# Some Questions on Income Disparity



## Bill Mattocks (Oct 20, 2011)

I hear and read a lot about how the _'middle class is disappearing'_ and the conclusion that _'this is a bad thing'._  So I have two basic questions.

1) Is the Middle Class actually disappearing?

2) If true, is this necessarily a bad thing?

I recognize that no matter how one represents what the 'middle class' is, the growth of real income (adjusted for inflation and cost-of-living) since WWII has slowed considerably with reference to the growth of real income to those termed the 'ultra-rich'.  But that statement does not in itself imply that a correction is either needed or desired.  I read a lot of arguments that capture the condition and demand a 'fix' without describing what the problem is.  In other words, yes, the rich are getting richer faster than the middle class is getting richer.  And that is bad because?

It seems to me that a more valid statement from which one can develop a hypothesis of a problem and then a plan of action to resolve is it this; is the class in poverty increasing?

There is no doubt that poverty is up in recent years:

http://www.census.gov/newsroom/releases/archives/income_wealth/cb10-144.html



> The nation's official poverty rate in 2009 was 14.3 percent, up from 13.2 percent in 2008  the second statistically significant annual increase in the poverty rate since 2004. There were 43.6 million people in poverty in 2009, up from 39.8 million in 2008  the third consecutive annual increase.


However, the same study found that...



> The poverty rate in 2009 was the highest since 1994, but was 8.1 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available. The number of people in poverty in 2009 is the largest number in the 51 years for which poverty estimates are available.



This would seem to indicate to me that since 1959, poverty rates have declined 8% even relative to today's numbers.  Taken strictly as a yardstick measurement, if 8% fewer of us live in poverty, then one must assume that those have joined the middle or upper classes financially.  What else could this mean?

Put another way, if the middle class is indeed shrinking, where are they going?  If the poverty level is increasing at the same time, one can argue that they are falling from middle class into poverty.  However, is the upper class growing?

I could not find much information online to support a yes or no answer.  I did find this:

http://austrianeconomists.typepad.com/weblog/2009/08/more-evidence-that-were-all-getting-richer.html

But since the data is only as recent as 2006, it does not include the recent recession, and I'm relatively sure that the percentages have changed since that time.

http://freemarketmojo.wordpress.com...shrinking-because-the-upper-class-is-growing/

But this leads me to a curious thought.

If, as it would appear at a glance, that the percentage of people below the poverty line has fallen by 8% since 1959, even including the current recession-caused increase in the numbers of people poverty, and the percentage of people becoming wealthy is increasing (or it was, again prior to the current recession), then it is reasonable to draw two conclusions.

The first is that the 'shrinking middle class' is caused by several things.  People getting more wealthy, thus leaving the middle class, and the recession, which has caused an increase in poverty and (I presume) a decrease in those moving from middle class to upper class.  However, minus the recession, the trend has been UP and not DOWN.

The second is that real problem is the recession and not the distribution of wealth.  In other words, it is not the 1% that need to be attacked, but the recession that needs to be ended.

Is attacking the ultra-rich a valid way to end a recession?  I suspect it would not be terribly efficacious.

_As an aside, I just want to add once more before this discussion gets going, that I seldom read arguments against the ultra-rich that do not include value judgments about the morality of their wealth; that is, that they "didn't earn it" or that they are otherwise evil, greedy, bad people.  If you're planning to introduce those elements as a reason for the income disparity to be changed, I am going to reject your argument as hate-based and not logic-based.  Don't tell me how you feel about rich people, tell me why their wealth should be confiscated and what good that will do to the recovery. Thank you._


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## decepticon (Oct 20, 2011)

All I can provide is my own experience. We were previously comfortably middle class. Then we were hanging by our fingernails from the bottom of the middle class. Currently we are sitting (not so pretty) on the top of the lower class heap. But I fear our downward slide may not have ended yet.

To provide a more concrete example, we used to go buy a new car every 5 or 6 years. Brand new, usually a midpriced or even lower priced option. Then we were limited to the loss leaders with no radio or carpeting. Then we found ourselves buying from the used-but-nice market. Now, my husband recently paid $3000 for his most recent Toyota. And we have another car that we paid $1000 for. All the while, the price of gas goes up, the price of groceries goes up, the cost of our utilities goes up, the cost of nearly every single item we buy goes up. However, my husband's income does not go up.

I work hard to be frugal and save as much as I can at every turn. I try to work part time online from home to earn additional income. But I'm not sure how long we will be able to continue on with life as we know it if things continue this way.

So I can't say whether the middle class in general is shrinking and why the numbers aren't showing more people living in poverty. But I can honestly say that I am getting more than a little nervous out here on our little farm. We will not starve, since we have the ability to grow our own food, but I feel that we are being pushed further and further outside of the mainstream economy.


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## Bill Mattocks (Oct 20, 2011)

decepticon said:


> All I can provide is my own experience. We were previously comfortably middle class. Then we were hanging by our fingernails from the bottom of the middle class. Currently we are sitting (not so pretty) on the top of the lower class heap. But I fear our downward slide may not have ended yet.
> 
> To provide a more concrete example, we used to go buy a new car every 5 or 6 years. Brand new, usually a midpriced or even lower priced option. Then we were limited to the loss leaders with no radio or carpeting. Then we found ourselves buying from the used-but-nice market. Now, my husband recently paid $3000 for his most recent Toyota. And we have another car that we paid $1000 for. All the while, the price of gas goes up, the price of groceries goes up, the cost of our utilities goes up, the cost of nearly every single item we buy goes up. However, my husband's income does not go up.
> 
> ...



I have no reason to doubt you, and I have great sympathy for you; I hope things improve for you.  And I do not mean to belittle your experience, but to look at the system, one must look at the aggregate, not individual cases.

The questions of course are whether or not what is true for you is true for all, and if so, if stripping wealth from the ultra-wealthy will fix it.


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## Steve (Oct 20, 2011)

Specific classes of people are being better protected from the cyclical nature of the economy.  The elderly are a perfect example, in large part directly attributable to Social Security.  In the early 60's, poverty for seniors overall was in the middle 30%.  It's under 10% now.  Black senior poverty rate in the mid-60's was over 60%.  It's hovering just over 20% now.  While these individuals are going to be included in studies on poverty, the remarkable progress America has made in helping these individuals live independently in their old age does not have a bearing on middle class, working families.

Another area to explore is the lower-middle/working poor class.   I'd like to know how you define middle class.  What does the term mean to you?  

It also seems to me to be a little premature.  While certainly, there was a spike in income even as late as 2008.  Income for many was inflated and quality of life was shown for many to be a house of cards.  Over the last 2 or 3 years, that house of cards has crumbled.  I think, as we see the statistics come in over the next few years, the "faux" upper class will fade, and as we pull out of the recession, things will settle toward the middle.

I posted a couple of links in some other threads.  Bill, did you read those articles?  If so, I'd really like to know where you disagree and why.  Also, IRS.gov also has tons of statistical information available on income and wealth.


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## decepticon (Oct 20, 2011)

Thanks for the sympathy. I did not mean to complain nor to give the impression that we are suffering or unhappy. We are not. It is what it is.

I understand that one individual case does not always equal the aggregate, but at least in my area, we are considered to be among those who are doing fairly well. There are hundreds who are not getting along as well as we are. The local food pantries are running on empty.

My concern is that it is so easy for the "agregate surveyors" to miss certain segments of the population and thereby underrepresent them in the results. Do they have a system to identify and quantify those who fell off the bottom of the lower class like we did from the middle class? What happens to those who have moved in with relatives because they can no longer afford to maintain a separate residence? What about those who were clinging to their sanity by a thread and who now wander from shelter to shelter - the thread having apparently snapped? (I'm not all that far from where all the wild animals were released when their owner recently committed suicide)

We live in an area where it is not all that unusual for someone to just retreat from society and go hole up in the hills around here. I sincerely doubt they are being counted by anyone.

I wonder whether any of those statistics spinners or bean counters or whoever have any real idea of just how many people do not fill out census forms or get represented on any other lists. Perhaps it is those people who fall off the bottom but leave no easily measurable trace.


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## Steve (Oct 20, 2011)

Bill, I also have to wonder, how is this thread different than your other thread, "The Evil of Being Wealthy?"  In both, you seem to be making the same points, and the same presumptions that anyone who disagrees must hate wealth.


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## JohnEdward (Oct 20, 2011)

Bill, 

One simple indicator per your inquiry individual vs "aggregate" qualifier is the middle class income doesn't require two incomes to live, much less live comfortably. One measure is amount of disposable income based on a single income. Third your salary. You have a healthy savings, and enough money for retirement and other such investments   There is a difference of living "like" middle class and being middle class and often that gets confused. Being "like" middle class is not in the middle class, it is being in a lower income level and trying to live a middle class existence, though coupon clipping, double income, selling one child or a limb, etc. just to save money to meet the minimum financial needs, with very little disposable cash. Where as middle class doesn't need to scrimp and save their salaries pay enough for a comfortable living, a savings, meeting all financial needs, able to make invests, able to deal with inflation. and have a healthy disposable income to a certain level. For example, a doctor would be middle class by today's standards. A nurse isn't but could live "like" middle class, if no kids, and really tightened the purse strings, and still not having all the financial benefits of a true middle class.

There is a grave distinction between those who truly are middle class and those struggling to "live" like middle class. I think many confuse the two on purpose and distort the size of the middle class to seem bigger,  just to  place more of a tax burden on  the middle class the ones who truly pick up the tab.


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## Bill Mattocks (Oct 20, 2011)

stevebjj said:


> Bill, I also have to wonder, how is this thread different than your other thread, "The Evil of Being Wealthy?"  In both, you seem to be making the same points, and the same presumptions that anyone who disagrees must hate wealth.



The two threads are not the same; or at least I did not intend them to be.  In the first, I asked the question _"is merely having wealth evil,"_ since it appears that many use emotional terms and imply immorality to wealth itself when talking about the accumulation of it.  In this thread, I am attempting to ask two things.  First, is the middle class actually shrinking (and subset of that, if it is, does that mean people are getting richer or poorer) and second, if there is a growing disparity between the rich and the poor, is that, by itself, a bad thing?

I will admit that I am cogitating on some fundamental questions here.  I like to get to root causes when I can.  If we say that the _'1%'_ are responsible for the misery many of us are experiencing, will removing the wealth from the 1% fix it?  And likewise, when we talk about the 'vanishing middle class', is that a) true and if so, then b) is that bad?  It seems we tend to describe something and then proceed to how to fix it without explaining in what way it is a problem.

