Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
@VintageFreak The thing I don't understand is how people will say any sort of social programs--welfare, Food Stamps, unemployment insurance, Social Security, Medicare, Medicaid, government subsidized education or job training and the increased taxation to fund those programs--are "communism" and therefore evil when in reality those programs were established in many countries to prevent communist or other kinds of violent revolution because of income inequality.
The ting I don't understand is why some people use straw man arguments on this forum. The people here; regardless if you agree with their position or not, are intelligent and can spot a 'straw man' easily.
A big contributor to the income inequality is the expansion of "free trade" which is promoted by shill publications for the elites such as Barrons. -- The import/export model promoted by the "Free Trade Uber Alles" crowd has created gutted the American Middle Class.
True. The middle class has shrunk from the 70s and will continue to do so.
He's not going to do all that stuff he said to get elected. No prosecuting Hillary. Romney (the "loser") is now a candidate for Sec. of State. The "wall" will be a fence in places. And some General has convinced him that water boarding isn't effective ... etc. etc.
I live in a heavily pro-Trump area. I'm not close to any of those folks but do know several who voted 3rd party or stayed home. The best answer any can give me is: "Hillary's a crook."
Disclaimer: Most of the above is sarcasism.
If he was a democrat these changes would be categorized as an 'open mind' and an 'evolution' in his thinking and put in a positive light.
@Dan Are those the same intelligent people that hate "straw man arguments" who when presented with data on the problems of inequality post tiny vaguely racist images of natives with huts whom I suspect the implication is that they're "primitive" as the only alternative to not leaving things as inequitable as they are?
Apologies to Dan. It's the best I could offer up to this otherwise enlightening discussion. (Special thanks to LB).
I will say ... that on one of those earlier points, the R's at least seem consistent: Ford pardoned Nixon. And Trump appears to be issuing a de facto pardon of Clinton before even in office. (One wonders about Constitutionality. But let's not worry about such small matters).
For the ages: "I don't want to hurt the Clintons."
@Dan Are those the same intelligent people that hate "straw man arguments" who when presented with data on the problems of inequality post tiny vaguely racist images of natives with huts whom I suspect the implication is that they're "primitive" as the only alternative to not leaving things as inequitable as they are?
Apologies to Dan. It's the best I could offer up to this otherwise enlightening discussion. (Special thanks to LB).
I will say ... that on one of those earlier points, the R's at least seem consistent: Ford pardoned Nixon. And Trump appears to be issuing a de facto pardon of Clinton before even in office. (One wonders about Constitutionality. But let's not worry about such small matters).
For the ages: "I don't want to hurt the Clintons."
Thank you.
I think at this point in time we need to allow the mud and negative characterizations that was presented during the campaign to fade away and watch what ACTIONS are taken.
Those that have an open mind will do that.
Those that are mired in the past will not. You will be able to spot these people because they will continue to repeat the generalizations and cartoonist characteristics of the campaign. They will be long on vitriol and short on facts and analysis.
A good question for the Constitutional scholars: Can she refuse Trump's pardon and insist on a trial in order to prove her innocence? (I'd think accepting such a pardon would make it very hard to run for office in the future.)
Income inequality is certainly not a modern phenomenon. Some form of the pyramid that Mr. Braham referenced has existed forever. And the numbers don't change all that much over rather large chunks of time. The posts have considered numerous sidebars of the generic topic. That happens often and adds to the overall value of MFO.
Not always, but most of the time, income inequality reflects the significance of the contribution made by the participants. It is commonly noted that 10% of any workforce generates 40% of the output. Sporting competitions make that unequal impact obvious. The pay scales do reflect those unequal contributions.
Those contributions are sometimes harder to detect in the business and political arenas. And to assign a dollar value to these contributions is doubly hard. The President of the US makes a lot less than a host of professional sport celebrities and company heads. Perhaps that does accurately measure contributions?
