Poor in America? Shouldn't be in America-Toxic Waste Version

[swbluto]

I was trying to check out the income distribution across the United States to try to find the best states as far as high incomes go. In my search, I found the census data to be pretty informative and it offered more information than just simply median household income data, it also offered the Gini coefficient which is a measure of income inequality.

That was interesting to see because the states with the highest median household incomes also tended to have the highest Gini coefficients. (NY and DC; I frequently hear that many people can't afford a house in those areas, so I imagine that the poorer classes are not well represented in the median household income stats; indeed, if you were to look at other measures such as per capita income, New York City is actually quite low in that regard.)

Since the census data didn't have the actual numbers, I googled it and Wikipedia had more detailed information:

http://en.wikipedia.org/wiki/List_of_U.S._states_by_Gini_coefficient

I tried to find the states with the highest average income and also the lowest Gini coefficient, and that state was basically Utah. Coincidentally, they also have a pretty low unemployment rate.

Trying to get a meaningful sense of the Gini coefficient numbers, I checked out the global Gini coefficients.

http://en.wikipedia.org/wiki/List_of_countries_by_income_equality

I sorted the list by the World Bank's Gini coefficient, and found that the United States has higher income inequality than 80% of the world's countries. That was interesting to find; I then checked the countries with the lowest Gini coefficient, and just by looking at them, it seemed like a lot of them were faring pretty well unemployment rate wise - places like Sweden and Germany. I also saw that Canada was pretty low on the list, like it was more equal than Utah, by a large margin. (We're talking .25-.3, compared to utah's .41 and NYC's .5; Brazil, the country with massive protests among the impoverished average citizen, is .54; higher number is more unequal...)

So, combining this with the labor wages to GDP ratio that I saw yesterday for the United States (52% of the GDP went to labor in 1950, whereas it's around 40% nowadays... It's more inequal... government, corporations and businesses are taking more of the national wealth than in the past...), I started wondering what the median income in Canada was looking like. If income was more fairly distributed, you would expect the median household income to be higher.

Well, I looked at it and the median household income in Canada was greater than $70,000 or more than $67,000 in USD. Woah! That's pretty significant because the median household income in the more well-to-do states in the United States is about $41,000-$45,000, so that's a pretty significant difference.

So the moral of the story is, if you're poor in America, you probably don't want to be in America. lol

 

[melodious]

So the moral of the lesson is, if you're poor in America, you probably don't want to be in America. lol

I am what you would describe the rich side.


:| But I'm really probably only sitting right outside the boundary line of a poor ol' sod.


Agh, there's a waterbug next to me!

 

[swbluto]

Well, I'm in college, so I'm pretty poor as of now, lol. But, I come from a fairly well-to-do family so I might have a chance of making it. Not very optimistic given the economy as of late so I'm doing my research, lol.

 

[melodious]

I call B.S. :lol:

You have 4500 posts and have been here since 2008.

That makes you a very prodigious poster or a person that really can manage his time


agh! Waterbug again!

 

[swbluto]

I call B.S. :lol:

You have 4500 posts and have been here since 2008.

That makes you a very prodigious poster or a person that really can manage his time


agh! Waterbug again!

Nah, just a sign of how easy college has been getting lately. Haven't heard of the recent decades' grade inflation have you? Standards gotta go lax when half the millennial generation is getting a bachelors and we can't be failing them all, that'd look bad and it'd hurt their elevated levels of self-esteem, lol.

Btw, 3 posts a day isn't that hard to manage, lol.

 

[dogman dan]

At least in the USA, it's not required to buy your job when you get out of school. Money's a big deal, but if you are poor, it at least helps that you don't have to kick back some of your salary to the boss. IRS yes, but not your boss.

But affordable housing near work is disappearing, and transportation to work eats a lot of the poorer folks income. For example, the bus does not run to the poorest neighborhood inside the city limits of my town. The poor have to walk or bike 7 miles to a bus stop, that happens to be about where the better neighborhoods begin. Even my house is a mile and a half from the furthest out the bus runs. Groceries are 10-15 miles away. So the poorest have the furthest to go in cars they can't afford.

