The Disparity Between Rich and Poor

Much has been made of the increasing disparity between the rich and poor in the United States, but I haven't really understood why it's happening or why something needs to be done about it. Thinking about this today, I wondered what factors have contributed to it. Here's what I came up with:

1.) Most immigrants arrive in the US penniless. This is the zero point of American poverty. As long as there are immigrants looking for better opportunities for themselves and their children, there will be poor people in the US.
2.) Upon arrival, first-generation Americans have to work very hard to accumulate wealth to the point of financial security, but because of their income level (and many times a higher-than-average number of children), they often have little or nothing to give their children to help them go to college or purchase cars or houses.
3.) The children are still better off than their parents. Because of a higher education level, a good work ethic learned from their parents and mastery of the English language, second-generation Americans can land better jobs than their parents did. They can earn more money and afford a higher standard of living. (Some may go to community colleges with government assistance and earn Associates' degrees or even better.)
4.) The children of second-generation Americans are completely assimilated. They've adopted American customs and dress, and don't speak with a noticeable accent. By working hard and making good financial and behavioral decisions, they can go to college and land salaried jobs they can retire from. They may even have a sizable inheritance they can pass down to the next generation.
5.) Once a family is able to pass family money from generation to generation, they can grow quite wealthy in just a few generations.

This is probably a typical scenario. Of course the kinds of jobs people have, the number of people a single income supports, their behavioral tendencies, and the social circles they are affiliated with can accelerate or break the cycle. The American custom of dual-incomes and fewer children has probably contributed much to the recent increase in the disparity between rich and poor. Remember the zero point stays the same: first generation Americans will almost always be poor, whether they are Irish immigrants in the 1900's or Mexicans in the 2000's. The only thing that changes is the how long a family has been in the US. My theory is that disparity between rich and poor comes not from racism or class warfare, but from the increased opportunities American people have created for their families over time.

The Lesson of Joe the Plumber

Obama assures us that tax hikes on the upper ($250K+) class won't affect normal $30-50K/yr average folks, which underscores a fundamental misunderstanding about how the economy works. There are many reasons why raising taxes on anybody while a recession looms is a bad idea, but increasing taxes on the job-creating class now is especially foolhardy. $250K+ people routinely support entire families on their discretionary income alone, something many of them will be cutting back on during impending hard times.

If you make a living in one of these industries, you should consider voting for someone other than Obama: general contracting or remodeling (plumbing, electrician, roofing, siding, carpeting, painting, etc.); home building; custom cabinet and furniture making; landscaping; clothier, haberdasher, dressmaker, eyewear or other fashion clothing manufacturer or boutique; professional photography; professional musician; fine artist or fine art gallery; luxury car sales and service; custom auto body shop or auto restoration; RV, boat or ATV sales; private education; gourmet food and drink; baker, chef or restauranteur; antiques and collectibles; consumer electronics; travel and tourism, including museums, aquariums, amusement parks and ticketed festivals; plastic surgery, cosmetic dentistry and other elective medical procedures; jewelry; real estate; financial planning, investment and venture capitalism; non-profit, religious and benevolent organizations; organic farming and grocery; high-quality musical instruments; high-quality sporting goods; ticketed events such as professional sports and concerts; event planning and DJ services; interior designer or decorator...

Get the picture? Pretty much any goods and services the average person cannot afford or has to put away money for will be affected. And these are industries that employ many average middle-class people. Obama wants to use the tax code to redistribute the wealth of the upper class amongst the middle and lower classes, but he forgets that the upper class redistributes their own wealth — the only difference is that rich people share their wealth with those they know to be deserving, honest and hard-working individuals (for example, my father, a self-employed custom cabinet-maker for 15 years). Obama says he wants to give everyone opportunity, but he takes away the primary incentive for working hard and producing quality goods and services — the acquisition of wealth by gaining the favor of those who have it.

A Smiley Story

I was walking through the skyway in downtown Minneapolis today when I saw a cleaning lady sweeping up a bunch of ice cubes scattered on the floor. For some reason, my first thought was that an "abominable snowman" had vomited there, and the mental image was so funny that even though I tried, I couldn't stop a smile from sneaking onto my face. I was dressed for business and wasn't supposed to be smiling so blithely for an unknown reason, but while I fought with the smile, a young and beautiful stranger, also dressed for business, saw the conflict and smiled with me. Completely naturally.

I don't know who she was. Just thought I'd share. :)

Best Science Images of 2008

National Geographic has just published its Best Science Images of 2008. This particular image caught my eye -- it shows the way the Bible cross-references itself. As Carnegie Mellon's Chris Harrison said, "It almost looks like one monolithic volume."

Palin a Closet Democrat?!

Rolling Stone Magazine presents "The Truth About Sarah Palin", presented (not surprisingly) without citations.

What Caused Our Economic Crisis? pt.2

Larry Lessig comments on the takedown of the video I linked to the other day. Via BoingBoing.net

A side note (for those who have seen the video) -- I have heard the Community Reinvestment Act mentioned as a leading cause of the the sub-prime lending crisis but definitely not the only cause, and probably not the root cause. I am still doing research on this, but the basic economic principles of supply and demand still apply, and ignorance of (or interference with) those principles is the root cause of nearly every economic crisis our country has experienced. Ironically, it is those very laws (i.e. Capitalism) that liberals attack as the cause of our problems. More on this as I do my research...