POST SCRIPTS

Many on the left have used these statistics to imply that wealth distribution should be the leading economic factor considered; in the attempt to push their economic agenda.

Unfortunately the old adage "The rich get richer, while the poor get poorer" just doesn't apply to capitalism in this country.

Yes, the rich have gotten richer, and as a RESULT the poor have gotten richer as well! Thats right, I said "as a RESULT", not in spite of.

I also take some issue with the notion that this phenomena somehow takes away from the "idealism" associated with making the transition from poor to rich.

How so? How are we defining "wealthy". Obviously CEO's aren't the only ones to be considered wealthy in America. And it should come as no shock that as American Companies merge, and grow larger both at home and internationally, that the CEO's will make considerably more. The skill required for many of the entry level jobs in some of these industries has not changed nearly as much as the requirements for those at the top.

Are CEO's over paid? Not if you let the market determine their salaries. I understand that liberals think that we should pay people based on the "worth" of their occupation, which they of course get to determine, but economics doesn't work that way. We pay people based off of the scarcity of what they have to offer. I go back to the old argument between water and diamonds. Water is far more valuable as it pertains to preserving life, but try giving your finance a glass of water in stead of the diamond she wanted and see what happens.

So wealth distribution is an interesting topic. Its helpful to know, and we should have a discussion on how to narrow that gap, ONLY if we are talking about solutions which helps the poor get richer without punishing the wealthy. Unfortunately, almost every time these statistics are paraded out, they are usually followed by some assault on free markets.

Jack has the right idea when he ends his post by reiterating that:

"One inescapable fact remains true and that's America's poor are still the richest in the world."

Ive been to several other countries where the wealth distribution was much more even. Trust me, you wouldnt want to be a poor person in any of them.

Jack, As I was reading your post several things crossed my mind:

1. Unfortunately the average American knows very little about wealth building and usually has a strong propensity to spend, spend, spend!

2. Americans have come to think of wages as some kind of wealth distribution game where some are given more than others.

3. Becoming a CEO or someone like Bill Gates requires certain choices and a great deal of hard work. it also requires making your ambition more important than family or putting off having family until you have "made it".

4. Many Americans think they are stuck in their job or that the job they are "stuck in" is the only way to obtain money.

5.The more money a person has the more money he can make. Americans don't save when they are young...they aren't willing to sacrifice in order to create a money making nest egg.

6. While some people are born to advantage and others are luckier than most in general people who have a lot get where they are by way of hundreds, maybe thousands of choices.

7. If you have chosen in life such that you earn little, then be happy with what you have made and if you wanrt more make different choices.

8. As long as laws are not being broken a company can do as it pleases with respect to CEO pay. If we as consumers find a companies policies distasteful we can make another choice and avoid their products.

The bottom line: what one person earns hasn't a thing to do with what another person can earn; there isn't a money pie to divide up. Also, Jack is right, America's poor are still the richest in the world and freedom, opportunity and abundance make it one of the easiest places in the world to make money.

well put Tina!

However, regardless of how well off the have nots might be, that growing divide results in a number of undesirable societal effects not the lest of which is class division! French royalty denied this was a problem and look what happened to them! lol But, currently we see this leading to low worker moral and general labor unrest, granted sometimes exploited by labor unions for their own self-interest. For those not working, and we have plenty of those, the lavish government entitlements that get better each passing year are sufficient to guarantee us many more generations of welfare recipients. Those people grow increasingly dependant on the government and this is fact of life we can all see right before us now! Again, it all adds up to a stratified society with this big division between the lowest and highest economic classes.

I know I just digressed a bit, (but I do think it is all related), so on to my original track, fixing piracy and looting this is making some people really, really rich at the expense of the little guys....one solution to the looting of companies by corrupt management is too obvious WE hold those corrupt corporate practices up to the light and prosecute them, denying them their ill gotten gains! Duh!

The SEC is supposed to do this and we have the laws in place, but they are totally overwhelmed, so that only a tiny fraction of the most serious violations will ever get investigated.

The obvious downside here is serious oversight will hurt innocent shareholders. So, it's easy to look the other way or let rules be bent as long at the books are in the black. Also, any further increases in anti-corruption oversight of corporate America could result in some businesses to leave for more permissive countries.

However, the long term effect of demanding responsible ethics in American business ought to be all the justification we need to demand it! It will translate to a stronger and better country and an example of how a democracy ought to work.

The current crop of Islamic Jihadists are always pointing out our flaws, to deny them less ammunition is a good thing...but it will require a lot of re-education... a lot the left has been lowering the bar for at least the last 50 years and any correction will be decades longs.

Here's where it get's done: In American schools and American families.

Teaching the rewards of good character and stress democratic values ought to be a mandatory subject taught in grades K through 12!! But, so many of our teachers are not up to it...they need this re-education first! So, it won't be easy, but the alternative is to continue going the direction we are going.

It is time to define words like "poor". I mean if we are going to say that Bill Gates is "rich" well in that case we are all "poor". It seems to me that economics in America is not unlike a high school exam being graded on a bell curve. Think of Bill Gates as the guy who blows the curve. If you remove him from the equation everything changes. For one thing, the "poverty line" will be lowered, meaning tons of people will be booted off welfare and forced to make a living and contribute to the collective good. On the other end of it, more people will be paying more income tax. I am not saying the super rich should get a free ride. I am saying that when it comes to making income charts and figuring out who is "poor" remove the Bill Gates from the mix. Oh and remove the deadwood from the mix also. Deadwood being people who are able but unwilling to work, also remove non-Americans.
I think if they (they being the people who define "poor") would have a much better idea of what "poor" means.

