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Income Inequailty in America: It's Far Worse Than You think


RollingRock
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A sombering read, to say the least. :( So what can/should we do about it? Are we already so deep into oligarchy that there's nowhere to go but down? Thoughts?

 

I have no problem with the more highly educated and experienced making more money. However the financial deck is stacked so the rich get incredibly richer each year while the poor flounder to simply stay afloat. Imho, the playing field needs to be leveled out, at least to some degree.

 

A sombering read:

 

 

 

 

In a candid conversation with Frank Rich last fall, Chris Rock said, "Oh, people don’t even know. If poor people knew how rich rich people are, there would be riots in the streets." The findings of three studies, published over the last several years in Perspectives on Psychological Science, suggest that Rock is right. We have no idea how unequal our society has become.

 

In their 2011 paper, Michael Norton and Dan Ariely analyzed beliefs about wealth inequality. They asked more than 5,000 Americans to guess the percentage of wealth (i.e., savings, property, stocks, etc., minus debts) owned by each fifth of the population. Next, they asked people to construct their ideal distributions. Imagine a pizza of all the wealth in the United States. What percentage of that pizza belongs to the top 20% of Americans? How big of a slice does the bottom 40% have? In an ideal world, how much should they have?The average American believes that the richest fifth own 59% of the wealth and that the bottom 40% own 9%. The reality is strikingly different. The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%. The Walton family, for example, has more wealth than 42% of American families combined.

https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/

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The hugely lopsided concentration of wealth at the top. And the deepening financial struggles of the bottom 40%, might be the biggest, best kept secret in the US today.

 

Considering tax laws and loopholes that largely exempt the very rich and are unavailable to everyone else, the wealth gap is bound to get wider. And the ultra rich have stashed vast fortunes in overseas banks, illegally deposited to avoid paying any taxes at all; While law enforcement looks the other way, by design.

 

And now we have an Oligarch executive entering office, backed by a totally Republican dominated congress and supreme court. A government almost surely committed to gut the social safety net.

 

As increasing numbers sink into destitution, the problem will become starkly apparent in the US and to the World.

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Perhaps we should collectivize all the wealth of these plutocrats and then send them to re-education camps where they can learn from self-criticism and forced-labor under the watchful eye of the party?

 

Bill

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Unfortunately, you are correct. It's been building up for decades now. We need to fight for change. It doesn't have to be this way.

The organized 1% didn't work for decades to get voted out. Change is not gonna happen peacefully. This is not the old British empire we are up against like it was with Gandhi. His method would not have worked against Hitler

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Realistically, we can't expect anything but more of the same, but an accelerated level for the next four years. If Trump goes, we get Pence. Even the mid-terms are highly unlikely to produce a 2/3 congressional majority necessary to override a veto.

 

But at the end of Trump' first term, poverty and homelessness may have gotten so bad, that the voting public will start to take the problem seriously. But we need the House of Representatives as well as the Senate and Presidency to effect real reform.

 

At a minimum, we need to:

End gerrymandering, one way or the other. And we need improved, tamper-resistant voting machines,

Start making it easier to vote, not harder.

Start enforcing already existing laws against hiding income, especially by secretly depositing it abroad.

Legislate more progressive tax codes.

Greatly expand the social safety net, not shrink what's left of it.

End war for profit.

Encourage labor unions instead of trying to wipe them out.

Repeal the so-called Citizen's United

Last but not least:-- Re-instate the fairness doctrine and end the domination of Right Wing talking heads on the airways.

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​Robert Reich cofounder of the liberal leaning American Prospect and former Labor Secretary under Bill Clinton supported Bernie Sanders in 2016. He recently authored Saving Capitalism: For The Many, Not The Few. In an interview with Rolling Stone he said the problem of wealth and income inequality is related to the market structure not just tax breaks for the rich, wage stagnation, or a lack of public investment. Reich cited bankruptcy laws that favor creditors, large corporations, and the wealthy in restructuring debt in ways ordinary people can't. He also identified the rise of monopolies in health insurance and pharmaceuticals that eliminate competition driving up costs to consumers.

