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Plutonomy

Toshi

butthole powerwashing evangelist
Oct 23, 2001
40,221
9,111
Or, "how Citigroup analysts described the 1%ers to a T back in 2005":

http://cryptome.org/0005/rich-pander.pdf

We project that the plutonomies (the U.S., UK, and Canada) will likely see even more
income inequality, disproportionately feeding off a further rise in the profit share in their
economies, capitalist-friendly governments, more technology-driven productivity, and
globalization.

In a plutonomy there is no such animal as “the U.S. consumer” or “the UK
consumer”, or indeed the “Russian consumer”. There are rich consumers, few in
number, but disproportionate in the gigantic slice of income and consumption they take.
There are the rest, the “non-rich”, the multitudinous many, but only accounting for
surprisingly small bites of the national pie.

The reasons why some societies generate plutonomies and others don’t are somewhat
opaque, and we’ll let the sociologists and economists continue debating this one. Kevin
Phillips in his masterly “Wealth and Democracy” argues that a few common factors
seem to support “wealth waves” - a fascination with technology (an Anglo-Saxon thing
according to him), the role of creative finance, a cooperative government, an
international dimension of immigrants and overseas conquests invigorating wealth
creation, the rule of law, and patenting inventions. Often these wealth waves involve
great complexity.

Society and governments need to be amenable to disproportionately allow/encourage the
few to retain that fatter profit share. The Managerial Aristocracy, like in the Gilded Age,
the Roaring Twenties, and the thriving nineties, needs to commandeer a vast chunk of
that rising profit share, either through capital income, or simply paying itself a lot. We
think that despite the post-bubble angst against celebrity CEOs, the trend of cost-cutting
balance sheet-improving CEOs might just give way to risk-seeking CEOs, re-leveraging,
going for growth and expecting disproportionate compensation for it.

Our contention: when the top, say 1% of households in a country see their share of
income rise sharply, i.e., a plutonomy emerges, this is often in times of frenetic
technology/financial innovation driven wealth waves, accompanied by asset booms,
equity and/or property. Feeling wealthier, the rich decide to consume a part of their
capital gains right away. In other words, they save less from their income, the wellknown
wealth effect. The key point though is that this new lower savings rate is applied
to their newer massive income. Remember they got a much bigger chunk of the
economy, that’s how it became a plutonomy. The consequent decline in absolute savings
for them (and the country) is huge when this happens. They just account for too large a
part of the national economy; even a small fall in their savings rate overwhelms the
decisions of all the rest.

The behavior of the exceptionally rich drives the national numbers - the “appallingly low” overall savings
rates, the “over-extended consumer”, and the “unsustainable” current accounts that
accompany this phenomenon. We want to spend little time worrying about these
(non)issues, neither do we think they warrant any risk premium on equities.
Gah. Can read no more.
 

stevew

resident influencer
Sep 21, 2001
41,347
10,275
i think by the time the financial crisis is unfvcked...i will be dead and buried.
 

Hello Kitty

Monkey
Nov 25, 2004
432
0
Houston
Japan's Lost Decade

AEI - Japan's Lost Decade

Japan's large fiscal stimulus packages, which became legendary during the 1990s, were ineffective for several reasons. First of all, the packages were not as large as advertised, often inflated by double counting as stimulus government programs that were already slated to be undertaken. More importantly, the packages were poorly directed--largely toward unproductive public works projects and credits to small businesses that were no longer economically viable. It would have been far better to have reduced tax rates and allowed households to employ the increase in disposable incomes as they saw fit.
Those who ignore history are bound to repeat it.
 

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
Do the rich really forget what happens when there's massive (and growing worse) income disparity??



And then...



