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Forum Post: Why can't everyone be rich?

Posted 6 years ago on April 14, 2012, 1:28 a.m. EST by francismjenkins (3713)
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I bet virtually everyone thinks this idea is ridiculous, even though they probably don't know why.



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[-] 2 points by JoeTheFarmer (2654) 6 years ago

Because not everyone has the talent or puts forth the effort.

Why can't everyone have a 4.0 GPA? Why can't everyone run a marathon? Why can't everyone win the Masters Golf tournament? Why can't everyone be a rock star?

I would pay more for a doctor than I would for a landscaper any day of the week!

I would pay more for a certified accountant than I would for a general process worker any day of the week.

[-] 2 points by francismjenkins (3713) 6 years ago

You're point is absolutely well taken, but what I think you may be not giving enough attention to, is the extent to which people believe they can realistically attain these things (and this is where, in my opinion, the change needs to be focused on). Rhetoric is obviously not enough to inspire people, or it certainly can't overcome real tangible barriers people see in their every day lives to achieving these sort of things.

The change, I think, must begin by empowering people. The best way I can think of to get people to believe they can change their own circumstances, is by putting them in charge of their own circumstances (and removing the shackles so to speak).

It's also true, from a purely logical perspective; that if people are exclusively focused on a day to day struggle to barely make ends meet, they will simply have less time and stamina left to focus on improving their circumstances.

[-] -1 points by Dell (-168) 6 years ago

what shackles ?

[-] 2 points by DemandTheGoodLifeDotCom (3360) from New York, NY 6 years ago

Everyone would be rich if income was allocated fairly.

Worker productivity in the US is about $65 per hour. So if income was allocated equally, full-time workers would get paid $135,000 per year, enough to make everyone rich.


Since the only economic reason for paying one person more than another is to get people to work hard, the only fair way to allocate income is to limit differences to only what is necessary to get them to do difficult work and give their maximum effort.

If we allocated income based on hard work, every worker would get paid closer to the $65 per hour they produce. For example, if we determined that paying the top earners 4 times more than the bottom earners was enough incentive to motivate people to work hard, we would be able to pay every worker from $115k to $460k per year. That would make every worker wealthy.

If we paid top earners 10 times more income, we would be able to pay everyone from $100k to $1 million per year which is also enough to make everyone wealthy.

You can see the calculations for those incomes here:


The only reason why poverty or even the middle class exists is because we allocate income unfairly. We allocate income based on bargaining power. It allows a very small minority to use their bargaining power to unfairly take more income than they earned and deserve which then leaves the vast majority broke since there is very little income left over to pay them.

Allowing the few at the top to take as much as 50 to 50,000 times more income than everyone else is unfair and undeserved because 1) they don't work 50 to 50,000 times harder than everyone else, 2) they didn't earn this money from willing consumers in the market, 3) they shouldn't have the power to force the rest of society into poverty or financial struggle, 4) there is no economic justification that requires us to pay them this amount in order for the economy to work well, 5) it makes society undemocratic since it gives them as much as 50 to 50,000 times more political power than everyone else.

[-] 1 points by francismjenkins (3713) 6 years ago

The only way I could reasonably see moving towards a society where workers earned all or most of what they produce, is if we had more employee owned firms (and labor unions are also helpful in this regard). We have employee owned companies now, where in many cases management is participatory, and so I think this can be reasonably accomplished in the relatively near future. But of course we have to make this a priority as a society, and the only way I see that happening is if we get the corrosive influence of money out of politics, and move towards a more participatory democracy. Citizens in some of our states enjoy some aspects of direct democracy (i.e. the right to hold recall elections), and while I'm not sure to what extent merely allowing recall elections induces more participation, it would at least make higher levels of participation possible (by caveat of the ability to recall politicians who do not represent the interests of voters, voluntary associations like General Assemblies, environmental groups, advocacy groups who fight on behalf of the poor and disenfranchised, etc., would become much more influential).

Of course conventional companies would probably also try and influence voter sentiment. Even if they lose the ability to directly influence the political process, they would still be able to advocate on behalf of "issues" (like for instance oil and gas companies who constantly run ads promoting the industry). We can safely say companies should not be allowed to contribute to political campaigns or provide funding for superpacs, but to say they can't run any ads whatsoever promoting their own industry, is a much bigger leap (but I'm not sure if the idea of having to compete against corporate interests, provided we level the playing field, is all that problematic).

[-] 1 points by DemandTheGoodLifeDotCom (3360) from New York, NY 6 years ago

I don't agree that employee owned companies will enable workers to earn from $115k-$460k (or somewhere close).

If a baseball team was employee owned, would they pay the baseball players an income comparable to the guy working the grounds? I don't think so.

But more to the point, owning companies is extremely risky. And there is still vast differences in profitability between companies.

If you are the owner of a failing company, you will be worse off than just being a worker. And if you own a company that is a lot less profitable than other companies, your income will be a lot less than if you worked at those other companies.

Also, if you work in an industry that employs mostly low wage workers like a retail store, you can never pay your employees a fair wage closer to the $65 per hour because your competitors who are not paying the fair wage will be able to offer lower prices.

The only way to eliminate unfair income inequality, and the only way to allocate income by hard work, is to allocate total income at the national level. And I think the only way to make that happen is to form a single worker union and demand it. And since 97% of workers would get a pay increase and 50% would get a nearly 400% pay increase, we could probably get enough workers to join the union to make this happen.

[-] 1 points by francismjenkins (3713) 6 years ago

We already have thousands of employee owned companies in this country, but indeed, the guy who has a PhD in physics working in the lab probably still gets paid more than the person answering phones, but that's okay. In employee owned/managed companies workers do better, earn more, better benefits, participate in management decisions, and have an ownership stake in the company.

Yes, unions are good as well (although the idea of a "national union" seems to be a move in the backwards direction, I think the last thing we need is more concentration of power, or more centralization). We need more participatory democracy, which implies less top down control.

[-] 1 points by DemandTheGoodLifeDotCom (3360) from New York, NY 6 years ago

I'm not an expert on employee-owned companies, but I would guess that the workers don't make anywhere near the $115k minimum that would exist if we allocated income nationally.

Unions are only effective if they have bargaining power. A small union cannot change anything, let alone a country's economic system. Only a large union with a significant percentage of the workforce can wield that kind of power.

