Where is wealth inequality going?

[Kaoru]

On a generational basis, the wealthy is getting richer. The current laws, via trusts, corporations and various other lawyer devices strategies has sufficiently matured such that a wealthy parent have the following means in terms of ensuring generational wealth:

1. better education for the kids - expensive universities & better tutors = better educational and future earning network outcomes

2. better lifelong support - kids get support in buying a house or getting ahead in life with capital purchases that would slow down another, average kid (imagine a 10k loan when you are 18, vs. 55).

3. better wealthy transfer.. (see above).

4. having fewer kids - more effective wealth transfer.

as such, the wealthy is trending wealthier..generation by generation. Look at bill gates, his mom is actually a successful VC. He didn't go to Harvard because it was randomly picked.

[LivingAlmostLarge]

The rich will perpetuate because they will give their children every advantage to get ahead. And the poor will stay poor because they can't give them college for free and house down payment and car. And middle class will shrink. Soon college and homes will be for those whose parents can afford it.

[Singuy]

The rich will perpetuate because they will give their children every advantage to get ahead. And the poor will stay poor because they can't give them college for free and house down payment and car. And middle class will shrink. Soon college and homes will be for those whose parents can afford it.

I am a firm believer that the advantages parents give to their children are not in the form of any private school/free college..but through teaching them the ability to make good life decisions from by being a positive role model. You don't have to be rich to provide this for your kids.

Look at the kids from poor incoming legal new generation immigrants living in the slums. Their kids usually ends up becoming MDs, graduating with honors, and not end up pregnant as a teen or on drugs. We all agree that immigrant parents are usually more intelligent, better decision makers, and having the ability to take calculated risks in life. They are usually at a disadvantage when it comes to language/cultural barriers which affects their ability to make money.

[disneysteve]

Look at the kids from poor incoming legal new generation immigrants living in the slums. Their kids usually ends up becoming MDs, graduating with honors, and not end up pregnant as a teen or on drugs.

That's different, though. The parents in those cases weren't raised in those conditions. They were often raised in other countries where things were quite different. They came here with the motivation and drive and commitment to build a better lives for their families. It's an entirely different mindset. In some cases I've seen, one parent (usually the father) had a successful career in the other country and gave it up to come to the US to start over. So when they get settled here, they're not starting from the same point as someone born and raised in poverty in the US.

Still, I agree that the teaching and role modeling is key no matter how much money you have. But you can't teach and role model good behavior if you don't know what that is yourself.

[disneysteve]

The rich will perpetuate
the poor will stay poor

middle class will shrink

So if the rich perpetuate and the poor stay poor, what exactly happens to the middle class? Where do they go? Do they elevate to the "rich" or do they decline to the "poor"?

Or, as I said previously, do we just keep changing the definition of middle class (which has no distinct definition anyway).

I keep hearing people say the middle class is shrinking but that would have to mean either the upper class or the lower class is growing but nobody ever really addresses that point.

[commoncentsmike]

I think that hits us sooner than later, we may very well live in a future of guaranteed income because there aren't anywhere near enough jobs to go around. That should make for an incredibly interesting debate when the time comes.

A few of the podcasts I listen to have discussed the idea of universal basic income and it's pretty interesting. Obviously on one hand it seems 100% unrealistic and too expensive, but there are a lot of things that could make it possible. And yeah, it's an interesting debate topic.

[Singuy]

That's different, though. The parents in those cases weren't raised in those conditions. They were often raised in other countries where things were quite different. They came here with the motivation and drive and commitment to build a better lives for their families. It's an entirely different mindset. In some cases I've seen, one parent (usually the father) had a successful career in the other country and gave it up to come to the US to start over. So when they get settled here, they're not starting from the same point as someone born and raised in poverty in the US.

Still, I agree that the teaching and role modeling is key no matter how much money you have. But you can't teach and role model good behavior if you don't know what that is yourself.

You sure that's not just an excuse? You think parents need to learn that being a drunk, poor, lazy and cheating on their spouses all day long is setting a bad example for their kids? Just because their parents did it doesn't mean they shouldn't break the cycle.

[disneysteve]

You sure that's not just an excuse? You think parents need to learn that being a drunk, poor, lazy and cheating on their spouses all day long is setting a bad example for their kids? Just because their parents did it doesn't mean they shouldn't break the cycle.

Person A who was born and raised in poverty in the US and only has a rudimentary education isn't in the same realm as
Person B who was a physician in India and moved to the US where their license isn't valid and they need to start over.

