Inflation, real income, and politics Moved from: Interesting Articles Relating to EVs

[rruff]

Your money should work for you

Gaming the system. Advocating that the owners of capital are the ones who deserve the gains. Which, whether you realize it or not, is playing right into the hands of the mega rich.

Meanwhile I think the workers should also experience an increase in living standard if productivity increases. If you actually think about it, the scientist and engineers who invent and apply new and more efficient technology are the ones who are actually improving productivity, but their salaries have been stagnant just like all the other workers.

 

[mpruet]

Because the spoils go to those who have lots of capital to "invest" in these things. If you didn't do it someone else would.

Meanwhile the poor slob working a job and spending all his income to support his family is getting screwed. Because the gains aren't going to workers, rather they are accumulating to owners of capital.

Well, he has a place to live in because I helped fund the house he lives in.

And why does he spend all his income?

 

[Happy Camper]

Because the spoils go to those who have lots of capital to "invest" in these things. If you didn't do it someone else would.

Meanwhile the poor slob working a job and spending all his income to support his family is getting screwed. Because the gains aren't going to workers, rather they are accumulating to owners of capital.

Just for kicks I'm going to say this. I have less income than the poor slob at the moment. And have for some time. I have no special resources. No backup. In fact I'm underwater to some extent.

I have no capital to invest. Yet when it's time for me to make money I will. And I'll be as successful at it as I decide to be.

Gaming the system. Advocating that the owners of capital are the ones who deserve the gains. Which, whether you realize it or not, is playing right into the hands of the mega rich.

I'm trying to understand your point.

It's bad to be a working slob.
It's bad to be successful. (Financially)
It's really bad to be really successful. (Financially)

So what should I try for? Work for free and let the government take care of my needs? No offense. But your words are seriously confusing me.

 

[bullfrog !]

I agree with most of the above statements but there are some rather important exceptions in my opinion. Most trades require fairly good health and you most times must be self employed or have employees to make enough to allow you to keep physically healthy enough to reach old age. There are not a lot of old welders, truck drivers, mechanics or plumbers for example. There are just too many exposures to weather, poor working conditions or hazards like fumes and chemicals used in those trades. If not self employed most employers do not want to pay any more than they have to and if in a non union shop many times no job security or guaranteed seniority. Times get tough many times the highest paid oldest non management person is the first to be laid off. In my experience.
Yes there is a price to pay to live as we do in this country. It isn’t charity or really all your money from my viewpoint. It is the dues you owe those that served both in government and military service to enable you to live in a society where you have the opportunity to make money. Yes you do get a voice in how and what for it is spent. I decided after serving I would never begrudgingly complain about paying taxes after seeing the sacrifices others made so present and future generations would have a free and caring society to live in, open to anyone that wanted to live free of oppression. Military service makes many realize the person next to them, no matter what political party, religion, skin color, or moral values, is the only person that they will have to depend on to keep them alive and matters. You do the best you can with what you have in all situations.

 

[rruff]

And why does he spend all his income?

Because he makes 1/4 what you do, and he has dependents, and even if he could accumulate capital, it wouldn't be much.

I don't know how old you are, but it was very different in the 60s and 70s.

 

[rruff]

So what should I try for? Work for free and let the government take care of my needs? No offense. But your words are seriously confusing me.

In case it wasn't obvious, I'm talking about how the system and the distribution of income and wealth has changed. I haven't said a word about what individuals "should" do. But since you mentioned it, I think you should do whatever you think is best. I don't have a problem with anyone accumulating capital and "investing" it.

I do have a problem with someone claiming that it's right/best/good for the system to increasingly favor capital and profit over work.

 

[Happy Camper]

In case it wasn't obvious, I'm talking about how the system and the distribution of income and wealth has changed. I haven't said a word about what individuals "should" do. But since you mentioned it, I think you should do whatever you think is best. I don't have a problem with anyone accumulating capital and "investing" it.

I do have a problem with someone claiming that it's right/best/good for the system to increasingly favor capital and profit over work.

But when I start making money again and am successful, I expect to make my money work for me to make more money. That's part of the system available to just about anyone. With very few exceptions.

Do I think corporate greed and profit at all costs is detrimental to the economy, and most of the people? Yes. And a lot of that has to do with the changes of the investor class over the years. Among other things.

 

[dhuff]

Define success. It means something different to everyone. Unless, of course, you mean money.