An analogy might be _"Gravity is increasing in some parts of the world and decreasing in others!  We must stop this inequality!" _ OK, first question, is the first statement true?  Turns out that yes, it is; the earth is becoming more oblate - that is, it is getting fatter at the equator.  Second question, is that a bad thing?  The answer appears to be that we don't know.  It's happening, but what does it mean to us?  And that of course casts doubt on the statement that we must do something about it.  Seems we're going from A to C without stopping at B first.  I'm just trying to go back and see if the problem a) is a problem and b) if it needs fixing.  Never mind if the proposed solution c) will fix it.


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## Bill Mattocks (Oct 20, 2011)

JohnEdward said:


> One simple indicator per your inquiry individual vs "aggregate" qualifier is the middle class income doesn't require two incomes to live, much less live comfortably. One measure is amount of disposable income based on a single income. Third your salary. You have a healthy savings, and enough money for retirement and other such investments   There is a difference of living "like" middle class and being middle class and often that gets confused. Being "like" middle class is not in the middle class, it is being in a lower income level and trying to live a middle class existence, though coupon clipping, double income, selling one child or a limb, etc. just to save money to meet the minimum financial needs, with very little disposable cash. Where as middle class doesn't need to scrimp and save their salaries pay enough for a comfortable living, a savings, meeting all financial needs, able to make invests, able to deal with inflation. and have a healthy disposable income to a certain level. For example, a doctor would be middle class by today's standards. A nurse isn't but could live "like" middle class, if no kids, and really tightened the purse strings, and still not having all the financial benefits of a true middle class.
> 
> There is a grave distinction between those who truly are middle class and those struggling to "live" like middle class. I think many confuse the two on purpose and distort the size of the middle class to seem bigger,  just to  place more of a tax burden on  the middle class the ones who truly pick up the tab.



I agree that it is difficult get get any agreement on what is and is not the 'middle class'.  As you pointed out (and others have as well), a single person living on 30K a year is in a different class based on their standard of living than a family of four living on that same 30K a year.

However, the data I'm looking at are objective in the sense that they are strictly looking at inflation-indexed dollars.  I realize that since even the definition of income and family has changed radically in many ways, even this is not objective; but it may be the best yardstick we have.

Basically, you can draw the line between lower class, middle class, and upper class anywhere you like.  The question is where income is going relative to those lines, no matter where you place them.

I also noted, but decided to leave out, some comments I read while reading online that some statisticians have noted that the biggest increase in the 'disparity' between the richest 1% and everyone else has been in Silicon Valley and NYC.  If you leave out those numbers, the increase in the rest of the country is remarkably consistent.  In other words, income rises and falls together and is NOT more disparate if you take out the Information-Age based new wealthy.  Interesting stuff, eh?


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## Bill Mattocks (Oct 20, 2011)

stevebjj said:


> Another area to explore is the lower-middle/working poor class.   I'd like to know how you define middle class.  What does the term mean to you?



I don't know, because it's not an objective marker.  What's middle class?  I presume that I've been middle class all my life; from my earliest days earning $9K per year in the military (yes, that's $9,000 per year) to the present, which is down %30 from my personal high-water mark in 2004.  By that I mean that I've always had enough to pay my housing, food, necessary expenses, and had a small amount of disposable income left over each paycheck.  I would tend to believe that 'lower class' means you either cannot meet your required expenses, or you have zero disposable income.  I don't know what that number is, and I suspect it's radically different based on people, regions, family size, financial obligations, and so on.

But that's kind of a side-track, isn't it?  The point being hurled about is that income disparity is increasing, and the (mostly unstated) premise is that it is because the middle class is vanishing and becoming poor.  While the number below the poverty line (not my definition, but the one the government appears to be using) is increasing, it's still down 8% from 1959.  One must ask therefore if the middle class really is vanishing, and if so, does it mean they are all getting poorer, or are they getting richer?  I suspect some of both, eh?  And taken as a whole, does this indict the system that has led us here.

When someone says _"There is an imbalance,"_ I must ask what the imbalance is first.  If I agree that there is in fact an imbalance, the next question is, to put it rather bluntly, _"so what?"_  An imbalance by itself does not imply that something is broken and needs to be fixed.



> I posted a couple of links in some other threads.  Bill, did you read those articles?  If so, I'd really like to know where you disagree and why.  Also, IRS.gov also has tons of statistical information available on income and wealth.



Not sure.  I've stayed out of some threads as they have become caustic.


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## JohnEdward (Oct 20, 2011)

Bill Mattocks said:


> I agree that it is difficult get get any agreement on what is and is not the 'middle class'.  As you pointed out (and others have as well), a single person living on 30K a year is in a different class based on their standard of living than a family of four living on that same 30K a year.
> 
> However, the data I'm looking at are objective in the sense that they are strictly looking at inflation-indexed dollars.  I realize that since even the definition of income and family has changed radically in many ways, even this is not objective; but it may be the best yardstick we have.
> 
> ...



Hmmm..yes... terms are ambiguous and abstract such as middle class, lower and upper. Old vernacular it was poor, rich and everyone else in between. Terminology isn't the real problem.  Yes, back in my day a Doctor wasn't considered middle class, but upper class wealth. Middle management was middle class, and one income was enough. Now I understand what you are seeing, the existence of the "new rich" was brought to our social conscious with a new industry. And in that time there was a boom in wealth. Silicon Valley make many people rich, it was the new gold rush. During that time the middle class was losing ground, and many people had the opportunity to capitalize on that wealth. It was a shot in the arm to both the middle class and the upper class. But that is what it was a shot into a diminishing middle class.  Currently, computer technology isn't making people rich as it did, the gold mine is tapped, and people are mining for flakes and not nuggets. But those who do mine enough flakes remind us of the good old days when money was being made. And there are still people who maintained their "Eurekas" and are still wealthily.  Then there are those who do become wealthy because of getting lucky in starting their own business etc. That all ways has been and they too move up into the middle and wealthy classes. But that isn't a whole lot of people.  I think this is what people are measuring. I don't believe it is enough to constitute a middle class revival.  The housing bubble was driven by easily attainable loans. Not by affordability due to income, or by traditional loan approval requirements. This too is another measure of the health and size of the middle class being sickly, because so many people borrowed to buy a home, the bulk of the people buying homes where first time home buyers who would have normally been rejected for a loan. That is because they didn't have the money in the first place.  Now, imagine if there was a healthily middle class who by normal qualification standards would qualify for a 15-30 year home loan that  instead drove the housing market. If that happened we would have had institutions collapse and all the other ugly things that happened? Would we the tax payer have to bail out the "too big to fail" institutions?   That for me is the most accurate indicator of an of yes, to your questions.  A middle class is disappearing and it is a bad thing. The question on my mind is will the middle class disappear completely. How bad will that hurt this country...as we can see and I have said so many times before a healthy middle class keeps us from being a modern third world country with all the related problems, where there is a great disparity of wealth.


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## MA-Caver (Oct 20, 2011)

Bill Mattocks said:


> I hear and read a lot about how the _'middle class is disappearing'_ and the conclusion that _'this is a bad thing'._  So I have two basic questions.
> 
> 1) Is the Middle Class actually disappearing?
> 
> 2) If true, is this necessarily a bad thing?_._



I dunno if it's actually disappearing. From my standpoint it's dwindling but not fading away. You can drive 5-15 minutes outside any major city and find yourself in sprawling middle class neighborhoods. Ironically the further out you go the better the neighborhoods because it not as old. As long as companies have a need for middle level management positions, supervisors ... people who generally get better pay than the laborer/office worker of the company... you're going to have middle class. 
From what I've seen there are three levels of middle class people. Lower Middle and Upper... all based on income variances ranging from $15-20K to upwards of $100K in annual salaries (and all points in between). As people move into higher salary brackets they tend to move into better neighborhoods when they have the money saved up or their banks  say that they can afford a bigger house/mortgage. 

Is it a bad thing? Well basically yeah. Without the middle class worker a lot of things can get bogged down because there's no middle-level management (supervisors, foremen, et al) to help run the labor portion of the business. Higher officers, i.e. Management which include, area, regional, divisional etc. are having to cover larger areas or more stores which take up a lot of time. But their income is in the "upper-middle class" range ($75-100K + ). 
Also losing the middle class takes away the incentive for the "lower-class" people to aspire to. There are many who know if they work long enough, hard-enough in a company that promotions DO take place... granted it could be a long slow process but sometimes depending upon a company's growth they can rapidly advance. It's happened to me before so I know it's an achievable position. So you have a group of people who know the so-called reality of hard-work and the "fruits" their labors can produce. Better homes, better cars, better lifestyles. 
Of the lower class I tend to put them into two social groups. The first being upper lower class which means the ones who are the laborers, the workers just starting out but still living in that crappy neighborhood where they just might wake up one morning and find their car sitting on cinderblocks and the wheels/tires are gone and now they have to take the bus to work everyday until they scrimp and save to buy new tires/wheels. The other are the "true" lower class which have stolen the tires. But they're not all criminals of course, just people with hard-luck lives. Poor work history, bad circumstances at home, dispair all of that and they're struggling. A majority of them would LIKE to work... if they're given the breaks to get them. 
Oh you gotta make your own breaks. Well yeah, I would tend to agree with that. Making your own breaks is doable in every sense of the phrase... if there's a foot-hold to step up on. 
What is the foothold pray tell? For starters, money or at least bus passes to travel to from home-job interview(s) -home, or if applicable gas money for that old klunker that they got, food for them and/or their families, ability to pay rent until the first several paychecks come... because the bills... they WILL add up over time. Well, if you've ever had it all and lost it and then having to start all over again from scratch (including scrounging up the materials to have scratch to begin with)... you know what I mean. 

(wow all that without a single complaint about the ultra-rich and the vast wealth that they could donate to charity to help the lower class achieve their dream of obtaining middle class status. :uhyeah:


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## JohnEdward (Oct 20, 2011)

A simple means to regenerating the middle class is in the hands of mega corporations, and the government. It is not secret on how to do that, it is a matter if they want to or not.

I forgot to make clear when I spoke Silicon Valley making people rich it wasn't enough to sustain a healthy middle class as manufacturing industry and other industries where being shipped over seas, or dying off. Lots of people where losing incomes as well, during the Silicon Valley boom.  When I referred to middle class it is a sustainable middle class. And not slight upward turn in a downward trend.  The field of Engineers use to be a middle class gig for decades, they are not anymore. Again another support for what are accurate indicators of deteriorating middle class.  I think some have not live long enough or where old enough to remember how large the middle class was, and the positive effect it had on the economy. Or watched the change in income disparity. Allot of people don't want that known. Because there has been a great shift in wealth that has caused a blaring income disparity in comparison.


