America takes notice of gap in incomes

Houston Chronicle) ^ | December 16, 2006 | MATTHEW BENJAMIN

[GodGunsGuts]

...

The portion of national income earned by the top 20 percent of households grew to 50.4 percent last year, up from 45.6 percent 20 years ago; the bottom 60 percent of U.S. households received 26.6 percent, down from 29.9 percent in 1985, according to the Census Bureau.

Meanwhile, average pay for corporate chief executive officers rose to 369 times that of the average worker last year, according to finance professor Kevin Murphy of the University of Southern California; that compares with 131 times in 1993 and 36 times in 1976.

...

[Toddsterpatriot]

Do you write like that to sound like you are saying something important when you're really just typing out meaningless words?

Just because you don't understand doesn't mean my words are useless. Why don't you explain how FR notes are backed by bonds? Why don't you explain how you can write derivatives for more than the value of the bonds in existence? Why don't you explain cash settlement?

Because you can't. LOL!

[GodGunsGuts]

If you want to refute something that was intended to be a serious work, then you should seriously refute it. Identifying random lines of text and then posting what amounts to snickering and cartoons in response does nothing to harm the author's credibility...And it most certainly doesn't help you own.

[nopardons]

Now wait just a cotton picking minute here! The CBOT didn't "open the CBOE; they allowed part of their FLOOR to be used for the CBOE, they entered into a partnership with the original members/seat holders of the CBOE and neither the CBOT nor the CBOE, which opened on April 26, 1973 had anything whatsoever, to do with Nixon's or our government's decisions on what to do about gold or debt or anything else.

And for the record, I know far more about THIS, than whoever wrote that drivel!

[nopardons]

What utter tripe!

[GodGunsGuts]

Thanks for being brief.

[nopardons]

Spot on!

[Torie]

Inflation, big time, is just around the corner eh?

[nopardons]

Of course you don't; you never do. You use OTHER PEOPLE'S WORDS....even when they are completely wrong!

You know nothing at all about the OVER THE COUNTER market, the CBOT, nor the CBOE; NOTHING and neither does your "expert"! OTOH, Toddsterpatriot and I do! And unlike Toddsterpatriot, I can tell you exactly what is still going on with the CBOE and to some extent, the CBOT today. I don't have to go do GOOGLE; unlike you. I don't need some supposed "expert" to tell me what's what; unlike those whom you've quoted, I AM THE EXPERT!

[nopardons]

Why don't you stop posting about things you know NOTHING at all about, which is repeatedly proven by your misuse of terms and bollixed up replies, that the rest of us have to keep correcting.

[nopardons]

Try it, it'll do wonders for your own replies. :-)

[Toddsterpatriot]

If you want to refute something that was intended to be a serious work, then you should seriously refute it.

He said FR notes are backed by bonds, they aren't. That's an enormous error. He doesn't understand how you can have more derivatives than there are bonds. It's easy. I can explain it to you. If you understood derivatives, you could explain it to me. So why don't you? To show you are credible.

[Toddsterpatriot]

If you want to refute something that was intended to be a serious work

This was serious?

What is surprising is not that it could happen. Government bonds are the tangible result of check-kiting pretending that ‘NSF’ checks have value. For a time people accept them as such but sooner or later the truth will dawn on them. At that point the value of bonds, whether fixed or floating rate, is doomed and will be wiped out like the biblical towns of Sodom and Gomorrah have been.

Wow!

[GodGunsGuts]

He said that FR notes are backed by *assets,* such as government bonds. I see nothing wrong with this statement:

"Government bonds today are not a legitimate instrument of saving as gold bonds of yesteryear were. They are supposed to have value because they are payable in FR notes at maturity. But what gives value to the FR notes? Why, it is the fact that they are liabilities of the issuing FR bank, backed by assets such as government bonds."

[nopardons]

That is neither "SERIOUS", or even accurate in any way.

[Toddsterpatriot]

He said that FR notes are backed by *assets,*

FR notes are not backed by assets, that's why they're called fiat! Boy do you sound silly.

They are supposed to have value because they are payable in FR notes at maturity.

Yes, you buy them with FR notes, they turn back into FR notes.

But what gives value to the FR notes?

He doesn't know?

