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.
When I read discussions of inequality it is usually at websites like this - places where the upper middle class/professional working class/etc. are found. Since most of these groups are stock and fund holders I wonder why CEO and executive rewards are discussed and shareholder rewards are sometimes lightly mentioned and other times ignored entirely. Is there a relationship between shareholder wealth and inequality? If, as Lewis claims, shareholders benefit from trends workers do not benefit from, then it would seem that most people who talk about their investments have an "invested" interest in an increase in inequality (until and unless it explodes in their face).
My husband and I have realized lately that if all our earned/entitled benefits were just stopped we could still live well compared to what might happen to others. But we don't understand why those more numerous "others" should just let us "do well".
It's nice to banter ideology intellectually but our bedrooms are warm and out bellies are filled. This is not a criticism; just an observation and some musing.
One of my anti-war friends in the 60s, upon driving past a rich man's house, pointed up at the house and said - "Come the revolution, I'm going to live in that house." In my mind, that is the type of thinking that makes the top of the pyramid relatively safe. The poor don't want equality, they want to be the top. They admire the man on the top.
@Anna, My whole point for posting some of my thoughts is to avoid the violent "revolution," which occurs when inequality becomes too great and often ends badly for everyone, by supporting and hopefully encouraging the expansion of the social safety net. It is via the voting booth that such gentler social reforms occur, and the upper middle class/professional working class etc. you mentioned all play an important role in that. As for the working class also being shareholders, that is by structural design, not often by choice. In the 1980s and 90s pensions were replaced with 401ks. The so-called democratization of Wall Street in which everyone owns a few shares is a grossly misleading concept because many Americans don't even have the money to contribute to their 401(k), being strapped with debt and often having less than $1000 in their bank account. Those that do have the money and contribute do so because there really is no other avenue for them to have a secure retirement. And even when they do invest, it is misleading to compare their piddling ownership levels to the executive suite's. The Walmart greeter who somehow manages to squirrel away enough to buy a few shares in their 401(k) is not benefiting from their colleagues and their own exploitation via low wages as much as the Walton family. And even if a handful are benefiting a significant amount, most benefit a lot more from public assistance the Republican party is seeking to gradually eliminate: https://washingtonpost.com/posteverything/wp/2015/04/15/we-are-spending-153-billion-a-year-to-subsidize-mcdonalds-and-walmarts-low-wage-workers/?utm_term=.d98b66abd011 Their wages are so low they need to go on food stamps, welfare and other social programs.
As for the poor wanting to be on top, that is human nature, but at least with their bellies full, a roof over their heads, and a decent job for which they are fairly paid they probably won't want to kill those on top. If they can't find that job, we should make sure we have that social safety net--the welfare, food stamps, unemployment insurance, Medicaid and job retraining programs--to ensure they still have full bellies and a roof over their heads. And we should make sure that when they find a job, that the minimum wage is high enough so they can actually live off that wage.
Lewis, I agree with you ideologically. But I look at the world full of poor. I look at what few instances of revolution I learned in school. Can you deny that it is usually the elite that lead peasant revolts? The 4th commandment and 2nd amendment outweighs all else in the American society. Yes, this is a gross generalization and just a biased observation but one thing elitists don't see is how the poor step up to try to help their neighbors while detesting help and advice from the elite. In my home town elite civil rights workers from the north were amusing to the people marching for reasons no elitist could really understand.
It strikes me now that those very elitists today are encouraged to sharehold with the czars. And while the shareholders scream foul, the czars lead an attack against the elite revolutionaries of yore.
@Anna, I imagine some here do actively work (volunteer) on social policy, and/or directly helping the poor, and like that. It is true that such discussion is often rich people's luxury. I do not think I had many 1960s' friends who said or wished things as thoughtless and unself-aware as that, although some of them certainly are living now in big houses, while some of those strongly support (and work for) higher taxes on the wealthy and redistributive programs, even as a few remain pals with Paul Singer and Larry Kudlow (former classmates). Many do work or have worked side by side with the less privileged and know something (a little) about their situations firsthand. You sound as though you might have had underprivileged experience yourself. If so, do you have any prescriptive thoughts? Have you read, or lived, 'Nickel and Dimed'?
It is indeed often a member of the elite who leads the working class in a revolt--a demagogue. Once things have reached that stage, it is already too late. This is why liberal elites discussing such issues is not idle chitchat. It's a smart act of self preservation that ultimately benefits everyone. Rather than violent communism or fascism, the liberal elite help maintain the social order by creating a safety net for the poor so they don't become too enraged by their condition. Once they become too enraged, they are looking for someone to blame. The demagogue seizes upon this and points his finger at a minority and the horror begins. The entire fabric of society is destabilized as a result--bad for the poor, what's left of the middle, and often also the elites whose businesses and stocks suffer. Or at least that is how these situations have played out in the past.
