Income Inequality is a result of Individual Effort/Choices

[regent]

I think it was Kozol that said I can walk down a street in your neighborhood and tell you what kind of schools you have.

 

[Publius1787]

Income Inequality is a result of Individual Effort/Choices

By and large, this premise is correct. There are, of course, always exceptions to the rule, but for the most part, your lot in life was earned by the decisions you made throughout it.

The by far greatest determinant of who will be in the top quintile of income is parental income. I guess everyone made bad choices in choosing their parents. And America is at the bottom of the developed world in economic mobility. There goes American exceptionalism. Americans are the world's worst at choosing life paths to rise in the world.

So Libertarians are adolescent sociopaths by choice?

No doubt if you have high skilled or rich parents, you benefit from both the increased opportunity/access and the possible skills they can teach you. But so what? It is no mistake that the students at the most prestigious music schools have musicians for parents. I know people who can take apart and put back together any mechanical device and weld to boot. They were thought by their father and their skills likely exceed anyone who has formal training on the matter. Too bad they're lazy and refuse to go to a technical college so as to increase their potential. It would be free with financial aid and they would qualify.

The cause is largely what we choose to do with our lives. American students are getting liberal arts degrees (I'm guilty of the same). Foreign students in our own schools are highly overrepresented in medicine, engineering, technology, physics, chemistry, and etcetera. Indeed, foreign students from poor countries and poor parents certainly see the United States as the land of opportunity. The question is why don't we?

It's because we're spoiled. We have enjoyed the most affluence for longer than any other country in the developed world. Even amongst recessions we've been relatively sheltered. We've also stopped taking risk. You cannot say the same of the Korean gas station owner who sets up shop in the hood to exploit a market gap. There are in fact so many well paying professions that require getting our hands dirty or taking some risk that Americans see as beneath them.

It also comes to instant gratification. We don't sacrifice anything and we want it all now. Hell, we have people in the projects with tricked out SUV's and iPhones. Indeed, no one saves, everyone spends, and they feel as if they are entitled to such a life style. Before the recession everyone was living large, afterwards they got caught with their pants down: instant gratification and no sense of long term financial planning.

Our problem is cultural more so than anything else. People whose families earn much less than the average American are coming to our own universities, setting up businesses in our own country and cleaning house. I guess we ought to start asking them how they achieved the American Dream.

 

[Bombur]

The initial premise of this thread is flawed. The issue is not that there are rich and poor. There will always be a top and bottom 1% of income earners. The issue is how the top .00001% is growing in income while the rest of the income spectrum is stagnant or even shrinking. You can look at the last 30 years or so of economic progress and see that at times economic growth has lead to income increases across the board and other times growth was almost entirely concentrated with the wealthy.

The comparison is as much between the top 1% of 1970 to the top 1% of 2010 as it is between the top and bottom 1% of any period of time. The reasons for these changes are almost entirely based on macroeconomic trends.

 

[bripat9643]

Hoover tried to convince the American people this same premise in 1932, self reliance and all that drivel. Hoover even lauded the apple-sellers on the streets as the new businessman. There are a number of factors that go into an individual's economic well-being, health, education, skills, age, inheritances, the nation's economy, and on and on, many factors the individual has no control over, but if we can make the case that it all depends on the individual we feel better, and maybe even a little superior.

You obviously don't know jack shit about Hoover. Hoover was anything but a laizzes faire capitalist. He was big government interventionist cast from the same mold as FDR.

When the stock market crashed in 1929, Hoover called in leading businessmen and urged them not to reduce wages or to lay off staff. Then he instituted public works programs, which would now be called “stimulus spending.” Hoover signed the protectionist Smoot–Hawley tariff bill, blocking free trade. As should have been expected, this was a disaster. Then Hoover lurched even more to the Left. He signed the Revenue Act of 1932—the largest peacetime tax increase in history. While under Coolidge, the top income tax rate was slashed from 73% to 24%, under Hoover, it shot up to 63%. And his last major attempt to save the economy was passing the Emergency Relief and Construction Act, which authorized still more stimulus programs and the creation of the Reconstruction Finance Corporation (RFC).

 

[regent]

Hoover tried to convince the American people this same premise in 1932, self reliance and all that drivel. Hoover even lauded the apple-sellers on the streets as the new businessman. There are a number of factors that go into an individual's economic well-being, health, education, skills, age, inheritances, the nation's economy, and on and on, many factors the individual has no control over, but if we can make the case that it all depends on the individual we feel better, and maybe even a little superior.