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## Steve (Oct 20, 2011)

Whether you agree or not, I think you'll enjoy reading this article.  I did.  It's long, but covers a lot of ground.  I posted a couple of other articles, as well, but they basically just reinforce the same points.

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html


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## Bill Mattocks (Oct 20, 2011)

stevebjj said:


> Whether you agree or not, I think you'll enjoy reading this article.  I did.  It's long, but covers a lot of ground.  I posted a couple of other articles, as well, but they basically just reinforce the same points.
> 
> http://sociology.ucsc.edu/whorulesamerica/power/wealth.html



Sigh.  Yes.  And no.

This points to a set of facts.  It doesn't *say* anything.  CEO's, for example, receive a very high multiple of pay compared to workers.  Yes.  I get it.  And this means what?  We are left with the conclusion that it is 'bad', but why is it bad?  The closest I could find in the article was that come companies are worried that CEO's are losing respect in the eyes of the public.  Uh, right.  OK.  That's why it is bad?

It's a perfect example of what I'm talking about, though.  Here's a startling set of information.  Great, thanks.  Now what does that mean?  Well, it's fuel for arguments to dismantle the 1%, or to NOT dismantle the 1% I guess, depending on how you read it.  But where are the facts that lead to the conclusion?

It's like saying baseball players are overpaid.  OK, perhaps they are.  But now what?   Is that bad?  If it is bad, does that mean we have to do something about it?  And if we have to do something about it, what would that something be?  All I get is a straight line from A (baseball players are overpaid) to C (and we must put a stop to that).  We've blown right through B, why is it bad.


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## Steve (Oct 20, 2011)

Bill Mattocks said:


> Sigh.  Yes.  And no.
> 
> This points to a set of facts.  It doesn't *say* anything.  CEO's, for example, receive a very high multiple of pay compared to workers.  Yes.  I get it.  And this means what?  We are left with the conclusion that it is 'bad', but why is it bad?  The closest I could find in the article was that come companies are worried that CEO's are losing respect in the eyes of the public.  Uh, right.  OK.  That's why it is bad?
> 
> ...


You read that entire article that fast???  Damn.  Took me a long time to get through it all and actually process what I'd read.  

And personally, I appreciate the facts that the article brings up.  Facts are a refreshing change of pace.  

I'll freely admit I have no idea what you're driving at.  You started off by asserting that the shrinking middle class is actually a growing upper class.  But when I give you an article you accept as factual which outlines in exhaustive detail the existing and growing disparity between the upper 20% and everyone else, and the upper 1% and the next 19%, which effectively debunks your theory that the upper class is growing, you tell me that this isn't what you're looking for.

You win.  Whatever you're driving at, I don't get it.


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## Bill Mattocks (Oct 20, 2011)

stevebjj said:


> You read that entire article that fast???  Damn.  Took me a long time to get through it all and actually process what I'd read.
> 
> And personally, I appreciate the facts that the article brings up.  Facts are a refreshing change of pace.



I like facts too.  But facts are not conclusions.  There is growing disparity between rich and poor is a fact.  What does it mean?  That is not stated.  Many who read the fact draw their own conclusion, but how did they get there?



> I'll freely admit I have no idea what you're driving at.



Sorry, I'll try to restate.




> You started off by asserting that the shrinking middle class is actually a growing upper class.



Not exactly.  What I said was that my first question when confronted with the statement that the middle class is shrinking is to ask if this is true.  Keeping in mind the axiom that if a person leaves the middle class, that means they either went up or down, I tried to determine if it is true that those leaving the middle class are going down.  It would appear that the trend since 2008 is down (the percentage of those in poverty are growing, therefore the middle class is shrinking).  However, it would at the same time appear that the middle class is growing based on the longer trend from 1959 to the present.  So the overall trend is up; the most recent trend is down.

I also asked (and asked myself) if the shrinking poverty level since 1959 means that the upper class is growing as well as the middle class.  I don't have any answer for that; just some anecdotal evidence, which I posted some links to.  Not enough to draw a conclusion, but food for thought.



> But when I give you an article you accept as factual which outlines in exhaustive detail the existing and growing disparity between the upper 20% and everyone else, and the upper 1% and the next 19%, which effectively debunks your theory that the upper class is growing, you tell me that this isn't what you're looking for.



Ah, I see.  Yes, it is good information for that.  Sorry, I misunderstood you.  What it does not give me is any reason why it is objectively a bad thing.



> You win.  Whatever you're driving at, I don't get it.



I'm not actually 'driving' so much at anything.  I'm not hiding a dagger in the folds of my robe, waiting for you to draw near so I can spring my trap.

I am pointing out that there is a common belief, to use vernacular, that_ the rich are too damned rich *AND* that it's a bad thing *AND* that it's the cause of our misery *AND* that we therefore ought to do something about it (presumably by raising taxes, fees, or just plain taking it away from them).
_
Now, what I'm saying and asking is this:

1) Is it true that the rich are growing richer while the poor grow poorer?
2) If true, is it a bad thing?
3) If it is a bad thing, is it the reason we are in the economic condition we are in?
4) If it is the cause, will stripping the '1%' of that wealth fix the problem?

All I seem to get in return is proof that the rich are indeed growing richer.  OK, if that's true, then it's true.  Now about the rest of it....


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## WC_lun (Oct 20, 2011)

The rich getting richer really isn't the issue.  However, the number if poor increasing and the number of middle class shrinking is a "bad thing." Why?  Well it is the economy.  The middle class is the engine that drives our economy.  The poor do not have the disposable income to influence the economy.  The rich do not spend enough of thier incomes to effect the economy.  Shrink the middle class and you decrease the money flow into the economy and you decrease the economy's ability to ride out volatile circumstances.  Add to that, the middle class actually pays most of the taxes, so we are also facing a decreased tax base, which of course affects many, many, things. So yeah, in my opinion that is a bad thing for our country as a whole.


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## Bill Mattocks (Oct 20, 2011)

WC_lun said:


> The rich getting richer really isn't the issue.  However, the number if poor increasing and the number of middle class shrinking is a "bad thing." Why?  Well it is the economy.  The middle class is the engine that drives our economy.  The poor do not have the disposable income to influence the economy.  The rich do not spend enough of thier incomes to effect the economy.  Shrink the middle class and you decrease the money flow into the economy and you decrease the economy's ability to ride out volatile circumstances.  Add to that, the middle class actually pays most of the taxes, so we are also facing a decreased tax base, which of course affects many, many, things. So yeah, in my opinion that is a bad thing for our country as a whole.



I don't think I would argue with you that any economy with a growing poverty rate and a shrinking middle class is 'bad'.  It doesn't take an economics degree (which I certainly don't have, I struggle understand the basics of economics) to understand that if people can't pay their bills, they won't spend money on extras, and the economy as a whole must suffer.  I completely get that.

But, if the census data are to be believed, the poverty rate has decreased since 1959, not increased.  It has, of course, increased since 2008, but relative to 1959, it is still even now down 8%.  All this while the 'disparity' between the very rich and the very poor has increased eleventy gazillion times.  What can we make of this?  (I'm not suggesting I know the answer, I do not).

And let us for a moment contemplate the concept that too many wealthy people is a bad thing.  This would seem to fly in the face of the basic traditional American concepts of working hard, becoming educated, struggling, and eventually (with luck, etc) becoming wealthy.  If having too many wealthy is actually damaging to the economy, it would seem that the American Dream as such is shattered; we must instead struggle to rise from poverty, but then stop right there, while we are still an effective gear in the engine of commerce and the economy.   Imagine telling one's children to try hard to succeed - but not too hard - because too much success would be a bad thing.  Kind of boggle the mind, right there.


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## granfire (Oct 20, 2011)

Well, it's called American _Dream_.
However, only a few will make it to that stage, most just surpass their parents in standard of living, and thus fullfill the dream.

Also, the level of poverty is relative.
Officials have a cutoff number for poverty. I think it's the same across the country and does not take into account the differences of standard in different regions.
Also, if you make one dollar more than the magic number, you are no longer considered poor. Does not buy you much at the grocery store, but hey, it's good to know you are not really poor.

Also, any given living standard is relative. If you always had what you got, you won't know the difference. If you had less, you are doing better, but making due with less than what you have is being poor.


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## Bill Mattocks (Oct 20, 2011)

granfire said:


> Well, it's called American _Dream_.
> However, only a few will make it to that stage, most just surpass their parents in standard of living, and thus fullfill the dream.



But all are raised to *want* it, even if few can make it.  If we're to believe that high income hurts the economy, we must now teach our children that too want the American Dream is actually a bad thing.  Or alternatively (and confusingly) that it is OK to want the American Dream, but not OK to actually achieve it.



> Also, the level of poverty is relative.
> Officials have a cutoff number for poverty. I think it's the same across the country and does not take into account the differences of standard in different regions.
> Also, if you make one dollar more than the magic number, you are no longer considered poor. Does not buy you much at the grocery store, but hey, it's good to know you are not really poor.
> 
> Also, any given living standard is relative. If you always had what you got, you won't know the difference. If you had less, you are doing better, but making due with less than what you have is being poor.



While true, what does that mean to the question about income disparity?


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## Twin Fist (Oct 20, 2011)

the upper class is growing, the lower class is growing, what does this mean?

there are winners, and losers, and not much else.

if you see your paycheck not keeping up with the cost of living increases? GET A BETTER JOB

DUH

dont *****, DO SOMETHING ABOUT IT

start your own business on the side, take a second job, but dont expect me to feel bad for you while you cry, piss and moan.

the people going from middle to upper? BE LIKE THEM

you are either moving UP or you will get left behind.

I am moving UP

anyone can do it. You just have to want to, and be willing to do the work. You see your job being phased out? GO BACK TO SCHOOL AT NIGHT and learn something


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## granfire (Oct 20, 2011)

Bill Mattocks said:


> But all are raised to *want* it, even if few can make it.  If we're to believe that high income hurts the economy, we must now teach our children that too want the American Dream is actually a bad thing.  Or alternatively (and confusingly) that it is OK to want the American Dream, but not OK to actually achieve it.


