Is this why people are poor?

[castille]

A recent MX poll (free newspaper found at most train/tram stops) discovered some interesting results about people and money.

The poll asked the question, "If you earned $1 million each year, how would you change your lifestyle?"

The question had multiple choices (summarised due to long length!):

• Party Lifestyle: Spend 75-100%, save little to none. Travel, throwing grand parties, new cars/TV/gadgets, etc.
• High Spending, Standard Saving: Spend approximately 50-75%, save the rest.
• Moderate spending, moderate saving: Maintain moderate lifestyle.
• Complete investment: Spend only enough for necessities, and invest everything.

65% chose the Party Lifestyle.
25% chose the High Spending lifestyle.
9% chose the moderate spending lifestyle
1% chose the Complete Investment lifestyle.



Additionally, an article on the UK Independent (8th January 2004, by Andrew Clennell) shows that the average IDEAL lifestyle would cost approximately £2.6 million a year! (thats a lot more in American dollars).


Is there any wonder why Americans are so poor? Why are most people in CREDIT CARD debt? (What is the point of having a credit card when you could pay cash and save on massive interest rates?)


Gee, I really wonder why most people are poor and in debt....

[PeterAngelo]

Americans have three needles in their arms sucking their lifes blood away and keeping them working slaves to a corrupt system.

1) Taxes.

2) Interest.

3) Support of church exemptions, and church banks, that pay no taxes and finance war machines in secret (Vatican Bank).

If there was equity in this economy, anyone who can pay rent should qualify for a mortgage.

Banks would pay more than 2% on savings while charging 30% for credit cards.

We are victims of an organized-crime gang government owned and controlled by the multi-national corporations, banks, and war machines.

It is as simple as that.

They depend on our greed, shallowness, and insipid stupidity to keep going.

It works.

When Corporations Rule the World
2nd Edition
by David C. Korten

It is ironic that corporate libertarians regularly pay homage to Adam Smith as their intellectual patron saint, since it is obvious to even the most casual reader of his epic work The Wealth of Nations that Smith would have vigorously opposed most of their claims and policy positions. For example, corporate libertarians fervently oppose any restraint on corporate size or power. Smith, on the other hand, opposed any form of economic concentration on the ground that it distorts the market's natural ability to establish a price that provides a fair return on land, labor, and capital; to produce a satisfactory outcome for both buyers and sellers; and to optimally allocate society's resources.

Through trade agreements, corporate libertarians press governments to provide absolute protection for the intellectual property rights of corporations. Smith was strongly opposed to trade secrets as contrary to market principles and would have vigorously opposed governments enforcing a person or corporation's claim to the right to monopolize a lifesaving drug or device and to charge whatever the market would bear.

Corporate libertarians maintain that the market turns unrestrained greed into socially optimal outcomes. Smith would be outraged by those who attribute this idea to him. He was talking about small farmers and artisans trying to get the best price for their products to provide for themselves and their families. That is self-interest, not greed. Greed is a high-paid corporate executive firing 10,000 employees and then rewarding himself with a multimillion-dollar bonus for having saved the company so much money. Greed is what the economic system being constructed by the corporate libertarians encourages and rewards. [See An Economic System Dangerously Out of Control .]

Smith strongly disliked both governments and corporations. He viewed government primarily as an instrument for extracting taxes to subsidize elites and intervening in the market to protect corporate monopolies. In his words, "Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.'' Smith never suggested that government should not intervene to set and enforce minimum social, health, worker safety, and environmental standards in the common interest or to protect the poor and nature from the rich. Given that most governments of his day were monarchies, the possibility probably never occurred to him.

The theory of market economics, in contrast to free-market ideology, specifies a number of basic conditions needed for a market to set prices efficiently in the public interest. The greater the deviation from these conditions, the less socially efficient the market system becomes. Most basic is the condition that markets must be competitive. I recall the professor in my elementary economics course using the example of small wheat farmers selling to small grain millers to illustrate the idea of perfect market competition. Today, four companies--Conagra, ADM Milling, Cargill, and Pillsbury--mill nearly 60 percent of all flour produced in the United States, and two of them--Conagra and Cargill--control 50 percent of grain exports.