You obviously don't know jack shit about Hoover. Hoover was anything but a laizzes faire capitalist. He was big government interventionist cast from the same mold as FDR.

When the stock market crashed in 1929, Hoover called in leading businessmen and urged them not to reduce wages or to lay off staff. Then he instituted public works programs, which would now be called “stimulus spending.” Hoover signed the protectionist Smoot–Hawley tariff bill, blocking free trade. As should have been expected, this was a disaster. Then Hoover lurched even more to the Left. He signed the Revenue Act of 1932—the largest peacetime tax increase in history. While under Coolidge, the top income tax rate was slashed from 73% to 24%, under Hoover, it shot up to 63%. And his last major attempt to save the economy was passing the Emergency Relief and Construction Act, which authorized still more stimulus programs and the creation of the Reconstruction Finance Corporation (RFC).

Not the same mold have you ever heard or read one of Hoover's speeches?
Hoover preached self reliance almost to the end of his term, and worse, his programs including the RFC were for the most part trickle-down programs. FDR, after an attempt to reduce government spending, put in programs to trickle up. Would Hoover even think of a CCC program?
Hoover offered nothing for the hungry, it was state and local. The mistake both FDR and Hoover's made with their trickle up and trickle down approach was not spending enough. A mistake FDR made alone was cutting off the New Deal in 1936 believing the problem had been solved.
There were no manuals or proven acts that cure depressions and there are none today.

 

[oldfart]

Your argumentation is getting better!

What my thread was about was why some people make the top 1-10% and others don't. Career choice clearly is important for this. Doctors do very, very well for themselves and can make the top 1% fairly readily, especially with a two-income household. The top 10% can be achieved with a degree in many STEM fields. I do agree that there is decreasing income mobility, but the majority of people of low socioeconomic backgrounds who have high intelligence tend to go to college(The book, "The Bell Curve" has some stats on this).

You probably ought to stay away from "The Bell Curve" as a source; it's methodology has not been well received in the statistical community.

If the question is what determines what individuals from families in the bottom 50% will reach the top 10%, obviously personal characteristics are important. But that doesn't explain why the gas between the median income at the bottom and the median income at the top is growing, no matter how you define the "top" and the "bottom". Nor does it explain why over 40 years the upward mobility has been decreasing in America. Are Americans getting lazier?

Somehow I don't think hoping people in the bottom 80% or so will develop more "gumption" is going to be a solution. If the key is higher education, then part of the solution is to make higher education more available.

Even more importantly, the fight about income inequality is often not about people who can't crack the top 1%, but more about people who can't crack the top 50%.

Almost. It's also about why upward mobility in all income brackets is decreasing while income disparity is increasing. Look, if all incomes increased by the same percentage, income inequality would not be changing over time and we probably wouldn't be having the discussion.

 

[The Rabbi]

The initial premise of this thread is flawed. The issue is not that there are rich and poor. There will always be a top and bottom 1% of income earners. The issue is how the top .00001% is growing in income while the rest of the income spectrum is stagnant or even shrinking. You can look at the last 30 years or so of economic progress and see that at times economic growth has lead to income increases across the board and other times growth was almost entirely concentrated with the wealthy.

The comparison is as much between the top 1% of 1970 to the top 1% of 2010 as it is between the top and bottom 1% of any period of time. The reasons for these changes are almost entirely based on macroeconomic trends.

Except your premise is not true. The middle class has been growing in income.

 

[Bombur]

The initial premise of this thread is flawed. The issue is not that there are rich and poor. There will always be a top and bottom 1% of income earners. The issue is how the top .00001% is growing in income while the rest of the income spectrum is stagnant or even shrinking. You can look at the last 30 years or so of economic progress and see that at times economic growth has lead to income increases across the board and other times growth was almost entirely concentrated with the wealthy.

The comparison is as much between the top 1% of 1970 to the top 1% of 2010 as it is between the top and bottom 1% of any period of time. The reasons for these changes are almost entirely based on macroeconomic trends.

Except your premise is not true. The middle class has been growing in income.

You are not saying my premise is not true, you are claiming a fact I presented was not true.

SOI Tax Stats - Individual Income Tax Return (Form 1040) Statistics

Do the research yourself but it is pretty clear to me that real income growth is concentrated towards the top of the income spectrum. The middle class often starts off below the mean and works their way up. Even if you find the data for the top .001% and compare it to the .0001% you will see more income growth as you work up the income spectrum.

The macro economic reasons for this are not hard to understand and are not a secret to anyone. Yet people still argue about BS like personal choice like it has anything to do with this conversation which is about macro-economics.