I think a lot of the debate I see here involves a fundamental difference in worldviews that your last sentence points out:

• The natural state of humankind is anarchy, "nature red in tooth and claw" as it were. In our modern society, money and what it represents is the only true measure of success of the individual (who is the only person that matters). I got mine, &*^$! you. The less fortunate have what they deserve because they weren't as smart or hard-working as the successful. This, vs...
• Humankind is meant to live together, I am my brother's keeper. Caring for your neighbor (and I mean "neighbor" in a Biblical* sense because of my background) is more important than amassing large amounts of wealth while my neighbor goes without basic necessities. Value and success is measured in the overall happiness of humankind collectively.

And please note that the above represents endpoints of a continuum, not binary "A or B" choices. I figure most of us fall somewhere in the gray area in the middle. I do, but I strive to become more like the second position than the first.

* I only mention that because I was raised in a mainline church, the Episcopal Church USA, and because the New Testament is full of stories about this dichotomy. I am not implying that one has to be a Christian, or any religion, to hold to this second worldview.

 

[rruff]

But when I start making money again and am successful, I expect to make my money work for me to make more money. That's part of the system available to just about anyone. With very few exceptions.

Of course it's a matter of degree. I don't have an issue with the concept or practice of investment.

Most people are not born with money. Any capital they acquire is what they saved from their job. If wages are depressed (which they've been since ~1980) then it's more difficult. For the great majority of the population, their main source of income is their wages.

I’m not 100% in agreement with that. Your worth to your employer is based more on how much your efforts improve the bottom line of the company.

Something that is nearly impossible to quantify or put a value on. Especially in a company that has a lot of employees.

I have some experience running a small business, and I never once thought "how is this person improving my bottom line?" People were hired to do things that needed to be done, and if I was happy with their performance, I made sure that they were well paid, relative to the market... so if they left it wasn't because they were underpaid. The bottom line was my concern, not theirs.

Well, he has a place to live in because I helped fund the house he lives in.

This sort of rationalization seems very silly to me. If his salary wasn't so poor, he could have funded it himself. You weren't doing anyone a favor... rather you were capitalizing on a way to make profit. If there are people needing a place to live, who have the means to pay for it, there will be no shortage of builders.

A shortage of capital has never been an issue. Consumer buying power is the limiting factor. And as we discovered in the middle of the last century, if you rig the game so that wages and benefits keep pace with productivity growth, everyone gets richer at an impressive rate.

 

[mpruet]

I have some experience running a small business, and I never once thought "how is this person improving my bottom line?" People were hired to do things that needed to be done, and if I was happy with their performance, I made sure that they were well paid, relative to the market... so if they left it wasn't because they were underpaid. The bottom line was my concern, not theirs.

Then that’s probably the reason that employees get underpaid. By not making yourself aware of who was doing the significant improvements to the bottom line, you’re discouraging the folks who go the extra effort to do any more than exactly what is required of them. You’re basically lowering the overall productivity. That’s really a smart management tactic.

This sort of rationalization seems very silly to me. If his salary wasn't so poor, he could have funded it himself. You weren't doing anyone a favor... rather you were capitalizing on a way to make profit. If there are people needing a place to live, who have the means to pay for it, there will be no shortage of builders.

And just why do you think I was getting anything in return for funding his house? Did I say anything about a return?

Just to be precise here, you have to have money to donate money.

 

[rruff]

I only mention that because I was raised in a mainline church, the Episcopal Church USA, and because the New Testament is full of stories about this dichotomy.

Even when I was a kid, I was amazed and perplexed at the difference between those stories and the actual beliefs and behaviors of the church and community I was born in. And when I asked about it, I got shouted down. It was a good incentive to make an early break though, and start thinking for myself.

 

[mpruet]

I think a lot of the debate I see here involves a fundamental difference in worldviews that your last sentence points out:

• The natural state of humankind is anarchy, "nature red in tooth and claw" as it were. In our modern society, money and what it represents is the only true measure of success of the individual (who is the only person that matters). I got mine, &*^$! you. The less fortunate have what they deserve because they weren't as smart or hard-working as the successful. This, vs...
• Humankind is meant to live together, I am my brother's keeper. Caring for your neighbor (and I mean "neighbor" in a Biblical* sense because of my background) is more important than amassing large amounts of wealth while my neighbor goes without basic necessities. Value and success is measured in the overall happiness of humankind collectively.

And please note that the above represents endpoints of a continuum, not binary "A or B" choices. I figure most of us fall somewhere in the gray area in the middle. I do, but I strive to become more like the second position than the first.

* I only mention that because I was raised in a mainline church, the Episcopal Church USA, and because the New Testament is full of stories about this dichotomy. I am not implying that one has to be a Christian, or any religion, to hold to this second worldview.

You’re totally missing the key point. There are opportunities everywhere. All you have to do is to take advantage of them.