Since the chances of achieving it are rather minute, why bother with the answer?
I am thinking more along the line that possession comes with responsibility. When you have the ultimate achievement in terms of money, you can do a lot of things a poor person can't afford. Like the rich of the olden days considered it an obligation to invest in philantropical ventures (or it was penance for making it off the poor, who knows).
lastly, it is steeped in Calvinism that God's love is reflected in your worldly possessions.





> While true, what does that mean to the question about income disparity?



What?

Oh...
It just goes towards reading the numbers.
The numbers don't lie, but don't tell he whole story. if the poverty level is set at 15.000$ you are still dirt poor, but not so in the sense of the statistic if you have 15.001$
Also, If you made it up to 15k from nothing is not reflected much or if you dropped from 25K.


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## JohnEdward (Oct 20, 2011)

Twin Fist said:


> the upper class is growing, the lower class is growing, what does this mean?
> 
> there are winners, and losers, and not much else.
> 
> ...



Since your moving up, let me know when you make the transition from nurse part-time to Doctor.  We need to flood the field with doctors, so that it isn't any longer insulated. And what has taken you so long. Why be a lowly nurse? That isn't a strong profession it is on the bottom level of medical professions. Nurses usually are the one who can't hack medical school. especial male nurses.  Won't it be pertinent to take your own advice.  Lead by example, not by words.


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## elder999 (Oct 20, 2011)

JohnEdward said:


> Since your moving up, let me know when you make the transition from nurse part-time to Doctor. We need to flood the field with doctors, so that it isn't any longer insulated. And what has taken you so long. Why be a lowly nurse? That isn't a strong profession it is on the bottom level of medical professions. Nurses usually are the one who can't hack medical school. especial male nurses. Won't it be pertinent to take your own advice. Lead by example, not by words.



For the record, I don't agree with John, but this is such a crock-nurses rock.Doctors generally couldn't do without them.And it's not on "the bottom level of medical professions," being above a variety of technicians like phlebotomists in wage and in the heirarchy. They're really in demand, and they make a pretty fair wage. 

Plus, being a hetero male nurse is an _outstanding_ way to meet really, really, _really_ downright *kinky* women. _Go John!_ :lfao:

I also think putting down someone for trying to improve themselves and their lot in life is pretty shameful.


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## elder999 (Oct 21, 2011)

Bill Mattocks said:


> .
> 
> 
> Now, what I'm saying and asking is this:
> ...


 

Yes  to both. The amount of wealth controlled by the so-called &#8220;1%&#8221; has increased-it isn&#8217;t just that the rich are growing richer, either.  
Yes.
No.
No.
There are more poor people in the U.S. than at any other time in the 52 years records on such things have been kept: more than 15% of Americans live below the poverty line, currently defined by the Census Bureau as $22K/yr. for a family of four.Of course, there are "more poor people" in part because there are simply _more people_, but the percentages should be somewhat alarming.I imagine it'll also be something of a surprise to some of you that the poverty line for a family of four is over $20k/yr.Such is life: at one time, $110k/yr was an awful lot of money, and now it's only comfortably middle-class, maybe _upper_ middle-class, but middle-class nonetheless.

As posted up thread, the quick way to poverty is job loss: something over 6 million jobs have been lost in the recession, and more than 9% of Americans are out of work. 

It also keeps getting harder and harder to attain what was once typical American upward mobility-in fact, a great deal of research shows that Americans have less mobility than people in a European countries.  For the first time in more than 20 years, employment as a percentage of population has fallen below the rate in the U.K., Germany and the Netherlands. Kids graduating from college are going jobless, and, saddled with debt from student loans, returning to live with their parents. The Census Bureau has even invented a new term for this: _doubling up _. Something like 3 million adults would be included in those poverty numbers, if not for living at home with their parents.

So yes, same sad song, only sung louder and faster: the rich get richer, and the poor get poorer. The rich grow fewer in number, or stay the same, and the ranks of the poor increase.


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## Bill Mattocks (Oct 21, 2011)

elder999 said:


> There are more poor people in the U.S. than at any other time in the 52 years records on such things have been kept: more than 15% of Americans live below the poverty line, currently defined by the Census Bureau as $22K/yr. for a family of four.Of course, there are "more poor people" in part because there are simply _more people_, but the percentages should be somewhat alarming.I imagine it'll also be something of a surprise to some of you that the poverty line for a family of four is over $20k/yr.Such is life: at one time, $110k/yr was an awful lot of money, and now it's only comfortably middle-class, maybe _upper_ middle-class, but middle-class nonetheless.



But the way you state it makes it sound worse than it is.  _"There are more poor people"_ is answered by yourself - there are *MORE PEOPLE*.  And according to what I quoted from the Census bureau itself, we're still down 8% from the percentage of people living under the poverty line in 1959, adjusted for inflation.



> As posted up thread, the quick way to poverty is job loss: something over 6 million jobs have been lost in the recession, and more than 9% of Americans are out of work.



Yes.  This would lead one to think that if the economy recovers, some 3% or so will rejoin the work force (since unemployment tends to hover around 6%, as I recall).  Nothing about 1% here that I can see.



> It also keeps getting harder and harder to attain what was once typical American upward mobility-in fact, a great deal of research shows that Americans have less mobility than people in a European countries.  For the first time in more than 20 years, employment as a percentage of population has fallen below the rate in the U.K., Germany and the Netherlands. Kids graduating from college are going jobless, and, saddled with debt from student loans, returning to live with their parents. The Census Bureau has even invented a new term for this: _doubling up _. Something like 3 million adults would be included in those poverty numbers, if not for living at home with their parents.



OK, that also sounds like the economy and therefore as temporary as the recession, assuming the recession is temporary (all of them have been so far).  Unless you are positing that this is not a recession, but the new normal, I am not seeing anything in the above statements that doesn't automatically get better when the economy recovers.



> So yes, same sad song, only sung louder and faster: the rich get richer, and the poor get poorer. The rich grow fewer in number, or stay the same, and the ranks of the poor increase.



Over my lifetime, the ranks of the poor have decreased, according to the Census Bureau.  I have no facts on whether or not the rich are _"fewer in number,"_ do you have something in that regard?


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## WC_lun (Oct 21, 2011)

elder999 said:


> For the record, I don't agree with John, but this is such a crock-nurses rock.Doctors generally couldn't do without them.And it's not on "the bottom level of medical professions," being above a variety of technicians like phlebotomists in wage and in the heirarchy. They're really in demand, and they make a pretty fair wage.
> 
> Plus, being a hetero male nurse is an _outstanding_ way to meet really, really, _really_ downright *kinky* women. _Go John!_ :lfao:
> 
> I also think putting down someone for trying to improve themselves and their lot in life is pretty shameful.



Not to derail the thread, but nurses are awsome.  They put up with all kinds of crap from patients (sometimes literally) that aren't smart enough to know that nurses are the first responders if they need something, everything from water to resucetation(sp?).  Most of the nurses I know are compassionate people and when I have an issue I know they'll listen and help if they can.  Much props for your career choice, John.


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## elder999 (Oct 21, 2011)

Bill Mattocks said:


> But the way you state it makes it sound worse than it is. _"There are more poor people"_ is answered by yourself - there are *MORE PEOPLE*. And according to what I quoted from the Census bureau itself, we're still down 8% from the percentage of people living under the poverty line in 1959, adjusted for inflation.



That percentage-15%-is somewhat unprecedented as well. It's not just that there are more people-a higher percentage of them are living at or below the poverty line, _and that percentage has  been steadily increasing even when the economy was growing._ I don't know where you're getting your census quotes, but:



> The poverty rate in 2010 (15.1 percent) was the highest poverty rate since 1993 but was 7.3 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available.



And it's the "adjusted for inflation" part that's the most damning, really, Bill-the threshold for what constitutes "poverty" has shifted dramatically: that a family of four is living at poverty on $22k/yr, and thus is eligible for assistance, like food stamps, etc., is shameful. I don't know how anyone makes it on $45k/yr., though, never mind $22k/yr.




Bill Mattocks said:


> Yes. This would lead one to think that if the economy recovers, some 3% or so will rejoin the work force (since unemployment tends to hover around 6%, as I recall). Nothing about 1% here that I can see.



No, there's nothing about that 1%, except that most of them don't need jobs. 

And who says the economy is going to recover?




Bill Mattocks said:


> OK, that also sounds like the economy and therefore as temporary as the recession, assuming the recession is temporary (all of them have been so far). Unless you are positing that this is not a recession, but the new normal, I am not seeing anything in the above statements that doesn't automatically get better when the economy recovers.



See above.





Bill Mattocks said:


> Over my lifetime, the ranks of the poor have decreased, according to the Census Bureau. I have no facts on whether or not the rich are _"fewer in number,"_ do you have something in that regard?



The number of billionaires has actually grown over the last couple of years. It has gotten harder to become a millionaire, though, and it seemed really easy when I was 30. Of course, now having a million dollars in assets merely makes one somewhat successfully upper middle class, what we used to call "comfortable," and then only maybe.

And no, taking away billionaires fortunes isn't going to fix any of these problems. Taxing corporations and the very-wealthy appropriately isn't going to fix unemployment or poverty, though it might prop up our government for another half century.


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## granfire (Oct 21, 2011)

WC_lun said:


> Not to derail the thread, but nurses are awsome.  They put up with all kinds of crap from patients (sometimes literally) that aren't smart enough to know that nurses are the first responders if they need something, everything from water to resucetation(sp?).  *Most of the nurses I know are compassionate people *and when I have an issue I know they'll listen and help if they can.  Much props for your career choice, John.



Not something that would pop into my head thinking about TF...but hey, the world needs psych ward nurses too!  (and no, my mom was one for 30 years, never dreaming about putting either branch of the noble profession down)



Alas...Seems like the devil of Statistics done bit us again...because the fact that the population increased dramatically since 59 had completely passed me by. 
While the % points might look favorable, the absolute numbers aren't.


(but elder, it depends on the are you are living at if you can make it on 22k, considering that around here 45k is a very good income)


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## Twin Fist (Oct 21, 2011)

Nurses are the ones that cant hack med school? ok, done with you. I dont have time to waste on this crap.




JohnEdward said:


> Since your moving up, let me know when you make the transition from nurse part-time to Doctor.  We need to flood the field with doctors, so that it isn't any longer insulated. And what has taken you so long. Why be a lowly nurse? That isn't a strong profession it is on the bottom level of medical professions. Nurses usually are the one who can't hack medical school. especial male nurses.  Won't it be pertinent to take your own advice.  Lead by example, not by words.


