What Causes The Growing Wealth Gap In America?

squarepush3r

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http://omidmalekan.com/?p=687


A major issue in America today is the growing gap between the rich and the poor, and the popular narrative is that the disparity is caused by capitalism run wild and only the firm hand of government can fix the problem. But what if this narrative has it backwards? What if the growing wealth disparity in America is actually caused by the government?
Take Warren Buffet, a man often at the center of this debate, as not only is he a billionaire, but also a vocal advocate for higher income taxes on the rich. Mr. Buffet’s focus on taxes on income is curious, as he didn’t become a billionaire by earning a high income, but rather from owning assets, like shares in Berkshire Hathaway. Many are aware of his acumen in making investments that have a “margin of safety” – or minimal downside – but few are aware of the greatest source of such safety for Mr. Buffet in recent years, the US Government.
During the 2008 crisis Buffet’s investment portfolio was full of wobbly financial companies like GE and Wells Fargo. In the span of 2 months Berkshire stock – and Mr. Buffets net worth – lost half their value. In response, Buffet invested more in collapsing financial companies like Goldman Sachs, then went public demanding a bailout. The Treasury Department and Federal Reserve responded with program after program to keep troubled financial entities alive, some of them invented specifically for Buffet holdings like GE. Just two years later, thanks to the impact of the bailouts and the Fed’s programs, Berkshire stock rebounded sharply. Mr. Buffet’s investment in Goldman Sachs, which he himself admitted was a bet on the bailouts, made billions and continues to earn him a profit years later.
Mr. Buffet wasn’t the only person that benefited from the bailouts, but wealthy citizens like him, who tend to hold the majority of assets in America, benefited disproportionately. The untold narrative of how Warren Buffet and others like him “get richer” is how they managed to not get poorer, even when their bad investment choices dictated such.
During the same 2 year span when Buffet’s net worth rose sharply, some 12 million Americans went on food stamps. Countless middle and lower class Americans lost their jobs and their homes. Small businesses were wiped out. These Americans didn’t get a bailout. Those that benefited the least from the boom years suffered the most during the bust. When people tell me that the bailouts saved the economy, I like to ask them, for whom?
On March 5th of this year, the Dow Jones Industrials Average recorded an all time high after an impressive rally from the 2009 lows. It’s widely agreed that the policies of the Federal Reserve are a big reason why. Fed Chairman Ben Bernanke often points to rising stocks as a measure of success for his programs. Perhaps he likes to boast about stock market gains because he can’t boast about major jobs creation or economic growth. In the 4th quarter of 2012 our GDP only grew by 0.1%, and the economy can barely create enough jobs to keep up with population growth. The latest report by the Labor Department showed only a paltry gain of 88,000 jobs in the month of March. Personal Income has been falling for years, and we are amid the worse period for wage growth in over a decade. The stock market has done well, but two thirds of all stocks are owned by the wealthiest Americans. Only the rich have benefited from the Fed’s largess.
The Fed has also lowered interest rates, and billionaire Mark Zuckerberg was able to get a mortgage at a rate of 1%. Most Americans would consider themselves lucky if they could get any mortgage, let alone at such paltry rates. Small business lending remains anemic and credit card rates remain high. Mr. Buffet on the other hand just announced a major acquisition financed mostly by cheap debt. Such leveraged buyout deals are lucrative when rates are this low, but ironically by law only millionaires are allowed to invest in the Private Equity Funds that utilize them.
The disproportionate gain by the wealthy from Federal Reserve actions as via the stock and bond markets is captured in a recently published Pew Research Center report on the first 2 years of the recovery. Their analysis reveals that from 2009 to 2011 the mean net worth of the top 7% rose by 28%, while the mean net worth of the lower 93% actually fell. The sharp rebound for the wealthy had nothing to do with their investment acumen, their risk-taking foresight or their hard work, as it was entirely driven by Government and Federal Reserve action.
There is one aspect of Fed action that impacts everyone, even the poor. The Fed’s easy money policies have driven up commodity prices. Despite gasoline demand being near a decade low, and supplies so plentiful that America now exports gasoline, the national price at the pump recorded another record this winter, and Americans are spending a higher percentage of their pre-tax income on gasoline than ever before. High gasoline prices hurt the poor and middle class disproportionately.
The next time you ponder the governments role in the growing wealth-gap, ask yourself this simple question: Since the start of the crisis our government has borrowed over $6 trillion and printed several trillion more. Into whose pockets did that money go?
 
