Resource Prosperity & Reducing Poverty

I posted the link to the rich/poor thread on my FB wall and this guy always chimes in on most stuff I post..

It grates me when one behaves as if he or she is clearing something up but he or she doesn't make the distinctions required to indicate just what it is that needs to be cleared up in the first place. Statements like "the rich are getting richer and the poor are getting poorer" are ambiguous, but not necessarily myths. In the context of argumentation, a myth is a statement that is a generalization that is untrue or lacks a sufficient basis to be treated as true, but is treated as true nonetheless. An ambiguous statement, on the other hand, could mean a number of possible things. For instance, "the right are getting richer..." can mean:

A) The rich make more money now than they did in the past, while the poor make less.
B) Real income of the rich have risen over time while real income of the poor have dropped over time.
C) The purchasing power of the rich has grown over time while the purchasing power of the poor has declined over time.
D) The real income ratio between top earners and bottom earners has grown larger over time.

It's not necessary that all of these are claimed when one says "the rich are getting richer...," and not all of these are myths. Indeed, right at the beginning Dr. Horwitz noted that (D) is true. If all one means by "the rich are getting richer..." is (D), then it's not a myth, pure and simple.

But what about (A-C)? The point of Dr. Horwitz's argument was to show that these are all untrue. It's obvious that (A) is untrue. The poor have a larger dollar amount listed on their paychecks now than they did in the distant past; but this is largely uninteresting, since what's important is not merely how much money one has (i.e. it's largely worthless by itself), but its value as a means of exchange for goods and services. That is, what is important is the purchasing power that money provides. With greater purchasing power comes greater ability to relieve oneself from dire conditions. (C) is the interesting claim, but unfortunately, Horwitz focused only on (B).

Is (B) untrue? Well it depends on whether we're talking about households or individuals. Horwitz's argument essentially boils down to this: 1) real wages have risen for everyone over time and 2) most of those who start off poor end up rich, therefore 3) the the poor are getting richer. If we're talking about real HOUSEHOLD wages, the argument is unproblematic. But the number of single income households has declined drastically since the 70's. Adding another income stream to a household (which also happens when people get married) will increase the real wages of that household, even if real INDIVIDUAL wages remain stagnant, which is precisely what has happened over the last forty years. In other words, households have a higher real income, but it has also required more hours worked per household.

But what is omitted from the presentation is the most telling. Purchasing power is dependent not only on how much one earns, but also on the cost of goods and services. While some goods have come down in real price over the past forty years (e.g. computers, and certain foods), others have risen quite rapidly (e.g. housing, education, gas & electricity), leading to an overall higher real cost of living. On top of that, credit was introduced as a means of enabling those whose wages plateaued to have at least the sense that their purchasing power was growing. We all know how that turned out, though. The real cost of goods & services purchased with credit went through the roof after compounding interest paid on those goods & services. What's the result? At best, the working class has endured purchasing power stagnancy; at worst, they've suffered a decline. On the other hand, rich households (i.e. households who own large shares of a company or companies) and individuals made far more money as a result of stagnant working class real wages (less or stagnant wages = less overhead = greater profit) and investment in the booming credit/financial industry. (C) is pretty much true.

So if one means (D), (C) or (B - w/ the proper qualifications) when one says "the rich are getting richer..." the claim isn't a myth. If one means (A) or (B unqualified), then, yes, the statement is a myth.

Of course, if purchasing power remains static, this doesn't necessarily mean that there isn't an increase in quality of life, which largely depends on the quality of goods and services purchased. Despite overall rising real costs of goods and services, they are generally better quality. Consequently, quality of life is overall better for all, even if only marginally so for the poor. These are the best of times, these are the worst of times.
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dreamache said:
I posted the link to the rich/poor thread on my FB wall and this guy always chimes in on most stuff I post..
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He seems to miss the point.

More people working more (producing more) is exactly how we get ahead. No one would dream of the notion that you can become rich by doing the same or less.

As people become more productive/profitable they get mobility. For some people that means getting a second job, or the wife taking work outside the house, or putting in overtime.

People who want to earn but are poor are usually short opportunity. Steve's argument implies that people have more opportunities to work now than ever before.
 
lukep said:
Also, he totally didn't take into consideration the rate of population explosion. He's basing all those numbers on time (the entire history before us) when man numbered fewer. Can it keep up when there is 10 Billion? 20? Doubtful.
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Supply and demand of everything will be a non-issue if we can keep stupid fuckers from breeding.