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## MJS (Oct 21, 2011)

Folks,

Unless I'm missing something, this thread isn't about doctors, nurses or the chosen profession of anyone on the forum.  Lets try to stick to the OP, ok?


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## granfire (Oct 21, 2011)

MJS said:


> Folks,
> 
> Unless I'm missing something, this thread isn't about doctors, nurses or the chosen profession of anyone on the forum.  Lets try to stick to the OP, ok?



Well, we could discuss income disparity between doctors and nurses. Then again I think not just a few could be shocked to realize how little some doctors make....


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## JohnEdward (Oct 21, 2011)

Twin Fist said:


> the upper class is growing, the lower class is growing, what does this mean?
> 
> there are winners, and losers, and not much else.
> 
> ...


 


JohnEdward said:


> Since your moving up, let me know when you make the transition from nurse part-time to Doctor.  We need to flood the field with doctors, so that it isn't any longer insulated. And what has taken you so long. Why be a lowly nurse? That isn't a strong profession it is on the bottom level of medical professions. Nurses usually are the one who can't hack medical school. especial male nurses.  Won't it be pertinent to take your own advice.  Lead by example, not by words.


 


elder999 said:


> For the record, I don't agree with John, but this is such a crock-nurses rock.Doctors generally couldn't do without them.And it's not on "the bottom level of medical professions," being above a variety of technicians like phlebotomists in wage and in the heirarchy. They're really in demand, and they make a pretty fair wage.
> 
> Plus, being a hetero male nurse is an _outstanding_ way to meet really, really, _really_ downright *kinky* women. _Go John!_ :lfao:
> 
> I also think putting down someone for trying to improve themselves and their lot in life is pretty shameful.



I agree you don't put someone down from trying to improve themselves and you don't put someone down because they can't, they are unable, or the opportunity isn't there.  I think it is pretty ignorant and asinine and hypocritical of people to make assumptions and stereotypes of others, like Twin Fist has modeled his comments. Such grossly stereotyping all people who make a living, who want opportunity, a fair shake to improving their lives, is pretty ignorant and asinine and hypocritical as it doesn't recognize such people are after the American Dream.  Twin Fist's comments echo the aloofness and pretentious snobbery rebuke humiliating the efforts and capabilities of others, like Twin Fist's fellow nurses and others chancing the American Dream as being lazy hacks who suck off the tax payer teat. Which is totally off base, it is degrading and insulting and meant to be to  those in Twin Fist's ranks. Twin Fist's comment is a pretentious snobbery rebuke stressing the lack of tolerance  for others in the working class wanting change, who are not content with accepting their lot in life. His very own lot.  When we analyze his comment,  he clearly feels if he is content in his lot and station in life, and feels no need to "advance", so could every one else.   But, when he experiences his own criticisms of others, when it is shown he is in the ranks of those he stereotypes, he rebukes, he is insulted. He didn't like the taste of his own medicine. Or when it hit home, when his rebuke was applied in the same way and similar tone to him.  Just as much as those he insults feels when they hear his criticisms. 

If you didn't catch my turn-about is fair play (used as the original idiom and not the American idiom) response to Twin Fist. In context, I am not attacking the nursing profession, or those who are nurses. It is so easy to make criticism of others when you haven't looked in the mirror at yourself. The moral of my comment is  don't rebuke others for what you see as their short-commings. Especially, if you haven't taken in account of yourself. 

My comment was not a personal attack on nursing or nurses (which is a noble profession are way under paid), but rather an instrument of device.


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## punisher73 (Oct 21, 2011)

One thing I see that no one really defines is what is "middle class".  It's disappearing, it's not disappearing.  I think that proper wealth distribution should follow a bell curve.  The bulk of your people (70%) should be in the middle part.

Now, here is the thing though.  What middle class?  You can't really say if you earn between x and y dollars because what's average for Los Angelos is going to be alot in the Midwest.  Also, I notice more "pleasure" spending that is now considered "necessity" like cable/satelite, computer and internet access, cell phones etc.  Buying new cars instead of slightly used or keeping them a lot longer until they really need to be replaced other than just wanting to get a new one.  How much of all this is effecting us?

Not to mention income going towards credit cards for things that couldn't be bought with cash in hand and paying off those mini-loans.


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## Bill Mattocks (Oct 21, 2011)

elder999 said:


> That percentage-15%-is somewhat unprecedented as well. It's not just that there are more people-a higher percentage of them are living at or below the poverty line, _and that percentage has  been steadily increasing even when the economy was growing._ I don't know where you're getting your census quotes, but:
> 
> And it's the "adjusted for inflation" part that's the most damning, really, Bill-the threshold for what constitutes "poverty" has shifted dramatically: that a family of four is living at poverty on $22k/yr, and thus is eligible for assistance, like food stamps, etc., is shameful. I don't know how anyone makes it on $45k/yr., though, never mind $22k/yr.



OK, so what you're taking issue with is what the facts mean, not what they are.  I get it.



> And who says the economy is going to recover?



Why would this recession be any different than any previous recession?  Maybe it is.  Maybe we won't recover.  But before I'd believe that, I'd have to have some kind of evidence that is compelling enough to make me believe that historic cycles don't repeat anymore, that we've fundamentally broken our economy permanently.  It could happen; all economies have beginnings and ends - so far.  But while they operate, they have cycles and history repeats over and over again.  And while in a peak, no one seems to want believe the good times will ever end, and while in a trough, no one seems to want to believe that it will ever end.

Every year, the weather is the worst we've ever experienced.  Right?  Except that it's NOT.

Recessions are temporary, unless this one is different.  And if it is different, then that requires evidence; otherwise I have to believe it is more like other recessions than not.



> And no, taking away billionaires fortunes isn't going to fix any of these problems. Taxing corporations and the very-wealthy appropriately isn't going to fix unemployment or poverty, though it might prop up our government for another half century.



I think I can agree with that.  So as Mythbusters says, _"Failure is always an option."_


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## granfire (Oct 21, 2011)

punisher73 said:


> One thing I see that no one really defines is what is "middle class".  It's disappearing, it's not disappearing.  I think that proper wealth distribution should follow a bell curve.  The bulk of your people (70%) should be in the middle part.
> 
> Now, here is the thing though.  What middle class?  You can't really say if you earn between x and y dollars because what's average for Los Angelos is going to be alot in the Midwest.  Also, I notice more "pleasure" spending that is now considered "necessity" like cable/satelite, computer and internet access, cell phones etc.  Buying new cars instead of slightly used or keeping them a lot longer until they really need to be replaced other than just wanting to get a new one.  How much of all this is effecting us?
> 
> Not to mention income going towards credit cards for things that couldn't be bought with cash in hand and paying off those mini-loans.



oh, make no mistake, when the rubber hits the road, all those things - maybe minus the cell phone - will be done away with - if the individual has some sort of functioning brain.

But yeah, there is a huge difference of what counts as classy between the coasts. What we have to make a comfortable life would not qualify us for poor in LA or NYC...we' have to get a lot more to do that....


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## JohnEdward (Oct 21, 2011)

Twin Fist said:


> Nurses are the ones that cant hack med school? ok, done with you. I dont have time to waste on this crap.


 


Bill Mattocks said:


> OK, so what you're taking issue with is what the facts mean, not what they are.  I get it.
> 
> 
> 
> ...



Good points, hope your right. 

I look it recessions as hurricanes, we can kind of predict when they will happen, we understand how they happen, and understand their point of origins. We watch them develop, analyze them, know the anatomy, rate them, we predict to a certain extent and give warning, but we don't know the eventual size, or where they will hit until they do. We can chart them historically (thought that is hind-sight) as hurricanes landings are very hard to predict even with modern technology. What we can't do is forecast them or predict them accurately, we are still in the catch-up mode when it comes to hurricanes. We try to use mounds advanced technology together all sorts of data like current weather and future weather conditions, historical cycles and weather patterns to predict the end strength, path, and duration of the hurricane. To our best efforts we are rarely correct.  BTW, tornados as another metaphor for a recession is even more tricky to predict. Hurricanes as a metaphor to this labeling of our current economic storm is going to be long and hard going. I would call our current economic situation a minimal Category 4. What gives me that indication? The 1% well even up to the 5% are hanging on tight to their money, and working hard like squirrels gather nuts for the winter,  pushing hard  a propaganda campaign that they feel entitled to not to give back to the country that make them wealthy. Not take a responsibility to help this country recover, which is an investment they fail to see.


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## Bill Mattocks (Oct 21, 2011)

JohnEdward said:


> Good points, hope your right.
> 
> I look it recessions as hurricanes, we can kind of predict when they will happen, we understand how they happen, and understand their point of origins. We watch them develop, analyze them, know the anatomy, rate them, we predict to a certain extent and give warning, but we don't know the eventual size, or where they will hit until they do. We can chart them historically (thought that is hind-sight) as hurricanes landings are very hard to predict even with modern technology. What we can't do is forecast them or predict them accurately, we are still in the catch-up mode when it comes to hurricanes. We try to use mounds advanced technology together all sorts of data like current weather and future weather conditions, historical cycles and weather patterns to predict the end strength, path, and duration of the hurricane. To our best efforts we are rarely correct.  BTW, tornados as another metaphor for a recession is even more tricky to predict. Hurricanes as a metaphor to this labeling of our current economic storm is going to be long and hard going. I would call our current economic situation a minimal Category 4. What gives me that indication? The 1% well even up to the 5% are hanging on tight to their money, and working hard like squirrels gather nuts for the winter,  pushing hard  a propaganda campaign that they feel entitled to not to give back to the country that make them wealthy. Not take a responsibility to help this country recover, which is an investment they fail to see.



I hope I am right also.  But historically, things remain the same more than they change.  We've had loads of recessions, but only one beginning, and so far, no end.  We will end at some point, but if I am going to believe that this is our 'end', I need more evidence that this is not part of an historical cycle.

I was part of the dot-com bubble.  I remember well watching my 401(k) value climb through the ceiling; at one point, I saw early retirement and wealth tied to it.  I also kept heavily invested in risky small cap stocks, mostly techs, and I read with enthusiasm the predictions that we had entered a 'new era' and that this was not a bubble.  Of course, it was.  I saw my 401(k) total value drop from, well never mind.  Suffice to say that cashed in, it would not have bought me a small camper, let alone a huge house with a boat.  My fault entirely, I blame no one but me!  But I was hardly alone; in fact it took me a long time to come to believe that this new normal was not a bubble; and then, of course, it was.  Hindsight is 20/20, but we also tend to immediately forget that when we were on top, we thought it would never end.  And likewise, when we're on the bottom, we think it will never end.