, increases in labor productivity via technology and expanding corporate profits at the expense of labor itself. CEOs and shareholders benefited from those trends while workers did not. They were intentionally left behind.
I deleted all the other points you wrote because they are part of the distraction. You are on the correct path with the above. And that it took you so long to get here proves my point about CEO pay being a distraction.
Now, CEOs are paid to run their companies for a profit. It was profitable to do what you wrote so the CEOs and shareholders benefited.
Now to help the workers identify what can be done to reverse the trends you mentioned.
Hopefully, you can not see how the CEO pay overshadowed the real issues and that discussion.
'The escalation in CEO pay was not accompanied by a corresponding increase in output. They didn’t make the pie bigger but they are taking a bigger piece of it. What that means is that everyone else has a smaller piece.'
Output hasn't increased? Then how were the needs of a growing population met? The USA's population more than doubled since the 60s.
huffingtonpost.com/entry/donald-trump-andrew-puzder_us_584739b0e4b0b9feb0da1b7c Donald Trump To Choose Fast-Food CEO To Be His Labor Secretary
The man who’s helmed Hardee’s and Carl’s Jr. could become the nation’s top workplace watchdog. Best of luck, Fight for $15.
=====================================
A Trump Administration will likely NOT favor a legislated $15/hr minimum wage. Such a national wage would be a job killer. --- and doesn't allow for wide differences between costs of living in places like LA & NY vs. say Wichita and Mobile.
However, moving to fair trade vs 'free trade' may have the same end-effect -- namely an activist -- dare I say, "progressive"/labor-friendly may well work to boost capital investment and good jobs here -- along with all the 'service jobs' that follow on from more manufacturing jobs.
The Dems' inclination to seize control (i.e. reduce individual decision making) is wrong-headed. Instead, alter the 'rules of the game' on trade and let market forces adjust to an economic environment where its more economical (and environmentally friendly) to produce locally, rather than source globally.
I keeping going back to the simple truth about the way "globalization" has developed.. It amounts to paying 3rd world wages, then charging 1st world prices.... so NATURALLY it causes income inequality... the fatter corporate margins accrue to the owners of capital (and the C-suite) at the expense of American labor. And the environmental degredation in China is far worse then the environmental impact if the manufacturing were done in the USA.
Reducing Chinese trade is pro-Labor and pro-Green.
Reducing Chinese trade is pro-Labor and pro-Green.
What the 'greens' do not acknowledge is that the USA exported its pollution when heavy industry and other mfg went off shore. If the 'greens' really wanted to improve the earth they would support The Donald's position and bring back mfg to the USA so it can follow the USA anti pollution laws.
@Edmond 1. There is a significant portion of democrats who support fair trade via restrictions on trade with slave labor countries like China. Ask Bernie Sanders about this. It is the rest of the free-market loving Republican party that will likely oppose Trump on this. It seems improbable he will get anything much done in this domain. 2. There is no evidence that raising the minimum wage stunts job growth. If anything it is economically stimulative via the multiplier effect of people with higher wages spending their increased income on goods and services. In fact, just letting the super-rich keep the money and hoping it will "trickle down" via reinvestment has consistently proven to be a failed strategy for the last thirty years. And everyone who follows the markets on this board knows this. Companies rather than reinvest in their own businesses and grow them have chosen instead to buy back their own stock or pay dividends rather than create new jobs. 3. Deregulation has failed massively in several sectors, most notably in financial services in 2008-09. Both parties bear responsibility for it. Why is it suddenly going to magically work for the Donald? I know, he's got the best deregulation. No one knows deregulation like he does. It's going to be huge!
@DanHardy Manufacturing can not come back to the U.S. in a major way unless wages here are equivalent to the slave wages received in the emerging world. That ship has sailed. Please tell me how America can compete with the lowest wage countries for manufacturing in this bar chart without ripping the fabric of our entire society apart?
"Please tell me how America can compete with the lowest wage countries for manufacturing in this bar chart without ripping the fabric of our entire society apart?"
OK: Hold imported manufactured goods & offshored service providers to the same minimum-wage, labor-rights, and environmental regulations as those imposed on domestic employers. Meaning, if the manufacturer or foreign service employer cannot prove they are operating in compliance with our laws, they don't get access to our markets. (Or they get access, but pay an exorbitant tariff, to encourage them to bring the jobs back.
@Edmond That would eliminate trade with countries like China and Mexico completely. Bear in mind, that China owns $1.2 trillion dollars worth of U.S. debt. What do you think they might do if you started a trade war as your reforms most certainly would? Also, bear in mind that you or Trump are faced with a Republican Congress sponsored by corporate donors diametrically opposed to such trade restrictions.
