When do you consider someone "wealthy" or "rich"?

Discussion in 'Business & Economics' started by Seattle, Aug 8, 2019.

  1. river

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    Write4U

    Brilliant , Just Brilliant .

    river
     
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  3. iceaura Valued Senior Member

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    Not necessarily, if you have a working free market. It depends on who is being paid more and who is more efficient.

    In the US since 1980 the cost of goods for the bottom 2/3 has been rising while hourly real wages for the bottom 2/3 have been stagnant and their production efficiency has increased.
    It disproportionately benefits the higher income - over time, it increases income and wealth inequality. In the US that inequality has already reached levels that suppress economic growth and productivity - market capitalism stagnates at these high levels of income inequality.
     
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  5. wegs Matter & Pixie Dust Valued Senior Member

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    Just from a sheer word comparison perspective, someone who is ''wealthy'' tends to save and invest more than the person labeled ''rich,'' who spends more than the wealthy person. Being ''rich'' can vanish in an instant, whereas ''wealth'' tends to be passed down generation to generation.
     
    Last edited: Nov 14, 2020
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  7. Seattle Valued Senior Member

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    That's true. I tend to think of wealth as something that anyone can have to a degree because it's just a mindset (discipline) and it's just having more than you need and you can control much of that.

    Rich, as you said, reminds me more of excess consumption and may not even involve wealth. It could just be debt. You could be "wealthy" with a couple hundred thousand if you weren't very materialist in nature and if you had everything paid for already.
     
  8. wegs Matter & Pixie Dust Valued Senior Member

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    Good points. I hadn't thought of it that way, that it all depends on one's lifestyle and mindset. I've read that wealthy people know how to ''make'' money whereas rich people ''have'' it (the examples were winning the lottery, or gaining it through an inheritance) Both wealthy and rich people could earn it making a living, but it's possibly the spend / save factor that makes the difference?
     
  9. Seattle Valued Senior Member

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    Really there is no difference as it's just semantics and it means whatever you want it to mean.

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    I just think that some people (regardless of how they get/got the money) spend more on assets that depreciate and others (who I would call wealthy) tend to spend more on assets that don't depreciate.

    The absolute levels don't mean much to me. I don't buy expensive cars and I keep my car a long time. A car isn't an investment and its value only goes down. If you put money in stocks and leave them alone you will create some level of "wealth" for yourself.

    If you rent you won't, if you buy a house you will, etc.

    I've seen people with relatively meager incomes leave a lot to their kids. I've seen people give something to their kids during their lifetimes and no inheritance and the kids end up with the same mentality (saving and giving something to their kids).

    It's a habit and a type of discipline (delayed self-gratification). It's not just something that applies to the uber-wealthy. It can apply to most of the population if that's what they want to do. Most don't.

    Actually when more people didn't rely/count on the government to take care of every problem this kind of thing was more common. Many people never used credit to buy cars and houses. They saved first. They didn't buy mansions. They built their own houses, lived in less expensive areas, etc.

    Today people come out of collage, buy a new car, get a house sooner and it's got to be large with plenty of space, impressive, etc.

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    That's not how you get wealth.

    Of course not everyone does that or can do that today but not everyone with a meager paying job needs to live in the most expensive cities either. If you don't make a lot, move to Ohio and you can buy a house with your meager paying job.

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    Last edited: Nov 14, 2020
  10. Write4U Valued Senior Member

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    The people who worked for Henry Ford, didn't need credit. He paid his workers a salary that enabled them to buy a Ford car.
    His workers had a stake in making good reliable cars, and Henry was both morally and financially satisfied....

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  11. Seattle Valued Senior Member

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    He also hated Jews didn't he?

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    Most people also didn't work for Henry Ford.
     
  12. Write4U Valued Senior Member

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    Most people also didn't get paid as much as Ford employees.

    I was not addressing his political views (of which I know very little), but as an employer he had found the secret to a happy workforce and company profits. The truth of this is obvious to anyone giving this a moment of thought.

    I have a recollection of a TV show where a big prosperous farmer received a sizable tax-break as part of an economic stimulus plan and incentive to hire more help and was interviewed by a reporter who filmed the interview.

    The reporter asked what the farmer was intending to do with this economic stimulus and if he intended to hire more help, to which the farmer replied that he put the money in the bank and had no plans to hire anyone. His motive was entirely reasonable; "I have all the help I need and I am not about to pay extra people for standing around doing nothing. They are not needed here."

    Economic stimulus in the hope that these economic incentives create a trickle down prosperity is a MYTH!
    It never happens

    If 1 penny of every dollar granted to the "job creators" is actually used to create a job, that would not hire bus boy in a diner. Trickle down capitalism is an oxymoron by definition.