When I was in the 8th grade one of my teachers made a statement that had a profound influence on me. “All of you have already decided if you’re going to live on the top of the hill or at the bottom.” The context was that it was up to us to make the most of what we had, and if we chose just to focus on the minimum requirements of our job, we’d be at the bottom.

No one has to make a career of a minimum low-paying job. They chose to not go beyond that.

I had a high-school class mate. He was not from a wealthy family - lived in a shack in a rural area. He was a bit of a goof-ball and barely passed his classes. But when he left high school, he started mowing lawns for income. He gradually expanded his business to include landscaping and eventually became one of the most sought after landscapers/nursery owners in east central Alabama. He ended up installing landscapes for multi-millionaires. His typical landscape installation was over $100K.

I had another friend who was great in school, but after leaving school he started doing nothing but watching TV and videos. He gradually became a recluse and didn’t even attend his class reunions. He ended up totally on public assistance.

Neither of these two were victims. Both chose the life that the received. The same is true with most folks alive now. They are not victims. They chose the life and the work that they have. They are not tied to their job. Those days of serfdom are long over.

 

[rruff]

Then that’s probably the reason that employees get underpaid. By not making yourself aware of who was doing the significant improvements to the bottom line, you’re discouraging the folks who go the extra effort to do any more than exactly what is required of them. You’re basically lowering the overall productivity. That’s really a smart management tactic.

Like I said, the bottom line was my problem, not theirs. Saving the company money, or figuring out a better way to do things was my responsibility.

And I believe it was much more important to foster a good work environment, and let people know they were appreciated... which they were, nothing phony about that. I think you way overestimate how much of an incentive money is for most people. That's also been proven in many studies. Poor pay is a disincentive, but if they are making good pay relatively, and they like their job, then damn near everyone will do it as best they can. Nobody left unless it was to move to a different town, or start their own business.

 

[RonDean]

This debate is PERFECT example of what we were talking about before, 90% vs 9% vs 1%. About Gini index and income inequality. https://en.wikipedia.org/wiki/List_of_countries_by_income_equality

Part of the problem is, that middle class is being squeezed, into poor and 9%. I can see how much harder it would be to my children to buy a house.

Schools are financed in a way that poor areas have poor schools with poor educational outcomes. So next generation is less capable to improve life, compared with parents (inter-generation social mobility decreases). So 9% see how easy is to fell into 90% (say, a medical emergency).

There are substantial tax subsidies to 1% (fed subsidised flood and fire insurance for nice homes in nice places, many of them *second* homes), sold to voters like help to average income family (instead of the median income).

Socialism lost to capitalism every time it was tried (so far, now China tries again), but capitalism needs to improve - improve outcomes for the whole society, not only 1%. Funny how everybody agrees that problems started in 1980'ties but Reagan was the best president. Maybe worker's unions could make capitalism more oriented for the benefit of the whole society, like in Germany. There is research that social problems are harder to solve in societies which are less homogenous, because it is easier to blame others (blacks for being poor, white males for being rich). And of course, the 1% manipulating the 9% to fear the 90% and vice versa.

No easy answers. If your answer is simple and easy, very likely it is also wrong.

Wander,
Total agreement, with the proviso that we are all subject to the winds of chance. A business reversal, a car accident, a global economic meltdown at exactly the wrong time, divorce, etc. etc. can all crash our expectations regardless of how well we planned.

And I would also posit that there are no "pure" economic systems. We have aspects of socialism and Russia and China are now allowing aspects of capitalism to flourish. Ditto for all the other countries I know of to some degree or other. It's what makes it all work - better in some cases than others.

But as long as any of us continue with "I did this" or "my friend did that" we will always end up with outliers and anomalies that probably do not apply very well to the general population. A National Bureau of Economic Research study found that people are born to families that are better off, better educated, and better situated. matters a lot and puts them at a natural advantage. Whether because of being taught better lessons at home or going to better schools or having better support, this holds true for more people than not. And is called the Birth Lottery. Another one of those winds of chance.

I don't say that that any individual cannot increase the odds of success by making better choices. That is obvious to many of us. Especially when we have seen many examples around us in slightly to extremely more affluent communities. But there are many (and a growing number of) people that do not see many such examples in their lives. That have not learned the necessary lessons and are just struggling to put food on the table and pay rent. Tell them to work harder or make better investments and you'll be lucky if they don't react less than positively.

 

[mpruet]

Like I said, the bottom line was my problem, not theirs. Saving the company money, or figuring out a better way to do things was my responsibility.

Duh - by not rewarding those that go well beyond the minimum requirements, you’ve just discouraged excellence and told those that tried to exceed those basic requirement that you do not value their work. That’s really a smart management technique.

And yes there are other things besides money, but just ignoring their extra effort is a manager’s method of discouraging their efforts and drives the over all level of productivity down lower than it need be. You’ve just removed all incentive to excell.