If 10,000 people agreed to go on strike until income was allocated based on hard work so that we can raise the minimum wage to $115k, those 10,000 people would be on strike forever.

But if 100 million workers did the same thing, our economic system would change overnight.

The last thing we need is more decentralization of worker bargaining power. Worker lack of organization is the only reason why they are getting exploited.

We need workers to get a much, much, much larger share of the available income (not more participatory democracy so they can continue to have little say in matters which have little importance in their lives) which will only come about through more organization and solidarity, not less.

[-] 1 points by francismjenkins (3713) 6 years ago

The phrase "more" participatory democracy implies that we currently have participatory democracy, and of course we don't. Moreover, I'm not sure where you're getting the $115K figure from, I assume this number is taken from simply dividing GNP by population (or at least working population), but I think that's a pretty crude measure.

A straight labor theory of value (aka Marx/Engels) is really hard to support. I mean, at a minimum, taking the example of the PhD scientist, who's doing the research and driving the technical innovation, you'd have to include all the hard work it took him or her to earn that PhD in the formulation.

If we tried to enforce a scheme that mandated equal pay in all circumstances, we run into the incentive problem (which is why even communist China doesn't do this, it was one of the primary drawbacks of Soviet style communism, although there were many other drawbacks, most notably, totalitarianism ... but I digress).

[-] 1 points by DemandTheGoodLifeDotCom (3360) from New York, NY 6 years ago

"The phrase "more" participatory democracy implies that we currently have participatory democracy, and of course we don't"

I don't think participatory democracy is going to make everyone rich. What is going to make everyone rich is allocating income fairly. And the only way to allocate income fairly is based on hard work. Allocating income based on hard work (instead of based on bargaining power) will enable us to raise the minimum wage to $115k (see below) which is enough to make everyone wealthy. And the only way to change the way we allocate income is for the majority of the "99%" to form a single union and demand it or go on strike. That change is not going to come through participatory democracy.


"I'm not sure where you're getting the $115K figure from"

I explained it in my original comment above. Here is the relevant part:

Since the only economic reason for paying one person more than another is to get people to work hard, the only fair way to allocate income is to limit differences to only what is necessary to get them to do difficult work and give their maximum effort.

If we allocated income based on hard work, every worker would get paid closer to the $65 per hour they produce. For example, if we determined that paying the top earners 4 times more than the bottom earners was enough incentive to motivate people to work hard, we would be able to pay every worker from $115k to $460k per year. That would make every worker wealthy.

If we paid top earners 10 times more income, we would be able to pay everyone from $100k to $1 million per year which is also enough to make everyone wealthy.

You can see the calculations for those incomes here:



"A straight labor theory of value (aka Marx/Engels) is really hard to support"

Allocating income based on hard work has nothing to do with the labor theory of value.

And the labor theory of value was a theory of classical economics, not Marx. It was supported by Adam Smith and Ricardo.

And I don't think anyone has debunked the labor theory of value concept. I believe the value of everything is based on how much labor it took to produce.


"If we tried to enforce a scheme that mandated equal pay in all circumstances, we run into the incentive problem"

I agree. I do not advocate paying everyone equally. However, paying everyone equally would be a lot less of a problem than most people think. And I believe I can make a pretty compelling case that paying everyone equally is workable.


"which is why even communist China doesn't do this, it was one of the primary drawbacks of Soviet style communism"

People were not paid equally in soviet communism. Some people argued that there was more inequality than in the West. But it did not have an incentive problem. Their economy under communism did better than it does now under capitalism and they developed faster than any capitalist country did. They went from a backwards, feudal, undeveloped, peasant country to a modern super-power in a few decades.

Their problem was lack of democracy, transparency and accountability and totalitarianism.

[-] 1 points by francismjenkins (3713) 6 years ago

Yes, Smith/Ricardo first developed the idea, but Marx/Engels expanded on it quite a bit, but anyway, the Soviet centralized planning project didn't produce a useful economy, because there's no way a central planner can have enough information to understand demand (particularly during that era, before the advent of the computational tools we have today).

They went from a semi-agrarian, underdeveloped society, to a totalitarian regime that diverted valuable resources (that people needed to survive), to building a military super-complex. They never became a modern super power, they became a militarized Orwellian nightmare.

If you want to argue for a successful top down model, fascism was arguably the most successful, but of course it depends on how we define successful (and for me, any top down regime precludes itself from being defined as successful). If the success doesn't come from the people and belong to the people, then it's not their success. They may delude themselves into thinking, by caveat of residing within certain geographic borders, they can somehow take pride in that success, but in my view that is a poor outlook.

I mean, I like labor unions, I think we need more unionized workplaces (not less), but a centralized "national" union seems like a slide towards the abyss. We're just too large a country for a project like this to work. Workers should own the places they work wherever possible, and if that's not possible (for some good reason) then, with the exception of highly educated professionals, workers should have the benefit of a labor union.

[-] 1 points by DemandTheGoodLifeDotCom (3360) from New York, NY 6 years ago

Choosing between a labor union that is going to get me $115k or $230k depending on whether I do difficult work and a 100% mortgage with a 0% interest rate or ownership in a worker-owned company that is going to pay me roughly what workers get paid today seems like a no-brainer.

I'm choosing the union that is going to pay me 4 times more income.

[-] 0 points by gforz (-43) 6 years ago

To have the type of pay for employees that you suggest, then the allocation of risk would need to be adjusted. You don't have the upside without the downside. Many business owners put their entire life savings into their businesses and sign personal guarantees on loans for property and equipment and for business capital. The employees come to work, get paid, and leave. Yes, they could lose their job, but they don't go bankrupt if the business goes under. I am actually for employee owned or at least partially owned companies because it aligns the interests of the owners and employees. Employee owned companies also have competition like any other business and like any other business have difficult decisions to make regarding hiring and firing, pay increases, pricing, etc. They often find that the grass is not necessarily greener on the other side. It can be, of course, but there are no guarantees. I think it would be ideal if everyone were required to take business classes, be required to start an imaginary company, create a business plan, fork over equity to start it, borrow more to grow it, hire staff, sell their product or service, and deal with the competing demands of their "constituents" in their company. Oh, and unions too. I think management should walk a mile in their employees shoes as well. I think a lot of eyes would be opened.