 

http://www.rollingstone.com/politics/news/robert-reich-on-why-capitalism-needs-saving-20151007

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​Robert Reich cofounder of the liberal leaning American Prospect and former Labor Secretary under Bill Clinton supported Bernie Sanders in 2016. He recently authored Saving Capitalism: For The Many, Not The Few. In an interview with Rolling Stone he said the problem of wealth and income inequality is related to the market structure not just tax breaks for the rich, wage stagnation, or a lack of public investment. Reich cited bankruptcy laws that favor creditors, large corporations, and the wealthy in restructuring debt in ways ordinary people can't. He also identified the rise of monopolies in health insurance and pharmaceuticals that eliminate competition driving up costs to consumers.

 

http://www.rollingstone.com/politics/news/robert-reich-on-why-capitalism-needs-saving-20151007

 

That's all very true. Once you have money, it's relatively easy to make more money. However if you're down and out and paycheck-to-paycheck, you will likely remain so.

 

I've worked in healthcare for a long time and the costs involved with insurance and pharmaceuticals is astronomical. The fact that drug companies sell medications to other countries at a fraction of what they sell them to Americans is disgusting. People can't afford that. I have a dear friend who has multiple sclerosis. She had to hire an attorney to obtain Medicare and drug coverage so she didn't die. Without insurance, her medications would cost $4500/month out of pocket. Who can afford that?

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That's all very true. Once you have money, it's relatively easy to make more money. However if you're down and out and paycheck-to-paycheck, you will likely remain so.

 

I've worked in healthcare for a long time and the costs involved with insurance and pharmaceuticals is astronomical. The fact that drug companies sell medications to other countries at a fraction of what they sell them to Americans is disgusting. People can't afford that. I have a dear friend who has multiple sclerosis. She had to hire an attorney to obtain Medicare and drug coverage so she didn't die. Without insurance, her medications would cost $4500/month out of pocket. Who can afford that?

 

You'd have the pharmaceutical companies raise their pricing in desperately poor countries where there are very low wages compared to the USA, and find these discounts "disgusting?" :huh:

 

Bill

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You'd have the pharmaceutical companies raise their pricing in desperately poor countries where there are very low wages compared to the USA, and find these discounts "disgusting?" :huh:

 

Bill

 

You're ASSuming again, sparky. No, if a pharmaceutical company can dole out medications to third world countries on the cheap they can dole them out to Americans for the same damn price. Why price gouge anyone?

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You're ASSuming again, sparky. No, if a pharmaceutical company can dole out medications to third world countries on the cheap they can dole them out to Americans for the same damn price. Why price gouge anyone?

 

You called it "disgusting" that drug companies would sell their products at a reduced rate abroad. That attitude seems cruel to those in the third world from my seat.

 

Are you aware of the estimated cost of developing a new drug in this day and age?

 

Bill

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You called it "disgusting" that drug companies would sell their products at a reduced rate abroad. That attitude seems cruel to those in the third world from my seat.

 

Are you aware of the estimated cost of developing a new drug in this day and age?

 

Bill

 

Sounds like an ad put out by Big Pharma.

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The pharmaceutical companies get huge subsidies from the U.S. Government in the form of patent rights. Take a good look at how much they spend in advertising reworked drugs with renewed patent rights. I am very much in favor of changing the system, one possible idea would be to spend more federal dollars for drug discovery which would be performed by the NIH. Drug companies are skimming hundreds of billions of dollars from all people from patent rights, and this is hundreds of billions each year that could help the rest of the 99 percent. Yet, this is how and why trade deals are done in private. The trade deals are built to strengthen Corporate rights, patent rights being a major piece of the pie.

 

Peace!

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2.6 Billion dollars to get to market. 10-12 years of research and trials. Many Millions more in follow-up studies to ensure safety on efficacy.

 

Costs are near 3 Billion in total. And how many drugs go nowhere?

 

I realize Berners believe that everything in this world should be free (or rather that someone else should pay) but there would be no MS medications (or any other type of new drug) is pharmaceutical companies could not get a reasonable return on their investments.

 

That's real life economics. Not the leftist fantasy version.

 

When companies act with malice or greed, as in the case of Martin Shkreli (Turing Pharmaceuticals) or Epi-Pens I'm all for doing everything legally possible to slap them down.

 

But developing new drugs is a very expensive and risky business. Demonizing people who are bringing new technologies and medications to market is part of the politics of anger and resentment that most politically mature Americans find off-putting in the extreme.