    Trickle-down economics
    https://en.wikipedia.org/wiki/Trickle-down_economics
     
  13. Write4U Valued Senior Member

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    As usual George Carlin brought sunshine to this deliberately obscured scheme that makes the rich richer, under the tortured logic (the BIG LIE) that making the rich richer somehow translates in making the poor richer......

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    (warning crude language)


    Does this remind of the "outgoing" current president.
    Anyone notice the stock-market lately. Doesn't seem much affected by the economic woes of the nation, does it? I see no Fortune 500 companies going bankrupt. They have laid off a lot of people!

    Hopefully Biden/Harris will prove that there still are some politicians left who have dedicated themselves to the concept that a rising tide should lift all boats, not just the 15,000,000 yachts, and letting the people in the row-boats drown.
     
    Last edited: Nov 14, 2020
  14. wegs Matter & Pixie Dust Valued Senior Member

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    Yea, unfortunately, many go into debt to appear wealthy and our culture is a bit shallow in that regard. Better to live minimally and store up some money for a “rainy day” if you can, because consumerism doesn’t yield happiness. I think of all the things I’ve wasted money on and have learned the hard way that all of those things didn’t bring me peace or joy.
     
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  15. iceaura Valued Senior Member

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    Having inherited enough equity in a house to collateralize a business loan is not a matter of mindset.
    In the US, for example, it's significantly a matter of race - along with the other features that correlate with membership in the lower working classes.
    The people who bought houses during W's tenure as President lost large amounts of wealth - the people who rented did better, on average.
    That was especially true of black people - in the Second Republican Crash (the 2008 one) a lot of equity - wealth - was transferred from black people to people like Trump.
     
    Last edited: Nov 14, 2020
  16. iceaura Valued Senior Member

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  17. Seattle Valued Senior Member

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    No one loses money when the housing market goes down unless they also lose their job and have to move. If you don't sell, nothing changes. Eventually you will have wealth again. Your skin color doesn't matter.
     
  18. Seattle Valued Senior Member

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    Why are you talking about trickle-down (supply-side) economics all of a sudden?

    Regarding a stimulus check, it's to help one remain whole.If you receive a stimulus check you're not expected to go out and hire someone. If you are a business who wants to stay open, it can help.

    The Laffer curve, like the Phillips curve do have a positive effect within a certain range. Outside that range the effect is less. Most of those terms were used more commonly when taxes were extreme and when interest rates were extreme.
     
  19. iceaura Valued Senior Member

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    Or they have an adjustable rate mortgage and interest rates go up when they can neither sell or refinance.
    Or they have to move to keep their job, and cannot sell or refinance.
    Or a couple of other little wrinkles.
    Yep.
    That's what happened to a majority of lower working class people who bought or borrowed on houses during the Republican administration of 2001 - 2009. Especially to black people, of course (steered into ARMS and bubble neighborhoods via racially bigoted moneylenders, first to lose jobs, denied refinancing on various racially loaded grounds, etc etc etc), but also to the white lower working class.
    The Crash and tax policy transfer of wealth from the lower 2/3 to the upper 1/10, of which the total mortgage looting in its various aspects was a plurality, was large enough to sabotage the entire US economy, which has yet to recover despite some beginnings of progress during the last half of the Obama administration (the current administration squelched that trend).
    That is not true, on average, in the lower 2/3 of the US economy since 1980. Most losers in the Second Republican Crash (for example) are not regaining their lost wealth, but remaining plateaued or continuing to lose it. And skin color is the single most significant correlative and predictive factor in such disasters - has been for more than a century (before the Republican botching of Covid black people in the US were predicted to cross into negative median net household equity in 2038 - and of course Covid, like almost all diseases and health problems in the US, hit them sooner and harder than it hit white people - individual net equity, median per capita wealth, is by some measures already negative among black adults in the US).
    The US economy has never been in that range.
     
    Last edited: Nov 15, 2020
  20. Seattle Valued Senior Member

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    Interest rates have come down and not up for quite some time. In any event, the first part that you mentioned applies to anyone.

    The rest is either just your standard rant or a result of borrowing more than they could afford. If the loans weren't made you would have cried foul (racism) and later when loans were tightened for everyone you now say that's racism in action.

    Your standard, they are helpless, rant.

    When interest rates are already high, any increase in taxes does have negative effects. When it's not so high, the effect is not as clear. It's the same with inflation and the unemployment rate. Doing more to bring the unemployment down even lower is not as inflationary with today's level of inflation. When inflation was much higher it was something to consider.
     
  21. iceaura Valued Senior Member

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    Nothing like that appears in any post of mine.
    I'm posting about what happened. Your interpretation of the implications of capability, helplessness, mental attitudes and character flaws, etc, are beside the point.
    If you want to argue that the facts of what happened imply that the victims of the Republican Crash were helpless or otherwise of flawed character, nobody can stop you - but my posting is not involved.
    Too late. That hasn't helped those who lost their wealth in the Republican Crash of 2008 - it's done them harm if anything: they can't even earn significant interest on their savings accounts or bond purchases now.
    The Crash was a dozen years ago. The ARM adjustments that broke the camel's back are matters of public record.
    No, it isn't.
    That's why you can't actually argue against any of it, and keep posting jerkwater platitudes with no basis in historical fact.