In the real world of unregulated markets, successful players get larger and, in many instances, use the resulting economic power to drive or buy out weaker players to gain control of even larger shares of the market. In other instances, "competitors" collude through cartels or strategic alliances to increase profits by setting market prices above the level of optimal efficiency. The larger and more collusive individual market players become, the more difficult it is for newcomers and small independent firms to survive, the more monopolisitic and less competitive the market becomes, and the more political power the biggest firms can wield to demand concessions from governments that allow them to externalize even more of their costs to the community.

Given this reality, one might expect the neoliberal economists who claim Smith's tradition as their own to be outspoken in arguing for the need to restrict mergers and acquisitions and break up monopolistic firms to restore market competition. More often, they argue exactly the opposite position--that to "compete" in today's global markets, firms must merge into larger combinations. In other words, they use a theory that assumes small firms to advocate policies that favor large firms.

Market theory also specifies that for a market to allocate efficiently, the full costs of each product must be born by the producer and be included in the selling price. Economists call it cost internalization. Externalizing some part of a product's cost to others not a party to the transaction is a form of subsidy that encourages excessive production and use of the product at the expense of others. When, for example, a forest products corporation is allowed to clear-cut government lands at giveaway prices, it lowers the cost of timber products, thus encouraging their wasteful use and discouraging their recycling. While profitable for the company and a bargain for consumers, the public is forced, without its consent, to bear a host of costs relating to water shed destruction, loss of natural habitat and recreational areas, global warming, and diminished future timber production.

The consequences are similar when a chemical corporation dumps wastes without adequate treatment, thus passing the resulting costs of air, water, and soil pollution to the community in the form of health costs, genetic deformities, discomfort, lost working days, a need to buy bottled water, and the cost of cleaning up contamination. If the users of the resulting chemical products were required to pay the full cost of their production and use, there would be a lot less chemical contamination in our environment, our food and water would be cleaner, there would be fewer cancers and genetic deformities, and we would have more frogs and songbirds. If the full cost of producing and driving cars were passed on to the consumer we would all benefit from a dramatic reduction in urban sprawl, traffic congestion, the paving over of productive lands, pollution, global warming, and depletion of finite petroleum reserves.

There is good reason why cost internalization is one of the most basic principles of market theory. Yet in the name of the market, corporate libertarians actively advocate eliminating government regulation and point to the private cost savings for consumers while ignoring the social and environmental consequences for the broader society. Indeed, in the name of being internationally competitive, corporate libertarians urge nations and communities to increase market distorting subsidies--including resource giveaways, low wage labor, lax environmental regulation, and tax breaks--to attract the jobs of footloose corporations. An unregulated market invariably encourages the externalization of costs because the resulting public costs become private gains. In the end it seems that corporate libertarians are more interested in increasing corporate profits than in defending market principles.

The larger the corporation and the "freer" the market, the greater the corporation's ability to force others to bear its costs and thereby subsidize its profits. Some call this theft. Economists call it "economies of scale."

Neva Goodwin, ecological economist, head of the Global Development and Environment Institute at Tufts University, and an advocate of cost internalization, puts it bluntly. "Power is largely what externalities are about. What's the point of having power, if you can't use it to externalize your costs--to make them fall on someone else?"

Corporate libertarians tirelessly inform us of the benefits of trade based on the theories of Adam Smith and David Ricardo. What they don't mention is that the benefits the trade theories predict assume the local or national ownership of capital by persons directly engaged in its management. Indeed, these same conditions are fundamental to Adam Smith's famous assertion in The Wealth of Nations that the invisible hand of the market translates the pursuit of self-interest into a public benefit. Note that the following is the only mention of the famous invisible hand in the entire 1,000 pages of The Wealth of Nations.

By preferring the support of domestic to that of foreign industry, he [the entrepreneur] intends only his own security, and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Smith assumed a natural preference on the part of the entrepreneur to invest at home where he could keep a close eye on his holdings. Of course, this was long before jet travel, telephones, fax machines, and the Internet. Because local investment provides local employment and produces local goods for local consumption using local resources, the entrepreneur's natural inclination contributes to the vitality of the local economy. And because the owner and the enterprise are both local they are more readily held to local standards. Even on pure business logic, Smith firmly opposed the absentee ownership of companies.