Joking aside, we all work at different levels of commitment. Many on MFO commit far more effort than I do in making investment decisions. Robert Frost observed that some folks are willing to work, while others are willing to allow them to do so. I'm in that latter class. That's why I invest using mutual funds and ETFs as my functioning tools. Other folks do the hard job.
Income inequality persists and will continue. Working hard does improve the odds for success but without any guarantees. Luck is always a player.
I thank God that I was born in the USA. That immediately tilted the odds in the more friendly direction. Climbing any pyramid is hard work, but is it easier in the US.
>> ... most of the time, income inequality reflects the significance of the contribution made by the participants.
What a view of the world. No social workers in your family, maybe. Of course if significance means society valuation, then we have our friend the tautology.
David sure has a negative view of the world. MJGs comment was spot on. Opportunity does exist in the USA but you have to put effort in towards it. It doesn't just come to you.
The death of fidel has some here in mourning. I say good riddance.
@MJG "Not always, but most of the time, income inequality reflects the significance of the contribution made by the participants" How do you explain the gender pay gap and race pay gap that exists in the U.S. today? How do explain the fact that most CEOs and boards of directors consist of white males? How do you explain the fact that many American CEOs receive astounding sums for subpar and sometimes wholly destructive performance which has driven some companies and in the case of our banking sector in 2008 the entire economy into the ground? How do you explain the wage gap that exists between U.S. CEOs and foreign ones? How do you explain the pay gap that exists between developed nations and developing ones for doing the same work in general? Does everyone in your meritocratic universe get precisely what they deserve or just the 80% to 90% in the word "most?"
Also, please explain why this chart is justified based on meritocracy.
Thank you for taking time to compose your reply. It is the reply of an angry man who more often sees the dark side and not the positive progress that has been made on remaining inequalities.
Just about all the shortcomings that you identified are being addressed and are decreasing in magnititude over time. I'm sure the speed of that progress is distressingly slow for you. I am satisfied with how these issues are being resolved in the USA. As a general,assessment, that resolution has been more rapid in the USA than in foreign States. I guess I'm more patient than you are. Existing gaps are closing. That's progress.
Your graph doesn't prove anything except that noise exists. The scales are an order of magnititude different for the two data sets and distort the perceived changes. Corporate profits have basically remained unchanged during the reported period. The Employee compensation ratio has gone down a few percent, likely properly reflecting less of a contribution as automation makes a stronger impact.
I am a happy warrior; your occupation suggests that a more frequent worrywart position is more profitable for you. When I was designing Space and Reentry vehicles I always identified ways to improve their performance. That kept the cash flow positive. Things are getting better every way. In a very general manner, the stock market is reflecting those improvements.
>> Opportunity does exist in the U S A but you have to put effort in towards it. It doesn't just come to you.
>> Existing gaps are closing. ... Things are getting better every way.
Dear Lord. You privileged two need to hang out with the hardworking poor. Or even with their social workers. And read some of the data. I mean, 'Nickel and Dimed' was published in 2001.
The deplorable that I am tells me this is spatial plasticity at work.
The great example is the recent election. Everyone was so certain that HRC was going to win that they didn't see the flaw. The result has had the left questioning their reasoning.
It's also called neuroplasticity.
Amazing stuff, considering I'm from the so called low info or low educated right that was the buzz phrase a few weeks ago.
I'm puzzled by your challenge concerning my acknowledgement of the " truth". Although I'm sure I made errors in a few of my posts, they were random and unintentional. I do try to be precise and accurate. I'm sure I was not 100% successful in achieving that goal.
As far as I know, my posting on this topic is free of such factual errors. If you have discovered any, please advise me. I welcome any clarifications or needed corrections. It has been said that truth is in the eyes of the beholder. That is especially so when discussing financial and investment matters. In these instances, truth is dependent upon loose, many times conflicting theory, and practical experience.
Thanks for your most recent presentation of attractive graphs. They are colorful, but I question their relevance to my position. For example, I don't see the significance of the fact that the fed's minimum wage has not kept up with inflation rate changes. In general, we are not discussing the absolute lowest rung on the worker's pay scale, but more like a higher average.
