When do conservatives realize what a problem income disparity is becoming in this country?

How about never or until the workers all riot?

Conservatives don’t see people as being interdependent. They think individuals should do everything on their own, completely independently. This oversight is a fundamental flaw in their understanding of the world, and until they see themselves as requiring help or at least cooperation from others, they won’t see the world any other way. And we’ll all be stuck in this bad economy.

We sink or swim together, and we only swim if we all cooperate. Without cooperation from conservatives, it is going to be almost impossible to turn this economy around because they will not be able to take off the rose colored glasses through which they look at the Waltons and others of that ilk.

When will liberals realize that income disparity is not solved by limiting potential. It is not solved by government give-aways nor restricting business. Make it easier to start business rather than harder. Incent people to work rather than not work. Grow the private sector rather than the government sector. Success should be something to emulate not despise.

The problem is that what Jaxk calls “success,” most rational people would call “gaming the system.”

A CEO who nets a 35 million golden parachute after ruining his company, causing hundreds of workers to be laid off—that’s success.

A day trader who makes a living gambling with other people’s money and manages to pay no taxes because his income is entirely capital gains—that’s success.

I don’t think conservatives realize it’s a problem because income disparity is a result of the market, and the market is like a deity to them. So if the market’s invisible hand doles out several hundred times more income to these people while declaring that these other people need to be unemployed, we shouldn’t doubt the market’s wisdom.

Once the crime rate hits their neighborhoods I am sure they will start to see the issues. I am with @marinelife why not riot. Seriously riot. It is going to take something big and mean to cut the hearts of the conservatives that never bleed.

No riots, please. Rioting will only serve to vindicate conservative caricatures of their political opponents and the “lucky ducky” poor, and the response will be even more heavyhanded and will result in a worse society.

Millions of customers are buying products that they love 24/7 from the Walton’s (Walmart) which in turn makes the Walton’s filthy rich, and then the very same customers complain about making the Walton’s rich? It seems like the customers are complaining about something that they made happen.

@Qingu

Honestly, you’re so far out in left field that it’s hard to find a common thread with which to start a conversation. First a day trader will pay the same tax rates as everyone else. Short term capital gains are taxed at the same rate. It’s impossible for me to imagine where you get the idea that they pay no taxes. Apparently you have no concept of either day trading or taxes.

As for a CEO that bankrupts his company, I would call a failure. I’m not sure how you apply that scenario to the Walton’s but I’m sure you’ll figure out a way. The only way you will achieve equal incomes is by making everyone dirt poor. In that endeavor you and @judochop seem to have a common goal. Destroy the businesses that bring prosperity. I hope you achieve your goal, I just hope you achieve it somewhere else.

Only long term traders qualify for 0% tax bracket (must meet the 10% bracket of income salary or no income salary at all to qualify)

Short term traders qualify for 10% tax bracket.

You can avoid the 10% short term bracket too if you have a good accountant. Preferably one who is very creative.

The conservatives I talk to really believe wealthy people spend more if they get more money. I am not talking about job creation, I am talking about buying stuff. So, they believe the economy can churn just as well with the money in the hands of the wealthy as it does in the hands of the not so wealthy. It’s ridiculous.

I agree eventually workers will have to organize. Hopefully it won’t be a riot. Pushing employees to the brink, reducing pay, while senior executives and owners still make huge profits will eventually have a backlash. I personally tend to be anti-union, because the union can push for unreasonable demands, and the union becomes its own entity, wanting to survive like any business. But, what other choice is there? It’s either going to be government or people organizing in some way to counter what is going on.

I’m so sick of the pendulum swinging from one extreme to another. Greedy abusive employers…then strong unions….now we are back to greedy abusive employers. Gawd! Make it stop. Some balance would be nice.

I don’t want to achieve equal incomes, Jaxk. I think people should be rewarded for harder work, or for work that requires significant training, risk, or expertise, with higher incomes.

I simply don’t think they deserve incomes several orders of magnitude higher. Why do you?

@JLeslie, I agree! Like someone (Jefferson?) said, if men (and women) were angels, we’d need no government… I’d add likewise we’d need no unions, and we’d need no businesses.

Any institution with power is going to have a large amount of scumbags and a propensity for corruption and overreach, that’s just how humans function. That’s the genius of the Constitution, that it provides a balance between the branches of government, and between “elites” and the democratic masses.

I feel like we used to have a better balance between labor and business forces, and between the wealthiest “elites” and the rest, and that balance has been thrown completely out of whack… with a large segment of the population (Republicans) believing there shouldn’t be any attempt at balance at all.

