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Not At My Table - Political Discussions => National & International Politics => Topic started by: Gaspar on August 03, 2010, 08:43:55 AM

Title: Good News on Housing
Post by: Gaspar on August 03, 2010, 08:43:55 AM

  WASHINGTON (Dow Jones)--The delinquency rate on Federal Housing Administration mortgages continued to show improvement in the second quarter, a sign the agency may yet avoid a taxpayer bailout.

  The number of new 90-day delinquencies in the second quarter fell by 32% from the first quarter, the FHA reported Monday. Also, for the first time in recent years, 90-day delinquencies dropped from the year earlier.

  The FHA is taking steps to rebuild its capital reserves after they fell to razor-thin levels amid soaring defaults on FHA mortgages. The FHA insures low down-payment mortgages for borrowers who meet its standards.

  To shore up its finances, the FHA has tightened standards. For example, it now requires borrowers with down payments of less than 10% to have credit scores of at least 580.

Stricter standards are working!  I wonder if Barney has learned his lesson?
Title: Re: Good News on Housing
Post by: nathanm on August 03, 2010, 08:56:38 AM
Quote from: Gaspar on August 03, 2010, 08:43:55 AM
Stricter standards are working!  I wonder if Barney has learned his lesson?

More likely the move to the 3.5% down requirement and the increase in up front MIP did the trick. The entire purpose of FHA loans has been to allow underserved populations to get loans they can't on the regular market. The real problem was that when the commercial lenders stopped doing subprime, the mortgage brokers who couldn't possibly bear to write less loans, foisted all their bad customers on FHA.

The FHA program has always had strict requirements related to recent negative information on one's credit report. (Must be 2 years post-BK, must be able to articulate a reason why the financial trouble won't recur, etc.)

It's quite unfortunate that the bad apples have messed it up for the people the program was intended to help. The worst part is that they now require your file be scorable. (but they'll take as low as 500)
Title: Re: Good News on Housing
Post by: rwarn17588 on August 03, 2010, 09:05:00 AM
On a related note, a recent report showed that the rich have high a higher mortgage delinquency rate than the rest of the population:

http://www.nytimes.com/2010/07/09/business/economy/09rich.html

Key part:

"Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

"More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

"By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent."
Title: Re: Good News on Housing
Post by: Cats Cats Cats on August 03, 2010, 09:08:54 AM
580 still isn't that great of a credit score.
Title: Re: Good News on Housing
Post by: Gaspar on August 03, 2010, 09:13:18 AM
Quote from: nathanm on August 03, 2010, 08:56:38 AM
More likely the move to the 3.5% down requirement and the increase in up front MIP did the trick. The entire purpose of FHA loans has been to allow underserved populations to get loans they can't on the regular market. The real problem was that when the commercial lenders stopped doing subprime, the mortgage brokers who couldn't possibly bear to write less loans, foisted all their bad customers on FHA.

The FHA program has always had strict requirements related to recent negative information on one's credit report. (Must be 2 years post-BK, must be able to articulate a reason why the financial trouble won't recur, etc.)

It's quite unfortunate that the bad apples have messed it up for the people the program was intended to help. The worst part is that they now require your file be scorable. (but they'll take as low as 500)

I have two battling thought processes on this.

First of all, a credit score of 500 or below is a dangerous investment.  A young family with only one department store credit card or perhaps a high interest car loan will score higher than this.  500 is the score of a person with no credit history.  The purchase of a new home should not be their first priority.  They need to rent and develop some history.  They can do some significant damage to themselves and the rest of us (as we've seen).

Second, I hate the credit rating system.  My score was 770 last year.  It has dropped to 740.  Why?  Because I got rid of some cards that I infrequently use, paid off a car loan, and purchased a new house.  I have a 0 balance on everything except the mortgage.  I've never missed a payment. 

The credit scoring system at the low end is a good barometer of responsibility, but at the high end, it only serves as a marketing tool for credit companies.  I think their should be another way to score credit responsibility.
Title: Re: Good News on Housing
Post by: Hoss on August 03, 2010, 09:21:57 AM
Quote from: Gaspar on August 03, 2010, 09:13:18 AM
I have two battling thought processes on this.

First of all, a credit score of 500 or below is a dangerous investment.  A young family with only one department store credit card or perhaps a high interest car loan will score higher than this.  500 is the score of a person with no credit history.  The purchase of a new home should not be their first priority.  They need to rent and develop some history.  They can do some significant damage to themselves and the rest of us (as we've seen).

Second, I hate the credit rating system.  My score was 770 last year.  It has dropped to 740.  Why?  Because I got rid of some cards that I infrequently use, paid off a car loan, and purchased a new house.  I have a 0 balance on everything except the mortgage.  I've never missed a payment. 

The credit scoring system at the low end is a good barometer of responsibility, but at the high end, it only serves as a marketing tool for credit companies.  I think their should be another way to score credit responsibility.

I always hated the way the credit scoring system worked.  I have been pretty good about maintaining my payments (except for a series of months in 2002 when I was unemployed and had to work some with two creditors).  Those items are currently off my history because of the 7 year expiration.

I paid off all my credit cards, didn't have ANY loans (car or otherwise) but had proven in the past that I was able to actually pay by bills (and never really failed to pay bills at all ever).

When I went to buy a new car, they ran the obligatory credit check and said my score came back with a 640.  The gentlemen telling me that told me that it wasn't because I had bad credit, but more because I had very little credit.  So, I pulled my TransUnion and sure enough, there wasn't much there.

I was able to get the auto loan, went ahead and got one credit card (low limit, just use in emergencies, blah blah) and last I checked my score was up to 740.

I agree with you, though.  The scoring system is flawed, but it was created by...you guessed it....the credit reporting companies.  It CAN be a good barometer on the low end, if by low end you mean people with little credit.  But, some people (like me) with little credit have a bit of disposable income and can make those payments.  They need to be looking at the bigger picture.  Monthly income vs debt load.  In the past, that's really the way lenders did this, by using the debt load ration.  A lot of lenders have gotten lazy and have allowed the scoring system to take over.
Title: Re: Good News on Housing
Post by: nathanm on August 03, 2010, 09:24:05 AM
Quote from: Trogdor on August 03, 2010, 09:08:54 AM
580 still isn't that great of a credit score.
No, but the whole point of the program is to lend to responsible people who for whatever reason (usually medical bills) don't have a good credit score or even a score at all.

The interest rate is usually higher and they usually pay more for mortgage insurance.

Gaspar, it should be perfectly possible to get a home loan without a credit score. What do you think was done before charge cards and credit reports? The bank looked at your income and your expenses, made sure you had a stable job, and whatever else they needed to do to feel comfortable. That's what FHA does. If you do have bad history, they make you explain it and satisfy them that it's not going to recur if you have anything to say about it.

They look at the total history, not just a number.

Besides, they do much better at lending to those with low scores or no credit than most institutions did. Probably because they won't insure exotic products and won't lend to just anybody. They do require smaller down payments, but the borrower pays for the risk in upfront MIP and a higher ongoing mortgage insurance cost.

There are a bunch of dishonest mortgage brokers out there (I got to see that first hand when one particular jackass wanted me to lie about my assets for a loan), and it annoys me to no end that they moved on to pillaging FHA once they got everything they could out of Fannie and Freddie.
Title: Re: Good News on Housing
Post by: Conan71 on August 03, 2010, 09:24:30 AM
Quote from: rwarn17588 on August 03, 2010, 09:05:00 AM
On a related note, a recent report showed that the rich have high a higher mortgage delinquency rate than the rest of the population:

http://www.nytimes.com/2010/07/09/business/economy/09rich.html

Key part:

"Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

"More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

"By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent."


Yeah, yeah, yeah.  The rich are evil and reckless, the poor are victims.

Granted, there are a lot of properties bought too late in the bubble on balloon notes and ARM's which speculators bought in hot markets expecting to cash in and they are walking away unable to service the debt.

The story assumes everyone with a $1mm mortgage to be "rich".  I don't know that I've heard a particular standard which defines "rich".  One fellow they cited has tapped equity from his home over years for various failed business enterprizes, and finally is deciding to get out from under the $9000 payment which he cannot afford.