Please note that my comments are not directed at defending or justifying the escalating CEO pay levels. I too find some of those levels grossly out of touch with likely contributions. But that does not mean that workers are grossly underpaid. These are separate and distinct observations. I do believe in the capitalistic system whereby supply and demand determines ultimate worker wages.
Is it perfect? Can we define what is perfect? Of course not, but the system has a tendency to be self-corrective. It moves towards a dynamic equilibrium position, which itself shifts with both time and economic conditions.
Tension between management and workers will always exist. That's the nature of this competitive interaction. Costs always matter. Lord kelvin once observed that increases in costs without increases in performance can only be tolerated in fancy women.
Management options are limited. In 1983, GE executive James Baker defined 3 candidate options as automate, emigrate, or evaporate. That third option is never acceptable and the first two function to limit workers compensation.
We may not like it, but that's the real business world.
Surely you have read even a little bit about the fate of average wages the last decades, also about the Costco model vs the Walmart model. Or maybe a shrug is all you got for policy thought.
I'm not familiar with the details of either the Costco or the Walmart (Sam's club) models, although we shop at all 3 entities. They fiercely compete for business in our neighborhood. All 3 are successful.
I do have the advantage of a female neighbor two houses away who has worked in a minor management function for all 3 operations and Target as well. She often extols the positive virtues of working for Costco. She claims that both the pay scale and the fringe benefits package offered by Costco is superior to those offered by the other organizations. She also asserts that Costco allows her greater freedom in making decisions in her area of expertise.
A cautionary note is required. She is a data base of one in my knowledge of the employment practices of these fine stores. By the way, she also shops at all the stores under discussion here.
Widely studied, if you would only read up about what you so like to pontificate on. Costco employees are not and do not need to be assisted by us taxpayers (Snap and the like).
>> that's the real business world.
See, that's the thing. Dated, uninformed thinking.
@MJG You say the inequality problem is being addressed and decreasing in magnitude when the opposite is true. Your answer to the problem is that the problem has always existed and therefore we should ignore it when in fact much of life's problems exist on a spectrum or scale and are not either-or situations. To say there has always been racism and therefore we should tolerate lynching when in the past there was only job discrimination would not be acceptable to most people. You see in the CEO pay relative to average worker pay graph I posted that for 23 years--from 1965 to 1988--the level of inequality barely budged and then exploded in the 1990s. There is a direct corollary between that explosion and the increase in profits from globalization and technology. CEOs received massive bonuses for laying off American workers and shipping their jobs overseas. The stock market and your portfolio benefited from that increasing level of inequality. But having a CEO make 20 times the average worker in 1965 could be considered an acceptable level of inequality, an ample incentive to do a good job to make the pay of twenty men or women. Now we are at 295 times. Don't pretend the shift doesn't exist or doesn't matter. And the CEO example is merely a slice of the much larger problem:
Stop pretending this isn't a growing problem and that it is acceptable just because some form of the problem has always existed.
@MJG You say the inequality problem is being addressed and decreasing in magnitude when the opposite is true.
And what you fail to understand is that worker pay has been flat from the '70s and CEO pay has increased. Decreasing CEO pay to what it was in the past does nothing for workers.
It is that simple.
The CEO/worker pay is just an shinny item that distracts people from the real issues.
Look over there! CEO/worker pay is out of wack from the past!!!!!!!!! Let's talk about that!!!!
In short you are allowing yourself to be distracted from the real issues.
If you want to help workers it isn't by wasting time talking about the CEO/Worker pay.
What percentage of workers in retail actually stay? It's a step on the ladder unless the worker has no initiative to find better employment. There are those who complain about the wages but are doing nothing for themselves to get a better paying job.
Comments
I will say ... that on one of those earlier points, the R's at least seem consistent: Ford pardoned Nixon. And Trump appears to be issuing a de facto pardon of Clinton before even in office. (One wonders about Constitutionality. But let's not worry about such small matters).