The directors of such companies, however, being the managers rather of other people's money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own .... Negligence and profusion, therefore, must always prevail, more or less in the management of the affairs of such a company?

Smith believed the efficient market is composed of small, owner-managed enterprises located in the communities where the owners reside. Such owners normally share in the community's values and have a personal stake in the future of both the community and the enterprise. In the global corporate economy, footloose money moves across national borders at the speed of light, society's assets are entrusted to massive corporations lacking any local or national allegiance, and management is removed from real owners by layers of investment institutions and holding companies.

It seems a common practice for corporate libertarians to justify their actions based on theories that apply only in the world that by their actions they seek to dismantle. Economist Neva Goodwin suggests that neoclassical economists have invited this distortion and misuse of economic theory by drawing narrow boundaries around their field that exclude most political and institutional reality. She characterizes the neoclassical school of economics as the political economy of Adam Smith minus the political and institutional analysis of Karl Marx:

The classical political economy of Adam Smith was a much broader, more humane subject than the economics that is taught in universities today.... For at least a century it has been virtually taboo to talk about economic power in the capitalist context; that was a communist (Marxist) idea. The concept of class was similarly banned from discussion.

Adam Smith was as acutely aware of issues of power and class as he was of the dynamics of competitive markets. However, the neoclassical economists and the neo-Marxist economists bifurcated his holistic perspective on the political economy, one taking those portions of the analysis that favored the owners of property, and the other taking those that favored the sellers of labor. Thus, the neoclassical economists left out Smith's considerations of the destructive role of power and class, and the neo-Marxists left out the beneficial functions of the market. Both advanced extremist social experiments on a massive scale that embodied a partial vision of society, with disastrous consequences.

If corporate libertarians had a serious allegiance to market principles and human rights, they would be calling for policies aimed at achieving the conditions under which markets function in a democratic fashion in the public interest. They would be calling for an end to corporate welfare, the breakup of corporate monopolies, the equitable distribution of property ownership, the internalization of social and environmental costs, local ownership, a living wage for working people, rooted capital, and a progressive tax system. Corporate libertarianism is not about creating the conditions that market theory argues will optimize the public interest, because its real concern is with private, not public, interests

[castille]

So you are saying corporations can control our minds and force us to buy consumer goods AGAINST OUR WILL?


This means:

1) Putting a gun to our heads (literal sense) and saying "Buy or execute"

2) Psychic powers to control our minds. Does Bill Gates have psychic powers?



Or maybe the majority of people are weak-willed sheep willing to follow very easily....

"Men are but mere sheep with excellent ability to obey and follow any charismatic individual."
-Adolf Hitler

[Man Against Time]

Everything will run smoother when people learn to ignore that guy.

[PeterAngelo]

Hitler was smarter than I thought.

Yes - you do not have to hold a gun to the head of an idiot to fleece him/her.

P.T. Barnum said it best.

There's a sucker born every minute and two to take him/her.

I have no mortgage, car payment or credit card interest.

I live in a beautiful beach front condo for the cost of the maintenance fee and taxes.

It comes to $250.00 per month - total.

If I paid a thousand dollars a month "rent" or interest on a phony mortgage, had a car payment, and was stupid enough to get myself in debt I would be the perfect patsy for our corporate oligarchs.

You do it - I know better.

Everyone on earth could live on twenty dollars a day if there was anything close to fairness, equity, justice or morality.

Guess what?

Stupid is as stupid does.

[suijurisfreeman]

Back in 1998 I purchased (cash) 20 acres in southcentral Kentucky for $8,700. The property taxes are only $65 per year. When I'm there I grow alot of my own food. I'm not connected to any public utilities, so no monthly gas, electric, phone bills to pay. I don't use a motor vehicle for transportation, I have a mountain bike and I'm finishing up my recumbent tricycle (velomobile-it will be totally enclosed when finished). This all was a major part of my quest for personal freedom. It's much harder to control someone who doesn't play their game. The game that most people are playing simply can't be won.

[PeterAngelo]

suijurisfreeman:

You are right - at least if they want to be honest.

