Posted on 02/06/2008 5:53:34 PM PST by Lorianne
It was always tempting to dismiss the ownership society as an empty slogan--"hokum" as former Labor Secretary Robert Reich put it. But the ownership society was quite real. It was the answer to a roadblock long faced by politicians favoring policies to benefit the wealthy. The problem boiled down to this: people tend to vote their economic interests. Even in the wealthy United States, most people earn less than the average income. That means it is in the interest of the majority to vote for politicians promising to redistribute wealth from the top down.
So what to do? It was Margaret Thatcher who pioneered a solution. The effort centered on Britain's public housing, or council estates, which were filled with die-hard Labour Party supporters. In a bold move, Thatcher offered strong incentives to residents to buy their council estate flats at reduced rates (much as Bush did decades later by promoting subprime mortgages). Those who could afford it became homeowners while those who couldn't faced rents almost twice as high as before, leading to an explosion of homelessness.
As a political strategy, it worked: the renters continued to oppose Thatcher, but polls showed that more than half of the newly minted owners did indeed switch their party affiliation to the Tories. The key was a psychological shift: they now thought like owners, and owners tend to vote Tory. The ownership society as a political project was born.
Across the Atlantic, Reagan ushered in a range of policies that similarly convinced the public that class divisions no longer existed. In 1988 only 26 percent of Americans told pollsters that they lived in a society bifurcated into "haves" and "have-nots"--71 percent rejected the whole idea of class. The real breakthrough, however, came in the 1990s, with the "democratization" of stock ownership, eventually leading to nearly half of American households owning stock. Stock watching became a national pastime, with tickers on TV screens becoming more common than weather forecasts. Main Street, we were told, had stormed the elite enclaves of Wall Street.
Once again, the shift was psychological. Stock ownership made up a relatively minor part of the average American's earnings, but in the era of frenetic downsizing and offshoring, this new class of amateur investor had a distinct shift in consciousness. Whenever a new round of layoffs was announced, sending another stock price soaring, many responded not by identifying with those who had lost their jobs, or by protesting the policies that had led to the layoffs, but by calling their brokers with instructions to buy.
And how can MOST people earn less than the average income? Can some math whiz explain that to me?
Easy. 5 people each earn $10. One person earns $100. The average income is $25. 5 of 6 (most) people earn less than the average (mean) income.
Perfectly possibly, depedning on which average you use.
Say there are five people, earning $10, $20, $30, $40, and $900. Average income is $200, but 4 out of 5 earn less than that.
OK fair enough, I understand. We can’t all be Bill Gates, so Bill Gates owes us.
The median is the level at which as many are above it as below. The average is the total amount divided by the numer of people. Conside - if person 1 earns 100000 and persons 2-10 earn 1000 the average will be above 1000 and 9 of 10 below it.
The average is just that -- total income divided by total households equals average household income.
The median is the point at which half the household incomes are higher and half are lower.
The mode is the most common household income.
So, yes, there can be a distribution that has more than half the homes below the average. But the median would be split 50/50.
The most interesting thing about the article, though, is its presumption that the most important task for politics is income re-distribution. Not growing the economy. Not raising the poor. But re-distribution, from the rich to the poor. Sharing the misery.
In other words, pure Marxist Communism.
Sigh, well, it is The Nation.
Regurgitation alert ...I'm not a statistics expert but there are three ways of measure averages, mean, median and mode.
And how can MOST people earn less than the average income? Can some math whiz explain that to me?
The statment makes perfect sense when you weight incomes for the wealthy who may earn many times the average. For example: say out of 100 people, 90 make $1000/mo and 10 make $100,000/mo, the average income for the 100 will be $1090, 90% of which are below the average income.
It’s like Lake Wobegon, where all the children are above average.
Or in a socialist state, where everybody is equal at all times, as are all outcomes. Which explains why all socialist states have a few people who own everything and control all power, and everyone else are starving peasants.
It’s elitist math: the elites win, and everybody else loses. So everybody is equal. If you disagree with the math, you are an anti-social, reactionary hooligan who should be shot.
That is unless unless they have the slightest moral sense, or have an understanding of economics, or prefer a free society to a statist one, or aspire to one day make it big, or half a brain.
Thanks, I can see how just a few Bill Gates’ thrown into the mix makes most everyone else extremely BELOW average.
