Please ask the algorithm and let us know.
1 Like
Chesterfield Roundtable had a visit from the St. Louis office of the Federal Reserve Board a while back. They say much of the wealth divide is due to racism. Restrictive covenants and red lining made it difficult for many African Americans to own homes. Home ownership is a major source of resources for many.
As they missed out on that opportunity they do not have the resources many have to deal with the unexpected. For many of us family steps in to help in an emergency. But not when you lack resources.
They tell us many African Americans now have college degrees and work as professionals. On income we are making good progress, but assets remains a problem.
The fed suggests slave reparations as one way to fill in this gap. Not a very popular idea, but something to consider. I should think other programs might work better such as free tuition to public universities (and other training programs) for slave descendants.
1 Like
Certainly true in the past and currently still true though progress has been made.
But the government and corporate entities pushed globalism that has pushed many working class folks of all races from middle class into the poor class. And the state has ignored their new dire economic straits. And that are unaffected in their occupations tell those folks “Come pull yourself up by you bootstraps. Get more education or training.” Other than that advice they have no desire to fund government program[s] to aid these folks. “Hey I got my own problems.” Well further education or training costs money. And now that former middle person ,who likely has a family, has much less income and financial commitments made while they were middle class. And they have less time as they likely took a second job in an attempt to maintain income. I suppose many have lost their homes as they fall behind on mortgage payments.
“Well these folks lacked foresight in choosing their occupation.”
What about programmers and accountants that did obtain higher education that have lost jobs to foreign programmers and accountants that can perform these functions in their native countries. Or corporate use of H1B visas to replace “high” cost professional class workers.
“Well these folks lacked foresight in choosing their occupation.”
Now to the housing problem. Housing is very expensive, similar to the stock market, and not just for minorities. It is hard for the young to obtain housing-owning or renting. They have to spend half of their income to obtain housing. Housing in my berg is 4 times more expensive now compared to 1980. Do people in town make 4 times what they earn in 1980? I think it is unlikely.
There are a significant number of starter homes in my town built for returning WW 2 veterans. However, they are mostly rentals now. And no new starter homes are being built. I suppose not enough profit in such housing compared to larger homes.
1 Like
Race based education subsidies? Immediately flamed as “DEI”. Nope. I think the time for any sort of reparations has passed.
Steve
1 Like
Guys, I’ve got a much different view of the issue. The graph is showing wealth disparity and you’re all talking about income. Two different issues. I haven’t looked lately, but last time I dug up the data, income in this country, as unbelievable as it sounds, pretty much follows the pareto distribution, and has since ~1900. That is not the issue.
The wealth gap does NOT follow the pareto distribution and that IS the problem. Playing around with income and income taxes will not fix this. I honestly think that this is the biggest threat to the US. There aren’t any surefire solutions that I know of. However, I think bulking up inheritance taxes is a must. Also, programs like the 401k, 403b etc. need to be used better. A large % of the population are not using them properly, plus the fees involved are ridiculous. Looking at this from a very basic common sense approach, how can the general population create wealth.
- Real Estate: Owning a house and/or rental property
- Start a business
- Invest in the market
I would guess that most people in the bottom section of the graph would not have a clue about doing any of the 3 options above. The key to me is education. Not learning the desired societal thought processes, but teach people why they should invest in real estate. Show them opportunities for starting a business. Teach them how to set a 401k correctly, and more importantly, teach the basic concepts of investing. I’m going to get off my high horse, I’ve blathered on enough.
I just want to end with this. We as a society are doing an unbelievably bad job of preparing our youth for the future. Once you get past the top 10%-20% of the kids in school, most of the remainder are left to flutter in the breeze until they are cast out into a cold reality without any proper skills.
Don’t mean to offend anybody, just my two cents.
Thanks,
Darryl
6 Likes
Darryl, a superb post, and I concur with your conclusions. Most of the USAian population can barely do arithmetic, let alone understand the power of saving and investing without paying the skim.
We need far better education (and although that has BIG long term payoffs, it ain’t FREE, see Finland), and a radical reform renewal in our politics to remove Congressional control from the wealth sheltering super elites.
We may need an economic CRASH to get the voters attention (“Good and Hard” as our slogan has become), and perhaps a quasi-religious renewal of civility and financial prudence.
1 Like
Raising minimum wages is not going to help, it will result in higher inflation. Tax the wealthy is a political battle. Rather than focusing on tax tiers, focus on how rich is able to pay so low taxes? One easy change could be
Make long-term capital gains, dividends as same as income… and just give exemptions for $100K, that will bring significant tax revenue.
7 Likes
2 Likes
YES!!!
Simple and attacks the true problem!
2 Likes