So far in our country, tops and bottoms of cycles have ended; always.

I also tend to bet contra these last few decades.  It has served me well.  Recessions like these are huge opportunities to invest.  If I'm wrong about it being part of a cycle, of course, I'll lose instead of win.  On the other hand, if life as we know it is truly over, I guess it doesn't matter much.


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## Tez3 (Oct 21, 2011)

punisher73 said:


> *One thing I see that no one really defines is what is "middle class". *It's disappearing, it's not disappearing. I think that proper wealth distribution should follow a bell curve. The bulk of your people (70%) should be in the middle part.
> 
> Now, here is the thing though. What middle class? You can't really say if you earn between x and y dollars because what's average for Los Angelos is going to be alot in the Midwest. Also, I notice more "pleasure" spending that is now considered "necessity" like cable/satelite, computer and internet access, cell phones etc. Buying new cars instead of slightly used or keeping them a lot longer until they really need to be replaced other than just wanting to get a new one. How much of all this is effecting us?
> 
> Not to mention income going towards credit cards for things that couldn't be bought with cash in hand and paying off those mini-loans.



As I've posted on another thread, the 'class' structure in America seems totally decided by how much money you have, thus you can go from being working class to middle class to back, here it's different. Class is decided less by money more by what your ancestors were! it takes several generations to move up or down a class. Here if you were born middle class you will always be middle class. If you are rich working class it will take at least three generations before you are accepted as having changed class and maybe not even then. A friend of my daughters is the son of a Lord, while coming from a very long pedigree and owning land and a castle nearby they actually have less money than I do but they are and always will be upper class. Me, because of my parents and theirs etc, will always be middle class even when I'm skint. 
http://en.wikipedia.org/wiki/Middle_class


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## punisher73 (Oct 21, 2011)

Tez3 said:


> As I've posted on another thread, the 'class' structure in America seems totally decided by how much money you have, thus you can go from being working class to middle class to back, here it's different. Class is decided less by money more by what your ancestors were! it takes several generations to move up or down a class. Here if you were born middle class you will always be middle class. If you are rich working class it will take at least three generations before you are accepted as having changed class and maybe not even then. A friend of my daughters is the son of a Lord, while coming from a very long pedigree and owning land and a castle nearby they actually have less money than I do but they are and always will be upper class. Me, because of my parents and theirs etc, will always be middle class even when I'm skint.
> http://en.wikipedia.org/wiki/Middle_class



In our country we have a concept of "old money" vs. "new money".  It's a way that the elite and rich distinguish themselves.  Old money is large inheritances passed down to future generations and they will look down upon the new money, or people who had to really work at it (at least that's the impression that is made, haven't had the chance to personally talk with anyone from the old money group lol).

I think we base our classes on money because we never had titles, etc. that were passed on like in England and other countries that had kings and nobility.


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## JohnEdward (Oct 21, 2011)

> http://www.dailyreckoning.com.au/economic-cycle-theory/2009/10/15/



Bill you might find this interest.


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## elder999 (Oct 21, 2011)

punisher73 said:


> In our country we have a concept of "old money" vs. "new money". It's a way that the elite and rich distinguish themselves. Old money is large inheritances passed down to future generations and they will look down upon the new money, or people who had to really work at it (at least that's the impression that is made, haven't had the chance to personally talk with anyone from the old money group lol).
> 
> I think we base our classes on money because we never had titles, etc. that were passed on like in England and other countries that had kings and nobility.



Only sometimes. Only somewhat. I have a friend who comes from "old money." Near as I can tell, it practically came over on the Mayflower with them-an exaggeration, but he said, rather famously, that he was the first person in his family to actually have a job in the entire 20th century. 

My family's money is nearly as old as some others, but we'll never be "old money," because of the color of our skin, and because we worked all along, and because it usually isn't quite as much, though in some cases it's a bit more......

In any case, the "middle class" is the foundation of this country, and one of the key elements of a democracy, or democratic republic like ours-it's an altogether American creatio-and part of what alluded to in the "illegal Declaration of Independence" thread-what our founders did was contrary to the way things had been done in most other countries for thousands of years.Since ancient sumeria, an unrestrained economy and heirarchichal social organization have *always* resulted in a ruling elite and a large number of impoverished workers. Because the founders borrowed so much to form our government and society-especially from American Indians-they produced a govenrment and society that not only empowers and creates a middle class, but _requires_ one.The closest equivalent for the founders was what Thomas Jeferson called _yeomanry_-his greatest fear for the new nation being not a king, but a new economic elite. They created a middle class by creating and regulating the rules of the _game_ of business, by protecting jobs inside the country with rational tariffs and trade policies and by providing a healthy social safety net and the means for social mobility, such as free public education-all the way through college-thus it was that the post WWII period was the one of greatest economic growth, and growth of the middle class.  The first middle class of our nation was land-based, and lasted from founding through the Civil War:average people living in relative self-sufficiency on "free land."  

We're seeing an end to the middle class for a lot of reasons, Bill-chief among them that corporations have been taking jobs elsewhere. The jeans made by the company that pretty much created them here in this country, Levi Strauss, haven't been made in this country since 2004. At one time, a person could work in a Levi Strauss factory in this country, make a fair wage, and be reasonably lower middle-class. The workers had health benefits and a savings plan for their retirement, and could own homes and have continue their children's education. With the coming of trade agreements like NAFTA, though, those workers-some 100 million of them in this country, have to compete on a level playing field with 5 billion of the world's most impoverished people. This is a result of "free trade," and deregulation. This country lost some 785,000 jobs in the apparel industry alone between 1994 and 2004, because it's cheaper for a Malaysian child to make our jeans than it is for an American homeowner-those jobs will be back, though, because pretty soon all those people occupying Wall Street (you know, if they had *jobs*, they mostly wouldn't have the time to be there, right?) are going to need them, and they'll do them for a lot less. This has all been engineered, and going on for a long, long time.'

So, yes Bill, losing the middle class is a bad, bad thing for the U.S.-it's who we are.


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## Sukerkin (Oct 21, 2011)

Very well expressed, Elder.  I've banged on about the globalisation of labour several times here but have never managed to encapsulate the problem so well in terms of American historical perspective.

For an example of the way that the Bean Counters have enriched the few at the expense of the many, you need look no further than the fate of my 'home' city, Stoke-on-Trent.  In twenty years it went from a power-house of the global ceramics industry to a crumbing ruin infested with unemployment.  The only thing that flourishes there now are the drug dealers.  That's what happens when you allow the corporate mind-set to 'outsource' labour - in our case a thousand years of expertise in the craft and art of ceramics lost in the passing of a generation to put an extra wad of cash in the back pockets of share-holders.


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## Bill Mattocks (Oct 21, 2011)

JohnEdward said:


> Bill you might find this interest.



I do, but I cannot say I am convinced by reading it that:



> Or as Michael Hudson said in a previous interview, "The economy has reached its debt limit and is entering its insolvency phase. We are not in a cycle but the end of an era. The old world of debt pyramiding to a fraudulent degree cannot be restored."



It may be true, but such an extraordinary claim requires extraordinary proof.


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## JohnEdward (Oct 21, 2011)

Bill Mattocks said:


> I do, but I cannot say I am convinced by reading it that:
> 
> 
> 
> It may be true, but such an extraordinary claim requires extraordinary proof.



The article was written in 2009. But it has, demonstrated by history near and far.  There are models that prove it. We are in it as well proven on lesser scales. Look at the last century, and the wealth structure and its disparity of wealth. Much of the arguments now are then same then due to the similar wealthy structure. Of course our cheap labor wasn't immigrants from the south, but rather children granted, but the was the similar disparity in wealth and the same reason for the disparity. Then  the Stock Market Crash which didn't effect everyone with wealth, but all who didn't have wealth, making a correction in wealth disparity. Lots of poor and poor people. But in a short time,  there was significant recovery and later it produced a strong stable economy. Starting the current falter, in the late 70's, has continued until today, we not since then had significant periods of an strong stable economy in comparison.  Before the last century the economy functioned and was based on a whole new model. There this and the last century are uncharted economic territory in many ways, and in terms of proving or not cyclic economic theory. But we are not when it comes to seeing the importance disparity of wealth has.  When the country was economically the strongest there was the same proportion of the disparity of wealth as today. Today, we are in a major economic crisis where our economy isn't stable or healthy, which effect the whole world. With no recovery in sight. Especially if this administration takes office again, and other players remain in charge. Basically, forecasting and where ever model you use to the economy is a being behind the eight ball.  Just as meteorologist trying to predict the next hurricane, it's strength, size, force etc. it can't be done. No matter why cyclic theorem they come up this.  

Am basically saying what ever side you are on what tends to happen is the most fundamental is over looked in favor of the more complex. It isn't a matter of claims or proofs. It is a matter of changing the gap of disparity to strengthen the economy.


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## Bill Mattocks (Oct 21, 2011)

JohnEdward said:


> The article was written in 2009. But it has, demonstrated by history near and far.  There are models that prove it. We are in it as well proven on lesser scales. Look at the last century, and the wealth structure and its disparity of wealth. Much of the arguments now are then same then due to the similar wealthy structure. Of course our cheap labor wasn't immigrants from the south, but rather children granted, but the was the similar disparity in wealth and the same reason for the disparity. Then  the Stock Market Crash which didn't effect everyone with wealth, but all who didn't have wealth, making a correction in wealth disparity. Lots of poor and poor people. But in a short time,  there was significant recovery and later it produced a strong stable economy. Starting the current falter, in the late 70's, has continued until today, we not since then had significant periods of an strong stable economy in comparison.  Before the last century the economy functioned and was based on a whole new model. There this and the last century are uncharted economic territory in many ways, and in terms of proving or not cyclic economic theory. But we are not when it comes to seeing the importance disparity of wealth has.  When the country was economically the strongest there was the same proportion of the disparity of wealth as today. Today, we are in a major economic crisis where our economy isn't stable or healthy, which effect the whole world. With no recovery in sight. Especially if this administration takes office again, and other players remain in charge. Basically, forecasting and where ever model you use to the economy is a being behind the eight ball.  Just as meteorologist trying to predict the next hurricane, it's strength, size, force etc. it can't be done. No matter why cyclic theorem they come up this.
> 
> Am basically saying what ever side you are on what tends to happen is the most fundamental is over looked in favor of the more complex. It isn't a matter of claims or proofs. It is a matter of changing the gap of disparity to strengthen the economy.



