Rich people screwin up our economy

[Science Abuse]

Rich people are bad for the economy, and trickle down doesn’t work. You've all heard me say this before, but here's some fodder:

This is an example that trucked through my head a few minutes ago, so I thought I’d write it down. To illustrate, I’ll use the example of Richard Wagoner and some laid off GM line workers.

 

Lets establish annual pay, first:

Wagoner; $8,200,000 (2005)

Line worker: $50,000 (there abouts. Fair wage for a bolt installer, shut up UAW)

 

For the comparison, we’ll hypothetically knock Wagoner down to $200,000 a year (Poor guy must be starving) With that free’d up $8mil, we can employ 160 line workers (insurance etc not included).

 

Now, ignoring the fact that poorer people tend to have more kids, we’ll just focus on individuals here, in a periodic consumption kinda way, starting with daily. The worth to the economy is measured by how much they spend and put back in. I’ve giving Wagoner a big benefit of the doubt, making him out to be a much better consumer than he probably is.

To summarize, we’re comparing an $8.2mil Wagoner vs 160 $50k workers.

 

Daily:

-Meals

*Wagner, 3 meals x $50 (he don’t eat white castle). $150 into the local economy.

*160 workers, 3 meals x $10 (we eat crap, but can afford Arbys because we have jobs) $4800 into the local economy.

Workers > Rich

 

Weekly:

-Fuel

*Wagners jet is thirsty, he burns 300 gallons a week @$3; $900 into the economy.

*160 workers. In 2005 the average yearly consumption per capita was about 540 gallons, divided by 52 is 10.4 gallons a week, times 3, times 160. $4992. (You and I know that commuters use much more, and the non-drivers swayed that survey. But I needed data)

Workers > Rich

 

Monthly:

-Housing

*Wagner, lets round way up and say he spends $10,000/mo on his domestic properties.

*Workers: You’re not affording more that $1000/mo, so $160,000 a month.

Also keep in mind, houses are consumers too, 160 homes will require more plumbers, electricians, masons, etc.

 

-Water:

*Wagner: round up to $1000/mo, lets say he had fountains and pools.

*Workers: About $50? x160 is $8000

 

-Energy (Consuming allot of this is bad, but for Republicans sake, we’re only focusing on money)

*Wagner, lots of gas and electric for his big place, $2000/mo

*Workers: Who pays less than $200avg/mo for a small house? No one. $200x160 is $32,000

 

-Media

*Wagner gets the illest shit, pays $1500 a month on cable, satellite, phone, internet, and movie rentals.

*160 workers just want cable and internet, average it at $80/mo (wish mine was that cheap), $12,800

 

Stuff:

-Audio

*Wagner gets the top of the line, best you can buy. $0 into the national economy. He damn sure didn’t buy an American stereo/TV. But, lets say that the store/salesman made $2000 off the sale.

*Workers, same deal. Our crap is cheaper, but we buy allot more of it. The stores just have to make $13/head off of us to beat out Wagner. Believe me, they make more. Walmart – Sanyo profit margins are much higher than B and O.

 

-Cars

*Wagner has an impressive stable….it’s probably all German and Italian. But, giving him the benefit of the doubt, he buys a top’o’the line GM vehicle from every class: $90k XLR, $60k Escalade, and a $200,000k RV. So, $350,000

*Workers: We have our jobs, we can afford a new base G6 for our family: $18k each, $2,880,000.

 

 

Vacations

I give up here, this wont be counted. This will again be a huge skew because Wagners will spend $3000 on airfare to go someplace outside the US, but 160 trips to “the lake” will probably average $500-$1000 each.

 

I’ve spent enough time, but this is enough to get the point. Rich people are bad for the economy because they are poor consumers. “Oh but they invest”...Working capital is not earned income, so it’s not here. Furthermore, they invest some beyond our borders (if they’re smart), so not all of it trickles down. In point of fact, very little is trickling down. Any econ folk want to tell us what our dollar would be worth in the following comparison:

Lots of people making a little money

A few people making allot of money

 

So, that’s my hair brained idea, and may well be flawed. I leave it to you all to go at it. Something that you cannot argue against:

$160 people making $50,000 a year will put ALLOT more money back into the local/national economy than one guy making $2,000,000

 

In the very limited example above, Workers spend almost twice on annual food consumption than Wagoner spends on everything, all year (1,752,000 vs 627,558).