When I was in California a few years back for a friend's college graduation, there was a graduation party for her at another friends house in a non-descript neighborhood in Irvine.  This house was maybe 1400 sq. feet, 25 years old, and not even a great view of anything.  $720,000.  It was explained to me that most houses in the neighborhood were $600K to $1mm.  Essentially, these homes would have sold in the $125 to $200K range in Tulsa.  This was a decidedly middle class neighborhood, not lavish, nowhere close to a Beverly Hills lifestyle.  By my standards, anyhow, these people were not "rich". 

Look at what was selling for $1mm up and down the coast of California over the last 10 years, those were not mini Taj Mahals.
Title: Re: Good News on Housing
Post by: Gaspar on August 03, 2010, 09:34:54 AM
Quote from: nathanm on August 03, 2010, 09:24:05 AM
No, but the whole point of the program is to lend to responsible people who for whatever reason (usually medical bills) don't have a good credit score or even a score at all.

The interest rate is usually higher and they usually pay more for mortgage insurance.

Gaspar, it should be perfectly possible to get a home loan without a credit score. What do you think was done before charge cards and credit reports? The bank looked at your income and your expenses, made sure you had a stable job, and whatever else they needed to do to feel comfortable. That's what FHA does. If you do have bad history, they make you explain it and satisfy them that it's not going to recur if you have anything to say about it.

They look at the total history, not just a number.

Besides, they do much better at lending to those with low scores or no credit than most institutions did. Probably because they won't insure exotic products and won't lend to just anybody. They do require smaller down payments, but the borrower pays for the risk in upfront MIP and a higher ongoing mortgage insurance cost.

There are a bunch of dishonest mortgage brokers out there (I got to see that first hand when one particular jackass wanted me to lie about my assets for a loan), and it annoys me to no end that they moved on to pillaging FHA once they got everything they could out of Fannie and Freddie.

Oh, I don't disagree.  The whole credit scoring system is the first flaw in a chain of flaws that leads up to problems like what we just experienced.  There should be a better way to score the worthiness of people applying for loans. 

Title: Re: Good News on Housing
Post by: we vs us on August 03, 2010, 10:22:47 AM
Quote from: rwarn17588 on August 03, 2010, 09:05:00 AM
On a related note, a recent report showed that the rich have high a higher mortgage delinquency rate than the rest of the population:

http://www.nytimes.com/2010/07/09/business/economy/09rich.html

Key part:

"Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

"More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

"By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent."


I read that article when it came out and was underwhelmed with it as a datapoint in the widening income disparity argument.  As Conan says, there're plenty of markets in the US where a million dollar mortgage is worth much less than it is in Tulsa.  And at the height of the subprime boom being handed a jumbo loan didn't necessarily indicate you had the wherewithal to pay it back, or the collateral to back it. 

But my question for the righties here:  let's say that there is a widening disparity between the rich and everybody.  Let's say that fewer people control more resources than they have since, say, WWII.  Isn't this a trend we should encourage?  Shouldn't we work with all haste to get the rich folks MORE of our resources, rather than less?  I don't know how to do that beyond rejiggering tax rates.  Perhaps we need to get rid of the minimum wage, holiday pay, etc.  Give employers total control over setting employment conditions.  Perhaps on an individual level we should turn down raises.  Perhaps we should save them as much money as possible so that they can, in turn, seed more small businesses so that we can return to full employment. 
Title: Re: Good News on Housing
Post by: Conan71 on August 03, 2010, 10:44:33 AM
Quote from: we vs us on August 03, 2010, 10:22:47 AM

But my question for the righties here:  let's say that there is a widening disparity between the rich and everybody.  Let's say that fewer people control more resources than they have since, say, WWII.  Isn't this a trend we should encourage?  Shouldn't we work with all haste to get the rich folks MORE of our resources, rather than less?  I don't know how to do that beyond rejiggering tax rates.  Perhaps we need to get rid of the minimum wage, holiday pay, etc.  Give employers total control over setting employment conditions.  Perhaps on an individual level we should turn down raises.  Perhaps we should save them as much money as possible so that they can, in turn, seed more small businesses so that we can return to full employment. 


Most definitely. /snark

WTH was that rant all about?  I guess I'm too much in tune with my personal wealth being what I "have" (intangible, non material) not what I "own" to care nor begrudge someone else who "owns" more than I do.  In the long run, I'm a whole lot happier and more fulfilled.   I've had points in my life where I "owned" more but I was much less happy than I am now.

I honestly don't get the left's obsession with an income and wealth gap.  Let those more monetarily blessed than I am suffer with it or prosper with it as they see fit.  It's really none of my business unless it impinges my freedom.  How exactly is it people earning $500K per year tread on the freedoms of those making minimum wage? 
Title: Re: Good News on Housing
Post by: Gaspar on August 03, 2010, 10:48:48 AM
Quote from: we vs us on August 03, 2010, 10:22:47 AM
I read that article when it came out and was underwhelmed with it as a datapoint in the widening income disparity argument.  As Conan says, there're plenty of markets in the US where a million dollar mortgage is worth much less than it is in Tulsa.  And at the height of the subprime boom being handed a jumbo loan didn't necessarily indicate you had the wherewithal to pay it back, or the collateral to back it. 

But my question for the righties here:  let's say that there is a widening disparity between the rich and everybody.  Let's say that fewer people control more resources than they have since, say, WWII.  Isn't this a trend we should encourage?  Shouldn't we work with all haste to get the rich folks MORE of our resources, rather than less?  I don't know how to do that beyond rejiggering tax rates.  Perhaps we need to get rid of the minimum wage, holiday pay, etc.  Give employers total control over setting employment conditions.  Perhaps on an individual level we should turn down raises.  Perhaps we should save them as much money as possible so that they can, in turn, seed more small businesses so that we can return to full employment. 

Don't really know where that rant is going, but for what it's worth, no.

By "we" I'm sure you mean government (lefty thing).  No government shouldn't work to increase or decrease the economic status of any person.  Mainly because that doesn't work.  Government has the power to impose limits and barriers.  It does not have the power to create wealth.  That power lies within the individual.  If the government gets out of the way and an individual has the drive, innovation and experience, he/she will create wealth.

As for the disparity between the wealthy and the poor, the way that you combat that is the same.  Get out of the way.  Allow the poor to have broader access to better schools (vouchers for private education).  Give them access to better jobs by removing the barriers to hiring (taxes, regulations, minimum wage laws, and now Obamacare). 

There will always be poor.  All that we can do is make sure that they have all of the same tools and opportunities available to every other american.  Government has never been a successful partner to the poor.  Government has only developed dependence, and addiction.   


Past studies by and large confirm the prediction that higher minimum wages reduce employment opportunities and raise unemployment, particularly among teenagers, minorities and other low-skilled workers. – Masanori Hashimoto

Low-income workers as a group are the major victims of minimum wage legislation. – Keith B. Leffler

The more laws and restrictions there are, the poorer the people become. – Lao Tsu

The higher entry standards imposed by licensing laws reduce the supply of professional services ... The poor are the net losers, because the availability of low-cost service has been reduced. In essence, the poor subsidize the information research costs of the rich. – S. David Young

Somehow, the fact that more poor people are on welfare, receiving more generous payments, does not seem to have made this country a nice place to live – not even for the poor on welfare, whose condition seems not noticeably better than when they were poor and off welfare. Something appears to have gone wrong; a liberal and compassionate social policy has bred all sorts of unanticipated and perverse consequences. – Irving Kristol


Title: Re: Good News on Housing
Post by: Red Arrow on August 03, 2010, 12:19:47 PM
Quote from: Conan71 on August 03, 2010, 10:44:33 AM
How exactly is it people earning $500K per year tread on the freedoms of those making minimum wage? 

You have apparently forgotten that there is a fixed amount of wealth out there.  If someone is greedy and makes $500,000/yr instead of a more equitable $125,000/yr, then there is $375,000 less money available to spread around.
Title: Re: Good News on Housing
Post by: nathanm on August 03, 2010, 12:26:16 PM
Income inequality is a problem because it leads to higher crime rates, more poverty, and generally makes this country a worse place to live. And it's got significant (bad) economic consequences.
Title: Re: Good News on Housing
Post by: Conan71 on August 03, 2010, 12:28:23 PM
Quote from: Red Arrow on August 03, 2010, 12:19:47 PM
You have apparently forgotten that there is a fixed amount of wealth out there.  If someone is greedy and makes $500,000/yr instead of a more equitable $125,000/yr, then there is $375,000 less money available to spread around.