@DanHardy Manufacturing can not come back to the U.S. in a major way unless wages here are equivalent to the slave wages received in the emerging world. That ship has sailed.
Please tell me how America can compete with the lowest wage countries for manufacturing in this bar chart without ripping the fabric of our entire society apart?
You need to study more about this subject. It isn't only wages that is the issue ... it is payroll service costs (e.g. employer SS payment), regulations etc. Some jobs will come back but very few.
It is the rest of the free-market loving Republican party that will likely oppose Trump on this. It seems improbable he will get anything much done in this domain.
The R and D were both for 'free trade' (AKA - oppression of the USA worker). Ross Perot was against NAFTA and both R&D pictured him as a fool.
The Ds are worse because they favor the illegal aliens who bring down wages and take jobs. You may want to reply that IAs do jobs that citizens would not do. Please research and think about it before you make such a statement.
LB "@Edmond That would eliminate trade with countries like China and Mexico completely. Bear in mind, that China owns $1.2 trillion dollars worth of U.S. debt. What do you think they might do if you started a trade war as your reforms most certainly would?"
REPLY: If the Chicoms dump Treasury debt, the Fed can buy it and call it "QE-PRC". The Fed has demonstrated they are quite able to engage in sustained interest rate suppression indefinitely. The Fed can just "soak up"/acquire the Treasurys. By the way, if the PRC sells $1 Trillion in US debt securities, where are they going to put that money? And what would those asset sales do to the RMB/USD FX rate? (hint: RMB skyrockets). China holding our debt is THEIR problem not ours.
The PRC is the one that will lose in any trade war with the USA -- as they have been the prime beneficiary of this crooked relationship running 'YUGE' persistent surpluses with us.... The American worker has been the victim of a unilateral "Trade Slaughter" the past 30 years, aided and abetted by global elites and their apologists (including Barrons/WSJ/Dow Jones) -- from both parties.
Besides, what kind of price can you put on a cleaner GREENER environment? -- Which will be the natural effect of crushing (or reducing) Chi-Com manufacturing.
But hey, any excuse to continue screwing the American worker and send their jobs to Shanghai, right?
If you think it's bad now, just wait until the robots make serious inroads into the labor force. Yes there will be new jobs installing and repairing robots, but not nearly as many as those lost in the first place.
If you think it's bad now, just wait until the robots make serious inroads into the labor force. Yes there will be new jobs installing and repairing robots, but not nearly as many as those lost in the first place.
Comments
My husband and I have realized lately that if all our earned/entitled benefits were just stopped we could still live well compared to what might happen to others. But we don't understand why those more numerous "others" should just let us "do well".
It's nice to banter ideology intellectually but our bedrooms are warm and out bellies are filled. This is not a criticism; just an observation and some musing.
One of my anti-war friends in the 60s, upon driving past a rich man's house, pointed up at the house and said - "Come the revolution, I'm going to live in that house." In my mind, that is the type of thinking that makes the top of the pyramid relatively safe. The poor don't want equality, they want to be the top. They admire the man on the top.
Their wages are so low they need to go on food stamps, welfare and other social programs.
As for the poor wanting to be on top, that is human nature, but at least with their bellies full, a roof over their heads, and a decent job for which they are fairly paid they probably won't want to kill those on top. If they can't find that job, we should make sure we have that social safety net--the welfare, food stamps, unemployment insurance, Medicaid and job retraining programs--to ensure they still have full bellies and a roof over their heads. And we should make sure that when they find a job, that the minimum wage is high enough so they can actually live off that wage.
It strikes me now that those very elitists today are encouraged to sharehold with the czars. And while the shareholders scream foul, the czars lead an attack against the elite revolutionaries of yore.
I imagine some here do actively work (volunteer) on social policy, and/or directly helping the poor, and like that.
It is true that such discussion is often rich people's luxury.
I do not think I had many 1960s' friends who said or wished things as thoughtless and unself-aware as that, although some of them certainly are living now in big houses, while some of those strongly support (and work for) higher taxes on the wealthy and redistributive programs, even as a few remain pals with Paul Singer and Larry Kudlow (former classmates). Many do work or have worked side by side with the less privileged and know something (a little) about their situations firsthand.
You sound as though you might have had underprivileged experience yourself. If so, do you have any prescriptive thoughts? Have you read, or lived, 'Nickel and Dimed'?
Now, CEOs are paid to run their companies for a profit. It was profitable to do what you wrote so the CEOs and shareholders benefited.
Now to help the workers identify what can be done to reverse the trends you mentioned.
Hopefully, you can not see how the CEO pay overshadowed the real issues and that discussion.
