Why we Need Rich People

[citizenthom]

Banks don't loan money from investors (I'm pretty sure that it's illegal to do so). They loan money from accounts that people have.

And because the banks therefore become investors...yeah, you get how you're totally incorrect here, I hope.

All economies are driven one thing...people's expectations of the future (you have obviously never taken an Econ course as that's pretty much the very first things you learn).

Uh-huh. And what is the main manifestation of those expectations? Investment. Who invests? People with expendable income, mainly the rich. and now you've come around to a more complete understanding of economic truth.

The mechanism that drives the feedback loop that is supply and demand is the demand side not the supply side. The reason we know this to be true is that supply adjusts to meet demand, but demand does not adjust to meet supply.

That's because until people know what the supply is, they cannot make demand decisions. And who ultimately controls what the supply is? People who invest in the supply side.

Again, I hope you have now come around to understand how our economy actually works.

 

[kermit]

And because the banks therefore become investors...yeah, you get how you're totally incorrect here, I hope.

Banks aren't people. This thread is about rich people.

Uh-huh. And what is the main manifestation of those expectations? Investment. Who invests? People with expendable income, mainly the rich. and now you've come around to a more complete understanding of economic truth.

Wrong...again. The main manifestation of those expectations is spending habits; the spending power of the rich, while vast, cannot support an economy. Investment is the result of that spending. If people aren't spending people won't invest. Afterall, investments won't pay off without spending.

I work for a publically traded company. If we don't have sales no-one will invest in us and no amount of investment will create sales. We learned that lesson during the Dot Com bubble. Investment without revenue is a bubble that will pop as it is an unnatural economic state. Granted investment will allow us to respond to sales opportunities.

Please don't think for a second that I feel that investment is unimportant. But I think you and others are vastly overstating it's importance.

That's because until people know what the supply is, they cannot make demand decisions. And who ultimately controls what the supply is? People who invest in the supply side.

That is total and complete jiberish. Beyond marketing demand cannot be controlled.

Again, I hope you have now come around to understand how our economy actually works.

That's funny coming from a supply-sider that somehow thinks that supply drives demand in non-isolationist economies.

 

[wpiman2]

YouTube - Thomas Sowell on Intellectuals and Society

This notion of "the rich" is pretty misleading. We talk about the growing gap between the poor and the rich. What gets left out is that people move in and out of these categories. The wealthiest people often don't stay at the top; and neither do people at the bottom.

Prof Sowell from Stanford speaks to this. He said the bottom 20% of incoming earning tax payers in 1979; when you look at these individuals years later they are in a different category. Only 5% remained in the bottom 20%! Over half were in the top 50%/ and 29% were in the top 20%. Just over ten years! If that isn't social mobility I don't know what is!

 

[Harpuia]

YouTube - Thomas Sowell on Intellectuals and Society

This notion of "the rich" is pretty misleading. We talk about the growing gap between the poor and the rich. What gets left out is that people move in and out of these categories. The wealthiest people often don't stay at the top; and neither do people at the bottom.

Prof Sowell from Stanford speaks to this. He said the bottom 20% of incoming earning tax payers in 1979; when you look at these individuals years later they are in a different category. Only 5% remained in the bottom 20%! Over half were in the top 50%/ and 29% were in the top 20%. Just over ten years! If that isn't social mobility I don't know what is!

Actually, I tend to agree that for a long time, there was a lot of social mobility in America.

I'm just saying that they do have a point. The trend is leaning towards the first generation to have a period of mostly social inmobility. It's becoming harder and harder to move up the social scale right now, and every President has made steps to try to make it that way.

Basically, if you take the bottom 20% of incoming earning tax payers in 2009, by 2029, you won't see as radical a change.

EDIT: I was wondering if this was the same video one of my conservative "friends" tried to show me a while back to prove I was really just retarded, despite my high IQ. It is.

 

[wpiman2]

It's becoming harder and harder to move up the social scale right now, and every President has made steps to try to make it that way.

Basically, if you take the bottom 20% of incoming earning tax payers in 2009, by 2029, you won't see as radical a change.

Do you have any evidence to support this assertion?

 

[TheNewWorldMan]

Do you have any evidence to support this assertion?

Look, you can try and spin this any way you want, but clear and convincing evidence has already been posted in this and other threads that the gap between rich and poor is widening, and that the standard of living of the American working class is in decline. We all know it to be true. Look at how in the Sixties, a working man could support a stay-at-home wife, a mortgage, and two kids. Then by the Eighties, the wife had to get a part time job. Now, today, with both husband and wife working, a working-class family is just keeping its head above the water.