Things are tough all over. Just like they were when I graduated into a deep recession in 1980. With a degree, I worked for minimum wage for years. (because I wouldn't move to a better town.)

 

[Harold in CR]

Many poor people in the USA, were not poor 10 years ago.

 

[dnmun]

before george bush stole the election and they wrecked the world economy by sending lehman brothers into bankruptcy.

also the little defect in his mental character refused to listen to the CIA when they told him osama was gonna get us so instead we had NY destroyed and $4 trillion dollars in debt for two useless wars that have alienated the entire world and gotten 5,00 soldiers killed a million afghan and iraqis dead, 100,00 soldiers with permanent scars and unable to find jobs.yep it was better when bill clinton balanced the budget and got the economy rolling up to the point where bush took over.

 

[Harold in CR]

Bill Clinton balanced the budget with UNTOUCHABLE SS funds. First thing he did that he should have been thrown out as President, BUT, he was backed just like the Bush's, only different sources.

 

[swbluto]

This trend has been going on way before Bush or Clinton, though both presidents certainly contributed to the current malaise (Bush, especially, but Clinton isn't blameless - he repealed the 1933 Glass-Steagall act in 1999 that was designed to protect America from another investor-induced great depression).

There's several graphs I'd like to share.

Less of the national income is going towards wages overtime.

Rich get richer.

The gini coefficient is a measure of income inequality. The USA's income inequality is worse than 80% of the world's developed countries, including (By a large margin) Germany which is doing great in comparison.

http://en.wikipedia.org/wiki/List_of_countries_by_income_equality (Has some neat little charts that you can custom sort)

And, recently, the Fed has been bailing out investors by printing money (About 2 trillion so far and counting), furthering the divide between the 1% and everyone else. (Everyone else gets poorer with inflation, which seems to be currently manifesting in higher real estate prices as money flows out from Wall-street to real estate.)

Quantitative easing:

And, I hate to state the obvious, but it seems like the evolution of commercial law in recent years heavily favors the 1%.

Now, you might wonder, "What could explain these trends"? I don't know, but I highly suspect OIL is a major reason. Thanks to the exploitation of fossil fuels during the early half of the 20th century, that fueled the economy and it exploded in growth; when times are good and people feel secure, people share and things leveled out. However, something happened in the early 1970s: the oil embargo and the trend started reversing. The economy was no longer secure as it had seemed and everybody came just a little bit more afraid. Also, US's oil production peaked during the 1970s. Also, which is probably also important, the USA was taken off the gold standard by Nixon in 1971 enabling FIAT currency. This probably made it easier for the financial classes to siphon off the wealth over the span of decades, exacerbating the increase in income equality; it's also a prerequisite to something like "quantitative easing"/"money printing", which is definitely known to directly increase the wealth inequality.

From wikipedia at http://en.wikipedia.org/wiki/Quantitative_easing#Increase_income_and_wealth_inequality

In August 2012 Bank of England issued a report stating that its policies of quantitative easing had benefited mainly the wealthy. For example the report said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. About 40 percent of those gains went to the richest 5 percent of British households.[77][78]

Dhaval Joshi, of BCA Research wrote that “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it".[78]

Economist Anthony Randazzo of the Reason Foundation wrote that QE “is fundamentally a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy. It is a primary driver of income inequality”.[78]

In September 2012 Donald Trump said on CNBC that "People like me will benefit from this."[78]

In May 2013 Federal Reserve Bank of Dallas President Richard Fisher said that cheap money has made rich people richer, but hasn't done quite as much for working Americans.[79] Most of the financial assets in America are owned by the wealthiest 5 percent of Americans. According to Fed data, the top 5 percent own 60 percent of the nation’s individually held financial assets. They own 82 percent of the individually held stocks and more than 90 percent of the individually held bonds.[78]

Before the 1920s, the economy was highly unequal: the "standard" corporations of the day make current corporate monoliths look like playtoys. Before the 1920s, I'm willing to bet America was a speck on the global map in terms of international power.