Population control is one of biggest issues the world faces. We can use our resources for 100's of 1000's of years if we can shave off 70%.
 
Just to make sure we're arguing the same thing here - what are we saying? Are we saying that Americans are living better on average now than they were in say, 1970? If so, what are we using as our measurables? I don't want to start attacking the wrong points so before we get started let's clear that up.
 
air conditioning and shit. they got dvd players etc.

But I think dreamache's arguer is making an interesting point. You can't just look at income and say people are getting richer. What about health insurance? Housing? Cost of living?

A top 20% living in manhattan likely has less disposable income than a bottom 20% living in kentucky.
 
FTC-Hater said:
^ That's why he pointed out that as resources become more limited (like copper did in his example) and prices rise as a result of supply & demand innovation happens and new materials are used (in the copper example it was the use of fiberop).
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Agreed, in Civilized countries. We can buy Priuses and eventually Teslas, when they come down in price enough.

But will they come down in price enough to be sold to the 3rd world developing countries in time?

Not likely. It's bad leadership over there that keeps them in the bronze age. Unless you can predict how the leadership will rise to our standards across the whole 3rd & 2nd world then it's just a safe bet that petro-burning cars will be produced in greater and greater numbers every single year from now until the day they get that great leadership.

erect said:
Supply and demand of everything will be a non-issue if we can keep stupid fuckers from breeding.

Population control is one of biggest issues the world faces. We can use our resources for 100's of 1000's of years if we can shave off 70%.
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Agreed 100%. Sadly, the last guy to try something like that, I think his name was Hitler or something, wasn't too respected for his opinion.

Heck, we Americans don't seem to respect the Chinese government's decision to enforce population control very much either.

We're just not there yet. It's going to take America's heartland feeling as crowded and dirty as a Bangladesh slum before americans agree to such a "radical" course of action.
 
guerilla said:
He seems to miss the point.

More people working more (producing more) is exactly how we get ahead. No one would dream of the notion that you can become rich by doing the same or less.

As people become more productive/profitable they get mobility. For some people that means getting a second job, or the wife taking work outside the house, or putting in overtime.

People who want to earn but are poor are usually short opportunity. Steve's argument implies that people have more opportunities to work now than ever before.
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"I may seem to miss the point, but I didn't. Purchasing power of those claimed to be upwardly mobile has largely remained stagnant or reduced DESPITE people doing more."
 
dreamache said:
"I may seem to miss the point, but I didn't. Purchasing power of those claimed to be upwardly mobile has largely remained stagnant or reduced DESPITE people doing more."
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Can he substantiate that?

And I am really arguing with some dude on FB by proxy?
 
Well peak oil is a fact. We have the data from the production of individual fields, and from the production of countries which shows an increase in production which peaks, and then falls off. The only difference is of scale, and there's no reason why the production of a planet should be different.

The second part of the video reminds me of the joke about two economists locked in a closet. When it comes around to lunch time one asks the other what they will do for food, the other replies "our demand will create the supply".
 
Unarmed Gunman said:
Because the most valuable resource we have is time. There is nothing more valuable and it is how we ultimately measure everything. To put it in simple terms, would the average American rather work 80 hours/week to earn $60k or 40 hours/week to earn $50k. If all you look at is the pay, you're missing the most important factor - time.
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This is where the law of diminishing returns comes into play. A quick look at wiki shows that South Koreans work on average 34% longer than Americans, but their GDP per capita is only 29,xxx whereas for the US it is 47, xxx. so not only do you get diminishing returns, working longer actually starts hurting productivity and sends it into reverse. You can take this to the extremes for the clearest example, if everyone started working 24 hours a day for 7 days a week the economy would collapse very soon. So there instead of working more and more, we should actually be trying to get closer and closer to the optimum.

It's quite popular to Americans to accuse Europeans of being lazy, but while hours worked are sometimes less, the output PER hour worked is often greater.

This bring up another good point, which is the difference between "working" and "being at work", which are very different things. Working 80 hours a week is meaningless if 20 of those hours are spent making coffee, drinking coffee, chatting, going out for a smoke, doing a circuit of the office, browsing facebook.........
 