It seems once every hundred years or so the richest 1% twist rules in their favor to the extent that they're FAR wealthier than everyone else, and then the poor rise up and behead/shoot/imprison those 1% and implement programs that distribute the wealth, and then over the course of the next 90 or so years the rich build their way back to prosperity and then it happens all over again. You'd think that maybe the rich would have learned by now?
 

jimmydean

The Official Meat of Ridemonkey
Sep 10, 2001
43,511
15,720
Portland, OR
Do the rich really forget what happens when there's massive (and growing worse) income disparity??



And then...



It seems once every hundred years or so the richest 1% twist rules in their favor to the extent that they're FAR wealthier than everyone else, and then the poor rise up and behead/shoot/imprison those 1% and implement programs that distribute the wealth, and then over the course of the next 90 or so years the rich build their way back to prosperity and then it happens all over again. You'd think that maybe the rich would have learned by now?
No, because it happens at worst once in their lifetimes each time.
 

$tinkle

Expert on blowing
Feb 12, 2003
14,591
6
how big can your pile be? no, no, i'm not talking about 35" MT super swampers; i mean cheddar.

i have everything i need
i want for nothing


what do i care that there are those [geographically, anyway] in our midst who have unimaginable wealth?
what do i care if they hoard almost all of it, giving far, far less than 1% to charity & are "irresponsible" with it?


let go of the bitterness
let go of the covetousness
 

Inclag

Turbo Monkey
Sep 9, 2001
2,780
465
MA
how big can your pile be? no, no, i'm not talking about 35" MT super swampers; i mean cheddar.

i have everything i need
i want for nothing


what do i care that there are those [geographically, anyway] in our midst who have unimaginable wealth?
what do i care if they hoard almost all of it, giving far, far less than 1% to charity & are "irresponsible" with it?


let go of the bitterness
let go of the covetousness
Whose societal interest should the government cater too? Whom should they listen too?
 

Toshi

butthole powerwashing evangelist
Oct 23, 2001
40,221
9,111
how big can your pile be? no, no, i'm not talking about 35" MT super swampers; i mean cheddar.

i have everything i need
i want for nothing

what do i care that there are those [geographically, anyway] in our midst who have unimaginable wealth?
what do i care if they hoard almost all of it, giving far, far less than 1% to charity & are "irresponsible" with it?

let go of the bitterness
let go of the covetousness
Deep, man.

I'm personally against it because it reflects the vast disconnect between effort * skill and rewards garnered. There is no freakin' way that people are doing 100x the "work" that I am, yet there are people who reap those rewards.

(One could turn this lens around 180 degrees and argue whether I'm doing 10x the work of a line worker, but I think that's easier to justify in terms of educational attainment, etc... but of course I'd think so, right? :D)
 
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Toshi

butthole powerwashing evangelist
Oct 23, 2001
40,221
9,111
Not only can we blame you for the income disparity, but we get to pin skyrocketing health care costs on you too... :D
I'm not on the clinical frontlines, where imaging studies are indeed wildly overutilized... but it's not my job to be the gatekeeper. Those who control the pursestrings--the insurers, public or private, or the hospital administrators--are the people who should be cracking down on overuse.
 

norbar

KESSLER PROBLEM. Just cause
Jun 7, 2007
11,516
1,738
Warsaw :/
Japan's Lost Decade

AEI - Japan's Lost Decade



Those who ignore history are bound to repeat it.
I love how you find your unbiased data on american enterprise insitute. Seriously. This is not a neutral agency so you taking your data from there is beyond stupid

The American Enterprise Institute is a community of scholars and supporters committed to expanding liberty, increasing individual opportunity, and strengthening free enterprise
From their site.

Also I think you must know less than me about the stimulus package and not read properly. The one now is allso called to little, a lot went to big business (which paid its Executives huge premiums from it - ergo poorly directed as in japan so big companies are not allways good). Also it's a different situation. Taxes in the US are lower now than they were then in Japan If I remember right.



Dante - just go to South Africa. We should send hello kitty there. Of course he will think it's because black men are evil but that won't really matter when they decide to rape him as their way of saying how much they respect his money.
 

