The poor get richer

[MosesPresley]

Conspicuous Regurgitation.

One way that the poor consume more than they earn is through questionable lending practices and that leads to:

Economy good for "repo man"

http://www.delawareonline.com/apps/p...008802150362As cash-strapped Americans fight to keep their homes, an increasing number are losing their cars.

The nation's busting economy has been a boom for the repo man.

Nationwide, auto repossessions are at a 10-year high, according to an economist at one of the nation's biggest wholesale auto auction houses.

"At the end of the day, you're going to protect your house before you protect your car," said Bill Gerhard, director of bank products for AAA Financial Services.

Or motorcycle.

On Thursday, two of Charlie Bryan's employees hauled a motorcycle away for delinquent payments.

The lot at Bryan's American Towing and Recovery in New Castle is jammed with SUVs and sedans. Repossessions have increased by about a third over the past two years, he said. He now repossesses about 400 vehicles a month.

Thomas Webb, chief economist for a unit of Atlanta-based Manheim, which has about half of the national automobile auction business, said that by the end of the year, repossessions are likely to have increased by about a third over 10 years ago.

Most of the repossessions come from large lending companies or banks like GMAC, Wachovia or Chase, Webb said.

Lenders in recent years relaxed their standards and took on more risky clients, leading to more defaults. The economy has slowed and more people are taking out loans on new or used cars, as opposed to leasing, Webb said.

Bryan recently repossessed a woman's motorcycle with 300 miles on it when her hours at work were cut.

Many repossessions are not hostile.

A lot of Bryan's business is taken care of for him -- people are voluntarily turning their automobiles back in to their dealer. That's good "if you don't want the embarrassment of me coming to your door every night, or day, or me coming to your job," he said.

Stephen Bennett of Hawkeye Recovery of Wilmington said business "is always good, and it's getting better. As the economy goes down, we get more and more work."

[CrONoS]

If the editorial is true, calculating the national inequality with the Gini Coeff. is not representative of the reality?

[Vanguard]

To be fair, there is undoubtedly some truth in the piece. The US has clearly been financing consumption at the cost of increasing debt. Since the very poor earn almost nothing, this makes their consumption look relatively high.

But it isn't a stable situation. The greatly increased relative wealth of the rich that results will eventually break the system.

Let's forget their BS data and go directly to their overall argument.

Essentially what Cox argues is that the rich are helping the economy by investing instead of consuming. So it doesn't matter what percentage of the economy the very rich own, they just invest all their extra money to help the rest of us.

This is standard conservative economic dogma. And also, not surprisingly, complete nonsense. It rests on the assumption that all economic activity, no matter what, is somehow "good". And since it is "good", it must be beneficial to society generally.

Alas, this the not the case. Rich people do not invest their wealth to benefit society. They invest their wealth to make the highest profit. Sometimes this means that they will invest in a society, building new businesses and employing people.

But sometimes it is more profitable to invest against a society, by speculating against those people investing in it.

In the abstract there is nothing particularly wrong with this. In a perfect economy, profits should mostly come from serving consumers.

But we have don't have a perfect economy. We have an economy with a huge debts. Every bit of debt we pile up makes it a little bit more profitable to invest against the future of the United States. And if that increased debt also comes from tax cuts for the wealthy, we are simply giving more money to people who profit by speculating against our future economy.

Capital has no nationality. If it is more profitable to destroy an economy than it is to build it up, then that is what all our extra capital will concentrate on doing.

[MrFun]

I'm not sure I buy into the idea that just because low-class people can buy DVD players and so forth, means that they are doing better.

[Ben Kenobi]

The other way the article lies is by substituting absolute poverty for relative poverty.

Absolute poverty is really the only measure that counts.

Relative poverty is a useless definition. Who cares if 90 percent of people make more money then me if I have what I need?

So because goods today are cheaper to make and much easier for realpoor people to buy, it is therefore equated that the poor are getting richer.

Yes, that is exactly the case. You can get richer by making more, or having the money you earn stretch further. I certainly would think I was richer if costs came down by half. It would mean that my money has more bang for the buck.

their position in society is still the same or worse.

Who cares about position? If I have what I need, position is useless.

In absolute terms the poor are doing better. Their money is stretching further then it used to.

[chequita guevara]

Can you eat a vcr, dumbass? Can you sleep in one at night?

[Ben Kenobi]

Can you eat a vcr, dumbass? Can you sleep in one at night?

Gee, so you'd be richer if the prices of stuff went up?



Consumer goods include things like beds, lightbulbs, you know the stuff you forget about but still need.

All I know if the less money I have to spend on those things, the more money I have to spend on eating better food and having a good house.

That's how the principle works.

[CrONoS]

Originally posted by chegitz guevara
Can you eat a vcr, dumbass? Can you sleep in one at night?

... So, are you suggesting that housing and food price has increased relatively to wage?


..... oops I forgot to say; Dumbass

[Aeson]

There are several reasons that the costs of goods have dropped so drastically, but perhaps the biggest is increased international trade. Imports lower prices directly. Cheaper inputs cut domestic companies’ costs. International competition forces producers everywhere to become more efficient and hold down prices. Nations do what they do best and trade for the rest.

Yah... but really we just exported our poor (or rather the jobs they do) to other countries and illegal immigrants. Good for us. Even good for (some of) them... but I don't think the people who actually make a good share of the stuff we consume are all that richer than their counterparts in the past.

Globalization and free trade are great things IMO, but their effects don't justify increasing income gaps.

[chequita guevara]

Originally posted by CrONoS

... So, are you suggesting that housing and food price has increased relatively to wage?

Yes.

[Sarxis]

The top fifth earn upwards of $170k a year, but spent half on food, transport, etc? Well that is some pretty kicking transportation, clothes, food..

While the bottom fifth actually spent twice what they earned? Almost $20k? So what!? What kind of food, clothes, transportation, do you think you can buy on $20k per year? And they make it sound like people who made that meager $10k in taxable income had a lot of non-taxable reserves to delve into. That doesn't sound like the low income people I've seen.

But I hope this article relieves the 'Haves' consciences at least a little.

[Ben Kenobi]

So if someone in Africa is making twice what he was last year, he's worse off just because a CEO in New York is making 2 and a half times more this year then last?

Why is economics a zero sum game?

[Kidlicious]

Originally posted by Ben Kenobi
Relative poverty is a useless definition. Who cares if 90 percent of people make more money then me if I have what I need?

Because the potential is there for you to have more.

[Kidlicious]

Originally posted by Ben Kenobi


Gee, so you'd be richer if the prices of stuff went up?



Consumer goods include things like beds, lightbulbs, you know the stuff you forget about but still need.

All I know if the less money I have to spend on those things, the more money I have to spend on eating better food and having a good house.

That's how the principle works.

The only way beds get cheaper is if you sleep on a crapier bed, as many poor people do. Bed's cost as much as $2000.

[Kidlicious]

Originally posted by Sarxis
The top fifth earn upwards of $170k a year, but spent half on food, transport, etc? Well that is some pretty kicking transportation, clothes, food..

While the bottom fifth actually spent twice what they earned? Almost $20k? So what!? What kind of food, clothes, transportation, do you think you can buy on $20k per year? And they make it sound like people who made that meager $10k in taxable income had a lot of non-taxable reserves to delve into. That doesn't sound like the low income people I've seen.

But I hope this article relieves the 'Haves' consciences at least a little.

Yep, the rich eat steak and lobster while I eat rice and beans. Suprise, suprise that they spend a similar amount of their income on food.