Alakazam said:
This is where the law of diminishing returns comes into play. A quick look at wiki shows that South Koreans work on average 34% longer than Americans, but their GDP per capita is only 29,xxx whereas for the US it is 47, xxx. so not only do you get diminishing returns, working longer actually starts hurting productivity and sends it into reverse. You can take this to the extremes for the clearest example, if everyone started working 24 hours a day for 7 days a week the economy would collapse very soon. So there instead of working more and more, we should actually be trying to get closer and closer to the optimum.

It's quite popular to Americans to accuse Europeans of being lazy, but while hours worked are sometimes less, the output PER hour worked is often greater.

This bring up another good point, which is the difference between "working" and "being at work", which are very different things. Working 80 hours a week is meaningless if 20 of those hours are spent making coffee, drinking coffee, chatting, going out for a smoke, doing a circuit of the office, browsing facebook.........
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Any proof to this? Not trollin.
 
Ar Scion said:
A top 20% living in manhattan likely has less disposable income than a bottom 20% living in kentucky.
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I would argue the contrary, people in Kentucky don't spend $5k on a pair of Italian loafers.
 
And why don't we measure how many ounces of gold you could purchase (since gold is non-fiat) with your salary in 1970 and compare that to what you could purchase now. In those terms, the average family would have to be earning about $160k to have the same net worth now that they had in 1970. The average American family is pretty far south of that figure. The whole argument is built on a bullshit fiat currency model that fluctuates with the wind, so when you use real value figures (ie. gold, silver etc.) it completely falls apart. The fact is people work more and earn less now (in real terms) than they did 40 years ago. That's not "getting richer" no matter how many DVD players, AC units and cars they're making monthly payments to Chase for.
 
papajohn56 said:
According to the Census Bureau, 12.6 percent of Americans were poor in 2005. Out of those persons classified as "poor" by the Census Bureau:

- Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

- Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.

- Only 6 percent of poor households are overcrowded. More than two-thirds have more than two rooms per person. The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

- Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

- Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

- Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.

- Ninety-eight percent report that they always had "enough food to eat" during the past four months, although not always the kinds of food they would have preferred.

How Poor Are America's Poor? Examining the "Plague" of Poverty in America | The Heritage Foundation
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Yeah, the "poor" in the U.S. are rather well off in comparison to the poor in many other developing lands like the Dominican Republic(using this example because I live here), many times the poor here don't even have electricity and running water. The average American would off themselves under such conditions. Although don't get me wrong, being "poor" in comparison to your contemporaries still sucks, I don't doubt that.

P.S. +rep at ya G, very interesting topic.
 
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Unarmed Gunman said:
The fact is people work more and earn less now (in real terms) than they did 40 years ago. That's not "getting richer" no matter how many DVD players, AC units and cars they're making monthly payments to Chase for.
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Far be it for me to agree with UG, but I don't think the concept of the American Debt system has been introduced enough to this thread.

Sometime over the last 80 years, let's say gradually since the Great depression, Americans (alone, I believe) have been weaned off carrying cash and made to feel it was just fine and natural to carry a credit balance.

My parents were among the worst. My friends referred to them all the time growing up as "The Joneses" even though that's not our last name at all.

Their mortgage was like $4,500 every month (1985 dollars!) their numerous credit cards all had monthly minimum payments of around $400 each, they had two car notes, student & medical bills left over, and didn't feel one bit of pressure for it... They encouraged ME to rack up the debt and live in luxury as a student too because they were typical, stupid, american debt-slaves.

As you can guess they are in a tiny condo today after going through a couple of Bankruptcies. -I was lucky, and CCCS was able to get me out of the trouble they caused me during my college years.

Back to my point, the condition of being cool while straddling $100K+ debt loads over long periods of time is commonplace here, but would NEVER EVER FUCKING EVER be allowed to happen in the first place in any other country I've ever been to.

That makes our system unique, but says some bad things about what the American Dream really is.

So I'd have to say the condition of being poor here is something you can rarely point to on this continent. Lots of people who look like they've got a million dollars in the bank are really a million dollars in the hole, with creditors chasing them around.

Like Donald Trump was a decade ago... Yet he never ate a can of tuna for lunch, I'd bet.
 
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