All told, the 160 workers made $8,000,000 and put $7,397,184 of it BACK into the local economy. The $602,816 remaining, divided over 160, means that the workers have $3767 each to spend on clothes, soap, vacations, etc. It all comes back. (Not even mentioning credit debt)

Wagoner, on the other hand, made $8,200,000 and only spent $627 558. That is $7,372,442 that does not go back into the economy.

“Oh, but he invests it!” Not all of it, but lets go with you guys, lets say he invests it…for how long? It will eventually be cashed out, his $8.2mil is his money. Chances are, he has good enough brokers that he will pull out quite a bit more than he put in. In the end, the economy still loses.

 

I’ve said it before, I’ll say it again: Reagan was a charlatain, and “trickle down” only trickles up.

[SpaceGhost]

My bad, I'll start spending my millions.

[Science Abuse]

My bad, I'll start spending my millions.

I'm a carpenter, don't forget my local ecomony.

 

The point was more that we need to stop voting for people who coddle the rich.

[SpaceGhost]

but I like to be coddled....

[KlubFoot]

Or, poor people need to stop their bitching and blaming and do something about their own financial future. I myself am by no means a rich person, but I understand that I'm not going to create wealth by bitching about how someone else makes millions and exploits their employees. Understand that there's probably a good reason that Richard Wagoner makes $8,000,000/yr and you don't.

 

If you want to focus on building the economy and patriotism, focus on immigration laws and education. Not what some guy who worked his ass off and CREATED his own wealth spends on a yearly basis. People like you are the problem with our economy. You go to work day in and day out only to bitch about the pay check you recieve at the end of each period. If its not good enough, DO SOMETHING ABOUT IT. I'm sick and tired of hearing people bitch about this and bitch about that when it comes to money. YOU AND ONLY YOU are in charge of your financial foundation.

 

The next time you are out and see something you want, instead of telling yourself you can't afford it because you don't get paid enough, ask yourself HOW can I afford this. Act upon your thoughts and make it happen. If everyone had this mentality our economy would be booming right now. Instead, everyone wants to blame everyone else for their own CREATED misfortunes.

 

Quit working for your money and make your money work for you.

[Mattsn2o281]

Very well thought out post, and great, great points, my only gripe would be this: Where do you cap what a person can make? 200k, 1 mil, 2 mil? Thats the downside to capitalism, you'll always have the very rich, and the very poor, and the rest of us somewhere in the middle.

[TTQ B4U]

Yes/no.....I for one aspire to be one of those that will be coddled.

 

Now while I certainly see your point and wish I made what he does annually, I also can see where while his salary is large, but it's also commensurate with who he is, what he has done and what his background has consisted of. His pedigree is quite impressive. He's no line worker in terms of background, education nor experience that's for sure.

 

Now so far as his pay....I don't have the details on how it's based, but I do think there should be more of an incentive for him and others to make the big bucks only should things turn around. That's really what GM needs. Someone to come in and be a hero. I'd pay that person $8.2M and I bet they would see it as an easy pill to swallow too.

 

 

The point was more that we need to stop voting for people who coddle the rich.

[Supplicium]

Or, poor people need to stop their bitching and blaming and do something about their own financial future. I myself am by no means a rich person, but I understand that I'm not going to create wealth by bitching about how someone else makes millions and exploits their employees. Understand that there's probably a good reason that Richard Wagoner makes $8,000,000/yr and you don't.

 

x2.

 

Its not the rich hurting, it is the now 5th generation of welfare recipients. We continue to provide people who really dont need it, people have more kids so they can collect it, we do not drug test people on welfare, people are teaching their kids that are in the welfare system that it is OK and normal to live off welfare.

[TTQ B4U]

No caps in my world thank you...not interested in that. Especially in todays market.

 

$100k isn't shit in todays world. $200k is the new $100k of just say 10 years ago and that is really only good money, for a family in the burbs not what I'd call big bucks. Especially when a bottle of V8 Fusion for my kids costs $4.25 at Kroger. That's bull...that shit was $2.99 all day one year ago. No doubt a gas-related surcharge thing.....