 

[wineboyrider]

There is a clear positive correlation between social spending and inequality, which suggests one of three things: the state's efforts to reduce inequality have been ineffective, increasing inequality is inspiring additional (and still ineffective) state action to combat it, or additional social spending is causing more inequality (unlikely). No matter what conclusion one draws, it is clear that the U.S.'s "Great Society" welfare programs have not reduced income inequality. It is not clear from the data that greater increases in social spending will alleviate income inequality.
Wages vs GDP can easily be explained with Austrian economics as it is directly proportional to the dollars decline since detachment from a commodity based currency (which forces government discipline). Government discipline is really an oxymoron these days isn't it? :lol: :lol:

 

[lbz5mc12]

All I know is that I've been unemployed for over 2.5 years. My skill set is in food service and retail management/cashiering of which there is usually an abundance of jobs. I believe I've had a total of 7 interviews in this whole time, 3 of them for seasonal. No dice.

The high unemployment rate is making job security seem laughable. I say this because when there is such a large surplus of available workers, when you make even the smallest of mistakes, you're out on your ass and they've replaced you faster than you can blink. This is also due to states that don't require reasons for termination. This lack of accountability has to stop. I mean what are you supposed to tell your next possible employer when they ask why you were terminated from your last job? "Gee you know what they didn't tell me" just doesn't cut it. You have to be accountable as an employee but your employer doesn't?

Take me for instance. I was a recently promoted head cashier at Home Depot which was my last job. My immediate supervisor and our Ops manager were also promoted at the same time as I was promoted. They had no clue what they were doing but they were supposed to be training me? They got to keep their jobs and I got fired due to poor performance issues. My poor performance issues were due to their lack of knowledge concerning their jobs and my training. The only actual learning I received was from the other head cashiers. I repeatedly brought this up with the GM to no avail. I was told at the time of promotion that if I felt that I couldn't handle the job I could go back to being a cashier. When I tried to step down they said I couldn't because of poor performance. They said I had to actually improve as a head cashier in order to be demoted. The whole front end of the store was supposedly performing poorly. They made me into the scapegoat. I had a 100% approval rating with the customers until the last 2 weeks before I was let go when mysteriously my approval rating dropped down to about 30%.

The approval rating is determined by the surveys customers can take online with their receipts. It doesn't matter who caused the customer to have a bad experience. The poor rating is automatically attached to whichever cashier or associate rang the customer's order up and completed the sell. Anybody can take any customer's receipt be it the original or a copy, go online and fill out the survey. Even being a supervisor I was still responsible for ringing customers up. I think you can see where I'm going with this so I don't need to explain further.

Just a word of advice to anyone that takes receipt surveys, make an effort to remember the name of both the people that caused you to have a positive experience as well as a negative one if it applies. If you just say you had a bad experience it will negatively affect the cashier at the end of your shopping trip. If you provide names, the blame goes where it's supposed to and the compliments go where they're supposed to.

I know it sounds like I'm whining but I'm not. I'm just trying to provide an example of how twisted shit has become. I'm also hoping that it is noted by my ability at conveying my message via the written word, so legibly and lacking any error, that I am not an uneducated putz with a chip on my shoulder. Though I may look like a gigantic, dumb-ass, redneck, it is not but my own form of urban camouflage.

 

[Chalo]

There is a clear positive correlation between social spending and inequality,

This is so wrong it's insane. Go visit the Netherlands, then go visit Haiti. Report back on which one has greater inequality, and on which one has greater social spending.

 

[wineboyrider]

There is a clear positive correlation between social spending and inequality,

This is so wrong it's insane. Go visit the Netherlands, then go visit Haiti. Report back on which one has greater inequality, and on which one has greater social spending.

Inequality only gets greater the more the government intervenes. The only role the government should play is enforcing contracts ie. such as employment contracts. There are many holes in the Gini coefficient that have not been discussed. I've been to the Netherlands great place, clean tolerant and friendly society bound together by a strong culture that values hard work and forging their environment having inherited one of the worst pieces of mainland Europe they have done quite well for themselves. As to Haiti Foreign Aid has caused their economic malaise. Foreign aid from the US and other countries patronizes DICTATORSHIP!
Ron Paul: Well, I would say, instead of what? If you cut out the warmongering and cut some of the deficit down and gave some away with humanitarian reasons, I’m not going to fight it, even though I don’t have any confidence in that. Because I think foreign aid too often gets in the hands of the politicians and they get into warring factions and they fight over it. And I don’t think the record is very good that it helps people. But we spent a lot of time on how this money is being spent, but we never talk about where the money comes from. If you take Bill Gates, he has a lot of money in his foundation, but he doesn’t get taxed on that. But poor people get taxed, whether it’s the inflation tax or the income tax or whatever, so they end up paying. And my argument for foreign aid is that you take money from poor people in the US and give it too rich people in other countries.......

