Donald Duck joins the Tea Party (http://www.youtube.com/watch?v=HfuwNU0jsk0&feature=player_embedded)
ickey too! (http://www.youtube.com/watch?v=dbjjTLVrkKA&feature=player_embedded)

"The gap between the haves and have nots is at a 80 year high."

I already showed you in the other post. And posts over the years.

That simple math results in this.

In any economy with inflation, the difference(the gap) BETWEEN the poor, the median(what we may call the middle class), and the rich will ALWAYS continue to grow.

It is just math.

If, in any inflation economy, which our is, IF a poor person's income doubles, and a rich person's income doubles by the same percentage. The difference(the gap) between the two increases logarithmically, each year.

They both make double what they made the year before.
But the difference between the two is logarithmically greater.
The gap MUST increase between the two, or three.

n any economy with inflation, the difference(the gap) BETWEEN the poor, the median(what we may call the middle class), and the rich will ALWAYS continue to grow.

It is just math.

If, in any inflation economy, which our is, IF a poor person's income doubles, and a rich person's income doubles by the same percentage. The difference(the gap) between the two increases logarithmically, each year.

They both make double what they made the year before.
But the difference between the two is logarithmically greater.
The gap MUST increase between the two, or three.

Give the people making these statements a little more credit.

They do compensate for inflation by using a reference year and divide the current income by the inflation for every year between today and the reference year.

And then find that after inflation has been taken out of the picture the income of almost everybody has at best been stagnant (i.e. the income rose just enough to compensate for inflation but the people did not increase their buying power, they just had to pay more dollars for the same thing.). A significant portion of the american population actually lost ground over the years. Their ability to buy things got less (thus the need for second and third jobs and attempts to cash in on the increasing value of houses).
Also, a few percent of the population saw their income increase by a very large amount, claiming much of the value of the real increase of economic production. Or if you use the pie analogy, a few people claim an increasing each year percentage of the pie. That would not matter so much if the pie got bigger to compensate, but compensating for inflation shows that for most people the substance of their slice of the pie does not increase and it is only hot air (inflation making all numbers bigger by the same percentage) that gives the illusion they are earning more each year.

Plus, you claim that for everybody the income increases by the same percentage. Surveys and economic research find, time and again, that this is not the case. At the low end of the pay scale the income raises by the same percentage as the inflation, if that. At the (extreme) end of the scale income is raised by 20, 30 percent and often more. E.g. in the year 2009 when most people saw their income decrease relative to inflation almost all bankers and CEOs gave themselves a raise of up to 30 percent (paid for by the government bailouts, the people who got laid off, and the banking system that claims to control tens of thousands times more money than the global annual production. Somehow)


Eri

Or if you use the pie analogy, a few people claim an increasing each year percentage of the pie.But even the poor have a pretty large slice.

So why does it bother you so much that a handful of people have a much bigger slice?

But even the poor have a pretty large slice.

So why does it bother you so much that a handful of people have a much bigger slice?
The pie doesn't grow or shrink, the pieces just get larger or smaller.

It reminds me of the US at the turn of the century. The poor were very poor, the rich were very rich and there wasn't much of a middle class. I think we're headed back to that.

Give the people making these statements a little more credit.

They do compensate for inflation by using a reference year and divide the current income by the inflation for every year between today and the reference year.


The gap argument people never compensate or account for this mathematical truism.

If in 1900 a carpenter and a doctor are working.
One makes 10 a week, the doctor makes 100 a week.
A difference of 90.

Lets just for sake of argument and math say that inflation is 10% per year.

In 1901
Carpenter makes 11 a week.
Doctor makes 110 a week.
Difference is now 99.

in 1902
Carpenter makes 12.1 a week.
Doctor makes 121 a week.
Difference is now 107.1

And so on.

The difference, the GAP, must increase apparently disproportionately. It MUST, it's just math.

I am not going to give them any credit. Their argument is founded on envy and class warfare. Not on math, or what happens in the real world.

It's not my fault that a carpenter makes 60K a year, and a surgeon makes 600K. That carpenter COULD have become a doctor if he wanted to, and had what it takes. But there are many many less people who wanted to, or had what it takes, that is to say more qualified, to become that surgeon than it took to become a carpenter. Less people, less available surgeons, which increases the value of a surgeon, and increases his or her pay.

If everyone who passed shop in highschool could cut and sew meat on living humans, but could not nail two boards together, their places would be reversed. The surgeons would be making 60K, and the carpenter would be making 600K.

The pie doesn't grow or shrink, the pieces just get larger or smaller.


Of course the pie grows.

30 years ago, what you do for a living, did not exist as a job.

The whole tech industry is pie growth.

Just look at MicroSoft, that is all new pie.
Apple, all new pie.
Cisco, all new pie.
RIM, all new pie.


This is one of the reasons why the Greenies want to convince everyone of Global Warming.

New pie, for new jobs, new growth.
The people that make solar panels.
All new pie.
Windmills over the Altemont
New Pie.
New gas stove production.
New pie.
CO2 reclamation and storage.
All new pie.