@Qingu There has been such an emphasis on taxation as of late, but not enough discussion on wages and how such a strong economic divide between the rich and the poor can take our country down. I did a question a few months ago asking if people who make a great salary, I think I used $150k, but my memory might be wrong, would be willing to give up 10% of their salary so people making much less could earn more. People turned it into a taxation question, I guess maybe I worded it poorly. I meant at the company level, closing the gap between the lowest paid and the highest paid, not moving the money through the government. The conservatives seem to focus on people who don’t work getting freebies. How about the people who do work, but can barely rub two nickles together after paying for necessities?

Some of the churches reinforce the attitude. Now making money is very Christian it seems in some sects of the religion. They wrap democracy, God, capitalism, and America all into one. Any deviation from those ideas would be like committing a sin. And, even considering other ideas is scary. I don’t accuse the wealthy businessmen of this, I think they know better, but all these religious conservatives who are barely middle class themselves defending the rich? I don’t get it.

Don’t get me wrong, it’s not like people of other religions don’t go after making a buck. Goodness knows Jews have been prosperous and sought profits (just to pick on my own) along with people of other religions. But, I don’t think it is exactly the same as the thought process I see here in the bible belt. What do you think?

Yeah I think the Christ-loves-laissez-faire-capitalism thing (and Christ-loves-American-exceptionalism) is pretty fucked up and creepy. Great example of how cults work, though.

Oh, right after thay transfer all the money left to their benefactors, and the lot of them split for greener pastures where they can run the same scam again.

Are you saying that the 6 members of the Walton family are in possession of more wealth than the bottom 30% or have more money because those two things are not the same but you seem to use them interchangeably? Wealth generally speaking is something of economic value (land, a house, monetary accumulation, etc.) while money is simply the medium of exchange for items of value (correct me if I’m the one mixed up on this btw). My point being is that using them interchangeably like this muddles the issue in discussion and potentially paints a different and misleading picture than what actually is.

It seems to me that we’re talking about lessening the rights of a segment of our country’s citizenry simply because they’re resented for having too much money in the opinion of those in support of this which in of itself undermines any sort of principled respect for the rights of anyone because you’re more or less saying that someone’s rights should be respected until you don’t like them. As a note on that this statement I’m not trying to put words into anyone’s mouth nor is it my intention to paint anyone as the bad guy so please correct me if I’m wrong.

We must also look as to what the cause is behind why this wealth is going to the top, take the Walton Family (a net worth of 93 Billion according to Forbes) for example. Last time I checked their wealth is due to Wal-Mart (posted revenue of 419 Billion in 2011) providing quality goods and services for the lowest prices and consequently this is the reason why so many consumers choose to buy from them, not through theft nor are their gains ill-gotten. That to me seems mutually beneficial for consumers and producers. That according to many is the problem, billions of people putting money (in trade for goods and services) into the hands of the few and now it seems to me that some of those many simply want the benefits of those goods and services without having to pay the price or at least not have that money go to people like the Waltons for whatever reason and unless you want to somehow take the choice out of the hands of the many I’m not really sure how this is to be remedied. (Granted this is an isolated example)

Also since that it has been decided that CEO’s are being paid too much or that their pay has a negative effect on the working class/economy/etc. should we be also be looking to reduce the pay of highly paid actors, authors, athletes, etc. and if so or if not, why? I mean if the issue is income earners being paid too much why should the target be painted solely on CEO’s and more importantly why is it?

@KidCurtis I kind of see it as an integrity question. Golden rule. Sometimes I say I want to redefine the word greed so that it means pursuing excessive profits.

Take the American auto industry. The big three were making hand over fist in the ‘50’s, had incredible market share around the world. The people at the top were making tons of money. The auto workers saw this, and the union, and believed they should be getting paid more too. Wages and benefits went up. Management/executives did not give up anything. Expectations of profit were of course still very high.

Then the late 60’s And 70’s come along while all these auto people are living high on the hog, and they don’t give a shit that Japan is bringing in safer, more reliable cars, at a good price. Now, the big three could have chosen to be more competitive, reevaluated salaries at every level, benefits, the quality of their cars, but they just hoped things were not really going to change I guess. Too short sighted, over confident, and obsessed with their extreme wealth.

I went to school in MI in the late 80’s and I could not believe how people thought there. Almost everyone I knew, I was coming from the east coast, were getting rid of American cars for Japanese. Much more reliable, always started up, never broke down. But, in MI they were clueless. I mean everyone owned an American car, because you better not drive a different car onto the lot if you work at one of the big three, and employees and family members got the X price to buy the cars. They were so completely out of touch with what the rest of the US was thinking.