 

 

 

Very well thought out post, and great, great points, my only gripe would be this: Where do you cap what a person can make? 200k, 1 mil, 2 mil? Thats the downside to capitalism, you'll always have the very rich, and the very poor, and the rest of us somewhere in the middle.

[l36tols1]

I LoL'd @ this thread only because the thread was created by The "Benz" Guy

 

But seriously well thought out post though.

[Stimmel1647545512]

x2.

 

Its not the rich hurting, it is the now 5th generation of welfare recipients. We continue to provide people who really dont need it, people have more kids so they can collect it, we do not drug test people on welfare, people are teaching their kids that are in the welfare system that it is OK and normal to live off welfare.

 

 

 

Sad but so true...

[TTQ B4U]

WOW! I love it....nicely said! I see a lot of the downside in life through my wife and bankruptcy law she practices. It's always amazing to see so many folks, many of whom do make a decent wage, spend soooo much and save nothing.

 

People need to start preparing for the future and pay themselves first vs living day to day and spending every dime they have.

 

I notice it with our friends. Both work and then spend it all. Many live larger than we do and yet combined, my wife and I make a lot more. The difference is we save 95% of what her practice brings in. Investing it for later so we can live large and larger than we do now when we are retired.....early.

 

Or, poor people need to stop their bitching and blaming and do something about their own financial future. I myself am by no means a rich person, but I understand that I'm not going to create wealth by bitching about how someone else makes millions and exploits their employees. Understand that there's probably a good reason that Richard Wagoner makes $8,000,000/yr and you don't.

 

If you want to focus on building the economy and patriotism, focus on immigration laws and education. Not what some guy who worked his ass off and CREATED his own wealth spends on a yearly basis. People like you are the problem with our economy. You go to work day in and day out only to bitch about the pay check you recieve at the end of each period. If its not good enough, DO SOMETHING ABOUT IT. I'm sick and tired of hearing people bitch about this and bitch about that when it comes to money. YOU AND ONLY YOU are in charge of your financial foundation.

 

The next time you are out and see something you want, instead of telling yourself you can't afford it because you don't get paid enough, ask yourself HOW can I afford this. Act upon your thoughts and make it happen. If everyone had this mentality our economy would be booming right now. Instead, everyone wants to blame everyone else for their own CREATED misfortunes.

 

Quit working for your money and make your money work for you.

[HotCarl]

Or, poor people need to stop their bitching and blaming and do something about their own financial future. I myself am by no means a rich person, but I understand that I'm not going to create wealth by bitching about how someone else makes millions and exploits their employees. Understand that there's probably a good reason that Richard Wagoner makes $8,000,000/yr and you don't.

 

If you want to focus on building the economy and patriotism, focus on immigration laws and education. Not what some guy who worked his ass off and CREATED his own wealth spends on a yearly basis. People like you are the problem with our economy. You go to work day in and day out only to bitch about the pay check you recieve at the end of each period. If its not good enough, DO SOMETHING ABOUT IT. I'm sick and tired of hearing people bitch about this and bitch about that when it comes to money. YOU AND ONLY YOU are in charge of your financial foundation.

 

The next time you are out and see something you want, instead of telling yourself you can't afford it because you don't get paid enough, ask yourself HOW can I afford this. Act upon your thoughts and make it happen. If everyone had this mentality our economy would be booming right now. Instead, everyone wants to blame everyone else for their own CREATED misfortunes.

 

Quit working for your money and make your money work for you.

 

While I agree with you I think you may have missed his point. He's saying that its a disgrace when people like Warren Buffet are only taxed up to 6%, when Warren Buffet even admited his own receptionist (who only makes 60k/year) is taxed up to 30%. He's not mad at Richard Wagoner for making 8.2million, he's mad at the system setup to only benefit the small percentage of people making an extreme amount of money.

 

But I could be wrong.

[AngryBMW]

Shut it Eric...you're one of "those Rich kids"!

-Marc

[copperhead]

Rich people are bad for the economy, and trickle down doesn’t work. You've all heard me say this before, but here's some fodder:

This is an example that trucked through my head a few minutes ago, so I thought I’d write it down. To illustrate, I’ll use the example of Richard Wagoner and some laid off GM line workers.