$tinkle

Expert on blowing
Feb 12, 2003
14,591
6
Whose societal interest should the government cater too? Whom should they listen too?
no one in particular
not the loudest voice
not the deepest pockets
not the most pious

unsure what that whittles it down to, but there ya go
 

rockofullr

confused
Jun 11, 2009
7,342
924
East Bay, Cali
i have everything i need
i want for nothing


what do i care that there are those [geographically, anyway] in our midst who have unimaginable wealth?
what do i care if they hoard almost all of it, giving far, far less than 1% to charity & are "irresponsible" with it?


let go of the bitterness
let go of the covetousness
You realize that, despite your comfortable life, there are still people in the US who are struggling to put food on the table or to provide a decent quality of life for their family?

"I'm happy with the status-quo so you should be too" is not a very powerful argument.
 

$tinkle

Expert on blowing
Feb 12, 2003
14,591
6
Are you applying for the job of Poet Laureate at the Heritage Foundation too? My application:

eliminate tax
infinite revenues
praise be to jeebus
not sure to whom that's directed
anyone who's read a minority of my posts with a modicum of reading comprehension knows that's not my position, nor one with which i empathize

boogeyman or strawman; i don't care, really
 

$tinkle

Expert on blowing
Feb 12, 2003
14,591
6
You realize that, despite your comfortable life, there are still people in the US who are struggling to put food on the table or to provide a decent quality of life for their family?
just b/c someone wants something, we should give it to them, or shall we ensure they have the opportunities to either succeed or fail based upon their decisions?

i'd rather have the freedom to fail, as i have in the past. it taught me much more than putting my hand in someone else's pocket.
 

TheMontashu

Pourly Tatteued Jeu
Mar 15, 2004
5,549
0
I'm homeless
just b/c someone wants something, we should give it to them, or shall we ensure they have the opportunities to either succeed or fail based upon their decisions?

i'd rather have the freedom to fail, as i have in the past. it taught me much more than putting my hand in someone else's pocket.
That's the thing though, when you're paying out the ass for healthcare, and working 2 8$ an hour jobs to attempt to pay for food for you and your kids, it's a bit on a difficult side to get a leg ahead. The system is working against the poor who are hard working, and allowing the lazy rich to rob them blind through campaign donations.
 

Toshi

butthole powerwashing evangelist
Oct 23, 2001
40,221
9,111
That's the thing though, when you're paying out the ass for healthcare, and working 2 8$ an hour jobs to attempt to pay for food for you and your kids, it's a bit on a difficult side to get a leg ahead. The system is working against the poor who are hard working, and allowing the lazy rich to rob them blind through campaign donations.
[devil'sadvocate] Why the **** did said person have children when they were only equipped with the skills to warrant working minimum wage jobs? [/da]
 

TheMontashu

Pourly Tatteued Jeu
Mar 15, 2004
5,549
0
I'm homeless
[devil'sadvocate] Why the **** did said person have children when they were only equipped with the skills to warrant working minimum wage jobs? [/da]
Even without kids it's hard to put food in YOUR mouth, and pay rent. I know plenty of kids my age working 40 hours a week, making 8 or 9$ an hour, they can't really afford a gas or insurance, much less a car. It's food and rent, that's about it, if one of them were to get sick they would be in a whole world of ****.

If some one works full time they should be able to at least, put food on their plate, pay some rent, and see a doctor. The reality is, you can't really do that.
 

Toshi

butthole powerwashing evangelist
Oct 23, 2001
40,221
9,111
Even without kids it's hard to put food in YOUR mouth, and pay rent. I know plenty of kids my age working 40 hours a week, making 8 or 9$ an hour, they can't really afford a gas or insurance, much less a car. It's food and rent, that's about it, if one of them were to get sick they would be in a whole world of ****.