Sorry, not seeing it.  My overall impression remains a simpler one; that our economy a) experiences cycles and b) that they continue.  I see nothing that tells me that the current recession is never-ending.


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## JohnEdward (Oct 21, 2011)

Bill Mattocks said:


> Sorry, not seeing it.  My overall impression remains a simpler one; that our economy a) experiences cycles and b) that they continue.  I see nothing that tells me that the current recession is never-ending.


 That is what am saying we don't know if it will end or if it does when? Therefore it is hard to apply a cyclic theory to our situation. But history and other economics do give us indication that the cycles are not consistent or uniform. Just in the same way we look at past hurricane data and models in terms of cycles telling us the difficulty of prediction. All we can say for sure is statically the frequency of the number of storms through out the year. i.e. July - November has the highest frequencies.  But under the right conditions a hurricane season can last well before or past that window.  Yes, never ending means never, at that is an extreme but not unrealistic. As when a recession doesn't end it usually means the on set of collapse.  Recession that doesn't end is because it turns into something worse. Are we at that point, don't know. We have to ride it out. Hopefully, it will end. But am not basing that on models or theories, as models and theories never predicted or factored in the Great Depression. Rather then trusting models and theories fortune tellers to let us know when things will recover. I rather employ the simple fix, painful for some, and put in place safeguards to lessen the effects of a recession so it will not last long and will end.  POV.


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## Twin Fist (Oct 21, 2011)

I dont buy your ******** "it was a literary device" retraction.

You insulted every nurse with your claptrap, I am 100% sure you meant it, and and trust me, we both know you would never say it to me or any other male nurse in person. 



JohnEdward said:


> Since your moving up, let me know when you make the transition from nurse part-time to Doctor.  We need to flood the field with doctors, so that it isn't any longer insulated. And what has taken you so long. Why be a lowly nurse? That isn't a strong profession it is on the bottom level of medical professions. Nurses usually are the one who can't hack medical school. especial male nurses.  Won't it be pertinent to take your own advice.  Lead by example, not by words.


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## Sukerkin (Oct 21, 2011)

Calmly now, gentlemen.  Such literary pawing-of-the-ground will not do.

Mr. Edward, if you really meant a clarification or an apology, there is no shame in reiterating it so that those taking offence know with more surety that that is indeed what you meant.

John, altho' I understand why your blood was up, it's not good form to be so challenging in your mode of speech in the Study.  As we know from past experience, that can lead to harsher still exchanges, which, given the relatively recent, new, tighter, guidelines on behaviour, is not a good thing.

When discourse descends into 'wrangling', with participants taking and giving insult, then it is generally not long before the Moderators have to step in to keep the peace.  It's much better if that doesn't have to happen and members show that they can moderate themselves, generating interesting and productive debate for all readers.

Mark A. Beardmore
MT Mentor


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## billc (Oct 21, 2011)

Voting Obama and as many other democrats out of office as possible will go a long way towards bringing the current recession to a close...whoever the republican may be...even that Paul guy.


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## granfire (Oct 21, 2011)

billcihak said:


> Voting Obama and as many other democrats out of office as possible will go a long way towards bringing the current recession to a close...whoever the republican may be...even that Paul guy.



You are either demented or simply ignorant.

I do hope you know this downward spiral started with the hero of the Republican army, I mean party, Ronald Reagan, and just because George W was freshly out of office, the bail outs do also fall on his head. 

So far any republican is the last nail in the coffin...maybe that Romny guy as the lone exception.


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## billc (Oct 21, 2011)

Sorry, the mess started with Jimmy Carter, with the final push by Bill Clinton, aided by Barak "the organizer" obama, and protected by the likes of Barney Frank and his boyfriend as well as Chris Dodd.  Bush did try to bring some control back over fannie and freddie, but the dems, and some republicans, stopped any attempt to fix the situation.

The timeline and the criminals...

http://www.americanthinker.com/2008/10/what_really_happened_in_the_mo.html



> *[FONT=times new roman,times]1990s[/FONT]*
> 
> [FONT=times new roman,times]With the mechanisms in place, the community organizing groups began developing directed strategies to exert more and more pressure on the lending industry in the cloak of complicity with CRA. Community organizer Barack Obama worked closely with ACORN activists. Employing the radical Alinsky intimidation tactics Obama had learned and was teaching -- "direct action" -- activists crowded bank lobbies, blocked drive-up teller lanes and demonstrated at the homes of bankers to browbeat risky lending in poor and minority communities. Those who resisted were accused of racism to the media and government officials.[/FONT]
> 
> ...


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## Twin Fist (Oct 21, 2011)

bll is right, the facts are the facts, the whole thing was caused by the DEMOCRAT protected fannie and freddy following DEMOCRAT thery of "everyone deserves to own a home" which is bull crap in it's purest form

no person deserves ANYTHING other than a  chance to pursue happiness

not results, but a chance at tryng to work for them


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## Sukerkin (Oct 21, 2011)

Aye, I am a firm believer in equality of opportunity rather than outcome :nods:.  But you've got to have a reasonably fair game for that to happen.

As to the roots of the present crisis, then, sorry to say, they do start in the 'soil' of the Reagan era.  Like I've said before, actions then were the pebble that started setting the conditions for the avalanche.  However, if what I've heard from John and Don and now BillC is true about the policies that twisted lenders arms to lend (where there was no realistic expectation of the borrower making good on the loan) then that is the charge that actually triggered the slide.

Of course, if the houses hadn't been ludicrously over-valued then it still wouldn't have been a banking crisis as the assets would not have been toxic - but that's a more complicated tale.


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## Twin Fist (Oct 21, 2011)

no it isnt

it is simple

DEMOCRATS FORCED banks to make loans to people that were not qualified

those people (of course) couldnt make the payments so they were foreclosed on

the fact that the properties were overvalued made matters worse, but the CAUSE of the problem was DEMOCRAT theory of social engineering


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## elder999 (Oct 21, 2011)

Bill Mattocks said:


> Sorry, not seeing it. My overall impression remains a simpler one; that our economy a) experiences cycles and b) that they continue. I see nothing that tells me that the current recession is never-ending.



And that's been true for most of our lives. There's every indication that this is different.

A good example from history: that land-based middle class I was talking about earlier? It lastd from the founding and though the Civil War. Then "free land" (*INDIAN* land) started becoming scarce,and the Industrial Revolution started drawing workers back into cities. As big business grew in the 1880s, the farm-based middle class collapsed, in part because the predecessors to ConAgra gained control of the sale and distribution of farm produce-this led to middle class farmers rising up and creating the Grange Movement to push back on big-agriculture, but the country was moving from an agricultural base to an industrial one, further eroding the farmers' power. As industry grew, the country entered a period sometimes referred to as the Robber Baron Era. Wealthy capitalists gaine monopolies over new technology and the resources it required: railroads, steel, oil, and coal, and amassed huge amounts of wealth.

That wealth did not trickle down.

By the start of the twentieth century, the average worker's income was less than $10k/yr. in today's dollars. Americans pushed back, limiting corporations with the Sherman Anti-trust act (essentially meaningless since Reagan scaled it back) . In 1907, that great Republican, Teddy Roosevelt, made it _illegal for corporations to give money to politicians,_ a law which is still on the books. Even with all this pushing back, though, the established aristocracy (_meritocracy?_) was frimly entrenched, and most Americans had no control over their own economic destiny, for the most part. The Robber Baron Era saw a very Dickensian America: from the 1880s through the Great Depression, things really only got worse for the working man.

There's every indication we're entering a similar period now. We're about to enter a very foolish trade war with China, over our misperception of the valuation of their currency. Additionally, there is a very real limitation on natural resources-while our own use actually isn't growing that much, the energy use of countries like China and India is growing at a remarkable rate. The list-_my list_-goes on and on, but the current recession may only be the beginning of a very dark period in American economic history. 

(*Buy LAND*)


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## JohnEdward (Oct 21, 2011)

Sukerkin said:


> Calmly now, gentlemen.  Such literary pawing-of-the-ground will not do.
> 
> Mr. Edward, if you really meant a clarification or an apology, there is no shame in reiterating it so that those taking offence know with more surety that that is indeed what you meant.
> 
> ...



Please, my apologies are extended if my rhetoric device is seen as beyond that to invoke emotional and unproductive petty insults is far from what I was doing. My comment was directed and calculated to stress a point as I said before, and was not intended to be anything else then to present and point out parallels in analogies.  I believe nursing is a noble profession and I personally don't believe otherwise. And really it would be silly to think it otherwise, nurses are the backbone of the hospital, clinic or office. I am sorry if any nurses found my comment slighting their profession. Again the use was specific and representational. My apology if anyone who may have mis-read my comments as being a petty knee jerk response to a perceived insult. Which is understandable as it happens allot on comment boards such as these, it is often done in lieu of a meaningful and intelligent response. I didn't take Twin Fist's comment personally, or as a slight though that is a well known device  intended to be a slight toward a whole class of people. Something I think Twin Fist failed to realize and wasn't sensitive to.


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## Bill Mattocks (Oct 21, 2011)

JohnEdward said:


> That is what am saying we don't know if it will end or if it does when? Therefore it is hard to apply a cyclic theory to our situation. But history and other economics do give us indication that the cycles are not consistent or uniform.



Not at all.  History tells us that we have booms and busts.  Both end.  In the absence of compelling evidence that the sun will not come up tomorrow, I choose to believe that it will.  It's simply the smartest bet; that doesn't mean it is right, it means it's the best odds.


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## Twin Fist (Oct 21, 2011)

is there an apology in there to all the nurses your insulted ?




JohnEdward said:


> Please, my apologies are extended if my rhetoric device is seen as beyond that to invoke emotional and unproductive petty insults is far from what I was doing. My comment was directed and calculated to stress a point as I said before, and was not intended to be anything else then to present and point out parallels in analogies.  I believe nursing is a noble profession and I personally don't believe otherwise. And really it would be silly to think it otherwise, nurses are the backbone of the hospital, clinic or office. I am sorry if any nurses found my comment slighting their profession. Again the use was specific and representational. My apology if anyone who may have mis-read my comments as being a petty knee jerk response to a perceived insult. Which is understandable as it happens allot on comment boards such as these, it is often done in lieu of a meaningful and intelligent response. I didn't take Twin Fist's comment personally, or as a slight though that is a well known device  intended to be a slight toward a whole class of people. Something I think Twin Fist failed to realize and wasn't sensitive to.


