Economic Disparity

JackRT

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Today , 2 January 2018, it is 10:40 AM. By noon today the highest paid CEOs in the United States and Canada will already have earned more than you or I will make in the entire year.

What does this say about our society?

Is this a healthy situation?

Is this just?

How long will this continue?

Will this lead to a major political shake up or revolution?
 
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Albion

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Today , 2 January 2018, it is 10:40 AM. By noon today the highest paid CEOs in the United States and Canada will already have earned more than you or I will make in the entire year.

What does this say about our society?
What it says to me is that those CEOs have been far more creative and productive than I have been since the beginning of the year.

There is nothing admirable about thinking that everyone ought to be paid the same as everyone else, regardless of the value of each one's input or accomplishments!
 
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expos4ever

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It is not a healthy situation, of course. However, I am confident that democratic nations will sort themselves out on this in a peaceful manner. On the other hand, money buys political power and the ultra-wealthy have many means at their disposal to ensure that wealth continues to flow to them.
 
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expos4ever

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There is nothing admirable about thinking that everyone ought to be paid the same as everyone else, regardless of the value of each one's input or accomplishments!
No one here has said this.
 
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Albion

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No one here has said this.
I didn't say that anyone did. However, that is usually what is in the mind of the person who bemoans the fact that some are paid more than others and does not also mention the fact that some people earn more than others because they are more productive than others.
 
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1am3laine

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Everyone is NOT created equal. Everyone is given their own talents and abilities and we have to use those to get greater and greater.

example: The parable of Talents ( matthew 25:14-30 kjv)
you will notice all of them were even different amounts so some people are greater than others even at the beginning.

All should NOT be paid the same but with society there are people who are making TOO much for the nothing that they do. But, this only happens because satan is the god of this world. ( 2 corinthians 4:4 )
 
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JackRT

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I have no problem at all with rewarding expertise and hard work. Workers too have their own expertise and most work very hard. The thing that bothers me most is the immense discrepancies. When I was a young man in the 60s, it was typical that a CEO made about ten times what the lowest paid full time worker in his company made. That seems to me to be not unfair. But today, CEOs can sometimes make more than a thousand times. They are "paid" this but did they really "earn" it?
 
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Doulosiesou

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Today , 2 January 2018, it is 10:40 AM. By noon today the highest paid CEOs in the United States and Canada will already have earned more than you or I will make in the entire year.

What does this say about our society?

Is this a healthy situation?

Is this just?

How long will this continue?

Will this lead to a major political shake up or revolution?

Hey Jack, I've been studying economics as an arm chair observer for many years. What I have learned over this time is that most corporations make money by utilizing credit available from the banking system. That is, they have access to credit at rates which are below what the market would normally set. They then use that credit in the form of issuing bonds to do things like buy back their own stock in order to inflate the price.

I guess what I'm trying to say, and I know this can be a hot button topic, is that our banking system can affect the price of money artificially, instead of allowing market forces to determine the cost of money (credit). This creates distortions, and mal-investments. Companies that should fail are allowed to exist by using credit. A lot of the credit they use is 'rolled' over at lower rates of interest in the future.

The Bible has a lot to say about economics, and money. Control of money via regulations and laws hides risk, and risk is an important element in finance. By hiding risk people are forced into more risky assets. For instance the commercial banks have artificially lowered interest rates forcing savers into more risky assets like stocks without realizing the risk involved.

In general I see no problem with companies making large profits if they provide a general prosperity for everyone, that is a beneficial wealth which benefits everyone in the economy and capital formation can occur, that is seen in higher rates that banks pay to depositors. But our rates have been set artificially by the banking system, regulated by the fed and other central banks of the world. That means their gains are artificial, and you see that periodically in the business cycle when the financial markets are finally allowed to function and purge the mal-invested debts.

If you are interested in learning more I recommend visiting sites like mises.org that discusses the principles of the business cycle which are a result of artificially setting the cost of money via the central banks.
 
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JackRT

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example: The parable of Talents ( matthew 25:14-30 kjv)
you will notice all of them were even different amounts so some people are greater than others even at the beginning.

The traditional understanding of some parables is not necessarily the correct understanding:
Parable of the Talents

The parable of the Talents (Mt 25:14-28) is about a servant who acts honorably by burying money given in trust, courageously denouncing an exploitive master, and as a result is consigned to extinction for his audacity.