If some one works full time they should be able to at least, put food on their plate, pay some rent, and see a doctor. The reality is, you can't really do that.
A car, gasoline to run it, and insurance for the whole mess is not a guaranteed right. Take the bus or ride a bike--works for plenty of Hispanic immigrants so why shouldn't it work for white boys from the 'burbs?

Continuing with the devil's advocacy here: Do your friends have cell phones? Do they buy new clothes? Video games? There's a hell of a lot of fat to be cut out from most peoples' lives, and whinging that one just can't get by on $20k/yr as a single person rings false to my ears... since I lived, as a single person, on $20k* myself. Did I have health insurance? Yep. Did I maintain continuing auto insurance coverage? $25/yr to Zipcar accomplished that. Did I eat enough food to stay alive? Not an issue... Did I have a car, though? No, and that single choice saved me multiple thousands of dollars.

(* I made more than that, but I put away enough into my IRA and 403b accounts such that I netted about $20k.)
 

TheMontashu

Pourly Tatteued Jeu
Mar 15, 2004
5,549
0
I'm homeless
A car, gasoline to run it, and insurance for the whole mess is not a guaranteed right. Take the bus or ride a bike--works for plenty of Hispanic immigrants so why shouldn't it work for white boys from the 'burbs?

Continuing with the devil's advocacy here: Do your friends have cell phones? Do they buy new clothes? Video games? There's a hell of a lot of fat to be cut out from most peoples' lives, and whinging that one just can't get by on $20k/yr as a single person rings false to my ears... since I lived, as a single person, on $20k* myself. Did I have health insurance? Yep. Did I maintain continuing auto insurance coverage? $25/yr to Zipcar accomplished that. Did I eat enough food to stay alive? Not an issue... Did I have a car, though? No, and that single choice saved me multiple thousands of dollars.

(* I made more than that, but I put away enough into my IRA and 403b accounts such that I netted about $20k.)
True, I ride my bike everywhere

These kids don't eat out, most have cell phones instead of a house phone, the broke asses I know don't play video games. They either A) go to school, and work and nothing else, or they B) are trying to make something of themselves playing music (hardcore to be more specific, that being dumb is another issue) NONE of them have health insurance (nor can they afford it) They make ends meat, but barely.

Oh, and 8 an hour is 1600$ before taxes, that's quite a bit off of 20K
 

clarkenstein

Monkey
Nov 28, 2008
244
0
A car, gasoline to run it, and insurance for the whole mess is not a guaranteed right. Take the bus or ride a bike--works for plenty of Hispanic immigrants so why shouldn't it work for white boys from the 'burbs?

Continuing with the devil's advocacy here: Do your friends have cell phones? Do they buy new clothes? Video games? There's a hell of a lot of fat to be cut out from most peoples' lives, and whinging that one just can't get by on $20k/yr as a single person rings false to my ears... since I lived, as a single person, on $20k* myself. Did I have health insurance? Yep. Did I maintain continuing auto insurance coverage? $25/yr to Zipcar accomplished that. Did I eat enough food to stay alive? Not an issue... Did I have a car, though? No, and that single choice saved me multiple thousands of dollars.

(* I made more than that, but I put away enough into my IRA and 403b accounts such that I netted about $20k.)
health insurance doesn't come so easy nowadays. and for some (not all) not having a car is not possible. i guess i could ride my bike to work everyday, but i'd be pulling just shy of 80 miles a day. i'd drop dead with the hours i have to work sometimes. and never see my kids, which i think is important, more important than a few extra bucks in my pocket.

owning a house closer to work is just not a possibility. i can't afford it, so i would have to move out of state to live closer to my job. and i thought i read you saying once that it wasn't a sustainable way to live - not having a car (i'm paraphrasing with some liberties i think). and also, if all americans dropped cell phones and cars from their budgets and use, wouldn't there be lots of job loss? vz would layoff, att would layoff, ford, chevy, toyota would all probably lay off workers too. your local mechanics would lose work, the parts suppilers would lose work too. cutting spending doesn't help ecomonies, it hurts them. we don't want people making $20k a year. we want people making $40k a year, or $50k a year, that's better for the economy. i know you're playin DA, i'm just returning a serve.
 