We have a real problem here. Denial is not only increasingly less convincing, but it's downright counterproductive. The working class knows better. They're not being fooled by the neoconservative mantra.

 

[Brother_Mark]

The wealthy not only provide sustenance for the nation, but give money ( or used to ) to evangelistic organizations that spread the Gospel of Christ.

Under both Republican and Democrat leadership, the wealthy are now taxed to such an extent ( I beleive I read that nearly 70% of the taxes are now paid by those making over $300k a year ) that they will eventually take their hard earned money and move it offshore or to another country ( as they have the right under the freedom to do so ) leaving the nation without risk capital to regenerate financial success. Once "the goose that lays the golden egg is gone", the citizenry of our nation will face true depression, lack of food, lack of jobs, and a loss of confidence in the free market system leading eventually to a cycle of discipline for our nation.

Our nation has turned against Bible Doctrine and the Gospel Message of Christ and will, eventually reap the whirlwind of our negative volition toward Him.

In Christ,
Brother Mark

 

[TheNewWorldMan]

The wealthy not only provide sustenance for the nation, but give money ( or used to ) to evangelistic organizations that spread the Gospel of Christ.

Under both Republican and Democrat leadership, the wealthy are now taxed to such an extent ( I beleive I read that nearly 70% of the taxes are now paid by those making over $300k a year ) that they will eventually take their hard earned money and move it offshore or to another country ( as they have the right under the freedom to do so ) leaving the nation without risk capital to regenerate financial success. Once "the goose that lays the golden egg is gone", the citizenry of our nation will face true depression, lack of food, lack of jobs, and a loss of confidence in the free market system leading eventually to a cycle of discipline for our nation.

Our nation has turned against Bible Doctrine and the Gospel Message of Christ and will, eventually reap the whirlwind of our negative volition toward Him.

In Christ,
Brother Mark

Yes, because Jesus was sooooooo about making the rich richer. Like when He went out to the multitudes, stole all their bread, and presented it to the aristocrats in His Father's name. Right? He just spent His life going from one executive soiree to the next, no?

Riddle me this then: how, with marginal tax rates on the wealthy TWICE as high as they are today, did America in the Sixties still send out missionaries, defend half the planet, have a standard of living second to none, and put men on the moon?

Tell you what--you abase yourself before the rich all you want, go lick Bill Gates's boots if you wish, but leave Jesus and the Gospel out of it. Go quote Atlas Shrugged; it seems to be the book you hew to the most.

 

[wpiman2]

Look, you can try and spin this any way you want, but clear and convincing evidence has already been posted in this and other threads that the gap between rich and poor is widening, and that the standard of living of the American working class is in decline. We all know it to be true. Look at how in the Sixties, a working man could support a stay-at-home wife, a mortgage, and two kids. Then by the Eighties, the wife had to get a part time job. Now, today, with both husband and wife working, a working-class family is just keeping its head above the water.

We have a real problem here. Denial is not only increasingly less convincing, but it's downright counterproductive. The working class knows better. They're not being fooled by the neoconservative mantra.

Huh, my grandmother had to work in the 50s and 60s. My grandfather was a police officer. Their life wasn't easy. They had one car and a house.

If you watched the video- you'd see that the gap has grown; but people move in and out of these different classes. 30% of the bottom 20% of earners end up in the top 20%. Many of the top earners fall off. They don't constantly stay there.

 

[chaz345]

Look, you can try and spin this any way you want, but clear and convincing evidence has already been posted in this and other threads that the gap between rich and poor is widening, and that the standard of living of the American working class is in decline. We all know it to be true. Look at how in the Sixties, a working man could support a stay-at-home wife, a mortgage, and two kids. Then by the Eighties, the wife had to get a part time job. Now, today, with both husband and wife working, a working-class family is just keeping its head above the water.

We have a real problem here. Denial is not only increasingly less convincing, but it's downright counterproductive. The working class knows better. They're not being fooled by the neoconservative mantra.

BUt the gap between the rich and the poor wasn't what was at issue. Mobility between those two groups was what was at issue.

As for both people "needing" to work, if you look at how much money most families spend servicing non-mortgage debt, it amounts to one of the two salaries. Average car payment is like $350 per month. Times two for most families and you've got a third to a half the take home of a decent second salary right there. Toss in a couple of credit cards and maybe a home equity line payment and the second salary is pretty much gone.

 

[chaz345]

Riddle me this then: how, with marginal tax rates on the wealthy TWICE as high as they are today, did America in the Sixties still send out missionaries, defend half the planet, have a standard of living second to none, and put men on the moon?