There was some good with the increase in wages, the middle class began to grow. Other industries also were paying the average guy better. The economy grew also because now there was more money in more hands.

Eventually the big three lost market share though, and profits. Started to suffer losses. See, they could have done the right thing. Made safer more reliable cars that their grandmothers would feel good about driving (that is the golden rule part) or curbed salaries and benefits to reduce costs (that has to do with the excessive greed part) but they didn’t, and eventually it caught up to them. A little integrity and long term thinking would have gone a long way for them. I still have negative association with American cars, I think they will break down. The Japanese had hit the scene when I was first becoming aware of cars and driving, and it all left a big impression on me for many many years.

I don’t hate Sam Walton, he had a brilliant idea. But, maybe he can bring great prices to consumers, bring in better quality goods, and not make quite so much profit? I don’t know much about how much he pays people, but if that increased a little it would help the people and grow the economies of the communities Walmart has a stronghold in. It would protect the company from competitors in the long term in my opinion, and they would gain respect. It should increase business, because now people who perceive Walmart as selling junk, might start shopping there more. Prices would not have to go up for consumers, just the company would profit a little less, but have a formula that will be long lasting. If they carried more American made products at great prices, they would attract a whole group of us that want the option, and fear for all the manufacturing that has gone abroad.

Some balance.

@KidCurtis The particular outrage in the Walton family, is that they made their riches by buying the lowest quality/cheapest products from typically overseas producers (with questionable human rights records, but that’s another issue).. whilst cutting the bottom line by paying their workers the most bare bones wages, and purposely setting up scenarios where they could work people just an hour or a half an hour even shy of legally earning benefits…. and then running all the ma-pa small scale stores out of business because they simply can’t compete.

They as a singular family have probably done more to hurt our economy than almost any other small group or singular person in history. And they own more money than 94 million of us.

The Carnegies, and Rockafeller… Ford… they had boat loads of money, comparable to this, as well. But they understood how economies work, and they paid their workers a fair wage, and focused on using the best parts, not the cheapest. They put money back into the economy, rather than greedily hold onto it like the Waltons have done.

@KidCurtis, you, like many conservatives, seem to be operating under the assumption that a person “deserves” all of the money they make in the marketplace.

In other words, it doesn’t make sense to you when people say it’s not fair that the Waltons have 1,000x money than 99% of their employees… because that is the wealth distribution the Invisible Hand of the market has allocated and the Invisible Hand is all-knowing and perfectly fair.

Am I on the right track? Do you think it’s possible that the marketplace can be rigged in favor of certain income groups (or other groups, for that matter)? Or is the market “fair” by definition?

Also I don’t think anyone arguing for lower income/higher taxes for fat cat CEO’s would exclude actors, sports stars, or other rich people you mentioned from that policy.

@JLeslie

Your portrayal of the Auto industry is overly simplistic. It simply isn’t the way it happened. A good study of the auto industry is actually a good example of the interaction of regulation, unions, and the law of unexpected consequences. It’s really an interesting story but probably a bit lengthy for this thread. It’s bit too easy to potray it as simply greed either from management or the unions.

@Jaxk Look you have points that we shouldn’t just have a feel good society, reward people who do nothing, and punish those who succeed.

But that’s not what anyone is suggesting. What we’re suggesting is that greed is going too far and taking over. You have people like the Waltons, who have more money than 30% of the country, and spend barely any of that money. In the mean time they drive other companies, small companies like your own, out of business… and buy their products from foreign countries, who make them built to last all of 20 minutes… and then pay their workers the bare minimum wage they can. They’re ruining this country… and conservatives want to give them more power.

@tedd

I’m not sure how you come to the conclusion that conservatives want to give them more power. I know that’s a cute way to make you point seem more acceptable but it misses the the target. There have been multiple businesses that have tried to use a similar model. Stores like K-Mart or Target, they just didn’t do it as well. Hell, J.C.Penny opened in 1902 with a similar retail model. We want to fault the Waltons simply because they were wildly successful with their stores. My problem with trying to limit thier success is that when you target any business, just because they are too sucessful, a lot of other businesses get caught up in that web.

I have some problem with the idea that Walmart products are somehow different than others. I’ve shopped there and don’t see a significant difference in the product brands nor the longevity of them compared to other discount stores. I will admit, they don’t carry much in the way of high end products. But to be honest, they have also placed more products in the reach of middle and low income people than any other retailer.