[-] 1 points by DemandTheGoodLifeDotCom (3360) from New York, NY 6 years ago

What you say about investment is true. In order to have an economic system that allocates income differently, we also have to allocate investment differently. If we are only paying people based on hard work and no longer paying people for investing, there obviously would be almost no investing.

What I propose is to just use public funds for all our investing. Everything would work exactly as it does now. Individually run banks would lend and invest in individually run companies. The only difference is that the money it uses is public money.

Since not everyone spends all their income as soon as they get it, there is a natural savings rate. This can easily be determined by the Fed. The Fed would then allocate this money to the banks for investing.

If the savings rate was too low, we would just implement an investment tax on the gross sales of business. This would essentially force business to save a portion of their revenue. This investment tax revenue would be added to the available funds we need for investment.

You can read more about this in an earlier post I wrote:


The problem with our economic system is not that employees don't get a piece of the profits. Profits do not make up a large percentage of our total income. The problem is that we allocate income so unequally. Too much income is unfairly concentrated in the hands of the few leaving too little income for everyone else. So I don't think employee owned companies are going to do much and since business is risky, will hurt a lot of people.

[-] 1 points by jssk (170) from Naperville, IL 6 years ago

No such thing. Even if I have a billion dollars, and everyone else has 10, I'm still poor. It's called inflation. Go to Zimbabwe, everybody's rich there.

[-] 1 points by badreadnaught (55) 6 years ago

If everyone were rich, no one would actually be considered rich, just as no one would be considered poor. Everyone having all that they need and want - in such a economic utopia, would theft, robbery, swindle and other such crimes become rare or vanish?

The accumulation of wealth and things that lend themselves to many a person's sense of self-importance would be difficult if not impossible to overcome. How do we conquer insecurity of the self? How do we stop people's desire to compensate for whatever is lacking in their spiritual selves, and that they attempt to compensate for through the accumulation of wealth? After a certain point the accumulation of money simply becomes a way of keeping score in the imagined "contest" of life. For some then, it morphs into wanting to show the world just how rich and therefore powerful they are. They buy large homes all over the world, buy yachts, works of art, etc. All driven by some (from my perspective) weird desire to compensate for who they really are deep down inside - insecure people.

When they prove to themselves and the world just how wonderful they are, they then believe themselves to be "entitled" and that rules and ethics are obsticles to be dealt with and gotten around. How poor they really are in their shallowness.

I know that there are exceptions to this generalization I've made, but they are few and far between, in my experience.

It's a wise person who knows when to be happy and satisfied.

[-] 1 points by blackpanther6389 (39) from Peoria, IL 6 years ago

That's not the way the monetary system works, nor can it. For one, everyone is held accountable for their own actions, so if they fall behind or even if they're born in the slums, honestly they have no chance. Not everyone comes up with a successful business plan, and those that do, have to be cut throat in order to maintain that since this is a competitive society as it stands now.

First we have to define what it means to be "rich" which would be hard since that's such an abstracted word anyways, it has no referent to the physical world. Second, we'd have to redesign practically everything in order to find a referent for that word "rich" and see to it that everyone can become that.

That's just my two cents though, I don't see it happening in this system though...

[-] 1 points by j91488 (14) from Menlo Park, CA 6 years ago

""I don't think it's ridiculous at all. If the world's wealth were to be spread out more fairly, maybe humans wouldn't be "rich" in the traditional sense of the world, but we would be far richer in terms of our health, well being and happiness.""" not to mention our population would sky rocket because no one would be dieng

[-] 1 points by sato (148) 6 years ago

Not everyone can be rich but everyone should have the same chance at the opportunity to become rich by hard work. This means that we need access to quality education and healthcare. What we have in USA is a elitist society where the rich are the ones that are more likely to become well paid employees or bosses because they do have access to the best education and healthcare. Meanwhile, we have the other side of the spectrum which is, people that work for most of their lives with no prospects of bettering themselves. People that are stuck on low wages jobs because they lack proper preparation. This people can't afford healthcare and if the worse were to happen, they are sht out of luck. Income inequality has grown tremendously in USA and it must be stopped because it only makes things worse for the economy.

Besides, the really superrich, like Romney just stockpile their money in foreign banks. Why would he care about paying a few mils to help fellow Americans get a better quality of life?

[-] 1 points by TrevorMnemonic (5827) 6 years ago

lulz so true. If people have more money, they spend it. And people spending money is good for the economy.

HR 2990 is the real solution.

[-] 1 points by francismjenkins (3713) 6 years ago

I would say if it has HR in front of it ... it can only be a short term solution. I support political reform, and political initiatives (mostly as a means to sort of hold back the tide of corruption, authoritarianism, etc., while more meaningful, revolutionary, and "ground up" changes are working their way through society), although there's probably not a chance in hell HR 2990 will gain any traction (realistically speaking). I think some aspects of it (or similar reforms) are doable in a more piecemeal way. For instance, we probably could get Glass Steagall restored (if we push hard enough and just don't give up on it), but it's unlikely congress will radically change our monetary system (in the way Kucinich would like to see).

[-] 1 points by amanofnoimportance (82) from Orlando, FL 6 years ago

There are "rich" people and "poor" people because of the existence of money.

Money blocks a direct path to essential nutrition and security that other creatures on this planet enjoy.

The people who control the money are able to make as much as they want out of thin air.

By making people believe that money is an essential element to access essential nutrition and security, they are better controlled. If you are controlled, you are not free. It does not matter if everyone makes the same amount.

I know this is oversimplified. Hopefully it conveys at least a small speck of the big problem.

[-] 1 points by GirlFriday (17435) 6 years ago

Why..who then would give definition to the upper class or the middle class?

[-] 1 points by Yin7 (44) 6 years ago

because some people have torn souls & empty hearts. They can only define themselves by what they have & what others do not. It will never change. People with money are jealous of raw talent, simple happiness, & love. They make up for these short comings by being filthy rich. The difference lies between humans. Some are bean counters & some artists. The camps are jealous of each other. It is not a one way street as OWS proves & as Wall Street proves. It is the yin & yang of life.

[-] 1 points by francismjenkins (3713) 6 years ago

To the extent this is true, isn't something I can quantify (my guess is we are a very narcissistic society). Nevertheless, the things I'm talking about are really the "low fruit" on the tree, things we can do in the short term to put us on a better trajectory. I tend to think that if we want participatory democracy, we shouldn't take an all or nothing approach. It's something that probably needs to happen gradually. For one thing, people have to want to participate. We can slowly get more participation by starting with the easy stuff. For example, if we say to residents of a public housing complex, hey would you guys like to manage the building yourselves? You can vote in a committee, you can rotate people in and out of those administrative roles, you can recall people if they screw up, whatever ... I'm pretty sure they would welcome the opportunity.