 

[Harold in CR]

I just started reading this article, and, if I am not mistaken, it is a VERY stupid example of how the economy is being manipulated. It says the FED is "Buying" 85 billion $$$ worth of bonds, etc. PER MONTH. With WHAT are they buying that has value ? Paper ???

I would like to see some input on this thread, that is not conjecture. We all have opinions, but, I welcome the people that really understand the financial system and the mess it is in. Thank you

LINK

 

[swbluto]

I just started reading this article, and, if I am not mistaken, it is a VERY stupid example of how the economy is being manipulated. It says the FED is "Buying" 85 billion $$$ worth of bonds, etc. PER MONTH. With WHAT are they buying that has value ? Paper ???

I would like to see some input on this thread, that is not conjecture. We all have opinions, but, I welcome the people that really understand the financial system and the mess it is in. Thank you

LINK

Fed's Buying bonds = Quantitative easing = Printing Money. See the M0 money supply graph above to see how the M0 money supply has tripled.

For a better explanation, they're creating 1s and 0s on a computer and then giving them to investors to buy the toxic Mortgage-Backed Securities(investment securities in the real estate industry), based on the real estate industry that crashed in 2008. They're also creating 1s and 0s on a computer and buying Treasury bonds; I don't really understand who they are "buying those from", but it's entering the system somehow, so I'm guessing it's mostly going towards investors and bankers and whoever the bond holders are.

Yes, it's just paper. Money created ex nihilo.

 

[dnmun]

how do you guys come up with this stuff? it has nothing to do with what the federal reserve has done.

you don't even live in the US so how is it important to you anyway.

 

[swbluto]

how do you guys come up with this stuff? it has nothing to do with what the federal reserve has done.

Hehe, you might be surprised by how deep the rabbit hole goes, by what a tangled web they've weaved, intending to deceive.

You might have not noticed, but America has had a crapload of inflation over the past century - a dollar today is worth about three cents in 1900.

Do you know what causes inflation?

That's right, the Federal Reserve! They are the bankers bank and they are the ones that essentially print money out of nothing. This inflation has been stealing savings and earning power from the people over many decades, and it's getting worse with their quantitative easing.

THIS IS WHAT INFLATION IS CAUSED BY:


The people who benefit mostly from inflation are the banks, they make up a good part of the 1% whose share of the national income has gone from 7% in 1950 to nearly 20% today. The interest rate they charge on their loans is tied to the prime rate which is tied to inflation, and thanks to the money multiplication affect of fractional reserve banking, their ROI is a multiple of the prime rate. The money they lend out to earn interest on essentially comes from the money the Federal Reserve prints. The more the federal reserve prints, the more banks lend out, the more money banks make. Of course, more money in the money supply means inflation...

Now that's not the only aggravating factor. I'm pretty sure increased consumption in the USA and the increased reliance on debt to fund ever bigger houses and the next best SUV has driven up the income inequality quite a bit (especially since the increase in consumption has outpaced wage increases, since wages have been essentially stagnant over the last two decades, adjusting for inflation.), as bankers make their money on the interest. 6% APR looks innocent enough, until you realize over 40% of Susie's income is going towards paying the interest on the mortgage on her McMansion.

 

[Harold in CR]

Thanks SWBLUTO.

To MR DNMUN, I respectfully decline to comment on your condescending remark.

you don't even live in the US so how is it important to you anyway.

You DON'T want to go there, EVER. !!

 

[Joseph C.]

That labour statistical comparison is interesting but what does labour mean?

Is it the sum total of everyone's earnings in the United States in a given year (well according to their tax figures anyway)?

If that's the case I would imagine that the 40 per cent figure isn't a true reflection on the real state of affairs. As the top earners are earning much more than in the 1950's and I'd imagine that the unemployment figure is much higher now. Although I could be wrong. Wouldn't be the first time.