I’m not sure what your solution too your perceived problem would entail. Do we simply take away thier money? That seems blatantly illegal. Do we say they can’t open anymore stores until the competition catches up? Do we break them up and make them sell some or all of their stores? Other than your complaint that they have too much money, I don’t see much justification for any of these. Or do we simply say, a person can only have so much money and when they exceed that predetermined level, we take it away. Maybe we can home in on that. How much is too much? A million, billion, 10 billion? Do we use earnings or net worth? I’m a bit leery of this idea that we can confiscate earnings or property as we see fit.

@Jaxk, you’re so cute sometimes.

Have you really never heard of the concept of progressive taxation?

@Jaxk If you can’t see the difference between the products at Wal-mart, and the products at… virtually any other store…. something is wrong with your eyes.

You seriously make me sick to my stomach with your stupidity. No wonder your business is floundering.

I don’t blame the Waltons for being successful. Though if you want to be honest, none of the current Walton’s had jack diddly to do with their fortune. Their father built the business from the ground up, with a model of treating employees well and buying American (made in the USA used to be stamped on everything at Wal-Mart). They inherited it, and have never ever worked a day in their entire lives. They turned that company into what it is now, and they exploit every loop hole they possibly can to turn a buck… at the expense of their workers, their products, the competition… and American in general. They could care less if 50% of the US population has no job, so long as they are making their money.

I would propose the government close loop holes that let companies like them abuse their employees, and put faulty products that are often found to be unsafe (see Chinese lead poisoning cases, and who sold most of those products) on the market. I would make it harder for them to simply edge out competition by putting back in place regulations that made it possible for small businesses to compete with large ones. And yes, most importantly I would tax the Waltons a lot more. Their entire fortune was built off the backs of the workers they abuse every day… and their company puts more and more people in poverty and at the mercy of government programs that will need funding… funding they should provide since they are causing the problem.

Whooa there partner. Walmart afaik sells many of the same products as other stores. Their deal is that they bully suppliers into accepting unreasonably low prices because their business model involves basically forming and holding local monopolies in areas.

@tedd

Maybe your right. I suppose my best strategy should be to limit those big guys that compete for business so that they can’t steal my customers. Hell if I could just make Safeway go away, my business would take off like a rocket. That’s the strategy, legislate them out of business.

Naw, maybe I’ll just compete like everyone else.

@Qingu Actually I tend to shop at Meijer when I’m going to a “big-box” store like this. Meijer has some of the same products, but also a plethora of stuff made in the USA, or at least in other foreign counties that value worksmanship and treating workers with human rights (Europe).

@Jaxk Ok, lets take that model. But lets say that safeway… is a multi-trillion dollar, multi-national corporation.

They can buy all the products they stock their shelves with, for ⅔ of what you have to pay… and they pay their employees, who are generally mean SOB’s or stupid, a dollar less than you pay yours. No one has benefits.

People shop at their store because the prices are lower, even though the products are inferior. How do you compete?

Not to mention they can shoulder years of losses while competing with you, because they have their corporate brethren to fall back on.

Enjoy working at safeway in a few years with that model.

@tedd

Actually the picture you paint is pretty close to reality. The part you don’t see, is that I have some strengths too. I compete on those strengths.

Everyone loves competition, @Jaxk. We all want to ensure competition.

Here’s the problem. In the capitalist system (which, by the way, I support over any other economic system), there’s a fundamental problem. People and businesses can make money simply by having money.

It would be like if you were in an automobile race, and the cars in the lead magically regenerate gasoline.

This is why markets have a tendency towards monopoly, it’s why poverty cycles are prevalent, and why wealth tends to become more and more concentrated in the hands of a very few wealthy people. Do you see this as a problem at all, @Jaxk?

@Qingu

We have reasonable laws against monopolies. I wholeheartedly support them. I don’t see where Walmart (or Safeway) violates any of them. I see nothing new in this Walmart scenario that hasn’t happened in the past. In the late 1800s stores like Wannamakers, were the target of this same kind of criticism. Department stores were killing the local economy and driving small business out. The uproar was significant. Then again in the early 1900s when Sears Roebuck began thier press with a mail order business. The country was in an uproar. Hell, many rural communities had book burning parties for the Sears catalog. In the 30s the government got involved to restrict department stores and create special taxation. The story is quite interesting. Now we are going through it again. Every time we see a major change in retail, we seem to go through the same reaction.

Change can be a scary thing.