And you still have not read the pertinent articles.
http://www.nytimes.com/2016/12/06/business/economy/a-bigger-economic-pie-but-a-smaller-slice-for-half-of-the-us.html
huffingtonpost.com/entry/donald-trump-andrew-puzder_us_584739b0e4b0b9feb0da1b7c
Regards,
Ted
huffingtonpost.com/entry/donald-trump-andrew-puzder_us_584739b0e4b0b9feb0da1b7c
Donald Trump To Choose Fast-Food CEO To Be His Labor Secretary
The man who’s helmed Hardee’s and Carl’s Jr. could become the nation’s top workplace watchdog. Best of luck, Fight for $15.
=====================================
A Trump Administration will likely NOT favor a legislated $15/hr minimum wage. Such a national wage would be a job killer. --- and doesn't allow for wide differences between costs of living in places like LA & NY vs. say Wichita and Mobile.
However, moving to fair trade vs 'free trade' may have the same end-effect -- namely an activist -- dare I say, "progressive"/labor-friendly may well work to boost capital investment and good jobs here -- along with all the 'service jobs' that follow on from more manufacturing jobs.
The Dems' inclination to seize control (i.e. reduce individual decision making) is wrong-headed. Instead, alter the 'rules of the game' on trade and let market forces adjust to an economic environment where its more economical (and environmentally friendly) to produce locally, rather than source globally.
I keeping going back to the simple truth about the way "globalization" has developed..
It amounts to paying 3rd world wages, then charging 1st world prices.... so NATURALLY it causes income inequality... the fatter corporate margins accrue to the owners of capital (and the C-suite) at the expense of American labor. And the environmental degredation in China is far worse then the environmental impact if the manufacturing were done in the USA.
Reducing Chinese trade is pro-Labor and pro-Green.
2. There is no evidence that raising the minimum wage stunts job growth. If anything it is economically stimulative via the multiplier effect of people with higher wages spending their increased income on goods and services. In fact, just letting the super-rich keep the money and hoping it will "trickle down" via reinvestment has consistently proven to be a failed strategy for the last thirty years. And everyone who follows the markets on this board knows this. Companies rather than reinvest in their own businesses and grow them have chosen instead to buy back their own stock or pay dividends rather than create new jobs.
3. Deregulation has failed massively in several sectors, most notably in financial services in 2008-09. Both parties bear responsibility for it. Why is it suddenly going to magically work for the Donald? I know, he's got the best deregulation. No one knows deregulation like he does. It's going to be huge!
@DanHardy
Manufacturing can not come back to the U.S. in a major way unless wages here are equivalent to the slave wages received in the emerging world. That ship has sailed.
Please tell me how America can compete with the lowest wage countries for manufacturing in this bar chart without ripping the fabric of our entire society apart?
OK: Hold imported manufactured goods & offshored service providers to the same minimum-wage, labor-rights, and environmental regulations as those imposed on domestic employers. Meaning, if the manufacturer or foreign service employer cannot prove they are operating in compliance with our laws, they don't get access to our markets. (Or they get access, but pay an exorbitant tariff, to encourage them to bring the jobs back.
Done and done.
The Ds are worse because they favor the illegal aliens who bring down wages and take jobs. You may want to reply that IAs do jobs that citizens would not do. Please research and think about it before you make such a statement.
http://www.nytimes.com/roomfordebate/2015/01/06/do-immigrants-take-jobs-from-american-born-workers
http://www.nytimes.com/2016/09/22/us/immigrants-arent-taking-americans-jobs-new-study-finds.html
http://www.forbes.com/sites/artcarden/2015/08/28/how-do-illegal-immigrants-affect-american-workers-the-answer-might-surprise-you/#6bf556106b10
REPLY: If the Chicoms dump Treasury debt, the Fed can buy it and call it "QE-PRC". The Fed has demonstrated they are quite able to engage in sustained interest rate suppression indefinitely. The Fed can just "soak up"/acquire the Treasurys. By the way, if the PRC sells $1 Trillion in US debt securities, where are they going to put that money? And what would those asset sales do to the RMB/USD FX rate? (hint: RMB skyrockets). China holding our debt is THEIR problem not ours.
The PRC is the one that will lose in any trade war with the USA -- as they have been the prime beneficiary of this crooked relationship running 'YUGE' persistent surpluses with us.... The American worker has been the victim of a unilateral "Trade Slaughter" the past 30 years, aided and abetted by global elites and their apologists (including Barrons/WSJ/Dow Jones) -- from both parties.
Besides, what kind of price can you put on a cleaner GREENER environment? -- Which will be the natural effect of crushing (or reducing) Chi-Com manufacturing.
But hey, any excuse to continue screwing the American worker and send their jobs to Shanghai, right?
http://www.dailykos.com/stories/2016/12/27/1611811/-How-a-rigged-system-gives-CEOs-a-golden-retirement
Nick de Peyster
http://undervaluedstocks.info/