[nopardons]

He doesn't appear to know much of anything, but since GiGi agrees with him, of course, he must be right! LOL

[GodGunsGuts]

That's why I put asterisks around assets. In other words, it's circular. Both are only worth as much as the faith people have in them. In other words, there is no intrinsic value in FR notes. And that's the whole point of the article. That's why he calls fiat money "irredeemable currency." So you were saying???

[remember]

Mase's deceptive charts don't prove whether Americans are better off now than they were back in the 1970s. First of all, Mase's charts compare FAMILY income. The problem with his charts are manifold. The biggest of which is the growing number of American families that have been forced to become two income families just to make ends meet. For instance, there are 11 times as many working married women with children under 6 years of age. If the goal of Mase's chart is to determine if American's are better off today than in previous generations, then this renders Mase's deceptive stats meaningless:

I agree that one must be very careful about reading too much into a small sampling of data. For example, Mase's charts in post #44 imply that wages have been going up. However, they look at just two real income levels, $50K and $75K, both of which are above the median wage. In addition, they are looking at family income, not individual income. On the other hand, the following graph contains U.S. Census data that shows that the real median income of full-time, year-round male workers has been stagnant since 1973:

The actual numbers and sources are at http://home.att.net/~rdavis2/ftyrinc.html. Then the following graph from the Bureau of Labor Statistics shows that the real average hourly wage of production workers is well below its 1973 high:

The actual numbers and sources are at http://home.att.net/~rdavis2//jobs.html.

[Alia]

From Fakete article: In their "Monetary History" published in 1963 Friedman and Anna Schwartz blamed the Great Depression of the 1930's on the 'Great Contraction' of the money supply in the United States during the period 1929 to 1933. This is where Friedman went wrong. He mixed up cause and effect. In reality the contraction of the money supply was the effect of the Great Depression, not its cause. Businessmen declined to borrow in spite of the extraordinarily low interest rate available, because they could not see any profitable business opportunities around. The Federal Reserve can print all the dollars bills it wants; what's the use if there are no takers? The idea of putting crisp Federal Reserve notes into circulation through helicopter-drop, attributed to Friedman by Bernanke, is puerile. There is no synthetic substitute for the enterprising spirit of businessmen in search of entrepreneurial profits. You can't push dollar bills down the throat of lethargic businessmen.

WOTT??? NO way.

What led up to the Great Depression was that households withdrew their deposits from banks, and held their money in currency. Bankers had to respond to this by reducing bank loans (a result of insufficient reserves).

Bankers had to increase their reserve ratios so they'd have sufficient cash on hand to LOAN to customers.

The higher reserve ratio reduced the money multiplier which ipso reduced the money supply.

From 1929 to 1933 money supply fell by 28% even WITHOUT the FedRes taking any deliberate contractionary action.

The net result? Higher unemployment and falling prices as a result to this massive fall in money supply.

And all of this was precipated by BANK RUNS, a goldbuggers dream come true.

So, in adding all this up: Fakete says that low-interest loans were abundantly available. And that no matter what the Fed did or didn't do, "can't push dollar bills down the throat of lethargic businessmen." So, the farmers are a lethargic lot of businessmen, he asserts. I think Fakete is an hysteric with an agenda, GGG.

Honest people can disagree about what led to the Great Depression; but the fact remains that GDP went down, for all countries. From 1929 to 1933 the money supply fell by 28%. The Feds did err in hindsight, in not offsetting this fall in the money multiplier with expansionary open-market operations, rendering a decline in the money supply.

OTOH, why the downing in aggregate demand? Stock prices had fallen about 90% during this period which decreased household wealth and consumer spending. Banking problems may have prevented some firms from obtaining financing for investing which would have depressed investment spending.

The entire concept of a central banking system was still very new in America, and taking baby steps.

But the core issue I take with Fakete's overall philosophy? Is his die-hard insistence upon "gold". Had we remained on the gold standard -- there'd far fewer businesses, entrepreneurs, developing countries. There'd be far more corporate monopolies. And ultimate the "one worlders" would have become a reality to our world. The fiat dollar tore into that monopoly. And I'm glad.

[Alia]

I suggest you do a study of how many Chicom slaves you get for the price of one American worker.

I understand your point and I considered actually doing the digging. But, it can be parsed more simply and obviously: Would you rather have 5 minimum wage workers working on your roof, or one professional roofer. The Marxist cant proffers that a coal miner should make as much income as a medical doctor. In terms of quality, under whom would you get the superior cure and treatment?

Back to manufacturing: An engineer working on the line, or a high school graduate?