 

Lets establish annual pay, first:

Wagoner; $8,200,000 (2005)

Line worker: $50,000 (there abouts. Fair wage for a bolt installer, shut up UAW)

 

For the comparison, we’ll hypothetically knock Wagoner down to $200,000 a year (Poor guy must be starving) With that free’d up $8mil, we can employ 160 line workers (insurance etc not included).

 

Now, ignoring the fact that poorer people tend to have more kids, we’ll just focus on individuals here, in a periodic consumption kinda way, starting with daily. The worth to the economy is measured by how much they spend and put back in. I’ve giving Wagoner a big benefit of the doubt, making him out to be a much better consumer than he probably is.

To summarize, we’re comparing an $8.2mil Wagoner vs 160 $50k workers.

 

Daily:

-Meals

*Wagner, 3 meals x $50 (he don’t eat white castle). $150 into the local economy.

*160 workers, 3 meals x $10 (we eat crap, but can afford Arbys because we have jobs) $4800 into the local economy.

Workers > Rich

 

Weekly:

-Fuel

*Wagners jet is thirsty, he burns 300 gallons a week @$3; $900 into the economy.

*160 workers. In 2005 the average yearly consumption per capita was about 540 gallons, divided by 52 is 10.4 gallons a week, times 3, times 160. $4992. (You and I know that commuters use much more, and the non-drivers swayed that survey. But I needed data)

Workers > Rich

 

Monthly:

-Housing

*Wagner, lets round way up and say he spends $10,000/mo on his domestic properties.

*Workers: You’re not affording more that $1000/mo, so $160,000 a month.

Also keep in mind, houses are consumers too, 160 homes will require more plumbers, electricians, masons, etc.

 

-Water:

*Wagner: round up to $1000/mo, lets say he had fountains and pools.

*Workers: About $50? x160 is $8000

 

-Energy (Consuming allot of this is bad, but for Republicans sake, we’re only focusing on money)

*Wagner, lots of gas and electric for his big place, $2000/mo

*Workers: Who pays less than $200avg/mo for a small house? No one. $200x160 is $32,000

 

-Media

*Wagner gets the illest shit, pays $1500 a month on cable, satellite, phone, internet, and movie rentals.

*160 workers just want cable and internet, average it at $80/mo (wish mine was that cheap), $12,800

 

Stuff:

-Audio

*Wagner gets the top of the line, best you can buy. $0 into the national economy. He damn sure didn’t buy an American stereo/TV. But, lets say that the store/salesman made $2000 off the sale.

*Workers, same deal. Our crap is cheaper, but we buy allot more of it. The stores just have to make $13/head off of us to beat out Wagner. Believe me, they make more. Walmart – Sanyo profit margins are much higher than B and O.

 

-Cars

*Wagner has an impressive stable….it’s probably all German and Italian. But, giving him the benefit of the doubt, he buys a top’o’the line GM vehicle from every class: $90k XLR, $60k Escalade, and a $200,000k RV. So, $350,000

*Workers: We have our jobs, we can afford a new base G6 for our family: $18k each, $2,880,000.

 

 

Vacations

I give up here, this wont be counted. This will again be a huge skew because Wagners will spend $3000 on airfare to go someplace outside the US, but 160 trips to “the lake” will probably average $500-$1000 each.

 

I’ve spent enough time, but this is enough to get the point. Rich people are bad for the economy because they are poor consumers. “Oh but they invest”...Working capital is not earned income, so it’s not here. Furthermore, they invest some beyond our borders (if they’re smart), so not all of it trickles down. In point of fact, very little is trickling down. Any econ folk want to tell us what our dollar would be worth in the following comparison:

Lots of people making a little money

A few people making allot of money

 

So, that’s my hair brained idea, and may well be flawed. I leave it to you all to go at it. Something that you cannot argue against:

$160 people making $50,000 a year will put ALLOT more money back into the local/national economy than one guy making $2,000,000

 

In the very limited example above, Workers spend almost twice on annual food consumption than Wagoner spends on everything, all year (1,752,000 vs 627,558).

All told, the 160 workers made $8,000,000 and put $7,397,184 of it BACK into the local economy. The $602,816 remaining, divided over 160, means that the workers have $3767 each to spend on clothes, soap, vacations, etc. It all comes back. (Not even mentioning credit debt)

Wagoner, on the other hand, made $8,200,000 and only spent $627 558. That is $7,372,442 that does not go back into the economy.