ZOMG
Mark Zuckerburg got a mortgage at 1%?!!!!!!!

If there was no federal reserve what do you think Mark Zuckerbergs mortgage rate would be?
 
ZOMG
Mark Zuckerburg got a mortgage at 1%?!!!!!!!

If there was no federal reserve what do you think Mark Zuckerbergs mortgage rate would be?

Whatever the market settled on at the time (and a little better than that for a billionaire).

I honestly have no idea but without bailouts I would imagine banks would be needing capital. When this happens, we see higher rates to encourage saving. If I had to guess I would say over 10% given we'd still be feeling the effects of the not really too big to fail fail.

What do you think interest rates would be right now without a Federal Reserve?
 
ZOMG
Mark Zuckerburg got a mortgage at 1%?!!!!!!!

If there was no federal reserve what do you think Mark Zuckerbergs mortgage rate would be?
Mark Zuckerberg? Why do you care? Jealous?

Besides Zuckerberg didn't finance it, a LLC did.
 
Whatever the market settled on at the time (and a little better than that for a billionaire).

I honestly have no idea but without bailouts I would imagine banks would be needing capital. When this happens, we see higher rates to encourage saving. If I had to guess I would say over 10% given we'd still be feeling the effects of the not really too big to fail fail.

What do you think interest rates would be right now without a Federal Reserve?

The truly rich do not have to pay any tax once they have their fortunes in hand. They can follow the simple tax planning advice to buy/borrow/die: Buy assets that appreciate in value without producing cash (like shares of Internet stocks), borrow to finance lifestyle, and die to pass on a "stepped up" basis to heirs wherein the tax gain miraculously disappears.
Zuckerberg now has $11 billion or more with which to play this game. He can live off money borrowed against that huge sum (rest assured, he can get good interest rates), never having to sell any asset at a gain, and never having to get an "ordinary" salary again.
http://www.cnn.com/2013/04/09/opinion/mccaffery-zuckerberg-taxes
 
Whatever the market settled on at the time (and a little better than that for a billionaire).

I honestly have no idea but without bailouts I would imagine banks would be needing capital. When this happens, we see higher rates to encourage saving. If I had to guess I would say over 10% given we'd still be feeling the effects of the not really too big to fail fail.

What do you think interest rates would be right now without a Federal Reserve?
To obtain her loan, Fantini worked with Tyler Vernon, founder and principal of Biltmore Capital Advisors in Princeton, N.J.
“You don’t have to be a billionaire," Vernon said, “to enjoy preferred interest rates.”
He has arranged for nearly 100 loans at rates ranging from 0.96 percent (for someone who borrows more than $1 million) up to 1.5 percent (for a client who secures less than $500,000). One of those loans was only for $50,000. One topped $8 million.
“Most people do actually use this for a real estate investment,” said Vernon, a former Merrill Lynch vice president. “And it’s definitely cheaper than Zuckerberg’s cost of money.”
How is this accomplished without going the usual bank or mortgage-lender route?
At his previous job, Vernon learned that during the 1980s Merrill Lynch, along with other large financial services companies such as Morgan Stanley Smith Barney, offered loan rates of 0.6 percent to United Parcel Service executives because that company’s once-private stock was so stable.
“So there were a few companies that set up these unbelievable rates targeted specifically to UPS. They didn’t make money on the loans but they knew they would get the (UPS honchos’) asset management business, which led to trades and commissions,” Vernon said.

http://www.nbcnews.com/business/zuckerberg-not-only-one-who-can-get-super-low-mortgage-898285
 
Unfinished state, and unsuccessful systems are caught in the planetary limb that interferes with the European project in the logic of including those areas that already belong to the European territorial structure.