These are tangible ways we can begin the process at the grassroots level. It's all about changing hearts and minds, and the process we use to achieve change is usually (in itself) the change we wind up with (so when people criticize OWS's focus on process, I really think they're just completely missing the point). Process is everything. How we pursue change IS the change.

[-] 1 points by FriendlyObserverB (1871) 6 years ago

Sure we can all be rich !

Rich is about having enough.. we can all have enough .. there is plenty of food shelter and clothing for everyone.. and jobs and opportunities .. there is enough for everyone .. absolutely ..

[-] 1 points by RedSkyMorning (220) 6 years ago

If everyone were rich, then everyone would also be poor... The grammar makes the statement ridiculous.

[-] 2 points by francismjenkins (3713) 6 years ago

You're statement presupposes that in order for wealth to exist, there must be poverty (e.g. wealth is a relative term). Another poster pointed out the fact that people from other places (suffering from starvation, drought, political tyranny, etc.) are eager to come to the US (as if that should be our standard of comparison when we examine our own quality of life and society).

However, that comparison is useful in another context, because even if everyone in the US became much richer, no longer spent every waking hour worrying about how to pay their rent or mortgage, there would still be plenty of poverty on earth for comparison purposes.

We might think that if we can eventually alleviate all poverty on earth, then we will (at some point) run into this problem, to which I respond, I look forward to the day when our only problem is the rhetorical definition of wealth :)

[-] 1 points by shoozTroll (17632) 6 years ago

Because we allow the rich to define the term.

In reality, many of the so called "rich" are suffering from an illness.

A mental condition, that will one day include a pathology beyond the symptoms.

Just because someone is rich, doesn't mean they are not nuts. They can just pay someone to convince you they're not.

[-] 1 points by RedSkyMorning (220) 6 years ago

Oh, many personality disorders seem to help people in their careers as long as its not too severe. Rich people and some of the most inventive (productive) people I know are literally nuts. ADD, OCD, anti-social personalities, bi-polar all can make a person see possibilities or do things a normal person wouldn't. That's why I'm against drugging up people for every little mental problem. I think these conditions are around because they benefit society.

[-] 2 points by shoozTroll (17632) 6 years ago

Inventive people don't necessarily become rich.

Sometimes, the truly insane rich use this against them.

Tesla is a perfect example.

[-] 1 points by infonomics (393) 6 years ago

Everyone is one idea removed from riches.

[-] 2 points by francismjenkins (3713) 6 years ago

Exactly, and the idea is, average people are stuck in the trenches fighting to keep what little they have, instead of focusing on what we should be focusing on, which is enhancing what we have. But of course average people aren't really to blame, rather, entrenched interests who have a stake in the status quo, like to keep us bogged down in the quagmire of defending that status quo (it's sort of a self-fulfilling prophecy). Whenever people get the crazy idea that things could be much better, these interests shift the goal post (and so far, we've allowed them to get away with it).

[-] 1 points by Pequod (17) 6 years ago

you arent being clear. what exactly do you mean?

[-] 2 points by francismjenkins (3713) 6 years ago

Everything that helps average people is under attack, whether it be social security, Medicare, whatever. So instead of thinking about ways to improve these programs so we achieve more desirable outcomes, we're bogged down in a political quagmire trying to defend the merit of the idea behind these programs, basically a never ending fight, forced to revisit the same questions repeatedly (so we're paralyzed, moving in place, while the world around us is moving forward). This is a pretty good hint that we may have maximized the extent to which our current system can achieve progress, and unless our generation steps up to the plate and innovates, it's just down hill from here.

[-] 0 points by Pequod (17) 6 years ago

I want to be courteous and avoid confrontation but the solution to maintaining Social Security and Medicare in their current forms is to dramatically raise taxes on everyone. I havent heard anyone on the left or right, excluding libertarians, say either plan is in and of itself "bad" i happen to believe they are noble ideas, but they need to be solvent. In their states today, they are growing exponentially, and it just a math problem, they will consume the entire budget of the US. I will say that again. Those 2 entitlements will consume the entire budget of America. No money for National Parks, no money for education, no money for roads. This isnt a matter of maybe, this is a matter of when. This cant be solved with platitudes, or posturing, or populism. We either decide to place structural limits on their growth, or we dcide to tax everyone for their entire paychecks and that includes minimum wage workers.

There was a point counterpoint editorial in my Sunday discussing this very issue. The Republican was backing the Ryan plan, because it sort of deals with the simple math and puts more of the burden for Medicare on the recipients. The Democratic response was to ignore the simple actuarial truth and pander to voters. No mention that to maintain Medicare, ALL income would have to be dramatically taxed.

Now who do you support?

[-] 1 points by francismjenkins (3713) 6 years ago

I don't view this as an either or choice (since I think both sides are offering substandard solutions). Treating social security or Medicare more like a pension system requires neither ignoring actuarial reality, or transitioning to a voucher scheme (like Ryan proposes), which effectively puts these programs on a trajectory towards death. I see no reason why, for instance, our social security administration shouldn't behave like a pension fund, investing in fixed income instruments (like municipal bonds, annuities, and other near zero risk instruments that typically outperform inflation). There's no appreciable risk of government picking winners and losers in the market place (since these are not conventional market securities). This is investing in municipal (as in state or city) bonds, or regulated industries where there's at least an implied (if not explicit) government guarantee. This not only gives retirees a better return on capital (over the course of their working careers), but it also allows them to retain a principle balance that can be passed to their heirs (and it allows them to take advantage of things like compound interest).

In other words, it enables average people to accumulate wealth (but it could still preserve the "social" aspects of social security, like survivor dependent benefits and disability).

[-] 1 points by Pequod (17) 6 years ago

If you wont be honest, then this reasonable discussion wont work. Being untruthful helps no one. Good luck in the future.

[-] 1 points by francismjenkins (3713) 6 years ago

I mean, if you're gonna accuse me of lying without providing any basis (just a bare assertion), then I think it's you who's not carrying on this discussion in a reasonable, adult manner.