Great post, Jack. I have a few comments.

...that growing divide results in a number of undesirable societal effects not the lest of which is class division!

We have been teaching division for fifty years! It's time to drop divisive unions, diversity, and class envy and get back to individual accomplishment, goals and achievment based on personal desires rather than some artificial dream of becoming rich or a star!

WE hold those corrupt corporate practices up to the light and prosecute them, denying them their ill gotten gains! Duh!...only a tiny fraction of the most serious violations will ever get investigated.

Thankfully GWB has made this a priority since becoming president. The high profile prosecutions will act as a deterent to others. The worst thing that can occur is no prosecutions. Also the notion that white collar America is different somehow and that we should be able to expect no criminal activity in this segment of the population is unrealistic. People are people, they fall down.

Here's where it get's done: In American schools and American families.

Right on the money! Ane we must be willing to speak up about it and press for higher standards of behavior and respect for others and the law. We've been 'lettin' it all hang out" for too long.

But, so many of our teachers are not up to it...they need this re-education first! So, it won't be easy

Also right on. There are alums all over America witholding private donations to press for better and different instructors and courses. People are paying more attention to the college curriculum and to the professors and choosing colleges based on the performance of same. Students are taking the professors on. It will be a long hard climb.

My final observation is one I made above. We need to educate about economics. Making and accumulating money is easier than most people realize. Creating a future for ourselves is hindered by our own ignorance of this most basic skill. A well educated population, one grounded in basic skills, will result in a population standing on it's own, choosing a level of abundance that works for them, and finds itself in a better position to compete in the world. Division and envy will be forgotten.

I don't think we can legitimately compare our economic and "class" system with that of 19th century France.

I think the point has been sufficiently made by all of us that individual initiative is the key to being successful in a capitalist system.

People respond to incentives, and right now there is a great deal of incentive to do nothing and get paid.

The left has managed to convince a great deal of people that they will never be able to get anywhere on their own. That only through their help will they ever be able to achieve anything moderately resembling the "American Dream".

Education reform is the key; but only if it comes in the form of drastic change.

Federal funding should come in the form of vouchers instead of direct payments to state and local governments. Government should get out of the education business. This is not to say that they should not finance education, just that they should not run it.

When the government saw that there were hungry people they started issuing food stamps; they didn't get into the grocery business.

Until there is competition in the lowest levels of our education system we will continue to see our schools, and subsequently our future labor force falling behind.

The stats Jack brought up are not useful to people who understand how the economy works; but in a world where perception is reaity, and politicians use stats like this to drive their flawed agenda, we should probably take notice and develop a counter strategy. And in this respect Jack brings up an invaluable point.

I have been working on a presentation for my old high school in Chico. The focus of it is to form an elective class that would explain different economic systems and the individual's role in them. The focus would be on capitalism since that is the system that the students will be operating in, but it will not ignore other theories.

Since my high school was something of a charter school in Chico, I wouldn't have to deal with the usual ed tape.

I would be interested in getting the opinion of Jack, Tina, Toby and Mike on the initial presentation, and hearing any suggestions you might have.

I will email the ruff draft to Jack.

Well Nick has put me to the challenge here and that's good. It's all part of my learning curve! lol

Alrighty then, let's reduce my argument to its most basic components. Here are the points I was clumsily trying to make the first time around:

1. Things that weaken a company or corporation or hold it up to ridicule and/or justifiable criticism are not real good for the bottom line. Things done that are corrupt or illegal are definitely not good for the bottom line! I was trying to make that point early on, so there it is.

2. My reference to French Royalty verses the corporate executive class distinction was just an analogy to illustrate when there is unbridled greed and self-indulgence there are often severe consequences that follow, we saw it then and we see it now in corporate corruption cases.

That reference was not to be taken as a literal comparison between 17th century France and todays corporate operations! lol Far from it, but there are some similarities in the class seperation that it fosters. How or why that happens is debatable, but the fact it exists is not debatable.

3. Character counts in all that we do and it's especially important for those in high places to be of exceptionally good character. We can lead best when we lead by good example. We probably agree strongly on this one.

4. The Bible talks about the bad things that happen when people live in excess and what the Bible talked about back then is still relevant now.

According to Wikipedia, The "Seven Deadly Sins"', also known as the "Capital Vices" or "Cardinal Sins", are a classification of vices that were originally used in early Christian teachings to educate and instruct followers... the Seven deadly sins include extravagance (my point), greed (also my point). So there you go, I'm defending Biblical principles... the wages indulged in by corporate officers and often downright greedy, if it's not I guess I don't know what greed is.

I was talking about moral vices and in a perfect world people wouldn't be greedy. We wouldn't need watchdogs like the SEC or FBI to investigate corporate looting by corrupt CEO's and the little people wouldn't suffer so much...but it's not a perfect world...uh, E-N-R-O-N.

This is basically my whole theme, be moral in all things and be reasonable about it, but if I could reduce even more I would say the Catholics summed it up best when they said,

"All things in moderation."

Nick, you made some good points, especially about competition being good for our schools. In fact I could agree with most everything you said to a large degree. I think we're just coming at the problem from slightly different directions and tactics.