The fact that we were at that time the only vaguely functional economy on the planet might have something to do with it.

Tell you what--you abase yourself before the rich all you want, go lick Bill Gates's boots if you wish, but leave Jesus and the Gospel out of it. Go quote Atlas Shrugged; it seems to be the book you hew to the most.

Gates might not be the best example for you use. He's very liberal, but unlike most of them, he's devoted his life since cutting back on his duties at microsoft to most effectively giving away as much of his fortune to worthwhile causes as he can. IOW, instead of spending his money on political causes that will force others to "give" he's actually giving his own money. Imagine what could happen if other rich liberals, (Kennedy family, Sorros, Kerry) did the same. I might disagree with Gates politics, (and I hate his company's products) but I at least respect that he's putting his own money where his mouth is, something that can't be said for very many liberals.

 

[KarateCowboy]

the nation's wealth

Phokus, if people who disagree with you don't make much sense, I think this is why. I generally see things differently than you because of this. I do not think of sum of all property owned by individuals in this nation as "the nation's wealth". If you look through that paradigm then it makes property look like this collective thing that everyone automatically has a right to. If we took that paradigm to something like hair, then we should be plucking follicles from women and giving it to bald men. "90% of the hair among the elderly is possessed by women. This is simply not right!". If you see property as something that people can generate on their own through their own labor and hold separately from someone else's property then that is a big paradigm shift and lead's to entirely different conclusions.

 

[citizenthom]

I work for a publically traded company. If we don't have sales no-one will invest in us and no amount of investment will create sales. We learned that lesson during the Dot Com bubble. Investment without revenue is a bubble that will pop as it is an unnatural economic state. Granted investment will allow us to respond to sales opportunities.

Sales are more important to your established, individual company. Investment is more important to the new companies that should take your company's place when your products are no longer up-to-date or relevant, and therefore, investment is more important to the entire economy.

And, as we've already illustrated, your example--your own company--was itself funded by rich people's money from banks, so I can't understand why you seem to think it helps your argument.

That's funny coming from a supply-sider that somehow thinks that supply drives demand in non-isolationist economies.

Supply does drive demand. You can't have demand for a non-existent item.

I'm also confused by the term "supply-sider." I'm just describing to you how things work, empirically-speaking. That doesn't mean we should artificially inflate the supply side. It means we have to recognize that when we affect the supply of investment money by restricting personal wealth, we have to recognize that it will stifle innovation and new business growth.

 

[kermit]

Sales are more important to your established, individual company. Investment is more important to the new companies that should take your company's place when your products are no longer up-to-date or relevant, and therefore, investment is more important to the entire economy.

Sales/revenue are more important to all companies. In the late 90's we saw what happen when investment is not backed my revenue. It creates a bubble of over valued companies what eventually crashes.

As far as our products not being up to date. You couldn't be more wrong. We are the industry leader for innovation; we have for a long time and will continue to be for the foreseeable future. This is one of the reasons why our sales are strong which makes us attractive to investors.

And, as we've already illustrated, your example--your own company--was itself funded by rich people's money from banks, so I can't understand why you seem to think it helps your argument.

How do we know the money is rich peoples. In fact, it is well known that rich people don't keep much in banks.

Supply does drive demand. You can't have demand for a non-existent item.

Supply cannot drive demand. Products exist to satisfy demand for them. The existence of cars does not drive demand. Before the car was even invented there was a demand for a "horseless carriage". If what you say is true, not product would ever fail.

I'm also confused by the term "supply-sider." I'm just describing to you how things work, empirically-speaking.

You are describing how you think things work. You are are economics what ITT Tech is to technology.

That doesn't mean we should artificially inflate the supply side.

Agreed

It means we have to recognize that when we affect the supply of investment money by restricting personal wealth, we have to recognize that it will stifle innovation and new business growth.

You speak in very general terms even though reality proves you wrong. The mid-20th century saw tremendous innovation and growth yet the taxes on the rich were double what they are today. If any thing low taxes have hurt innovation and growth because those things have been replaced with quick profits.

 

[citizenthom]

Sales/revenue are more important to all companies. In the late 90's we saw what happen when investment is not backed my revenue. It creates a bubble of over valued companies what eventually crashes.

What does this have to do with our discussion? Your argument is that because some investments go bad, investment is not important?

Supply cannot drive demand. Products exist to satisfy demand for them. The existence of cars does not drive demand. Before the car was even invented there was a demand for a "horseless carriage".