Damn, I keep forgetting that, komrade.  Can I borrow your copy of the manifesto when you are done with it?  ;)

Certainly all of the $375K will be horded or sent offshore to some bank account instead of being used for consumption which provides jobs for others in the economy therefore we must confiscate it and let the government spread it around more efficiently.  Obviously buying expensive cars, furniture, boats, RV's, or spending it on lavish dinners or vacations doesn't provide a single job.
Title: Re: Good News on Housing
Post by: Conan71 on August 03, 2010, 12:30:30 PM
Quote from: nathanm on August 03, 2010, 12:26:16 PM
Income inequality is a problem because it leads to higher crime rates, more poverty, and generally makes this country a worse place to live. And it's got significant (bad) economic consequences.

That's rich.  People being wealthy leads to sociopathic behavior in those who chose to drop out of high school.  Look what a shithole Cuba turned into when they equalized it for everyone.  Russia, Poland, East Germany, Czechloslovakia anyone?

What part of "communism is a failure" did you miss in the last century?
Title: Re: Good News on Housing
Post by: Red Arrow on August 03, 2010, 12:36:34 PM
Quote from: Conan71 on August 03, 2010, 12:28:23 PM
Damn, I keep forgetting that, komrade.  Can I borrow your copy of the manifesto when you are done with it?  ;)

Certainly all of the $375K will be horded or sent offshore to some bank account instead of being used for consumption which provides jobs for others in the economy therefore we must confiscate it and let the government spread it around more efficiently.  Obviously buying expensive cars, furniture, boats, RV's, or spending it on lavish dinners or vacations doesn't provide a single job.


Now you're talkin'    

No, you can't borrow my copy of the manifesto.  I need it for reference to remember how things are supposed to work.  I'm sure the government will give you a copy of your own for a generous tax contribution of $375,000.
Title: Re: Good News on Housing
Post by: Gaspar on August 03, 2010, 12:37:44 PM
Quote from: Red Arrow on August 03, 2010, 12:19:47 PM
You have apparently forgotten that there is a fixed amount of wealth out there.  If someone is greedy and makes $500,000/yr instead of a more equitable $125,000/yr, then there is $375,000 less money available to spread around.

Huh?  Let's analyse your statement. 
QuoteYou have apparently forgotten that there is a fixed amount of wealth out there.
Completely untrue.  The average poor person in this country has a higher standard of living than the average person in most European countries.  We have generated a standard of living through the generation of wealth via innovation and hard work that is an example to the world.  If your statement were true, our standard of living would remain the same.  Yet as the rich get richer the poor get plasma TVs.

QuoteIf someone is greedy and makes $500,000/yr instead of a more equitable $125,000/yr
What if they are not greedy.  What if they work hard building a business and make $500,000 a year.  Not everyone successful is greedy.  On the contrary, most of the wealthy people I know are very kind and giving.  In fact, every boss I have ever had has been extremely wealthy, and far more charitable than any of my poor friends.

Quote. . .less money available to spread around.
Money is not spread around, it is earned.  It flows to those who work hard and innovate.  It flows away from the lazy, and the foolish.

The standard of living of the common man is higher in those countries which have the greatest number of wealthy entrepreneurs. – Ludwig von Mises

Capitalism has created the highest standard of living ever known on earth. The evidence is incontrovertible. The contrast between West and East Berlin is the latest demonstration, like a laboratory experiment for all to see. Yet those who are loudest in proclaiming their desire to eliminate poverty are loudest in denouncing capitalism. Man's well-being is not their goal. – Ayn Rand, Theory and Practice



Those who rail against "the greedy" suffer from the sin of envy.  they are consumed with hatred that flows from the guilt of their failures.  They cannot forgive themselves.
Title: Re: Good News on Housing
Post by: Red Arrow on August 03, 2010, 12:41:41 PM
Quote from: Conan71 on August 03, 2010, 12:30:30 PM
That's rich.  People being wealthy leads to sociopathic behavior in those who chose to drop out of high school.  Look what a shithole Cuba turned into when they equalized it for everyone.  Russia, Poland, East Germany, Czechloslovakia anyone?

What part of "communism is a failure" did you miss in the last century?

If everyone is equally poor, you can't be envious of your neighbors' stuff.  They don't have anything either.  Is everybody happy?
Title: Re: Good News on Housing
Post by: Gaspar on August 03, 2010, 12:44:20 PM
Quote from: Red Arrow on August 03, 2010, 12:41:41 PM
If everyone is equally poor, you can't be envious of your neighbors' stuff.  They don't have anything either.  Is everybody happy?

That is a personal problem. 

Why be envious of anyone.  I am not wealthy.  I hope to be some day.  I do not envy my wealthy neighbors, I learn from them.  They have much to teach.
Title: Re: Good News on Housing
Post by: Red Arrow on August 03, 2010, 12:47:20 PM
Quote from: Gaspar on August 03, 2010, 12:37:44 PM
Huh?  Let's analyse your statement.  Completely untrue.  The average poor person in this country has a higher standard of living than the average person in most European countries.  We have generated a standard of living through the generation of wealth via innovation and hard work that is an example to the world.  If your statement were true, our standard of living would remain the same.  Yet as the rich get richer the poor get plasma TVs.
What if they are not greedy.  What if they work hard building a business and make $500,000 a year.  Not everyone successful is greedy.  On the contrary, most of the wealthy people I know are very kind and giving.  In fact, every boss I have ever had has been extremely wealthy, and far more charitable than any of my poor friends.
Money is not spread around, it is earned.  It flows to those who work hard and innovate.  It flows away from the lazy, and the foolish.

The standard of living of the common man is higher in those countries which have the greatest number of wealthy entrepreneurs. – Ludwig von Mises

Capitalism has created the highest standard of living ever known on earth. The evidence is incontrovertible. The contrast between West and East Berlin is the latest demonstration, like a laboratory experiment for all to see. Yet those who are loudest in proclaiming their desire to eliminate poverty are loudest in denouncing capitalism. Man's well-being is not their goal. – Ayn Rand, Theory and Practice



Those who rail against "the greedy" suffer from the sin of envy.  they are consumed with hatred that flows from the guilt of their failures.  They cannot forgive themselves.

Gee, I never thought of it that way
[/sarcasm]  I gotta get back to work.
Title: Re: Good News on Housing
Post by: Conan71 on August 03, 2010, 12:58:16 PM
Quote from: Gaspar on August 03, 2010, 12:37:44 PM

Yet as the rich get richer the poor get plasma TVs.


It's only fair.

Actually, I heard a fair amount choose LED rather than plasma.
Title: Re: Good News on Housing
Post by: TheArtist on August 03, 2010, 02:42:35 PM
Quote from: Red Arrow on August 03, 2010, 12:19:47 PM
You have apparently forgotten that there is a fixed amount of wealth out there.  If someone is greedy and makes $500,000/yr instead of a more equitable $125,000/yr, then there is $375,000 less money available to spread around.

Bullpuckey.  

 You know, It takes a lot to start and or build a business.  You work lots of extra hours, evenings, weekends, holidays etc.  There are all kinds of hoops you have to jump through, a lot of stress and responsibility, paperwork, taxes, insurance, advertising...  Takes a lot of creativity, failing and trying again, sacrifice up front with no promise of success later, etc. etc. etc.

So lets say I work my arse off for years and years and get to the place where I can hire people.  The point of hiring people is for me, the owner, is to finally reap my reward and make a lot of money.  I didnt go through all that crap just so some new guy who didnt go through all of that could come in and instantly make anywhere near what I am making.  

If the "worker" doesnt like that,,, they are perfectly free to go ahead and build their own business.  They can then see how "easy" it is.  

Same goes for someone who invested their time and effort in college.  Sacrifice up front for a hoped for, but not certain, greater reward later.