Most people understand the story as Matthew has (cf. Lk 19:12-24). But his concluding editorial, "To all those who have, more will be given, but from those who have nothing, even what they have will be taken away" is at odds with everything else Jesus says on the subject of haves and have-nots (Mk 10:25/Mt 19:24/Lk 18:25; Mt 6:19-21/Lk 12:33-34; Mt 19:30; Mt 20:16; Lk 6:24; Lk 16:19-31); and Jesus was obviously no capitalist. Matthew's editorial implies that the first two servants are the heroes of the story, which Jewish peasants would have found outrageous.(1)

As Richard Rohrbaugh and William Herzog have demonstrated -- though in very different ways, as we will see -- the third servant is the hero of this parable, because he acted honorably and refused to participate in the rapacious schemes of the master. Contrast with the agenda of the first two servants:

"First things first: the master's initial investment must be secured, then doubled; after that, the retainers can make their profit. They are always walking a tightrope, keeping the master's gain high enough to appease his greed and not incur his wrath while keeping their own accumulations of wealth small enough not to arouse suspicion yet lucrative enough to insure their future. The master knows the system too, and as long as the retainers keep watch of his interests and maintain a proper yield, he does not begrudge their gains. In fact, he stands to gain a great deal by encouraging the process. Not only do the retainers do his dirty work, exploiting others for profit, but they siphon off anger that would otherwise be directed at him." (Herzog, Parables as Subversive Speech, p 160).

The first two servants do exactly as expected of them, doubling the master's money and presumably making some "honest graft" on the side, as all retainers did in agrarian empires. But the third servant acts completely out of character -- this alone is the tip-off that he will be the story's hero -- by digging a hole and burying the master's money to keep it intact, acting in accordance with Jewish law.(2)

When the master (naturally) rewards the two servants, the third servant acts stunningly by blowing the whistle on him (as Herzog puts it), while at the same time giving him back the money he had buried in trust: "Master, I know that you are a hard man, reaping where you did not sow, gathering where you did not scatter." This retainer says what every peasant has always wanted to say.

An alternate version of this parable was preserved in the Gospel of the Nazorenes (now lost), reported by Eusebius. Here the third servant is accepted with joy, while the other two are condemned. In "A Peasant Reading of the Talents/Pounds", Rohrbaugh notes the chiastic structure:

The master had three servants:

A one who squandered his master’s substance with harlots and flute girls
B one who multiplied the gain
C and one who hid the talent;

and accordingly,

C’ one was accepted with joy
B’ another merely rebuked
A’ and another cast into prison.

(Eusebius, Theophania; from Hennecke & Schneemelcher, New Testament Apocrypha 1:149)

Though I'm eternally suspicious of arguments based on chiastic structures, this one is powerful. Here we have an ancient author who rejected the Matthean judgment on the third servant, while modern critics insist on vilifying him.

Like many of Jesus' parables, the Talents ends on dark ambiguity. "The whistle-blower is no fool," says Herzog. "He realizes that he will pay a price, but he has decided to accept the cost (p 167)." The question is who his friends are after banishment. Will peasants acknowledge and respect his honorable course of action, or would the fact that he was a retainer make such meeting of the minds impossible? Listeners are left pondering the fate of an unlikely hero.

Endnotes

1. The ways in which critics have followed Matthew's (and Luke's) demonizing of the third servant are astounding. C.H. Dodd thinks that the third servant's "overcaution" and "cowardice" led to a breach in trust. T.W. Manson believes that the punishment for the third servant's "neglected opportunity" was a complete "deprivation of opportunity". Dan Via says the third servant's "refusal to take risks" led to repressed guilt and the loss of opportunity for any meaningful existence. John Donahue thinks that out of "fear of failing", the third servant refused even to try to succeed. The list could go on and on. (See Herzog, p 153.)

2. According to the Mishnah, money could be guarded honorably only by placing it in the earth: M.B. Mes. 3:10; B.B. Mes. 42a.

Bibliography

Eusebius: Theophania (from Hennecke & Schneemelcher, New Testament Apocrypha, Westminster, 1963.)

Herzog, William: Parables as Subversive Speech, Westminster John Knox, 1994.

Malina, Bruce & Rohrbaugh, Richard: Social Science Commentary on the Synoptic Gospels, Second Edition, Augsburg Fortress, 2003.

Rohrbaugh, Richard: "A Peasant Reading of the Talents/Pounds: A Text of Terror", BTB 23:32-39, 1993.[/quit]
 
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Almost there

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Today , 2 January 2018, it is 10:40 AM. By noon today the highest paid CEOs in the United States and Canada will already have earned more than you or I will make in the entire year.

What does this say about our society?

Is this a healthy situation?

Is this just?

How long will this continue?

Will this lead to a major political shake up or revolution?
Only if envy wins.
 
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It is not a healthy situation, of course. However, I am confident that democratic nations will sort themselves out on this in a peaceful manner. On the other hand, money buys political power and the ultra-wealthy have many means at their disposal to ensure that wealth continues to flow to them.
The situation will become healthy when Christ returns, and not before. ;)
 
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Albion

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I have no problem at all with rewarding expertise and hard work. Workers too have their own expertise and most work very hard. The thing that bothers me most is the immense discrepancies.
Ah. Well then, let's discuss that instead.
 
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1am3laine

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The traditional understanding of some parables is not necessarily the correct understanding:

[Bible Gateway passage: Matthew 25:14-30 - King James Version]

In Mattehw 25:15 He gave the talents according to their ability if you read the kjv.
So People are NOT equal and some should have more than others.

Still GOD said In Matthew 26:11 the poor you will always have. So no matter how much you try to stop it, it will always be here.
 