[-] 1 points by Pequod (17) 6 years ago

I will give you the benefit of the doubt then. There is no trust fund for Social security. There is nothing, no aggregate of cash collecting interest. The average monthly benefit is $1200 or roughly $15000/yr. Right today a safe rate of return is 3%. 3% of $500000 =$15000. There are about 50000000 people collecting SS. To be self funding, as you want, We would need to have $25 trillion dollars invested in 3% bonds. Every cent that you paid into SS was spent immediately to pay SSI benefits.

Do you understand that? If you do, how can we possibly find that money to put into bonds? There is no real trust fund.

[-] 1 points by francismjenkins (3713) 6 years ago

Okay, but I guess I should have clarified my thoughts on this. Technically, the government does owe the social security administration money, but leaving that aside (and assuming the worse), if we absolutely had to come up with something to fund social security at current levels (assuming anemic economic growth perpetually into the future, which is probably not a good assumption, but I won't digress), yes we may have to cut cost of living increases somewhat, and raise the payroll tax (estimates I've seen put the needed increase at around 0.9%, but again, this assumes none of the metrics go in our favor).

Even under those conditions, we could still transform the social security system into a viable pension system, it would just take us about two decades (maybe even slightly longer). Seems like a long time, but unfortunately time seems to go quicker than we like, but more importantly, if we did this ... we could put this issue to rest (because a responsible government doesn't second guess major social programs, critical to virtually its entire population, every election cycle).

In other words, we need to rethink this issue, and modernize social security to match the demographic trends. But we don't need to toss the most venerable segment of our population into abject poverty to accomplish this. Another added benefit would be enhanced confidence in the American political system (which we might think would benefit us from the perspective of currency valuation and attracting investment). The confused chaos that now best describes Washington, isn't doing us any favors. Moreover, a Ryan plan sort of solution just isn't going to happen (even if it is more ideal, not an assumption I make, but even if it were, it doesn't matter, so we need to be more creative).

You have to keep in mind, when people talk about "unfunded liabilities" (as in Medicare or social security), the shocking numbers we see are based on 75 year projections (and you should know as well as I do, a 75 year projection is something very close to worthless). This is not merely a matter of actuarial projections (if it were, it would be more reliable), this depends on birth rates, income levels, inflation, etc. (which is not something that can be accurately modeled when looking so far into the future). Maybe we have a biotech boom that completely changes the outlook, or maybe we continue to slide into the economic abyss, which would likewise completely change the calculus. But one thing I do know for certain, the sooner we start to upgrade this system, the sooner we'll get it done; and even if the metrics all wind up falling in our favor, the economy goes on a half century super normal growth spurt, we have another baby boom, etc., it would still be better (anyway we look at it) to have a system where people acquire a property interest in their retirement fund.

[-] 1 points by Builder (4202) 6 years ago

Define rich.

This is mother earth. Nobody gets out of here alive.

[-] 1 points by francismjenkins (3713) 6 years ago

I define rich in the conventional way. While "we're here" (on earth that is), financial comfort.

[-] 1 points by Builder (4202) 6 years ago

Financial comfort for me means not having to commute to earn money for food. I can catch enough fish and crustaceans, or shoot enough beef, to stay at home and work on my cabin, or extend our campgrounds.

Can you describe what financial comfort means for you?

[-] 1 points by francismjenkins (3713) 6 years ago

And so you should be able to do just that (but I'm pretty sure, even in today's world, you can ... although there may be barriers to this lifestyle I'm unaware of, since I never did the Zarathustra thing).

[-] 0 points by Pequod (17) 6 years ago

Its really hard to maintain equality. Some people tend to be very smart with money, others make very poor decisions and spend every penny. It might be apocryphal, but I have heard lots of poor folks that win the lottery end up flat broke a few years later. I do know for a fact that many rock stars and athletes end up broke. They were rich, but squandered it.

We are promised the pursuit of happiness, we arent promised happiness. They are very different things.

[-] 2 points by francismjenkins (3713) 6 years ago

I'm not talking about equal outcomes, but I will say, we shouldn't forever limit ourselves to the trappings of rules (or better stated, popular perceptions concerning those rules) that were enumerated in the 18th century. I love our Constitution, but the phrase "pursuit of happiness" doesn't limit the extent our society can help facilitate the comfort of all its members. Moreover, I'm not trying to promulgate a definition of happiness, except to say there are advantages of wealth that virtually all sane people would like to enjoy, and it wouldn't necessarily be all that difficult to accomplish.

[-] 0 points by engineer4 (352) 6 years ago

Happiness is relative. There are likely 3 billion people that would come to this country for just a small chance for "happiness". As for a definition, you would never get agreement on that. Pursuit of happiness is reference to the right for opportunity, but not an absolute right to succeed. as for comfort, again, what is the definition, how much comfort? Guess we will need a comfort bureau and comfort enforcers. :-)

[-] 2 points by francismjenkins (3713) 6 years ago

Sure, people who come from the worse conditions on earth (societies governed by tyrants, engulfed with drought, abject poverty of a level hard for us to imagine, starvation, despair, etc.) are eager to get into the US. If you're satisfied by comparing ourselves to these failed societies, then sure, you probably won't be all that eager to see change. Obviously most of us here are not satisfied with those sort of comparisons. Also, if you think the only two choices in the entire universe are suck it up & like the status quo or comfort bureau's and enforcers, then I'm sure you would be similarly hesitant to endorse change (of course many of us see this obviously false dichotomy for what it is, absurdity).

[-] 1 points by engineer4 (352) 6 years ago

Can you define happiness? How about equal outcomes? You ask to enjoy the advantages of wealth? Then go do so, you are a free person here, what is stopping you. And don't say the system is, that is just not true. The only limits you have are the choices you make, starting at a young age and forward. Some will succeed and some will fail. Some are smarter than others. Some have more ambition. That is just the way it is. You can not change that. But you can be sure to involve yourself in a systems that promotes fairness and equal acres to opportunity. Those that are truly disadvantaged should be assisted. But you seem to want all to have same outcome. Now that would not be a fair system at all.

[-] 3 points by francismjenkins (3713) 6 years ago

Oy, skim the thread (get an idea of where the discussion has been focused), and then come back to me. I mean seriously, I'm sick of repeating the same thing ... this doesn't imply equal outcomes.

[-] 1 points by engineer4 (352) 6 years ago

If I did miss something, then apologies. Sometimes the threads get hard to follow.

