I guess ignoring the laws we set out to guide our country is the “in” thing these days…

You and I obviously have a fundamental misunderstanding of the world. It’s the Social Darwinist theory if people are poor, it’s their fault for not working hard enough or being intelligent enough, etc. And conversely, that rich people are those being rewarded for hard work and intelligence.

I take this very personally. My family was poor for generations back. To say that my grandfather was poor because he didn’t work hard enough or wasn’t intelligent enough is a personal insult. He worked all his life and would have died penniless if it hadn’t been for the United Mine Workers.

Are things really so different now? Maybe you don’t see the real lives of poor people because it’s not a part of your reality. I know people who work two jobs AND go to college, but can’t get ahead in the world because two jobs doesn’t bring in much income at minimum wage, and a two-year degree in any field is barely even a foot in the door.

Rich and poor has much more to do with how you are born, not who you are. I was lucky enough to be born into the middle class, go to a good high school and go to a private college thanks to big scholarships. Now, my four-year degree isn’t worth the paper it’s printed on; I’ll be burning it for heat next winter.

If you take a hard look at America, you will see a lot of “intelligent, hard-working” poor people and a lot of rich people with neither characteristic. I can’t say that there’s no correlation between intelligence or dedication and income; I’m just saying that it’s not as strong as you think it is, and it’s particularly skewed among certain groups.

No one wants to admit that they’re rich because they were lucky. Social Darwinism makes people feel okay to be rich. So they’re less inclined to give up their money to the “undeserving.” If we could realize that we’re all in the same boat and that there’s a lot of luck involved in achieving the American Dream, it would be easier to adopt a more progressive tax system.

If you really think that most poor people are unintelligent or lazy, I challenge you to seek them out. Prove me wrong.

I suspect that the poor not soaking the rich on taxes has very little to do with internalized values and much more to do with relative political power.

How much people make is a mixture of talent, intelligence, ability, ambition, upbringing, education, connections, the market they’re in and the way the government has structured that market, and luck. Some people are talented and make a lot of money because of it; some people are talented at capturing the government and making a lot of money because of it; some people are talented but go into low-demand fields.

And Amy: WTF is up with that ad hominem? There most certainly are MAs and PhDs in economics.

It is not hard work, I would argue, that make people incredibly successful, but the luck they had to be born into a family that could provide them with the opportunities to learn how to be successful and explore talents that they have.

You’re right Carla, I did pull the difference between 100,000$ and 300,000$ out of my ass. I realized after I wrote it that there would be some grey area between them. Somewhere there is some clever individual that played by the rules and made a shit ton of money. We should ask ourselves though, do resourceful mill workers, carpenters, and nurses, even the most able and talented among them, make 300,000$ a year. No. Doctors and lawyers, however, can expect those kinds of salaries.

The question is really one of who gets to be a price setter rather than taker, and how and why. This is very similar to the problem of how corporations maintain monopolies. This never begins and ends with a market–in fact, these forces undermine the smooth operation of markets, and all of the superficial microeconomics 101 deductions that follow from it–like the one that you expound above. This is very important to things like public policy, because the a priori econometric argument for the efficiency of markets to regulate themselves is also trumped–as we have seen, in reality, in the past few months.

Anyways…

Carla says: “People become rich because of talent, ability and intelligence.”
Carla’s not wrong here, but her comment seems to imply that this is always a good thing, which it isn’t. (One example: The “talented and intelligent” banks that promoted sub-prime loans to the point of lying)
Plus, the same can be said for a (money) counterfeiter, but does that mean that their devaluing the currency is helping people? And what about when a meatpacking corporation threatens to outsource it’s jobs if it doesn’t receive frivolous government subsidies? It does take “talent, ability and intelligence” to counterfeit money, make poop look like gold and blackmail the government, but that doesn’t mean that it doesn’t end in moderate to huge financial loss on the peoples’/government’s part.

Carla also says: “The idea that we should take even more money from the wealthy to subsidize the lives of the unsucessful is not only stupid; its bad economics.”

I’ll agree with you when the financial black hole called the US auto industry gives us ALL our money back and the CEOs and Board of Directors fund the ailing industries (that made them so rich) instead. I support that kind of private investment.

But if you’re talking about the rich people that invested and saved their money wisely, I have nothing against them at all.

In case you have been living in a cave this past year…read the news and you will have realize that private investment and the “talented” hedge fund and all of that are the MAJOR cause of this shithole we are in right now. Perharps you should read this book to help you with your fake MA/PhD in econ “House of Cards: A Tale of Hubris and Wretched Excess on Wall Street by William D. Cohan”

Way to pull statistics entirely out of your ass. Someone making 100k is OK, but someone making 300k is exploiting the system? Please. I’d love to hear your explanation for how that “fucks up economies.” I have my MA (working on a PhD) in econ, so I’d LOVE to hear your explanation.

People who say things like “The top 1% pay X% of the taxes” drive me nuts, because the main reason X is so high is because the top 1%’s share of income is so incredibly high. But man, that graph sucks.