 

[Grey beard]

I just started reading this article, and, if I am not mistaken, it is a VERY stupid example of how the economy is being manipulated. It says the FED is "Buying" 85 billion $$$ worth of bonds, etc. PER MONTH. With WHAT are they buying that has value ? Paper ???

Exactly! Paper. The "Fed" is not "Federal", nor does it have "reserves". It was created by Bankers, for Bankers. An interesting but long, presentation on the creation of the Fed: http://m.youtube.com/watch?feature=related&v=Q93R5EQVOLI

For those who don't drink the cool aid, the economy is still not doing well. The jobs report is still poor. 350,000 new applicants for unemployment insurance, 160,000 new jobs. Most of the applicants for UI come out of the private sector while most of the new jobs are Government. What the jobs report numbers don't say. 10,000 people per day retire, 300,000 per month. In a growing economy, one person will be hired for each retiree. We are so far away from that. Another issue not addressed is concerning how companies are preparing for our health care debacle. All the big box stores and chain businesses are cutting as many people back to 28hrs as they can to avoid the "full time employee" requirements in Oboma care. They cut back two, and hire another part timer to fill the hours the others had. These hires take people out of the unemployment lines, even though they are not full time, and fudge the numbers our leaders give us.

GDP. It used to be we could get an idea of how we were doing by charting GDP. Since they decided to lump Gov. spending in with it, the numbers only tell you what the administration wants you to hear, and then in a few months they quietly revise the figures, like they do with the employment numbers.

 

[Sancho's Horse]

Unemployment figures do not reflect the massive number of people joining the ranks of the permanently disabled. Not being able to sleep well is now a cause for disability. Look at the numbers on disability, and the welfare to work "success" looks a bit less successful.

 

[Dauntless]

Keep in mind before you start throwing rocks at anothers' analogies of the Fed, trying to sum it up in few words is like the blind men with the elephant; you can only describe what you're feeling close to you.

So the Fed is much like yourself if you began a business enterprise that is more open to you than you know. Imagine yourself borrowing money at ridiculously low rates such as 1%. Why, you could lend it out at 5% and make a profit. 20 people borrow $50k each, you're getting $19k a month in payments and paying under $12k each month to the Fed, who will make close to $50k total for printing that $1 million you lent out, while you make nearly $600k. Fascious as my telling seems, it's a kids' book version of what the Fed does to get you to quit your stinkin' job so someone else ca have it, pay over $100k income tax on what your making, maybe even hire an unemployed secretary. Oh, and with what's left go spending every dime on a wonderful time. You start to understand how it could be that Alexander Hamilton paid off the American Revolutions national debt by buying toxic assets.

It can be done well, as with an agency Herbert Hoover started getting morphed in the Rural Electric Administration by Roosevelt. Once the power and phone lines had been run all over the country some of the workers had to be kept on to maintain the sysstem. Others could work on rewiring homes. It all created jobs and made the U.S. the first to have power and phones everywhere. Or it can be done bady, as with everything Obama does being a boondoggle that pisses money away and accomplishes nothing. The government made money bailing out the savings and loans in the 80's, but pursued only political gamesmanship and lost money in TARP under Obama.

My phoneline/DSL is down so I'm typing this with my thumbs and not researching details. Oh what I could with the computer and the search engine to help me remember. But permanent inflation was not created by the Fed but in fact it was introduced by Herbert Hoover during a retreat in th Poconos for business leaders such as Henry Ford, where Hoover raved about the fascist ideal of enslaving the workers in a death spiral of prices that would rise faster than wages. Ford was so impressed he announced right there in the Poconos that he was giving his workers a raise.

Ah, what might I write tomorrow when the line is fixed? The average 4 year degree is only 24k???????????? I gotta find out about that. 2 years of community college in California is $5k, but it takes 6 years to get classes.

 

[swbluto]

Keep in mind before you start throwing rocks at anothers' analogies of the Fed, trying to sum it up in few words is like the blind men with the elephant; you can only describe what you're feeling close to you.