[-] 0 points by Pequod (17) 6 years ago

I think you did say you want to determine outcomes. "Facilitate the comfort" means determine an outcome. Thats impossible. And you are defining happiness as material advantage.

[-] 2 points by francismjenkins (3713) 6 years ago

No, I don't think material comfort is the only measure of happiness, but it does make happiness easier to achieve. Moreover, I'm not endorsing predetermined outcomes. Let's say we, in some way, facilitated the formation of nonprofit real estate trusts to purchase urban rental property. We might think these entities would naturally be able to charge less rent, and they will be less likely to evict residents who are experiencing hardships (and more likely to work with those folks). By making life a little bit easier for people, it allows them to focus on enhancing their happiness even further (and this is just one small example of what I'm talking about). BTW this doesn't imply that landlords are morally culpable (in many cases they simply can't financially absorb losing rental income). Moreover, the traditional tenant/landlord relationship is fine (in my view), provided the relationship is voluntary.

Another idea, allow residents in public housing complexes to manage the property they live in (in a participatory way), rather than treating them like a herd of cattle. This gives them the power to improve their own lives (and this basic idea can be applied to a variety of different things).

The point is the more people have to struggle for basic necessities, the more they're forced to defend what little they have, and the less able they are to influence outcomes, the less they focus on improving their lives and enhancing happiness. The question isn't whether or not we can do these things, I think it's very easy to understand how we can, the question is really about our morality as a society.

[-] 0 points by Pequod (17) 6 years ago

There are for profit real estate trusts as we speak, and they do no better than my or your brothers return. If I may, you are falling into a trap, believing there is a nice cushion of profit in private ownership of real estate.

here are some yields for REITs.


So we could reduce rents by 4-6% in a non profit, i guess that might help renters, but then no one will invest capital in a building of that type, so the tenants would be entirely on the hook for repais and maintainence. I like your idealsm, but you are being quite naive, tenants will not manage their own property, period. They are tenants BECAUSE they dont want the expenses of property management, to expect them to invest in a building not their own is not being honest. Honesty is the bedt policy, always.

[-] 1 points by francismjenkins (3713) 6 years ago

Like I said, I'm not endorsing this model as a cure all, or even implying that it can or should be applied in all circumstances, but I also don't think this is naive idealism. A nonprofit would be just as able to maintain a building and perform repairs as private owners. If residents were able to manage the property themselves (in other words, if residents of public housing complexes were able to manage those buildings themselves, or nonprofits owned apartment buildings, where the nonprofits were themselves managed by residents under a participatory model) I see no natural reason why there would be less incentives to physically maintain the property, and indeed the reverse should be true.

[-] 1 points by Pequod (17) 6 years ago

Ok pencil this out for me in a pro forma. It is eady to do. Show me the numbers.

[-] 1 points by francismjenkins (3713) 6 years ago

Isn't that sort of expecting too much from an informal internet post? But, I can do (I think) one better. There are nonprofit real estate trusts in existence today, and I think Britain allows residents in some of its public housing facilities to manage the buildings they live in (so we don't need a speculative business plan, we have real world examples, the gold standard in terms of empirical evidence).

[-] 1 points by XenXmith (8) from Fairfax, CA 6 years ago

How are you going to get someone to wipe your rich arse if they're rich too?

[-] 1 points by francismjenkins (3713) 6 years ago

Do you know of any wealthy people (who are not physically handicapped) who pay others to wipe their ass? If not, then why should we be worrying about a problem that doesn't exist?

[-] 1 points by Pequod (17) 6 years ago

Probably because people have very different skill sets. Some types of labor are in demand, some are not.

[-] 1 points by francismjenkins (3713) 6 years ago

That assumes all wealth is apportioned on the basis of labor value. Even wealthy people in large cities live in small apartments (compared to the square footage of suburban homes or apartments). Point is, why do some people have to spend every waking hour of their lives worrying about paying for that small slice of life? Why do the wealthy enjoy much more relative comfort, when their apartments aren't necessarily larger than the poor, and both enjoy access to necessities (like running water, heat, electricity, a telephone, television, etc.)? What if renters lived in buildings owned by nonprofits (that charged less rent because they don't earn a profit), what if residents of public housing complexes managed the buildings they lived in, what if things like civilian complaint review boards had real power to implement policy changes, what if everyone had access to affordable (or free) healthcare, what if everyone had access to affordable (or free) college, what if our social security system worked more like a regular pension system, where people accumulated wealth that not only pays an annuity on retirement, but also leaves a principle balance they can pass to their heirs, etc.?

I concede, some of these ideas could probably only work if people became more involved (e.g. we began to move towards more participatory democracy).

[-] 0 points by Pequod (17) 6 years ago

I can tell you I am a landlord and the "profit" in being a landlord is tiny. I do make quite a lot of money on some commercial property that i rent to big corporations but I also own many single family residences and those lose money other than paying down the mortgage.

There have been tons of non profit community housing and it gets ruined really quickly. Go to the South side of Chicago to see the effects of public housing.

I will give you an honest factual example. I rent a home to a couple for $1750/month. The mortgage taxes and HOA fees are $2150/month. I lose about $400 month but its a 15 year mortgage so i will own it outright in 12 years. With roof repairs and plumbing and landscaping I will likely put about $80000 out of my pocket into it before I own it outright. Figuring rents will climb over 12 years, I will start making probably $2500/month pure cash, but thats twelve years from now. I put $60000 down on it a few years ago. So I will have about $120K put into it and will finally start making money of about $25000 in 12 years. Its no get rich quick scheme.

[-] 1 points by francismjenkins (3713) 6 years ago

I understand that (my brother is a landlord, although not in a large city, in Connecticut), and he's definitely not getting rich (although he makes some money). I'm not suggesting some sort of confiscatory scheme, but rather, a nonprofit entity buying buildings (to the extent feasible).

I understand as it now public housing complexes are absolutely terrible (particularly in cities like Chicago, where I went to college), but are these buildings managed by its tenants? I'm pretty sure they're not, and so people have no sense of ownership in where they live.

Not all people necessarily need this sense of ownership in where they live, because for them renting is a "choice" (not a necessity). In other words, they could be owners if they wanted to (and I think this makes all the difference), or at minimum, they don't view the idea of owning property in the future as unrealistic (indeed, it's a goal many people actively strive for under the assumption that they will indeed achieve it).