I’m not opposed to structural economic change or even to “big businesses” in principle. I don’t like how people romanticize small businesses when sb’s often provide subpar services at expensive prices. I am glad you support regulations against monopolies.

My original point was about the big picture. You seem to think that anything the market decides is, by definition, “fair.” What you earn in the market, you deserve in a moral sense. I dispute this, because the capitalistic market structure strikes me as uniquely unfair in terms of game theory in that people who are already ahead in competition can automatically gain additional rewards instead of having to compete for those additional rewards. Do you agree with this?

@Qingu

No actually I don’t agree. I’m going to stick with Walmart as an example simply because it’s what the question is about. But realistically it applies throughout the market. When a company becomes complacent and tries to rely on there size to give them the advantage, they fail. Sears, Wannamakers, Target, Pennys, etc. have not kept up and lost thier market share. They haven’t necessaily gone belly up but when new innovative ideas come up, they displace the old. Walmart is a good example of the new replacing the old. Hell, I can’t even find a Sears in my area and they used to be everywhere.

I don’t know what the next innovation will be in retail. If I did, you guys would be complaining about how rich I was. What I do believe is that trying to manipulate profits through regulation is a bad idea. The same as it was in the 40s when congress was trying to enact a special tax for chain grocery stores that would have cost more than thier total profits. Or when they enacted price fixing laws to protect the drug stores.

Walmart has created incredible wealth for the owner but it has done most of this over the past 30 years. These guys didn’t start out rich they gained wealth and created prosperity in the communities in which they operate. Where Walmart opens a store, unemployment goes down and business sales go up for all categories, not just retail. They aren’t perfect but thier contribution is quite impressive. And it really is a rags to riches story.

“Where Walmart opens a store, unemployment goes down and business sales go up for all categories, not just retail.”

Cite, please?

And I think you missed the point of my question, or else you’re deliberately not answering. I understand that competition still exists even as wealthy companies enjoy benefits that smaller companies do not. I also don’t believe anyone was suggesting that regulation should be used to manipulate profits. I was not asking about the existence of competition or regulation, I was asking about something more fundamental and moral: do you believe that very wealthy people deserve all their money in a moral sense? Or to put it another way, do you believe the market is perfectly fair, or is it possible for very wealthy people to influence the market’s operation itself to increase their wealth?

@Qingu

Yes, I believe they deserve it. The difference between us is that I don’t qualify the point as the wealthy. I think everyone deserves the fruits of their labor. Is the market perfect, nothing is perfect. But the market has the ability to adjust. I gave you a couple of examples above where government got involved to fix what you perceive as a problem. To try and compensate for what they thought was the same situation you perceive today. that department stores were evil and threatening the local economies. We didn’t need regulation then nor do we need it now.

As for your last question, can the wealthy influence the market, yes. I don’t see the Waltons doing that. If you believe that negotiating a better contract with thier vendors, is manipulating the market, I disagree.

Overall, I don’t feel like getting into another name calling match with you. It’s Christmas. Maybe after New Years, we can go back to that. If you want an opinion from me, I have no shortage of them. Nor am I reluctant to share them. You don’t need to insult me to find out what they are.

I still don’t think you understand my question.

I agree that people should be entitled to the fruits of their labor. Where we disagree is how we define “fruits of labor.”

A business owner makes 10x as much money (i.e “fruits of labor”) as her workers? I can buy that. She probably works longer and more stressful hours. She also probably invested more in education and collateral in the business itself.

100x as much? Now that’s stretching it. Nobody labors 100 times as hard as other workers. The cost of education investment, in its entirety, is now less than the yearly salary we’re talking about here.

1000x as much? If someone is making 1,000 times as much money as other workers it is now clear to me that we’ve moved well, well beyond “fruits of their labor.”

The Walton’s make more than 10,000x as much money as their workers. Can you explain how you’ve come to the conclusion that all of this wealth is, in fact, the deserved fruit of their honest and hard-workin’ labor? Because you haven’t really told me anything beyond continuing the standard conservative assumption of ”‘cuz the market says so.”

@tedd I always say Meijers did the superstore way before Sam Walton :).

And, you summed up my point perfectly, the issue is things being taken too far.

@Jaxk Why do you think the labor of the laborer is worth so much less than the executives? The desparity is unreasonable in my opinion.

@Qingu

I couldn’t have put it better, it is ”‘cuz the market says so.” Let me elaborate. When you look at Steven Jobs, he was much more than the sum of his education. More than the sum of his labor. He had something special that most of us don’t have. You could put 10,000 people in a stadium and none would have come up with Apple. Even if you told them to create a computer, you would not have come up with Apple. So how much was he worth? I suppose the answer is very subjective. Still, I think he was worth the billions he made. The 35,000 Apple employees may feel the same way.