 

Another reason for greater "income disparity" has nothing to do with the above, but has to do with larger markets in this modern world.  Hundreds of millions more people to sell to, all with easy access to goods.  As in,,, If I invent or create the next big thing, a fancy wachamacallit that people want, or even just a silly trinket.  Even if I am only making pennies on the dollar on each, today an individual has the potential to sell to markets of hundreds of millions, if not billions.  I could be instantly a LOT richer than the average guy.  If Megamart picks your toy to sell in its stores,,, Instant mega disparity. Write a best seller today, hit movie, newest rad clothing design, whatever... if it goes "viral" you can be richer than the same thing being sold to the smaller reach and markets of past generations.  While the guy behind the counter selling the products is going to be making what he made before.  Its not making any difference to his wage potential whether he is selling your item in one store, or "they" are selling your item in thousands of stores all over the country or world to millions.  Nothing has changed for you or for him, but the scale of potential reward for the person creating the goods being sold.  You may sell 10, or 100, or millions of something. You can't and shouldn't want to regulate that, and why would you want to?  
Title: Re: Good News on Housing
Post by: Gaspar on August 03, 2010, 02:53:22 PM
Those greedy artists should share the wealth. ;)
Title: Re: Good News on Housing
Post by: nathanm on August 03, 2010, 03:13:33 PM
Quote from: Conan71 on August 03, 2010, 12:30:30 PM
That's rich.  People being wealthy leads to sociopathic behavior in those who chose to drop out of high school.  Look what a shithole Cuba turned into when they equalized it for everyone.  Russia, Poland, East Germany, Czechloslovakia anyone?

What part of "communism is a failure" did you miss in the last century?
At least now I see why you see the world in the way you do. You only see the extremes. It's either "capitalism" or "communism." "Freedom" or "oppression." It's as if there is nothing in between.
Title: Re: Good News on Housing
Post by: guido911 on August 03, 2010, 03:21:03 PM
Quote from: TheArtist on August 03, 2010, 02:42:35 PM
Bullpuckey.  

 You know, It takes a lot to start and or build a business.  You work lots of extra hours, evenings, weekends, holidays etc.  There are all kinds of hoops you have to jump through, a lot of stress and responsibility, paperwork, taxes, insurance, advertising...  Takes a lot of creativity, failing and trying again, sacrifice up front with no promise of success later, etc. etc. etc.

So lets say I work my arse off for years and years and get to the place where I can hire people.  The point of hiring people is for me, the owner, is to finally reap my reward and make a lot of money.  I didnt go through all that crap just so some new guy who didnt go through all of that could come in and instantly make anywhere near what I am making.  

If the "worker" doesnt like that,,, they are perfectly free to go ahead and build their own business.  They can then see how "easy" it is.  

Same goes for someone who invested their time and effort in college.  Sacrifice up front for a hoped for, but not certain, greater reward later.

 

Another reason for greater "income disparity" has nothing to do with the above, but has to do with larger markets in this modern world.  Hundreds of millions more people to sell to, all with easy access to goods.  As in,,, If I invent or create the next big thing, a fancy wachamacallit that people want, or even just a silly trinket.  Even if I am only making pennies on the dollar on each, today an individual has the potential to sell to markets of hundreds of millions, if not billions.  I could be instantly a LOT richer than the average guy.  If Megamart picks your toy to sell in its stores,,, Instant mega disparity. Write a best seller today, hit movie, newest rad clothing design, whatever... if it goes "viral" you can be richer than the same thing being sold to the smaller reach and markets of past generations.  While the guy behind the counter selling the products is going to be making what he made before.  Its not making any difference to his wage potential whether he is selling your item in one store, or "they" are selling your item in thousands of stores all over the country or world to millions.  Nothing has changed for you or for him, but the scale of potential reward for the person creating the goods being sold.  You may sell 10, or 100, or millions of something. You can't and shouldn't want to regulate that, and why would you want to?  

Good post.
Title: Re: Good News on Housing
Post by: Conan71 on August 03, 2010, 03:23:14 PM
Quote from: nathanm on August 03, 2010, 03:13:33 PM
At least now I see why you see the world in the way you do. You only see the extremes. It's either "capitalism" or "communism." "Freedom" or "oppression." It's as if there is nothing in between.

What do you think "income equality" is, Nate?

Title: Re: Good News on Housing
Post by: nathanm on August 03, 2010, 03:37:26 PM
Quote from: Conan71 on August 03, 2010, 03:23:14 PM
What do you think "income equality" is, Nate?
There you go again, seeing only the polar opposites. There is a place between the high and increasing income inequality we have now and full equality. We had it for much of the 20th century in this country, and the healthy middle class was one of the key reasons we had such a robust economy.

Nobody says everyone should make the same thing, but maybe it's a bit much for a CEO to make literally a thousand of time more than the average FTE worker in a company. Being privately owned, any business is free, and should be free, to pay a CEO it hires anything it likes. That doesn't mean that sort of radical difference ought to be encouraged, though.

And sorry about my tone in my previous post. It wasn't necessary.
Title: Re: Good News on Housing
Post by: Conan71 on August 03, 2010, 03:52:10 PM
Quote from: nathanm on August 03, 2010, 03:37:26 PM
There you go again, seeing only the polar opposites. There is a place between the high and increasing income inequality we have now and full equality. We had it for much of the 20th century in this country, and the healthy middle class was one of the key reasons we had such a robust economy.

Nobody says everyone should make the same thing, but maybe it's a bit much for a CEO to make literally a thousand of time more than the average FTE worker in a company. Being privately owned, any business is free, and should be free, to pay a CEO it hires anything it likes. That doesn't mean that sort of radical difference ought to be encouraged, though.

And sorry about my tone in my previous post. It wasn't necessary.

You aren't channeling Reagan are you?  ;)

I'm totally confused what you are getting at, on the one hand you say a company should be free to pay a CEO whatever it likes, but that a CEO making 1000 times what the average worker is making is a bad thing.

It's normal in a capitalistic economy to reward those who provide jobs for others with more income than those they manage or employ.  I assure you, I earned every penny and grey hair when I managed others and was compensated for doing so.  If the board of directors thinks a CEO is performing well enough to reward them with handsome bonuses, it's their call.  It's certainly not leading to the erosion of modern society however.

Much like artist alluded to, I'm not aware of any entrepreneur who went into business for themself to make less than those they employ, though it can happen if they are properly compensating sales staff or if they have a key staff member without whom the company could not exist.  I out-earned my boss a couple of years, he didn't begrudge me for it, he simply gave himself a raise in subsequent years.  Much like the BOD of a corporation giving huge bonuses to a CEO, they do it because he/she is worth it to them.  
Title: Re: Good News on Housing
Post by: nathanm on August 03, 2010, 04:29:45 PM
I don't understand what's confusing about thinking someone should be free to do something yet think that thing that they should be free to do is something they shouldn't do. It's like those yahoos in Alaska who were openly carrying guns at their little rally. It shouldn't be illegal to do that, but I still think it's dumb.

Nor am I saying that CEOs should make less than the average employee, but we seem to have gotten by just fine back when it was only a hundred times the average worker's salary rather than a thousand. In any event, it's merely one example of income inequality. My point is that if resources get concentrated too much at the top, everyone else won't have enough money to buy your stuff.
Title: Re: Good News on Housing
Post by: TheArtist on August 03, 2010, 09:10:09 PM
Quote from: nathanm on August 03, 2010, 04:29:45 PM
I don't understand what's confusing about thinking someone should be free to do something yet think that thing that they should be free to do is something they shouldn't do. It's like those yahoos in Alaska who were openly carrying guns at their little rally. It shouldn't be illegal to do that, but I still think it's dumb.

Nor am I saying that CEOs should make less than the average employee, but we seem to have gotten by just fine back when it was only a hundred times the average worker's salary rather than a thousand. In any event, it's merely one example of income inequality. My point is that if resources get concentrated too much at the top, everyone else won't have enough money to buy your stuff.

But where does the money that the CEO gets go?   Its invested or spent.  

Say he spends it building and furnishing a huge mansion.  I work in those types of homes and see all the people who make a living, put food on their families tables, roof over their heads, kids through college,, by laying the marble and tile, crafting and installing the wrought iron, setting up and installing the home theater, making the cabinetry, custom making and installing the trim, putting in the pool, and yes painting the fancy murals and faux finishes. Who is to say the guy working at the business should get the money and not me?  Who is to say his living is more important than mine?