I bought a condo on Clearwater Beach cash and a car cash. I do not use banks, credit cards, or anything that can be traced.

With taxes, insurance, and everything else - minus interest wasted on borrowed money - I live on $125.00 per week (that covers reefer too).

I can make that in an hour at my son's law office if I need to.

We also have boats and could live even if all hell breaks loose. The Gulf of Mexico has plentiful food.

The rest can be handled.

I have ten grown children and grand-children. They are an army.

I stay in combat ready physical condition and live a very stress free life.

It takes a lot of education, life experience, and intelligence to realize the true perils of modern life. You are on the right path - I applaud you.

I love Kentucky - it always appeared to me that the whole state was professionally landscaped.

My kid sister is doing exactly what you are doing outside of Little Rock, Arkansas.

If I had to I could go there and survive.

It is something to consider. It is something that must be considered.

[castille]

If you dont use public utilities, how do you use the Internet?

[Impenitent]

running on hamster wheels...

[fedfem]

perhaps a generator.

[white rice]

</span><blockquote><span class="smallfont">Quote:</span><hr size="1" />Originally Posted by (castille,)

Is there any wonder why Americans are so poor? Why are most people in CREDIT CARD debt? (What is the point of having a credit card when you could pay cash and save on massive interest rates?)


Gee, I really wonder why most people are poor and in debt....<hr size="1" /></blockquote><span class='postcolor'>

Middle class Americans are not poor yet. but they're on the road towards screwing themselves by generating debt and placing the financial load on the only collateral they have, their homes. American culture is an mainstay of extravagence and excess. It doesn't help when you see shows about rich people and their houses on cable. Consumerism defeated communism, therefore consumerism is the best lifestyle. Everyone esle wants to live like an American....

Personally, I think it's a lot of hogwash. WW2 generation had to face shortages and come out of a period of economic uncertainty. The Vietnam generation rebelled against the old ways through coddling their children. Well, there's no war and the times are rolling even though antidepressant medication is on the rise. So... what is there to fill that void?

[PeterAngelo]

I was born in 1946. I am the Vietnam generation. We were not coddled. We were educated. There is a difference.

The Civil Rights Act of 1964 integrated schools and they have gone to hell ever since.

It is not that the Blacks brought the level down - Washington instituted policies that brought both Blacks and Whites down.

It is not accidental. My generation went to the streets because we actually knew what was going on.

This generation has been dumbed down and perverted by Madison Avenue. All the corporate ologarchies value is consumerism - blind, dumb, mindless, shallow consumerism.

The Charles Manson affair was a godsend ( or plan) for the Nixon conservatives. The "peace and love" culture threatened the whole fabric of corporate deceit and military-industrial murder for profit.

Manson scared all the doctors, lawyers, Indian Chiefs, movie stars and other rich people.

hippies became demons to be feared.

It immediately turned into polyester, disco-duck land, and we have been worshipping gold ever since.

My generation evolved into the neocoms, serial-killing military hawks, corporate thieves, Enron victims, and ignorant wage-slaves working so hard they don't even know there is a war - or care.

The younger generation is undereducated, overworked, battered and lost.

I took a writing class at USF and we traded papers with other classmates. Current high school graduates are semi-literate at best. I passed an English Diagnostic test to get into the English program at USF thirty years after graduating high school. I know current high school graduates who cannot pass that test and have tried several times.

The professor was my age. I asked him how he could give a "B" to a paper like that. He said he got a lot of pressure from the front office to keep the seat filled. Period.

Sad.

I have gone to college on and off since 1965. I have many degrees and love to learn. I always enjoy seeing eighty year old people in class. The lust for life, learning, understanding, and improving ones own life is apparently a rare gift.

America provided the opportunity for the "natural aristocracy" to excel to the stars.

The problem is, not everyone can compete. IQ tests acknowledge the different levels of abilities of humans.

It is not fair - but we want it to be.

That is the reason so many take drugs - to kill the pain of failure.

We need to value people for what they can do. Not punish them for what they can't do.

If that became our paridigm ( I hate that word - it means model), it would solve a lot of problems.

It works against our corporate-greed model.

DUH!!!!

Peace and Love?

Charlie Manson?

War?

Helter Skelter?

