Trickle down or trickle up economics?

[disneysteve]

I assumed the OP meant Keynesian economics, but I could be wrong, of course.

Could you summarize what that means exactly?

[maat55]

Agreed.

Tripod - I don't have the time or the energy to rebut your post. The three charts I would post (if I had time) would be median income, income of the top 5% and the national debt over the last 25 years.

There's been much growth the last 25 years, but virtually all the benefits have gone to the wealthy. Which gets back to my original point - success from whose perspective?

When are people going to realize that the rich are rich because they make better financial decissions, while the poor make poor decissions. If the poor were to think and manage their money like the rich, they would both come closer to the center.

Instant gratification or lack of sacrifice and lack of financial education are the poors enemy, not the rich. IMO.

[disneysteve]

When are people going to realize that the rich are rich because they make better financial decissions, while the poor make poor decissions. If the poor were to think and manage their money like the rich, they would both come closer to the center.

In general, I agree with you, but you've got to admit that the rich (and even the middle class) generally start off in life with a competitive advantage. I work in a very poor area, one of the poorest cities in the country (I'm not sure if it is still ranked #1). I see how people live. I see indirectly the quality of the education. I see the way people struggle to accomplish basic things that you and I take for granted. I'm not saying it is impossible to overcome being poor if you make wise decisions and choices in life, but I do think it is tougher for those with limited means and limited education to know what those wise choices might be. It isn't like they have a lot of great role models.

[feh]

Could you summarize what that means exactly?

Here you go: Keynesian Economics

[feh]

When are people going to realize that the rich are rich because they make better financial decissions, while the poor make poor decissions.

Do you truly believe it's that simple? If so, please support your argument.

[m3racer]

In general, I agree with you, but you've got to admit that the rich (and even the middle class) generally start off in life with a competitive advantage. I work in a very poor area, one of the poorest cities in the country (I'm not sure if it is still ranked #1). I see how people live. I see indirectly the quality of the education. I see the way people struggle to accomplish basic things that you and I take for granted. I'm not saying it is impossible to overcome being poor if you make wise decisions and choices in life, but I do think it is tougher for those with limited means and limited education to know what those wise choices might be. It isn't like they have a lot of great role models.

I absolutely disagree. The opportunity to succeed is in place regardless of your financial situation. I grew up in a poor environment but was able to get a great education thru HARD WORK & SACRIFICE. Everything else is just a weak excuse.

[feh]

I absolutely disagree. The opportunity to succeed is in place regardless of your financial situation. I grew up in a poor environment but was able to get a great education thru HARD WORK & SACRIFICE. Everything else is just a weak excuse.

Of course, you are one data point. Let's look at a couple reports:

The Death of Horatio Alger
Graphic: How Class Works - New York Times

There are many other studies available that show the same thing. Feel free to google.

[disneysteve]

I absolutely disagree. The opportunity to succeed is in place regardless of your financial situation. I grew up in a poor environment but was able to get a great education thru HARD WORK & SACRIFICE. Everything else is just a weak excuse.

As I said, it isn't impossible to overcome being poor. Lots of people have done it and that's great if you are one of them. I just think it is more difficult for a poor child to succeed than it is for a child born to well-off parents. My daughter has a lot more opportunities open to her than most of the children I care for in my practice.

[tripods68]

Of course, you are one data point. Let's look at a couple reports:

The Death of Horatio Alger
Graphic: How Class Works - New York Times

There are many other studies available that show the same thing. Feel free to google.

m3racer made a good point that supports his claim.

That New York times had the Top Fifth Income above making $60K per year in 1988 pretty much remained in the same income bracket 10 years later 1998. At the same time, at least half of the bottom Fifth and Lower Middle Income in 1988 were able to move up to higher income brackets through hard work.

[feh]

m3racer made a good point that supports his claim.

I must've missed it. I believe his hypothesis is that anybody can become rich through hard work and sacrifice. How does his result indicate it's possible for anybody?

That New York times had the Top Fifth Income above making $60K per year in 1988 pretty much remained in the same income bracket 10 years later 1998. At the same time, at least half of the bottom Fifth and Lower Middle Income in 1988 were able to move up to higher income brackets through hard work.

That would appear to be an assumption on your part. What about the 50% of the bottom fifth that didn't change brackets?

I never stated it was impossible to change brackets. But it's well documented that it is not simply achieved by effort.

[tripods68]

I must've missed it. I believe his hypothesis is that anybody can become rich through hard work and sacrifice. How does his result indicate it's possible for anybody?

m3racer point was you can succeed in any environment through hard work and sacrifice and never claimed to be rich. He only mentioned "successful" which have different meanings to every individual/family. But I could be wrong.

would appear to be an assumption on your part. What about the 50% of the bottom fifth that didn't change brackets?

You can't just look at this data and starts making assumption, you have to look at the census to make further comparative analysis. But it is interesting, if you read NY times graph the group that makes up the lower middle and bottom fifth group were made up of high school or GED equivalents.

Lower middle class: 27-37% earned high school or GED equivalents.
Bottom Fifth group: 25-35% earned high school or GED equivalents.
These are compelling data since high school graduates household median income is $36,835 according the 2003 Census. While high school drop outs makes median household income around $22K a year.

[maat55]

Do you truly believe it's that simple? If so, please support your argument.

I use myself as an example. I started out a low incomer and am still one to a degree. I lived paycheck to paycheck, borrowed for cars, boat, ran up CC's.

I basically used my income to fund depreciating assets with interest. With the knowledge I have now, I no longer borrow money but instead invest, bargain with cash, limit depreciating assets and spend less than I earn.

I will never earn 250k a year with my hands, but will someday with my investments. This is the story of many millionaires today.

Everyone has this ability. Many don't know it, many won't do it. I would argue that a large portion of the dollars wasted by the poor, go to the rich, which is then reinvested.

If you do not know how the rich operate and the poor operate, you need to read more books.

[m3racer]

I never stated it was impossible to change brackets. But it's well documented that it is not simply achieved by effort.

Again, I emphatically disagree. I do not consider myself "smart"' by any means. I do subscribe to the theory that to achieve success it take 1% intelligence and 99% hard work. I'm simply amazed at the laziness of the average American. The system is in place. Just get an education! Is it really that hard to excel in school? NO IT'S NOT!! I wonder how our society would function if 90% of Americans were college educated? The irony is the large number foreign students that come to America to get an education, while most young Americans piss away that golden opportunity.

[m3racer]

BTW, I'm not saying in order to be successful you need a college degree. My point is that a good education can greatly help your chances of living a comfortable middle class life.

[rooskers]

If you do not have the skills, why should you be paid anything but a minimal wage. There are many people with minimal skills that would be just as willing to do the job for minimal pay. Now, if you have skills or learn a trade, then you have an opportunity to be paid a higher rate.

Pay isn't out of whack, that's impossible. Pay can never be out of whack in a free market. That statement is inherently false.

If an employer doesn't pay a competitive wage, then don't work there. If NO companies are willing to pay you more, it's because you're not qualified to receive the higher wage; in other words, you're not worth enough to them. That's not their fault, that's your fault.

I am a mathematics teacher in Oregon and they require a master's degree. I work in a rural school and as a result make a little over $30,000 a year. Maybe all rural school teachers in Oregon should just realize that the market has told us we are not worth it and either are their children. Instead we should all abandon the children and let them get their education from private schools where the teachers are paid far better. Those children who can't afford private school cannot blame their lack of education on the state but instead should blame themselves for not working hard enough.