You can say that a portion of his compensation should have or could have gone to the workers at his company, but didnt it go to all those workers building that mansion?  Don't those workers deserve to make a living as well?  Who are you to say which person gets employed or how much they will earn? What about the garden keeper, the maid, the personal chef, nanny, etc. etc.  I think they would argue that the job they have, is just as worthy of being called a job as those jobs on the factory floor or at the store.  A portion of his money is indeed still going to the "labor force"  and the rest invested.

 Now I don't think that some of these stories we hear about CEOs failing their companies and still getting paid huge sums is right... But then the thought is, well if his company fails, then another company with good management and board will succeed and hire more. Capitalism may be uncomfortable at times.  Change is part of the system and we cant really predict when change will happen so it can be quite untimely and irritating. Thats why we try to build in safety nets.  But if they go too far, the safety nets can begin to strangle.  
Title: Re: Good News on Housing
Post by: Red Arrow on August 03, 2010, 09:51:24 PM
I wrote "You have apparently forgotten that there is a fixed amount of wealth out there.  If someone is greedy and makes $500,000/yr instead of a more equitable $125,000/yr, then there is $375,000 less money available to spread around."  just to see what responses I would get.

FWIW, I don't believe there is a fixed amount of wealth.
Title: Re: Good News on Housing
Post by: Conan71 on August 04, 2010, 09:16:08 AM
Quote from: TheArtist on August 03, 2010, 09:10:09 PM
But where does the money that the CEO gets go?   Its invested or spent.  

Say he spends it building and furnishing a huge mansion.  I work in those types of homes and see all the people who make a living, put food on their families tables, roof over their heads, kids through college,, by laying the marble and tile, crafting and installing the wrought iron, setting up and installing the home theater, making the cabinetry, custom making and installing the trim, putting in the pool, and yes painting the fancy murals and faux finishes. Who is to say the guy working at the business should get the money and not me?  Who is to say his living is more important than mine?

You can say that a portion of his compensation should have or could have gone to the workers at his company, but didnt it go to all those workers building that mansion?  Don't those workers deserve to make a living as well?  Who are you to say which person gets employed or how much they will earn? What about the garden keeper, the maid, the personal chef, nanny, etc. etc.  I think they would argue that the job they have, is just as worthy of being called a job as those jobs on the factory floor or at the store.  A portion of his money is indeed still going to the "labor force"  and the rest invested.

 Now I don't think that some of these stories we hear about CEOs failing their companies and still getting paid huge sums is right... But then the thought is, well if his company fails, then another company with good management and board will succeed and hire more. Capitalism may be uncomfortable at times.  Change is part of the system and we cant really predict when change will happen so it can be quite untimely and irritating. Thats why we try to build in safety nets.  But if they go too far, the safety nets can begin to strangle.  

That was a great post.  I'd formulated a similar reply but you beat me to it.  One more thing to add though is that corporate CEO's often improve the quality of life in the cities they live in with their excess of income.  They usually donate to the arts, hospital foundations, community foundations, and are cheerleaders for fund-raising like the United Way.

Sure they get a tax break for charitable work, so can any of us.  Those donations lower the burden for the rest of us in areas of advanced health care, education, and simply having a better quality of life.  Especially in Tulsa it's easy to look around and see what people like George Kaiser, the Williams family (and Steve Malcom), Zarrow family, Schusterman Family, Tom Kivisto (before he went tits up), the Helmerich's, etc. ad nauseum have done to improve Tulsa.

It's not like fortunes end up in a vacuum and don't recirculate in the economy.
Title: Re: Good News on Housing
Post by: we vs us on August 04, 2010, 09:18:01 AM
Quote from: TheArtist on August 03, 2010, 09:10:09 PM
But where does the money that the CEO gets go?   Its invested or spent.  

Say he spends it building and furnishing a huge mansion.  I work in those types of homes and see all the people who make a living, put food on their families tables, roof over their heads, kids through college,, by laying the marble and tile, crafting and installing the wrought iron, setting up and installing the home theater, making the cabinetry, custom making and installing the trim, putting in the pool, and yes painting the fancy murals and faux finishes. Who is to say the guy working at the business should get the money and not me?  Who is to say his living is more important than mine?

You can say that a portion of his compensation should have or could have gone to the workers at his company, but didnt it go to all those workers building that mansion?  Don't those workers deserve to make a living as well?  Who are you to say which person gets employed or how much they will earn? What about the garden keeper, the maid, the personal chef, nanny, etc. etc.  I think they would argue that the job they have, is just as worthy of being called a job as those jobs on the factory floor or at the store.  A portion of his money is indeed still going to the "labor force"  and the rest invested.

 Now I don't think that some of these stories we hear about CEOs failing their companies and still getting paid huge sums is right... But then the thought is, well if his company fails, then another company with good management and board will succeed and hire more. Capitalism may be uncomfortable at times.  Change is part of the system and we cant really predict when change will happen so it can be quite untimely and irritating. Thats why we try to build in safety nets.  But if they go too far, the safety nets can begin to strangle.  

So how was your business in the 90's?

I ask because letting the top tier of the Bush tax cuts expire takes us back to the Clinton-era tax structure. 
Title: Re: Good News on Housing
Post by: we vs us on August 04, 2010, 09:19:35 AM
Quote from: Conan71 on August 04, 2010, 09:16:08 AM

Sure they get a tax break for charitable work, so can any of us.  Those donations lower the burden for the rest of us in areas of advanced health care, education, and simply having a better quality of life.  Especially in Tulsa it's easy to look around and see what people like George Kaiser, the Williams family (and Steve Malcom), Zarrow family, Schusterman Family, Tom Kivisto (before he went tits up), the Helmerich's, etc. ad nauseum have done to improve Tulsa.

It's not like fortunes end up in a vacuum and don't recirculate in the economy.

And you're the guy who doesn't trust the Metro Chamber of Commerce?  I just don't get it.
Title: Re: Good News on Housing
Post by: Conan71 on August 04, 2010, 09:21:48 AM
Quote from: we vs us on August 04, 2010, 09:19:35 AM
And you're the guy who doesn't trust the Metro Chamber of Commerce?  I just don't get it.

Huh?  What's that got to do with philanthropy?  Do wealthy people donate to CoC's? I suppose so.

What's the deal, can't refute reality this morning so it's ad hominem time?  ;)
Title: Re: Good News on Housing
Post by: we vs us on August 04, 2010, 09:28:58 AM
Quote from: Conan71 on August 04, 2010, 09:21:48 AM
Huh?  What's that got to do with philanthropy?  Do wealthy people donate to CoC's? I suppose so.

What's the deal, can't refute reality this morning so it's ad hominem time?  ;)

Nope not all, but that's one of the CoC's main mission -- philanthropy -- and they get it done through rich-guy networking.  Which is kinda the core of the Conservative argument, if I understand it.  Provide to the Rich Man, for he shall make us all wealthy in turn.  If you believe that, then I'd think you'd support organizations like the Chamber, which exist to facilitate that exchange of philanthropic capital amongst those who have the most of it.  

That's why I'm surprised that you're hostile towards it.  In a lot of ways, the Chamber is a cornerstone of the trickle down philosophy.
Title: Re: Good News on Housing
Post by: Conan71 on August 04, 2010, 09:41:25 AM
Quote from: we vs us on August 04, 2010, 09:28:58 AM
Nope not all, but that's one of the CoC's main mission -- philanthropy -- and they get it done through rich-guy networking.  Which is kinda the core of the Conservative argument, if I understand it.  Provide to the Rich Man, for he shall make us all wealthy in turn.  If you believe that, then I'd think you'd support organizations like the Chamber, which exist to facilitate that exchange of philanthropic capital amongst those who have the most of it.  

That's why I'm surprised that you're hostile towards it.  In a lot of ways, the Chamber is a cornerstone of the trickle down philosophy.


The concept of a Chamber of Commerce is a great thing.  They supposedly exist to promote (get this) commerce!