Must be articulate strong anti-European stance in order to have a chance to connect all the elements into a meaningful whole. For example., It turns out that Italy, Spain, Portugal, Greece unfinished state, unlike Germany, Great Britain, Sweden., Which are top noch. It is an economy power, which by itself is not the superiority of organization and construction of the state. This superiority comes from forcing those state mechanisms in the economic purpose of achieving profit and capitalist expansion.

But the point is that the state system is not based on economics, but the other way around. Organization of the state based on the idea of ​​what is good, just, true, free. When the idea is its set, the legality of the content, such that recognizes itself, its proper implementation, the world's production of goods and services, goods and cash flows, the singularity property, then we have a capitalist state that the principle of freedom remains at the level of abstract individuality. This means that it is understood solely by his point of singularity, which it defines as excluding relation to the other as to the knowledge of the time of generality that it also constitutes - not mature, or what remains clouded. This page developed communism, but we will not talk about that.

Everything is anxious to determine what the individuality and his freedom. And now that we have capitalism with its exclusionary attitude; individual and the state can reach equality, mutual respect with other individuals or states, because excluding relation to other constitutive just for them. They are nothing more than the ratio.

And now Germany and other northerners less developed economically oppressed southerners; course within the states more or less oppressed immigrants, low-class, and so on. Northerners also an oppressive, it is America. Telling them what to do and how, when someone is not listening there is a beating. Let's not mention examples, as they undergo the Western statesmen who dare to go to visit Fidel Castro and practice socialism, and what methods are available when the communists in a western country too their heads, for example. in Italy.
In capitalism, everyone is at the same time on one oppressor and oppressed on the other side. The cause is that the abstract individualism of both the individual and the state can not come to independence, because they do not know the moment generality. So he is not only opposed to the other from him and depend on. Is dependent on the capitalist workers and obrnuto.Isto applies to the states. European countries, although they are subordinated - to the big boss. State, a situation in which both individuals were equal and mutually respected in the overall integrity of his person and his liberty will remain unknown to the West. Thus we see that the rule of the principles of abstract particulars "free world" has in itself still a problem unsurmounted contrasts ancient lordship and bondage. The instability of the world rests in the fact that he basically does have the principle of liberty, that is, the principle of universality, equality, and so on., But fails to reconcile it with other individuals at the moment of freedom - the principle of individuality, which is the world's leading and who the same way as the principle of universality of freedom is constitutive. From there, the tension, there crumbling, hence the crisis. This world is torn apart in itself.

Who oppresses America? Is it the top of the chain and hierarchy? Does the principle of capitalism that America finally moves from exclusionary relationships to each other, necessarily, except in relation to himself. It certainly was. However, someone in a certain, although much milder way almost oppressive and does not respect even America. We know that it is Israel, according to which America shows weakness and snishosdljivost astonishing. The reason for that is the power of the Israeli economy, or the military, and as we can see in this example, so that reality is not what the government, but there is a principle, the idea that the West is in Israel carried out more consistently and more extreme. That is its superiority.

America and Israel are so deeply involved in the paradoxical relationship, where the all-powerful protector of big brother humbly obey his ward, that you might think that there comes a kind of internal conflict. Internal conflict is the essence, but as it is a two-state here is not its stage. Israel appears to be perhaps the greatest master. He does not humiliate, except in a moral sense. He still can not impart lessons on human rights, those who have the make-up can still: this is the price going to the extreme. Everything has a price to different payment method.
 
Hey, we are not so bad...number 5 worse. That GINI is defined like this. If only one person has all the money and not a single other person has any....slaves, that is the mythical 1.000.