 

Bill

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The pharmaceutical companies get huge subsidies from the U.S. Government in the form of patent rights. Take a good look at how much they spend in advertising reworked drugs with renewed patent rights. I am very much in favor of changing the system, one possible idea would be to spend more federal dollars for drug discovery which would be performed by the NIH. Drug companies are skimming hundreds of billions of dollars from all people from patent rights, and this is hundreds of billions each year that could help the rest of the 99 percent. Yet, this is how and why trade deals are done in private. The trade deals are built to strengthen Corporate rights, patent rights being a major piece of the pie.

 

Peace!

 

Getting patent protection for one's intellectual property isn't a government subsidy. If companies had to invest nearly 3 Billion dollars and anyone could rip off their work the development of new medications would cease.

 

Bill

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I disagree, actual worth in drug discovery per cost is way out of whack regarding profit incentive when you add in patent rights which harms the economy as a whole. 2014 the US economy generated some 18 trillion, your mentioning of 3 billion spent does not take into account the profits they reap due to patents. Far too much went to the top one percent. Patent rights actually hurt competition more then help discovery of new effective drugs. It is a huge government give away. There simply has to be a better way.

 

Peace!

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Here is an interesting research study regarding the use of the current U.S. patent system for drug discovery. I think it is very important to take into account lack of efficacy of new important drug discovery regarding cost to the taxpayer as well as cost effectiveness overall world wide. It's a lot to take in yet it's a clear critical view that one cannot illustrate in a few sentences. The current overall cost is daunting and simply should trigger significant policy change. Unfortunately it is not even being discussed by politicians these days / and I don't wonder why.

 

http://cepr.net/documents/publications/healthcare_stagnation_2007_03.pdf

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You called it "disgusting" that drug companies would sell their products at a reduced rate abroad. That attitude seems cruel to those in the third world from my seat.

Your seat is obviously intent on thinking the worst, regardless of what I say. I think it's great people in poor countries get cheap/free medication. That said, I think it's a travesty that people in the US often go bankrupt and/or homeless just so they can afford that same medication.

 

Are you aware of the estimated cost of developing a new drug in this day and age?

 

Bill

Not exactly, but I'm sure it's not cheap. Instead of price gouging working Americans (many of whom are struggling), maybe big pharma should stop doling out billions in executive bonuses and political lobbying....and invest some of their mad profits back into their company's R&D? Greedy fuckers.

 

http://www.occupy.com/article/killing-us-softly-five-deadly-sins-big-pharma#sthash.OLfxfYzu.hfrdENyU.dpbs

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Your seat is obviously intent on thinking the worst, regardless of what I say. I think it's great people in poor countries get cheap/free medication. That said, I think it's a travesty that people in the US often go bankrupt and/or homeless just so they can afford that same medication.

 

Not exactly, but I'm sure it's not cheap. Instead of price gouging working Americans (many of whom are struggling), maybe big pharma should stop doling out billions in executive bonuses and political lobbying....and invest some of their mad profits back into their company's R&D? Greedy fuckers.

 

http://www.occupy.com/article/killing-us-softly-five-deadly-sins-big-pharma#sthash.OLfxfYzu.hfrdENyU.dpbs

 

As I pointed out up thread, it starts pushing 3 Billion dollars all-in and 10-12 years of research to develop a single new drug. And there are big risks that a trial can go bad at any moment, leaving investments up in smoke.

 

Bashing everyone who tries to advance medicine as "greedy fuckers" is the problem of blind leftist ideology. It is not a rational response.

 

No one should abide those few who act criminally (like Martin Shkreli) but downing a whole industry is demagoguery.

 

Bill

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As I pointed out up thread, it starts pushing 3 Billion dollars all-in and 10-12 years of research to develop a single new drug. And there are big risks that a trial can go bad at any moment, leaving investments up in smoke.

 

Bashing everyone who tries to advance medicine as "greedy fuckers" is the problem of blind leftist ideology. It is not a rational response.

 

No one should abide those few who act criminally (like Martin Shkreli) but downing a whole industry is demagoguery.