For the ages: "I don't want to hurt the Clintons."
I think at this point in time we need to allow the mud and negative characterizations that was presented during the campaign to fade away and watch what ACTIONS are taken.
Those that have an open mind will do that.
Those that are mired in the past will not. You will be able to spot these people because they will continue to repeat the generalizations and cartoonist characteristics of the campaign. They will be long on vitriol and short on facts and analysis.
Income inequality is certainly not a modern phenomenon. Some form of the pyramid that Mr. Braham referenced has existed forever. And the numbers don't change all that much over rather large chunks of time. The posts have considered numerous sidebars of the generic topic. That happens often and adds to the overall value of MFO.
Not always, but most of the time, income inequality reflects the significance of the contribution made by the participants. It is commonly noted that 10% of any workforce generates 40% of the output. Sporting competitions make that unequal impact obvious. The pay scales do reflect those unequal contributions.
Those contributions are sometimes harder to detect in the business and political arenas. And to assign a dollar value to these contributions is doubly hard. The President of the US makes a lot less than a host of professional sport celebrities and company heads. Perhaps that does accurately measure contributions?
Joking aside, we all work at different levels of commitment. Many on MFO commit far more effort than I do in making investment decisions. Robert Frost observed that some folks are willing to work, while others are willing to allow them to do so. I'm in that latter class. That's why I invest using mutual funds and ETFs as my functioning tools. Other folks do the hard job.
Income inequality persists and will continue. Working hard does improve the odds for success but without any guarantees. Luck is always a player.
I thank God that I was born in the USA. That immediately tilted the odds in the more friendly direction. Climbing any pyramid is hard work, but is it easier in the US.
Best Wishes.
What a view of the world. No social workers in your family, maybe. Of course if significance means society valuation, then we have our friend the tautology.
The death of fidel has some here in mourning. I say good riddance.
How do you explain the gender pay gap and race pay gap that exists in the U.S. today? How do explain the fact that most CEOs and boards of directors consist of white males? How do you explain the fact that many American CEOs receive astounding sums for subpar and sometimes wholly destructive performance which has driven some companies and in the case of our banking sector in 2008 the entire economy into the ground? How do you explain the wage gap that exists between U.S. CEOs and foreign ones? How do you explain the pay gap that exists between developed nations and developing ones for doing the same work in general? Does everyone in your meritocratic universe get precisely what they deserve or just the 80% to 90% in the word "most?"
Also, please explain why this chart is justified based on meritocracy.
Thank you for taking time to compose your reply. It is the reply of an angry man who more often sees the dark side and not the positive progress that has been made on remaining inequalities.
Just about all the shortcomings that you identified are being addressed and are decreasing in magnititude over time. I'm sure the speed of that progress is distressingly slow for you. I am satisfied with how these issues are being resolved in the USA. As a general,assessment, that resolution has been more rapid in the USA than in foreign States. I guess I'm more patient than you are. Existing gaps are closing. That's progress.
Your graph doesn't prove anything except that noise exists. The scales are an order of magnititude different for the two data sets and distort the perceived changes. Corporate profits have basically remained unchanged during the reported period. The Employee compensation ratio has gone down a few percent, likely properly reflecting less of a contribution as automation makes a stronger impact.
I am a happy warrior; your occupation suggests that a more frequent worrywart position is more profitable for you. When I was designing Space and Reentry vehicles I always identified ways to improve their performance. That kept the cash flow positive. Things are getting better every way. In a very general manner, the stock market is reflecting those improvements.
Best Wishes.
>> Existing gaps are closing. ... Things are getting better every way.
Dear Lord. You privileged two need to hang out with the hardworking poor. Or even with their social workers. And read some of the data. I mean, 'Nickel and Dimed' was published in 2001.
The truth is that if you went back to the past it would not help the worker!
The truth is that CEO pay got out of wack with the dissolution of ownership i.e. common stock is an investment vehicle.