Very nice way to disprove your own argument: you're saying demand is driven by people's imaginations, not by their evaluations of existing products. I suppose you think Star Trek has created a big, unsatisfied market for starships? Speaking of which...

You speak in very general terms even though reality proves you wrong. The mid-20th century saw tremendous innovation and growth yet the taxes on the rich were double what they are today.

And those innovations were driven by investments--government investments. It's well-recognized that most of the innovation of the mid-20th century was financed by war spending, then NASA spending. In other words, growth was driven by what the government wanted, much of which then turned out to have private applications (most notably computers and plastics).

And again, none of this vindicates your apparent argument that new business is driven not by investment by people with expendable income, but by people sitting around dreaming up products and then demanding someone invent them so they can buy them. Which is just plain odd.

 

[TheNewWorldMan]

Huh, my grandmother had to work in the 50s and 60s. My grandfather was a police officer. Their life wasn't easy. They had one car and a house.

If you watched the video- you'd see that the gap has grown; but people move in and out of these different classes. 30% of the bottom 20% of earners end up in the top 20%. Many of the top earners fall off. They don't constantly stay there.

Basic math says the situation is getting worse. Try "moving out" of the poor class if you have to work full-time at a dead-end job and have no time or resources for school.

We need to work on narrowing the gap, period. If the wealthy elite don't like it, let them leave America. They, too, can be replaced with lower-cost alternatives. I'm reasonably sure we can find people willing to push papers and play golf all day for $4 million a year rather than $10 million. Being a CEO is a pretty good gig.

 

[wpiman2]

Basic math says the situation is getting worse. Try "moving out" of the poor class if you have to work full-time at a dead-end job and have no time or resources for school.

We need to work on narrowing the gap, period. If the wealthy elite don't like it, let them leave America. They, too, can be replaced with lower-cost alternatives. I'm reasonably sure we can find people willing to push papers and play golf all day for $4 million a year rather than $10 million. Being a CEO is a pretty good gig.

I'd say 3/4 of the people I work with whom earn in the low to mid 6 figure salaries come from from poorer backgrounds. Mobility isn't an issue in the US.

 

[kermit]

What does this have to do with our discussion? Your argument is that because some investments go bad, investment is not important?

I never said any such thing. In fact I specifically said "Please don't think for a second that I feel that investment is unimportant". Is this how you debate, by misrepresentation?

Very nice way to disprove your own argument: you're saying demand is driven by people's imaginations, not by their evaluations of existing products. I suppose you think Star Trek has created a big, unsatisfied market for starships? Speaking of which...

You obviously don't understand what demand means.

And again, none of this vindicates your apparent argument that new business is driven not by investment by people with expendable income, but by people sitting around dreaming up products and then demanding someone invent them so they can buy them. Which is just plain odd.

Your ability to understand what I am saying is apparently as good at your ability to understand economics and business. Both of which you have no ability to do.

 

[keith99]

Wrong...again. The main manifestation of those expectations is spending habits; the spending power of the rich, while vast, cannot support an economy. Investment is the result of that spending. If people aren't spending people won't invest. Afterall, investments won't pay off without spending.

I work for a publically traded company. If we don't have sales no-one will invest in us and no amount of investment will create sales. We learned that lesson during the Dot Com bubble. Investment without revenue is a bubble that will pop as it is an unnatural economic state. Granted investment will allow us to respond to sales opportunities.

Please don't think for a second that I feel that investment is unimportant. But I think you and others are vastly overstating it's importance.

So you point to an ongoing concern. How about companies that are starting up? A lot there depends on the 'rich', rich meaning those with money to lose. It has been that way for centuries. Take the sailing ships of a couple of centuries ago. The Rich played a part, investing and accepeting risk. But so did the captians and crew. And with luck and hard work at least the officers could become rich. Or at least rich enough to have the choice of taking some of the same high risk/high reward ventures that existed, at the time.

All comes to balance of the mix. The rich who can and will invest in startup ventures are vital to a society, but they are not the only vital part of a society.

 

[variant]

People with large amounts of money are very unlikely to have much of it in liquid form. My grandmother was a fairly wealth woman, worth around $1M (in the 80's) before long-term care cost most of it, when my mother took over her finances she had about $900k in investments and only around $25k in the bank. I am by no means wealthy and I have close to that much in the bank.

That’s just because bank deposits are bad investments.

I am not entirely sure why other investments don't count....

If you own bonds the bond holder is doing the same thing as the bank. Using the money borrowed from you to invest somewhere else.

If you invest in stocks the company issuing the stock is doing the same thing.

All positive investments have the same basic principle behind them.