“Oh, but he invests it!” Not all of it, but lets go with you guys, lets say he invests it…for how long? It will eventually be cashed out, his $8.2mil is his money. Chances are, he has good enough brokers that he will pull out quite a bit more than he put in. In the end, the economy still loses.

 

I’ve said it before, I’ll say it again: Reagan was a charlatain, and “trickle down” only trickles up.

[Lustalbert]

It is part of an incintive based system. If I know I am only going to make 200k a year, and the goverment will prohibit me from making any more, what is my reason to further myself or try harder when I reach that 200K cap?

If I start a business, and it does well, I should be able to reap the rewards of what my business makes, that is my incintive for taking on the risk of starting that business. Without the incintive, no one will try any harder then they need to in order to meet the minumum standard.

[Supplicium]

It is part of an incintive based system. If I know I am only going to make 200k a year, and the goverment will prohibit me from making any more, what is my reason to further myself or try harder when I reach that 200K cap?

If I start a business, and it does well, I should be able to reap the rewards of what my business makes, that is my incintive for taking on the risk of starting that business. Without the incintive, no one will try any harder then they need to in order to meet the minumum standard.

 

couldnt say it better.

[Scotty2Hotty]

My bad, I'll start spending my millions.

Break bread homie Where's my Christmas present?

[RX-7 Addict]

So...

 

exactly what research have you done on Rick W's spending habits? Are these even close? Do you have any evidence to suggest Rick does in fact spend xxxx on his car, on his house? What about his wife, does she like jewelry? Point is this is such a bad example.

 

And to say that investing doesn't give back to the economy is a blatent lie. It's investors that give companies the money to hire people. It's investors who give companies the money to produce goods which people want to buy. It's investors that give companies the resources (money!) that make our economy and growth possible. All the investors ask for is their money back +/- .

 

How is investment bad again? Please explain how spending money on consumer goods is better than investments in companies that provide goods, services, and jobs within our economy.

[Mensan]

WORDS

 

 

You have listed what you feel is a problem, yet you have listed no solution. Is this just a thread to bitch about rich people? If you were Wagoner, what would you do differently? Other than complaining, what are you doing to change things?

[Science Abuse]

The point you guys ar emissing is simple: Our money is worth more in many hands than it is in few hands.

You have listed what you feel is a problem, yet you have listed no solution. Is this just a thread to bitch about rich people? If you were Wagoner, what would you do differently? Other than complaining, what are you doing to change things?

If I were Wagoner, I'd be happy with a few hundred thousand a year, and I'd expect to be fired if I didn't improe the company. But I didn't grow up loaded, he's acustomed to nicer things.

You posted while I was writing, look below:

He's not mad at Richard Wagoner for making 8.2million,

Actually, I am. I don't like him because he's being paysed gobs of money to suck at something, I could suck at it for half the price!

 

 

And you guys blaming the poor, you have indeed missed the point. They are a burden, yes, but htey are a burden to the taxpayer, which is us. ALSO keep in mind,t hat the welfare money that we are giving them is passing through them and back into the community. Even though they didn't make the money, they are stimulating the economy with it.

 

The entire post centers on the (Republican) idea that money must be spent to have a strong country. A bunch of people holding on to their money and not psend it is what closes buisnesses down. A pertienet and current example: New cars.

Buying a new car is pretty much fiscally stupid, they depriciate and don't do anything better than an off-lease used car. Suppose 20% of the car buyers realaize this next year, and buy used instead of new. What happens to the auto makers? They lose, they lay off, unemployment goes up, welfare goes up, but the taxes funding it go down. Everythign is effected by everything. Our fiscal responcibility kills the dollar, but WE HAVE TO horde our pittence, because we're struggling to stay fed.

The people controlling the wealth are doing just that, controlling it. They move it around, grow it a bit, but mostly just sit on it. They have to SPEND it, put it in other peoples pockets, so that they can put it in other peoples pockets, so that they can put it in other peoples pockets, so that they can put it in other peoples pockets, etc.

The capitalist Economy is a circulatory system, and we're developing a a huge clot at the top.