Again, this CEO/worker pay issue a wedge issue that only serves the 'I'm more concerned then you are" crowd. It does not and will not help the worker.
http://assets.pewresearch.org/wp-content/uploads/sites/12/2015/05/FT_15.05.20_minWage_1938_2014.png
The past also saw way stronger and more widespread unionization.
So what is this about shareholders?
Wedge issue, bwahaha. Whom is the wedge dividing? The few who defend CEO multiples from the rest of us?
Tax stratospheric CEO pay and options differently and see how much it helps.
The great example is the recent election. Everyone was so certain that HRC was going to win that they didn't see the flaw. The result has had the left questioning their reasoning.
It's also called neuroplasticity.
Amazing stuff, considering I'm from the so called low info or low educated right that was the buzz phrase a few weeks ago.
I'm puzzled by your challenge concerning my acknowledgement of the " truth". Although I'm sure I made errors in a few of my posts, they were random and unintentional. I do try to be precise and accurate. I'm sure I was not 100% successful in achieving that goal.
As far as I know, my posting on this topic is free of such factual errors. If you have discovered any, please advise me. I welcome any clarifications or needed corrections. It has been said that truth is in the eyes of the beholder. That is especially so when discussing financial and investment matters. In these instances, truth is dependent upon loose, many times conflicting theory, and practical experience.
Thanks for your most recent presentation of attractive graphs. They are colorful, but I question their relevance to my position. For example, I don't see the significance of the fact that the fed's minimum wage has not kept up with inflation rate changes. In general, we are not discussing the absolute lowest rung on the worker's pay scale, but more like a higher average.
Please note that my comments are not directed at defending or justifying the escalating CEO pay levels. I too find some of those levels grossly out of touch with likely contributions. But that does not mean that workers are grossly underpaid. These are separate and distinct observations. I do believe in the capitalistic system whereby supply and demand determines ultimate worker wages.
Is it perfect? Can we define what is perfect? Of course not, but the system has a tendency to be self-corrective. It moves towards a dynamic equilibrium position, which itself shifts with both time and economic conditions.
Tension between management and workers will always exist. That's the nature of this competitive interaction. Costs always matter. Lord kelvin once observed that increases in costs without increases in performance can only be tolerated in fancy women.
Management options are limited. In 1983, GE executive James Baker defined 3 candidate options as automate, emigrate, or evaporate. That third option is never acceptable and the first two function to limit workers compensation.
We may not like it, but that's the real business world.
Best Wishes.
Surely you have read even a little bit about the fate of average wages the last decades, also about the Costco model vs the Walmart model. Or maybe a shrug is all you got for policy thought.
I'm not familiar with the details of either the Costco or the Walmart (Sam's club) models, although we shop at all 3 entities. They fiercely compete for business in our neighborhood. All 3 are successful.
I do have the advantage of a female neighbor two houses away who has worked in a minor management function for all 3 operations and Target as well. She often extols the positive virtues of working for Costco. She claims that both the pay scale and the fringe benefits package offered by Costco is superior to those offered by the other organizations. She also asserts that Costco allows her greater freedom in making decisions in her area of expertise.
A cautionary note is required. She is a data base of one in my knowledge of the employment practices of these fine stores. By the way, she also shops at all the stores under discussion here.
Best Wishes.
>> that's the real business world.
See, that's the thing. Dated, uninformed thinking.
And the CEO example is merely a slice of the much larger problem:
Stop pretending this isn't a growing problem and that it is acceptable just because some form of the problem has always existed.
And what you fail to understand is that worker pay has been flat from the '70s and CEO pay has increased. Decreasing CEO pay to what it was in the past does nothing for workers.
It is that simple.
The CEO/worker pay is just an shinny item that distracts people from the real issues.
Look over there! CEO/worker pay is out of wack from the past!!!!!!!!! Let's talk about that!!!!
In short you are allowing yourself to be distracted from the real issues.
If you want to help workers it isn't by wasting time talking about the CEO/Worker pay.
you got anything actual to add?