How to Fix America's Wealth Inequality: Teach Americans to Be Cheap

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    Mar 13, 2013 3:57 PM GMT
    Well yes, and government policies that encourage savings not punish it.

    http://www.theatlantic.com/business/archive/2013/03/how-to-fix-americas-wealth-inequality-teach-americans-to-be-cheap/273940/
  • conservativej...

    Posts: 2465

    Mar 13, 2013 6:20 PM GMT
    I am not surprised that there has been no response to Riddler's post. The most interesting part of this thread is not so much the article, as the response to the article, for it is telling of the culture (at least that present on RealJock.com) at large.
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    Mar 13, 2013 6:44 PM GMT
    I like Noah Smith's blog, but this is absurd. How much cheaper can you get when people have gone from Walmart to dollar stores? You still have not changed the income gains that are distributed unequally despite vast improvement in productivity by all workers. Whoever has capital nowadays wins big time, no matter how thrifty you are.
    (BTW, I'm one of those thrifty people. I got a lot of savings in the bank. That's just how I'm brought up, but it sure doesn't help the economy.)
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    Mar 13, 2013 7:40 PM GMT
    q1w2e3 saidI like Noah Smith's blog, but this is absurd. How much cheaper can you get when people have gone from Walmart to dollar stores? You still have not changed the income gains that are distributed unequally despite vast improvement in productivity by all workers. Whoever has capital nowadays wins big time, no matter how thrifty you are.
    (BTW, I'm one of those thrifty people. I got a lot of savings in the bank. That's just how I'm brought up, but it sure doesn't help the economy.)


    Being thrifty and having money in the bank that you have capital. How is this absurd? We all spend with a certain level of frivolity.

    "How much cheaper can you get when people have gone from Walmart to dollar stores?" This assumption betrays your bias... especially when even the poorest in the US tend to have things like cell phones, are able to find money to smoke, drink etc. No one is saying they have to be complete cheap puritans but to suggest that the poor don't have the capacity to save is absurd in developing countries and even more so in developed countries. Do a search for "micro savings" for a large body of research.
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    Mar 13, 2013 8:45 PM GMT
    The absurdity is in the unequal distribution of income, and trying to fix it by having people save more when there is not "more" to be saved.

    And yes, I'm well aware that the poor can save. And your bias shows when you point to smoking and drinking as activities less suitable to the poor simply because they are poor and should save their money instead. Vices are vices and all walks of life indulge in them. The rich just have more resources to do so.
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    Mar 13, 2013 8:48 PM GMT
    q1w2e3 saidThe absurdity is in the unequal distribution of income, and trying to fix it by having people save more when there is not "more" to be saved.

    And yes, I'm well aware that the poor can save. And your bias shows when you point to smoking and drinking as activities less suitable to the poor simply because they are poor and should save their money instead. Vices are vices and all walks of life indulge in them. The rich just have more resources to do so.


    Everyone has vices - you're right and that's what I was highlighting. The rich could do less and generally do do less already as a % of their overall incomes. That's not a bias, that's a fact... the bias however is in saying "How much cheaper can you get when people have gone from Walmart to dollar stores?" - a somewhat bizarre assumption at best.

    If they moved more towards savings instead of spending on credit for things that don't generate a return, they'd by definition be wealthier - and then there's also a change in mindset as well for many choices.
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    Mar 14, 2013 12:46 AM GMT
    Heck, I go to a dollar store now.
    http://abcnews.go.com/Business/dollar-store-booming-business-cheap/story?id=17934578 The winning formula begins in tiny towns -- the underserved communities even Wal-Mart or Target wouldn't give a second look. Dollar stores gobble up cheap real estate, sometimes an old store front on a forgotten Main Street, or the strip mall that lost a bookstore or an electronics retailer. Then they hire a small work force -- each store might only have two people working at a time, whereas a Wal-Mart or Target will have a payroll of more than 100.

    Dollar stores use almost no advertising. No expensive TV commercials. Customers can pick up a circular in the front of the store to find deals.

    Their final secret is a laser-like focus on the customer -- some might even call it an obsession. When Family Dollar President Mike Bloom is talking about business, he paints a picture of a mother.

    "Eighty percent of our customers are women so we think about 'her' all the time," Bloom said. "She earns $40,000 a year or less and a lot of them earn $25,000 a year or less. It's usually a single mom in a household typically taking care of kids."


    http://www.suntimes.com/business/3840139-420/booming-dollar-stores-drawing-one-third-of-u.s.-conusmers
  • coolarmydude

    Posts: 9190

    Mar 14, 2013 3:04 AM GMT
    1) disposable income

    2) The more money exchanges hands, the better the economy


    And conservatives still think they understand economics... icon_rolleyes.gif
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    Mar 14, 2013 3:09 AM GMT
    The issue is very multifaceted and the article gets at one piece of the puzzle, which is education. If the poor and middle class were thoroughly educated on how to build wealth, and how to think wealthy, PLUS they were intrinsically motivated enough to carry out the behaviors of wealth creation, then individuals would have more wealth.