I'm not really sure what sort of philanthropic mission a CoC is supposed to be on.  Do they donate to museums?  Medical foundations?  Hand up organizations like Starvation Army, Day Center, St. Joseph's Residence, and Goodwill?  Perhaps you are referring to the CoC youth (Ty-Pros).

Typically foundations are geared toward philanthropy (Kaiser, Schusterman, Zarrow, Zink, etc.) not CoC's.

To my knowledge a CoC generally exists to attract visitors, conventions, events, and new employers to the area.  My issue with the Tulsa CoC is they seem to be pretty lame and tend to glom onto projects which would have happened with or without their input.  I'm apparently not alone in my dislike and mistrust of the local CoC.  You and I have had differing experiences when dealing with the Chamber and I suspect my view is somewhat colored by a negative experience my company had with them a few years back. 
Title: Re: Good News on Housing
Post by: we vs us on August 04, 2010, 10:30:49 AM
I didn't mean this as a derail from the original point of the thread, and I guess I misunderstood your objections:  not to CoC's in general but to Tulsa Metro in particular. If it's a specific org's implementation of the ideal that's one thing; I'd thought you didn't like CoC's in general, and IMO they exist to bring the big guys and the little guys together.  And not just in philanthropy but in commerce as well. 

Re: my ranty rant yesterday:  I was trying to point out that consistently lionizing a shrinking portion of the population who controls more and more of the country's resources is a losing proposition for almost everybody.  Yes, it is correct that money is not finite, and value can grow from nothing; it is also correct that just because rich folks are getting richer it doesn't automagically follow that everyone else gets poorer. There are situations and times when a rising tide does in fact lift all boats.  However:  that is in fact NOT what is happening in the US in this point in time. 

Right now, in our particular situation, the very rich are getting richer and everyone else is getting poorer.  The recession has exacerbated this trend, but it has been progressing apace for the last decade. 

I am trying to get an honest response from the conservatives on this board about this situation, but that seems to not be happening.  Instead there's an insistence that, in essence, this is the vindication of Reaganomics since one half of the trickle down theorem is coming true.  Rich folks are getting richer!  Fantastic!  But in order for it to work, we all have to be getting richer, too, and it just ain't happening, and hasn't been happening in any real sense for a decade now.  In fact the theorem is running in the opposite direction, since the rich are getting richer and the rest of us are getting poorer.

But please don't take this as an "eat the rich" screed.  I don't want the top 1% strung up in the public square, and I don't want to loot and burn their chateaus.  I don't want to take away incentive to succeed, and I don't want to take away the freedom for a business to decide to pay a CEO what it wants to pay. 

However, the system is out of whack.  I would like to know the conservative plan for stopping it from getting worse. So far the response has only been to keep doing what we've been doing. 
Title: Re: Good News on Housing
Post by: bokworker on August 04, 2010, 10:46:45 AM
Quote from: we vs us on August 04, 2010, 10:30:49 AM
I didn't mean this as a derail from the original point of the thread, and I guess I misunderstood your objections:  not to CoC's in general but to Tulsa Metro in particular. If it's a specific org's implementation of the ideal that's one thing; I'd thought you didn't like CoC's in general, and IMO they exist to bring the big guys and the little guys together.  And not just in philanthropy but in commerce as well.  

Re: my ranty rant yesterday:  I was trying to point out that consistently lionizing a shrinking portion of the population who controls more and more of the country's resources is a losing proposition for almost everybody.  Yes, it is correct that money is not finite, and value can grow from nothing; it is also correct that just because rich folks are getting richer it doesn't automagically follow that everyone else gets poorer. There are situations and times when a rising tide does in fact lift all boats.  However:  that is in fact NOT what is happening in the US in this point in time.  

Right now, in our particular situation, the very rich are getting richer and everyone else is getting poorer.  The recession has exacerbated this trend, but it has been progressing apace for the last decade.  

I am trying to get an honest response from the conservatives on this board about this situation, but that seems to not be happening.  Instead there's an insistence that, in essence, this is the vindication of Reaganomics since one half of the trickle down theorem is coming true.  Rich folks are getting richer!  Fantastic!  But in order for it to work, we all have to be getting richer, too, and it just ain't happening, and hasn't been happening in any real sense for a decade now.  In fact the theorem is running in the opposite direction, since the rich are getting richer and the rest of us are getting poorer.

But please don't take this as an "eat the rich" screed.  I don't want the top 1% strung up in the public square, and I don't want to loot and burn their chateaus.  I don't want to take away incentive to succeed, and I don't want to take away the freedom for a business to decide to pay a CEO what it wants to pay.  

However, the system is out of whack.  I would like to know the conservative plan for stopping it from getting worse. So far the response has only been to keep doing what we've been doing.  


It is a fair question but I guess I would wonder why those that are getting poorer aren't doing what those that are getting richer are doing? Is it true that there is no opportunity for one to improve their social position? is it just inequality of opportunity?

I am all for equal opportunity... equal outcomes? No way. Certainly there are those born with the silver spoon that have a head start but I know way too many people that came from limited backgrounds and became successful on their own to think that a silver spoon is a prerequisite. In fact, in my experience I have seen more wasted silver spoons. it is important to believe that you have the ability to make a difference in your own life. If we have a system that is quashing that belief then it needs to change but, expecting opportunity to be handed to you is an unreasonable expectation.
Title: Re: Good News on Housing
Post by: Conan71 on August 04, 2010, 10:55:06 AM
Wevus, good post, good clarification.

It's difficult for a conservative to say how you change that, because artificial structures in free-market economies don't seem to work.  The whole idea of closing an income gap is somewhat Marxist, so it's not something I'm particularly comfortable with.

Since self-reliance is generally one of the main tennets of conservatives, I believe most of us suscribe to the notion that every person is capable of making their own fortune.  There's really nothing holding someone back from it who has the mental capacity, work ethic, and ingenuity to make it happen.  Many people who started out with very modest means have gone on to become incredibly wealthy and brought others along with them.  Take a look at the sorts of jobs that Apple and Microsoft have provided which did not exist in the 1970's in the sort of volume they do now.  The fact is, as American workers have seen improved jobs and incomes in the last 30 to 40 years, we've allowed a quiet trickle of cheap labor to come in and take up the slack in jobs Americans no longer had to do.

I often have to question when the subject of a wealth gap and income gap comes up, how much of that dilution is happening due to the overflow of immigrants to this country who are willing to work for lower wages.   If the lower end of the work force is willing to work for a lower wage I don't see how, in a free-market economy, someone is obliged to pay them more.  That's what a minimum wage essentially does.  It establishes a floor, but it cannot address the cash for day labor market which is out there.  Obviously there's a demand for that sort of labor and people likely willing to work for less than the minimums tax free and untraceable.  Don't think for a second that amnesty would result in getting all that income on the books either, it won't.  It also won't raise the standard of what people are willing to work for.

Our cheap ways and demands for lower priced goods are as much to blame for lower wages as are people being willing to work for them.  People demonize low wages, yet we still seek out the best prices for every day items, including what we eat.  "Hell no I don't want to pay $1.19 a pound for green bell peppers grown in the U.S. and picked by U.S. workers, I want mine grown in the U.S. and picked by migrant workers for .69 a pound!"

Until you and I are willing to pay double what we are used to for food and other goods we use on a daily basis, you simply cannot arbitrarily raise wages.  No government I'm aware of has ever succeeded in improving the human condition by imposing a higher tax structure on the "haves" in a society, nor by nationalizing entire industries and companies.  I'm not saying you are getting at that, but what other models other than communism purport to even out wages?

For a quick and interesting read, look up the Wiki on Felix Sabates, a Cuban immigrant whose family was wildly successful in pre-Castro Cuba who had everything taken from them.  He built a fortune here starting with nothing more than the shirt on his back.  
Title: Re: Good News on Housing
Post by: nathanm on August 04, 2010, 01:00:53 PM
Conan, you make the mistake of believing that everyone has a good birth. Many do not. If you're destitute and can't afford clothes, it's nearly impossible to get a job. Same thing if you're homeless and can't bathe. The old adage that it takes money to make money is pretty accurate. It's slightly off, since illiquid assets can serve the role of money in greasing that wheel, but the essential sentiment is correct.