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## Sukerkin (Oct 21, 2011)

What makes this a bit different, Bill, is that this time we had a 'failure' of the banking and credit systems upon which economic activity has been based since we came off the Gold Standard.  

To prop that system up, we, the economically active, have been robbed of our earnings (I think it's about £5000 per household over here in the UK) and all that influx of unearned money to the financial sector has still not fixed the fundamentally broken machine.  Too much wealth has been syphoned off and turned into unproductive money and the wheels are seizing up.

The system needs an overhaul but no-one knows how or dares attempt it but the unpalatable truth is that what has been in operation for eighty or so years is a protracted period of spending future money today and there is a limit to how long that can go on before, as in the USA, the debt becomes greater than the amount that the nation can earn.

It's not a natural part of the seven year cycle that global economics follows, it is something different and far worse than a common-or-garden bust after a boom.  Whether it's a difference that will matter in the longer term is open to debate of course.


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## Bill Mattocks (Oct 21, 2011)

Sukerkin said:


> What makes this a bit different, Bill, is that this time we had a 'failure' of the banking and credit systems upon which economic activity has been based since we came off the Gold Standard.
> 
> To prop that system up, we, the economically active, have been robbed of our earnings (I think it's about £5000 per household over here in the UK) and all that influx of unearned money to the financial sector has still not fixed the fundamentally broken machine.  Too much wealth has been syphoned off and turned into unproductive money and the wheels are seizing up.
> 
> ...



Still doesn't persuade me.  I am old enough now to have personally experienced some of the ups and downs.  And old enough to recall the pundits saying and attempting to explain through a variety of means why this time was different.

Maybe it is different this time.  I can't argue against that possibility.  I just have to believe that "it's really really different this time" is less compelling than what has come before, over and over.


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## elder999 (Oct 21, 2011)

Bill Mattocks said:


> Still doesn't persuade me. I am old enough now to have personally experienced some of the ups and downs. And old enough to recall the pundits saying and attempting to explain through a variety of means why this time was different.
> 
> Maybe it is different this time. I can't argue against that possibility. I just have to believe that "it's really really different this time" is less compelling than what has come before, over and over.



To understand that "it's really really different this time," one only has to look at the Dow, which closed today at 11,808.79, up 267.01 pts. from yesterday's close. 

When, in all those times the economy was* down*, was the market at *10,000 pts*. in our lifetime, Bill? The market currently indicates a healthy economy-it's about back to where it was when the "recession" started, and there's massive profit being made. Mind you, the market's a little psycho, subject to the whims and fears of traders, and intersting phenomena that result from computerized trading, but it's still all you need to look at to know that "it's really, really, *really* different this time."


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## Bill Mattocks (Oct 21, 2011)

elder999 said:


> To understand that "it's really really different this time," one only has to look at the Dow, which closed today at 11,808.79, up 267.01 pts. from yesterday's close.
> 
> When, in all those times the economy was* down*, was the market at *10,000 pts*. in our lifetime, Bill? The market currently indicates a healthy economy-it's about back to where it was when the "recession" started, and there's massive profit being made. Mind you, the market's a little psycho, subject to the whims and fears of traders, and intersting phenomena that result from computerized trading, but it's still all you need to look at to know that "it's really, really, *really* different this time."



I don't know what it means.  I'm not an economist and I don't pretend to be one.  Nor am I essentially an optimist about our current situation.  What I am is a believer in inertia.

And frankly, if we're now on terra incognita, what's the point in extrapolating what will happen next?  In a chaotic system, there's not much to do but try to ride the wave.


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## elder999 (Oct 21, 2011)

billcihak said:


> Sorry, the mess started with Jimmy Carter, with the final push by Bill Clinton, aided by Barak "the organizer" obama, and protected by the likes of Barney Frank and his boyfriend as well as Chris Dodd. Bush did try to bring some control back over fannie and freddie, but the dems, and some republicans, stopped any attempt to fix the situation.



Once again, we see what partisan rhetoric and propaganda can do to spin the story. This crisis was a direct product of deregulation-deregulation that the corporations who caused it insisted on for years, and had Democrats and Republicans pushing for. Ultimately, it led to commercial banks doing business as savings and loans, and vice versa. It led to those risky motgages being traded heavily as_ instruments, _as derivatives or futures-it was all motivated by greed, and directly marketed to the poor and minority communities. How can you say that institutions were browbeated into risky lending, when they engaged in robocalls to the ghettos, offering mortgages to people who often couldn't afford to pay rent? At no money down? All that money that resulted from the overvaluation of real estate, and the creation of debt where there was none before-it went into someone's pocket at some point, dude, and those people were concerned with "Red" states, or "Blue" states, the only color they cared about was green......



Bill Mattocks said:


> I don't know what it means.



It means that the rich get richer, the poor get poorer, and more and more people join their ranks every day, squeezed out of the middle class by the vacuuming of wealth into the uppermost reaches of the economy.

It means some of us are really and truly well ****ed.



Bill Mattocks said:


> I'm not an economist and I don't pretend to be one. Nor am I essentially an optimist about our current situation. What I am is a believer in inertia.



I'm not an economist either, Bill. What I am is a guy with a perspective well beyond that of "in my lifetime." I have the benefit of more than a century of investments. I'm also a believer in inertia, but that law applies to bodies in motion as well, especially if we liken them to a rock rolling down a hill, or a handbasket sliding into hell......:lfao:



Bill Mattocks said:


> And frankly, if we're now on terra incognita, what's the point in extrapolating what will happen next? In a chaotic system, there's not much to do but try to ride the wave.



*(BUY LAND)*..._or a boat, *or both*_.


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## Bill Mattocks (Oct 22, 2011)

elder999 said:


> It means that the rich get richer, the poor get poorer, and more and more people join their ranks every day, squeezed out of the middle class by the vacuuming of wealth into the uppermost reaches of the economy.



I think we've established that.  What we have not established is whether or not that is a bad thing.



> It means some of us are really and truly well ****ed.



In the long term, we're all dead.  As someone else said, but I agree with it.



> I'm not an economist either, Bill. What I am is a guy with a perspective well beyond that of "in my lifetime." I have the benefit of more than a century of investments. I'm also a believer in inertia, but that law applies to bodies in motion as well, especially if we liken them to a rock rolling down a hill, or a handbasket sliding into hell......:lfao:



Science says that this laptop could fall through my desk onto the floor.  But in reality, it's not very likely to do so.  My point is that systems are more likely to do what they have always done than they are to do something radically different, proven by history.  I will defer to the most-likely path in the absence of compelling information that they system has stopped being one.



> *(BUY LAND)*..._or a boat, *or both*_.



I am legally prohibited from doing either one at this time.  I am permitted to continue administering my own 401(k) plan, and I have a 4.7% return for YTD and 4.6% over the last two years.  I'm no financial wizard but I bought Ford stock at $2, know what I mean?  People talk about 'buy low and sell high' but they can't do it.  They are risk-averse, easily-frightened, and move with a herd mentality.  Times of turmoil are also times of opportunity.  As the scroll in our dojo says, the time to stike is when the opportunity presents itself.


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## elder999 (Oct 22, 2011)

Bill Mattocks said:


> I think we've established that. What we have not established is whether or not that is a bad thing.



It is a bad thing, Bill. The end of the middle class means the end of democracy as we think we've known it. We're seeing the beginning of overt, outright corporate rule. That's a bad thing. It's in corporation's interest to diminish the middle class, lower the number of educated people, lower the number of self-sufficient people (as though there were so many of us as it is) lower the number of property owners,control the media and all information that people can receive(*tell you what to think*) control food and water sources(*tell you what to eat*), and increase the membership of a weak workforce that has to expend all its energy just scraping by on the pennies tossed down from on high(*tell you what to do*).

It's a very bad thing, Bill. 





Bill Mattocks said:


> Science says that this laptop could fall through my desk onto the floor. But in reality, it's not very likely to do so. My point is that systems are more likely to do what they have always done than they are to do something radically different, proven by history. I will defer to the most-likely path in the absence of compelling information that they system has stopped being one.



THis is where you're wrong. The system has experienced radical changes in the past. You're limiting your view to what's occurred in your lifetime-see my post about the Robber Baron Era: it already *is* radically different, and your not seeing-or _refusing_ to see it-isn't going to change that.

You wanna ride that wave? You need to acknowledge that it's the biggest ****ing one you've ever seen, or are ever gonna see, and it's just _starting_ to swell, about two sets back.....:lfao:




Bill Mattocks said:


> I am legally prohibited from doing either one at this time. I am permitted to continue administering my own 401(k) plan, and I have a 4.7% return for YTD and 4.6% over the last two years. I'm no financial wizard but I bought Ford stock at $2, know what I mean? People talk about 'buy low and sell high' but they can't do it. They are risk-averse, easily-frightened, and move with a herd mentality. Times of turmoil are also times of opportunity. As the scroll in our dojo says, the time to stike is when the opportunity presents itself.



Yeah-I bought Ford @ between $1.65 and $1.90, and sold all but the 5,000 shares that represented my initial investment when it was between $12.70 and $16. Made a boatload of money....[_seriously_...... I bought another boat :lfao:....Times of turmoil *are* times of opportunity, but you should take that "sell high" money and buy land, seriously, and not much more than $10,000 in gold-for bartering purposes. 

There's nothing prohibiting you from buying real estate outright if you have the cash, is there? That's what I've been doing, and telling a lot of people to do: get your 401K out of the market as much as you can, too, or resolve to work until you're dead, like I'm gonna, but not because you want to, like I do, but because you'll *have* to.


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## Bill Mattocks (Oct 22, 2011)

elder999 said:


> There's nothing prohibiting you from buying real estate outright if you have the cash, is there? That's what I've been doing, and telling a lot of people to do: get your 401K out of the market as much as you can, too, or resolve to work until you're dead, like I'm gonna, but not because you want to, like I do, but because you'll *have* to.



I can technically buy real estate if I have cash, yes, but there's a catch; I can't have that much cash.  It's all very complicated, which I am just learning.  The short answer - no, I can't buy Real Estate legally at this time.

As to the 401(k) mix, as of today:
52.15% Long Term Bonds: up 9.4 percent YTD
38.89% Short Term Bonds: up 1.8 percent YTD
5.20% Small / Mid Cap Equity Index: down 15.5 percent YTD
3.77% Small / Mid Cap Equity: down 14 percent YTD

100% of new contributions are split 50/50 between Equity Index stocks and Equity stocks; I'm buying into a falling market.


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## elder999 (Oct 22, 2011)

Here are the people the "99%" are protesting against.


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