend weekends and evenings fixing things at, that I make the mortgage payment (And let me tell you, my wife puts in just as much work as I do) is me just collecting rent?

 

[Gadawg73]

The myth is the rich got wealthy "off the backs of others".
All of my clients have $$ and most of the rich got rich from others that are productive.
The rich get richer because they keep doing the positive and productive things over and over and over and over that made them wealthy to begin with.
Same with 95% of the poor that are adults. Poor is because of bad choices. My sister is poor. She is poor 100% because of her lifetime of laziness and not being disciplined.

 

[dblack]

Where should I be looking?

Look at the points I'm making for starters. In a free economy you can't make money unless someone else gives it to you voluntarily. And unless they're insane or being coerced, they won't do that except in trade for something they value.

What is it that prevents the rich from enriching themselves at the expense of everyone?

Laws against fraud and theft.

What is a good decision? Is it one that enriches the investor, or one that benefits the country as a whole?

A good decision is one that satisfies the needs and wants of others - to the point that they're willing to pay money for the results of the decision.

No. They're landlords. They collect rent. They don't try to manage the renters' businesses for them.

Who says? I mean, I suppose they could just rent their land, if they chose to, but even that entails decision and judgment (Who do they rent to? What stipulations and limitations do they put on the use of their land? etc... ). In any case, it's still up to them as owners.

What you're describing is management, not ownership.

Nope. It's ownership. Should we look up the word in the dictionary?

And you're assuming the owners would do better doing it themselves, rather than hiring professionals.

Maybe for hardcore venture capitalists. But, in general, for the average investor, I'd assume the opposite. But they still have to exercise the judgment to hire good professionals, if they don't, they lose their wealth. That's at the core of what I'm getting at.

I'm making a distinction between managing resources and owning them. Sometimes they go together. Often they don't.

The owner always has the final say, is always the ultimate manager, over what they own. That's the entire meaning of ownership. They can choose to delegate that authority if they want, but it's their decisions in the end that matter.

 

[Sundial]

WAIT A MINUTE!

You just started another thread claiming debt was a good thing, and here you are claiming people who use money and wealth to make more money and wealth are not earning their money and wealth.

SERIOUSLY???

Dude, I don't know if you are just unable to grasp that your arguments contradict one another or you are just blindly posting nonsense for effect and attention.. Which is it?

DEBT is the very essence of using money to create money. Jesus man, wake up...

If the rich work, then they're working. I'm not arguing that money is a bad thing. I'm arguing that the rich don't contribute merely by existing.

WTF kind of a cop-out lame excuse was that? They don't get money for existing. The use of their money (ies) earns more money for them in its use by banks, investments, etc... Dude you just argued that debt is good in one thread and somehow the rich don't earn their money in this one. And you do not see a conflict in the two??

No.

One more time...

Wealthy people do the largest investing. Investing in banks, businesses, stocks, bonds, you name it. That is what generates wealth not only for them but other people as well. Want or need a car loan? Then rich people have to be investing into banks or it won't be easy for you to get it cause there is no large monies available that people will risk on you to borrow. Understand this yet?

Money made from these investments they either reinvest back into something or place into CD's, savings accounts, retirement accounts, trust funds, charities, non-profits and any other account or institution. Monies into accounts is used by banks to add to their monies to loan out to you for your car loan...

Without those rich people using their money to make money you wouldn't be able to get a loan. Its as simple as that...

1. Money doesn't generate wealth. People do. "Putting money to work," is just an expression. Even if money did work, it would be the money doing the work, not the rich people.

2. You don't need rich people to have money. Even if there were no rich people, money would still exist. It would just be more evenly distributed.

3. Banks don't need money to make loans. It's loans that create money, not the other way around. Even if they did, ten people with ten dollars have as much as one person with one hundred.