    I analyzed a friends grocery list once because she complained health food was too expensive. I counted 50 dollars worth of "empty calories" including mallowmars.

    When an individual complains of money problems, I simultaneously feel their pain and wish them success, but also can't help but critically think about any dolars they have wasted...

    And no one is perfect. I'm typing this in a Starbucks with the full blown knowledge that I could have made this "venti green tea" at home for a fraction of the cost. But the difference is that not everyone realizes this... Education is a huge piece of this puzzle.
  • coolarmydude

    Posts: 9190

    Mar 14, 2013 3:23 AM GMT
    JerseyJames75 said Education is a huge piece of this puzzle.


    And the next piece of the puzzle is that not all education is equal, and unequal on different levels.
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    Mar 14, 2013 11:10 AM GMT
    Riddler believes in the same fantasies as his hero Paul Ryan. Reality will not be countenanced. icon_rolleyes.gif
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    Mar 15, 2013 4:42 AM GMT
    If only the poor would be content with their bread rather than fancy brioches, who would even be poor? I mean, can't they just stick with forest wood for heating? Can't they just get by with tin can phones? You can even get a network with these.

    imageV3D.JPG

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    Mar 15, 2013 4:47 AM GMT
    file-130.jpg
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    Mar 15, 2013 12:27 PM GMT
    Alternatively, the poor could save more and work towards a different mindset. It's kind of telling how seething the usual left is with their condescension and low expectations.
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    Mar 15, 2013 12:50 PM GMT
    Aristoshark said
    conservativejock saidI am not surprised that there has been no response to Riddler's post.

    I'm not either, because it's massively stupid. as he is.
    Inequality isn't about what's left over after you make your subsistence purchases.
    Inequality is about income.
    Mistaking the one for the other is the sign of a feeble brain or utter dishonesty.
    Or, as in Riddler's case, both.


    Your post speaks for itself.
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    Mar 15, 2013 12:59 PM GMT
    riddler78 said
    Aristoshark said
    conservativejock saidI am not surprised that there has been no response to Riddler's post.

    I'm not either, because it's massively stupid. as he is.
    Inequality isn't about what's left over after you make your subsistence purchases.
    Inequality is about income.
    Mistaking the one for the other is the sign of a feeble brain or utter dishonesty.
    Or, as in Riddler's case, both.


    Your post speaks for itself.

    This, time 3.14.
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    Mar 15, 2013 2:52 PM GMT
    datscarf said
    smartmoney said
    riddler78 said
    Aristoshark said
    conservativejock saidI am not surprised that there has been no response to Riddler's post.

    I'm not either, because it's massively stupid. as he is.
    Inequality isn't about what's left over after you make your subsistence purchases.
    Inequality is about income.
    Mistaking the one for the other is the sign of a feeble brain or utter dishonesty.
    Or, as in Riddler's case, both.


    Your post speaks for itself.

    This, time 3.14.


    wut?


    It's Pi, datscarf - infinity.
  • Posted by a hidden member.
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    Mar 15, 2013 3:17 PM GMT
    meninlove said
    datscarf said
    smartmoney said
    riddler78 said
    Aristoshark said
    conservativejock saidI am not surprised that there has been no response to Riddler's post.

    I'm not either, because it's massively stupid. as he is.
    Inequality isn't about what's left over after you make your subsistence purchases.
    Inequality is about income.
    Mistaking the one for the other is the sign of a feeble brain or utter dishonesty.
    Or, as in Riddler's case, both.


    Your post speaks for itself.

    This, time 3.14.


    wut?


    It's Pi, datscarf - infinity.


    Lol. Right. Multiplying things by pi = infiniti. And that's why you were never any good at retail banking.
  • Posted by a hidden member.
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    Mar 15, 2013 11:30 PM GMT
    coolarmydude said1) disposable income

    2) The more money exchanges hands, the better the economy


    And conservatives still think they understand economics... icon_rolleyes.gif


    Exactly. Even in China, sluggish consumer spending (due to the Chinese habit of squirrelling away cash) is holding back growth. The Chinese economy is more dependent than ever on exports and investments. Chinese consumers are not really reaping the full fruits of their labour. If Americans are addicted to living beyond their means, the Chinese are too adept at living beneath theirs.

  • Posted by a hidden member.
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    Mar 16, 2013 7:09 PM GMT
    Ex_Mil8 said
    coolarmydude said1) disposable income

    2) The more money exchanges hands, the better the economy


    And conservatives still think they understand economics... icon_rolleyes.gif


    Exactly. Even in China, sluggish consumer spending (due to the Chinese habit of squirrelling away cash) is holding back growth. The Chinese economy is more dependent than ever on exports and investments. Chinese consumers are not really reaping the full fruits of their labour. If Americans are addicted to living beyond their means, the Chinese are too adept at living beneath theirs.



