Author Topic: Causes of wealth inequality?  (Read 6095 times)

DTEJD1997

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Causes of wealth inequality?
« on: January 22, 2019, 10:49:24 AM »
Hey all:

I'm going to suggest that ONE of the biggest causes of wealth inequality in the USA is due to education and "educators".

In that, there are 2 things that are causing problems.

1). A dearth of business/finance/economics in grade school/high school.  This perhaps even the case at some colleges?  I generally went to good primary/high schools and received ALMOST no education in regards to the stock market, banking, personal finance (balancing a check book, insurance, savings, investments, living within your means, etc.).  There was some discussion of differences in capitalism/socialism/communism and such, but not a lot.

90% of what a person needs to know regarding personal finance can be taught reasonably well in 1 semester to anybody with a 6th grade understanding.

This is generally not being done. 

So if people don't know/understand how the system works/operates, then is it any wonder that they have limited opportunities and financial problems?

2). A lot of educators are engaged in "scams" to get money and funding for their class/program/school.  This is endemic and going on all over the place.

Look at the problems with Detroit Public Schools.  Simply shocking and a disgrace.  Generations of children are sold down the river, but the teachers/admins make out like bandits (which they literally are a shocking percentage of the time).

Then you've got colleges putting out false/distorted employment statistics trying to induce young people to take out mortgage levels of debt to get an education.

I would posit that if the education system were corrected, opportunity in America would increase quite a bit.  It certainly would not solve everything, but it would be a great way to get started!


MarkS

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Re: Causes of wealth inequality?
« Reply #1 on: January 22, 2019, 11:03:25 AM »
I would add that the last three decades of falling and or artificially low rates have benefited the wealthy and those in finance far more than those in main street.

rb

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Re: Causes of wealth inequality?
« Reply #2 on: January 22, 2019, 11:08:56 AM »
One problem with your theory DTEJD is that when wealth inequality was lower they still didn't teach business/finance/economics in grade school/high school.

stahleyp

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Re: Causes of wealth inequality?
« Reply #3 on: January 22, 2019, 11:21:25 AM »
I agree with that low rates plays a huge factor. I'll also say that globalization plays a big piece too.
Paul

DTEJD1997

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Re: Causes of wealth inequality?
« Reply #4 on: January 22, 2019, 11:23:54 AM »
One problem with your theory DTEJD is that when wealth inequality was lower they still didn't teach business/finance/economics in grade school/high school.

That very well may be...BUT not teaching certainly does not help.

Conversely, where would we be if it were taught starting in 6th grade?  A little at first, then more every year.  When you graduate high school, you then have a very basic knowledge of economics, finance, and ESPECIALLY personal finance.

You would have a lot more business start ups...more people saving/investing for their retirement, less credit card debt, less vehicle leasing, less student loans, better health care insurance, and on down the line.

Heck, I would go so far as to further suggest that you would have MUCH better tax rates and even government policies!

Maybe I'm just KRAZY though...

DTEJD1997

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Re: Causes of wealth inequality?
« Reply #5 on: January 22, 2019, 11:25:42 AM »
I agree with that low rates plays a huge factor. I'll also say that globalization plays a big piece too.

Yes, offshoring of industry/business certainly plays a part.

Education reform is simply on BIG component.  Fix that and you solve/make better a bunch of things/outcomes...but it is not the ONLY part of the solution. 

A solid start to fixing things though.

Gregmal

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Re: Causes of wealth inequality?
« Reply #6 on: January 22, 2019, 11:48:07 AM »
Offshoring is a big deal. But how do you fix it? Well, for starters, you'd have to give companies an incentive to pay more to keep workers here. But when you do that, the deadbeat liberals just whine about handouts for big, wealthy corporations... Can't win.

Ross812

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Re: Causes of wealth inequality?
« Reply #7 on: January 22, 2019, 12:55:35 PM »
Wealth inequality goes far far beyond school curriculum. Right now we are kind of observing a combination of 1) the transition from a industrial to an information/service economy and 2) the effects of decades of failed government policy.

Offshoring is a big deal. But how do you fix it? Well, for starters, you'd have to give companies an incentive to pay more to keep workers here. But when you do that, the deadbeat liberals just whine about handouts for big, wealthy corporations... Can't win.

Capitalism, in its purest form, is naturally going to optimize labor and equipment to make the corporation as efficient as possible. It seems like both sides of the aisle agree that unchecked capitalism is not going to work for the country. Both sides are essentially calling for some form of intervention on the capitalist machine. Examples:

- "give incentives to companies" (from above)
- mandate benefits (time off, minimum wage etc.)
- Tariffs (current administration) 
- Regulation (environment, financial etc.)
- Tax rate

In the 1930's the country reacted to the financial depression by creating a social safety net. Rather than mandating the benefits provided by corporations, the government took on the roll of taxing and paying for the "layer of protection".

In order to protect the interests of US capitalism and individual citizens the country spends money on defense and infrastructure.

The left and right are arguing about where to spend money and intervene in order to optimize our capitalist economy:

The Right: the dream is to grow the economy to the point where the individuals at the bottom have an acceptable quality of life. One aspect of this is to limit the number of individuals at the bottom to make it easier to bring the quintile along (ie cut immigration). Cut regulation and tax rates to make the machine grow faster. This sounds like a good strategy, but the system has been set up to reward those in the upper two quintiles at a higher rate than the bottom three quintiles of the population, so wealth inequality continues to increase.   

The Left:  wants to help the individuals at the bottom by mandating the corporation provide a certain level of pay and benefits. If all else fails, they want to maintain the social safety net. This is all paid for by taxing the corporation and the individuals with money in the top quintiles. This sounds alright as well except for it slow the growth of the machine. Those with means protect their wealth to slow transfer to those at a lower rung and we see stagnation.   

If the country wants to reduce the wealth gap, our capitalist system has to be allowed to grow while at the same time allowing those in the lower quintiles of the economy to gain at a higher rate than those at the top. It is going to be some tough medicine for those making 100k+ and it's going to take some ideas from both sides of the aisle because neither has a proven solution.

 
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SharperDingaan

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Re: Causes of wealth inequality?
« Reply #8 on: January 22, 2019, 01:09:49 PM »
The person in the homeless shelter doesn't understand basic finance? The women hooking for crack doesn't understand finance?
Or is it more that if your kid doesn't understand basic finance - it's because you (& not someone else) didn't teach it to them?
And if this education wasn't occurring, you still chose to do nothing about it?
Rags to rags in 3 generations is still alive and well.

The same thing occurrs around anti-vacination.
Until you've seen someone die, or become crippled, from the disease that you are protesting about; you really have no idea.
Too much bubble-wrap.

SD


rkbabang

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Re: Causes of wealth inequality?
« Reply #9 on: January 22, 2019, 06:04:01 PM »
If everyone is doing better, what does it matter that some people have much much more. <yawn> this is a big non-issue. Don't spend your life filled with greed and envy worrying about what someone else has.