[-] 1 points by JadedGem (895) 6 years ago

Building material prices are pretty expensive. Labor can be had more affordable. The incomes of of builders were quite good during the housing boom. There really is no reason why a house shouldn't depreciate instead of appreciate to the point a house with 30 year old wiring and plumbing costs the same as a new house. The cost of housing to begin with is grossly over inflated and it starts at the pine tree and faucets. Since the goal is not to produce economical housing but 30 years of debt that require x amount of hours of labor to pay for. Housing is more of a way to indenture the population than to provide shelter and that is the state of the problem.

[-] 1 points by francismjenkins (3713) 6 years ago

There's one reason that immediately comes to mind, real estate is not like other products, because land is a finite resource (and regardless of the fact that buildings should, in theory, be viewed as a depreciating asset, the underlying land will always appreciate as long as we have population growth). This is one reason I think it would be wiser for us to adopt a view that the real estate market cannot behave like normal markets (I would say the same is true for certain other things, like the medical insurance market).

Nevertheless, the quality and age of the building itself is a factor in pricing real estate. For instance, as a general rule, if you have equally sized parcels of land, situated in the same community, a newer and larger building, constructed using better and more modern building techniques and materials, will be valued higher compared to its older and smaller counterparts. There's obviously exceptions to this rule, but those exceptions are usually very tangible. The building is in mid town versus downtown (and so getting to work, for the average person, will take a little bit longer), or one house (even though it's located in a nearby neighborhood) is in a different (more desirable) school district, etc. etc.

[-] 1 points by JadedGem (895) 6 years ago

Yes, but the value of land prices in Urban areas suck up the economic rewards of Union jobs or higher wage jobs. I live in an area where land is cheap, that's why I was focused on the building materials. Land prices in Urban areas are over the top. But if you can find people willing to assume the debt a bank who will make the loan, well there you go. Reality didn't much factor into it, it was designed to be a huge money pit and it is. As long as people are willing to sign for it, you can stick any amount you want on it. Same goes for education. As long as people stand in line to sign for it, they aren't being taken hard enough apparently.

[-] 1 points by francismjenkins (3713) 6 years ago

Okay, and yes, this is a problem; and the debate here becomes more nuanced. Do we believe that we have to change the entire outlook of our society before we can begin to tackle these problems in tangible ways, or do we do both at the same time? I wish I could confidently answer this question, but this is really something that needs to percolate from the deliberation process, and ideally, from participatory processes like general assemblies.

I do admit that (unless I hear more convincing arguments to the contrary) I'm on the side of doing both at the same time. Indeed, I think one compliments the other, provided that it's foremost and always participatory, voluntary, and truly democratic.

[-] -1 points by takim (23) 6 years ago

because,......................people do not have equal abilities, talent , drive or ambition.

[-] 1 points by francismjenkins (3713) 6 years ago

The question really isn't whether everyone could be "equally" rich, just rich (which doesn't necessarily imply equal outcomes). I understand people might view these things as mutually exclusive, but I don't think they need to be viewed this way.

[-] -2 points by beautifulworld (22858) 6 years ago

I don't think it's ridiculous at all. If the world's wealth were to be spread out more fairly, maybe humans wouldn't be "rich" in the traditional sense of the world, but we would be far richer in terms of our health, well being and happiness.

[-] 2 points by flip (7101) 6 years ago

have you read buckminster fuller - "spaceship earth" - sounds like you have - he wrote it in 1969!

[+] -4 points by beautifulworld (22858) 6 years ago

No, never heard of him flip, but after googling him, I can say that I've been to the Biosphere in Montreal.

[-] 1 points by flip (7101) 6 years ago

spaceship earth is really interesting - he says we are on a self regenerating ship with everything we need to have a beautiful world (sorry - i had to do it) - he talks about how we waste fossil fuels and misallocate resources (1969!) that are not renewable - brilliant man and really funny how he puts sentences together.

[-] -3 points by beautifulworld (22858) 6 years ago

Yeah. I read a little more of his philosophy of ephemeralization, "doing more with less," and thought it was very interesting. Not so out there, if you ask me.

[-] 0 points by Pequod (17) 6 years ago

How would you spread the wealth? Please give real concrete examples. Would you tax wealthier people and just give poorer people a stipend ala welfare?

[-] -2 points by beautifulworld (22858) 6 years ago

I don't know. That's a big question. I think it would require an overhaul of society and how we think about economic systems and how we value labor, and how the people of the world interact with one another and share resources.

[-] 0 points by engineer4 (352) 6 years ago

BW. How would you revalue labor? Some on this forum seem to think that physical labor is more valuable than mental labor. Some believe that those who sit at a desk all day have it easy as compared to outside workers. I believe it comes down to how you are valued by your employer, what skill sets you bring to the table to assist the company to achieve their goals, etc.

[-] 2 points by beautifulworld (22858) 6 years ago

For one thing, I would like to see a living wage for all people. Beyond that, like I said, unless our society has a total overhaul, labor will continue to be divided based on skill level and many other factors. I do think there could be more compression of wages. In other words, CEO's don't need to earn 343 times the average worker's wage.

[-] 0 points by engineer4 (352) 6 years ago

Previous discussions about living wage has gotten no where. No one can agree what it actually is or how much, or how would any small or medium business pay it. Wages must be left to the market conditions, your skill set and need of the employer for that value added resource (the worker). Why is it always the CEO. How about movie stars, athletes, etc. You attempting to fix a ceiling on wages. Are some outrageous? Sure. But if some one want to pay it, fine. If you do not support particular movie star, don't go to the movie. If you don't like a product of a high paid CEO, don't buy it. It is pretty easy to boycott something. But think about what you are also doing. As you boycott something, you hurt the employees (layoffs), shareholders (share price and dividends), pension funds for everyone (unions, individuals, etc). It is not so cut and dry as one believes. Hey, I did like my CEO getting the dollars he got, so I did not vote for him on my share proxy. Is there push back? Yes, but your seeing it from shareholders, not from outsiders of a company.