    Well yes and no. The Chinese tend to save more because of a lack of a social net which is ironic considering China still considers itself to be a communist country. Savings tends to be a lot better than consumption spending because it means a cheaper cost to investment. China has significant problems in its financial system as it stands - and while on the surface it appears they are net savers, you just need to dig down to the provinces and the cities where there is significant borrowing and corruption. Markets are about production and the allocation of resources - not consumption - which is what those like coolarmydude and you apparently have gotten wrong.
  • Posted by a hidden member.
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    Mar 16, 2013 9:56 PM GMT
    icon_lol.gificon_lol.gificon_lol.gificon_lol.gificon_lol.gificon_lol.gif
  • Timbales

    Posts: 13993

    Mar 16, 2013 10:08 PM GMT
    there's a difference between being cheap and being thrifty
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    Mar 19, 2013 2:27 AM GMT
    So his title was misleading...he just wants the poor to be taught to be better managers of the help that they should be getting from the government:
    http://noahpinionblog.blogspot.com/Although my Atlantic column on wealth inequality got a lot of publicity, the comments were mostly negative. Almost all of them said one basic thing: "The poor don't have any money to save!"

    Now, first of all, this means that a lot of people just glossed over the column itself, and instead just guessed/assumed the message from the title and picture. These people assumed that my column was calling for the poor and middle class to help themselves instead of relying on society to help them (in other words, basically an "angry conservative uncle" column). Whereas if they read it closely, they'd find me saying this:

    "[O]ne obvious thing we could do to make wealth more equal is - surprise! - redistribution. It turns out that income redistribution and wealth redistribution have much the same effect on the wealth of the poor and middle-class. Income redistribution is probably a bit better, for two reasons. First, people with higher incomes tend to save more, meaning they build wealth more rapidly. Second, people with higher incomes tend to have less risk aversion, meaning they are more willing to invest in assets like stocks (which get high average rates of return, although they are risky) rather than safe assets like savings accounts and CDs that get low rates of return.

    In other words, giving the poor and middle-class more income will boost the amount they are able to save, the percentage they are willing to save, and the return they get on those savings. Part of the reason America's wealth distribution is so unequal in the first place is that our income distribution is very unequal."

    So obviously I do realize that the poor have very little money; this is why I suggest that we tax the rich to give the poor more money, in order that they may save more (and consume more, of course)!


    And to regulate the credit card companies and payday checking businesses that screw so many people.
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    Mar 19, 2013 2:07 PM GMT
    Er no, that's not what he argues for with respect to regulations - and this is why I often characterize your arguments as dishonest because you should know better - what he concluded with:

    http://noahpinionblog.blogspot.ca/2013/03/how-poor-can-and-should-save-money.html

    In other words, combining these findings, we see one simple truth: Most poor people, if they didn't take out payday loans, would not die. They would not be out on the street or crippled or starving. Instead, they would simply be wealthier. For this reason, many states, and the federal government, are all actively looking into legal restrictions on payday lending; some have already done this.

    Regulation can help, but tricksters are ingenious. Poor people need to learn how to avoid the tricksters. My column was suggesting that government, through public school and through awareness campaigns, can help people avoid the tricksters just as fast as the tricksters can come up with new tricks.

    And this probably applies to middle class people as well, who almost certainly borrow way too much on credit cards. 22.5% interest?? You have to be kidding me! The whole credit card industry survives only because of the large number of people who make only their minimum payments and end up getting trapped in high-interest credit card debt for life. Some of those people borrow for emergency medical expenses, but even in those cases - where borrowing makes sense - I'm sure people could find much cheaper ways to borrow.

    The point is, avoiding unnecessary high-interest debt is equivalent to saving lots and lots of money, while consuming the same amount overall. In other words, it;s a free lunch for people, as long as they known how to grab it.

    Anyway, I think a lot of people saw my column as an "either/or" thing - they thought I was arguing that we should encourage self-reliance and ignore the social aspect of wealth inequality. But I don't see these things as substitutes. I see them as complements. We want society to help the poor and middle-class as much as possible. And we also want the poor and middle-class to help themselves as much as possible. That way, the poor and middle-class get the maximum amount of total help possible. There is no trade-off!

    And remember, if you live in a corrupt, predatory kleptocracy, you want to A) fight to change your society for the better, and B) at the same time, rely as little as possible on the goodwill of the corrupt kleptocracy to provide you with your daily bread. "Just save your money" is not a cure-all for the poor. But "save your money while fighting to change the system" is way better advice better than "spend all your money and borrow at 3000% and pray for the revolution to come soon".


    I can understand his moderation of his original message given his audience but I saw his column more to be an emphasis of the savings side of the equation instead of just the redistribution (which is the side I disagree with - but whose sentences I did see in the original column). It's ironic that you didn't interpret his column correctly originally though. He does however acknowledge there are significant opportunities for savings. I disagree however that payday loans have no use. I think they shouldn't generally be used but they do provide an instrument of financial flexibility if absolutely required (his conclusion incidentally does not follow from the points cited by pew).
  • GQjock

    Posts: 11649

    Mar 19, 2013 2:11 PM GMT
    What ... not only do we basically pay taxes to subsidize the wealthy

    Now we gotta scrimp and save besides ?

    Dude .... time for the Donald Trumps and the Exxon's of this world to get off the public funding teat