 

[Wicked Jester]

Let us see if I earned my income yesterday.
I drove to Atlanta, 42 miles, and did research in the Fulton county courthouse. Traffic was horrible and $12 to park and dealing with government workers to search for closed files and make copies. Then I drove to Lilburn, Ga. to interview witnesses, 35 miles from Atlanta, then to Watkinsvile, Ga. another 45 miles to interview 2 more witnesses, then to Athens, Ga. 15 more miles to take care of some other business, then to Gainesville, Ga. another 50 miles looking for a defendant in a civil case and then to Murrayville, Ga. another 12 miles to look further and then back to the office another 50 miles away.
A 10 hour day plus mileage of 232 miles plus the parking and lunch comes to almost $1000.
I busted my ass for that $$$ and my clients are glad to pay it and yes, I am rich.
Because I EARNED THE $$$ THAT MADE ME RICH.
Same as 95% of all the other rich folks.
Amazing how many dumb asses there are out there that believe $$$ falls from trees.

Good for you!

Now, turn around, and hand at least three quarters of what you earned over to the nearest liberal standing there with their hand out, who's screaming at you that it's their money, DAMMIT!

Or simply do what I do. Tell 'em to go fuck themselves!

 

[Sundial]

If the rich work, then they're working. I'm not arguing that money is a bad thing. I'm arguing that the rich don't contribute merely by existing.

What do you consider "work?"

I'd say it's something that requires some physical or mental effort (or at least time), is related in some way to creating some sort of good or service, and is ordinarily done for compensation.

 

[Sundial]

If the rich hire someone else to manage their wealth, they can get richer without trying. Whether they're on the beach, or someone else.

Without trying? You ever try to hire someone, or choose a contractor, or delegate any of your responsibilities effectively 'without trying'?

OK. So selecting a hedge fund is a kind of work. But once it's done, it's done, right? You're retired. You don't have to do it anymore.

If they choose well and hire someone good, they'd probably have some spare time to lie on the beach and still turn a profit. But then, they'd have to pay that person, and the better they are, the more they'll charge.

If they don't do that, if they don't figure out a way to put their money to good use, it's a wash and they lose their money. In any case, it's their decision on what to do with that money - invest it themselves, hire someone to do it on their behalf, blow it all on hookers and blow - and, if they have a lot of money, it makes a big difference.

Are you really denying this? How do you think things would work out if there was little or no incentive for people to invest money in this way? How would resource allocation get done? Who would waste their time carefully investing their money, who would bother finding someone to do it for them, if there was no profit in it?

I'm not making a policy proposal; I'm not saying, "let's take all the money from the rich." I'm making an observation: that the richest of the rich mostly don't work for what they get.

That doesn't mean I think it should be taken away from them. (Well, I do think we should raise the income tax a little bit... But you know what I'm saying.)

Anyway, saying that most of the income of the rich is unearned is not the same as saying nobody should have unearned income.

It's not even close.

 

[bigrebnc1775]

Did obama earn his millions?

 

[bigrebnc1775]

If the rich work, then they're working. I'm not arguing that money is a bad thing. I'm arguing that the rich don't contribute merely by existing.

You seem to be arguing that they get richer 'merely by existing'. But that doesn't hold up. If they don't do something useful with their money, if all they do is hangout on the beach, they won't get richer. They might be able to coast on their cash for a while, but if all they do is spend or hoard their money, their wealth will eventually be depleted.

If the rich hire someone else to manage their wealth, they can get richer without trying. Whether they're on the beach, or someone else.

You're worried about the rich not working do you care that those on the welfare system don't work and have more money than a lot of people who are out in the work force busting their ass.

 

[thereisnospoon]

If the rich work, then they're working. I'm not arguing that money is a bad thing. I'm arguing that the rich don't contribute merely by existing.

WTF kind of a cop-out lame excuse was that? They don't get money for existing. The use of their money (ies) earns more money for them in its use by banks, investments, etc... Dude you just argued that debt is good in one thread and somehow the rich don't earn their money in this one. And you do not see a conflict in the two??

No.

One more time...