It's in everybody's best interest to reduce income inequality. What I don't know is how to go about doing that in a way that doesn't offend my own sensibilities, much less yours or anyone else's.
Title: Re: Good News on Housing
Post by: custosnox on August 04, 2010, 01:19:53 PM
Quote from: nathanm on August 04, 2010, 01:00:53 PM
Conan, you make the mistake of believing that everyone has a good birth. Many do not. If you're destitute and can't afford clothes, it's nearly impossible to get a job. Same thing if you're homeless and can't bathe. The old adage that it takes money to make money is pretty accurate. It's slightly off, since illiquid assets can serve the role of money in greasing that wheel, but the essential sentiment is correct.

It's in everybody's best interest to reduce income inequality. What I don't know is how to go about doing that in a way that doesn't offend my own sensibilities, much less yours or anyone else's.
I've been almost completely down and out, on the verge of homelessness (avoided it because someone gave me a place to stay temporarily) and in pretty bad shape.  But, there are always ways to work and make some money if your willing to do the work.  It may not be much, but it might be enough to get you to that next step.  It is possible to pull oneself up off the streets and end up on top.  It's just most don't want to put in the work that is required to do so.  So why should the person that pulls themself up from the bottom through hard work and perserverance have to then pay to bring someone else up that doesn't work hard, and just gets by through handouts?
Title: Re: Good News on Housing
Post by: TheArtist on August 04, 2010, 01:53:01 PM
I really don't think the current situation of growing income disparity has much to do with something of the "the rich getting more and taking it from the poor" variety.  Its more as Conan pointed out, immigration, and globalization.  We are in an ever flatter world where many jobs are competing with billions of poor people doing those jobs for less, products being made for much less, etc.  It was bound to happen that as time goes on things would equalize and do so at a lower salary scale than we were used to.  Wages have been and will continually go up in those other countries, but there are still so many poor people that the overwhelming weight of numbers is going to bring the balance of wages in our country down.  Unless you are doing a job that can't be easily outsourced to other countries or done by poor immigrants.

Then add to that technological productivity gains.  Less people needed to produce more.

Then add to that what I had said earlier about being able to sell to hundreds of millions, and the resulting wealth that can create.  

The average person and poor of the world are equalizing their wages, while the rich are tapping into more wealth and larger markets. The world as a whole is getting much wealthier, and its not just all the rich. Lots of once poor people are getting wealthier (expanding those markets), but they are bringing down the average guys wages to boot.  

Sure you could probably do some tweaking around the edges with taxes and such, but what I am seeing causing the majority of the growth in disparity, isnt so much the rich taking more than their fare share or from the poor. But thinking about it a bit more.  I think there is some "wealth redistribution" of sorts going on. You could argue that its the poor of the world taking away/bringing down income from the once, comparatively wealthy, US worker.  The poor are taking from the rich.  You just didnt realize that in comparison, you were the rich lol.  
Title: Re: Good News on Housing
Post by: Gaspar on August 04, 2010, 02:01:49 PM
Nathan,
I have friends born to wealth that work as cooks in hotels.  I also have friends born to abject poverty (one who was homeless and used to sleep on my sofa during high-school because his parent's up and left him) who are now millionaires.

We don't live in a cast system or a closed class system in this country.  In fact the greatest thing about this country are our stories of rags to riches and our tumbles from grace.  The choices you make dictate your level of success based on what you value.  Sure, wealthy kids have an economic advantage, but often they also take that for granted.  On the contrary, poor and middle class kids have far more opportunities to learn the value of hard work and enterprise than their wealthy counterparts.  Most of this country's great innovators and captains of industry share the same rags to riches tales.  They learned to value work and innovation because they had to. 

Life's hardest lessons are the best learned.

On the other side of the argument, many poor people make poor decisions.  The casinos and smoke shop drive-troughs are filled with them.  If given $25, many would buy a 12 pack and pack of Marlboros before they would even consider paying towards their credit card debt, or saving for rent.  They know their course of action is not the best, however they take it because they value instant gratification over economic responsibility. 

Sure, some of these people work hard too, but their work is consumed by what they value.  No matter how much money you throw their way, unless you change their value system, they will continue to make the same decisions that made them poor in the first place.  We've seen this story again and again too, the poor lottery winner that ends up in massive debt because there was no change in that person's value system.  There was even a reality show about it "The Lottery Ruined My Life."

Wealth is the result of something internal, not simply the digits in one's bank account. 



Title: Re: Good News on Housing
Post by: bokworker on August 04, 2010, 02:12:25 PM
There's an idea for a new show..."Wealth re-distribution ruined my life".... lot's of participants.
Title: Re: Good News on Housing
Post by: nathanm on August 04, 2010, 02:21:20 PM
Quote from: TheArtist on August 04, 2010, 01:53:01 PM
I really don't think the current situation of growing income disparity has much to do with something of the "the rich getting more and taking it from the poor" variety.
The research done on the topic does not prove that statement to be true.
Title: Re: Good News on Housing
Post by: Gaspar on August 04, 2010, 02:22:02 PM
Quote from: bokworker on August 04, 2010, 02:12:25 PM
There's an idea for a new show..."Wealth re-distribution ruined my life".... lot's of participants.

That show was already canceled in Russia, and much of Eastern Europe, and my cable doesn't pick up Cuban TV.
Title: Re: Good News on Housing
Post by: Conan71 on August 04, 2010, 02:53:40 PM
Quote from: nathanm on August 04, 2010, 02:21:20 PM
The research done on the topic does not prove that statement to be true.

Cite the research.  (Didn't you ever have a physics or calc professor say: "Show your work!  ;) )

There's way too many social programs available out there to support your assertion about "bad birth" and not being able to shower or get decent clothes for an interview.  You can even get transportation to and from a job, via social services.

Admittedly, I had a better hand up coming from a middle to upper middle class family.  However, my ambition was never terribly lofty.  I didn't care a whole lot for school, I did well but never worked to my full potential with the exception of history and English.  I really had a hard time with advanced math and science, though I got decent grades in those.  I could have easily gotten into law school, and at my current age, I'd likely be making three or four times what I do now, or I could simply be a burned out attorney playing bartender in some resort town.  I'm still not quite sure where people got the idea on here at one point that I'm an attorney.  I've got a law degree on my wall but it was my father's (who was a Democrat, if you can imagine).  I simply did not want to deal with all the reading through boring texts and confusing legal terms, spiced with latin.

Nope, I'm a college drop-out who could sell and could teach others to sell.  I've also got a very strong mechanical aptitude which allows me to grasp concepts which have helped me sell over the years.  I've been a regional sales manager for a chemical company, owned my own business, worked in advertising, and worked in finance.  Fact of the matter is, you don't go to college to learn to sell.  Either you can sell or you can't.  Either you get up and go make cold calls every day or take care of your clients or you fail.  I've caught some lucky breaks along the way, meeting the right person at the right time or having the right referral.  It was still up to me to win that job and more importantly to get out there every day and keep it.

Like Gaspar, there are people I know of who came from the worst possible home environment to become community leaders, and I've watched others with a silver spoon up their donkey crash and burn spectacularly (Doug Pielsticker, anyone?).  I've also seen people who came from a horrible environment repeat it, and I've seen those who came from wealth do even better than the generation before them.

At least in the America I live in, you are free to become as successful as you want or be as mediocre as you want, and there are people just waiting to help those who fail.  I learned through a very hard personal tragedy about 10 years ago that success wasn't piling up toys, adding to my bank account and building a little Taj Mahal as a tribute to my material success.  I learned success was leaving this planet just slightly better than it was when I got here.  I left my job with the chemical company and started my own business at that time.  That was a choice.  Again, I could be making two to three times what I do now, live in a fancier neighborhood, and drive a new Benz, but I'm so much happier with a job I love and fewer material possessions to worry about.  I'm still able to pay cash for my daughter's college and put some back for retirement which I'm planning on in about 10 years in my mid-50's.  I don't have lofty material goals anymore.

If someone else has lofty goals, they can get there if they are willing to put in the work.  You can go from a slum to law school or med school.  You don't have to have every break I got along the way.  If you have the right attitude and desire, people will spot it and will give you the chance to prove yourself.