When Lee Iacocca took the helm of Chrysler in 1979 it was doomed to bankruptcy. 250,000 employees were staring at the company going under. Chrysler owed $4 billion, nearly 10% of all US corporate debt. Lee turned that around and in two years Chrysler turned a profit. Within four years Chrysler had paid back the government loan. Was Lee worth the 4 million shares he got? I would say yes.

It seems that most people are able to understand why Angelina Jolie would be making 10,000 times more for her role in a picture than her hair dresser will make for the same picture. But they have a problem with an industry CEO having a similar relationship. I’m speculating here but I think it’s because they don’t see the same level of talent and they don’t attribute the success directly to the CEO. Whereas the picture is more easily seen as a result of Angelina’s talent.

Now when we look at the Waltons, anybody could have done that. But they didn’t. How much of this success can be directly attributed to Sam Walton and how much to his eventual heirs. I don’t know. But somebody did a helluva job. Maybe we should say there’s a limit but honestly I wouldn’t presume to know what that should be. Just as I don’t know the limit of ones talent, I don’t know the limit of ones earnings or potential. But I do know that just because you have more than me, I won’t begrudge you what you have.

@JLeslie

I don’t know if this answers your question as well, but it’s what I see. The janitor may do an incredible job but will have very limited impact on the business or overall employment. While the CEO is more likely to impact tens if not hundreds, of thousands of jobs and billions of economic activity. Are they really of equal value?

“It seems that most people are able to understand why Angelina Jolie would be making 10,000 times more for her role in a picture than her hair dresser will make for the same picture. But they have a problem with an industry CEO having a similar relationship.”

Who are you talking about here? I have the exact same problem with Jolie as I do with CEOs. I don’t know anyone who wants to exempt actors and sports stars from progressive taxation.

Beyond that, I guess we just have very different views of human nature and society. I don’t canonize Steve Jobs as this mystical individual who are worth tens of thousands of times more than their contemporaries. Both people were very much products of their culture. And if Jobs didn’t figure out how to make user-friendly attractive computers, I would bet 10 million space credits some other person (a bright person, admittedly) would fill that niche. The same goes for Google’s PageRank algorithm, or for Walmart’s at-the-time novelcorporate strategy of aggressively expanding into markets and using their clout to bully suppliers into low prices.

Why do I believe this? Because the entire history of technological advancement is filled with stories of “parallel inventions/discoveries.” Newton and Liebniz figured out calculus at the same time. Numerous people invented versions of the light bulb, improving upon each others’. Darwin… well okay in the course of googling for the other evolution guy I found this website that lists more examples than I know off the top of my head.

Nobody invents things in a vacuum. No business earns profits in a vacuum. And to the extent that a few bright and motivated individuals are the ones who figure out how to succeed within an open niche, I think it’s absolutely, pathologically absurd to believe this “success” entitles them to a net worth 5 orders of magnitude more than their peers.

@Jaxk Who said equal?

@JLeslie

OK, I guilty of the exaggeration of which I often blame others. We are aguing over the extent of the disparity rather than whether there should be one.

Please do try to keep that in mind Jaxk. Saying everyone should make equal income, irregardless of ability and effort, is a whole other ballgame from merely quibbling about how much incomes should vary in a perfect world.

I’ll tell you about where my head is at. $50k for the worker at the bottom, and tops $2million for the guy at the top. Give or take a little, but that is just using round numbers and considering full time employment. This not even discussing business owners and income from investments, I am talking salaries.

I am completely ok with part time employment, and if it were up to me employers would not pay for benefits such as medical insurance, but that is a messy discussion that maybe we should ignore for now.

@Qingu

Yes I guess we do have different interpretations. Steve Jobs did much more than invent a computer. If you recall, Apple decided that Jobs had outlived his usefulness and Sculley outed him. Apple floundered for many years after the exit of Jobs. Meanwhile Jobs went on to found Next computer and then Pixar, before returning to Apple. When Jobs returned, Apple again prospered with innovative new products. It’s pretty hard to say this was anything other than the genius of Jobs. He was an excellent marketeer and manager, as well as a creator. It was Jobs graphical interface that created the basis for Bill Gates to create Windows. Maybe someone else would have done the same thing or maybe we’d still be using DOS.