    Unfortunately for the American rightwing crowd, this is public record, historical event, stuff that happened - when you post half-comprehended muddle from the first chapter of an economics textbook you never read through, the conflict with what anyone who was paying attention remembers from real life is immediate and stark.

    For example: The idea that a few poor people in America for some reason suddenly deciding to take out larger mortgages than they could repay - and apparently holding a gun on their local bankers, to get them to fork over the money - brought down the entire Western financial system on three continents and ruined dozens of the largest banks in the world, is a stupidity so crass one can hardly believe it is honestly endorsed by grownups.

    The fact that conning desperate, ignorant, or vulnerable applicants into taking out mortgages that are larger (or set up to get larger) than the applicants can possibly repay is illegal in the US - that there are laws against predatory mortgage lending, for good reason, and lefties favor them is just the beginning of what's wrong with this wingnut fantasy. The fact that the entire American residential real estate market - not just the working class's small overborrowing fraction, the whole thing - was less than one tenth the size of the derivative market that led the collapse, is merely another letter in the game of horse's ass that they lost twelve years ago when Goldman Sachs came hat in hand (and visible fear in aura) to W's White House (to cover emergency cash loans whose origin no one has ever described - although it's no secret who on this planet would have had that kind of money on hand, or how they would have reacted to a failure of Goldman to obtain government bailout money as promised).
    Silly boy.
    Why the American wingnut has to invent stupid shit for other people to would have said if things had been completely different than they were is obvious. Why they try to pin it on people who are right in front of them and laughing at their inability to invent anything plausible is less obvious.
    Your dumbass fantasy world doesn't exist. I've been all over this forum advocating tighter bank regulation, and warning that the regulations haven't been tightened enough and aren't being enforced by this Republican administration, for example. Nowhere, ever, have I said that the recent and inadequate tightening of mortgage lending in my State is racism in action.

    In the real world I and the people like me not only said the opposite of what you just invented there, but put money behind it - the lefties and liberals in my State organized with other States and paid lawyers to try to block the racist mortgage lending that we could see was going to blow up in our neighborhoods, and tried to get the Feds to regulate the banks - beginning by enforcing the laws being broken and the regulations being ignored. We were beaten by the Republican administration and its pet Court.
    Btw: You want employment rate, not unemployment rate, for that argument.
     
  22. Seattle Valued Senior Member

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    No one is arguing that Goldman Sachs wasn't at fault. This is what happens when you protect firms from the free market at the same time as regulating that market but not enforcing those regulations.

    No, I don't but employment rate and unemployment rate are different ways to describe the same thing, obviously.

    I was referring to the relationship between inflation rate and the unemployment rate. If you drive the unemployment rate lower, inflation increases. At a time of low inflation, this is less of a concern.

    However, as we both know, you just want to argue and aren't particularly interested in factual matters. You're more interested in the "Republican Crash" and talking about "wingnuts".

    Carry on.
     
  23. iceaura Valued Senior Member

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    And I noted your argument works better from the relationship between the inflation rate and the employment rate. Lord knows why I bothered.
    No, they are not.
    (Your earlier attempts to claim that I had never studied economics are beginning to arouse a certain suspicion, given the rule of thumb for rightwing trolls and your repeatedly displayed ignorance of basic economics in these posts)
    So?
    This is your bs, posted right here:
    No, it wasn't. Pay attention.
    Your fantasy world does not exist, did not exist then, and never has existed.
    For the umpteenth time in dealing with your infantile "economics": Not necessarily.

    Depends on when, how, and why - for starters, how high they were in the first place and how they got to that level.

    If you drive the unemployment rate lower by putting hundreds of thousands of working age adults in jail at a time of high unemployment due to bad tax policy, say, you might get no increase in inflation at all - or even deflation from a decrease in demand.

    And inflation might also increase sometimes if you drive the unemployment rate higher. That's what the Republican shitforbrains are all hot and bothered about with the 15$@hr minimum wage, for example - it's supposedly guaranteed to boost inflation and unemployment at the same time, on their planet.
    We are reminded that the rise of fascism as the dominant political movement in modern America, and one of its major consequences - the biggest economic crash since the Depression that ushered in WWII - don't count as "factual matters" in the Bandarlog universe.

    Looking more closely, the entire W&Cheney administration has all but vanished from the public discussion, along with the Republican Congress that continued its efforts - if one relies on American corporate media, Trump took office in a world made entirely by Obama (and the history of the Republican Party he represents begins in the year 2016).

    People wonder why I end up repeating myself on this forum.
     

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