So the Fed is much like yourself if you began a business enterprise that is more open to you than you know. Imagine yourself borrowing money at ridiculously low rates such as 1%. Why, you could lend it out at 5% and make a profit. 20 people borrow $50k each, you're getting $19k a month in payments and paying under $12k each month to the Fed, who will make close to $50k total for printing that $1 million you lent out, while you make nearly $600k. Fascious as my telling seems, it's a kids' book version of what the Fed does to get you to quit your stinkin' job so someone else ca have it, pay over $100k income tax on what your making, maybe even hire an unemployed secretary. Oh, and with what's left go spending every dime on a wonderful time. You start to understand how it could be that Alexander Hamilton paid off the American Revolutions national debt by buying toxic assets.

It can be done well, as with an agency Herbert Hoover started getting morphed in the Rural Electric Administration by Roosevelt. Once the power and phone lines had been run all over the country some of the workers had to be kept on to maintain the sysstem. Others could work on rewiring homes. It all created jobs and made the U.S. the first to have power and phones everywhere. Or it can be done bady, as with everything Obama does being a boondoggle that pisses money away and accomplishes nothing. The government made money bailing out the savings and loans in the 80's, but pursued only political gamesmanship and lost money in TARP under Obama.

My phoneline/DSL is down so I'm typing this with my thumbs and not researching details. Oh what I could with the computer and the search engine to help me remember. But permanent inflation was not created by the Fed but in fact it was introduced by Herbert Hoover during a retreat in th Poconos for business leaders such as Henry Ford, where Hoover raved about the fascist ideal of enslaving the workers in a death spiral of prices that would rise faster than wages. Ford was so impressed he announced right there in the Poconos that he was giving his workers a raise.

Ah, what might I write tomorrow when the line is fixed? The average 4 year degree is only 24k???????????? I gotta find out about that. 2 years of community college in California is $5k, but it takes 6 years to get classes.

I could see the bankers interests in the federal reserve (Borrowing at the prime rate to lend out at the market rate is a pretty good deal, and all new money goes through them), and now it's pretty clear where the government's interests lie with taxation off the labors of the people. That makes this picture far more clear:

Bankers benefit from the systematically ensured longterm increase in the concentration of the money supply (And all that affords, such as property and 1/8th the entire USA's assets), government benefits from the increased labor productivity in markets with the greater liquidity and the increased tax yields on the labor. (However, I think in recent years, the increased concentration of wealth has started to affect the labor productivity that government depends on, by the economic volatility associated with it. That is, the bankers interests are kind of working against the governments better interests; sure, bankers love owning more of the assets in the United States that printing money provides, but government benefits more from higher labor output in a myriad non-directly-monetary ways.)

And, when banks make a misjudgment and lose epic money on mortgage bets, they can just print up money anyways! If they can't ensure an increase in the concentration of wealth the old-fashioned way, they'll just run the printing presses with reckless abandon and ensure it anyways!

Sweet deal. Confirms the notion the entire freaking system is rigged against everyday people. Not just the stock market, but the entire money system. Helps explain the mechanisms behind the post-1970s trends in the graphs above.

I sure wish the USA had another JFK. Of course, he was assassinated after speaking badly of banksters; I hope the next one avoids assassination, stays alive like Andrew Jackson, and banishes the banksters like he did!

Btw, I don't think you're that young, but I don't really know how old you are, either.

 

[dnmun]

so amazing how little people understand about the fed but seem to think they are experts. the federal reserve policy is there to keep the banking system solvent after hank paulsen pushed lehman into bankruptcy back then and precipitated the financial crisis. there was no need to do that since the fed had a plan to take control of lehman and unwind it over several years without damaging the credit markets. instead the commercial paper market dried up overnight and sent the banking system and the immense commercial paper market into a catatonic state.

if the federal reserve had not been able to talk bush into going to congress and getting help there would be untold millions still outa work.

all these rich people who think they are gonna make so much money with their gold stash because they wanna see all the poor people in the hole where they should be and the world is only for them and their gold. so they make sure they have their bushmaster rifles to kill everyone who gets in their way when society hits the wall of unemployment.

the federal reserve has clearly stated goals of restoring maximum employment, not maximum riches for all of you richy rich people. hope your gold collapses even more today. you deserve it.