Comments on: How the middle class enables the ultra-rich http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: TFF http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39947 Thu, 07 Jun 2012 13:00:34 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39947 “the government promises me $2 in benefits for every dollar I pay in”

You sure you aren’t confusing Social Security with your 401k? At a 2.5% real return, compounded for 30 years (roughly the average span between contributions and benefits, both spread over decades) you can withdraw twice as much in retirement as you contributed, adjusted for inflation. That’s a very manageable long-term investment target.

Social Security likely won’t pay you or I anything. Their cash flow only covers 75% of the promised payments, and the least painful way to close that gap is to eliminate benefits for the 25% of the households that have substantial other savings.

Moreover, you need to consider the rising national debt, over $50k per man/woman/child in the country. Under the present tax structure, the bulk of that cost falls on the middle class — $50k to $200k income.

I’m not complaining. I consider myself wealthy, even if I don’t have nearly as much money as Immelt (or likely most of the people who post here). In theory, we could quit work tomorrow and live off our savings indefinitely (mid-40s, two kids)… How much money does one need?

]]>
By: y2kurtus http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39940 Thu, 07 Jun 2012 02:24:15 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39940 I hate to crash the party with math but lets look at some of those big numbers a little more. 27 million businesses 10,000 or so of which are big greedy profit machines. Those 10,000 to 100,000 companies sent the goverment 10% of all receipts. They also honestly collect income and payroll tax on their millons of workers. Since most are publicly traded they allow for efficent valuation and tracking of dividends and capital gains and estate taxes.

The 20 millionish at the bottom are pass through entities which pay no income taxes. Walmart offers a weak benifits package, the corner hardware store offers none whatsoever.

The true middle class (of which I am a member) gets a nearly free ride (assume a mortgage, a 401k, health insurance, 2 IRA’s and 2 kids.)

Sure I pay FICA… big freaking deal, the goverment promises me $2 in benifits for every dollar I pay in.

Jeff Immelt’s 30 something years with GE have earned him a multi million dollar income for life pension which he is already eligible for. He’ll be in the office tomorrow figuring out how to sell more jet engines, gas powerplants.

Your free to think what you want Felix but the rich carry us.

]]>
By: FifthDecade http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39937 Thu, 07 Jun 2012 00:48:23 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39937 You might find this related story about the 389 year old oldest business in the US interesting:
http://www.bbc.co.uk/news/business-18261 045

]]>
By: FifthDecade http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39936 Thu, 07 Jun 2012 00:39:20 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39936 @Doly I like your post. Good points. In a previous post I believe Felix said he earned about $150,000 a year, which I thought for a blogger was pretty good and no wonder he was quite happy doing what he does. I blog too, nowhere near as prolifically, but then I do it for fun and make no money from it. That buys me the freedom to blog about whatever I want, whenever I want, and I don’t have to worry about saying something that might upset advertisers.

Your example of the Beatles is another example of this phenomenon. Although music was always important, one can’t help thinking that for McCartney at least money was important, while for John it bought him freedom. Someone once asked Lennon how much he earned and he answered “I asked my accountant that once so he wrote it on a piece of paper; only trouble is I lost the paper”

At some level of income though, as in Maslow’s hierarchy of needs, the need to have money to buy things ends, and the need for recognition takes over; basic needs can be satisfied by remarkably small sums of money, but peer group recognition and respect can be expensive when the score is calculated in earnings. Perhaps banking would improve if instead of chasing dollars, other factors such as number of deals done, or companies saved, or jobs created could be used instead.

]]>
By: running http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39933 Wed, 06 Jun 2012 23:43:12 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39933 if i was rich my time would be very valuable, but since i’am not i have a lot of free time

]]>
By: Doly http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39931 Wed, 06 Jun 2012 21:45:47 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39931 “if you can’t buy a better lifestyle for the money you can sell your current lifestyle for, it would be a bad decision to trade down”

That’s the point, exactly. In fact, if you already like your lifestyle, it usually would take a large increase in your income or wealth to buy a lifestyle you’d like even more. (Felix, you seem to like what you are doing. How much money would buy you a lifestyle you’d like even more?)

And that’s not even considering that you may believe that a lot of money might tempt you to make some bad long-term decisions. Richard Feynman famously rejected a much higher salary he was offered at another university, on the grounds that it would be enough to allow him to maintain a mistress, which he would very much like to do in the short term, but would probably ruin his life in the long term.

There must be a lot of truth in the idea that the ultra-rich are mostly people who are never satisfied, or they would have reached much sooner the point when they’d have refused to trade their lifestyle for more money. There are exceptions, like some celebrities that got very famous very fast. The Beatles always looked to me like guys that would have been perfectly happy if they had a lot less money, as long as they could continue doing music.

]]>
By: Curmudgeon http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39928 Wed, 06 Jun 2012 20:36:51 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39928 Felix, two things.

1. You don’t have to buy a puppy. Let me introduce you to the Humane Society.

2. I suspect you don’t have a puppy. You don’t seem like the midday dog-walker type. And if you’re not walking your dog at lunchtime, shame on you.

]]>
By: acrophobe http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39927 Wed, 06 Jun 2012 20:25:15 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39927 ok. i should have proofread what i wrote. i meant central indiana

]]>
By: acrophobe http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39926 Wed, 06 Jun 2012 20:23:39 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39926 I grew up in California’s central valley where most family farmers live a hardscrabble life and would be happy to sell their farms for a boatload of cash – except, of course, no there no buyers offering them staggering sums.

similarly most of the small shopkeepers in the central valley would be happy to reap a windfall by selling their stores to a well-heeled buyers but convenience stores and gas stations don’t bring in the big buck offers.

this, as far as i can tell, is true also of small businessmen in west texas (where I used to spend my summers as a kid) and in central indian (where I lived for a short while)

in short, I think farmers and shopkeepers in westchester are no more representative of small business in america than farmers and shopkeepers in napa valley or in martha’s vineyard or in hilton head are. I realize that this might be contrary to the worldview of felix and davidson and other adherents of bien pensant opinion, and apologize for any distress this might cause.

]]>
By: TFF17 http://blogs.reuters.com/felix-salmon/2012/06/06/how-the-middle-class-enables-the-ultra-rich/comment-page-1/#comment-39925 Wed, 06 Jun 2012 20:09:48 +0000 http://blogs.reuters.com/felix-salmon/?p=14739#comment-39925 Actually, I was thinking more of other values. “Self-worth”. “Honor”. “Satisfaction”. “Peace”.

This afternoon I was sitting with five girls, three different ethnicities, helping them study for their math and science finals. While it is easy to think that a million dollars would help me achieve greater things, it would also distance me from the accomplishment.

]]>