 

Bill

 

I agree Bill. I would rather we look at the truth using statistical data - the patent system as it stands is as huge government giveaway that makes no sense economically. A lot of people who work in research, whether they work for the NIH or for private pharmaceutical corporations are in the business of trying to defeat disease for all. Yeah, there are some greedy assholes , I won't mention Martin Shkerli CEO of Turing Pharmaceuticals by name... but if I did, what good would it do?

 

Peace!

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I agree Bill. I would rather we look at the truth using statistical data - the patent system as it stands is as huge government giveaway that makes no sense economically. A lot of people who work in research, whether they work for the NIH or for private pharmaceutical corporations are in the business of trying to defeat disease for all. Yeah, there are some greedy assholes , I won't mention Martin Shkerli CEO of Turing Pharmaceuticals by name... but if I did, what good would it do?

 

Peace!

 

I know I prefer calling out the (actual) greedy asshole and jailing those who engage in criminality (and at a much higher rate than is happening today), to blasting everyone working in research to advance science and medicine as a greedy blood-sucker. I agree with you.

 

Unfortunately, the Left is in a full-time bashing mode that doesn't distinguish between those who are successful while contributing greatly to the nation's future and those who abuse the system. That failure will keep the Left a fringe movement without a future. Rightly so.

 

Bill

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I know I prefer calling out the (actual) greedy asshole and jailing those who engage in criminality (and at a much higher rate than is happening today), to blasting everyone working in research to advance science and medicine as a greedy blood-sucker. I agree with you.

 

Unfortunately, the Left is in a full-time bashing mode that doesn't distinguish between those who are successful while contributing greatly to the nation's future and those who abuse the system. That failure will keep the Left a fringe movement without a future. Rightly so.

 

Bill

I think a lot of folks are confusing things here regarding people who you call leftist and those who actually are truly trying to make a difference for all. There is in truth a huge neoliberal crowd that caters to the top 1 percent and this has gotten much more pronounced. It's global btw. The system is rigged and inequality as it now stands is a huge problem for everyone. That is not to say that anybody who works for a corporation is a bad person or that rich people who worked hard all their lives are bad people, many of them are great folks indeed.

 

It does not make sense that the average CEO earns 200 times the average workers pay. It does not make sense how we have subsidized oil companies in the past, yet the right goes wild when you try to turn the corner and go green, especially when you understand the true cost of fossil fuel usage in the past an on into the future. Call it leftist if you will, but facts are facts. What I want is a better more sustainable economy that is fair.

 

https://cleantechnica.com/2012/08/03/oil-gas-over-13-times-more-in-historical-subsidies-than-clean-energy/

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I'm sure many of you know more about the healthcare industry than I do. Still, I want to offer my observations.

 

Healthcare doesn't exactly follow the normal economic rules. When you're talking about computers (for example), most people will take a computer that's 95% as good if they can get it for 50% of the price. When it comes to medical care, that's not the case. If your life is on the line, you'll pay whatever you have to get the best possible treatment. That tendency is exaggerated when the cost of treatment is paid by someone other than yourself. If it's the government or your insurance company that has to pay the bill, you're going to scream if they try to cut corners and give you something other than the best, even if your illness isn't life threatening.

 

Drug companies exploit that. They will introduce a new drug or device that's only slightly better than the old one, then charge a much higher price. I tend to agree with Bill that this is a fair price to recoup their investment. But, it's causing the market not to direct capital in the most efficient directions. If you're a pharma company, the most reliable way to consistently meet your profit forecast is to gradually improve your products with low risk incremental improvements. The way things are now, you'll get just as many customers for coming up with a slightly better treatment as you would if you completely cured the disease...and your likelihood of success is much higher.

 

Market forces really aren't working that well in this situation. One possibility would be to make consumers feel the difference between a $100 pill and a $10,000 pill instead of paying a flat co-pay. I'm not saying to charge them $10,000, but maybe charge them much more than what they'd pay for the cheaper pill. To some extent that would direct revenue toward treatments that are cost-effective and influence researchers to change their approach.

 

Another possibility is to nationalize the whole thing. Let a federal agency decide which treatments are cost-effective and which ones aren't. The cost savings could be used to improve healthcare for those who can't afford it or for research. The Republicans would call it a 'death panel'. As with all federal bureaucracy, it would be painfully (lethally?) slow in responding to new technology.

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