Liberal/socialist/communist/democrat, economic philosophy in a nut shell.
Average annual wages 2001 2002 UNITED STATES(3)................ $36,219 $36,764 1.5
The top one is from the Census Bureau, and the bottom one is from the Bureau of Labor Statistics. While it's true that most people are below average income earners, we can see that they're not much below the median income - only 20% below.
This no doubt true. But it is also true that stock probably makes up the majority of the average American’s savings (if he/she has any) even if they don’t realize it.
Most Private retirement accounts are invested in stocks, most (probably all) company held retirement funds are invested in stocks, all whole life insurance funds are invested in stocks. If you have an interest in a saving plan or company retirement fund you are most likely invested in stocks unless you made very conservative (stupid) investment decisions.
And if you are smart you will not derive any income from these investments until you retire. If you have done well you will not be of average income by then, you will be of above average income.
THIS reminds me of a shirt tail relative of mine whose daughter is attending the Univ of Washington and taking an “Ethics” class. Her class was assigned to write a paper on why everyone should give all their money to the poor of the world.....she decided to take the opposite view....and explain WHY that is a ridiculous idea.....it was just due yesterday, so I don’t know how she did....but she was extremely nervous about the whole thing. The Marxists are EVERYWHERE!
“That is unless unless they have the slightest moral sense, or have an understanding of economics, or prefer a free society to a statist one, or aspire to one day make it big, or half a brain.”
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Moral Sense? To a Democrat it is moral to take from the evil, oppressive, manipulative, price-gouging rich.
Understanding of economics? Democrats will settle for 1% economics growth (or even less) if that means that people get paid exorbitant wages (with benefits) and have little risk of losing their job.
Free society to a statest one? The Democrats answered this question roughly 80 years ago with the New Deal, and they haven’t had thier fill of big government since.
Aspiring to one day make it big? Why not make it big with a nice big tax-payer funded government job? You can be completely incompetent and yet still make 5 (even 6) figures with very little fear of losing your job. Plus, you get to vote yourself pay-raises instead of competing in the free-market for them. Sweet! /s
Half a brain? Democrats are still smart enough to understand the fatal flaw of an increasingly democratic society. You can always vote yourself a chunk of the national, state, and local treasury. Which is exactly what they are doing to a larger degree every year.
Sure... some very rich people earn several times the average.
Well, if you count both dividends and capital gains the average return is 10%. That means that you would have to have 10 years of income saved as stock to have your typical stock gains match you income. That's on top of any real estate, bonds or cash savings. That's pretty tough no matter what your income level is. Even if you are retired, you should have moved to a majority of bonds, thus not making the majority of your earnings in stocks.
most people earn less than the average income
If it were the other way around, with most of the people earning more than average, that would mean you have a lot of middle class people with a few desparately poor ones. For example 9 people making $50k and one making $5k. The nine would have above average income. Libs would scream at the inequality of that too.
The Republicans have been hawking home-ownership as the road to the American Dream for years.
However, the subprime mortgage mess rather than making home ownership easier, has actually turned homes into just another commodity.
It is one thing to be a "landowner" with several tillable acres of land near abundant water supplies. It is another thing to have part interest in several high-rise condos that you hope to flip.
Being able to buy a home ... after accruing a reasonable down payment ... and a decent credit rating ... and a decent enough income to pay a mortgage ... that is the road to the American Dream. It is the attitudes and habits of self-discipline, thrift, etc. that allow people to eventually achieve the American Dream.
People getting into "homes" with no money down and illusory mortgage payments ... and immediately using what equity they had in the home to buy jet skis and big screen TVs ... is the profligate way back to the poor house.
I certainly hope that noone in the White House actually said something like: Well there's a whole lot of silliness going on in the mortgage market, but lets not put a kibosh on it because ultimately having more home owners is a good thing!
Living Large [Drew Carey on America’s Middle Class]
To hear the Lou Dobbses and Bill O’Reillys of the world—not to mention politicians ranging from Ron Paul to Hillary Clinton—the middle class of America (however you define that term) has never had it so tough. Between credit squeezes, out-of-control immigration, rising costs of education and health care and everything else, it’s all darkness out there for those of us who are neither millionaires nor welfare cases, right?
In “Living Large,” Drew Carey and reason.tv examine the plight of the American middle class. What do they find?
http://reason.tv/video/show/61.html
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