Happiness is a warm gun?

Imagine - all we need is love!

[JustinGilmore]

</span><blockquote><span class="smallfont">Quote:</span><hr size="1" />Originally Posted by (castille,)
A recent MX poll (free newspaper found at most train/tram stops) discovered some interesting results about people and money.

The poll asked the question, "If you earned $1 million each year, how would you change your lifestyle?"

The question had multiple choices (summarised due to long length!):

• Party Lifestyle: Spend 75-100%, save little to none. Travel, throwing grand parties, new cars/TV/gadgets, etc.
  
• High Spending, Standard Saving: Spend approximately 50-75%, save the rest.
  
• Moderate spending, moderate saving: Maintain moderate lifestyle.
  
• Complete investment: Spend only enough for necessities, and invest everything.
  

65% chose the Party Lifestyle.
25% chose the High Spending lifestyle.
9% chose the moderate spending lifestyle
1% chose the Complete Investment lifestyle.



Additionally, an article on the UK Independent (8th January 2004, by Andrew Clennell) shows that the average IDEAL lifestyle would cost approximately £2.6 million a year! (thats a lot more in American dollars).


Is there any wonder why Americans are so poor? Why are most people in CREDIT CARD debt? (What is the point of having a credit card when you could pay cash and save on massive interest rates?)


Gee, I really wonder why most people are poor and in debt....<hr size="1" /></blockquote><span class='postcolor'>

Okay, I disagree. The leading cause of poverty is just that, POVERTY. If you're born into poverty you're not likely to get out of it. That's what's statistically shown. Sure, there are people who go into poverty, though look at the numbers of people who get themselves out of poverty, not many. This is another reason which proves trickle down economics wrong-because all it does is allow middle class familys to go into proverty, though it does not allow any poverty-ridden people to get into the middle class.

[eburchelli]

Peter Angelo, you state the following in your post: "I was born in 1964. I am the Vietnam generation. We were not coddled. We were educated. There is a difference"

"I have gone to college on and off since 1965."

I've never heard of a child prodigy who was this advanced. College at age one? WOW

Or have I missed something in translation?

[castille]

</span><blockquote><span class="smallfont">Quote:</span><hr size="1" />Originally Posted by (JustinGilmore,)
Okay, I disagree. The leading cause of poverty is just that, POVERTY. If you're born into poverty you're not likely to get out of it. That's what's statistically shown. <hr size="1" /></blockquote><span class='postcolor'>


Statistically, most Germans loved Hitler and supported the Nazis. Statistically, the majority of Soviet soldiers committed war crimes. Statistically, the majority of pilgrims supported the burning of witches.

Just because the majority does it doesnt mean its right....


I think we should just ban credit cards and car loans altogether. If people want to buy consumer goods, they can always save up for it. Instead of buying it with a credit card and whining about the bill....

[Man Against Time]

People are still making the mistake of taking Peter Angelo seriously. I think I will change my signature to, "Everything will run much more smoothly around here when everyone learns to ignore Peter."

Even if "Born in '64" is metaphorical and he was a young man in 64, his son cannot be much older than 25. Must be all that personal freedom and unwillingness to be traced (internet messageboards and ISP's are known for their untraceability ya know) that makes his son the one in a million childhood upstart with his own law firm.

The guy is a loser 17 year old- stop replying to him.



Anyway, people are poor because they dont make a lot of money- duh.

[PeterAngelo]

TYPO - Born in 1946 - sorry

Old age sucks

I wish I was seventeen again - I could make the same mistakes and have all this fun over again.

Four more angel wives sounds good - I wish I could convince angel 25 year olds it's a good idea.

[eburchelli]

Thank you. I'm new here and have to learn who is what.

[eburchelli]

"TYPO - Born in 1946 - sorry

Old age sucks"

Thanks. It sounds a lot better and I'm sure it's not old age - yet!

[Catch 22]

I think we're all overlooking one major factor here. You're asking poor people who've never tasted a rich lifestyle before what would happen if they were suddenly rich. Obviously a lot of people would go all out, they're fantasizing not thinking in reality.


How about we try to make social commentary backed up by real experiments and not newspaper survey's done in an uncontrolled environment. There are too many unknown variables.