Sorry to get off on the rah rah tangent.  I simply know no way of closing this supposed gap, other than advising people to work harder or go back to school if they want to earn more.  I'm not even sure this gap is a bad thing.  Obviously there are jobs to be done throughout the economy and people are needed to fill them.  There's a reason pushing a broom doesn't pay as much as being a technical service advsior does, it doesn't require much more skill than showing up every day.  People are apparently needed at every income level otherwise all jobs would pay the same.  If you try and close the gap by taking from the other end, that's punitive and goes against the concept of liberty that we hold dear.

I'm perfectly happy with my station in life and the choices which got me here.  I'm frankly quite tired of class envy and people unwittingly putting down a class of people who have helped make America a great place to live through the jobs they provide, the money they spend in the economy, and the gifts they give back to their communities.

/self-revealing soap box.
Title: Re: Good News on Housing
Post by: TheArtist on August 04, 2010, 06:30:06 PM
Quote from: nathanm on August 04, 2010, 02:21:20 PM
The research done on the topic does not prove that statement to be true.

  Would love to see any info about that.   
Title: Re: Good News on Housing
Post by: we vs us on August 04, 2010, 07:08:10 PM
(http://www.mint.com/blog/wp-content/uploads/2010/07/WealthDistribution-3.jpg)
Title: Re: Good News on Housing
Post by: we vs us on August 04, 2010, 07:09:09 PM
(http://www.businesspundit.com/wp-content/uploads/2010/01/wealth_distro-thumb.jpg)
Title: Re: Good News on Housing
Post by: we vs us on August 04, 2010, 07:10:17 PM
If you can't say it with infographics, it shouldn't be on the web.
Title: Re: Good News on Housing
Post by: nathanm on August 04, 2010, 07:33:35 PM
Many of you seem to be under the mistaken impression that I'm saying everybody should make the same amount of money. I'm not at all. The problem isn't that some people make less than others, it's how ridiculously much less some people make than others.

Obviously, some income inequality is perfectly natural and doesn't cause an issue. The problems come in when taking it to one extreme or another.

Quote
In a 2005 study, the authors found that the top 10 percent of earners saw their share of overall income rise from 27 percent in 1966 to 45 percent in 2001
Quote
Their point: income inequality is growing even among the top 10 percent of earners as the superstars and CEOs increase their pay faster than lawyers and investment bankers. But at least the pay of the superstars, lawyers, and investment bankers is market-driven. The pay of CEOs is not.
Quote
They cite one study of 1,500 firms that found that the compensation earned by the top five corporate officers in 1993-5 equaled 5 percent of their firms' total profits during that period; by 2000-2, that ratio had more than doubled to 12.8 percent.

All this is happening as real wages continue their decline, eating away at the lower classes, even as more and more people get college degrees and learn technical skills.

If you want more, Google Scholar is your friend. I might post some further references if my brain feels up to understanding dense economics papers later on this evening.

We have this myth in this country that we have unlimited economic mobility and no class system at all. It's just not true. If you have the bad fortune to grow up in the inner city or in some rural backwater with an awful public school system, you have little chance of making it to the top. Sure, it happens, but those instances are the exception that proves the rule. It's ridiculous to assert that poor people are poor because they're all lazy. It's a radical assertion that nobody seems to have any proof for. The whole thing reminds me of people blaming the poor for the financial meltdown. It's so patently ridiculous I don't know why I even bother debating it.
Title: Re: Good News on Housing
Post by: Red Arrow on August 04, 2010, 08:39:17 PM
Quote from: nathanm on August 04, 2010, 07:33:35 PM
Many of you seem to be under the mistaken impression that I'm saying everybody should make the same amount of money. I'm not at all. The problem isn't that some people make less than others, it's how ridiculously much less some people make than others.

There will always be a Bill Gates or Warren Buffet.  There will always be someone at the bottom.  

A purchasing director at one of my former employers told me to always get 5 quotes for a project.  Discard both the most and least expensive and choose among the middle three.

If we (statistically) discard the richest and poorest extremes, what would the spread look like?  How much remains in the middle?  (You always seem to have the time to research things like this.)

Wages/salaries are also somewhat subject to supply and demand as well as value to society.  
Title: Re: Good News on Housing
Post by: Red Arrow on August 04, 2010, 10:03:20 PM
Quote from: we vs us on August 04, 2010, 07:08:10 PM
(http://www.mint.com/blog/wp-content/uploads/2010/07/WealthDistribution-3.jpg)

NM 88029 is Columbus, New Mexico.  It is a town just north of the NM/Mexico border west of El Paso, TX.  It is on an abandoned rail road.  I guess it doesn't surprise me that they aren't a hotbed of economic activity.  I expect that the cost (and yes, standard) of living is less than in NYC.  

73.4% of consumer debt is held by the bottom 90%.  People buying things they cannot afford.  I know some are buying necessities but not all.  What surprises me is that 26.6% of consumer debt is held by the top 10%.  Why aren't they paying their bills?  Investments paying more than the interest on the consumer debt?

Edit:  interesting facts about Columbus NM an Pancho Villa
http://www.southernnewmexico.com/Articles/Southwest/Luna/Columbus/ColumbusNewMexico-PanchoV.html

Title: Re: Good News on Housing
Post by: Conan71 on August 04, 2010, 10:35:21 PM
Wev & Nathan,

If you were in the 1% that supposedly controls 34% of the wealth, would you still be concerned about income disparity? How would you propose to solve the issue?
Title: Re: Good News on Housing
Post by: nathanm on August 04, 2010, 10:49:57 PM
Quote from: Red Arrow on August 04, 2010, 10:03:20 PM
73.4% of consumer debt is held by the bottom 90%.  People buying things they cannot afford.  I know some are buying necessities but not all.
And the reason they can't afford the game console, big TV, or vacation? Because the real purchasing power of the average person has been steadily eroded over the last 30 years, while the real purchasing power of the top 10% has increased dramatically. I don't know what the solution is, but it's obviously a problem.
Title: Re: Good News on Housing
Post by: Red Arrow on August 04, 2010, 11:06:31 PM
Quote from: nathanm on August 04, 2010, 10:49:57 PM
And the reason they can't afford the game console, big TV, or vacation? Because the real purchasing power of the average person has been steadily eroded over the last 30 years, while the real purchasing power of the top 10% has increased dramatically. I don't know what the solution is, but it's obviously a problem.

Part of the solution regarding the consumer debt is for people to realize that they can't afford the 52" TV and they should settle for the 42" that maybe they can afford. Your numbers may be different but the principle applies. A sense of entitlement and requirement for instant gratification makes for bad financial decisions. "Charge it", I'll pay for it next month. Unfortunately, next month's money is already spent on purchases from months ago.  And so on..... It works for discretionary spending.  Doesn't help for the hot water heater that quits between paychecks once you are behind the curve.  Better education about handling personal finances while in High School could be a beginning since so many adults obviously don't know how to manage theirs.
Title: Re: Good News on Housing
Post by: TheArtist on August 04, 2010, 11:08:10 PM
  None of those graphics say WHY the disparity is increasing.  I have said it IS increasing.  It would have to in this world.  How could it not?

Say fifty years ago you were the rich guy able to sell something to 50 million people, but today your able to sell to 500 million people... he is gonna be a whole lot richer today.

And thats just one example.

Title: Re: Good News on Housing
Post by: nathanm on August 05, 2010, 01:40:38 AM
Quote from: TheArtist on August 04, 2010, 11:08:10 PM
Say fifty years ago you were the rich guy able to sell something to 50 million people, but today your able to sell to 500 million people... he is gonna be a whole lot richer today.
Ideally, other businesses would come into being to serve the larger market, thus increasing competition and keeping pricing down. These days that doesn't much happen. You get three or four big firms that control the vast majority of any given sector.
Title: Re: Good News on Housing
Post by: Conan71 on August 05, 2010, 08:03:19 AM
Quote from: nathanm on August 05, 2010, 01:40:38 AM
Ideally, other businesses would come into being to serve the larger market, thus increasing competition and keeping pricing down. These days that doesn't much happen. You get three or four big firms that control the vast majority of any given sector.

But keeping pricing down helps to suppress wages and the purchasing power would likely remain static for those you are concerned about.