concentration of wealth

[alarmclock]

Let’s assume for this posting that the societal concentration of wealth is a bad thing (that is, at the macro level, we do not want a handful of families to own everything).

Employing armchair economics, do you think the uproar in housing & credit is going to concentrate or dilute wealth in the US? There are some generally accepted measurements (Lorenz curve / Gini coefficient) regarding the concentration of wealth, FWIW.

I think (hope) that a lot of wealthy folks are losing their butts right now, e.g. Merril, GS, etc. OTOH, I don’t know if teleporting shareholder value from WaMu in ’07 to builders/homeowners in ’05 is/was a gain or loss of concentration.

World-wide, I think it’s a no brainer that the US share of wealth is shrinking, to the benefit of the Middle East & Asia.

[studenteconomist]

I don’t think the credit bubble is having a reversal of the concentration of wealth in this country. In fact, I think it is the opposite, albeit only a small amount. About 70% of Americans “own” their homes (or at least have a mortage for their home). Thus if the average price for housing drops in the US, then most of us have a lower net worth. Now, does the average American or the richest Americans have a higher percentage of their total wealth in real estate? It should be pretty obvious to most people that the average American has most of their net worth in the home, while the same is not true of the rich. Thus the average American is seeing his net worth decline due to the housing bust while the rich may or may not be suffering (it depends on how their non-real estate assets are performing).
On another point, globalization has shown no letup this decade, and this trend is due to the rapid concentration of wealth much more than housing is. So I think that you will see increased concentration of wealth throughout this decade and probably much longer. I would agree that this is mostly a bad thing, but there are some positives in this trend.

[kev374]

I think the big wigs are going to get wealthy regardless. The losses are always distributed to the hapless middle class shareholders, the fat commissions, big Wall St. bonuses and fat CEO salaries have already been paid out. It’s too late for them to lose. I think the scammers on Wall St. have also exported a lot of these CDOs overseas to some ignoramuses there who have relied on bogus American rating firms like Moodys.

[kev374]

I think the big wigs are going to get wealthy regardless. The losses are always distributed to the hapless middle class shareholders, the fat commissions, big Wall St. bonuses and fat CEO salaries have already been paid out. It’s too late for them to lose. I think the scammers on Wall St. have also exported a lot of these CDOs overseas to some ignoramuses there who have relied on bogus American rating firms like Moodys.

[kev374]

I think the big wigs are going to get wealthy regardless. The losses are always distributed to the hapless middle class shareholders, the fat commissions, big Wall St. bonuses and fat CEO salaries have already been paid out. It’s too late for them to lose. I think the scammers on Wall St. have also exported a lot of these CDOs overseas to some ignoramuses there who have relied on bogus American rating firms like Moodys.

[kev374]

I think the big wigs are going to get wealthy regardless. The losses are always distributed to the hapless middle class shareholders, the fat commissions, big Wall St. bonuses and fat CEO salaries have already been paid out. It’s too late for them to lose. I think the scammers on Wall St. have also exported a lot of these CDOs overseas to some ignoramuses there who have relied on bogus American rating firms like Moodys.

[studenteconomist]

I don’t think the credit bubble is having a reversal of the concentration of wealth in this country. In fact, I think it is the opposite, albeit only a small amount. About 70% of Americans “own” their homes (or at least have a mortage for their home). Thus if the average price for housing drops in the US, then most of us have a lower net worth. Now, does the average American or the richest Americans have a higher percentage of their total wealth in real estate? It should be pretty obvious to most people that the average American has most of their net worth in the home, while the same is not true of the rich. Thus the average American is seeing his net worth decline due to the housing bust while the rich may or may not be suffering (it depends on how their non-real estate assets are performing).
On another point, globalization has shown no letup this decade, and this trend is due to the rapid concentration of wealth much more than housing is. So I think that you will see increased concentration of wealth throughout this decade and probably much longer. I would agree that this is mostly a bad thing, but there are some positives in this trend.

[studenteconomist]

I don’t think the credit bubble is having a reversal of the concentration of wealth in this country. In fact, I think it is the opposite, albeit only a small amount. About 70% of Americans “own” their homes (or at least have a mortage for their home). Thus if the average price for housing drops in the US, then most of us have a lower net worth. Now, does the average American or the richest Americans have a higher percentage of their total wealth in real estate? It should be pretty obvious to most people that the average American has most of their net worth in the home, while the same is not true of the rich. Thus the average American is seeing his net worth decline due to the housing bust while the rich may or may not be suffering (it depends on how their non-real estate assets are performing).
On another point, globalization has shown no letup this decade, and this trend is due to the rapid concentration of wealth much more than housing is. So I think that you will see increased concentration of wealth throughout this decade and probably much longer. I would agree that this is mostly a bad thing, but there are some positives in this trend.

[studenteconomist]

I don’t think the credit bubble is having a reversal of the concentration of wealth in this country. In fact, I think it is the opposite, albeit only a small amount. About 70% of Americans “own” their homes (or at least have a mortage for their home). Thus if the average price for housing drops in the US, then most of us have a lower net worth. Now, does the average American or the richest Americans have a higher percentage of their total wealth in real estate? It should be pretty obvious to most people that the average American has most of their net worth in the home, while the same is not true of the rich. Thus the average American is seeing his net worth decline due to the housing bust while the rich may or may not be suffering (it depends on how their non-real estate assets are performing).
On another point, globalization has shown no letup this decade, and this trend is due to the rapid concentration of wealth much more than housing is. So I think that you will see increased concentration of wealth throughout this decade and probably much longer. I would agree that this is mostly a bad thing, but there are some positives in this trend.

[gold_dredger_phd]

The Chinese sell us leaded toys and we sell them toxic financial products. A match made in heaven.

The US will have a more hour-glass-style society where there will be no middle class, just a bunch of wealthy people living behind barbed wire and the rest of us in shanty towns, I mean, McShantyTowns.

[LookoutBelow]

"Hour Glass shaped society".….NOPE…try again,… this time visualize a pyramid, look at the dollar bill again to remind you of the very top section

[LookoutBelow]

"Hour Glass shaped society".….NOPE…try again,… this time visualize a pyramid, look at the dollar bill again to remind you of the very top section

[LookoutBelow]

"Hour Glass shaped society".….NOPE…try again,… this time visualize a pyramid, look at the dollar bill again to remind you of the very top section

[LookoutBelow]

"Hour Glass shaped society".….NOPE…try again,… this time visualize a pyramid, look at the dollar bill again to remind you of the very top section

[gold_dredger_phd]

The Chinese sell us leaded toys and we sell them toxic financial products. A match made in heaven.

The US will have a more hour-glass-style society where there will be no middle class, just a bunch of wealthy people living behind barbed wire and the rest of us in shanty towns, I mean, McShantyTowns.

[gold_dredger_phd]

The Chinese sell us leaded toys and we sell them toxic financial products. A match made in heaven.

The US will have a more hour-glass-style society where there will be no middle class, just a bunch of wealthy people living behind barbed wire and the rest of us in shanty towns, I mean, McShantyTowns.

[gold_dredger_phd]

The Chinese sell us leaded toys and we sell them toxic financial products. A match made in heaven.

The US will have a more hour-glass-style society where there will be no middle class, just a bunch of wealthy people living behind barbed wire and the rest of us in shanty towns, I mean, McShantyTowns.

[Author]

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