[-] 2 points by beautifulworld (22858) 6 years ago

Look, the U.S. economy has been set up, purposefully, to enrich a very small number of people at the expense of the masses, the suffering of the masses, really. How did they do this? They brainwashed people like you into "wealth worship." They've convinced the American public that being wealthy is being godly. Strive for material wealth, even though there's no opportunity for you, but dumb you, strive anyway, and hope and pray that someday you can be a rich person! Yeah! In the meantime, half of all Americans earn less than $26,000 per year, 22% of our children live in poverty, 42% of African American children live in poverty, 1 in 7 Americans are on food stamps!, 49 million have NO health insurance, millions have lost their homes, people have to mortgage their lives jut to go to college, and the list goes on and on.

Labor costs take a chunk from the profits. Labor is a cost. What I'm saying is, either divide it up more fairly, more evenly, so people don't suffer! Or, divide it up more. Take more from the profits and spread it around more!

And, I don't think there is a single human being walking the earth who is worth a salary of more than, I don't know, maybe $500,000 -$1,000,000. No one. There is just no human being that has a skill set and can work hard enough to justify more than that. So there, for the first time, I'm saying we should have a cap on wages. Because greed is rampant, it's unfair, and frankly, it causes a lot of pain. And, if people can't do what is right on their own, then it should be legislated.

[-] 0 points by engineer4 (352) 6 years ago

BW. I have not been brainwashed, but have only done things right, saved, stayed within my means, worked very hard, etc. Wealth is subjective to each person. Most people in the middle class would not consider themselves wealthy but most people below them would say they are. I understand your passion. But a lot of the problems are self administered. I wish it was not so, and the collateral damage to those around them is great, especially the children. There is a cultural problem that never gets discussed. People need to step up. As for wage caps, it is something that just is not practical. As for college cost, I understand the pain, but no one is required to go to the high cost schools when there are many lower cost alternatives. I worked two jobs while in college, went to a state school rather than private institution, paid off my loans in 5 yrs.

[-] 2 points by beautifulworld (22858) 6 years ago

Okay, I know where you are coming from, but last night on the news I saw some woman, a Congresswoman or Senator, I think, say that kids don't have to go to these expensive schools. They don't need to take out student loans. It's not necessary. Huh!!!??? What's she talking about? Because the numbers are the numbers. Tell me, if we have x number of kids in college that need x number of spots and 1/2 of those spots are at public schools (sort of affordable, but not really. In my state, the in state public school runs $23,000 for tuition, room and board) and 1/2 of those spots are at schools that charge $35 - $57,000 per year! where is that half supposed to go? If all kids only went to the cheaper schools, which are not very cheap, btw, how would we fit them all in there? There aren't enough spots!!! So, that is a bogus argument. Same thing for the argument to work hard, to do the right things and you'll get a head. It's bogus. The opportunities are not there! You can work your ass off in this country and get no where because half of the jobs pay s--t, pardon my french.

[-] 1 points by shoozTroll (17632) 6 years ago


WE have the here, the absolute model of perfection!!!!!!!

A user who has NEVER, I repeat NEVER, done the the wrong thing.

ALWAYS, he does the exact correct thing, Every single time.

Oh, and by the way, he's NEVER been brainwashed either.

All I can say is,,,,,,,,Yeah,. right.

[-] 0 points by engineer4 (352) 6 years ago

Oh, I have made many mistakes, but I choose to learn from them. Is there something wrong with that?

[-] 1 points by shoozTroll (17632) 6 years ago

Except that, that is exactly what you said.

I'm not going to copy and paste it, as it's only a few posts up from here.

So then, that would make you a pathological liar.

I will have to assume that you have also been brainwashed.

Or at the very least, assimilated.

[-] 1 points by engineer4 (352) 6 years ago

When I mentioned "done things right", I mean in the overall, not everything Individually. Sorry if that was mis-interpreted by you as perfection. Not my intention.

[-] -1 points by Pequod (17) 6 years ago

If you dont have any ideas, you will not make much progress.

[-] -2 points by beautifulworld (22858) 6 years ago

Thanks. LOL!

[-] 0 points by francismjenkins (3713) 6 years ago

Not that I don't support normalizing our tax rates i.e. reversing the Bush tax cuts on the wealthy (not only as a matter of fairness, whatever that means, but primarily as a matter of fiscal responsibility), but I also don't think we can redistribute our way into wealth equality (or anything close), unless our goal is to make everyone equally poor.

[-] -2 points by beautifulworld (22858) 6 years ago

"Poor" being a relative term.

[-] 1 points by francismjenkins (3713) 6 years ago

That level of redistribution could reduce overall wealth, and eventually erode quality of life across the board (not only for the wealthy, but also for average people). But of course it's a matter of degree. For instance, Scandinavian societies tend to have less wealth disparity, and they rate higher in terms of happiness (I suppose to the extent happiness can be objectively quantified). But they're not redistributing "all" wealth, just "some" wealth.

More aggressive redistribution models include command control socialism (like that tried in the former Soviet Union), or potentially just getting rid of money altogether. The Soviet approach had obvious flaws, and we might think that money makes things more efficient (although there may be alternatives).

But I think we'd want to start by keeping things within a range of what's reasonably achievable, and what moves us towards a better trajectory (for the longer term).

[-] -2 points by beautifulworld (22858) 6 years ago

Yes. You can philosophize about "equality" but it doesn't mean you have to achieve or aspire to "absolute" equality. That is probably unrealistic, though, like I said, not ridiculous.

[-] -1 points by Dell (-168) 6 years ago

if you are given more money that wont satisfy you very long. because soon you will be once again looking over the fence at what your neighbor has and want more once again. How long were you satisfied after your last raise at work? everyone constantly wants more. everyone is greedy. Some are just better at getting money than others.


[-] -3 points by beautifulworld (22858) 6 years ago

Speak for yourself!

[-] -1 points by Dell (-168) 6 years ago

well eveyone on this forum seems to be speaking for everyone else - I just figured I could do the same. Or should I be censored?

[-] -2 points by beautifulworld (22858) 6 years ago

I don't want you censored, but just to be clear you are not speaking for me. LOL!

[-] -1 points by monetarist (40) 6 years ago

What is a fair distribution of wealth? According to you fair is everyone getting equal irrespective of the significance of their contribution, it's like everyone getting a C+ in a test irrespective of their effort or how many answers they got correct. For me, it is about getting wealth proportionate to your contribution, capability etc. In my case, some get A+ and some get F.

[-] -2 points by beautifulworld (22858) 6 years ago

We've had this discussion before. I don't necessarily value people the same way you do, and, I never said I think "absolute" equality would ever work or that it is even necessary.