@JLeslie Salaries are a different animal. The Waltons didn’t make thier money through salary. Nor do most of the people at the top. Hell Lee Iacocca earned $1/yr for his turn around of Chrysler. Of course he made about $200 million on the stock (that’s an estimate from the data I can find).

I know what Steve Jobs did. (Full disclosure: I edit technology and computer articles for a living.)

There were GUI’s before Jobs. Jobs streamlined the concept and made it easier to use. There were touchscreen mobile computers before the iPhone (the Nintendo DS most famously). The iPhone was streamlined and easy to use. Likewise for most of Jobs’ “inventions.” He took the work that others had done, put them together in new ways, streamlined them, and sold them in a new package.

Jobs was a visionary, I think he deserves to be compared to Thomas Edison. But Edison wasn’t a solitary genius who invented magic devices from nothing either. Electric power and electric lights all preceded him. He took these ideas, put them together new ways, and slightly improved them bit by bit.

I’ll say it again: in the alternate universe identical to ours except Edison’s mother miscarried him, we would still have electric power and electric lights. In the universe where Steve Jobs died in childbirth we would still have graphical user interfaces and computerlike mobile phones with touchscreens. All of these ideas were floating in the cultural air, and there was a huge incentive to figure out how to make them work. Perhaps they wouldn’t work as well at first, or perhaps we’d have to wait a few years longer before they came to market.

I want to say clearly again: I am not arguing remotely that Jobs should make exactly as much money as a mere tech editor. Visionaries deserve to be rewarded handsomely. Such rewards incentivize people to become visionaries and figure stuff out. 10,000x as much, however, goes way way beyond “handsomely” into territory that even people like Edison never dreamed of.

By the way, did you know that Steve Jobs did not make the majority of his fortune from Apple? He made most of it from simply being an investor in Pixar. That’s how the market decided to apportion rewards for his “work.”

Also: on Apple’s relative success with and without Jobs. This sounds like a valid point until you think about it, because my understanding is that Sculley and the board of directors were a bunch of dumbasses. It doesn’t mean Jobs was personally worth all of the relative profits Apple lost during his absence, it means that the people in charge of the company made extremely poor decisions that cost the company. Jobs record at Apple was also spottier than you are portraying.

Similarly, if Nintendo decided to suddenly fire Shigeru Miyamoto (the father of videogames, creator of Mario, Zelda, 3-D gaming as we know it, the Wii), the extremely wealthy company would probably be in trouble and lose billions of dollars. I do not think this means Shigeru Miyamoto is personally worth billions of dollars. (Neither does Miyamoto)

@Qingu

Jobs was more than simply an investor in Pixar. You’ve got to admit, that’s an over statement. He bought Pixar in ‘86 and was CEO when he engineered the sale to Disney.

“there was a huge incentive to figure out how to make them work.” Exactly.

I won’t argue about Shigeru Miyamoto since I’m not familiar with him. But I do like Zelda. Hell, I still play the original on my old nintendo (although I wish he’d used a different tune in that game).

Jobs did zero work on Pixar movies.

Actually, this is worth talking about. The “Stephen Jobs” of Pixar, so to speak, is John Lasseter, the director of its most popular and influential movies. But because our economic system so lavishly rewards investors (largely through a low as hell capital gain tax), Stephen Jobs is entitlted to the so-called fruits of John Lasseter’s labor. (Lasseter’s net worth is a mere 100 million.)

So even if we are to take your argument for granted, that creative geniuses like Jobs and Lasseter and Miyamoto and Walton ought to be entitled to all of the fruits of their creative labor as defined as profits that would not exist were they not working at whatever businesses they work at, that’s not how the market is structured at all to begin with. The market is structured to reward investors who pump money into companies that employ creative geniuses rather than the creative geniuses themselves. (Said creative geniuses of course may elect to buy stock options in the companies they work for, which is if I’m not mistaken how Jobs makes most of his money from Apple).

Though this is getting far afield from my original point. I do think that investors should be incentivized to pump money into successful business operations, especially those that improve society. And like I said before, creative geniuses must be incentivized as well, even if they do not exist in vacuums. I simply in both cases that we are well past the law of diminishing returns for incentive.

The last few zeros on these people’s paychecks has jack shit to do with incentive. Steve Jobs would not have worked less hard at Apple if he made 100 times less money. Steve Jobs probably did not care that he has less money than Larry Page from Google. Steve Jobs did care that his beloved iOS was losing marketshare to Google’s copycat Android OS, because he took pride in his work. The people who don’t take pride in their creative work, the ones who simply try to make money in order to have money and win social status among the bizarre billionaire niche, are the precisely the people who I don’t give a shit about incentivizing.