And then find that after inflation has been taken out of the picture the income of almost everybody has at best been stagnant (i.e. the income rose just enough to compensate for inflation but the people did not increase their buying power, they just had to pay more dollars for the same thing.). A significant portion of the american population actually lost ground over the years. Their ability to buy things got less (thus the need for second and third jobs and attempts to cash in on the increasing value of houses). Well two things happened for this to occur.
A doubling of the available workforce.
And an increase in avarice.

I don't see this inability to buy things that you mentioned.
Even poor people buy more of stuff, or bigger stuff than they ever had in the past.

Also, a few percent of the population saw their income increase by a very large amount, claiming much of the value of the real increase of economic production. Remember, lets use CEOs as an example, that there are only 500 people most qualified(as deemed by the company's owners), to be CEOs of the Fortune 500 companies. Supply and demand plays a big part of what prospective CEOs can negotiate what their pay is.

Or if you use the pie analogy, a few people claim an increasing each year percentage of the pie. That would not matter so much if the pie got bigger to compensate, but compensating for inflation shows that for most people the substance of their slice of the pie does not increase and it is only hot air (inflation making all numbers bigger by the same percentage) that gives the illusion they are earning more each year. One of the biggest pie holders in our country was a software programmer. A writer. But was able to write something that no one else could write, and he wrote something that lots of people wanted to buy.

In order for you to increase your wealth, you can not just continue to work at an unskilled minimum wage job. You will have little to no control over your standard of living, and it will be tied to inflation. What you need to do, is learn something new, a new job where there are less qualified people doing that job, and a job that is in demand.

Or you can take the money that you make at your job, and invest that money in companies. That way you make dividends. Or you can play the stock market, which is risky. And buy low and sell high to increase your wealth. This is risky, because what happens just as often as buy low and sell high, is buying high and selling low. That is risk. Those who do it right, take the risk, and do it the right way. They have knowledge or information that you don't know(suppy and demand), and even with risk, and because of it, they profit, and increase their wealth.

You have to do something different, move ahead, in order to make more money and increase your standard of living above the populace. You can't just sit back, doing your normal work, and expect greater returns. You can't even expect to keep up.

Plus, you claim that for everybody the income increases by the same percentage. No, I have not claimed that. I used a static number in the model. To make a mathematical point.

Supply and demand plays an important role into what size the percentage increase is over inflation. If there is fewer of something in demand, it's cost goes up.

Risk also plays an important role into what kind of outcome gets.
Jeff Bezos is an example of that.
He sold his and his wifes home.
Took out credit card loans from his family.
Drove his car with his wife to the west coast and started a new company.
A company which provided a service that others wanted, and paid for.
HUGE risk.

And it paid off. There are thousands(millions perhaps) just like him, where they lost everything.


Surveys and economic research find, time and again, that this is not the case. At the low end of the pay scale the income raises by the same percentage as the inflation, if that. That's because those two things are tied together. If a minimum wage worker doubles his minimum wage, his standard of living is not going to change. Because what he or she buys is tied to the work of others, other minimum wage workers. His wage doubles, but so does his loaf of bread. The bread costs double now because everyone making and bringing that bread to market, or ringing it up at the checkout aisle, also make(cost) twice as much.

I knew that when I was 17 with a high school education. Did not need any research for it to be true.

At the (extreme) end of the scale income is raised by 20, 30 percent and often more. E.g. in the year 2009 when most people saw their income decrease relative to inflation almost all bankers and CEOs gave themselves a raise of up to 30 percent (paid for by the government bailouts, the people who got laid off, and the banking system that claims to control tens of thousands times more money than the global annual production. Somehow) I am ambivalent about the government bailouts.
On one hand, they all deserved to go bankrupt and fail.
On the other, our economy would be worse off today if they were allowed to fail.

The bonuses and increases in salary by CEOs(in bailed out companies), no ambivalence. That was and is out and out theft. Even with bailout, the entirety of boards and presidents and VPs, should have all went to jail, and been replaced. They still should.

Eri,

Let me give you a recent real world example.

One of my coworkers, a nurse was having conversation with a doctor which I was able to over hear.

They were talking about ways that a nurse could make more money.
The doctors suggestion was that the nurse go to school and get the cert for a Certified Registered Nurse Anesthetist. The doctor stated that he could then make more money than a regular GP doctor(which is true).

Afterwards, I talked to the nurse about that conversation(he brought it up actually). He's expecting his first baby soon, and his wife works with us as well. I asked him, why don't you go to CRNA school. You are smart enough, I said, because he is.

He states, well, that would be two to three years that I would not be making any money at all. Because he would be in school. And he followed up with, and I would end up with 200K in school loans that I would have to pay back. So I would set back about half a million just to get it.

Here is a person who has the means, the ability, and the opportunity to essentially double in personal income(from what a normal nurse makes, to over what a normal doctor makes). And he is ambivalent because of the cost and the risk(he could fail out eg).

This is human behavior. There is no economic conspiracy to keep him from doubling his income. This is risk and reward behavior. It is not even opportunity or ability, which he has both of. Which leads to supply and demand, if it were easy and cheap to become a CRNA, they would not make more than most doctors.