 

Those 160 people represented over 7 million dollars being put into local shops, services, banks, and mortgage firms. If they get laid off, then that 7 million dollars dissapears AND a huge deffecits apears, because there are now 160 people sucking down 5 or 6 million dollars in unemployment. Shops close, taxes go up, etc.

Why did this happen? So the upper teir people could hold onto their peice of the pie. What do they do with all that money? Effectively nothing, they become the clot. Like I said before, working capital doesn't count, because it doesn't stay anywhere; "You can use my money, but I want it back."

 

So we see a downward spiral. The wealthy sacrifice the workers to maintain their wealth...but it is those very workers that buy crap and contribute to the wealth.

Consider, all the people that GM laid off used to get GM discounts. So, when time came to buy a car, many of them went for a new GM. Now that those million or so people don't have jobs, they aren't buying cars, sales are effected, more workers get laid off, etc.

 

I'm trying not to sound like I'm advocating a communist "redistribution of wealth", because communism doesn't work. BUT, we need to take the trillion dollar clot from the people on the upper crust and spread it around to the working people so that they can spend it on houses and Pontiacs and Harleys and CONDOMS and trips to the lake.

 

Some of you say "Oh they earned it,t hey have that money for a reason, etc!"

Donald Trump. How did he make his first million? He inherrited it. It is much much easier to turn a million dollars into 2 milion than it is to turn $20 into $40. Dick Cheneys total gross investment in halliburton back in 99 is now worth about 3x what he paid for it. How do people get super rich? They start out rich.

CEOs? Have you ever met one? Do you know what they do? They make loads of moeny because they can, plain and simple. They are not given a salary, so much as they are patted on the back by investors and the board. They've been getting X percent more every year for the last 150 years, and it's not because they are worth it. There are people getting multi million dollar bonuses while they drive their companies into the red. Sorry guys, if you don't grow our wealth, we don't grow yours.

[Scotty2Hotty]

What we really need to do as a country is help out OUR own poor first, before stepping out and helping those other shitty 3rd world countries. I agree with you Eric, the US working man/woman that ain't making millions, puts more into the economy that the rich. They sit on their money, while the not so rich must spend to stay alive.

 

- I should own stock in RJ Reynolds tobacco, Budweiser, and the Miller companies. I spend enough with them every week to get a piece of the pie.

[El Karacho1647545492]

I agree that trickle down economics is bullshit and that Reagan was a complete maniac whose version of reality was very distorted. Still, in a market economy there will always be winners and losers, and its the responsibility of the winners (note, its the responsibility of the WINNERS not the government) to help the losers. Unfortunately, whenever anyone loses in this country instead of finding a solution or a route to a solution they point blame and come up with reasons they shouldn't have to do anything to receive benefits.

[Scotty2Hotty]

I Unfortunately, whenever anyone loses in this country instead of finding a solution or a route to a solution they point blame and come up with reasons they shouldn't have to do anything to receive benefits.

Unemployment is ok for a minute, but since we are the United States of America, it's kinda sad some of our citizens have to live on welfare/food stamps.

[Science Abuse]

I agree that trickle down economics is bullshit and that Reagan was a complete maniac whose version of reality was very distorted. Still, in a market economy there will always be winners and losers, and its the responsibility of the winners (note, its the responsibility of the WINNERS not the government) to help the losers. Unfortunately, whenever anyone loses in this country instead of finding a solution or a route to a solution they point blame and come up with reasons they shouldn't have to do anything to receive benefits.

If we were talking about a slight difference in wealth, then you would be absolutely right. Unfortunately, this simply isn't possible anymore, there is too much of an advantage held by the top 3%.

I challenge you to make a million dollars by working hard. You cant do it (outside of professional sports). Some time, some where, you're either going to have to lose your shirt, or fuck somebody over. Keep in mind, those guys aren't "making" money, that term is misleading. An economy has a certain amount money to go around. If you want to control X amount, it has to come from somewhere. There are firms out htere that make massive amounts of money by buying up companies, liquidating them, and laying of all of the workers. this happend at my last job, though they kept our line of chinese-made parts. We weren't struggling, we were doing well, but our owners were old and decided to sell. They got their money, the firm got thiers, and everyone who worked hard to make the company what it was got axed (some had been there from the begining). 6 people made a load of cash, 30 people got laid off, and we were doing well.

 

the people controling the cash are misusing it.