And I believe it was much more important to foster a good work environment, and let people know they were appreciated... which they were, nothing phony about that. I think you way overestimate how much of an incentive money is for most people. That's also been proven in many studies. Poor pay is a disincentive, but if they are making good pay relatively, and they like their job, then damn near everyone will do it as best they can. Nobody left unless it was to move to a different town, or start their own business.

That’s BS. No one will try harder if there is no reward for trying harder.

 

[mpruet]

Wander,
Total agreement, with the proviso that we are all subject to the winds of chance. A business reversal, a car accident, a global economic meltdown at exactly the wrong time, divorce, etc. etc. can all crash our expectations regardless of how well we planned.

Err - that’s why you’re advised by every financial planner/advisor to always have a good sized emergency fund - at least 3-6 months worth.

I’ve always had a cash/near-cash fund of that amount, and now have a near-cash fund of 4 years. I’m sleep well at night with little worry.

 

[rruff]

You’re totally missing the key point. There are opportunities everywhere. All you have to do is to take advantage of them.

And you keep missing the key point that the opportunities are small in number relative to the population, and what people need are good paying jobs in aggregate. Look at what the jobs people actually have are paying.

The statistics speak for themselves... wages suck. That even goes for professions unless they are controlled by national institutions (like medicine).

by not rewarding those that go well beyond the minimum requirements, you’ve just discouraged excellence and told those that tried to exceed those basic requirement that you do not value their work. That’s BS. No one will try harder if there is no reward for trying harder.

I actually expected excellence, and in most cases that's what I got. If someone was lacking in skills but not determination, they were helped and usually able to learn. If someone had irreconcilable attitude issues they were encouraged to leave.

The reward is the satisfaction of doing a job well, and contributing to a successful effort. Believe it or not, most people really appreciate being able to do that in a good environment.

 

[Happy Camper]

Wander,
Total agreement, with the proviso that we are all subject to the winds of chance. A business reversal, a car accident, a global economic meltdown at exactly the wrong time, divorce, etc. etc. can all crash our expectations regardless of how well we planned.

I've been on top and on the bottom. Some of those situations happened to me personally. Then you get back up and start moving again. It's not always easy. But it is what it is.

But as long as any of us continue with "I did this" or "my friend did that" we will always end up with outliers and anomalies that probably do not apply very well to the general population.

Show me the place and person that the individual didn't do this or their friend didn't do that where anything positive happened. Any movement in society happens with many individuals doing something.

We aren't some hive mind where every person plays their exact part. That society doesn't exist in a fruitful, positive way in and large scale.

A National Bureau of Economic Research study found that people are born to families that are better off, better educated, and better situated. matters a lot and puts them at a natural advantage. Whether because of being taught better lessons at home or going to better schools or having better support, this holds true for more people than not. And is called the Birth Lottery. Another one of those winds of chance.

Birth lottery. So parents teach their kids what they know about whatever it is they know about. I agree with that.
It also explains why some are taught how to make and save money. And why some are taught other lessons.

I've made money. I've lost money. The one thing I made sure to instill in my kids is this. Money is a tool that's useful in many situations. But it won't give you happiness. "The best things in life aren't things". Find happiness and contentment in your life wherever you are. Whether you end up rich, or end up working paycheck to paycheck. If you're doing something you love go for it. Money can buy many things. But it can't buy happy. And you can always make more money.

I don't say that that any individual cannot increase the odds of success by making better choices. That is obvious to many of us. Especially when we have seen many examples around us in slightly to extremely more affluent communities. But there are many (and a growing number of) people that do not see many such examples in their lives. That have not learned the necessary lessons and are just struggling to put food on the table and pay rent. Tell them to work harder or make better investments and you'll be lucky if they don't react less than positively.

That's when you "teach a man to fish" instead of making sure he has fish delivered to his house daily. Knowledge is key.

Anyone that comes up to me and says they are helpless because of circumstances gets asked the question.

Can you let those circumstances go and move forward? If so, they are willing to learn how to succeed.

If not? They aren't ready to leave the comfort and shield those circumstances provide. "I know I could have had better if only..." It's a real and powerful thing. It's a huge risk to see if you can succeed or fail based on your own merit. I get it. That's a person I can talk to, but probably can't help.

 

[Happy Camper]

And to be extremely clear. Jobs are one way to make money. But there are plenty of other ways.

 

[mpruet]

The reward is the satisfaction of doing a job well, and contributing to a successful effort. Believe it or not, most people really appreciate being able to do that in a good environment.

And if that is the best that any manager can do for their employees, then no wonder that the salaries have stagnated .