If every single person has exactly the same amount, that is 0.000.

Suprising to me, is Japan, the most equal at .504.

But, see the WORLD number....the same as the USA. No free ride here or anywhere in total.

[TABLE="class: wikitable sortable jquery-tablesorter"]
[TR]
[TH="class: headerSort"]Country[/TH]
[TH="class: headerSort"]population (1000s)[/TH]
[TH="class: headerSort"]adults (1000s)[/TH]
[TH="class: headerSort"]Share of world population (%)[/TH]
[TH="class: headerSort"]Share of adult population (%)[/TH]
[TH="class: headerSort"]Wealth per capita[/TH]
[TH="class: headerSort"]Wealth per adult[/TH]
[TH="class: headerSort"]Share of world wealth (%)[/TH]
[TH="class: headerSort"]GDP per capita[/TH]
[TH="class: headerSort"]Share of world GDP (%)[/TH]
[TH="class: headerSort headerSortUp"]Wealth Gini[/TH]
[/TR]
[TR]
[TD="align: left"]
22px-Flag_of_Namibia.svg.png
Namibia[/TD]
[TD]1894[/TD]
[TD]874[/TD]
[TD]0.03[/TD]
[TD]0.02[/TD]
[TD]8843[/TD]
[TD]19159[/TD]
[TD]0.01[/TD]
[TD]6058[/TD]
[TD]0.03[/TD]
[TD]0.847[/TD]
[/TR]
[TR]
[TD="align: left"]
22px-Flag_of_Zimbabwe.svg.png
Zimbabwe[/TD]
[TD]12595[/TD]
[TD]5631[/TD]
[TD]0.21[/TD]
[TD]0.15[/TD]
[TD]6104[/TD]
[TD]13654[/TD]
[TD]0.05[/TD]
[TD]2607[/TD]
[TD]0.07[/TD]
[TD]0.845[/TD]
[/TR]
[TR]
[TD="align: left"]
22px-Flag_of_Denmark.svg.png
Denmark[/TD]
[TD]5340[/TD]
[TD]4072[/TD]
[TD]0.09[/TD]
[TD]0.11[/TD]
[TD]66191[/TD]
[TD]86807[/TD]
[TD]0.22[/TD]
[TD]28539[/TD]
[TD]0.33[/TD]
[TD]0.808[/TD]
[/TR]
[TR]
[TD="align: left"]World[/TD]
[TD]6085576[/TD]
[TD]3697511[/TD]
[TD]100.00[/TD]
[TD]100.00[/TD]
[TD]26416[/TD]
[TD]43494[/TD]
[TD]100.00[/TD]
[TD]7675[/TD]
[TD]100.00[/TD]
[TD]0.804[/TD]
[/TR]
[TR]
[TD="align: left"]
17px-Flag_of_Switzerland.svg.png
Switzerland[/TD]
[TD]7167[/TD]
[TD]5497[/TD]
[TD]0.12[/TD]
[TD]0.15[/TD]
[TD]137549[/TD]
[TD]179345[/TD]
[TD]0.61[/TD]
[TD]28209[/TD]
[TD]0.43[/TD]
[TD]0.803[/TD]
[/TR]
[TR]
[TD="align: left"]
22px-Flag_of_the_United_States.svg.png
United States[/TD]
[TD]284154[/TD]
[TD]202865[/TD]
[TD]4.67[/TD]
[TD]5.49[/TD]
[TD]143727[/TD]
[TD]201319[/TD]
[TD]25.40[/TD]
[TD]35619[/TD]
[TD]21.67[/TD]
[TD]0.801[/TD]
[/TR]
[/TABLE]
 