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JackRT

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Doulosiesou

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If people would think about investing their savings locally, then local businesses can grow and then that creates more prosperity for everyone. Personally, I think our problems are related to scale. People put their money in stocks or bonds which to me is like hiding their savings under the rock. They trust the system to grow their money instead of taking personal responsibility and re-investing it back into their local economies.

We think that because the markets are so big and grow so quickly that being part of them will assure our savings, for our retirement or family. But there are a lot of hands in-between your investments and your savings, each hand along the way wants a cut. So, in other words we have a financial system that is disproportionate to the size of the real economy where people work for a living. This disproportionate size is what allows executives to reap such large gains, not in providing a valuable or useful service to the economy.

Just my opinions on the matter.
 
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The traditional understanding of some parables is not necessarily the correct understanding:

I think this says more about Herzog's politics than the actual biblical text's meaning in the first century. Jesus uses authority figures to represent God in other parables, for instance, in the parable of the Shrewd Manager (Luke 16).

Joachim Jeremias offers a more realistic interpretation, that the servant who buries his talent in the ground represents the religious establishment of Israel who has squandered what God has given them and will soon face judgment.
 
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Doulosiesou

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I think this article is really good:

_________________________________

Credit is the foundation of the current financial system, for credit enables consumers to bring consumption forward, that is, buy more stuff today than they could buy with the cash they have on hand, in exchange for promising to pay principal and interest with their future income.


Credit also enables speculators to buy more assets than they otherwise could were they limited to cash on hand.


Buying goods, services and assets with credit appears to be a good thing: consumers get to enjoy more stuff without having to scrimp and save up income, and investors/speculators can reap more income from owning more assets.


But all goods/services and assets are not equal, and all credit is not equal.


There is an opportunity cost to any loan (i.e. credit), as the income that will be devoted to paying principal and interest in the future could have been devoted to some other use or investment.


So borrowing money to purchase a product or an asset now means foregoing some future purchase.


While all products have some sort of payoff, the payoffs are not equal. If I buy five bottles of $100/bottle champagne and throw a party, the payoff is in the heady moments of celebration. If I buy a table saw for $500, that tool has the potential to help me make additional income for years or even decades to come.


If I’m making money with the table saw, I can pay the debt service out of my new earnings.


All assets are not equal, either. Some assets are riskier than others, with a less certain income stream or payoff. Borrowing to buy assets with predictable returns is one thing, buying assets with highly speculative returns is another; regardless of the eventual result of the investment, the borrower still has to pay interest on the debt, even if the speculative investment goes bust.


Less than 1/2

The Inescapable Reason Why the Financial System Will Fail
 
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I think this article is really good:

_________________________________

Credit is the foundation of the current financial system, for credit enables consumers to bring consumption forward, that is, buy more stuff today than they could buy with the cash they have on hand, in exchange for promising to pay principal and interest with their future income.


Credit also enables speculators to buy more assets than they otherwise could were they limited to cash on hand.


Buying goods, services and assets with credit appears to be a good thing: consumers get to enjoy more stuff without having to scrimp and save up income, and investors/speculators can reap more income from owning more assets.


But all goods/services and assets are not equal, and all credit is not equal.


There is an opportunity cost to any loan (i.e. credit), as the income that will be devoted to paying principal and interest in the future could have been devoted to some other use or investment.


So borrowing money to purchase a product or an asset now means foregoing some future purchase.


While all products have some sort of payoff, the payoffs are not equal. If I buy five bottles of $100/bottle champagne and throw a party, the payoff is in the heady moments of celebration. If I buy a table saw for $500, that tool has the potential to help me make additional income for years or even decades to come.


If I’m making money with the table saw, I can pay the debt service out of my new earnings.


All assets are not equal, either. Some assets are riskier than others, with a less certain income stream or payoff. Borrowing to buy assets with predictable returns is one thing, buying assets with highly speculative returns is another; regardless of the eventual result of the investment, the borrower still has to pay interest on the debt, even if the speculative investment goes bust.


Less than 1/2

The Inescapable Reason Why the Financial System Will Fail
Good article. I see credit as a double edged sword. And the most dramatic example of the impact of credit is the proliferation of expensive items in the hands of the average citizen.

Imagine, without credit, how many people would be employed at Harley Davidson, General Motors, Ski-Doo, etc.
 
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Doulosiesou

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So when nearly everything is credit (our capital is slowly dying which is reflected in the super low interest rates) then the risk for 'investments' is masked. The investor doesn't know if it will be profitable, they just know all the indexes are going up. But a lot of that credit was used in consumption, stock buybacks are a very good example of consumption, the bonds the corps issue are then used to buy back stock, that's pure consumption it's not investing in new hardware, or employees or research and development.

The CEOS then make a lot of money through the financial engineering which is all based off of credit, not productivity.
 
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Doulosiesou

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Good article. I see credit as a double edged sword. And the most dramatic example of the impact of credit is the proliferation of expensive items in the hands of the average citizen.

Imagine, without credit, how many people would be employed at Harley Davidson, General Motors, Ski-Doo, etc.

Yes, fire and credit are both kind servants but cruel masters.
 
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