Person B is clearly in a better spot to make something of himself here in the US even though Person A and Person B might be living next door to each other in a crappy neighborhood.

[TexasHusker]

Reminds me of a friend of mine who owns an auto repair shop here. He was in a North Vietnamese prison for 7 years and he and his wife somehow escaped and made it to America in the 1980s.

He washed dishes for a good while, then went to work for a local transmission shop for a few years, and now he works very hard at his own shop.

He has three kids. Two were valedictorian in their high school classes of over 600. One graduated with honors from Northwestern, one Magna from U of Texas, another Magna from Brown I believe.

Two of them are completing their residencies, another one is practicing law.

Meanwhile, I was born and raised here, graduated the same high school, and had every opportunity, yet I was in the fourth quartile of the class and could only be accepted at a local junior college.

In America, you have the freedom to accomplish, or fail to accomplish.

Excuses are handy, however.

[disneysteve]

A few of the podcasts I listen to have discussed the idea of universal basic income and it's pretty interesting. Obviously on one hand it seems 100% unrealistic and too expensive, but there are a lot of things that could make it possible. And yeah, it's an interesting debate topic.

I've also heard and read a number of things about that. It's a really fascinating topic. As for expense, if it replaces a bunch of existing entitlement programs, it might not be nearly as expensive as people think while also being far more effective.

[Singuy]

Person A who was born and raised in poverty in the US and only has a rudimentary education isn't in the same realm as
Person B who was a physician in India and moved to the US where their license isn't valid and they need to start over.

Person B is clearly in a better spot to make something of himself here in the US even though Person A and Person B might be living next door to each other in a crappy neighborhood.

Lets not forget, people who comes for these countries were all living in poverty. You think my parents who came to the U.S in the 1980s were well off in China? China was borderline North Korea until they embraced Capitalism.

So yes, that physician may be doing well in India..but India is still a third world in which "doing well" is most likely having a lower standard of living than someone on food stamps in the U.S.

[corn18]

Something I heard on NPR once that has stuck with me:

You are a product of your expectations, not a product of your environment.

[disneysteve]

Something I heard on NPR once that has stuck with me:

You are a product of your expectations, not a product of your environment.

Life isn't so simple, though, as much as people like to pretend it is.

I work in a very poor area, frequently voted the poorest city in America and/or the most dangerous city in America. Do you truly believe that the residents here have all of the same options and opportunities as I do in my nice suburban neighborhood? If you believe that, you're fooling yourself.

People like to blame the poor for being poor. And certainly, there are things that some people could do to improve their situation, but it is typically people of privilege saying that stuff.

[corn18]

Life isn't so simple, though, as much as people like to pretend it is.

I work in a very poor area, frequently voted the poorest city in America and/or the most dangerous city in America. Do you truly believe that the residents here have all of the same options and opportunities as I do in my nice suburban neighborhood? If you believe that, you're fooling yourself.

People like to blame the poor for being poor. And certainly, there are things that some people could do to improve their situation, but it is typically people of privilege saying that stuff.

Move to MI. I can't find people that will show up to work on time more than 2 days in a row. If people can find their way across an ocean with nothing and make it work, someone in your poor town can certainly change their lot in life.

[Singuy]

Life isn't so simple, though, as much as people like to pretend it is.

I work in a very poor area, frequently voted the poorest city in America and/or the most dangerous city in America. Do you truly believe that the residents here have all of the same options and opportunities as I do in my nice suburban neighborhood? If you believe that, you're fooling yourself.

People like to blame the poor for being poor. And certainly, there are things that some people could do to improve their situation, but it is typically people of privilege saying that stuff.

I am not doubting that the poor lacks opportunities. It's their reluctance to do anything about it that bothers me.

Any parent from poverty ridden countries put their kid's education on top of everything else. Parents are willing to sacrifice their own nutrition so they can buy books for their kids. They might live in a shack with a leaking straw roof, but they will make sure their kids can grow up to be a decent human being and will provide them the best education they can afford.

Do you see this culture here? I see parents spend more money on their beers than their kid's weekly meals...because you know..they have to "relax" from working a hard 8 hrs day....while some poor guy in India works 14 hours a day sweeping the streets so his kid can go to a better school...

Why are there so many physicians who are Indian? Must be because they come from a rich country huh....

Like I said, the poorest person in the U.S already won the lottery...if some poor guy in a straw house can raise their kids to become something..why can't someone here on food stamps?