Wealthy people do the largest investing. Investing in banks, businesses, stocks, bonds, you name it. That is what generates wealth not only for them but other people as well. Want or need a car loan? Then rich people have to be investing into banks or it won't be easy for you to get it cause there is no large monies available that people will risk on you to borrow. Understand this yet?

Money made from these investments they either reinvest back into something or place into CD's, savings accounts, retirement accounts, trust funds, charities, non-profits and any other account or institution. Monies into accounts is used by banks to add to their monies to loan out to you for your car loan...

Without those rich people using their money to make money you wouldn't be able to get a loan. Its as simple as that...

1. Money doesn't generate wealth. People do. "Putting money to work," is just an expression. Even if money did work, it would be the money doing the work, not the rich people.

2. You don't need rich people to have money. Even if there were no rich people, money would still exist. It would just be more evenly distributed.

3. Banks don't need money to make loans. It's loans that create money, not the other way around. Even if they did, ten people with ten dollars have as much as one person with one hundred.

On your point number two......False. Money is not distributed. In fact the concept of money is false. Unless a person possesses a large amount of cash, they have no money. They have "wealth" Wealth is the concept by which a person's income investments, real property, possessions and savings is measured. Wealth is created.
Your premise of "distribution" presupposes the existence of a finite pot of wealth from which we all draw with the permission of some unseen entity. That's false.

 

[dblack]

I'm not making a policy proposal; I'm not saying, "let's take all the money from the rich." I'm making an observation: that the richest of the rich mostly don't work for what they get.

That doesn't mean I think it should be taken away from them. (Well, I do think we should raise the income tax a little bit... But you know what I'm saying.)

Anyway, saying that most of the income of the rich is unearned is not the same as saying nobody should have unearned income.

It's not even close.

Fair enough. But it's selling a falsehood. A falsehood that is often used to promote just such policy proposals. "The rich make their money off the backs of the poor" is an inspiring slogan for working class demagoguery, but it fails to promote any real understanding of the problems we face as a nation. It obscures what's really going on with a convenient myth.

All of this frustrates me a great deal, because what we need, more than anything, is for progressives and libertarians to recognize the common enemy of corporatism and face it dead on. Indulging in the puppet theater of the traditional left/right bickering is nothing more than distraction.

 

[Wiseacre]

I'm not making a policy proposal; I'm not saying, "let's take all the money from the rich." I'm making an observation: that the richest of the rich mostly don't work for what they get.

That doesn't mean I think it should be taken away from them. (Well, I do think we should raise the income tax a little bit... But you know what I'm saying.)

Anyway, saying that most of the income of the rich is unearned is not the same as saying nobody should have unearned income.

It's not even close.

Fair enough. But it's selling a falsehood. A falsehood that is often used to promote just such policy proposals. "The rich make their money off the backs of the poor" is an inspiring slogan for working class demagoguery, but it fails to promote any real understanding of the problems we face as a nation. It obscures what's really going on with a convenient myth.

All of this frustrates me a great deal, because what we need, more than anything, is for progressives and libertarians to recognize the common enemy of corporatism and face it dead on. Indulging in the puppet theater of the traditional left/right bickering is nothing more than distraction.

The common enemy of corporatism? Explain please.

 

[turtledude]

According to the IRS, the answer is mostly not.

Of the richest of the rich only 6.5% of income was from working, as of 2007. The rest came from things like interest, dividends, and capital gains.

In other words, the kind of income you get without having to wake up in the morning.

Which raises the question: if the rich are consuming without working, who is doing their work for them?

Link

class envy sucks. its an excuse people who fail to achieve use. My late father started working at the company he died as the CEO for when he was 16. He invested his salary and by age 65 he was making more from his investments than his salary. He also was elected a director of a few other companies. He didn't take salary for that but took stock which started earning income for him

and Libtards claim that the income was not "earned"

LOL

 

[ShackledNation]

In free market capitalism, yes, the rich earn their income. In our bizarre corporatist/socialist mixed economy, sometimes yes, sometimes no.