Toshi

butthole powerwashing evangelist
Oct 23, 2001
40,221
9,111
True, I ride my bike everywhere

These kids don't eat out, most have cell phones instead of a house phone, the broke asses I know don't play video games. They either A) go to school, and work and nothing else, or they B) are trying to make something of themselves playing music (hardcore to be more specific, that being dumb is another issue) NONE of them have health insurance (nor can they afford it) They make ends meat, but barely.

Oh, and 8 an hour is 1600$ before taxes, that's quite a bit off of 20K
Where's all their money going then? Into their cars? Into buying musical equipment for their bands? No pity there, either.

health insurance doesn't come so easy nowadays. and for some (not all) not having a car is not possible. i guess i could ride my bike to work everyday, but i'd be pulling just shy of 80 miles a day. i'd drop dead with the hours i have to work sometimes. and never see my kids, which i think is important, more important than a few extra bucks in my pocket.

owning a house closer to work is just not a possibility. i can't afford it, so i would have to move out of state to live closer to my job. and i thought i read you saying once that it wasn't a sustainable way to live - not having a car (i'm paraphrasing with some liberties i think). and also, if all americans dropped cell phones and cars from their budgets and use, wouldn't there be lots of job loss? vz would layoff, att would layoff, ford, chevy, toyota would all probably lay off workers too. your local mechanics would lose work, the parts suppilers would lose work too. cutting spending doesn't help ecomonies, it hurts them. we don't want people making $20k a year. we want people making $40k a year, or $50k a year, that's better for the economy. i know you're playin DA, i'm just returning a serve.
Owning a house isn't a right, either, let alone one close to your workplace. You made the choice to live farther away, and owning a car therefore should have been part of your "is it worth it?" cost metric.

Your point about increased consumption being what the economy needs is one that I've mulled over myself, as it seems to be ultimately unsustainable:

https://plus.google.com/115479414905422234350/posts/eF31S4mVYPf
https://plus.google.com/115479414905422234350/posts/MPoSAB4itu6
https://plus.google.com/115479414905422234350/posts/9qSa8JQq8bt
 

TheMontashu

Pourly Tatteued Jeu
Mar 15, 2004
5,549
0
I'm homeless
Where's all their money going then? Into their cars? Into buying musical equipment for their bands? No pity there, either.
I know 1 kid who lives like that an owns a car, he doesn't have insurance

Lets see, that's like 1200$ a month on 8$ an hour, you're looking at between 6 and 700 for a room around here (unless you live out a bit, then 5 is doable BUTTT you need to factor in bart bus costs) add another 100$ in utilities and 40$ on a cheep phone thats less than 500$ a month to buy food, get to work, buy food, replace worn out shoes things of that nature. Now I don't know how much food costs where you are, but I can easily drop 80$ a week for food for myself at the grocery store, that's with no booze, no meat, nothing organic, cooking from scratch twice a day.

Like I was saying, they barely make it, I feel especially bad for my friends who's parents kicked them too the curb, but because of their age can't get FAFSA money. Even CC around here is 1000$ a year tuition and another 1000$ in books, so there goes those kids money.
 

Toshi

butthole powerwashing evangelist
Oct 23, 2001
40,221
9,111
There's no right to live in California. Too expensive? Move to the midwest.
 

dante

Unabomber
Feb 13, 2004
8,807
9
looking for classic NE singletrack
There's no right to live in California. Too expensive? Move to the midwest.
Uh, no offense, but that's not exactly a cohesive argument when you extrapolate it to the rest of the population. There has to be *someone* to flip burgers for minimum wage or else the living costs go through the roof. If everyone who made less than $15/hour moved to the midwest prices would go up for everyone to the point that $20/hour workers would have to move........