Lou- how do you feel about the further concentration of wealth being transferred from the bottom 99% to the top 1%? I know that stating this sets off the "socialism" alarms in some, but the wealth redistribution upward in our country is true and undisbuted. How much weight would you give to this historic wealth transfer in contributing to our country's problems?
Ted,
What wealth is being transferred from the 99%? Is it the "country's" wealth? The government's? Or what each one of us is able to earn, save, and invest? I know the feel-good, populist nonsense spewed by the collectivist class warriors which has the criminally greedy "rich" screwing the virtous, hard-working poor. It is so much part of the popular culture that even the basketball genius, golfing basketcase Charles Barkley feels compelled to utter it in Feherty's entertaining show about golf.
Perhaps I can use sports to illustrate. Does anyone look at Kobe Bryant and intimate that he is basically stealing his team's wealth? During the 2010-11 regular season, the Lakers averaged 101.5 points. Kobe "produced" on average 25.3 of those points. Did the Lakers transfer those points to Kobe? Did 93% of the Lakers transfer 25% of "their" production to one player? We could monetize that and ask, is it "fair" that Kobe is paid 27% of the team's total payroll though he is less than 7% of the team (one of 15 players)?
I know the line of reasoning- Kobe or any "rich, fat cat" couldn't average 25.3 points or make miillions of dollars without the support of his team or cadres of workers (or the structure and institutions of society). There is really only one reason why Kobe and "the rich" are compensated as they are: they do something so relatively unique and rare that others are willing to pay them to do it. Except when government fosters a system of crony capitalism or fixes the officiating in sports as occurs occasionally in international competitions, it is that simple.
There are any number of studies on the concentration of wealth. The left can arrange its data points to demonstrates what it wants. There are a couple of threads on this site citing analysis that the concentration is overstated when looking at income and wealth on an after-tax basis, and income transfers to the lower socioeconomic groups.
To answer your question, the biggest danger to our economy is not that wealthy people are making too much money- OUR ECONOMY IS NOT A ZERO SUM GAME, and God knows the Fed knows how to run those printing presses- but that our expectations have grown much faster than our means or desire to meet them. We all want 35 hour work weeks, 6 week vacations, 12 paid holidays, free healthcare, all sorts of freebie insurance and benefits, a six figure salary, and a secure retirement at age 65 (55 or less if you're a government worker). Us and some 6+ billion people!
Unfortunately, Friedman is right that the world is indeed getting flatter- no great revelation here. And the so-called unknown unknown that we all really know is out there somewhere, but think if we call it a "Black Swan" it excuses our lack of preparation (inability to postpone gratification), will with some certainty come to bite us in the ass.
In the past, our margin for error was substantial. Today, with government spending at 24+% of GDP and trending upwards greatly when Obamacare "benefits" really come into effect, where do we go? Historically, tax collections have been in the 18 -19% of GDP. As the WSJ demonstrated, you can tax "the rich" at 100% of their income and it doesn't get us out of the pickle.
Our economy has long moved from brawn to brain; physical labor to knowledge. Despite doubling over a relatively short period of time our per capita "investment" in educating our kids , the majority are stuck in mediocrity. This, some very unfavorable demographic trends, and a self-indulgent, self-perpetuating ruling elite are the real dangers. Keep promising to the masses more of what they must know they can't deliver. Keep kicking the can down the road. As Keynes said, "in the long run we are all dead". Blaming things on those who produce might make some of us feel better, but unless the non-"rich" are going to start creating their own jobs and accumulate some of their own wealth, we will eventually earn our just desserts. Reality can be a real bitch. Perhaps we can at least appreciate the beauty of its simplicity.
Now, aren't you sorry you asked?