The truly rich do not have to pay any tax once they have their fortunes in hand. They can follow the simple tax planning advice to buy/borrow/die: Buy assets that appreciate in value without producing cash (like shares of Internet stocks), borrow to finance lifestyle, and die to pass on a "stepped up" basis to heirs wherein the tax gain miraculously disappears.
Zuckerberg now has $11 billion or more with which to play this game. He can live off money borrowed against that huge sum (rest assured, he can get good interest rates), never having to sell any asset at a gain, and never having to get an "ordinary" salary again.
http://www.cnn.com/2013/04/09/opinion/mccaffery-zuckerberg-taxes

Yep Zuckerberg doesn't ever have to pay any taxes, well except the $1 BILLION in taxes. Does that even count? Hell thats like pocket change for me, If I saw $10 Billion laying on the street, I doubt if I could be bothered to even pick it up. A billion, humrph, that's nuthin!!
 
To obtain her loan, Fantini worked with Tyler Vernon, founder and principal of Biltmore Capital Advisors in Princeton, N.J.
“You don’t have to be a billionaire," Vernon said, “to enjoy preferred interest rates.”
He has arranged for nearly 100 loans at rates ranging from 0.96 percent (for someone who borrows more than $1 million) up to 1.5 percent (for a client who secures less than $500,000). One of those loans was only for $50,000. One topped $8 million.
“Most people do actually use this for a real estate investment,” said Vernon, a former Merrill Lynch vice president. “And it’s definitely cheaper than Zuckerberg’s cost of money.”
How is this accomplished without going the usual bank or mortgage-lender route?
At his previous job, Vernon learned that during the 1980s Merrill Lynch, along with other large financial services companies such as Morgan Stanley Smith Barney, offered loan rates of 0.6 percent to United Parcel Service executives because that company’s once-private stock was so stable.
“So there were a few companies that set up these unbelievable rates targeted specifically to UPS. They didn’t make money on the loans but they knew they would get the (UPS honchos’) asset management business, which led to trades and commissions,” Vernon said.

http://www.nbcnews.com/business/zuckerberg-not-only-one-who-can-get-super-low-mortgage-898285

Do you begrudge everyone who has something or is able to do something that you aren't?
 
The truly rich do not have to pay any tax once they have their fortunes in hand. They can follow the simple tax planning advice to buy/borrow/die: Buy assets that appreciate in value without producing cash (like shares of Internet stocks), borrow to finance lifestyle, and die to pass on a "stepped up" basis to heirs wherein the tax gain miraculously disappears.
Zuckerberg now has $11 billion or more with which to play this game. He can live off money borrowed against that huge sum (rest assured, he can get good interest rates), never having to sell any asset at a gain, and never having to get an "ordinary" salary again.
http://www.cnn.com/2013/04/09/opinion/mccaffery-zuckerberg-taxes

As a finance junkie, I question the author's claim which you highlighted in red. It's true that you can borrow money against an asset and enjoy it, but the IRS might consider it a constructive sale or a constructive dividend, depending on the asset, its organizational structure, and the structuring of the transaction. Then you would have to pay capital gains tax. Congress did some of this relatively recently specifically to neutralize the products banks were shopping to high net worth people.
 
Idk too much about this so i'll keep it short. Greedy fuckers and people like me who just go with it and don't do anything to change it.
 
Well, simply put it is a false augment, up there with gun control. It's another Commonweath infection idea. Double Think.

Our gap is the same as the world in total. And heres the kicker. The Best in the World at this is Japan. Japan is the most introverted culture that can call itself open.

So, more emotion tampering. Talk about something as if it was bad, but never consider the comparisons.

Just look at that list to see what this subject really means. You can't have a GINI 1.000 or 0.OOO. But, you can get to .504 if you are as weird as Japan. We are not.

And what about the bastions of Leftist Vallhalla? How about the Swiss and Dutch? "Worse" than us.

Give up. This is a meaningless false argument to jack your minds. Where else on this list do you want the USA?
 
corporate welfare...and at the heart of that, the federal reserve bank

There's also a principle which is undeniable where those who receive newly created money do better than those who receive it last. They get in on the ground level. Just like a ponzi scheme.
 
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