Also, my god, what is wrong with you? I guess a Republican would not like the music from Zelda. :)

@Qingu

This is where the whole thing gets sticky. We seem to be gravitating to the relative worth or contribution of each of the players. You feel Jobs had nothing to do with Pixar other than an investor. I suppose I could argue that Jobs bought the company for $5 million and injected another $5 million in capital to keep it afloat (it was not at all clear it would ever succeed). Jobs kept the company alive and provided Lasseter the opportunity to make his $100 million. How much is that opportunity worth? Jobs fought with Disney for years before finally striking the deal to sell HIS company to them. And if I read your previous statements right, if Lasseter hadn’t done the work someone else would have done it anyway so how much is he worth?

We’ll never come to agreement on the relative worth of each person in the chain of events. Better to let the market do that.

One last point. My take on this is that some/many/all of you would like to limit the net worth of individuals. Whether that limit be $10 million or $100 million is not my issue. If Jobs net worth was limited, would he have bought Pixar or would it have gone by the wayside? Venture capital is designed to provide money for innovation with a huge upside potential. If that potential is limited and the net worth of those that are willing to take the risk is reduced, how much will be available for innovation and much risk will be acceptable. I fear we will be killing the golden goose. And even if I accept you view that all innovation will occur anyway. That even the best ideas will be eventually implemented by someone else, how much longer will it take. Or do we let the government be the financier, as they want to do with Green Energy. They will direct us to the best technology choices. A proposition that makes me shudder.

“We’ll never come to agreement on the relative worth of each person in the chain of events. Better to let the market do that.”

I agree, there is no other valid mechanism to apportion value on a large scale. But humans are not machines. Not to sound to Marxist here, but: the market may value a certain machine $X based on its ability to generate $Y of profits for that company, and pay that amount to get it. But machines cannot spend money. They cannot use their market-determined worth to influence the market itself, or the political system; in other words to wield power over other individuals, others who the market does not value very much.

I don’t want to limit people’s net worth, I want a more progressive tax structure. Low taxes for your first 100k, higher taxes for your next 100k, much higher taxes for the next bracket, and so on. This isn’t about apportioning value in a marketplace, it’s about limiting the power that individuals have over others in a democratic system. It’s the same idea behind limiting terms or providing counterbalances in the structure of democratic governance. Power concentration in any form is dangerous.

That’s my big point. My smaller point is that I do think the market overvalues investor value by way of the extremely low capital gains tax. I would like to raise that tax significantly and also put in place a financial transaction tax. Not saying investors have no value, but it sure seems like they’re able to extract way, way more value from the system than people who actually do the work they’re investing in.

@Qingu

Given the nature of the question and our discussion, limiting the income seems to be at least, part of the issue (i.e. the CEO should not be making more than x time the salary of the workers). We already have a progressive tax system but I assume you don’t think it doesn’t go high enough. Fair enough, we can disagree on that but the capital gains really is where the disagreement becomes more fundamental.

Capital gains really are a single year spike kind of event. Jobs purchased Pixar in ‘86 and sold it 20 years later. I don’t even know when (or if) he sold the Disney stock but that is when the capital gains would be realized. In other words an investment and then a long period of dead time and then a huge spike in profits. The truth is, I’m not really concerned about Jobs, he got plenty of money and if his taxes were a little higher I wouldn’t cry. The concern I have is the guy that cashes in his retirement (again a one time spike), that would get hit with those huge taxes that steal his retirement. Someone like me. Remember I don’t have those tax loopholes. Or tax credits. Or any other method of reducing the tax burden. If you put capital gains at the same rate as income, my retirement savings (the proceeds from selling my business) would be cut in half. You would get the guys you want to get but you would also get a large portion of middle class America. I don’t want that to happen.

We’ll likely disagree on this one as well but diminishing returns will affect investment and even the sale of companies like Pixar. It forces decisions to be made on taxes rather than business. I honestly believe we make too many decisions already based on taxes rather than business.

I think we’ve agreed in the past on some modification of the way some capital gains taxes should work. The idea that hedge fund managers should be able to take their management fee in capital gains is just wrong. Carried interest, they call it. What a racket. The other big loophole I detest is the long term capital gains for commodities. It’s not enough that you can leverage you money (sometimes up to 10 times) but do we also have to reduce the taxes on what is obviously a short term gain?

Anyway, the net of all this is that I think taxes should be used to pay for essential government services and not as a tool for income redistribution. I have no problem with the progressive tax system but if I had my way, it would treat everyone the same.